MARKETING NOTES

Marketing
1. The act or process of buying and selling in a market.
2. The commercial functions involved in transferring goods from producer to consumer.
Process associated with promoting for sale goods or services. The classic components of marketing
are the Four Ps: product, price, place, and promotion-the selection and development of the product,
determination of price, selection and design of distribution channels (place), and all aspects of
generating or enhancing demand for the product, including advertising (promotion).

Marketing concept
Goal-oriented, integrated philosophy practiced by producers of goods and services that focuses on
satisfying the needs of consumers over the needs of the producing company. The marketing concept
holds that the desires and needs of the target market must be determined and satisfied in order to
successfully achieve the goals of the producer.

Q1. Strategic Planning

Strategic Market Planning

A Strategic marketing plan is an outline of the methods and resources required to achieve
organizational goals within a specific target market(s).
Strategic planning requires a general marketing orientation rather than a narrow functional
orientation.

All functional areas must include marketing and must be coordinated to reach organizational goals.
It is a heirarchal process, from company wide to marketing specific. (Marketing concept,
implemented from top down.)

A strategic plan gives:

• Direction and better enables the company to understand mkt. function dimensions
• Makes sure that each division has clear integrated goals
• Different functional areas are encouraged to coordinate
• Assesses SW & OT
• Assesses alternative actions
• It is a basis for allocating company resources
• A procedure to assess company performance

The strategic planning process may include the following, although this differs from one
organization to another:
• Develop a SWOT analysis
• Develop Mission Statement that evolves from the SWOT analysis
• Develop Corporate Objectives that are consistent with the organization's mission statement.
• Develop corporate strategy to achieve the organization's objectives. [if the organization is
made up of more than one SBU, then follow loop again for each SBU, then proceed]
• Marketing (and other functional objectives) must be designed to achieve the corporate
objectives
• Marketing Strategy, designed to achieve the marketing objectives.

The strategic market planning process is based on the establishment of organizational goals and it
must stay within the broader limits of the organizations mission, that is developed taking into
consideration the environmental opportunities and threats and the companies resources and distinct
competencies.

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A firm can then assess its opportunities and develop a corporate strategy. Marketing objectives must
be designed so that they can be accomplished through efficient use of the firms resources.

Corporate strategy is concerned with issues such as diversification, competition, differentiation,

interrelationships between business units and environmental issues. It attempts to match the
resources of the organization with the opportunities and risks of the environment (SWOT).
Corporate strategy is also concerned with defining the scope and roles of the SBU's of the firm so
that they are coordinated to reach the ends desired.

SWOT Analysis
A SWOT Analysis examines the companies:
• Strengths...Internal
• Weaknesses...Internal
• Opportunities...External
• Threats...External

By developing a SWOT analysis, a company can determine what its distinctive competancies are.
This will help determine what the organization should be in business for, what its mission should be.

Q2. Importance of Advertising in the Promotion Mix.

Advertising
Paid form of a nonpersonal message communicated through the various media by industry, business
firms, nonprofit organizations, or individuals. Advertising is persuasive and informational and is
designed to influence the purchasing behavior and/or thought patterns of the audience. Advertising is
a marketing tool and may be used in combination with other marketing tools, such as sales
promotions, personal selling tactics, or publicity.

Forms of Advertising
Advertising can take a number of forms, including advocacy, comparative, cooperative, direct-mail,
informational, institutional, outdoor, persuasive, product, reminder, point-of-purchase, and specialty
advertising.
 Advocacy Advertising
 Comparative Advertising
 Cooperative Advertising
 Direct-Mail Advertising
 Informational Advertising
 Institutional Advertising
 Outdoor Advertising
 Persuasive Advertising
 Product Advertising
 Reminder Advertising
 Point-of-Purchase Advertising
 Specialty Advertising

Advertising Objectives
Advertising objectives are the communication tasks to be accomplished with specific customers that
a company is trying to reach during a particular time frame. A company that advertises usually
strives to achieve one of four advertising objectives: trial, continuity, brand switching, and

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switchback. Which of the four advertising objectives is selected usually depends on where the
product is in its life cycle.
Media
Paying people to hold signs in public places is one of the oldest forms of advertising such as the
'board guy' pictured above

Transit advertising is combined with experiential marketing using pedapods in Australia.

Commercial advertising media can include wall paintings, billboards , street furniture components,
printed flyers, radio, cinema and television ads, web banners, web popups, skywriting, bus stop
benches, magazines, newspapers, town criers, sides of buses, taxicab doors and roof mounts, musical
stage shows, subway platforms and trains, elastic bands on disposable diapers, stickers on apples in
supermarkets, the opening section of streaming audio and video, posters, chicken niblets, and the
backs of event tickets and supermarket receipts. Any place an "identified" sponsor pays to deliver
their message through a medium is advertising.

Q3. Market Segmentation?

Process of dividing the market according to similarities that exist among the various subgroups
within the market. The similarities may be common characteristics or common needs and desires.
Market segmentation comes about as a result of the observation that all potential users of a product
are not alike, and that the same general appeal will not interest all prospects. Therefore, it becomes
essential to develop different marketing tactics based on the differences among potential users in
order to effectively cover the entire market for a particular product. There are four basic market
segmentation strategies: behavior segmentation, demographic segmentation, geographic
segmentation, and physiographic segmentation.

Top-down and bottom-up

George Day (1980) describes model of segmentation as the top-down approach: You start with the
total population and divide it into segments. He also identified an alternative model which he called
the bottom-up approach. In this approach, you start with a single customer and build on that
profile. This typically requires the use of customer relationship management software or a database
of some kind. Profiles of existing customers are created and analysed. Various demographic,
behavioral, and psychographic patterns are built up using techniques such as cluster analysis. This
process is sometimes called database marketing or micro-marketing. Its use is most appropriate in
highly fragmented markets. McKenna (1988) claims that this approach treats every customer as a
"micromajority". Pine (1993) used the bottom-up approach in what he called "segment of one
marketing". Through this process mass customization is possible.

Q4. Product Positioning

Product positioning involves tailoring an entire marketing program—including product attributes,
image, and price, as well as packaging, distribution, and service—to best meet the needs of
consumers within a particular market segment. In this way, product positioning is part of the overall
process of market segmentation, but involves a narrowing of focus. "Segmentation analysis tells us
how the market is defined and allows us to target one or more opportunities," Glen L. Urban and
Steven H. Star wrote in their book Advanced Marketing Strategy. "Product positioning takes place
within a target market segment and tells us how we can compete most effectively in that market
segment."

The key to product positioning understands the dimensions consumers use to evaluate competing
marketing programs and make purchase decisions. It may be helpful for small business managers to
create a graph in order to map consumer perceptions along several different dimensions. Once

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consumer perceptions are understood, the next step is to select the best positioning for the product
and take steps to align the marketing program behind this positioning choice. Some examples of
possible positioning choices include quality, reliability, and unique features or benefits. Before
delving into product positioning further, it may be helpful to understand the process and goals of
market segmentation.

Q5. Market Research

Market research is the process of systematic gathering,
recording and analyzing of data about customers, competitors
and the market. Market research can help create a business
plan, launch a new product or service, fine tune existing
products and services, expand into new markets etc. It can be
used to determine which portion of the population will
purchase the product/service, based on variables like age,
gender, location and income level. It can be found out what
market characteristics your target market has. With market
research companies can learn more about current and
potential customers.
The purpose of market research is to help companies make
better business decisions about the development and
marketing of new products. Market research represents the
voice of the consumer in a company.
A list of questions that can be answered through market
research:
• What is happening in the market? What are the
trends? Who are the competitors?
• How do consumers talk about the products in the
market?
• Which needs are important? Are the needs being met
by current products?

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Q6. Marketing Mix

Combination of marketing elements used in the sale of a particular product. The marketing elements
center around four distinct functions, sometimes called the Four Ps: product, price, place (of
distribution), and promotion. All these functions are considered in planning a marketing strategy,
and any one may be enhanced, deducted, or changed in some degree in order to create the strategy
necessary to efficiently and effectively sell a product.

“The Four P's”

The most common variables used in constructing a marketing mix are price, promotion, product and
place (also called distribution). First suggested by Jerome McCarthy (McCarthy, J. 1960), they are
sometimes referred to as the four P's. McCarthy said that marketers have essentially these four
variables to use when crafting a marketing strategy and writing a marketing plan. In the long term,
all four of the mix variables can be changed, but in the short term it is difficult to modify the product
or the distribution channel. Therefore in the short term, marketers are limited to working with only
half their tool kit. This limitation underscores the importance of long term strategic planning.

McCarthy's four P's look at marketing from the perspective of the marketer. It describes what
variables marketers have to work with, and hence is sometimes referred to as a marketing
management perspective. Robert Lauterborn (Lauterborn, R. 1990) claims that each of these
variables should also be seen from a consumer's perspective. This transformation is accomplished by
converting Product into "customer solution", Price into "cost to the customer", Place into
"convenience", and Promotion into "communication". He calls these the four C's.

New Product Development

Preparation for full-scale manufacturing of a product not previously offered by that marketer,
including these activities: conceptualization; concept testing and approval; research and
development; prototype testing; economic and market research; and decision making with regard to
positioning, pricing, packaging, distribution, and promotion. A new product may be a minor or great
variation on an existing brand, a true product innovation, or an imitation of a product already on the
market. New product development is necessary to maintain market share because demand for most
brands or products tends to decline over time. New product development is also a necessary response
to new technology and changing market conditions. New product development may be handled by a
dedicated department within the company or may be part of each brand manager's responsibilities.

Product Life Cycle (PLC)

Theory that recognizes four separate developmental stages in the life span of a product, with each
stage characterized by its own distinct marketing opportunities and restraints. In a product's
introductory stage, growth is slow, with minimal profits, since consumers' purchases have merely
been on a trial basis. If the product is successful, it goes into a growth stage, where its growth rapidly
expands by new market entries, improved distribution channels, and shrewd pricing strategies. A
maturity stage follows, where sales and profits stabilize. Finally, the product goes into a decline,
where sales and profits decrease. The product life cycle theory states that a typical product's life
cycle follows the form of an S-shaped curve, although some products may have a very rapid growth
stage or an immediate decline. Also, some mature products can have their life cycle reversed. For
example, when baking soda was launched, it was used only for cooking and quickly reached the
maturity stage of its life cycle. When it was discovered that baking soda deodorized refrigerators,
however, the product's sales soared and its new use put it back in the growth stage of its life cycle.

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Q7. Promotional mix

Advertising- Any paid form of non-personal presentation and promotion of ideas, goods, or services
by an identified sponsor.

Examples: Print ads, radio, television, billboard, direct mail, brochures and catalogs, signs, in-store
displays, posters, motion pictures, Web pages, banner ads, and emails.

Personal selling- A process of helping and persuading one or more prospects to purchase a good or
service or to act on any idea through the use of an oral presentation.

Examples: Sales presentations, sales meetings, sales training and incentive programs for
intermediary salespeople, samples, and telemarketing. Can be face-to-face or via telephone.

Sales promotion- Incentives designed to stimulate the purchase or sale of a product, usually in the
short term.

Examples: Coupons, sweepstakes, contests, product samples, rebates, tie-ins, self-liquidating

premiums, trade shows, trade-ins, and exhibitions.

Public relations- Non-paid non-personal stimulation of demand for a product, service, or business
unit by planting significant news about it or a favourable presentation of it in the media.

Examples: Newspaper and magazine articles/reports, TV and radio presentations, Charitable

contributions, speeches, issue advertising, and seminars.

Q8. What is Consumer Buying Behavior?

Definition of Buying Behavior:

Buying Behavior is the decision processes and acts of people involved in buying and using products.
Need to understand:
• why consumers make the purchases that they make?
• what factors influence consumer purchases?
• the changing factors in our society.

Consumer Buying Behavior refers to the buying behavior of the ultimate consumer. A firm needs to
analyze buying behavior for:
• Buyers reactions to a firms marketing strategy has a great impact on the firms success.
• The marketing concept stresses that a firm should create a Marketing Mix (MM) that satisfies
(gives utility to) customers, therefore need to analyze the what, where, when and how
consumers buy.
• Marketers can better predict how consumers will respond to marketing strategies.

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Short Notes:
1. Product management is a function within a company dealing with the planning or marketing of
a product or family of products at all stages of the product lifecycle.
Product management typically deals with these activities:
• Defining new products and gathering market requirements (New Product Development)
• Securing internal resources for product team
• Working across all functions to bring a product to launch
• Promoting the product internally across all functions
• Promoting the product externally with press, customers, and partners
• Bringing new products to market
• Product differentiation
• Product positioning and outbound messaging
• Product Life Cycle considerations
• Product portfolio management

Product management typically deals with these closely-related functions:

• Product marketing
• Program management
• Project management

2. Marketing communication (or marcom) consists of the messages and related media used to
communicate with a market. Those who practice advertising, branding, direct marketing, graphic
design, marketing, packaging, promotion, publicity, public relations, sales, sales promotion and
online marketing are termed marketing communicators, marketing communication managers, or
more briefly as marcom managers.

Traditionally, marketing communication practitioners focus on the creation and execution of printed
marketing collateral; however, academic and professional research developed the practice to use
strategic elements of branding and marketing in order to ensure consistency of message delivery
throughout an organization. Many trends in business can be attributed to marketing communication;
for example: the transition from customer service to customer relations, and the transition from
human resources to human solutions. In branding, opportunities to contact stakeholders are called
brand touchpoints (or points of contact.) Marketing communication is concerned with the general
behavior of an organization and the perceptions of the organization that are promoted to stakeholders
through these touchpoints.

Integrated marketing communication presents aspiration of companies to develop and optimal

combination of communication elements in order to maximize effects and minimize losses (defined
as investment which did not result in goal achievement).

3. Promotion is one of the four aspects of marketing. The other three parts of the marketing mix are
product management, pricing, and distribution. Promotion involves disseminating information about
a product, product line, brand, or company.
Promotion comprises four subcategories:
• Advertising
• Personal selling
• Sales promotion
• Publicity and public relations

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The specification of these four variables creates a promotional mix or promotional plan. A
promotional mix specifies how much attention to pay to each of the four subcategories, and how
much money to budget for each. A promotional plan can have a wide range of objectives, including:
sales increases, new product acceptance, creation of brand equity, positioning, competitive
retaliations, or creation of a corporate image.

An example of a fully integrated, long-term, large-scale promotion is Pepsi Stuff.

4. Competitor Analysis
Also called competitive analysis, the process of identifying the performance and marketing strategy
of competitive brands or products in the marketplace. In order to plan an effective marketing
strategy, marketers need to know about the competitive environment and to find out all they can
about competitors' products, prices, communication channels quality, and service so as to determine
areas of competitive advantage and disadvantage.

5. Brand Management
Brand management is the application of marketing techniques to a specific product, product line, or
brand. It seeks to increase the product's perceived value to the customer and thereby increase brand
franchise and brand equity. Marketers see a brand as an implied promise that the level of quality
people have come to expect from a brand will continue with present and future purchases of the
same product. This may increase sales by making a comparison with competing products more
favorable. It may also enable the manufacturer to charge more for the product. The value of the
brand is determined by the amount of profit it generates for the manufacturer. This results from a
combination of increased sales and increased price.

6. Positioning (marketing)

A product's position is how potential buyers see the product. Positioning is expressed relative to the
position of competitors. The term was coined in 1969 by Al Ries and Jack Trout in the paper
"Positioning" is a game people play in today’s me-too market place" in the publication Industrial
Marketing. It was then expanded into their ground-breaking first book, "Positioning: The Battle for
Your Mind".

Positioning is something (perception) that happens in the minds of the target market. It is the
aggregate perception the market has of a particular company, product or service in relation to their
perceptions of the competitors in the same category. It will happen whether or not a company's
management is proactive, reactive or passive about the on-going process of evolving a position. But
a company can positively influence the perceptions through enlightened strategic actions.
In marketing, positioning has come to mean the process by which marketers try to create an image
or identity in the minds of their target market for its product, brand, or organization. It is the 'relative
competitive comparison' their product occupies in a given market as perceived by the target market.
Re-positioning involves changing the identity of a product, relative to the identity of competing
products, in the collective minds of the target market.

De-positioning involves attempting to change the identity of competing products, relative to the
identity of your own product, in the collective minds of the target market.

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Product positioning process

Generally, the product positioning process involves:
1. Defining the market in which the product or brand will compete (who the relevant buyers
are)
2. Identifying the attributes (also called dimensions) that define the product 'space'
3. Collecting information from a sample of customers about their perceptions of each product
on the relevant attributes
4. Determine each product's share of mind
5. Determine each product's current location in the product space
6. Determine the target market's preferred combination of attributes (referred to as an ideal
vector)
7. Examine the fit between:
o The position of your product
o The position of the ideal vector
8. Position.
The process is similar for positioning your company's services. Services, however, don't have the
physical attributes of products - that is, we can't feel them or touch them or show nice product
pictures. So you need to ask first your customers and then yourself, what value do clients get from
my services? How are they better off from doing business with me? Also ask: is there a
characteristic that makes my services different?

Write out the value customers derive and the attributes your services offer to create the first draft of
your positioning. Test it on people who don't really know what you do or what you sell, watch their
facial expressions and listen for their response. When they want to know more because you've
piqued their interest and started a conversation, you'll know you're on the right track.

Q. Target Market
Group of persons for whom a firm creates and maintains a product mix that specifically fits the
needs and preferences of that group. For example, the furniture market can be divided into segments
described as Early American, contemporary, or traditional. A marketer may choose to target the
entire furniture market with the generalized product, promotion, distribution, and pricing strategy
meant to appeal to everyone, or may go after one segment of the furniture market with a customized
strategy or several segments of the furniture market with more than one strategy.

Market segments can be defined in several other ways besides product types-for example, consumer
types, channels of distribution, or price levels. Consumer market segments are defined in terms of
geographic (place of purchase or use), demographic (age, income, occupation of consumer), and
psychographic (buying motives, product usage level, lifestyle) criteria.

Selecting a target market segment for a product rather than attempting to sell to the entire market can
be a more efficient use of promotion dollars, because a greater market share can be achieved by
capturing most or all of a segment via a carefully directed marketing plan that reaches precisely the
right people with the right message than by trying to capture market share with a generic approach. It
is also a better use of production resources if they can be concentrated on a single product and/or
package, thus experiencing economies of scale. For example, a factory that only makes metal bed
frames can operate with less equipment, expertise, and materials than a similar size company that
makes metal bed frames, sofa beds, dining room tables, and office furniture.

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Target marketing makes better use of distribution dollars as well, enabling marketers to concentrate
on developing working relationships with department-store chains or on developing a business-to-
business sales force, but not both.

Market Segmentation (Short Note)

Process of dividing the market according to similarities that exist among the various subgroups
within the market. The similarities may be common characteristics or common needs and desires.
Market segmentation comes about as a result of the observation that all potential users of a product
are not alike, and that the same general appeal will not interest all prospects. Therefore, it becomes
essential to develop different marketing tactics based on the differences among potential users in
order to effectively cover the entire market for a particular product. There are four basic market
segmentation strategies: behavior segmentation, demographic segmentation, geographic
segmentation, and physiographic segmentation.

What is marketing?

Process associated with promoting for sale goods or services. The classic components of marketing
are the Four Ps: product, price, place, and promotion-the selection and development of the product,
determination of price, selection and design of distribution channels (place), and all aspects of
generating or enhancing demand for the product, including advertising (promotion).

Marketing

The term market is the root word for the word marketing. Market refers to the location where
exchanges between buyers and sellers occur. Marketing pertains to the interactive process that
requires developing, pricing, placing, and promoting goods, ideas, or services in order to facilitate
exchanges between customers and sellers to satisfy the needs and wants of consumers. Thus, at the
very center of the marketing process is satisfying the needs and wants of customers.

Needs and Wants

Needs are the basic items required for human survival. Human needs are an essential concept
underlying the marketing process because needs are translated into consumer wants. Human needs
are often described as a state of real or perceived deprivation. Basic human needs take one of three
forms: physical, social, and individual. Physical needs are basic to survival and include food,
clothing, warmth, and safety. Social needs revolve around the desire for belonging and affection.
Individual needs include longings for knowledge and self-expression, through items such as clothing
choices. Wants are needs that are shaped by both cultural influences and individual preferences.
Wants are often described as goods, ideas, and services that fulfill the needs of an individual
consumer. The wants of individuals change as both society and technology change. For example,
when a computer is released, a consumer may want it simply because it is a new and improved
technology. Therefore, the purpose of marketing is to convert these generic needs into wants for
specific goods, ideas, or services. Demand is created when wants are supported by an individual
consumer's ability to purchase the goods, ideas, or services in question.

Consumers buy products that will best meet their needs, as well as provide the most fulfillment
resulting from the exchange process. The first step in the exchange process is to provide a product.
Products can take a number of forms such as goods, ideas, and services. All products are produced to
satisfy the needs, wants, and demands of individual buyers.

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The second step in the satisfaction process is exchange. Exchange occurs when an individual
receives a product from a seller in return for something called consideration. Consideration usually
takes the form of currency. For an exchange to take place, it must meet a number of conditions. (1)
There must be at least two participants in the process. (2) Each party must offer something of value
to the other. (3) Both parties must want to deal with each other. (4) Both participants have the right
to accept or to reject the offer. (5) Both groups must have the ability to communicate and deliver on
the mutual agreement. Thus, the transaction process is a core component of marketing. Whenever
there is a trade of values between two parties, a transaction has occurred. A transaction is often
considered a unit of measurement in marketing. The earliest form of exchange was known as barter.

Marketing in the Overall Business

There are four areas of operation within all firms: accounting, finance, management, and
marketing. Each of these four areas performs specific functions. The accounting department is
responsible for keeping track of income and expenditures. The primary responsibility of the finance
department is maintaining and tracking assets. The management department is responsible for
creating and implementing procedural policies of the firm. The marketing department is responsible
for generating revenue through the exchange process. As a means of generating revenue, marketing
objectives are established in alignment with the overall objectives of the firm.

Aligning the marketing activities with the objectives of the firm is completed through the process
of marketing management. The marketing management process involves developing objectives that
promote the long-term competitive advantage of a firm. The first step in the marketing management
process is to develop the firm's overall strategic plan. The second step is to establish marketing
strategies that support the firm's overall strategic objectives. Lastly, a marketing plan is developed
for each product. Each product plan contains an executive summary, an explanation of the current
marketing situation, a list of threats and opportunities, proposed sales objectives, possible marketing
strategies, action programs, and budget proposals.

The marketing management process includes analyzing marketing opportunities, selecting target
markets, developing the marketing mix, and managing the marketing effort. In order to analyze
marketing opportunities, firms scan current environmental conditions in order to determine potential
opportunities. The aim of the marketing effort is to satisfy the needs and wants of consumers. Thus,
it is necessary for marketing managers to determine the particular needs and wants of potential
customers. Various quantitative and qualitative techniques of marketing research are used to collect
data about potential customers, who are then segmented into markets.

Market Segmentation

In order to better manage the marketing effort and to satisfy the needs and wants of customers, many
firms place consumers into groups, a process called market segmentation. In this process, potential
customers are categorized based on different needs, characteristics, or behaviors. Market segments
are evaluated as to their attractiveness or potential for generating revenue for the firm. Four factors
are generally reviewed to determine the potential of a particular market segment. Effective segments
are measurable, accessible, substantial, and actionable. Measurability is the degree to which a market
segment's size and purchasing power can be measured. Accessibility refers to the degree to which a
market segment can be reached and served. Substantiality refers to the size of the segment in term of
profitability for the firm. Action ability refers to the degree to which a firm can design or develop a
product to serve a particular market segment.

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Consumer characteristics are used to segment markets into workable groups. Common
characteristics used for consumer categorizations include demographic, geographic, psychographic,
and behavioral segmentation. Demographic segmentation categorizes consumers based on such
characteristics as age, gender, income level, and occupation. It is one of the most popular methods of
segmenting potential customers because it makes it relatively easy to identify potential customers.
Categorizing consumers according to their locations is called geographic segmentation. Consumers
can be segmented geographically according to the nations, states, regions, cities, or neighborhoods in
which they live, shop, and/or work. Psychographic segmentation uses consumers' activities,
interests, and opinions to sort them into groups. Social class, lifestyle, or personality characteristics
are psychographic variables used to categorize consumers into different groups. In behavioral
segmentation, marketers divide consumers into groups based on their knowledge, attitudes, uses, or
responses to a product.

Once the potential market has been segmented, firms need to station their products relative to similar
products of other producers, a process called product positioning. Market positioning is the process
of arranging a product so as to engage the minds of target consumers. Firm managers position their
products in such a way as to distinguish it from those of competitors in order to gain a competitive
advantage in the marketplace. The position of a product in the marketplace must be clear, distinctive,
and desirable relative to those of its competitors in order for it to be effective.

Marketing Mix

Once a positioning strategy has been determined, marketing managers seek to control the four basic
elements of the marketing mix: product, price, place, and promotion, known as the four P's of
marketing. Since these four variables are controllable, the best mix of these elements is determined
to reach the selected target market.

Product. The first element in the marketing mix is the product. Products can be either tangible or
intangible. Tangible products are products that can be touched; intangible products are those that
cannot be touched, such as services. There are three basic levels of a product: core, actual, and
augmented. The core product is the most basic level, what consumers really buy in terms of benefits.
For example, consumers do not buy food processors, per se; rather, they buy the benefit of being
able to process food quickly and efficiently. The next level of the product is the actual product—in
the case of the previous example, food processors. Products are typically sorted according to the
following five characteristics: quality, features, styling, brand name, and packaging. Finally, the
augmented level of a product consists of all the elements that surround both the core and the actual
product. The augmented level provides purchasers with additional services and benefits. For
example, follow-up technical assistance and warranties and guaranties are augmented product
components. When planning new products, firm managers consider a number of issues including
product quality, features, options, styles, brand name, packaging, size, service, warranties, and return
policies, all in an attempt to meet the needs and wants of consumers.

Price. Price is the cost of the product paid by consumers. This is the only element in the marketing
mix that generates revenue for firms. In order to generate revenue, managers must consider factors
both internal and external to the organization. Internal factors take the form of marketing objectives,
the marketing-mix strategy, and production costs. External factors to consider are the target market,
product demand, competition, economic conditions, and government regulations. There are a
number of pricing strategies available to marketing managers: skimming, penetration, quantity, and
psychological. With a price-skimming strategy, the price is initially set high, allowing firms to
generate maximum profits from customers willing to pay the high price. Prices are then gradually

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lowered until maximum profit is received from each level of consumer. Penetration pricing is used
when firms set low prices in order to capture a large share of a market quickly. A quantity-pricing
strategy provides lower prices to consumers who purchase larger quantities of a product.
Psychological pricing tends to focus on consumer perceptions. For example, odd pricing is a
common psychological pricing strategy. With odd pricing, the cost of the product may be a few cents
lower than a full-dollar value. Consumers tend to focus on the lower-value full-dollar cost even
though it is really priced closer to the next higher full-dollar amount. For example, if a good is priced
at $19.95, consumers will focus on $19 rather than $20.

Place. Place refers to where and how the products will be distributed to consumers. There are two
basic issues involved in getting the products to consumers: channel management and logistics
management. Channel management involves the process of selecting and motivating wholesalers and
retailers, sometimes called middlemen, through the use of incentives. Several factors are reviewed
by firm management when determining where to sell their products: distribution channels, market-
coverage strategy, geographic locations, inventory, and transportation methods. The process of
moving products from a manufacturer to the final consumer is often called the channel of
distribution.

Promotion. The last variable in the marketing mix is promotion. Various promotional tools are used
to communicate messages about products, ideas, or services from firms and their customers. The
promotional tools available to managers are advertising, personal selling, sales promotion, and
publicity. For the promotional program to be effective, managers use a blend of the four promotional
tools that best reaches potential customers. This blending of promotional tools is sometimes referred
to as the promotional mix. The goal of this promotional mix is to communicate to potential
customers the features and benefits of products.

Strategic Market Planning

A Strategic marketing plan is an outline of the methods and resources required to achieve
organizational goals within a specific target market(s).

Strategic planning requires a general marketing orientation rather than a narrow functional
orientation.

All functional areas must include marketing and must be coordinated to reach organizational goals.
It is a heirarchal process, from company wide to marketing specific. (Marketing concept,
implemented from top down.)

A strategic plan gives:

• Direction and better enables the company to understand mkt. function dimensions
• Makes sure that each division has clear integrated goals
• Different functional areas are encouraged to coordinate
• Assesses SW & OT
• Assesses alternative actions
• It is a basis for allocating company resources
• A procedure to assess company performance

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The strategic planning process may include the following, although this differs from one
organization to another:

• Develop a SWOT analysis

• Develop Mission Statement that evolves from the SWOT analysis
• Develop Corporate Objectives that are consistent with the organization's mission statement.
• Develop corporate strategy to achieve the organization's objectives. [if the organization is
made up of more than one SBU, then follow loop again for each SBU, then proceed]
• Marketing (and other functional objectives) must be designed to achieve the corporate
objectives
• Marketing Strategy, designed to achieve the marketing objectives.

The strategic market planning process is based on the establishment of organizational goals and it
must stay within the broader limits of the organizations mission, that is developed taking into
consideration the environmental opportunities and threats and the companies resources and distinct
competancies.

A firm can then assess its opportunities and develop a corporate strategy. Marketing objectives must
be designed so that they can be accomplished through efficient use of the firms resources.

Corporate strategy is concerned with issues such as diversification, competition, differentiation,

interrelationships between business units and environmental issues. It attempts to match the
resources of the organization with the opportunities and risks of the environment (SWOT).
Corporate strategy is also concerned with defining the scope and roles of the SBU's of the firm so
that they are coordinated to reach the ends desired.

SWOT Analysis
A SWOT Analysis examines the companies:
• Strengths...Internal
• Weaknesses...Internal
• Opportunites...External
• Threats...External
By developing a SWOT analysis, a company can determine what its distinctive competancies are.
This will help determine what the organization should be in business for, what its mission should be.

Organizational goals
Organizational goals are derived from the mission, corporate strategy is derived from the
organizational goals.

Goals must specify the end results that are desired, that are measurable and within a particular time
frame.

SMAC
• Specific
• Measurable
• Achieveable
• Consistent

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Corporate Strategy
Issues include:
• Scope of Business-----What Business you are in??
• Resource deployment----How you are going to use your resources??
• Competitive advantage----What are your competitive advantages??
• Coordination of Production, Marketing, Personnel etc.----
• Coordination process??

Marketing Planning.
Marketing plans vary by:
• Duration
• Scope
• Method of Development, bottom up/top down

Objective is to create a Marketing plan. A plan for each marketing strategy developed.
Marketing strategy encompasses selecting and analysing the target market(s) and creating and
maintaining an appropriate marketing mix that satisfies the target market and company. A Marketing
strategy articulates a plan for the best use of the organizations resources and tactics to meet its
objectives. Do not pursue projects that are outside the companies objectives or that stretch the
companies resources.

Plan includes:
• Executive summary
• Situation Analysis
• Opportunity and Threat Analysis
• Environmental Analysis
• Company Resources
• Marketing Objectives
• Marketing Strategies to include:
o Target market (Intended) A target market is group of persons/companies for whom a
firm creates and maintains a Marketing Mix that specifically fits the needs and
preferences of that group. Does the company have the resources to create the
appropriate MM and does it meet the company's objectives.
o Develop a marketing mix-how to reach the target market. The marketing mix is
designed around the buying motive-emphasizing the marketing concept. The
marketing environment effects the marketing mix, which is only controllable to a
certain extent (the MM). Before developing the MM, need to determine the needs of
the target market.
• Financial Projections
• Controls and Evaluations

Marketing control process consists of establishing performance standards, evaluating the actual
performance by comparing it with the actual standards, and reducing the difference between the
desired and actual performance.

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Six Environmental Forces

• Societal
• Regulatory
o Political
o Legal
o Regulatory
• Economic
Business life cycles:
• Prosperity
• Recession
• Depression
• Recovery
• Competitive
• Technology
• Natural

What is Consumer Buying Behavior?

Definition of Buying Behavior:

Buying Behavior is the decision processes and acts of people involved in buying and using products.
Need to understand:
• why consumers make the purchases that they make?
• what factors influence consumer purchases?
• the changing factors in our society.
Consumer Buying Behavior refers to the buying behavior of the ultimate consumer. A firm needs to
analyze buying behavior for:
• Buyers reactions to a firms marketing strategy has a great impact on the firms success.
• The marketing concept stresses that a firm should create a Marketing Mix (MM) that satisfies
(gives utility to) customers, therefore need to analyze the what, where, when and how
consumers buy.
• Marketers can better predict how consumers will respond to marketing strategies.

Developing a Target Market Strategy

Developing a target market strategy has three phases:
1. Analyzing consumer demand
2. Targeting the market(s)
o undifferentiated
o concentrated
o multisegmented
3. Developing the marketing strategy

Marketing management is a business discipline focused on the practical application of marketing

techniques and the management of a firm's marketing resources and activities. Marketing managers
are often responsible for influencing the level, timing, and composition of customer demand in a
manner that will achieve the company's objectives.

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