Understanding Marketing: From Concepts to Strategies

Topic 1: The Marketing Function

What is Marketing?

Marketing is the process of identifying, understanding, and meeting customer and societal needs by creating, communicating, delivering, and exchanging value.

Key Concepts:

• Need: A basic requirement for survival (e.g., food, shelter).
• Want: A specific desire for a product or service that can satisfy a need.
• Demand: Wants backed by the ability and willingness to pay.
• Product: Any tradable offering that satisfies a need, including tangible goods, services, ideas, and experiences.
• Market: All potential buyers who share a need or desire and have the ability to exchange value.
• Consumer Insight: A non-obvious understanding about customers that can change their behavior for mutual benefit.

Evolution of Marketing

1. Product Orientation (1.0): Focus on production efficiency and product availability. Unidirectional communication.
2. Consumer Orientation (2.0): Emphasis on understanding and meeting customer needs. Dynamic and bidirectional communication.
3. Values and Society (3.0): Businesses consider their impact on society and the environment. Multidirectional and interactive communication.
4. Social Values (4.0): Focus on social responsibility, sustainability, and creating a better world. Omnidirectional communication.

The 3Cs of Marketing

• Corporation: The company itself and its internal stakeholders.
• Competitors: Companies offering similar products or services.
• Customers: The target audience for the company's offerings.

Types of Marketing

• Business Marketing
• Political Marketing
• Public Sector Marketing
• NGO Marketing
• Individual and Social Marketing

Marketing Strategies

• Desmarketing: Reducing the demand for a product (e.g., tobacco).
• Antimarketing: Using reverse psychological techniques to discourage consumption (e.g., campaigns against gender-based violence).

Market Expansion Strategies

• Market Penetration: Selling more existing products to existing markets.
• Product Development: Introducing new products to existing markets.
• Market Development: Entering new markets with existing products.
• Diversification: Entering new markets with new products.

Modern Marketing Orientations

• Product Orientation
• Marketing Orientation
• Experience Orientation
• Trust Orientation

The Marketing Mix (4Ps)

• Product: The good or service offered to meet a need.
• Price: The cost to the consumer for acquiring the product.
• Place: Distribution channels and locations where the product is sold.
• Promotion: Marketing activities to communicate value and persuade purchase.

PESTEL Analysis

A framework for analyzing the macro-environmental factors affecting a business:

• Political: Government policies, regulations, and stability.
• Economic: Inflation, unemployment, economic growth, and income levels.
• Social: Demographics, lifestyles, values, and cultural trends.
• Technological: Innovation, automation, and technological advancements.
• Environmental: Climate change, sustainability, and resource availability.
• Legal: Laws, regulations, and ethical considerations.

Marketing Functions

• Planning
• Implementation
• Control
• Market Research
• Logistics

Strategy

A plan of action designed to achieve a long-term goal.

Sustained Competitive Advantage

Ways to produce a good or service of equal value at a lower cost or in a more desirable fashion, providing a long-term advantage over competitors.

Topic 2: The Market

What is a Market?

A market consists of people or organizations with needs and wants, the ability to purchase, and the willingness to spend money on goods and services.

Types of Competitors

• Direct Competitors: Offer similar products or services in the same industry.
• Indirect Competitors: Offer different products or services but compete for the same customer spending.
• Substitute Competitors: Offer products or services from a different category that can satisfy the same need.

Consumer Behavior

The study of how individuals or groups select, purchase, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and wants.

Consumer Buying Process

1. Problem Recognition: Perceiving a need or want.
2. Information Gathering: Seeking information about potential solutions.
3. Evaluating Alternatives: Comparing different products or brands.
4. Purchase: Making the buying decision.
5. Post-Purchase Behavior: Evaluating satisfaction and potential cognitive dissonance.

Consumer Journey

1. Awareness: Becoming aware of a product or brand.
2. Consideration: Evaluating the product or brand as a potential solution.
3. Purchase: Making the buying decision.
4. Retention: Continuing to use the product or brand.
5. Advocacy: Recommending the product or brand to others.

Factors Influencing Consumer Behavior

• Economic Factors: Income, disposable income, and purchasing power.
• Personal Factors: Age, occupation, lifestyle, values, and personality.
• Psychological Factors: Motivation, perception, learning, and beliefs.
• Cultural/Social Factors: Culture, subculture, social class, reference groups, and family influences.

The STP Process

A strategic marketing framework for identifying and targeting specific customer segments:

Segmentation

Dividing a market into distinct groups of buyers with similar needs, characteristics, or behaviors.

• Geographic Segmentation: Based on location, region, or climate.
• Demographic Segmentation: Based on age, gender, income, education, or occupation.
• Psychographic Segmentation: Based on lifestyle, personality, values, or interests.
• Behavioral Segmentation: Based on purchase behavior, usage rate, or brand loyalty.

Useful Segment Criteria

• Measurable: Size, purchasing power, and characteristics can be measured.
• Differentiable: Segments are distinct and respond differently to marketing efforts.
• Substantial: Segments are large and profitable enough to serve.
• Accessible: Segments can be effectively reached and served.
• Actionable: Effective marketing programs can be designed for each segment.

Emerging Consumer Segments

• YUPPIE: Young Urban Professional
• BOBO: Bourgeois Bohemian
• NYLON: New York-London
• LAT: Living Apart Together
• DINKY: Double Income No Kids
• LOHAS: Lifestyles of Health and Sustainability

Targeting

Evaluating market segments and selecting one or more to target with marketing efforts.

• Full Market Coverage: Targeting the entire market with a single marketing mix.
• Segment Concentration: Focusing on one or a few specific segments.
• Specialization Policy: Specializing in a particular product or market niche.

Positioning

Developing a unique selling proposition and creating a distinct image and identity for a product or brand in the minds of target customers.

Positioning involves choosing one or two key areas to concentrate on and outshine competitors.