Lecture 1

Marketing: Textbook A social and managerial process by which individuals and groups obtain what they need and want through creating and
exchanging products and value with others
AMA Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that
have value for customers, clients, partners, and society at large.
Customer value: The difference between the benefits the customer gains from having access to or owning and using an offering, and the costs of
obtaining it.
FUNCTIONAL/INSTRUMENTAL EXPERIENTAL/HEDONIC SYMBOLIC/EXPRESSIVE COST/SACRAFICE
Correct/Accurate
attribute:
features, functions, attributes,
or characteristics (such as
aesthetics, quality,
customization, or creativity)
Appropriate performances:
(such as reliability,
performance quality, or
servicesupport outcomes)
Appropriate outcomes:
(such as strategic value,
effectiveness, operational
benets, and environmental
benets)
Sensory Value:
(such as aesthetics, ambiance,
aromas, feel/tone)
Emotional Value: (such as
pleasure/enjoyment, play/fun,
excitement, adventure, and
humor)
Social/Relational Value:
(such as relational
or network benets,
bonding/connectedness,
personal interaction,
developing trust or
commitment, and
responsiveness)
Epistemic Value:
(such as curiosity, novelty,
knowledge, or fantasy)

Self-Identity Worth: (e.g.,
buying a new outt) or in
giving (e.g., giving
diamonds to a spouse, as
suggested by DeBeers)
Personal Meaning: (such as
music, comfort foods, and
vacations,
among many others)
Self-Expression:
Products such as Calvin Klein
fragrances, Roots clothes, a
Volkswagen Beetle, or Body
Shop lotions allow consumers
to reect or express their
personalities, tastes, and
values.
Social Meaning:
BMW, Rolex, and Lee Valley
Tools are purchased
because of their prestige,
status, or image
Conditional Meaning:
(such as roses on Valentines
Day)
Economic Costs:
minimizing economic costs,
such as product
price, operating costs,
switching costs, and
opportunity costs.
Psychological Costs:
relational costs include
cognitive difculty/ stress,
conict, search costs,
learning costs, psychological
switching costs, and
psychological relationship
costs, such as attachment.
Personal Investment:
the time, effort, and energy
consumers devote to the
purchase and consumption
process.
Risk:
(personal risk, operational
risk, nancial risk, or
strategic risk) warranties,
refunds, exchange.
Lecture 2
The marketing philosophies:
The production philosophy: holds that customers will favour products that are available and highly affordable.
The product philosophy: is the idea that consumers favour products that offer the most quality, performance and features, and that the
organisations should therefore devote its energy to making continuous product improvements; a detailed version of the new-product idea stated in
meaningful consumer terms.
The selling philosophy: is the idea that consumers wont buy enough of the organisations products unless the organisation undertakes a
larger scale selling and promotion effort.
The marketing philosophy: focus on the customer provide what they want
The societal marketing philosophy: focus on impact on all stakeholders, company, customer, society
Marketing terms:
Needs: States of felt deprivation (physical, social, self expression)
Wants: The form taken by human needs as they are shaped by culture and individual personality.
Demands: Human wants that are backed by buying power.

Market (place): A market is the set of all actual and potential buyers of a product. They share a particular need or want that can be satisfied
through exchange.
Also:
- name of a context clothing, DVD market
- total group of people baby boomers
- place where people shop
Offer / Product: The thing that a provider makes available for exchange.

Goods
Services
Places
Ideas and Ideologies
People
Organisations
Satisfaction (delight): The customers conscious evaluation of a product or service feature, or of the product or service itself.
The extent to which a products perceived performance matches a buyers expectations.
What influences whether a customer is satisfied or not?
- how well they think the product or service performed
- the customers past buying experience
- the information and promises made by the organisation
- the price vs the good

Exchange: The act of obtaining a desired object from someone by offering something in return
Restricted
Simple two parties, reciprocal
Generalised
More complex three parties
Complex
Multiple parties, independent
Lecture 3
The marketing environment: The actors and forces outside marketing that affect marketing managements ability to develop and maintain successful
transactions with its target customers
Two major components:
1. Microenvironment
The forces close to the organisation that affect its ability to serve its customers:
the organisation
market channel firms
customer markets
competitors and publics





COMPANY
Business portfolio
Capital investments and
resource allocation
Corporate culture
Corporate structure

Product/market portfolio
Resource allocation
Product-markets
Business culture
Strategic cost management
Brand Management
Markets
Products and services
Profit-yielding strategies
Product management
Profit improvement
MARKETING INTERMEDIARIES
Marketing intermediaries help an organisation to promote, sell and distribute its goods to final buyers.
They include:
Resellers / distributors / retailers: distribution channel firms that help the org. find customers or makes sales to them.
Physical distribution firms: Warehouse, transportation and other firms that help the org. stock and move goods.
Marketing services agencies: Advertising agencies, media firms help the org. to target and promote their products.
Financial intermediaries: Banks, credit companies, insurance comapnies help finance transactions or insure against the risk
associated with buying and selling goods.

CUSTOMERS the makreting organisation can operate in five types of customer markets
1. Consumer markets*: individuals and households that buy goods and services for personal or household consumption
2. Business markets*: organsiation that buy goods and services for further processeing or for use in their production process
3. Reseller markets: organisations that buy goods and services in order to resell them at a profit
4. Government markets*: government agencies that buy goods and services in order to produce public services or transfer these goods and
services to others who need them.
5. International markets: overseas buyers, including consumers, producers, resellers and governments. Each market has special
characteristics that call for careful study by the seller.
COMPETITORS
- An alternative provider of the offer sought by the market
- Can be close and have immediate impact on customer or may be anyone trying to get the $ out of the customers hand
PUBLIC(stakeholders)
A public is any group that has an actual or potential interest in, or impact on, an organisations ability to achieve its objectives.
Financial publics: influence the organisations ability to obtain funds. (banks, investment houses and shareholders)
Media publics: are those that carry news, features and editorial opinions. (newspapers, magazines, radio and televison stations)
Government publics: management must take into account government requirements. (issues of safety, truthful ads, resellers rights)
Citizen-action publics: org. marketing decisions may be questioned by consumer groups, environmental, minority and public interst.
Local publics: (neighbourhood residents and community protection organisations) attends meetings, answer questions to community
General publics: must be concerned with the general publics attitude towards its products, services and activities. (the org image)
Internal publics: (employees, volunteers, managers, board of directors) newsletters are used to inform and motivate.
Another view of the microenvironment
Porters Five Forces
Often, however, managers define competition too narrowly, as if it occurred only among todays direct competitors. Yet competition for profits goes
beyond established industry rivals to include four other competitive forces as
well: customers, suppliers, potential entrants, and substitute products. The
extended rivalry that results from all five forces defines an industrys structure
and shapes the nature of competitive interaction within an industry.
2. Macroenvironment
The larger societal forces (trends) that affect the whole micro-
environment: PESTN
Political/legal: Laws, government agencies and pressure
groups that influence and limit various organisations and
individuals in a given society
Legislation regulating business: The federal Trade
Practices Act protects consumers against unfair
business practices, and also protects the interests of
society against unrestrained business behaviour.
Increased emphasis on ethics and socially
responsible action: Business is also governed by
social codes and rules of professional ethics.
Economic: Factors that affect consumer buying power and
spending patterns.
Changes in income: With increaseing inequality in incomes,
value marketing has become the foal for many marketers
looking for ways to offer todays more financially cautious buyers greater value.
Changes in consumer spending pattern: Spending less on one thing (clothes and footwear) and more on another
(medical care and health expenses)
Social/cultural/demographic: Demography is the study of human populations in terms of size, density, location, age, sex, race,
occupation, and other statistics
Changing age structure of population: Australias population has grown from 1.2 to 1.3 %
Changing household: Working women and mothers have increased. People are marrying later (27-29 year olds)
Geographic shift in population: Moving between states, movement from rural to urban areas, city to suburbs.
Better educated and more white-collar population: Women with higher degrees and main field 15-64 y/o commerce
Increased ethnic diversity: overseas migration
Technological: Forces that affect new technologies, creating new product and market opportunities
Fast pace of technological change: Organisations who dont keep up with technological change will find their products out of date
High R&D budget and increased regulations: banning of unsafe products
Natural: Natural resources that are needed as inputs by marketers or which are affected by marketing activities
shortages of raw materials
increased cost of energy
increased pollution
government intervention in natural resource management
Lecture 4
A marketing information system refers to the people, equipment and procedures to gather, sort, analyse, evaluate and distribute needed, timely and
accurate information to marketing decision makers.
- Marketers need information about anything that affects their relationship with their customers.
- Essentially they need to know and understand the marketing environment (Week 3).
- As this is constantly changing the generation and analysis of
information is a constant process.
ASSESSING INFORMATION NEEDS: The organisation begins by
interviewing their managers and what information they need. The
organisation must decide whether the benefits of having an item of
information are worth the costs of providing it, both value and cost are
often hard to assess.
what types of info do you need to make decisions?
what types of special studies do you periodically request?

DEVELOPING INFORMATION:
Internal records: Information gathered from sources within the company to evaluate marketing performance and to detect marketing problems
and opportunities
Information through sales and accounting systems
Product, brand, territory sales and cost data
Sales person and channel performance data
Production performance data
Complaints and customer response data
Marketing intelligence: The systematic collection and analysis of publicly available information about competitors and developments in the
marketing environment
Actors in the microenvironment
Government reports
Trade association publications and shared data
Magazines, newspapers and books
Company reports, websites
Syndicated multi-client market research studies
Store audits
Warehouse withdrawal data
Media usage
Marketing research: The function that links the consumer, customer and public to the marketer through information used to:
identify and define marketing opportunities and problems
generate, refine and evaluate marketing actions
monitor marketing performance
improve understanding of the marketing process
Information Analysis: All data needs to be turned into usable information on which marketing decisions can be made
Analysed by managers or specific analysts in the organisation
This process may include advanced statistical analysis to help learn more about relationships within a data set and
their statistical reliability.
This is usually done by applying mathematical models that answer questions such as what if? and which is best?
Distributing information: Managers must receive information for making decisions in good time
Day to day tactical decisions (intranets and extranets)
Marketing strategy and planning decisions
The right information, at the right time, in the right format, to the right people
The marketing research process: The function that links the consumer, customer and public to the marketer through information used to:
identify and define marketing opportunities and problems
generate, refine and evaluate marketing actions
monitor marketing performance
improve understanding of the marketing process







The marketing research process:
1. Define the problem and research objectives
2. Developing research plan for collecting information
3. Implementing the research plan collecting and analysing data
4. Interpreting and reporting the findings






Value component Market research applications
Understanding Value Market description, customer value analysis; usage and
awareness studies, critical incident studies, market
share, brand image and positioning; monitoring of
community attitudes
Configuring Value New product research, market feasibility studies, brand
extension studies, usability research
Communicating Value Brand health, audience research (TV, radio, newspapers,
magazines, internet); copy testing, advertising testing,
advertising tracking, PR effectiveness, integrated
market communication research
Delivering Value Retail research, research among channel partners, staff
motivation research
2. Develop the plan / design the research
Secondary data
consists of information that already exists
Primary data
consists of information collected for the current research purpose.
Start with secondary data!
Proceed to collection of primary data only when secondary data
sources exhausted or yield marginal returns

Focus Groups
- Very common MR technique
- Definition: An interview conducted by a trained moderator among a small group
of respondents in an unstructured and natural manner
Examples:
Groups to test reactions to new brand logo
Groups to help understand issues in choice of interior features of motor vehicles
Groups to explore customers moments of truth with Financial Services provider
Groups to evaluate a TV commercial (message not impact)
Depth Interviews
> Intensive, one-on-one discussion between researcher & respondent
Typically 30-90 minutes
Semi-structured
Aims at insight
> Application areas
Business to Business research
When access to groups is limited
When group discussions might inhibit responses eg
research into condom or tampon use and experiences
> Selection of respondents
Key informants or judgment sample
Contact methods
> Information can be collected by mail, phone, personal
interview or online.

Implementing and interpreting
Implementing the research plan
After gathering the data, the researcher now
implements the plan. This involves collecting,
processing and analysing the information and
findings.
Interpreting and reporting findings
The researcher must now interpret the findings, draw
conclusions and report them to management.
The researcher should present the major
findings that are useful for the main decisions faced
by management.


Public Policy and Ethics in Marketing Research
When properly used, marketing research benefits both he sponsoring company and its customers. It helps the
company to make better marketing decisions, which in turn results in products and services that meet the needs of consumer more effectively.
However, when misused, marketing research can also annoy customers. Examples include:
Intrusions on consumer privacy: canbe find $1.1 million if breached (registered as do not call)
Misuse of research findings: dont stretch the truth when advertising findings
An increase in Codes of Practice: AMSRO has developed a code that governs the handling of information about the subjects of
research for all AMSRO member organisations.

Market research is required to solve specific problems faced by an organisation
Problems can be solved through the application of qualitative and quantitative research projects
The MR process guides the development and implementation of market research projects
MR project can only be successful if the right questions are asked, to the right people, using the right methods


Lecture 5

Psychological characteristics Personal characteristics Cultural characteristics Social characteristics
Motivation: A motive or drive is a need
that is sufficiently pressing to direct the
person to seek satisfaction.
Someone who buys a BMW cause they like
the feel, could be because they want to
show off success but at a deeper level = to
feel young and independent again.
Perception: The process by which people
select, organise and interpret information
to form a meaningful picture of the world.
- selected exposure, distortion and
retention.
Learning: Changes in an individuals
behaviour arising from experience.
Generalising from past experiences,
discriminating against brands, motivating
cues.
Beliefs and attitudes: A descriptive
thought or conviction that a person holds
about something.
Attitude a persons relatively consistent
evaluations, feelings and tendencies
towards an object or idea.
Personality and self concept:
Personality refers to the unique
psychological characteristics that lead to
relatively consistent and lasting responses
to ones own environment.
Coffee high, sociability customers.

Occupation: Manual workers
tend to buy more work clothes
and different sort of cars whereas
those involved in information-
intensive industries tend to buy
more business shirts and ties and
PDAs.
Economic situation: Discount
airlines such as Jet star and Rolex
for elegant classic watches.
Culture: People change their
goods and services they buy over
their lifetimes.
Tastes in food, furniture and
recreation are often age related.




Culture: Culture is the set of
basic values, perceptions wants
and behaviours learned by a
member of society from family
and other important institutions.
Growing up in a different
neighbourhood.
Sub culture: A group of people
with share valued systems based
on common and life experiences
and situations. Chinese, Italians.
Social class: Relatively
permanent and ordered divisions
in a society whose members
share similar values, interests
and behaviours.
Family and household:
Influenced by family members,
or whether they have children or
disposable income.
Roles and status: Belonging to
family, clubs, organisations.
Each role carries a status
reflecting the general esteem
given to it by society.
Groups: Reference groups
groups that have direct (face to
face) or indirect influence on a
persons attitudes or behaviour.
Membership groups groups
that have a direct influence on a
persons behaviour and to which
a person belongs.
Aspirational groups groups
which an individual wishes to
belong. (football team)



Buyer decision process:


PROBLEM RECOGNITION

Sensing a difference between actual state and desired state

e.g. hunger

e.g. marketing communication
INFORMATION SEARCH
cial sources (marketing-driven)
Inform the buyer

Legitimise or evaluate products










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ALTERNATIVES
tion to help make the purchase decision

Individual consumer
Buying situation
and these processes, then they may be
able to influence the buyers evaluation
PURCHASE DECISION
ustomer buys the most preferred brand/alternative
Product category, Brand, Reseller, Timing, Quantity

Attitudes of others OR Unexpected situational factors
POST PURCHASE BEHAVIOUR
dissatisfaction

-purchase conflict) can occur
-of-mouth communication is powerful
BASES FOR SEGMENTATION

Industry, company size, location

Technology, user status, customer capabilities

Organisation, power structure, existing relationships,
policies, criteria

Urgency, application, order size
teristics
Of the buyer(s)

Lecture 6
STEPS IN SEGMENTATION, TARGETING AND POSITIONING.
1.Market segmentation:
Dividing a market in to distinct groups of buyers with different needs,
characteristics or behaviour who might require separate products or
marketing mixes
The process of classifying customers into groups with different needs,
characteristics or behaviour
A market segment is a group of potential buyers who share some
similarities and will likely respond in a similar way to given offer of value
Artificial grouping
Consumer segmentation
Business or industrial segmentation




Four main groups of variables can be identified:
Geographic calls for dividing the market into diffferent geographical units such as:
nations, regions, states, municipalities, cities or neighbourhoods.
Demographic calls for dividing the market into groups based on demographic variables
such as:
age, sex, family size, family life cycle, income, occupation, education, religion
and nationality.
Psychographic calls for dividing the market into different groups based on:
social class, lifestyle or personality characteristics.
Behavioural calls for dividing the market into groups based on consumers:
benefits sought; knowledge of, attitude towards, uses for and responses to a
product
Effective Segments
Effective segments must have the following characteristics
Measurability
Can the market segments be measured?
Accessibility
Are the segments accessible to the company?
Substantiality
Are the segments of an economic size?
Actionability
Is the basis of segmentation useful to the company?
2. Target positioning
esulted from steps one and two need to be evaluated and the company needs to select one or more segments with which to
exchange value
A market target refers to evaluating each market segments attractiveness and selecting one or more of the market segments to enter.

Evaluating market segments (3 to consider)
(i) segment size and growth: The company must first collect and analyse data on current dollar sales, projected sales growth and study rates
and expected profit margins for various segments. Some companies will want to target segments with large current sales, a high growth rate and a
high profit margin. Avoiding direct competition by choosing smaller and less competitive companies (ING)
(ii) segment structural attractiveness: The company must examine several major structural factors that affect long-run segment
attractiveness. A company is less attractive if it contains many strong competitors. Less attractive = if theres potential product substitutes. The
relative power of buyers (possess strong increasing bargaining power) relative to sellers, they will try to force prices down, demand more quality.
The power of suppliers of raw materials, equipment, labour and services in the segment are powerful enough to raise or reduce quality or quantity
of ordered goods and services.
(iii) company objectives and resources: If the company possesses the required strengths, this isnt enough. It needs to employ skills and
resources superior to those of the competition.

Selecting market coverage strategies for segments:
1. Undifferentiated marketing: A market coverage strategy in which a company might decide to ignore market segment differences and go
after the whole market with one market offer.
2. Differentiated marketing: A company decides to target several market segments and designs separate offers for each.
3. Concentrated marketing: A company goes after a large share of one or a few submarkets.


2: Profiling The Segment

are common to particular groups
demographic and geographic descriptors
before describe
3. Positioning Arranging for a product to occupy a clear, distinctive and desirable place relative to competing products in the minds of target consumers;
formulating a competitive positioning for a product and creating a detailed marketing mix

The way the product is defined by consumers on important attributes the place the product occupies in consumers minds relative to
competing products
ffer from its competitors on attributes/benefits considered important by a target
A market positioning refers to setting the competitive positioning for the product and creating a detailed marketing mix.
Process of positioning
hat the brand and its competitors currently occupy in the minds of the customers
the position that perfectly matches the target segments ideal attributes

Repositioning: change existing perceptions, attitudes and beliefs

Positioning statement: a clear and precise expression of how the brand is to be communicated to the market
Positioning strategies:
- usage occasions (Gatorade summer/winter)
- benefits they offer (toothpaste sensitive teeth)
- against a competitor (Hertz and Avis)
- away from competitors (comparing against other competitors in ads)
- product classes (Dove hand soap = bath oils)
tage: An advantage over competitors gained by offering consumers greater value (Kotler, 2010, p.284)
Product differentiation
Performance (safety car features), style, design, durability, etc.
Services differentiation
Delivery(faster), installation, repair, training, etc.
Personnel differentiation
Employees competence(degrees), skills, knowledge, etc.
Image differentiation
Company image, brand image(apple and QANTAS), etc.
Differences thats worth establishing to the extent that it satisfies the following criteria:
Important: The difference delivers a highly valued benefit to target buyers
Distinctive: Competitors dont offer the difference or, the company can offer it in a more distinctive way
Superior: The difference is superior to other ways that customers might obtain the same benefit
Communicable: The difference is communicable and visible to buyers
Pre-emptive: Competitors cannot easily copy the difference
Affordable: Buyers can afford to pay for the difference
Profitable: The company can introduce the difference profitability

is often required due to changes in the macro and micro environment
Customer needs and fashions
Competitor repositioning
Advances in technology
Changes in government regulations
Competitors are perceived as too similar and use the same basic positioning strategy
The marketing mix
(McCarthy, 1960)
Product
Price
Place
Promotion
der social, organisational,
competitive, and economic issues also of concern to the discipline.
The extended marketing mix

The environment in which the service is assembled and where the firm and customer interact

All human actors who play a part (employees and other customers)

Procedure, mechanisms and flow of activities





Lecture 7
What is a product?
- The thing (good or service or idea or person) that a provider makes available for exchange
Anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a need or a want
Goods, Services, Places, Ideas and Ideologies, People, Events, Causes and Experiences
Challenges of services

Cannot be seen, tasted, felt, heard, smelled before being bought

Services cannot be separated from providers

Services are more variable than products as they involve interactions between different staff and customers

Cannot be stored for later sale or use
SOLUTION: 7 Ps
Three levels of a product
Core Product
-solving services or benefits that consumers are really buying when they obtain a product

tivation to consume the offer

QANTAS: Time-critical transport
Actual Product
rand name, packaging and other attributes that combine to deliver core product benefits

Product quality
Ability of the product to perform its functions: durability, reliability, precision, ease of operation, etc.
Product features
A competitive tool for differentiating the companys product from competitors products
Product design
Style and function, attractiveness, useability, economical to produce and distribute
QANTAS: schedules, inflight services, safety record, meals, seat allocation, duty free shopping, flight booking system
Packaging and labelling
aging decisions: Designing and producing the container or wrapper for the product
Primary package, secondary package, shipping package

To contain and protect
To communicate to customers
Attract attention
Describe the product
Meet legal requirements

Brand
A brand is a perception formed from:
Experiences
Communication messages
e to the customer
short-cut

combination of these, intended to identify the goods or services of one seller or group of sellers and to
differentiate them from those of competitors

part of a brand that can be enunciated, e.g., Special-K, Soho, Ford Falcon, Coca-Cola, Mercedes Benz

part of the brand that can be seen but not enunciated, e.g. Nike logo, McDonalds logo

the brand name or brand mark that the seller has exclusive legal right to use, eg. Coca-cola has trade marked its brand name and the special
style of writing (brand mark)

the legal name of an organisation rather than a specific product, eg. The Coca-Cola Company, Nike, Inc., McDonalds Corporation
Augmented Product
additional consumer services and benefits built around the core and actual products
QANTAS: Qantas club, priority baggage, tours, holiday packages, frequent flyer scheme, fly drive packages, Hertz car rental booking
Support services
y part of the augmented product

Installation, Delivery, Advice, Warranties, Repair, Complaint handling


Product management
Classification of consumer products

Frequently bought, with minimum of buying effort (e.g. FMCG)

Buying usually involves comparison of alternatives (e.g. clothing, furniture)

Unique product characteristics -> special purchase effort (e.g. cars)

Customer has little knowledge or interest (e.g. life insurance)
Classification of industrial products (goods bought by individuals and organisations for further processing or for use in conducting a business)

Products which become part of the buyers product (e.g. raw materials farm products and natural products and manufactured materials and
parts component materials such as iron, yarn, cement)

Products which aid in the buyers manufacturing or service operations (e.g. buildings, machinery, office equipment)

Industrial products which do not enter the buyers finished product (e.g. electricity, paper supplies, legal services)
Product hierarchy
ry: a group of products with functional coherence
duct line: a group of products within a product class that are
closely related
within a product line
Also known as a stockkeeping unit (sku)
rtment): The set of all product lines and items
that an organisation has
New products

New to the world
New category entries
Additions to product lines
Product improvements
Repositioning
Variations of the above
product development
The development of original products, product
improvements, product modifications and new brands through the
companys own R&D efforts
















Lecture 8
Price
r using the product or
service
The many faces of price:



Factors affecting price:
Internal
Objectives and strategy

Survival
Profit maximisation
Market share
Product quality

The overall marketing mix should reflect the desired positioning
Price is only one component of the mix, and must be consistent with the other components
Costs


Do not vary with quantity produced or sold
Larger quantities will each unit will then carry a lower share of the fixed costs

Vary directly with the level of production

Sum of fixed and variable, for any given quantity
External
Customer perceptions
and set the upper limit (price ceiling)
-oriented pricing involves understanding the value the customer places on a product, then setting the price accordingly
Market types

Commodity product, with many buyers and sellers

Many buyers and sellers, with differentiated products across different prices

A few sellers who are sensitive to each others pricing

One seller
Factors that affect price sensitivity
y of the product to the consumer
f substitutes
stige or exclusiveness of the product
to income
rty
in conjunction with previously purchased assets
Other external factors to consider




ACCC and Competition and Consumer Act
Pricing strategies
Cost-plus pricing
a standard mark-up to the cost of the product

-Up
Break-even analysis
ffer that you have to sell at a
given price in order to cover all of your costs, both fixed and variable
-even volume = Fixed cost / Unit sell price unit variable cost


Economic Non-economic
Rent Psychological
Salary Personal investment
Fee Risk
Interest
Value-based pricing
rather than on the sellers cost
enhance perceived value
in the customers minds, then price is set to match
this value
Other pricing approaches
-based
Economic-value pricing
Going-rate pricing
Sealed bid / tenders
-based
Seller paid on basis of performance of
offer















Product mix pricing strategies



-product pricing
-bundle pricing
Price adjustment strategies
allowances












Channel organisation

A unified network of producers, wholesalers
and retailers

A network of two or more companies at one
level working together, e.g. Yarra Valley Wine
Growers Association

Multi-channel distribution systems in which a
firm sets up two or more marketing channels to
reach one or more segments
Channel management

Selecting channel members
Based on business experience,
other lines carried, growth,
profitability, cooperation, reputation
Motivating channel members
Gaining cooperation e.g. through
higher/lower margins, cooperative
advertising, allowances, contests
Evaluating channel members
Monitoring performance of
intermediaries

Network of handling and storage facilities to hold goods closer to
customers

Ownership: company-owned or outsourced?
Number of warehouses: single (centralised) or multiple?
Location of warehouses?
arehouses, closer to customers:
Increases customer service levels; but also
Increases company costs

Physical delivery of goods (value)
d on characteristics of customers, product, and mode):
Water, Rail, Road, Air
Other (e.g. pipeline, people, electronic)
aster, more reliable transport:
Increases customer service levels;
BUT ALSO Increases company costs

Reducing uncertainty about all of the above!
reduce uncertainty:
Inventory (e.g. forecasting customer demand)
Warehousing (e.g. identifying optimum locations)
Transportation (e.g. planning optimum loads)
Lecture 9
Distribution channels
What are marketing channels?
organisations involved in the process of making a product or service available to users Kotler, 2010, p.426
makes a product or provides a service with the end customer for that
product or service
Why use intermediaries?


Contacts
Experience
Specialisation
Scale of operations

Channel functions





bution


Vertical marketing network
unified network either one channel member owns the others, has contracts with
them, or wields so much power that they all cooperate
= success of all firms
Channel design



Types of intermediaries
For example, company sales force, manufacturers agency,
industrial distributors
Number of intermediaries
Intensive distribution (as many outlets as possible)
Selective distribution
Exclusive distribution (limited number of outlets)

Criteria; economic, control, adaptive
Logistics defined
he strategic management of the flow of materials and
associated information between suppliers and customers with
the aim of maximising customer value in the long term at the
lowest possible cost
efficient, cost-effective flow and storage of material, in-process
inventory, finished goods and related information from point of
origin to point of consumption for the purpose of conforming to
customer requirements Kotler, 2007, p.530.
How does logistics add value?

Location, quantity, time, process, etc.

Goods held to satisfy customer demand

Production economies
Seasonality
Production process
Contingencies
Transport savings

Increases customer service levels; but also
Increases company costs



Message Execution
t
Media Vehicle
Marketing communication tool
(next hour)
Specific Media decisions
Reach
Frequency
Evaluating the Campaign

Brand Recall
Product Recall
Sales
Market Share
tools are easier to evaluate than others

Public Relations and Publicity

Building good relations with the companys
various publics by obtaining favourable
publicity, building up a good corporate image
and handling or heading off unfavourable
rumours
Includes press releases, product publicity,
corporate communications, lobbying and
counselling

Activities to promote a company or its
products by planting news about it in media
not paid for by the sponsor

Retailing
al customer (consumer) for their own personal or household use

Store retailers
Non-store retailers
Retail organisations
Retailing decisions
tion, targeting and positioning

Offer assortment
Services and extended offerings
Atmosphere
The retail experience
Branding
Pricing levels

Advertising and other promotion methods
Salespeople

Lecture 10
Integrated Marketing Communications
consistent and compelling
message about the organisation and its products.

Budget Decisions

All-you-can-afford
Percentage of Sales
Competitive-Parity
Objective and Task
g Budget Strategy
Product Life Cycle stage
Market Share
Competition and Clutter
Advertising Frequency
Product Differentiation

Message Strategy

Positioning statement as a big idea
Unique selling proposition (USP) the key fact, feature
or benefit that is used to drive differentiation in the mind of the consumer
Appeals
Rational
Emotional, Moral

Factors Affecting the Marketing Communications Mix


strategy


Tools Used to Communicate Messages
communications
campaign will employ a
combination of the following tools depending on their objectives and the target audience
Advertising, Public relations / publicity, Direct marketing , Sales promotion, Personal
selling, Sponsorships, Social media
Advertising
-personal communication by an identified sponsor
make media and vehicle choices
Broadcast, Print, Outdoor, Interactive
Direct Response
create a direct response from customers
Retailing trends

Fuel / convenience (e.g. BP)
Supermarket / fuel (e.g. Safeway, Coles)
Department / pharmacy

Category killers
Supercentres
-store retailing growth
Online
Direct marketing

RFID
Payment methods
Points of Differentiation for IMC tools

Can differ based on reach, medium and
intermediaries used, eg. advertising agencies

Some tools achieve higher exposure

People pay more attention to virals,
permission marketing, PR/publicity, personal
selling
veness
One-way communication more difficult than
two way
Sales Promotion
imary objective of creating an
immediate sale
ools are:
Samples in-store, through mail, in magazines
Price-offs short term
Refunds/rebates on proof of purchase
Premiums free gifts eg glass with purchase of whiskey
Contests/sweepstakes/games delayed entry vs immediate
gratification
Bonus packs 20% extra free
POP in-store displays to encourage purchase
Personal Selling
conversation with one or more prospective purchasers for the purpose of making sales
The role of personal selling varies by types of business and industry, the nature of the product or service, and the business strategy e.g. retail
selling vs. selling consulting services.
The salesperson is often seen as the company in the eyes of the customers and prospects.
The process of personal selling may involve:
- Generating leads - qualifying leads - making sales calls
negotiating and closing the sale - following-up to build and maintain the customer relationship
Sponsorships
a company, product or brands visibility by associating it with
something the market segment views as positive
Events and sponsorships are good relationship building activities that can
emotionally bind customers to a company or brand.

People with cultural, sporting or educational importance
Cultural and sporting events
Charities and causes
Changing Face of Marketing Communications




- Product placement
Lecture 11
Global issues in marketing: (1) GLOBALISATION
International Marketing

Production, Technology, Capital, People, Information, Business
competition in most industries
or Australian businesses to go abroad
Major decisions in International Marketing
1. Looking at the global marketing environment
2. Deciding whether to go international
3. Deciding which markets to enter
4. Deciding how to enter the market
5. Deciding on the global marketing program
6. Deciding on the global marketing organisation
The global marketing environment
Need to understand trends in the macro environment
Deciding whether to go international
)

Car manufacturing, Retail, IT-based industries
Deciding which markets to enter



High-level strategic decisions:
Incremental or simultaneous entry?
Concentrated or diversified?
Deciding on the global marketing program

The world as a single market

The world as a portfolio of national opportunities
Standardises some core elements, and localises other elements
Deciding how to enter the market

-based
Joint venturing, Acquiring, Greenfield
operation
-based
Contract manufacturing
Strategic alliances
Deciding on the global organisation

Simply shipping out goods

One or more functions responsible for offshore activities: marketing, manufacturing, research, finance, planning, personnel

Worldwide manufacturing facilities, Worldwide marketing approaches, Worldwide financial flows, Worldwide logistics systems

(2) SOCIAL MEDIA
What is Social Media?
Social media includes web-based and mobile based technologies which are used to turn communication into interactive dialogue between organizations,
communities, and individuals. Andreas Kaplan and Michael Haenlein define social media as "a group of Internet-based applications that build on the
ideological and technological foundations of Web 2.0, and that allow the creation and exchange of user-generated content." Social media is ubiquitously
accessible, and enabled by scalable communication techniques.
Social media and marketing
-generated content (UGC) or consumer-generated media (CGM).
common thread running through all definitions of social media is a blending of technology and social interaction for the co-creation of value.
Who wants what?
Companies



ustomer lifetime value


Traditional Marketing being sidestepped by consumers
-marketing
Blocking ads, do-not-call register, IceTV

On the back of broadband

E.g. when researching online financial products:
47% obtain info from friends/family
28% obtain info from company websites
20% obtain info from company advertising
(3) ETHICS AND SOCIAL RESPONSIBILITY
Ethical Issues in Marketing

Planned obsolescence
Product quality and safety
Product warranties
Fair packaging and labelling
Pollution
on
Exclusive territories
Dumping
Dealer rights
Predatory competition
Deceptive practices

E.g. artifically inflated Was prices

E.g. Overstating products features or performance

E.g. Misleading oversized-packs

Unsafe products



Manufacturer indifference
Increased production complexity (e.g. outsourcing)
Poorly trained labour
Poor quality control
Consumers








Opportunities in Social Media

Gaining insights from others conversations


Energising
Identifying enthusiastic customers and using
them to influence others

Enabling customers to help each other

Providing employees with social media tools

Bait-and-switch advertising
False and deceptive
advertising
Promotional allowances
Bribery

Price fixing
Price discrimination
Price increases
Deceptive pricing
High prices
due to:
High costs of distribution
Intermediaries, inefficiencies, etc.
High advertising and promotion costs
Expensive campaigns, excessive
packaging, etc.
Excessive gross profit margins
Fair vs greedy?
High pressure selling

Insurance, gym memberships, electricity,
charity donations
they dont need or want
mandatory cooling-off periods
rt-term vs long-term
benefits (relationship marketing?)
Planned obsolescence

Updating styles (e.g. fashion)
Continually adding new features to make older models obsolete (e.g. electronics industry)
Using materials that will fail earlier than they should
Marketings Impact on Society

False wants and too much materialism
People are judged on what they own, rather than who they are
Too few social goods
Overselling private goods may result in an increase in demand for public services (e.g. cars -> roads)
Cultural pollution
Materialism, sex, power, status
Too much political power
Lobbying politicians to support an industrys interests ahead of societys (e.g. oil?)
Actions to Regulate Marketing
. Competition and Consumer Act)

An organised movement of consumers whose aim is to improve the rights and power of buyers in relation to sellers (Kotler, 2010, p.619)

An organised movement of concerned citizens, businesses and government agencies seeking to protect and improve peoples living
environment
Maintaining social responsibility
ld make marketing decisions by considering consumers wants the organisations requirements, consumers long-run interests and
societys long-run interests.