MARKETING:
ROLE OF MARKETING:
• Marketing: Activities aimed at developing the relationship between business and its customer base
o Securing the market for the business’s products (goods and services)
• Examines the motivation of consumer desires and perceptions
o Emphasis on the psychology of consumers
• Relies on the ability to transform goods and services to such a level that encourages consumer purchase
STRATEGIC ROLE OF MARKETING GOODS AND SERVICES
• To maximise sales and profits
o Implementing a marketing plan that can be used to attain greater sales
o Marketing plan: Document that lists activities aimed at achieving particular marketing outcomes in
relation to goods or services
• To increase market penetration and market share
o The more people that buy the product, the greater share of available market for the product
• To maximise consumer choice
o Consumers can find goods that exactly satisfy their wants
o Proliferation: Where a product category contains many brands with few differences
• To maximise consumer satisfaction
o By consuming more, the customer will be happier
INTERDEPENDENCE WITH OTHER KEY BUSINESS FUNCTIONS
Key business function:
Human Resources
Finance
Interdependence:
• Ensuring the right people are employed
• Staff are customer-focused
• Staff are well-trained in goods and services
• Changes in marketing activities require staff training and development
• Employees need to be trained in specifications and promotional offers
• Revenue forecasts
• Sourcing from suppliers
• Cost/benefit analysis
• Cash flows from each product/service
• When sales begin to decline, finance will look to marketing to increase sales
by altering the marketing mix
Operations
• Allocates budgets to effectively control costs and minimize expenses
• Distribution and lead times
• Manages the increase in demand for a good as a result of marketing activities
• Uses market research from marketing to prepare production schedules
• Operations and marketing collaborate in the design and development
PRODUCTION, SELLING, MARKETING APPROACHES
Production approach:
• Focused businesses on the production of goods and services
• Emphasis on production process rather than what the consumers actually wanted
o Based on demands of mass production techniques
• Use of scientific management à Efficiency
o Was the prime motivating factor of marketing to deliver the best possible product
Example: Henry Ford focused on efficiency and cheap production
Selling approach:
• Emphasised selling because of increased competition à Stimulated demand
o Businesses increased spending on advertisements, sales agents + representatives
• Businesses were still neglecting the needs of the customer
o Trying to create demand through sales representatives
Marketing approach:
STAGE 1:
• The growing importance of achieving business success by focusing on customers in the marketing activities
• Focused on finding out what customers want, through market research, and satisfying that need
STAGE 2:
• Cultivation of a relationship between the consumer and the business
o Creating a two-way long-term relationship à How customers become an important stakeholder to
the business
• Growing public concern over environmental pollution and resource
depletion
o External pressure from customers and environmental
Corporate social responsibility:
organisations
Example: Increased demand for ecologically sustainable products
• Customer orientation:
Process if collecting information from customers and basing marketing
decisions + practices on customers’ wants and interests
• Cultivates a long-term relationship between consumer and business
• Can maintain high levels of customer satisfaction
• Development of long-term and cost-effective relationships with
individual customers
Relationship marketing:
• High priority on customer retention and continual satisfaction à
Customer loyalty
o Generates repeat sales
o Through loyalty programs, coupons etc.
• Businesses must use regular feedback from customers to ensure they meet all the needs of those customers
o Orienting themselves towards customer satisfaction à Increased sales + profits
TYPES OF MARKETS
Market: A place where consumers and sellers are able to conduct transactions
Market:
Description:
• Resource
Markets for commodities
o Buying and selling of primary products
Example:
• Minerals
• Agricultural products
• Mining
• Resource markets may be local or larger
• Natural resources
• Manufacturing
• Construction
• Banking
• Gas and electricity
• Grown produce like fruit and
domestic/international markets
• Producers don’t usually see the eventual consumer
• Manufacturing industry that purchases and
transforms the primary products
o Value-adding through use of machinery
Industrial
and labour
• Businesses engaged in this market are often said to
be engaged in “Business to Business” (B2B)
• Products and services are mass-produced
o Very large markets
vegetables
o Little regard is given to individual demands
Mass
• Aimed at consumers in a very broad sense b/c
products have universal appeal
o Market aggregation à Customers are
treated as a single group
• Intermediate
Source bulk supplies and redistribute them to both
small and large sized retailers
o Resell them to make a profit
• Small markets where products and services are
differentiated
• Importers
• Wholesalers
• Retailers
• Small retail outlets
• Luxury cars
• Over 50s
• Young married couples w/o
o Appeal to a small sector à Specialised
Niche
• Aim to establish a competitive advantage in that
market segment
• Individuals and households who purchase with the
intent of using or consuming the goods and services
Consumer
• Usually divided into distinct demographic segments
• Marketers try to anticipate what consumers want
o Influenced by social, psychological,
children
• Ethnic population
• Working women
governmental and personal factors
o Capitalise/maximise these factors to their
advantage
INFLUENCES ON MARKETING:
FACTORS INFLUENCING CUSTOMER CHOICE
Psychological:
• Influences that affect an individual’s buying behaviour
o Perceptions, motives, attitudes, personality and self-image, and learning
PERCEPTION:
• Perception: Process through which people select, organise and interpret information to create meaning
• Marketing managers must create a positive or favourable perception of the product
o Can be through advertising to create a certain “image”
Example: Apple markets their iPhone 5c as “revealing a personality” and “making a statement” to draw in
younger consumers
MOTIVES:
• Motive: The reason that makes an individual do something
• Marketing managers can attempt to influence a consumer’s motives
o Example: Buying a specific product to emulate a celebrity
Case study: HiSmile Teeth Whitening Kits
Sponsors online influencers to use their products and make posts onto social media with the product
ATTITUDES:
• Attitude: A person’s overall feeling about an object or activity
• A customer’s attitudes can generally influence the success or failure of the business’s marketing strategy
PERSONALITY AND SELF-IMAGE:
• Personality: A collection of all behaviours and characteristics that make up that person
o Influences the types and brands of product a person buys
• Self-image: How a person views himself or herself
o A major determinant of what products we buy
• Marketing managers will highlight the image value of their products à Tap into an individual’s desire to
express their identity
LEARNING:
• Learning: Changes in an individual’s behaviour caused by information and experiences
o Can be based on indirect experiences
• Marketing managers assist customers to learn about them
o Encouraging brand loyalty
o Brand loyalty: When favourable attitudes towards a single brand results in repeat sales over time
• Example: Businesses giving free samples
Sociocultural:
• Forces exerted by other people and groups that affect customer behaviour
o Social class, culture and subculture, family and roles, and peers
SOCIAL CLASS:
• Social class: A person’s relative rank in society, based on his or her education, income or occupation
• Influences the type, quality and quantity of products a customer buys
o Example: People from higher socioeconomic classes are more willing to buy higher priced products
like luxury cars
Case study: Mercedes-Benz
Luxury automobiles by Mercedes-Benz are targeted towards individuals in high socioeconomic classes, with their
products symbolizing luxury, status and financial comfort
CULTURE AND SUBCULTURE:
• Culture: Learned values, beliefs, behaviours and traditions shared by a society
• Influences buying behaviour à Determines what people wear, eat and how they live
Example: More low-fat and sugar-free foods are now marketed in response to the greater desire for nutritious
and healthy foods
FAMILY AND ROLES:
• Roles of individuals in a family unit will influence buying behaviour
o Need to market products to satisfy particular roles in a family
Example: Market research shows that women still make buying decisions related to healthcare products, food and
laundry supplies
PEERS:
• Peers: A group of people whom a person closely identifies, adopting their attitudes, values and beliefs
• Customer’s buying behaviour can match their peers’ beliefs and attitudes
o Word of mouth recommendations
Economic influences:
• Influence a business’s capacity to compete + a customer’s willingness and ability to spend
BOOM:
• Boom: Period of great prosperity or rapid economic growth
o Low unemployment + rising incomes
• Businesses increase their production lines + attempt to increase their market share
o Customers are more willing to spend
Example: During a boom period, customers are willing to spend more on recreational products like specialised
cosmetics
RECESSION:
• Recession: A period of temporary economic decline during which trade and industrial activity are reduced
o High unemployment + falling incomes
• Businesses stress the value and usefulness of a product
o Customers are more price-conscious à Less willing to spend
Example: During a recession period, customers buy only essential products and won’t eat out as often
Government influences:
• Can use economic policies to influence the level of economic activity
o Can expand or contract the level of economic activity
§ Directly or indirectly influence business activity + customers’ spending habits à Influence
the marketing plan
Case study: 2008 Global Financial Crisis
Stimulus packages sent out by the Australian Federal Government reduced the impact of the GFC upon consumer
spending and businesses
• Influence of government regulations
o More direct + immediate
• Regulatory forces à Statute laws and regulatory bodies that can influence business behaviour
o Breaches can result in financial penalties
Example: Competition and Consumer Act 2010 (Cwlth), Sale of Goods Act 1923 (NSW), Fair Trading Act 1987
(NSW)
CONSUMER LAWS
• Introducing laws to improve protection and rights of consumers + to clarify the rights and responsibilities of
businesses
THE AUSTRALIAN CONSUMER LAW:
• Introduced in 2011 à A single, national consumer law
o Replaced 17 existing national, state and territory consumer laws
• Applies in the same way to all Australian consumers and businesses, regardless of location
• Marketing managers need to be aware of any changes to the laws
o Responsibility is to understand + apply the laws within their businesses where needed
COMPETITION AND CONSUMER ACT 2010:
• Formerly the Trade Practices Act 1974 (Cwlth)
• Purpose:
o To protect consumers against undesirable practices
§ Misrepresentation of products, places of production, misleading and deceptive advertising
o To regulate certain trade practices that restrict competition
• Applies to all Australian businesses, including commercial activities of the government
• Enforced + administered by:
o Australian Competition and Consumer Commission (ACCC)
o Each state and territory’s consumer agency
o Australian Securities and Investments Commission (ASIC)
• Breaches of the Act can result in:
o Civil or criminal proceedings against the business or individual concerned
§ Brought forth by the ACCC
o Penalties of up to $1.1 million (companies) and $220,000 (individuals) for unconscionable conduct
o On-the-spot infringement notices (fines) to manufacturers
o Public warning notices
Deceptive and misleading advertising:
Fine print:
Before and after
advertisements:
Tests and surveys:
Country of origin:
• Important conditions written in small-sized print à Difficult to read
Example: Fine print details that can limit the availability of an offer
• Can be misleading through digital enhancement or distortion
Example: Cosmetic clinics can distort the before and after advertisements in
their marketing
• Advertisements can make unsubstantiated claims
• The accuracy in labelling
Example: There is a difference between ‘made in Australia’ and ‘product of
Australia’
• Packaging:
contents
• Special offer:
• Size and shape of a package can give a misleading impression of the
Advertisements can imply that the offer is only for a limited time, but is
actually continuously available
Businesses also commonly engage in deceptive and misleading advertising techniques such as:
O BAIT AND SWITCH ADVERTISING:
§ Advertising a few products at reduced prices to attract customers, then directing them to
higher priced items
O DISHONEST ADVERTISING:
§ Using words that are deceptive or claim false qualities about a product
Case study: LG’s false advertising in 2006
Falsely advertised the energy consumption details of its air conditioners. Had to pay $3 million compensation to
customers.
SMH. 2006. LG to pay $3m after false energy claims.
Price discrimination:
• Price discrimination: The setting of different prices for a product in separate markets
• Is prohibited if the discrimination could substantially reduce competition
o Only justified on transport costs, early payment or bulk purchases
Implied conditions:
• Consumer guarantees: Comprehensive set of rights and remedies for defective goods and services
o Established in the ACL
• Implied conditions: Unspoken and unwritten terms of a contract
o Assumed to exist regardless of whether they were especially mentioned or written into a contract
Example: A product is of acceptable quality à Acceptable in appearance and finish, free from defects, safe
and durable
Warranties:
• Warranty: A promise by the business to repair or replace faulty products
o Designed to offer a degree of protection to the customer if the good is faulty or if the service is not
carried out with due care and skill
• Is necessary for businesses to state clearly the terms and conditions of the warranty
o Warranty conditions apply to all products and services traded
REFUNDS AND EXCHANGES (RETURNS):
• Business is required by law to offer a refund if the products are:
o Faulty
o Do not match the description or sample
o Fail to do the job they were supposed to do
• Accurate signs regarding refunds and exchanges need to be displayed
ETHICAL INFLUENCES
ETHICAL CRITICISMS OF MARKETING INCLUDE:
• Creation of needs à Materialism
o Materialism: An individual’s desire to constantly acquire possessions
• Stereotypical images of males and females
• Use of sex to sell products
• Product placement
o Product placement: The inclusion of advertising in entertainment
Case study: Product placement in films
In the movie ‘Quantum of Salace,’ James Bond is seen using Sony Ericsson cell phones, Sony electronics, Omega
watches, Heineken beer, Smirnoff vodka etc.
Truth, accuracy and good taste in advertising:
• Advertising: Paid, non-personal message communicated through a mass medium
• Unethical marketing practices include:
o Untruths due to concealed facts, exaggerated claims, vague statements, and invasion of privacy
• Can use this to mislead customers
• o Can severely harm the truth customers have in a product or a business
Untruths due to
concealed facts
Pieces of information purposefully omitted from an advertisement
Case study: Coca-Cola
Made an advertisement where they busted common myths about Coke – it doesn’t
make you fat, doesn’t rot your teeth, isn’t highly caffeinated. It was seen as misleading
• Puffery: Exaggerated praise or flattery, especially when used for promotional
purposes that no reasonable person would take as factual
Exaggerated claims
• These claims cannot be proved
Case study: Kellogg’s NutriGrain
Claims that it is “iron man food”
• Vague statements
Statements using words so ambiguous that the consumer will assume the
advertiser’s intended message
o Deliberately misleading or ambiguous language à ‘Weasel’ words
• Tracking web users and using this to target them with advertisements
o Can breach consumer privacy
Invasion of privacy
Case study: BlueKai
Resells collected behavioural data to businesses for target advertising purposes
Good taste in advertising:
• ‘Good taste’ in advertising is a highly subjective matter
o Common agreement as to what society considers acceptable à Marketers must be aware of
community sensitivities
Case study: Dolce and Gabbana
In one of their advertisements, they depicted a gang rape connoting violence against women, which was widely
condemned by many marketers and consumers
Case study: Puppetry of the Penis
Was recently ordered to remove a billboard in Brisbane because of complaints made to the ASB
ADVERTISING STANDARDS BUREAU:
• Ensures that acceptable advertising standards are followed
• Administers a national system of advertising self-regulation through the Advertising Standards Board and
the Advertising Claims Board
o Self-regulation: A business controls its own activities rather than being publicly regulated by an
outside organisation such as the government
o Have a dispute resolution mechanism à Deals with consumer complaints about most forms of
advertising
• Ineffectiveness: Self-regulatory system à Lacks the authority to enforce guidelines
Products that may damage health:
• Self-regulatory advertising codes (Responsible Children’s Marketing Initiative and the Quick Service Restaurant
Code) aren’t working
• Federal government sets restrictions on children’s advertising
o Not allowed during programs for pre-school children
• Cigarette advertising has been illegal since 1976
o But marketers place them amongst other objects
• Alcohol is allowed to promote through media
DIGITAL ADVERTISING OF JUNK FOOD TO CHILDREN:
• Marketers targeted advertisements of “unhealthy foods” to young children
o Through free toys, competitions, mascots etc.
• Social influence à Social-networking sites to advertise junk food to children
o Word-of-mouth advertising + Viral marketing
Engaging in fair competition:
• Compete to attract the greatest number of customers à Increase in sales revenue and profit
• Can engage in unfair marketing strategies à Consumer exploitation
o Consumer exploitation: When the rights of consumers are ignored
Example: Highly exaggerated advertisements, incomplete product descriptions, manipulative and high-pressure
selling methods
• This can generate bad publicity à Bad for the business
• Businesses need to monitor actions of competitors + assess changes they’re making
ETHICAL MARKETING POLICY:
• Acts as a standard against which to assess the business’s ethical performance
Sugging:
• Selling under the guise of a survey or research
o A sales technique designed as market research
§ Can be conducted by telephone, mail, fax or the internet
§ Often accompanied with gifts like a cash donation to a charity, a product sample etc.
o Ethical issues à Invasion of privacy + deception
• Is unethical BUT not illegal
o Only breaches laws when it is misleading and deceptive
• Encourages members of the public to purchase a good or service
o Has to follow the MRA Code of Marketing Research Standards
§ “Ensures that the respondent information collected during any study will not be used for
sales, solicitations, push polling or any other non-research purpose.”
• Cooperation of consumers is becoming more difficult with declining response rates à Refusal to participate
due to suspicions of sugging
MARKETING PROCESS
• Functions of the business operate towards the overall business objectives
o “Marketing plan”
SITUATIONAL ANALYSIS
SWOT:
• SWOT analysis: Identification and analysis of the internal strengths and weaknesses of the business, and the
opportunities in, and threats from, the external environment
o Internal assessment of its own operations + broadens this to include an analysis of the external
environment
o Gives indication of position compared with competitors
• Changes can dramatically alter the course of a business à Must monitor these changes
Product life cycle:
• Product life cycle: Stages a product passes through
o Introduction, growth, maturity, and decline
• A different marketing strategy is required at each stage
Stage:
Description:
Challenges:
Marketing strategies:
• • Introduction
• • • • Unestablished distribution
Experiencing
• Growth
as it builds its
buyers
• • Entering the market
new product
• Selective distribution
• Addition of support services to
Maintenance of quality of
Cash flow problems can
Distribution channels +
staff may not be able to
reputation
Communications to educate
potential customers about the
maintain and improve product
force price increases
rapid growth
Promotions directed at early
networks
product/service
• • marketing
Initial or
infancy stage
market foothold
Establishing a brand name
requires cash + effective
Price penetration to gain a
handle the excessive
quality
• Wider promotions
• Increase of distribution channels
• Differentiating the product
demand
• • Maturity
• itself from competitors
Sales begin to
plateau
• • a slower pace
through features and packaging
Customers want new
tastes in product/service
May still
increase, but at
Needs to differentiate
• Adjustment of prices to hold off
Need to examine pricing
competitors + maintain market
policies in view of
share
increased competition
• Decline
• Sales decline
• Business may
Reduced prices to sell remaining
stock
• Need to review all
need to review
marketing aspects and
operations to
take action
• Discontinued promotions
• Reduced distribution channels
• Maintained products with some
improvements or rejuvenation
renew the
• business
Selling products to another
business
• Products can decline due to:
o Changing social trends
o New technologies à New products replacing old ones
o Reduced demand
o Fluctuations in the level of economic activity à Shifts in customer spending habits
MARKET RESEARCH
• Market research: Process of systematically collecting, recording and analyzing information concerning a
specific marketing problem
o Provides accurate, up-to-date, detailed and relevant information
o Minimises the risk when releasing a new product
• Identifies + outlines both opportunities and problems
DETERMINING INFORMATION NEEDS:
• Information collected should be relevant + accurate
o Identify the issue/problem
• Information collected should:
o Help achieve marketing objectives
o Increase sales and profits
o Create marketing strategies
DATA COLLECTION – PRIMARY AND SECONDARY SOURCES:
• Marketing data: Information relevant to the defined marketing problem
PRIMARY DATA:
• Primary data: Facts + figures collected from original sources for the purpose of the specific research problem
• Is directed at solving a specific marketing problem
• Methods of collection include:
o Surveys: Gathering data by interviewing people
o Observation: Recording behavior of customers
§ Personal observation or electronic observation
o Experiments: Gathering data by altering factors under tightly controlled conditions to evaluate
cause and effect
SECONDARY DATA:
• Secondary data: Information that has already been collected by some other person or organisation
o Example: Census data that has already been collected by the government
• Two types:
o Internal data: Collected from inside the business
§ Customer feedback, research reports
o External data: Published data from sources outside the business
§ Magazines, newsletters, the internet
DATA ANALYSIS AND INTERPRETATION:
• Conclusions can be drawn à Finding patterns, deviations, averages etc.
• Can be represented in a table or graph
o Cross-tabulating to allow comparisons
Case study: Heinz
Market research showed that the design of their bottles was difficult for kids, who were their target market.
Came up with user-friendly coloured bottles
Case study: Pampers diapers
Market research showed that the product wasn’t selling well in Japan because the size of the packaging was too
big for the small homes in Japan. They repackaged the product and re-launched it
Case study: Head and Shoulders
Market research showed that people in third-world countries wanted disposable products since they were cheap
and easy. They started distributing shampoo packaged into sachets
ESTABLISHING MARKETING OBJECTIVES
• Marketing objectives: Realistic and measurable goals to be achieved through the marketing plan
INCREASING MARKET SHARE:
• Market share: A business’s share of the total industry sales for a particular product
Case study: Grocery market sector
Coles and Woolworths have a large market share, with 38% and 30% respectively
EXPANDING THE PRODUCT MIX:
• Product mix: The total range of products offered by a business
• Expanding the product mix can increase profits in the long term
• Product mix should also be changed
o Tastes, preferences and trends change over time
o Demand can decrease
• Businesses should understand customer needs
MAXIMISING CUSTOMER SERVICE:
• Customer service: Responding to the needs and problems of the customer
• Businesses should be adopting strategies to maximise customer service:
o Training employees
o Establishing + maintaining long-term relationships with customers
o Customer-oriented attention
IDENTIFYING TARGET MARKETS
• Target market: Group of present and potential customers to which a business intends to sell its product
o Primary target market: Market segment at which most of the marketing resources are directed
o Secondary target market: A smaller and less important market segment
• Customers within the same target market share similar characteristics
WHY BUSINESSES SELECT A TARGET MARKET:
• To be able to direct its marketing strategies to that group of customers
• Can better satisfy the wants and needs of the targeted group
o Efficient use of marketing resources
o Relevant promotion material
o Better understanding of consumer buying behavior
TYPES OF MARKETING APPROACHES:
Type of marketing
Description:
approach:
Mass marketing
• Seeks a large range of customers
• Creates a single marketing mix à Directed at the entire market
• One type of product with little or no variation
• Focuses on high sales and low prices
o Products that appeal to the whole market
Example: Toothpaste, fizzy drinks, vegetables
• Total market is subdivided into groups of people who share one or more
common characteristics
Marketing segmentation
• Allows a business to design a marketing plan to meet the needs of that
target market
Example: Motor vehicles
Niche market
• Narrowly selected target market segment
• Uses brand recognition + customer satisfaction
Example: Sports channels like ESPN
DEVELOPING MARKETING STRATEGIES
• Marketing strategies: Actions undertaken to achieve the business’s marketing objectives through the marketing
mix
• Businesses use elements of the marketing mix to develop a marketing strategy
o Marketing mix: Combination of the four Ps – product, price, promotion and place – that make up
the marketing strategy
Element of the marketing mix:
Description:
• Product: A good or service that can be exchanged for money
• Need to determine features such as:
Products (goods and/or services)
o Quality, packaging/labeling, design, brand name
• Products need to satisfy customer needs + provide intangible
benefits
• Price: Amount of money a customer is prepared to offer in
exchange for a product
• Price
Must consider:
o Strategies used to decide prices
o Costs of production
o Level of consumer demand
• Promotion: Methods used to inform, persuade and remind customers
about a business’s products
Promotion
• Methods include:
o Advertising, personal selling, publicity, through the internet
• Place: Channels of distribution and ways of getting the product to
the customer
• Usually involves intermediaries such as wholesalers or retailers
Case study: Gucci and Louis Vuitton
Place/distribution
Have small channels of distribution à Products are available only at
selected locations
Case study: Coca-Cola
Have wide channels of distribution à Products are available
everywhere
IMPLEMENTATION, MONITORING AND CONTROLLING
IMPLEMENTING THE MARKETING PLAN:
• Implementation: Process of putting the marketing strategies into operation
o Decisions that are made to make sure the plan is effective
o How, where, and when
• The implementation of the marketing plan should:
o Be structured and organized
o Have effective lines of communication
o Achieve marketing objectives
o Be fully integrated with other actions of the business
MONITORING AND CONTROLLING THE MARKETING PLAN:
• Monitoring: Checking and observing the actual progress of the marketing plan
o Gathering information
o Reporting on change, problems or opportunities
• Information is used to control the plan
• Controlling: Comparison of planned performance against actual performance
o Taking corrective action to make sure objectives are attained
Key Performance Indicators:
• Forecast level of performance against which actual performance can be compared
o Example: Increase monthly sales by 5%
• Actual performance needs to be compared against this to evaluate the effectiveness of the marketing plan
DEVELOPING A FINANCIAL FORECAST:
• A financial forecast that details the costs and revenues for each strategy
o Can decide how to allocate its marketing resources
• Requires two steps:
o Cost estimate: How much the marketing plan is expected to cost
§ Market research, product development, promotion and packaging, and distribution
o Revenue estimate: How much revenue/sales the marketing plan is expected to generate
§ • Based on how much consumers are expected to buy + predicted sales
Forecasting marketing costs are easier à Something the business can control
COMPARING ACTUAL AND PLANNED RESULTS:
• KPIs used to measure the success of marketing plans:
o Sales analysis
o Market share analysis
o Marketing profitability analysis
• Sales analysis: Comparing of actual sales with forecast sales to determine the
effectiveness of the marketing strategy
Sales analysis
Market share analysis
• Sales figures are inexpensive to collect and process
• Data do not reveal the exact profit level
• There has been a recent shift to computerized sales à Efficiency
• Market share analysis: Evaluating the marketing strategies as compared with
those of competitors to analyse market share
• Marketing profitability
analysis
Marketing profitability analysis: A business breaks down the total marketing
costs into specific marketing activities
• Can assess the effectiveness of each activity
o Helps with resource allocation in the future
REVISING THE MARKETING STRATEGY:
• The business is now in a position to assess which objectives are being met and which are not
o Revision of the marketing plan
Changes in the marketing mix:
• Production modifications
o To maintain a competitive advantage
• Price modifications
o Respond to changes in the external environment
o Example: Economy, government policies
• Promotion modifications
o To correspond to the life cycle of the product
§ • Example: High promotion costs for new products
Place modifications
o To cater to the growing market à Global markets, demographic changes etc.
o Example: Global expansion
New product development:
• Needs to develop new products to achieve long-term growth
Product deletion:
• Product deletion: The elimination of some lines of products
o Done to maintain an effective product mix
GLOBAL MARKETING
GLOBALISATION:
• Globalisation: Process by which firms operate on a global basis
o Can be done by addressing the world as one market
o Objective is to service the global market à Producing goods + services that can be marketed,
promoted, and sold in different countries
§ • Creates economies of scale, maximization of products + spread of well-recognised brand
Multi-national corporations (MNCs)/Trans-national corporations (TNCs): Global firms that operate in more
than one country
Examples: Toyota, Hyundai, McDonald’s, KFC, UBS, Bank of China
• Factors affecting globalization:
o Reduction in trade barriers (tariffs)
o Reduction in capital controls between countries
o Rapid pace of change in information and communications technology (ICT)
GLOBAL BRANDING:
• Branding adds value to a product
o Name, sign, symbol, design, or a combination of these features
§ Identifies the goods or services of sellers
§ Differentiates them from competitors
STRATEGIES:
• Based on attributes, consumer benefits, values, and
personality
Global brands
Example: Apple
Creation of brand equity à Brand is valued in
financial terms by financial markets
Brand strategy
• Introducing line extensions
• Using existing brand attributes
• Engaging in product innovation to develop new
products on a global basis
• How a brand is positioned in a market to capture
market share and maximise profits
Brand positioning
• Can be re-positioned to adapt to certain market
characteristics
o Example: Tastes of consumers in various
countries
Brand packaging
Brand labeling
• Activities connected with designing and producing
the container or wrapping for the product
• Identifies a product or band
• Makes it easily recognizable + makes an
impression
o Brand association and brand recall