MARK213 Lecture 2 Review
How does Aldi compete with Coles and Woolworths?
- Aldi competes with Coles and Woolworths by offering competitive prices on products that are essentially the same as those offered by Coles and Woolworths. - Additionally, Aldi are able to compete through offering a variety of products beyond those of Coles and Woolworths, such as ski/snow equipment etc. This could also be considered extra promotions that are not offered by Coles and Woolworths. - The four P's; product, place, price, promotion - always try to locate between Cole's and Woollies in order for customer sharing
What are the types of research objectives?
1. To gain background information and develop hypotheses, 2. To measure the state of a variable of interest, 3. To test hypotheses that specify the relationships between two or more variables.
It is fundamental to understand that the concept of marketing is...
A business philosophy focused on the customer - suggesting we will have a good chance of success if we have a good understanding of wants and needs of customers and know how to effectively satisfy those wants and needs of target customers better than competitors. - customer focused is key.
What is the marketing environment?
All of the internal and external forces that affect a marketer's ability to create, communicate, deliver and exchange offerings of value. - customers provide value in the form of money, supplier provides value in the form of good and services. There are micro and macro environmental factors as well.
Micro environmental factors...
Consists of customers, clients, partners and competitors. The organisation can, however, exert some influence on the customers, clients, partners, competitors and other parties that make up its industry. In one way or another, all of the factors in the micro environment affect the marketer. Affect all parties in the industry, including suppliers, distributors, customers and competitors - closer to the firm or company.
Why is data collection, data analysis and reporting necessary?
Data must be collected according to the methods specified in the research design. The research process is to ensure the research design is properly followed, responses are recorded correctly and errors are not introduced. [Garbage in- garbage out!] The data collection process can be conducted in‐house or it can be outsourced. [What about you?]
Types of data collection (examples) include
Focus groups Questionnaires Observation where designing the most appropriate method is crucial, then managing its effectiveness
The complexity of the macro environment is demonstrated by...
For example, the development of internet technology created a need for new laws to regulate online conduct; An entire online economy developed; The provision of internet infrastructure and the regulation of internet content has become a major political issue; The nature of relationships and how people spend their days has been fundamentally changed by the online world.
Macro environmental factors...
Include political forces, economic forces, sociocultural forces, technological forces, environmental forces and legal forces.
What is the relationship between industries and markets?
Industries are on the supply side - a subset of industries is sectors - and within industries there are organisations - markets are on the demand side - markets are the customers - the groups of people that make up demand for a certain product - markets can be divided into groups of people with more specialised needs, these are called segments.
What does a situation analysis involve?
Involves analysing: - The company; through the firms goals and objectives, their market share, their service quality, their marketing mix strategy, their HR policies and practices. - The market: size, growth, customer segments, customer needs, buyer behaviour, intermediates - The environment: through political, economic, social, technological, legal/regulatory measures - The competition: major competitors, their goals and objectives, market place behaviour, growth, service quality, operations and resources, marketing mix and strategies
What ethics govern market research?
Market researchers have an ethical responsibility to their clients or employers and to those who participate in the research. The market research industry attempts to self‐regulate its activities in Australia through the Australian Market and Social Research Society (AMSRS).
Marketer's need to understand their partners because...
Marketers need to understand their partners, how each partner's processes work and how their partnerships benefit each party. Partners include the following: Logistics firms Financiers Advertising agencies Retailers Wholesalers Suppliers Marketers need to know the missions and strategies of their partners. Marketers need to understand their partners' cost structure to enable them to price their offerings appropriately.
How are market research problems identified?
Marketers use information to identify and define marketing opportunities and threats; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process. The thing the market research is intended to address is often referred to as the research problem. A poorly defined research problem will lead to research that does not generate the information required to enable the marketing organisation to make marketing decisions.
What is an MIS?
Marketing Information System - In addition to specific market research projects, organisations continuously collect data as part of everyday activities, such as sales, purchases, enquiries and accounting. o A marketing information system (MIS) is the structure put in place to manage information gathered during the usual operations of the organisation. o Marketing information systems play a vital role in linking the customer to the marketer.
What is involved in preparing a market research brief?
Outlines the research problem and describes the specific information required from the market research project. Generally states the research problem and the information required, and specifies the timeframe, budget and other conditions of the project. A typical market research brief will include the following: 1. Executive summary 2. Introduction 3. Background 4. Problem definition 5. Time and budget 6. Reporting schedule 7. Appendices. International market research is research conducted in more than one country. The researcher encounters issues such as ensuring equivalence across different cultures and languages.
What are the components of the Marketing Plan?
The components of The Marketing Plan are as follows: - Executive summary is the first stage; gives a guide as to what the report will be and cover, part that you show your CEO - major findings, any gaps through the research, what solution is necessary for these gaps? - Introduction (150-200 words) - - Micro - SWOT - SW/OT - SW are internal- OT are external - PESTLE is what we use to analyse an organisations external environment - critically analyse - Background - Problem definition - Time and budget - Reporting schedule - Appendices. - Product, Price, Place, Promotion - Financial plan - this will determine the kind of implementation you can afford - determine your reach - Budget implementation - explain how objective will be implemented - The evaluation - can see where things work, the way things work etc. - Conclusion - sum up what has been done
What is the External Environment?
The external environment is concerned with things that are outside of the organisation. The external environment encompasses the people and processes that the organisation cannot directly control. Marketers can only seek to influence the external environment.
What is the Internal Environment?
The parts of the organisation, the people and the processes used to create, communicate, deliver and exchange offerings that have value. - inside the organisation, thus can be directly controlled - the organisational chart should show who's directly controllable e.g. CEO, middle management etc. The internal environment is directly controllable by the organisation.
What is the research problem?
The research problem - The research objective (dependent on the problem) - From whom is the information to be gathered, What information is needed, The unit of measurement used to gather the information, Word questions using respondent's frame of reference. Difference between symptoms and problems
Why is there a need to align internal and external marketing?
There is a need to align internal marketing with external marketing because internal marketing is directly controllable and therefore a misalignment in the marketing culture/image can be directly dealt with. Whereas external marketing is not directly controllable so alignment is crucial in allowing some influence over external marketing. For example, it is crucial to align you company's image/product/service with that of the needs and wants of the external world if you are to be successful. - External market cannot be directly controlled only influenced - e.g. competitors, governments, consumers etc. - the macro world - the marketing strategy; in order to promote the concept or idea through the wants and needs of the customers - organisational strategy: internal, ability to control staff through training and development, marketing strategy alignment between staff and organisational marketing plan - need to be aligned because the customer just sees the whole company holistically - Also have to help your organisation strategy - Internal marketing is a business philosophy or culture which is organisation wide
In order to understand current and future needs of the target market, marketers must...
Understand what their customers value now Be able to identify any changes in customer preferences Be willing and able to respond to changes Anticipate how needs and wants might change in the future Be able to influence customer preferences.
When is it appropriate to undertake market research?
consider: Limited resources — a budget — that governs all activities. Before undertaking a market research project, the following should be considered. Relevance Timing Availability of resources Need for new information Cost-benefit analysis.
What is internal marketing?
o A cultural framework and a process to achieve strategic alignment between frontline employees and marketing. - marketing both inside and outside of the organisation - marketing in organisations; whilst most firms have a marketing department, marketing is a business philosophy and must start with the board, CEO and senior managers. For marketing to work it's got to be an organisational wide philosophy - entire organisation needs to have a customer focused culture. - E.g. suppose the CEO and board of a bank decide they want to be Australia friendliest bank - spend a few million dollars on advertising, but then you go in there and the staff are rude - thus there a misalignment between CEO and staff in what their marketing culture is and thus marketing is external to the customer and internal to organisation (must be aligned) - employing people that suit the culture and fit marketing image. = marketing needs to be led from the top
What is a population and what is a sample?
o A population is the whole group of people you are appealing to - E.g. If you want to know 'how many' consumers like your product your population of interest is all consumers in the product class. o A sample is a subset of the population that, when test, gives information about the whole population. - e.g. Sampling is an inference - from the responses of a sample we can infer something about the population
What are the types of research?
o Exploratory - to investigate, run focus groups to gain general idea o Descriptive - questionnaire, provide metrics about satisfaction, age, income, gender etc. o Causal - Looking at relationships, to establish if one variable influences another e.g. advertising should impact sales
What is the role of market research in marketing decisions?
o Generates much of the information and knowledge to enable marketers to make marketing decisions and develop marketing strategy. o Discovers 'information of use' in making marketing decisions. o Informs many different types of decisions, including decisions about: o Market segmentation, Sales performance, Product, Distribution, Promotion, Pricing, Attitudes and behaviours.
What is a sample?
o How might we select and take samples? Get a test tube and take out a sample of water and analyse that. Sampling is an inference - from the responses of a sample we can infer something about the population - taking a sample of the population or target market to make inferences about the population of the target market
Describe the populations of interest:
o If you want to know 'how many' consumers like your product your population of interest is all consumers in the product class. o If you want to know about the reasons consumers buy your product ('why') your population of interest is the all of the reasons (or ideas). o Could be all consumers in a product class o Census and sample: o Census - everybody has to fill out the census o Sample - how you select the sample is important, must relate to the actual population o Use a sample because you may not have the time or resources to do a census - if a sample is done correctly you shouldn't need a census
Tute question: what is meant by internal marketing?
o Internal marketing refers to orienting and motivating customer-contact employees and supporting service people to work as a team to provide customer satisfaction. o A cultural framework and a process to achieve strategic alignment between frontline employees and marketing. - internal marketing is directly controllable o Cultural framework - organisational culture - business or philosophy
An example of the Macro Environment is Legal forces, this is...
o Laws and regulations are intimately tied to politics. o Elected officials and the bureaucracy that works for them are ultimately responsible for making legislation; that is, for creating and changing laws. o Regulations are made under conditions established by legislation and tend to deal with more minor or more specific issues than legislation. o Laws and regulations govern what marketing organisations can and cannot legally do. o Marketing is regulated, particular advertising
Provide an overview of the market research process
o Market research involves five major components: o Defining the research problem o Designing the research methodology o Collecting data in accordance with the research design o Analysing data and drawing conclusions o Presenting the results and making recommendations. o Market research is an ongoing process and is constantly evolving.
What is a SWOT analysis?
o Marketers need to be able to isolate the key, or most important, factors that need to be addressed to continue to compete effectively in the market. o SWOT is short for Strengths, Weaknesses, Opportunities and Threats. o Strengths are those attributes of the organisation that help it achieve its objectives: competitive advantages and core competencies. o Weaknesses are those attributes of the organisation that hinder it in trying to achieve its objectives. o Opportunities are factors that are beyond the organisation's direct control, though the organisation may be able to have some influence over them. o Threats are factors that are potentially harmful to the organisation's efforts to achieve its objectives.
Marketer's need to understand their competitors because...
o Marketers seek to understand their competitors' marketing mix, sales volumes, sales trends, market share, staffing, sales per employee and employment trends. o Marketers exist in competitive markets and there are many different types of market competition. o About understanding customers but just as much about understanding competitors e.g. trends in competitors' products etc.
What are marketing metrics?
o Marketing metrics are measures that are used to assess marketing performance. o The framework's underlying principles are that metrics should be linked to strategy and should include, as a minimum, four key elements: Return on marketing investment (e.g. sales, profit), Customer satisfaction (customer churn, number of complaints), Market share in targeted segments (market share growth/decline, market share compared to competitors) and brand equity (awareness in target market, loyalty to business). o Measures - what is it your trying to achieve? E.g. improved customer satisfaction - if you want to monitor it you have to measure it e.g. what's the level of satisfaction in 2017 and then again is 2018 o Why do you spend so much on advertising? - is it to spread awareness, this can be measured
What are marketing metrics and why are they important?
o Marketing metrics are measures that are used to assess marketing performance. o The framework's underlying principles are that metrics should be linked to strategy and should include, as a minimum, four key elements: Return on marketing investment, Customer satisfaction, Market share in targeted segments and brand equity. o Measures - what is it your trying to achieve? E.g. improved customer satisfaction - if you want to monitor it you have to measure it e.g. what's the level of satisfaction in 2017 and then again is 2018 o Marketing metrics are important to marketers because they allow testing and measurement of customer satisfaction/wants/needs. Which in turn allow the marketer to keep their product or service up to date with current trends in the external world.
Distinguish between quantitative and qualitative research by providing four examples (2 of each) to show how quantitative and qualitative research is used.
o Quantitative research entails numbers and quantifying the demand for products through marketing research, as such it may ask how much or how often you use your phone/buy a certain product etc. as such questionnaires and online research are well suited to quantitative research. o Qualitative research questions the why and how of a product and may ask why you buy a certain product, features you like or dislike and how the product could be improved. This is exemplified in focus groups and interviews.
Why is research fundamental to the marketing concept?
o Research is an essential component of the marketing concept because market research is used to stay in tune with customers, clients, partners and society at large. o Research is fundamental to marketing as you cannot assume you know what the customers want or what competitors are doing - you have to research - it is essential to stay in tune with customers, clients and society at large. o Market research enables an understanding of competitors - What are the strengths and weaknesses of your opponent - watch what they do - how they brand products, their strengths and weaknesses, their target market etc
What is the scientific method?
o Science is "knowledge obtained by the scientific method." Klemke and Holloinger et. al.(1980) o The Scientific Method - "embraces problem solving by authority, intuition, common sense and logic. It permits any solution to a problem, however obtained, but rejects it unless it is in accord with the evidence" (Bassey, 1968 p. 12). o The collection, measurement and interpretation of data (the evidence) is essential to a defendable research project. o We are social scientists in marketing
What are the two types of data available to market researchers?
o Secondary data comprise information originally gathered or recorded for some purpose other than to address the current market research problem. Secondary research can be internal or external. Where an internal example is enquiries to book into a restaurant and an external example is magazines, radio, TV etc. o Primary data are data observed or collected directly from respondents as part of the current market research project, for example responses to a questionnaire or focus group.
What are the types of data?
o Secondary data comprise information originally gathered or recorded for some purpose other than to address the current market research problem.- internal or external o Primary data are data observed or collected directly from respondents as part of the current market research project (e.g. responses given on a questionnaire) - quantitative or qualitative o IMPORTANT: Marketers should always assess whether their research questions can use secondary data before embarking on primary data collection. [Secondary first!]
The main parts of a typical organisation include:
o Senior management o Middle management o Functional departments o Employees o External vendors (outsourcing)
Why is market research so crucial to marketing?
o Successful organisations put their customers' wants and needs at the heart of marketing and business decisions. o Market research is an essential component of understanding the market. o Market research is used by marketers to stay in tune with their customers, clients, partners and society at large. o Marketers often need to provide a brief for market research agencies, and so we will provide an overview of the briefing process. o Research is fundamental to marketing - don't assume you know what the customers want or what competitors are doing - you have to research - it is essential to stay in tune with customers, clients and society at large
An example of the Macro Environment is Technological forces, this is...
o Technology is advancing at an unprecedented rate. o Technology does not just change the expectations and behaviours of customers and clients. o Technological change can have huge effects on how suppliers work. o Technology, while enabling many advances, can also pose a threat to marketers. o Rapid changes in technology not only change expectations of customers and clients but also influences how suppliers work o E.g. winery in Tasmania where the owner can adjust sprinklers from anywhere in the world o E.g. changing demand for movies and music, why would you get in your car and go to a DVD shop when you can download it on your laptop
How is data analysed?
o The data analysis technique to be used will have been planned as part of the research design: Quantitative: complete a questionnaire online where the data can be entered straight into a mathematical package such as SPSS for analysis, and Qualitative data; where you start to use words for analysis, highlighting key points people have said - there are different techniques in analysis
An example of the Macro Environment is Environmental forces, this is...
o The environmental factors that affect individuals, companies and societies. o There is a wide range of environmental factors that companies need to be mindful of, including ecological and environmental aspects such as weather, climate and climate change. o Environmental factors can have more influence in certain industries, and marketers need to be mindful of the factors likely to influence their particular industry.
What is the Macro environment?
o The macro environment encompasses the factors outside of the industry that influence the survival of the organisation. o In some cases it is possible for marketers to influence macro‐environmental factors. o Effective marketers continually monitor the environment, adapting and changing offers where necessary in response to changes in the macro environment. o To be a good marketer you need to monitor what's going on in the world you need to be able to keep up and adapt to change
Explain the three types of research used by marketers
o Three types of research fundamental to marketing are: o Exploratory research - Marketing research used to gather preliminary information that will help to define problems, and to suggest hypotheses. Exploratory research is an important part of any marketing or business strategy. Its focus is on the discovery of ideas and insights as opposed to collecting statistically accurate data. That is why exploratory research is best suited as the beginning of your total research plan. o Descriptive research - Marketing research used to better describe marketing problems, situations or markets. Descriptive research is used to describe characteristics of a population or phenomenon being studied. It does not answer questions about how/when/why the characteristics occurred. Thus, descriptive research cannot be used as the basis of a causal relationship, where one variable affects another. o Causal research - marketing research used to test hypotheses about cause and effect relationships. o Extra: Experimental research - Gathering primary data by selecting matched groups of subjects, giving them different treatments, controlling related factors and checking for differences in group responses.
Why is the need for information important?
o To understand existing and potential customers as well as our competitors we need information. o We need the right information. Not information overload! o First, we get data and we analyse the data which gives us information - understand existing and potential customers o E.g. Sydney Kidman - at one stage held 1/16th of Australia's land area in the early 1900's. He knew about the value of information o Customers, Competitors, The Business Environment, Strategic Planning.
Why is it important to understand your competitors?
o What are the strengths and weaknesses of your opponent? - watch what they do - how they brand products, their strengths and weaknesses, their target market etc. - if you are to be successful you must understand the opposition
An example of the Macro Environment is Economic forces, this is...
o What's going on in the economy, how much money can customers and organisations spend? o All of those factors that affect how much money people and organisations can spend and how they choose to spend it. o Economic forces and conditions can change quickly and dramatically, and marketers can find themselves facing a very different economic environment within a short period of time. o Interest rates are another economic force. o E.g. operating a business in Perth you might have been doing very well a few years ago but since the retrenchments in mining your customers have less disposable income so you might lose customers.
An example of the Macro Environment is Political forces, this is...
o _______________ describe the influence of politics on marketing decisions. o Many organisations, particularly smaller ones, monitor political issues, but do not actively engage in politics. o Larger organisations, or the bodies created to represent smaller ones, can engage directly in politics by seeking to influence lawmakers.
An example of the Macro Environment is Sociocultural forces, this is...
o ________________________ is a term used to describe the social and cultural factors that affect people's attitudes, beliefs, behaviours, preferences, customs and lifestyles. o 'Demographics' describe statistics about a population. o Changes in demographic characteristics should be expected to result in changes in the behaviour of individual consumers and society generally. o Demographics; the make up the people in the population - need to understand how demographics have changed in order to meet changing cultural influences and then customer needs
Don't assume...
we know what the customer wants, what competitors are doing etc. - we need to do research into this to determine what target customers want and what competitors are doing - allows you to adjust the marketing mix based on evidence.