Marketing

consumer laws - price discrimination

the setting of different prices for a product in separate markets, giving preference to certain retailers, selling products to some retailers cheaper than others

consumer laws - deceptive and misleading advertising (packaging)

the size and shape of the package may give a misleading impression of the contents

factors influencing customer choice - economic

the success or failure of a nation's economy can greatly affect consumer behaviour based on a variety of economic factors. if the economy is strong, consumers have more purchasing power and money is pumped into the thriving economy.

factors influencing customer choice - sociocultural (society)

family, friends, peers, co-workers, where you live and people you look up to.

price - loss leader

generate little profits or losses to encourage consumer to purchase goods, stock only a few item to encourages customers, then upsell for expensive products

place/distribution - distribution channels (producer to consumer)

good is produced and passed directly to the consumer, no intermediaries. allows the producer to maintain control and have a direct point of contact

ethical influences - products that may damage health

goods and services that damage people's health are called Sin Products, e.g. cigarettes and gambling. the government puts restrictions on them and may advertise to warn us of the dangers involved with using these products.

factors influencing customer choice - psychological (personality)

how a purchaser sees themselves wearing/buying it, influencing brand choice.

global marketing - global pricing (standardised, customised and market customised pricing)

how businesses work out the price of products in different countries - standardised pricing: same price and country - customised pricing: different prices in different countries - market customised pricing: setting prices according to local market conditions/the amount of competition in the local market

price - price and quality interaction

how quality affects price

factors influencing customer choice - psychological (self image)

how the customer sees themselves and products they may buy, wear or use.

global marketing - competitive positioning

how will a business stand out (differentiate) from existing competition. - advantages: design, after sale service - disadvantages: can't differentiate on price, not sustainable/profitable

ethical influences - sugging

'selling Under the Guise of a Survey' - sales technique disguised as market research, not illegal but highly unethical.

promotion - personal selling

aims to establish a direct link between business and consumer, involves taking the business to the customer, e.g. door-to-door sales

production approach

- 1850s to 1920s - a focus on mass production - no differentiation - no regard given to customers or budget - marketing was taking an order and delivering a product/service - little to no competition

marketing approach

- 1960 - present - businesses put the customers wants/needs first - this approach uses multiple strategies to achieve goals - customer feedback is used to drive these marketing processes

selling approach

- selling or sales approach - 1920s to 1960s - a big focus on sales - mostly through radio and travelling salesmen - sales force was a tactic used to try and sell products as more enter the market, e.g. car sales

promotion - the communication process

all about market research, because it allows the business to develop strategies that will attract the product's intended target market

establishing marketing objectives

SMART (Specific, Measurable, Achievable, Realistic, Time-bound), e.g. increasing market share, expanding the product range, expanding existing markets and maximising customer service

situational analysis - SWOT, product life cycle

SWOT - overview of the internal strengths and weaknesses of a business, and external opportunities and threats of a business Product Life Cycle - analysis that examines the current position of the goods and services that a business produces over four phases - establishment, growth, maturity, post-maturity (renewal or decline)

factors influencing customer choice - sociocultural (culture)

a set of values and ideologies of a particular community or group of individuals.

consumer laws - deceptive and misleading advertising (country of origin)

accuracy in labelling is important; e.g. 'made in Australia' and 'product of Australia' have two distinct meanings

global marketing - customisation

adapting the product to meet local consumers needs and wants, businesses modify their existing marketing mix or develop a new one for each new product market - middle path: combo of standardised & customised, e.g. Nike, McDonald's. - advantages: sales and profit increase - disadvantages: it may cost more

consumer laws - deceptive and misleading advertising (special offer)

advertisements may be misleading or deceptive if they imply that a special offer is available for only a limited period, when in fact the offer is continuously available

ethical influences - truth, accuracy and good taste in advertising

all promotional material should be truthful, accurate and in good taste, e.g. nothing offensive or rude.

global marketing - standardisation

assumes the way a product is made, used and consumed around the globe is the same the world over - advantages: cost effective, economies of scale, quality control, recognisable - disadvantages: cultural differences

factors influencing customer choice - economic (boom, recession, contraction)

boom - less unemployment, economic growth, high income, advertise heavily, more sales. contraction - high unemployment, slow economic growth, stabilising incomes, low spending and investment, marketing plans should stress the value and visibility of products. recession - high unemployment, low income, no confidence, very little spending, marketing should focus on maintaining existing market share.

products - branding & packaging

branding - the use of a name, term, sign, symbol or design intended to identify a seller or group of sellers and differentiate them from their competitors packaging - development of product's container and the graphic design of the product

market segmentation

breaking down the total market into small market based on similar characteristics of a customer group

product differentiation

business distinguishing goods and services from competitors based on features, i.e. quality or price, e.g. versace

consumer laws - deceptive and misleading advertising

businesses advertising their goods or services in ways that are wrong or unethical

processes

businesses must ensure that its processes and procedures are customer friendly and satisfy their needs. businesses with insufficient processes will lose customers and damage its reputation

consumer laws

businesses must ensure that they comply with: - Australian Consumer Law (2011) to avoid hefty penalties ($1.1 million for companies/$200,000 for private businesses). - Consumer protection laws are written in The Competition and Consumer Act 2010 (CCA) and enforced by the ACCC (Australian Competition and Consumer Commission). - These laws are used in an effort to discourage unfair and unconscionable conduct. The law is designed to protect customers and regulate practices that restrict competition.

types of markets - resource

businesses that get their product (raw material) from primary industries - natural resources from the land - e.g. farmers, logging, fisheries, mining, oil exploration

types of markets - intermediate

businesses who purchase finished products and resell them to their customers to make a profit - wholesalers - e.g. Harvey Norman purchase Apple, Sony, etc. and resell to customers

types of markets - industrial

buyers/businesses purchase products to produce/manufacture other products - production process - e.g. Boost Juice purchases fruits and blenders to produce juice

consumer laws - deceptive and misleading advertising (before & after advertisements)

consumers may be misled by 'before' and 'after' advertisements, where the comparison is distorted so that 'before' images are worsened and 'after' images enhanced

promotion - advertising

convey a message to a broad group of customers, e.g. radio, TV and Internet

promotion - sales promotion

create interest and generate awareness of product, e.g. competitions, samples and discounts

promotion - public relations

creating an event for a business to generate awareness of its product and business activity, e.g. Ben and jerry's free ice-cream

service differentiation

differentiating the direct contact between the business and the consumer, e.g. Telstra offering 24/7 helpline for users

place/distribution - distribution channels (place)

distributing a product from where it is made to the consumer

market segmentation - psychographic

dividing a market into segments based on consumer lifestyle, personality, values and interests, e.g. promoting cars as stylish and fashionable to image-conscious people

market segmentation - demographic

dividing people by age, gender, income, family size and level of education, e.g. BMW targets its X5 4WD to middle to high income earning young mothers, as a family car

market segmentation - behavioural

dividing the market based on the consumers knowledge of, attitudes toward and use of a product, e.g. Mercedes promoted a car as 'tradition, meet innovation', targeting middle income earning young families who seek practicality in a sedan

consumer laws - deceptive and misleading advertising (fine print)

important conditions are written in a small-sized print and are therefore difficult to read

physical evidence

includes the location of where the service is being provided and the materials needed to carry out the service such as signage, brochures and business cards.

types of markets - consumer

individuals/households who buy goods/services for their own use - e.g. us

implementation, monitoring & controlling - implementation

integrating the goals and objectives of the marketing plan into all areas of the business. To do it, you should establish lines of communication, motivate employees and make people familiar with marketing goals

place/distribution - channel choice (intensive, selective, exclusive)

intensive - product is readily available to a wide selection of stores, e.g. toilet paper selective - limited stores and location, which allows the producer to control the market, e.g. Apple exclusive - restriction on the number of products available, e.g. Mercedes

implementation, monitoring & controlling - developing a financial forecast

involves (1) cost estimate and (2) revenue estimate

ethical influences - engaging in Fair Competition

it's the role of the Australian Competition and Consumer Commission (ACCC) to regulate business competition and prevent unfair competitive behaviour like price-fixing between two or more major competitors.

types of markets - mass

large general market where a business produces a large amount of one product - e.g. Energy, Telstra

implementation, monitoring & controlling - monitoring & controlling

monitoring - observing the actual progress of the marketing plan controlling - comparison of planned performance against actual performance. Taking corrective action to make sure the objectives are achieved, including sales analysis (comparing actual and forecast sales), market share analysis (comparing market share to that of its competitors) and marketing profitability analysis (comparing financial benefits and non-financial benefits against the cost of implementing the plan)

ethical influences - definition of ethics

moral correctness of business practices related to developing, promoting, pricing and distributing the product to consumers

price - competition based pricing

observing competitor price and then making your price lower

interdependence with other key business functions

operations - success of product/campaign shows what/how much it needs to produce finance - marketing campaigns require budgeting and funding HR - design, implementation and evaluation is powered by skills, time and creativity of humans

promotion - the communication process (opinion leaders & word of mouth)

opinion leaders - businesses use individuals that are respected to create a link between the leaders image and the brands reputation word of mouth - consumers relating to others, their reaction to the use of a product, including the degree to which they are satisfied by the product

market research

primary data - the facts and figures collected from the original sources for the purposes of the specific research problem, e.g. surveys, observation and experimental research. secondary data - information that has already been collected by another person or organisation, including internal data (stats, feedback, reports) and external data (ABS, magazines, internet)

promotion - relationship marketing

process of building and maintaining long-term relationship with customers, high level of customer satisfaction, value and service, e.g. loyalty programs

market segmentation - geographic

process of dividing a market or customer group into smaller markets based on different geographic locations, e.g. nations, states and local government areas, e.g. Mercedes in central Sydney promote small, fuel efficient cars for those living in the inner city

factors influencing customer choice - psychological (attitude)

process of learning results in beliefs and attitudes and how they influence buying behaviour. attitudes are learned predispositions that respond in a consistently un/favourable manner to a given object.

place/distribution - distribution channels (producer to retailer to consumer)

producer passes good to retailer who then passes it to the consumer. producer can concentrate on manufacturing, greater distribution and access to products

place/distribution - distribution channels (producer to wholesaler to retailer to consumer)

producer passes good to wholesaler, who sells part of stock to retailer who then gives it to consumer. producer holds less stock, marketing is the responsibility of the retailer, therefore less costs.

developing marketing strategies

product (tangible) - quality, design, name, warranty, packaging, features price (cost) - selecting the most appropriate price for the market being targeted promotion (consumer awareness) - strategies to inform, persuade and remind customers about its products place (moving the product from A to B) - distribution of the product, i.e. transportation and number of intermediaries

strategic role of marketing goods and services

profit maximisation - translate this goal into reality - offers society choice and employment

people

refers to the quality of interaction between the customer and those within the business who will deliver the service. consumers make judgments about a business based on how employees treat them.

factors influencing customer choice - psychological (perception)

selective; we see what we want to see. this is concerned with the way stimuli (commercial, ads, packaging) are interpreted. products, messages and images aren't always perceived in the manner intended.

price - price points

set different prices on similar products based on different features, e.g. iPods

price - penetration pricing

set prices as low as possible to gain immediate customers, penetrate the market and gain market share rapidly

types of markets - niche

small markets for specialised groups

consumer laws - deceptive and misleading advertising (tests & surveys)

some advertisements make unsubstantiated claims; for example, stating '9 out of 10 people prefer a product when no survey has been conducted

price - psychological pricing

take advantages of your consumer responses, e.g. $5,999 prices

identifying target markets

target market - a group of customers for whom a particular product has been developed mass market - all consumers market segment - one area of a particular market niche market - market segments that consist of smaller segments

place - distribution channel

the channels by which the product is moved from the place of the manufacturer to the consumer

factors influencing customer choice - psychological (motivation)

the drive to satisfy a need, and can be socially learned, e.g. marriage, or instinctive, e.g. hunger.

positioning

the image that a product has in the mind of the consumer, e.g. Ferrari

e-marketing

the internet allows businesses to interact with customers in a more efficient and cost effective manner while still delivering a personalised service. assists in gaining brand awareness and sales growth.

factors influencing customer choice - government

there are many laws and regulatory bodies regarding price and competition, as well as taxes and tariffs affecting the price of goods and the income of consumers, e.g. Government bodies advertising for people to drink less alcohol could reduce consumer spending on alcohol.

consumer laws - implied conditions

these are the unspoken and unwritten terms of a contract - the conditions are assumed to exist

consumer laws - warranties

this is a promise by the business to repair or replace faulty products

price - cost based pricing

total manufacturing cost + additional amount (profit)

place/distribution - physical distribution issues - transport, warehousing, inventory

transport - process of moving goods from one location to another. Can be expensive and must consider the type of good, e.g. moving mobile phones vs furniture. warehousing - process of storing products before they are distributed to the consumer. Also depends on the type of goods inventory - businesses must have enough stock to satisfy demand but not too much that they are unable to sell idle stock

price - prestige pricing

used for products that consumers regard as prestigious, therefore are willing to pay high price

price - skimming

used when a business wants to recover high costs. done by setting really high price

global marketing - global branding

worldwide use of term, phrase, slogan, symbol, logo or title that identifies a business and its products, e.g. McDonalds, Apple, Nike. Cost-effective and with brand name linked to new products, less money marketing new product - advantages: recognisable, more customers, therefore more reach and more profits. - disadvantages: risk, different laws/standards, local competition