Marketing process
Marketing process
1. Marketing strategies and
objectives
The company first identifies its strategic aims and develop
vision and mission accordingly, they then decide which
marketing strategies to go for and more specifically, what
objectives are then needed to achieve those strategies
effectively.
2. Scanning micro and macro
environment
Micro environment: The actors close to the company that
affect its ability to serve its customers --- the company, the
suppliers, marketing intermediaries, customer markets,
competitors and publics.
Macro- environment: The larger societal forces that affect
the micro- environment --- demographic, economic, natural,
political and legal, technological and cultural environment.
Pest Analysis- Political and Legal
environment
The political and legal arena has a huge influence upon the
regulation of businesses, and the spending power of
consumers and other businesses. You must consider issues
such as:
1.How stable is the political environment?
2.Will government policy influence laws that regulate or tax
your business?
3.What is the government's position on marketing ethics?
4. What is the government's policy on the economy?
5. Does the government have a view on culture and religion?
6. Is the government involved in trading agreements such as
EU, NAFTA, ASEAN, or others?
Pest analysis: Economic
Environment
Marketers need to consider the state of a trading economy in
the short and long-terms. This is especially true when planning
for international marketing. You need to look at:
1. Interest rates.
2. The level of inflation, Employment level per capita.
3. Long-term prospects for the economy Gross Domestic
Product (GDP) per capita, and so on.
Pest analysis: Socio cultural
Environment
The social and cultural influences on business vary from
country to country. It is very important that such factors are
considered. Factors include:
1.What is the dominant religion?
2.What are attitudes to foreign products and services?
3.Does language impact upon the diffusion of products onto
markets?
4.How much time do consumers have for leisure?
5.What are the roles of men and women within society?
6.How long are the population living? Are the older
generations wealthy?
7.Do the population have a strong/weak opinion on green
issues?
Pest analysis: Technological
Environment
Technology is vital for competitive advantage, and is a major
driver of globalization. Consider the following points:
1. Does technology allow for products and services to be made
more cheaply and to a better standard of quality?
2.Do the technologies offer consumers and businesses more
innovative products and services such as Internet banking,
new generation mobile telephones, etc?
3.How is distribution changed by new technologies e.g. books
via the Internet, flight tickets, auctions, etc?
4.Does technology offer companies a new way to
communicate with consumers e.g. banners, Customer
Relationship Management (CRM), etc?
3. Marketing intelligence and
marketing research
Marketing intelligence: The systematic collection and analysis
of publicly available information about competitors and
developments in marketing environment.
Marketing research: The systematic design, collection,
analysis and reporting of data relevant to a specific marketing
situation facing an organization. Such as evaluation of
customer satisfaction, retention, loyalty, buying behavior of
customers etc.
The marketing research process
Defining the Developing the Implementing the Interpreting and
problems and research plan for research plan--- reporting the
research collecting collecting and findings
objectives information analyzing the data
Defining the problems and
research objectives
Marketing managers and researchers must work closely to find
out and then write problem statements and objectives of the
study.
The marketing manager may know that something is wrong
without knowing the specific causes.
After the problem is clearly identified, the manager with
researcher then set the research objectives.
The objectives can be met by using three types of research
-- Exploratory research (to gather preliminary information to help define
problems and suggest hypothesis)
-- Descriptive research (to describe marketing problems, situations or
markets e.g. potential for a product or the demographics and attitudes of
customers.
-- Causal research (to test cause and effect relationships)
Developing the research plan—
collecting and analyzing data
After clearing defining goals and objectives, the next step is
to find ways to collect and analyze the information needed.
Two ways can normally be used to collect the required
information.
1. secondary information
2. primary information
Secondary information: The already available information
can be used to meet the research objectives. Company’s
internal databases and many external sources i.e business
information providing organizations, government agencies,
internet data etc can be used to know about the demographic
changes, buying patterns, preferences and behavior etc.
Developing the research plan—
collecting and analyzing data
Primary information: if the information collected isn’t
sufficient, managers usually go for primary data collection i.e.
to collect data that doesn’t exist before and you get it first
hand.
Research approaches Contact methods Sampling plan Research
instruments
--- observation --- Mail --- sampling unit
--- survey --- Telephone --- sampling size --- Questionnaire
--- experiment --- Personal --- sampling procedure --- Interview
--- online --- focus groups
Implementing the research plan
The next step is to put the research plan into action by
collecting the secondary and primary data.
The researcher and marketing manager must understand and
avoid the problems that can cripple the research in any way.
The problem can occur in data collection as the respondents
may give the biased opinion that can lead to falsified results.
The information collected must be analyzed, tabulated and
passed through certain statistical tests.
Interpreting and reporting the
findings
The market researcher must then interpret the findings, draw
conclusions and report them to show to the management.
The management must then analyze its reliability, correctness
and must avoid biased and “what we expected” results.
The true picture can actually leads towards effective decision
making
4. Analyzing consumer behavior
The buying behavior of final
consumers-individuals and households
who buy goods and services for
personal consumption.
Factors affecting consumer
behavior
Cultural
Social
Personal
Age and life Psychological
Culture Reference
cycle stage Motivation
groups Perception Buyer
Subculture Occupation
Economic Learning
Family Beliefs and
Social class situation
Life style attitudes
Roles and
Personality
status
The Consumer Buying Decision
Process
Need Information Evaluation of Purchase Post purchase
recognition search alternatives decision behavior
The consumer buying decision
process
Need recognition: The first stage of the buyer decision process in which
the consumer recognizes a problem or need.
Information search: The stage of the of the buyer decision in which the
consumer is aroused to search for more information.
Alternative evaluation: the stage of the buyer decision process in which
the consumer uses information to evaluate alternative brands in the
choice set. CPV
Purchase decision: The buyer’s decision about which brand to purchase
Post purchase behavior: The stage of the buyer decision process in which
the consumers takes further action after purchase based on their
satisfaction or dissatisfaction.
5. Market segmentation, target
markets and positioning
Companies today recognize that they cannot appeal to all
buyers in the market place, or at least not to all buyers in the
same way. Buyers are too numerous, too widely scattered and
too varied in their needs and buying behavior. Moreover, the
companies themselves vary widely in their abilities to serve
different segments of the market.
Thus most of the companies are moving from mass marketing
toward target marketing—identifying market segments,
selecting one or more of them and developing products and
marketing programs tailored to each.
Steps in market segmentation,
targeting and positioning
Selecting customers to serve Decide on a value proposition
Segmentation Differentiation
Divide the total market into Differentiate the market
smaller segments offering to create superior
Create value for customer value
targeted customers
Targeting Positioning
Selecting the segment or Position the market offering
segments to enter in the minds of the target
consumers.
Market segmentation
Dividing a market into smaller
groups with distinct needs,
characteristics or behaviors
who might acquire separate
products or market mixes.
Segmenting consumer markets
There is no single way to segment a market. A marketer has to try
different segmentation variables, resources, locations, buying attitudes
and buying behavior.
The segmentation variables can be:
Geographic segmentation
Demographic segmentation
Psychographic segmentation
Behavioral segmentation
Geographic segmentation
World region or country
North America, western Europe, middle
region east, China, India, Canada, Pakistan, New
zealand.
Under 5,000, 5,000-20,000, 20,000-50,000,
City or metro size
50,000-100,000, 100,000-250,000, 250,000-
500,000 etc
Density Urban, Sub Urban, Rural
Climate Northern, Southern
Demographic segmentation
Age Under 6, 6-11, 12-19, 20-34, 35-49, 50-64, 65+
Gender Male, female
Family size 1-2,3-4, 5 +
Family life cycle Young, single; young, married, no children; young,
married with children; older, married with children;
older, married, no children; older, single
Under 5000, 5,000-10,000, 10,000-20,000, 20,000-
Income
35,000, 35,000-60,000, 60,000-100,000, 100,000 above
Professional and technical, managers, officials, students,
Occupation retired, farmers etc
School or less, high school, high school graduate, college
Education or university graduates
Religion Christian, Jewish, Muslim, Hindu, other
Race Asian, Hispanic, black, white
Nationality North American, south American, British, Pakistani,
Italian, Japanese
Psychographic segmentation
Social class lower lowers, upper lowers, working class,
middle class, upper middles, lower uppers,
upper uppers
Life-style
Achievers, strivers, survivors
Compulsive, gregarious, authoritarian and
Personality
ambitious
Behavioral segmentation
Occasions Regular, special occasion
Benefits Quality, service, economy, convenience, speed
User status Non-user, ex-user, potential user, first-time
user, regular user
User rates Light user, medium user, heavy user
Loyalty status None, medium, strong, absolute
Readiness stage Unaware, aware, informed, interested,
desirous, intended to buy
Attitude towards
Enthusiastic, positive, indifferent, negative,
product hostile
Requirements for effective
segmentation
Measurable
Accessible
Substantial
Differentiable
Actionable
Selecting target market segments
After evaluating different segments attractiveness, the
company must now decide which and how many segments it
will target.
“ A target market consists of a set of buyers who share
common needs or characteristics that the company decides to
serve.”
The company then design a separate marketing program for
each target market segment.
Target Market Strategies
Undifferentiated Differentiated Concentrated (niche) Micro marketing
(mass) marketing (segmented) marketing (local or individual
marketing marketing
Targeting broadly Targeting narrowly
Target Market Strategies
Undifferentiated (mass) marketing: A market-coverage strategy in which a firm
decides to ignore market segment differences and go after the whole market with
one offer.
Differentiated (segmented) marketing: A market-coverage strategy in which a
firm decides to target several market segments and design separate offer for each.
Concentrated (niche) marketing: A market-coverage strategy in which a firm
goes after a large share of one or a few segments or niches.
Micro-marketing: the practice of tailoring products and marketing programs to the
needs and wants of specific individuals and local customer groups—includes local
marketing and individual marketing.
Local marketing: Tailoring brands and promotions to the needs and wants of local
customer groups—cities, neighborhoods and even specific stores.
Individual marketing: tailoring products and marketing programs to the needs,
wants and even preferences of individual customers—also labeled “markets-of-one-
marketing, customized marketing and one-to-one marketing.”
Differentiation and Positioning
Beyond deciding which segments of the market it will target,
the company must decide on value proposition- on how it will
create differentiated value for targeted segments and what
position it want to occupy in consumer minds e.g. product
positioning.
“Products are created in the factory, but brands are created in
the mind,” says one positioning expert.
Mercedes and Cadillac positions on luxury.
Suzuki on economy.
Haleeb on thickness.
Jazz on “coverage, quality, rates”
Dawlance on reliability
Wal-Mart on “low prices every day”
How differentiation is created?
Identification of competitive advantage-to the extent that a company can
differentiate and position itself as providing superior value
Strong positioning cant be built on empty promises.
A company can differentiate itself or its offering in terms of:
Products
Services
Channels
People
Image
Choosing the right competitive
advantage
How many differences to promote?
Some firms only stick to one unique selling proposition (USP). Each brand should
pick an attribute and tout itself as “number one” on that attribute. E.g. reliability
of Dawlance.
On the contrary, some companies think that they should position themselves on
more than one differentiator. E.g. jazz “coverage, quality and rates” Unilever’s
three in one bar soap offering cleansing, deodorizing and moisturizing benefits.
Which differences to promote?
Differentiators should be:
Important to the customers
Distinctive from the competitors
Superior from the competitors’ same benefits
Communicable and visible to buyers
Preemptive so that competitors cannot easily copy the difference.
Affordable so that buyers can afford to pay for it.
Profitable so as from it, company can achieve its primary objective.
Possible value propositions
The full positioning of a brand is called the brand’s value
proposition—the full mix of benefits upon which the brand is
differentiated and positioned. The benefits are measured
against the price of the offering.
More for more positioning (Mont blanc pen, PC hotel,
Mercedes)
More for the same positioning (Lexus)
The same for less positioning (Wal-Mart)
Less for much less positioning (Southwest airlines)
More for less positioning ( the ideal situation)
