Principles of Marketing

PRINCIPLES OF MARKETING 2022-2023

03.05.2023 prof. alvisi

Solomon, Michael R; Marshall, Greg W; Stuart, Elnora W, Marketing: Real People, Real Choices [Global Edition]

11th ed. Pearson Education. ISBN 9781292434384

MARKETING CONCEPT

we can trace back examples of marketing even before 1950 because marketing talks

➔ about changing

fourth era of marketing : marketing it is a set of tools used to create value, to

➔ meet people needs

marketing is about exchange

➔

Production Era

marketing is trying to find what your customers desider and then produce it

➔ once what people wanted was clear, large number of companies tried to

◆ create that product or service

Sales Era

people started to do discount in order to make their customers choose them instead

➔ of the competitors 1

PRINCIPLES OF MARKETING 2022-2023

Relationship Era

instead of worrying about the product you’re making, worry about the customers,

➔ asking what they want

build a relationship with the customers and only then worry about your

◆ product

short your orizont, adapt your product to the market and the customers

◆

Triple-Bottom-Line Era

The Changing World of Marketing

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Marketing is like Dolby

V=value

➔ value is more important than the cost

◆

P=price

➔ this should be enough to cover the costs and to make money out of it

◆

C=costs

➔ if my price increases, but the costs are the same, there’s a chance that my

◆ customers will not buy my product because they think it is not worth it

if the costs increase, it is not a good idea to increase the prices too

◆

Marketing Defined:

activity, Institutions, Processes

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Value for Customers

needs : they cannot be created

➔ Everyone has needs and shares the same (be happy, get love etc.). they can

◆ change because of our nationality, ethnicity etc.

the goal of a company is to identify a need and find something that can fulfill

◆ that need better or before another company does it

wants

: when a product is able to fulfill a need and its price is affordable for different

➔ types of people it becomes a wants benefits

it becomes a wants because it offers you

➔ demand : created by the number of people that want the specific product minus the

➔ number of people that cannot afford it

market

demand exist in a

➔ marketplace : a place that can be physical or not

➔ 4

PRINCIPLES OF MARKETING 2022-2023

04.05.2023 prof. alvisi

CREATE AND DELIVER VALUE

Why do companies exist?

➔ they exist to make life easier for us, they exist to create value and that’s the

◆ purpose of marketing

therefore, companies should not exists if they aren’t no longer creating value

◆ ● they are not there to give people a job, they aren’t there to make

money but only for creating value

Value from the Seller’s Perspective

competition is never against other companies, it is always targeting at serving at the

➔ best your customers better than your competitors

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CHAPTER 2

World Trade

trade : there is a continuous flow of goods and services all around the world

➔

Steps in the Decision Process to Enter Glòobal

Markets

There are a number of things we should consider if we want to go global (political

➔ differences, religious differences etc.)

step 2: in some cases i cannot enter a new market

➔ step 3: the best way to enter a new market

➔ do something less risky or going full in or doing something in between

◆

step 4: would my product work just as well as in the old market or do i have to do

➔ something different? 6

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Should we go Global?

there is a possibility in which the new market can make more profit than the previous

➔ one there is an opportunity to grow with a minimum expense

◆

Is your business scalable?

➔ any increase in the output produce will increase the cost of production

◆ A scalable business is a business in which increased revenues cost less to

◆ deliver than current revenues. In other words, the cost of growing is far

outweighed by the resulting profits.

Which kind of competition am I going to face?

➔ my new rivals may not have a product that it is up to my standard

◆ it could be successful if i am going to compete with competitors less

◆ aggressive than the previous one

competitive advantage:

➔ Competitive advantage is the favorable position an organization seeks in

◆ order to be more profitable than its rivals.

if you can at the same time creating more value for your customers than your

◆ competitors and you are able to catch that value and keep it to yourself (doing

both things simultaneously) then you have competitive advantage

● the reason why you are successfully locally would still be true once

you enter another market? if so, then you have competitive advantage

01. Internal Analysis

cost structure

1. : for examples, if you are selling clothing, then you have to make

sure that your clothing can be sold in the new market

resources endowment

2. : i have to make sure that the things i control (resources

etc.) still would have value when i enter another market

transportation

3. : huge difference in price because of transportation costs (this

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PRINCIPLES OF MARKETING 2022-2023

doesn’t matter if we are talking about a different product with more value)

performance standpoint

4. : when demand exceeds supplies the price will go up,

when supply exceeds demand the price go down

Initiatives in International Cooperation and Regulation

02. Analyze the External Marketing

Environment

Elements of the external environment (pestel + 5+1 framework)

Competition in the Macro environment

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monopoly : google

➔ customers have no choice than the only company

◆

oligopoly : markets dominated by few producer

➔ the difference between an oligopoly and a competitive market it’s that in an

◆ oligopoly you never compete on price because in an oligopoly every company

has more or less the same size, they share the same cost constructors and

each time you could lower the prices, other competitors can do the same

monopolistic competition

: several different companies with several different

➔ offerings.

each of them is not a perfect substitute of the opposite

◆ the higher the company number, the higher competition

◆

perfect competition

: all products are perfect substitutes

➔

Levels of economic development

Market-Entry Strategies

Localization versus Standardization

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PRINCIPLES OF MARKETING 2022-2023

adapt for example my food with the new country tastes (korean>spicier etc.)

➔

RECAP

ETHICS

Ethics is job one in marketing planning

When is a Bribe not a Bribe? Ethical issues for

global business

05.05.2023 prof. fakir class 3 10

PRINCIPLES OF MARKETING 2022-2023

MARKETING RESEARCH

Rule N. 1: Loyalty

loyalty: customers are not always loyal to a company. a company has to make effort

Rule N. 2: surviving

Rule N. 3: Spoil the customers-retain the

customers

the company has to satisfy customers need

➔ first philosophy: serving customers as a parent

➔ If a customer wants something, he has to pay for it.

◆ if he wants discount he must participate in loyalty program

◆ if he has a problem, we as a company can solve it

◆

second philosophy: grandparent

➔ this philosophy just spoil their customers

◆

MARKETING 11

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PRINCIPLES OF MARKETING 2022-2023

COMPLEX OR SIMPLE MARKETING

simple : you can just have your own demographic research

➔ complex

: you hire someone professional to do that

➔

PROCESS OF MARKETING RESEARCH

seven steps you have to follow if you want to do a marketing research

STEP 01: Define the marketing research

problem

it means: the process of collecting, analyzing and interpreting data about customers, about

rivals and business environment in order to improve market effectiveness

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PRINCIPLES OF MARKETING 2022-2023

STEP 02: determine the marketing research

plan

Secondary research 14

PRINCIPLES OF MARKETING 2022-2023

Primary research

PRIMARY AND SECONDARY DATA RESEARCH

Primary data

Exploratory research: 15

PRINCIPLES OF MARKETING 2022-2023

Descriptive research

Causal research

Method to collect primary data

neuromarketing: uses brain’s customers activities to understand how they make decisions

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ONLINE RESEARCH

BOUNCE RATE 17

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STEP 4: design the sample

STEP 5: collect the data

STEP 6: Analyze and interpret the data

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STEP 7: Prepare the research report

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09.05.2023 prof. fakir

CUSTOMER BEHAVIOUR

NEED RESEARCH

INFORMATION

LEVEL OF TAKING DECISION

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PRINCIPLES OF MARKETING 2022-2023

EVALUATING OF ALTERNATIVES

Factors that may influence our decisions

Cultural factors

SOCIAL FACTORS

Opinion leaders: influencers

➔ reference groups: group we identify with or a group we want to be associated with

➔

INDIVIDUAL FACTORS 22

PRINCIPLES OF MARKETING 2022-2023

PSYCHOLOGICAL FACTORS

perception: one customer may like your product or service and the other may not

➔ Motivation: the reasons why we buy that product could change in time

➔ Learning: the more experience you have about that product the less you need to

➔ know about it

Beliefs and attitudes:

➔

PURCHASE 23

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post purchase

THE AIDA MODEL 24

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PRINCIPLES OF MARKETING 2022-2023

11.05.2023 prof. alvisi

CHAPTER 7: segmentation, target

marketing, positioning

Learning Objective

Target marketing: select and enter a market

segmentation : dividing a market into pieces.

➔ Is it more profitable treating marketing as a whole thing or to divide it?

◆ ● thanks to globalization, industries easily become worldwide

finding what customers want without having to sell the product first

◆ Segmentation is the process of dividing a larger market into smaller pieces

◆ based on one or more meaningful, shared characteristics. This process is a

way of life for almost all marketers in both consumer and

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PRINCIPLES OF MARKETING 2022-2023

STEP 1: SEGMENTATION

this part it is true, but it is not enough

➔ goal of segmentation: we are looking for segment of customers who are alike, they

➔ share the same needs

this doesn’t mean we have to serve them all, we can decide to develop a

◆ specific product and serve one or more segments

Segmenting consumer markets

DEMOGRAPHIC SEGMENTATION:

BY AGE

The first set of variables are the demographic variables. they are attractive because

➔ they are easy to find

BY GENDER

Many products, from fragrances to fashion apparel and accessories, specifically

➔ appeal to men or women. Traditional segmentation by gender often starts at an early

age—even diapers come in pink for girls and blue for boys.

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While society’s perspective on gender has changed in recent years and there’s been

➔ a shift toward less rigid and binary definitions of gender, most marketing continues to

categorize products for men or for women. In some cases, manufacturers develop

parallel products to appeal to each sex.

A growing number of people are taking a more fluid attitude toward gender—that is,

➔ beyond the traditional male/female dichotomy. Gender identity is the personal sense

of one’s own gender.

Gender identity can correlate with a person’s assigned sex at birth or can

◆ differ from it.

Gender expression typically reflects a person’s gender identity, but this is not

◆ always the case.

Androgyny refers to the possession of both masculine and feminine traits.

◆ Nowadays, marketers are more frequently making a distinction between

sex-typed people—who are stereotypically masculine or feminine—and

androgynous people.

● Androgyny can create new target markets for savvy marketers who

create products for that growing segment

One way to do this is for a firm to take a current product sold to one gender and test

➔ the waters with it or an adaptation of i