MKT100 Midterm

Lecture 1 – Defining Marketing

Marketing ➔ The activity, set of institutions, and processes for creating, communicating, delivering, and
exchanging offerings that have value for customers, clients, partners, and society at large
Value
- Relationship between the benefits a customer gets for what they give up in return for those benefits
- Benefit >>> Price + Non-Financial Cost
- Customer value is totally subjective, people with the same resources can have a different idea of what value
is
- Formed by customer’s expectation. They perceive value differently.
Four Activities of Marketing
1. Creating Value ➔ Work with suppliers and customers to create offerings with value
2. Communicating Value ➔ Advertising offerings and learning from customer
3. Delivering Value ➔ Giving offerings to customer
4. Exchanging Value ➔ Trade value (money) for those offerings
4 P’s (Marketing Mix)
1. Product / Service Strategy (Create Offerings)
a. Using market offerings (Produce / Services / Information / Experience) to fulfil customer needs
and wants
2. Promotion Strategy (Communicating)
a. Communicate customer value and build customer relationship using the promotional mix
b. Promotional Mix:
i. Advertising ➔ Through internet, Youtube, etc
ii. Personal Selling
iii. Sales Promotion ➔ Discount, Promotions
iv. Public Relations ➔ News Media, Participation in Events such as Marathon
v. Direct and Digital Marketing
c. Goal of promotion: Inform, Connect, Persuade, Remind
3. Place Strategy (Delivering)
a. Delivering benefits and values to customer
b. Starts from the beginning of supply chain (Raw material supplier ➔ Tier 2 supplier ➔ Tier 1
supplier ➔ Manufacturer ➔ Dealers ➔ Consumers)
4. Price Strategy (Exchanging)
a. Exchange money for product or services
b. Factors to consider: Cost, Competition, Customer, Government Policy, Stages of Product Lifecycle
c. In some cases, doesn’t have to use money (points, cashback, etc).
i. For example: Users can use Facebook for free. In exchange, Facebook sells the customer’s
search data to other companies
Marketing Concepts
1. Production Oriented (1800 – 1920) ➔ Focuses on reducing production cost
2. Selling Oriented (1920 – WWII) ➔ Aggressive sales techniques
3. Product Orientation (Post WWII) ➔ Create different products from the competition
4. Market Orientation (1950-1990) ➔Create what customer wants
5. Value Orientation (Current) ➔ Create value for customer, 1-on-1 customer relationship service dominant
logic era
Marketing can be performed by individuals and organization
- B2B (business to business, ie Costco)
- B2C (business to consumer, ie retail)
- C2C (consumer to consumer, ie eBay)
Key Aspect of Marketing
1. Marketing helps create value
2. Marketing is about satisfying customer needs and wants
a. Needs ➔ Required for survival
b. Wants ➔ Needs influenced by culture and personality
c. Demand ➔ Wants + Buying Power
3. Marketing always entails an exchange between parties
a. Buyer and seller giving up one thing to receive value
4. Marketing requires marketing mix decisions
5. Marketing can be performed by both companies and individuals
a. B2B (business to business, ie Costco)
b. B2C (business to consumer, ie retail)
c. C2C (consumer to consumer, ie eBay)
6. Marketing occurs in many situations
a. Marketing also occurred in Non-Profit companies and industry-wide level.
Changing Marketing Environment
1. Criticism of Marketing ➔ Create wants for products and services that are not needed, high prices, harmful
2. Sustainability ➔ Acceptable practices, viable, and equitable
3. Ethics and Marketing ➔ Avoid scamming, user privacy, accountability for mistakes, human right
compliance
4. Service-dominant Logic ➔ Able to provide value no matter how its delivered
5. Metrics ➔ Use technology to gather data to create better offers
6. A Global Environment ➔ Business influenced by global effects such as War, Pandemic, Culture, Laws
The Marketing Process
Lecture 2 & 3 - Strategic Planning and the Marketing Environment
Strategic Planning: A process that helps an organization allocate its resources to capitalize on opportunities
in the marketplace.
Strategic Marketing Planning Process
- Planning Phase
o Step One: Situation analysis
▪ Evaluate the External and Internal Environment
▪ SWOT
o Step Two: Business mission and objectives
- Implementation Phase
o Step Three: Identify opportunities
▪ Segmentation, targeting, positioning
o Step Four: Implement marketing mix
▪ Product, price, place, promotion
- Control Phase
o Step Five: Evaluate performance using marketing metrics
▪ Four Management Functions: Planning, Organizing, Leading, Controlling
Situation Analysis
- Must be conducted before a company makes a decision
- Keep in mind the decision or action to be considered
- Consider only factors that are relevant to the decision
Environments in Analysis Situation
1. External Environment (Macroenvironment)
a. Factors (PESTC: Political, Economic, Social, Technology, Competitive):
i. Political / Legal / Reg
a. When conducting in multiple market, companies must understand regulations vary
across country and states
b. Change in political leader can also change the regulations
ii. Economic
a. Inflation, unemployment, interest rate, growth / recission affect sales and goals of
company. Some customer will be more cautious when buying, which lowers buying
power.
iii. Social
a. Demographics such as age, gender, income, status, and trends always change, which
impact beliefs and value they hold
a. For example: Fitness, nutrition, and health trends ➔ vitamin water production
iv. Technology
a. Technology affects communication, easier for consumers to compare and study
products
v. Competitive
a. Competitive in macro compares the company as a whole. How intense is the
competition in the industry? Is the revenue in that market concentrated or
distributed evenly?
b. Five Forces that Shape Industry Competition
 2. Internal Environment (Microenvironment)
a. Factors:
i. Company Resources
ii. Company Capabilities
iii. Corporate Partners ➔ Necessary to see if
partner is giving advantage or
disadvantage
b. Competition
i. Necessary to analyze the 3 factors in
comparison to competition
a. In micro level, competition occurs between organizations to see if they have
stronger or weaker resources, capabilities, and partners
Direct and Indirect Competition
- Direct: Same product (Burger King vs McDonalds), same customer group (Fast Food)
- Indirect: Different product (Burger King vs Pizza Hut), same customer group (Fast Food)

SWOT (Strength Weakness Opportunity Threats)

- Strength or Weakness
o Internal to the company
o Within the control of the company
o A comparison against the competition
- Opportunity or Threats
o External to the company
o Not within the control of the company
o Exists in the absence of the company
Developing Objectives
- Goals to accomplish in a given time frame
- Should be realistic and measurable

Product and Market Entry Strategies (Ansoff’s Matrix)

- Strategic marketing plan to give direction to certain market group
Suitable Competitive Advantage (SCA)
- Company’s unique superiority over its competitors. Allowing it to maintain its leading position in the
market
- Should not be easily copied and can be maintained over the long term
- Types
o Location excellence ➔ Not easy for competitors to add location
▪ Examples: High-end Mall, Tourist Spot, etc
o Operational excellence
▪ Strong supplier relationship, supply chain management (i.e. product should not be dormant,
but available when needed), and efficient operation to offer customer better pricing
▪ Example: Wallmart
o Product excellence
▪ High perceived value, unique offering that can’t be easily copied by competitors
▪ Example: Supreme
o Customer excellence
▪ Excellent customer service, loyalty program, product service care
▪ It’s more affordable to keep customers than finding a new one
Strategic Planning – 3 Levels
- Levels:
o Corporate (Corporate-level plans) – Collection of SBUs
o Business (Business-level plans) – SBU (Single Business Unit)
o Marketing (Functional-level plans)
- The strategies at each level should be consistent and help to fulfil the objective of the other levels
The BCG Growth-Share Matrix
- Tool to determine position and growth of a company or
a product
- High Market Growth ➔ Promising Future (AI, Tech, etc)
- High Market Share ➔ Many Money
Lecture 4 – Buyer Behaviour
Consumer Purchase Decision Process
- Need/Want Recognition ➔ Search ➔ Evaluation ➔ Choice ➔ Post Purchase Use and Evaluation
o Search ➔ Look for brands, etc
o Evaluation ➔ Find which brand fulfil customer’s requirements
o Choice ➔ Finalize choice and determine purchase method and where to buy it (Online, etc)
o Post Purchase Use and Evaluation ➔ Can cause “Post Purchase Dissonance”, reinforce it with
customer service, etc
Product Disposal
- How customer can throw away unused product without damaging the environment
o Possible solutions: Refills to avoid plastic waste
- Circular Economy:
o Take out waste and pollution in each process
o Keep the products and materials for use as long as possible
Involvement and Consumer Buying Decisions
- Low Involvement
o Inexpensive
o Purchased regularly (Groceries)
o Low risk if buyer made mistake
o Customer knows limited information about the product
- High Involvement
o Expensive - Can cause great deal of post purchase dissonance
o Purchased occasionally (Car, Phone, House)
o High risk if buyer made mistake
o Customer knows many information about the product
- Factors Determining Involvement Levels: Interest, Situation, Previous Exp, etc
Types of Buying Decision
- Impulse Buying ➔ Purchases with no plan
- Routine Response Behaviour ➔ Purchases with limited information
- Limited Problem Solving ➔ Between low and high involvement, search for a little more info after having
some
- Extended Problem Solving ➔ Spend time to gather info
Factors of Consumer Decision Making Process
1. Personal Factors – gender, age, lifestyle, activities, stage in life (single, married, have kids), mood, personality
2. Psychological Factors – motivation, interpretation of the world, learning / experience, attitude
a. Selective Exposure – selecting information that makes into the brain
b. Selective Attention – filtering out information based on its relevant to you
c. Selective Retention – Ignoring or forgetting information
d. Selective Distortion – misinterpretation of the intended message
3. Societal Factors – culture, sub-culture (religion, jobs), social class, family
4. External Factors – social norms, time of year (seasons), situational factors, reason of purchase
Marketing Research
- Most product and services fail because they don’t understand customer. To do so, company use market
intelligence and other data to conduct marketing research.
1. Marketing Intelligence: Gathering info on an ongoing basis to stay in touch with the market
- Marketing Research Process
1. Step 1 – Define the Problem
▪ Critical part of the study
▪ Include relevant information by narrowing the parameters
▪ Research objective is the goal
2. Step 2 – Design the Research
▪ Primary Data ➔ Your own new information from interview or surveys
• Qualitative ➔ focuses on consumer attitude and behaviours
o Descriptive research
o Casual research
• Quantitative ➔ numbers to describe or measure: 5W 1H
▪ Secondary Data ➔ Existing information from existing reports (financial, sales, etc)
3. Step 3 – Design Data Collection Forms
▪ Extremely important how questions are worded
▪ Use pre-set answers to ensure a comparable data
4. Step 4 – Specify Sample
▪ Sample is a portion of the population
▪ Larger sample ➔ Accurate results
5. Step 5 – Collect the Data (online and mobile surveys, physical measurements, observing)
6. Step 6 – Analyze the Data
▪ Use only quantitative data to draw conclusion
▪ Can compare data to see if conclusion is consistent
7. Step 6 – Write the Report and Present
Marketing Information System (MIS)
- Used by company to manage large number of information and make decisions
- Integrating all info collected so others can use
Business Buying Behaviour (B2B)
- B2B markets differ from B2C in the following ways: number of goods sold, product complexity, long sales
cycle, etc
- Characteristics
1. Market
▪ Demand is derived from consumer markets
▪ Few customers, more geographically concentrated & large orders
▪ Demands is inelastic, fluctuates more and frequent (dynamic)
2. Product
▪ More technical
▪ Mainly raw and semi-finished goods
▪ Emphasis on delivery time, after sale service, financing
3. Buying Process
▪ Complex, Price negotiation, Formalized
▪ Buying criteria and objective specified
▪ Many participants in buying decision
▪ Close long-term relationships
4. Marketing Mix
▪ Direct selling
▪ More technical advertising, emphasis on personal selling
▪ Price often negotiated with trade or quantity discount
Classifying Business Customers
1. Producers
a. Profit-oriented
b. Buy to modify or add it into their products / services, then sell
2. Resellers
a. Retailer and wholesalers
b. Buy to sell
3. Government
a. Largest single segment for goods and services
b. Put contracts for bid
c. Municipal, Academic, Social, and Hospitals (MASH)
4. Institutions
a. Seek to achieve goals other than business goals
b. Other than MASH: place of worship, labour unions, civic clubs, foundations, fraternal organizations
The Buying Centre – Group of people who make purchasing decision in an organization
1. Initiator ➔ Who discovers the needs for the product / service
2. Users ➔ Who will use the product / service
3. Influencer ➔ Provide information for evaluating alternative and improving buying decision
4. Buyers ➔ Select the supplier and arrange terms of purchase
5. Deciders ➔ Approve for final suppliers
6. Gatekeepers ➔ Determine who can access the buying center and control flow of info
Types of Buying Situations
- Straight Rebuy ➔ Routinely reorder without modification
- Modified Rebuy ➔ Modify product specification
- New Task ➔ Buyer purchase for the first time
- Systems Selling ➔ Buying complete solution to a problem from a single seller
The Buying Culture
- Autocratic Culture ➔ Multiple participants, only one makes the decision (Decider)
- Consultative Culture ➔ One makes the decision, but consult with other members before buying
- Democratic Culture ➔ Decision based on majority of buying centre
- Consensus Culture ➔ Decision made if all member agreed
The Interpersonal and Personal Dynamics of B2B Marketing
- Interpersonal factors among members of buying centre affects the decision (“office politics”). Personal
factors also affect decision, as buyers can be overwhelmed with choices.
Networks and B2B Relationships
- In business marketing there must be commitment and trust between business partners.
- Long term interaction, build upon many transactions. Exchange of value is created through these
interactions
- Network is crucial, its about how a business can accomplish goals by cooperating with others