Friday September 7th Marketing for PR Practitioners CHAPTER 1 - MARKETING AND CONSUMER BEHAVIOUR MARKETING DEFINITIONS Advertising Persuasive

e form of marketing communication designed to get a positive response from a defined target market Basic role influence behavior of target market Public Relations Firms communication with varying public (shareholders, middlemen, consumers, suppliers, etc.) Marketing Process of planning and executing conception, pricing, promotion/distribution of ideas, goods/services to create EXCHANCES that satisfy individual and ORGANIZATIONAL objectives Organizational function Creating, communicating, and delivering value Managing customer relationships to benefit the organization and its stakeholders The 4 Ps 1) Product Anything offered to a market for accusation, use, of consumption 2) Price 3) Promotion 4) Place The Marketing Process 4 factors are required: 1) 2 or more parties (individual or organizational) with unsatisfied needs. 2) Desire and ability to be satisfied. 3) Communication 4) Something to exchange ($) Target Market one or more specific groups of consumers toward which an organization directs its marketing efforts Market segmentation is the process of sorting groups of the target market Important to divide in homogeneous segments Once target market is decided, design market to appeal to them using MARKETING MIX

WHAT IS A MARKET? Made up of potential consumers with desire and ability to buy a specific product MARKET Ultimate consumers Organizational buyers Both The PRODUCT is marketed (exercise) PRODUCT 1) Goods 2) Services 3) Ideas 4) Places 5) People MICRO (individual company)/MACRO (society) MARKETING Marketing is a process of creating exchange in relationships Between the producers and consumers/customers Marketing can be defined as: a) A process divided into 2 levels: Micro macro How individual organization directs its Enhances social benefits for society AT marketing to benefit customers LARGE how to benefit society b) Organizational philosophy Every organization has a particular philosophy that directs the way it does business Uses mission statement - spells out basic function Formal vs informal ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ THREE TYPES OF ORGANIZATION 1) Product driven Making/creating products A good product will create his own demand FOCUS on the product itself rather than the consumer needs Usually internally focus pay little attention to consumers real needs 2) Sales driven Role of sales force is emphasized BELIEF any product can be sold if enough selling effort is used Motto: fit the customers to fit the companys offerings Via door to door/telemarketing ISSUE selling what consumers do not normally think of buying 3) Market driven

Prevalent during the 1930s, popularized post-war years (shift from sellers to buyers market) NOW customer needs are key Serving customers needs + building customers relationships = longterm profitability. Five different organizations in history of north American business 1) Production era 2) Sales era 3) Marketing concept era 4) Market orientation era 5) Customer experience management era SEVEN IMPERATIVES FOR MARKETING SUCCESS 1) Have a global outlook 2) Commit to quality 3) Deliver customer value 4) Innovative continuously 5) Embrace technology 6) Practice relationship marketing 7) Act ethically and responsibly CHAPTER 2 marketing role in the organization Describes strategic planning and marketing role in process Quality Service Cleanliness Value What is strategic planning? 3 steps o Define organizational mission o Determine specific objectives realistic and measurable o Identify growth strategies STRATEGIC PLANNING steps in strategic planning 1) Define company mission 2) Set company objectives/goals 3) Design business portfolio 4) Plan marketing & other functional strategies MISSION STATEMENT In essence, the mission statement clarifies the nature of existing products, markets, and functions the organization presently provides. SEPT 21 ORGANIZATIONANAL OBJECTIVES Translate mission statements into objectives/goals Specific, measurable goals the organization seeks to achieve and by which it can MEASURE its performance.

Possible organizational objectives for UNITED WAY: Increase fund raising Increase amount of volunteers Offer more information at high schools SETTING STRATEGIC DIRECTIONS Answer 2 questions: Where are we now? Where do we want to go? KEY get to know your customers Issue of competency o Benchmarking (look at competitors and what they do.. choice of copying or doing better than them) o Competitive advantage 4 GROWTH STRATEGIES 1) Market penetration 2) Market development 3) Product development 4) Diversification Internal SW Strengths/weaknesses External OT Opportunities/threats

SWOT ANALYSIS Know if mission statement is clear, objectives are realistic, and growth strategies are correct Strength Weaknesses Internal Opportunities Threats External STRATEGIC MARKETING PROCESS phases of management 1) MARKET PLANNING develop plan 2) MARKETING IMPLEMENTATION execution 3) MARKETING CONTROL measure results PUBLIC IMAGE and ITS INFLUENCE Good reputation is important earned through good marketing Sensitivity towards consumers is important o Emphasis on customer service o Support in community o Support of issues important to society The Marketing Plan

Marketing situation Marketing objectives Marketing strategy o Target market o Positioning o Marketing mix product, price, promotion, place Marketing budget Marketing organization Control

Sales Analysis -> inventory Profitability Analysis -> checking inventory distribution Budget Sales forecast Expenses Control What happens after product is released What controls you propose Deviations: 1) Solve problems 2) Exploit opportunities MARKETING CONTROL Issue of measuring results Corrective issues/actions One tool that you can use in control phase is the: o MARKET AUDIT A comprehensive, unbiased, periodic review of the organizations marketing management efforts. 2 areas of analysis: Sales analysis Profitability analysis

EVOLVING MARKETING ENVIRONMENT

How maintain success Anticipation of change Key: ENVIRONMENTAL SCANNING To maintain an active marketing plan one needs to continually be aware of outside TRENDS and significant impacts on the business world Need to identify ACCELERATORS or BRAKES SOCIAL FORCES 2 components

o Demographics Study characteristics of human population, its values and behavior Population shifts census metro areas Ethnic diversity ethnic marketing The Canadian family Blended family Generational cohorts Baby boomers Generation x Generation y o Culture Changing attitudes and values Culture incorporates the set values, ideas, and attitudes of a homogenous group of people that are transmitted from one generation to the next 2nd social force a) Trends b) Changing roles time poverty c) Attitudes change d) Values working, marriage, honesty e) Ecological consciousness NATURAL ENVIRONMENT Increased pollution Water quality and availability Increased use of non-renewable resources The green movement Varied government positions ECONOMIC FORCES Economy pertains to the income, expenditures, and resources that affect the cost of running an organization or a household Economic forces: o Macro inflationary and recessionary economy o Micro consumer income: Gross Total amount of money made in one year by a person, household, or family unit is referred to as gross income Disposable Disposable income is money a consumer has left after paying

Technological Forces Technology of tomorrow Technologys impact on marketers o Electronic commerce o Intranet o Extranets marketspace o E-business o E-marketing o E-commerce Technology o Society is in an age of technological change: o Inventions o Innovations o Scientific discoveries o Research o Ie. Biomedicine, computers, robotics, telecommunications, 3D, short PLC, etc. o KEY maintain environmental scanning Competitive Forces Alternative Forms of Competition o Pure competition o Monopoly o Oligopoly o Monopolistic competition CANADAS MAREKT STRUCTURE MONOPOLY one firm serving the entire market OLIGOPOLY few firms dominate the market MONOPOLISTIC COMPETITION many firms compete based on unique marketing mixes to differentiate offerings PURE COMPETITION many firms marketing similar products where the differential advantage is not clear to consumers Regulatory COMPETITION ACT: Key legislation designed to protect competition and consumer - Criminal offences (i.e. price fixing, predatory pricing, misleading practices)

taxes to use for food, shelter and clothing. Discretionary Discretionary income is the money that remains after paying for taxes and necessities.

** Figure 3-4 Major federal legislation designed to protect competition and consumers ** Regulatory Forces Regulation consists of RESTRICTIONS the provincial and federal laws place on business with regard to the conduct of its activities (1) COMPETITION ACT (2) SELF REGULATION: an industry attempts to police itself (3) CONSUMERISM: The Consumer Bill of Rights - Right to Safety - Right to be Informed - Right to Choose - Right to be Heard - CANADA Dept. of Consumer of Corporate Affairs 2 problems 1) Noncompliance of members 2) Enforcement of regulation CHATPER 5 Consumer BehaviorV The behavior of individuals in obtaining goods and services, including the decision processes that precede and determine the purchase What makes the consumer tick? IFLUENCES on CONSUMER BEHAVIOUR Psychological Marketing Company (image) Economic Cultural Social ** Figure 5-1 Purchase decision process ** 1. Problem recognition: Perceiving a Need Goal of marketer: How can you help the consumer recognize a problem? ACTIVATE THIS PROCESS KEY: the perception of a NEED 2. Information search: Seeking Value INTERNAL vs EXTERNAL Own memory When past knowledge not enough: 1) Personal sources 2) Public Sources 3) Marketer-dominated 3. Evaluation of alternatives: Assessing Value Evaluative criteria

Consideration set Development of Evaluation Criteria 3 Phases: a) Suggesting criteria to use for the purchase b) Yielding brand names that might meet criteria c) Developing perception of VALUE KEY: creating a Evoked SET of particular brands 4. Purchase decision 2 choices remain: a) Whom to buy from? b) When to buy? 5. Post purchase behavior Cognitive dissonance This stage is key to a market-driven organization Perception how one organizes & interprets information (funnel shape) 4 stages 1. Selective exposure 2. Selective attention 3. Selective comprehension 4. Selective retention Perception Organization 1. Selective did you watch CTV? 2. Attention do you watch the AD? 3. Comprehension do you understand the message 4. Retention 0 will you remember product next week Issue of PERCEIEVED RISK in purchasing a product/service Anxieties felt when purchasing a product - COST - PERFORMANCE - PSYCHOSOCIAL IS LEARNING TAKING PLACE? Learning from REPEATED experience BRAND LOYALTY linked to the concept of habit formation Values/ Lifestyles VALUES personally/socially preferred modes of conduct ATTITUDES learned predisposition to an object BELIEFS subjective perception of how product performs LIFESTYLES PSYCHOGRAPHICS (handout)

Marketing Research: From Information to Action The Internet is reinventing marketing research Lower Cost Engaging More creative

Marketing Research & Information Technology The quality of all marketing planning decisions depends on the quality of the information on which they are based. Imperative of NEW products Market Research On going process Defining a marketing problem, systematically collecting and analyzing in formation and recommending actions WHY? To eliminate RISK & UNCERTAINTY Goal: find needs/ wants of consumers to help design the marketing mix

CHAPTER 8 : Consumer Survey Q: if goal of marketing research is to survey consumers why is it difficult? Problems: a) Who should you talk to? b) What to ask them? c) How to ask them? SAYING IS NOT ALWAYS DOING Marketing Research Process Apply the Scientific Method 2 basic principles of the Scientific Method: - Reliability - Validity What are reliability and validity? Reliability is the ability to replicate research results under identical environmental conditions. Validity involves the notion of whether the research measured what was originally intended. ** FIGURE 8-1 the basic marketing research process **

STEP ONE Problem Definition Critical Proper problem defin. Means 50% of the marketing research task is already done EXPLORATORY RESEARCH Usually informal /casual 2 parts informal fact finding - Examination of secondary sources of information Exploratory research almost always involves use of SECONARDY DATA Divided into 2 parts INTERNAL : Sale reports, financial, statements, customer letters etc. EXTERNAL: Fed Gov. Reports, Stats Canada, Local Library, Commercial organizations ( ie, Nielsons), Trade Assoc, Periodicals, etc. Advantages/ Disadvantages of Secondary data ADVANTAGES: Availability at low or no cost Information is updated constantly by some sources May be the only source of information Useful in exploratory research stage DISADVANTAGES: Inability to resolve a specific problem Reliability and accuracy of the data are often questioned

Data are outdated and not applicable to a rapidly changing market STEP TWO FORMAL RESEARCH DESIGN The collection of Primary data Divided into 2 categories: QUANTITATIVE/ numbers Vs QUALITATIVE/ words IMPORTANCE of SAMPLING Sampling: selecting representing elements from the chosen population Probability (precise rules to select sample) vs. non-probability QUALITATIVE DATA No true statistical inferences/statements Used to examine attitudes/feelings/motivations of consumers Use WORDS not NUMBERS Samples are usually selected on non-probability basis and small Great for uncovering hypothesis Ex. DEPTH INTERVIEWS/ FOCUS GROUPS

QUANTITATIVE DATA Data is which analysis and interpretation reply on numbers and percentages obtained from a study (data collection from strutted questionnaire) Involves studies that use mathematical analysis to search for statistically significant differences between various types/groups of consumers Surveys Asking consumers questions and recoding their responses 4 options: mail, telephone, personal interview and online Which option to use depends on: 1. Nature of information sought 2. Cost and time constraints 3. Location of respondent WORDING 4 guidelines: 1. Clarity 2. Avoid Bias 3. Ability of Respondents 4. Willingness of respondents SURVEYS SUMMARY Advantages: enables a large amount of data to be gathered quicklyand inexpensively

LIMITATIONS: Sampling biases can skew results. Poorly constructed questions can result in answers that are ambiguous, so data are not clear. Accuracy depends on ability and willingness of subjects to answer questions accurately EXPERIMENTS One or more variable are systematically manipulation and the effect of that manipulation on other variables is studied KEY of Cause Effect relationships In Field or LAB settings Answers the what if question Advantages: strict control of variables offers researchers the opportunity to draw conclusion about cause-and-effect relationships Limitations: influence subjects behavior; unexpected and uncontrolled variables may confound results;; many variables cannot be controlled and manipulated OBSERVATION Watching, either mechanically or in person, how people behave Ie people meter for tevelvision Can reveal what people do but NOT why? ETHONGRAPHIC RESEARCH: observational approach to discover subtle emotional reactions as consumers encounter products in their natural use enviroment TEST MARKETING Placing a product for sale in one or more limited markets, representative of the whole, in order to observe its performance under a proposed marketing plan Grocery Gateway STEP 3 DATA COLLECTION and ANALYSIS Purpose transform data into valuable information for decision-making Cross-tabulations or crosstabs it is a method of analyzing and relating data having two or more variables; used to discover the relationship in the data CONCLUSION AND REPORT Interpret the information and make conclusions with regard to managerial The report should highlight the important results and conclusions LAST STEP CONCLUSIONS AND REPORT This is where you make suggestions for actions

CHATPER 9 MARKET SEGMENTATION Results from a determination of factors that distinguish a certain group of consumers from the overall market Finding a base to start from Defined = grouping people according to their similarity in one or more dimensions related to a particular product category These market segments are grouped according to : a) common needs b) will respond similarly to a specific marketing offer/marketing mix Identify market needs Benefits in terms of Product features Expense Quality Savings in time and convenience Step 1: Group Potential Buyers into Segments Ways to segment consumer markets Geographic Segmentation - Find out where the buyers are? - Region/Province/City/Urban vs Rural - Develop regional marketing programs Demographic Segmentation - Population Characteristics very popular for 2 reasons:

1. Needs are tied to demographic characteristics 2. Information is easy to locate and measure - Variables: age/gender/income/education/occupation/marital status/ household size/ ethnicity/religion Psychographic Segmentation - Personality traits - Linked to product preferences and brand choice - People with the same demographic characteristics can have different profiles (different personality) - SUMMARY: there are 6 Goldfarb segments divided neatly into more or less traditional, with 56% of the population falling into the more TRADITIONAL SEGMENT - CHILL HANDOUT - Social class: strong impact on preferences - Lifestyle: reflected in purchases - Personality: express who they are Behavioral Segmentation - Based on behavioral variables: a) Benefits sought - Benefit segmentation consumer needs for certain product benefits (ie. TIMEX) b) Product usage 4 dimensions: a) User status b) Usage rate 80/20 c) Occasions for use d) Degree of Brand Loyalty Usage rate 80/20 rate

CASE STUDY QUESTION: If you wanted to segment the market for skis in Canada, how would you go about it? (10 marks) Geographic 2 marks Demographic 2 marks Psychographic 2 marks Behavioral 2 marks Market Segment Strategies HANDOUT There are 3 market segment strategies 1. Undifferentiated/Mass Marketing

2. Differentiated Marketing 3. Concentrated/Niche Marketing Positioning the product After segmentation strategy is complete, marketers must follow up by selecting an effective PRODUCT POSITINING STRATEGY This refers to the place the product occupies in the consumers mind relative to the competition. (Cough Medicine = Buckles) THAN develop an overall marketing mix that supports this strategy Approaches to Product Positioning 2 basic approaches: A) Head to Head positioning (Ms.Vicikies) B) Differentiation Marketing Product positioning using Perceptual Maps Exercise of beer companies

CHAPTER 10:DEVELOPING NEW PRODUCT AND SERVICES Lifeblood of many business firms Developing new products captures the essence of Marketing entrepreneurial spirit 80% failure rate 15-20,000 NEW products are launched every year in North America What is a product? Anything that is offered to a market for acquisition use or consumption and satisfies an individual; or organizational need. Includes goods/services/ideas/place/people TANGIBLE attributes **on test - Core - Basic Value INTAGIBLE attributes **on test - Adjuncts - Value-added dimensions Classifying Products Two ways done: A) Degree of tangibility i) Non-durable goods ii) Durable iii) Services

B) Type of user Consumer goods ----------- industrial Classification of Business Goods Production Goods Support Goods - Instillations - Accessory Equipment - Supplies - Services Q: Explain the difference between product mix and product line. A: A product line is group of product that are closely related because they satisfy a class of needs, are used together, are sold to the same customer group, are distributed through the same type of outlets, or fall within a given price range. Each product line has its own marketing strategy, whereas a product mix is a number of product lines offered by a company. NEW PRODUCT Can be used at any product up to the 12 months period AFTER it enters regular distribution Q: how do we define a new product? Firms often introduce new products to offset seasonal variations in the sales of their current products Ie. Campbells soup 1. Newness Compared with Existing Product 2. Newness in Legal Terms 3. Newness from the Companys Perspective 4. Newness from the Consumers Perspective Why new products or services succeed or fail Marketing Reasons for New- Product Failures - Insignificant point of difference - Incomplete market and product definition (Protocol) - Too little market attractiveness - Poor execution of the marketing mix - Poor product quality on critical factors - Bat timing - No economical access to buyers