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MARKETING
Marketing Definition
Marketing is the process of identifying and satisfying customer needs with want-satisfying goods and services. It includes the coordination of four elements Đalled the 4 P’s of ŵaƌketiŶg:
- Identification, selection and development of a product
- Determination of its price
- “eleĐtioŶ of a distƌiďutioŶ ĐhaŶŶel to ƌeaĐh the Đustoŵeƌ’s place
- Development and implementation of a promotional. Marketing focus upon customer orientation and satisfaction of customer needs.
Chapter I: The Marketing basics
-THE NEED-
In marketing need is a driver of human action which marketers try to identify, emphasize and satisfy, and around which promotional efforts are organized. Aďraham Maslow’s hierarchy of needs insists on the fact that one cannot satisfy a need without previously satisfying the need that precedes it. A satisfied need is not a motivator. The most powerful need is the one that has not been satisfied
Physiological needs: They are meant to regulate and balance the individual, such as maintaining his health and biological equilibrium. For example: drinking, eating, sleeping, heating etc. Security needs: They are linked to the aspiration of most human beings to their future physically and morally. For example: (Accommodation, income and resources, Physical security against violence, delinquency, aggression, moral and psychological security, family stability, health and social security) Social needs: It is the feeling of belonging to a group. The quest of social integration and consideration. It includes as well the feeling to be loved. Esteem needs : This has to do with the quest for self-respect, the feeling to be recognized by others, the feeling to valorise oŶeself thƌough oŶe’s oĐĐupatioŶ. It ĐaŶ iŶĐlude snobbism.
Self-actualization : It is the feeling of self-accomplishment, to make exploits, to get involved into extra ordinary activities. The feeling to participate in the development and improvement of the world.
-THE WANT-
A want is a specific way of satisfying need. Marketers do not create needs; they suggest means to satisfy them. Needs pre-exist, ŵaƌketiŶg aloŶg ǁith otheƌ soĐial foƌĐes iŶflueŶĐe people’s ǁaŶts ďLJ suggestiŶg them one product instead of another.
Example: the need to eat (HUNGER), the want of Hamburger instead of Pizza.
-THE PRODUCT-
It is an item that helps to satisfy or alleviate a need or a want. The product can also be all the assets a customer may receive to satisfy his needs and wants.
A product can be:
A perishable good Ex: food
A durable good Ex: A fridge, a cloth
A service which is characterized by 4 elements: It can be an activity, an asset or a satisfaction from a transaction such as medical care, reparation, hairdressing. -THE SERVICE- Not owned (Lack of ownership): You cannot own and store a service like you can do for a product. Services are used or hired for a period of time. Example: when buying a ticket to the Ziguinchor the service lasts maybe 16 hours Intangible (Intangibility): You cannot hold or touch a service unlike a product. Example: a Western Union transaction is not touchable unlike a laptop. Not separated from the service provider and customers (inseparability): A service cannot be separated from the service provider. A product when produced can be taken away from the producer unlike a service. Example: for the service of teaching to take place, both students and teachers need to be present and involved. Perishable (Perishability): A service lasts a specific time and cannot be stored like a product for later use. Example: when travelling by train, coach or air the service will only last the duration of the journey. The service is developed and used almost simultaneously. Heterogeneous (Heterogeneity): Each service experience is unique. If travelling by plane the service quality may differ from the first time you travelled by that airline to the second, because the airhostess is more or less experienced. Example: A concert performed by Youssou Ndour on two nights may differ in slight ways because it is very difficult to repeat exactly the same performance or dance move. -THE DEMAND- The quantity of a good or service that buyers are ready to buy at a given price at a particular time. Will+ purchasing power. It is the desire to buy products, sustained by a will and a purchasing power. IŶ a giǀeŶ ŵaƌket the ĐoŶsuŵeƌs ďuLJ pƌoduĐts oƌ seƌǀiĐes ǁhiĐh eĐoŶoŵists Đall ͞ the deŵaŶd͟. -THE SUPPLY- The quantity of a good, a product or service, information and/ or experience that companies and businesses are able and willing to offer for sale at a specified price in a given time period in order to meet customer needs. -THE MARKET- It can be defined as a group of consumers which express their needs and wants by purchasing products, services or ideas.
For economists a market is the confrontation between the supply and the demand, a place where goods and services are exchanged. A market is people or organizations with wants to satisfy, money to spend, and the willingness to spend it. Each target market has distinct needs, which need to be monitored. It is imperative for an organization to know their customers, how to reach them and when customers' needs change in order to adjust its marketing efforts accordingly. The market is the focal point for all marketing decisions in an organization. Consumer markets are individuals and households that buy goods and services for personal consumption. Business markets buy goods and services for further processing or for use in their production process.
Reseller markets buy goods and services in order to resell them at a profit.
Government markets are agencies that buy goods and services in order to produce public services or transfer them to those that need them. The federal government is the largest buyer in the United States.
International markets consist of buyers in other countries.
-THE EXCHANGE- (Without exchange no Marketing) This includes 5 conditions:
Chapter II: THE MARKET
SECTION 1: CHARACTERISTICS OF A MARKET
There are 5 main characteristics of a market:
- Its size: It can be international, national or local.
- Its life ĐLJĐle: A ͞ Ŷeǁ ŵaƌket͟ ĐoƌƌespoŶds to a ŵaƌket ǁith Ŷeǁ aĐtiǀities. A ͞ ŵ atuƌe ŵaƌket͟ is a business sector where the supply and the demand already exist
- Its dynamism: In a market the demand can either be growing, stable or declining. The marketer must follow the dynamism of the market.
- Its poteŶtial: A ͞ stƌuĐtuƌed ŵaƌket͟ ŵeaŶs that the poteŶtial supplLJ is higheƌ thaŶ the poteŶtial demand. the opposite is Đalled ͞ aŶ opeŶ ŵaƌket͟
- Its ramifications: A market is never completely isolated .It has horizontal and vertical ramifications Horizontal: substitutes and complementary products Vertical :The other branches (business fields)
SECTION 2: COMPONENTS OF THE MARKET
The demand: Market =customers It is a desire to buy a product sustained by a will and a purchasing power. One of the main roles of Marketing is to meet the needs of the customers by conducting a good management of the Demand. -THE ACTORS- The consumers The consumer is the person that uses a product or a service whether he is the one who buys it or not. The present consumers They actually use the product for now and are always buying it .For instance the customers that are buying orange or Tigo credit cards. The non-relative consumers They are not using the product for now but are likely to use it in the future. For example an 18years old boy vis a vis a car .Those are the customers, companies are looking for to increase their market share. The absolute non consumers They will never buy the product nor use it because of religious consideration. Ex: true Muslims Vis a Vis pork. A good marketer tries to identify them in other to avoid directing products to them.
The buyers
They do the act of purchasing with their own resources. Ex: In our African families the father is most of the time the one who buys food.
The opinion leaders
They play the role of an advisor in the sense that they are specialists in their domain. Example: a doctor, an architect.
The advisors
They can influence or have a say in the act of purchasing but their opinion is not decisive.
This classification helps to determine the size of the market.
Market analysis
By extending its market through these elements the company can increase its market share.
The present (real) market of the field
It includes both the customers of the company and the one of the competitors.
The global market of the company
The global market of the company means all the customers of company, the one of the competitors, the relative non consumers and the absolute non consumers.
The real market of the company
They represent the present customers of the competitors.
The supply: Market=product and manufacturers
The supply can be defined as all the products currently in existence in the market and which correspond to the expressed demand.
It is also the market seen through the eyes of actors like the manufacturers, the distributors and the competitors.
We measure the place of a supplier in a market by determining his market share. The market share can be absolute or relative.
Market Share
The absolute market share: turn over of the company/turn over of the market
It is calculated by dividing the turn over of the company by the one of the market. It helps to determine the place of the company in relation to the whole market.
The relative market share
It is the turnover of the company divided by the turn over of the main competitor.
Example: To watch a movie we may use a CD Rom or a DVD or a cassette.
The market of complementary products
They are complementary to the main product of the company but satisfy a different needed: a printer, a scanner, a USB key is complementary to a computer.
The branches or fields The branch can be defined as all the commodities which are necessary for the manufacturing of products. Ex : the wood industry that serves to manufacture paper, furniture; the cotton industry that helps to make cloth etc.
Segment Target and Positioning process
To get a product or service to the right person or company, a marketer would firstly segment the market, then target a single segment or series of segments, and finally position within the segment(s).
There are many ways that a segment can be considered. For example, the auto market could be segmented by: driver age, engine size, model type, cost, and so on. However the more general bases include:
By geography - such as where in the world was the product bought
By psychographics - such as lifestyle or beliefs
By socio-cultural factors - such as class
By demography - such as age, sex, and so on.
Chapter III: ANALYSING BUYER BEHAVIOUR
Marketing theory traditionally splits analysis of buyer or customer behaviour into two broad groups for analysis – Consumer Buyers and Industrial Buyers.
Consumer buyers are those who purchase items for their personal consumption
Industrial buyers are those who purchase items on behalf of their business or organisation.
Understanding consumer behaviour and knowing customers is never simple. Customers may say one thing but do another. They may not be in touch with their deeper motivation. They may respond to influences that change their minds at the last minute.
BusiŶesses Ŷoǁ speŶd ĐoŶsideƌaďle suŵs tƌLJiŶg to leaƌŶ aďout ǁhat ŵakes ͞ Đustoŵeƌs tiĐk͟. The questions they try to understand are:
- Who ďuLJs?
- Hoǁ do theLJ ďuLJ?
- WheŶ do theLJ ďuLJ?
- Wheƌe do theLJ ďuLJ?
- WhLJ do theLJ ďuLJ? For a marketing manager, the challenge is to understand how customers might respond to the different elements of the marketing mix that are presented to them. If management can understand these customer responses better than the competition, then it is a potentially significant source of competitive advantage. I. Factors influencing buyer behaviour The starting point for understanding buyer behaviour is the stimulus-response model
IŶ the aďoǀe ŵodel, ŵaƌketiŶg aŶd otheƌ stiŵuli eŶteƌ the Đustoŵeƌs ͞ ďlaĐk ď odž͟ aŶd pƌoduĐe ĐeƌtaiŶ responses.
Marketing management must try to work out what goes on in the mind of the customer – the ͞ ďlaĐk ďodž͟. The BuLJeƌ’s ĐhaƌaĐteƌistiĐs iŶflueŶĐe hoǁ he oƌ she peƌĐeiǀes the stiŵu li; the deĐisioŶ-making process determines what buying behaviour is undertaken. A ĐoŶsuŵeƌ’s ďuLJiŶg ďehaǀiouƌ is iŶflueŶĐed by cultural, social, personal, and psLJĐhologiĐal faĐtoƌs that deteƌŵiŶe the ͞ ďuLJeƌ ĐhaƌaĐteƌistiĐs͟ iŶ the ͞ ďlaĐk ďodž͟. These ĐaŶ ďe suŵŵaƌised as folloǁs: Cultural: Culture – Subculture – Social Class Social: Reference Groups – Family – Roles and Status Personal: Age and Life Cycle Stage – Occupation – Economic Circumstances – Lifestyle – Personality and self-concept Psychological: Motivation – Perception – Leaning – Beliefs and attitudes
BUYER CHARACTERISTICS
I.1 Cultural factors
Other Stimuli
Marketing Stimuli
Price Product Promotion Place
EĐoŶoŵiĐ TeĐhŶologi Đal Cultuƌal PolitiĐal
BuLJeƌ’s BlaĐkďodž
BuLJeƌ ĐhaƌaĐteƌis tiĐs
BuLJeƌ DeĐisioŶ PƌoĐess
BuLJeƌ’s RespoŶse
PƌoduĐt ĐhoiĐe BƌaŶd ĐhoiĐe Dealeƌ ĐhoiĐe PuƌĐhase tiŵiŶg PuƌĐhase aŵouŶt
Associative reference groups iŶĐlude people ǁho ŵoƌe ƌealistiĐallLJ ƌepƌeseŶt the iŶdiǀiduals’ current equals or near-equals—e.g., co-workers, neighbours, or members of churches, clubs, and organizations. Finally, the dissociative reference group includes people that the individual would not like to be like for example, the store literally named The Gap came about because many younger people wanted to actively dissociate from parents and other older and "uncool" people.
All reference groups have opinion leaders – people whom, because of their special skills, knowledge, personality, or other characteristics, exert influence on others. Opinion leaders drive the decision of many others and are important for marketers to identify. An example is the use of celebrities and athletes in advertising.
Family
The most important reference group is the family , a group of people related by blood, marriage, or adoption living together in a household. A household relates to a dwelling rather than a relationship. It could consist of a single person, a family, or any group of unrelated persons who occupy a housing unit. Marketers are interested in the buying behaviour of the household as a unit. Who influences the buying decision? Who makes the buying decision? Who makes the actual purchase? Who uses the product? It is interesting to note that children are assuming greater household responsibility for purchases.
In a group or family, several individuals may interact to influence the purchase decision. The typical roles in such a group decision can be summarised as follows:
Initiator: The person who first suggests or thinks of the idea of buying a particular product or service
Influencer: A person whose view or advice influences the buying decision
Decider: The individual with the power and/or financial authority to make the ultimate choice regarding which product to buy
Buyer: The person who concludes the transaction
User: The person (or persons) who actually uses the product or service
Marketers are particularly interested in the roles and relative influence of the husband, wife and children on the purchase of a large variety of products and services.
There is evidence that the traditional husband-wife buying roles are changing. Almost everywhere in the world, the wife is traditionally the main buyer for the family, especially in the areas of food, household products and clothing. However, with increasing numbers of women in full-time work and many men becomiŶg ͞ hoŵe ǁoƌkeƌs͟ the tƌaditioŶal ƌoles aƌe ƌeǀeƌsiŶg.
The challenge for a marketer is to understand how this might affect demand for products and services and how the promotional mix needs to be changed to attract male rather than female buyers.
Roles and status:
A person participates in many groups- family, clubs, and oƌgaŶisatioŶs. The peƌsoŶ’s positioŶ iŶ eaĐh gƌoup can be defined in terms of role and status. A role consists of the activities a person is expected to perform. Each role carries a status. People choose products that communicate their role and status in society.
Company presidents often drive Mercedes, wear expensive suits and drink expensive wines. Marketers must be aware of the status-symbol potential of products and brands.
I.3 Personal factors
A ďuLJeƌ’s deĐisioŶs aƌe also iŶflueŶĐed ďLJ peƌsoŶal ĐhaƌaĐteƌistiĐs. These iŶĐlude the ďuLJeƌ’s age aŶd stage in the life cycle, occupation, economic circumstances, lifestyles, and personality and self-concept.
Age and stage in the life cycle :
People buy different goods and services over a lifetime. They eat baby food in the early years, most foods in the growing and mature years, and special diets in the later years. Taste in clothes, furniture and recreation is also age related.
Consumption is shaped by the family life cycle. Individuals and families tend to go through a "life cycle." The simple life cycle goes from Child/teenager ---> young single ---> young couple* ---> full nest---> empty nest ---> widow(er).
Occupation and economic circumstances
Occupation also influences consumption patterns. A blue-collar worker will buy work clothes, work shoes, etc. A CEO will buy expensive suits, air travel and country club membership. Marketers try to identify occupational groups that have above-average interest in their products and services. A company can tailor its products for certain occupational groups.
Product choice is also greatly affected by economic circumstances: savings and assets, debts, borrowing power and attitudes towards spending and saving. Marketers of income-sensitive goods continuously monitor trends in personal income, savings, and interest rates. If economic indicators point to a recession, marketers can take steps to redesign, reposition, and re-price their products in order to continue to offer value to target customers. Lifestyle A peƌsoŶ’s patteƌŶ of liǀiŶg as edžpƌessed iŶ his oƌ heƌ aĐtiǀities, iŶteƌests, aŶd opiŶioŶs. Lifestyle is a ƌiĐh desĐƌiptoƌ of peoples’ ďuLJiŶg patteƌŶs. Lifestyle: General categories ( AIO ): Activities Interest Opinions Work, Holiday, Leisure Activities, Sport
Family, House, Food, Media, Profession
Social issues, Politics, Business, Economy, Education, Products, Future, Culture
Personality
It is a peƌsoŶ’s distiŶguishiŶg psLJĐhologiĐal ĐhaƌaĐteƌistiĐs that lead to ƌelatiǀelLJ ĐoŶsisteŶt aŶd lastiŶg responses to his or her environment. Personality is often described in terms of such traits as self- confidence, dominance, autonomy, deference, sociability, defensiveness, and adaptability. Personality can be a useful variable in analyzing consumer brand choices. The idea is that brands also have personalities, and that consumers are likely to choose brands whose personalities match their own.
Self-Concept
“iŶĐe seleĐtiǀe edžposuƌe, distoƌtioŶ, aŶd ƌeteŶtioŶ filteƌ ŵaƌketeƌ’s ŵessages, ĐoŶsuŵeƌs speŶd relatively little time and effort in processing advertisements. As a result, marketers must work very haƌd to attƌaĐt the ĐoŶsuŵeƌ’s atteŶtioŶ.
Beliefs and attitudes
A belief is a desĐƌiptiǀe thought that a peƌsoŶ holds aďout soŵethiŶg. People’s ďeliefs aďout a product or brand influence their buying decisions. An attitude desĐƌiďes a peƌsoŶ’s ƌelatiǀelLJ ĐoŶsisteŶt eǀaluatioŶs, feeliŶgs, aŶd teŶdeŶĐies toǁaƌd an object or an idea. People have attitudes toward almost everything: religion, politics, clothes, music, food, etc. Attitudes put them into a frame of mind of liking or disliking an object, moving towards or away from it. Attitudes lead people to behave in a fairly consistent way towards similar objects. Attitudes :
- Cognitive (know the product)
- Affective (positive or negative beliefs of the product)
- Behavioural (intent to buy a product or making the action of buying)
These in turn influence buying behaviour.
Apprenticeship: ;haďits aŶd edžpeƌieŶĐes ĐhaŶgiŶg oŶe’s kŶoǁledge of pƌoduĐtsͿ
II. THE CONSUMER BUYING DECISION PROCESS
Consumers go through a five-stage buying decision process: (1) need recognition, (2) information search, (3) evaluation of alternatives, (4) purchase decision, and (5) post-purchase behaviour. The consumer selects an involvement level or how much effort to exert in satisfying a need. The more effort exerted the higher the involvement. For some purchases, consumers may go through these stages very quickly or may actually even skip stages or reverse some of the steps.
Most buying decisions for products sold in supermarkets, drugstores, and discount stores are low involvement. These products have close substitutes and are relatively low-priced. The consumer will be more involved when he or she lacks information about the purchase, views the product as important, thinks the product has considerable social importance, and sees the product as having a potential for providing significant benefits.
Need recognition occurs when buyers perceive a significant difference between their actual state and their desired state. Marketers are very interested in the factors that trigger a conscious recognition of a need.
Information search leads the consumer to evaluate the alternatives in order to reach a purchase decision. Evaluation of alternatives involves establishing criteria with which to evaluate each alternative before making a purchase decision.
OfteŶ a ĐoŶsuŵeƌ’s eǀaluatioŶ ŵaLJ ďe iŶĐoƌƌeĐt due to iŶedžpeƌieŶĐe aƌe ďiased iŶfoƌŵatioŶ. Marketers must monitor choice criteria in order to identify changes and to correct any misconceptions.
The purchase decision is a series of related decisions consumers must make before making a purchase. These decisions include such things as specific features of the product or product attributes, where and when to make the actual purchase, how to take possession, and the method of payment. The buying decision may be determined by such factors as location, convenience, speed of service, merchandise accessibility, prices, merchandise assortment, services offered, and sales personnel. “uĐĐessful ŵaƌketeƌs eǀaluate theiƌ Đustoŵeƌs’ iŶŶeƌ ŵotiǀes aŶd ĐaƌefullLJ desigŶ the shoppiŶg experience accordingly.
The purchase process does not end with the purchase. Post-purchase behaviour can influence future purchases and what the buyers tell others about the product. You may recommend the brand to everyone who asks you about your purchase. Or, you may tell everyone about your unhappy experience with the product. In many purchases, consumers may experience anxieties, known as cognitive dissonance.
This oĐĐuƌs aŶLJtiŵe theƌe is iŶĐoŶsisteŶĐLJ iŶ a peƌsoŶ’s ĐogŶitioŶs suĐh as kŶoǁledge, attitudes, ďeliefs, and values. Each product considered by the consumer has both advantages and disadvantages. Thus, the purchased product has both advantages and disadvantages. The rejected products have some advantages.
Given the importance of post-purchase behaviour in influencing future purchases, marketers want to help reduce dissonance. They can reassure buyers through their advertising and personal selling, while giving quality service after the sale.
This model is important for anyone making marketing decisions. It forces the marketer to consider the whole buying process rather than just the purchase decision (when it may be too late for a business to influence the choice!)
The model implies that customers pass through all stages in every purchase. However, in more routine purchases, customers often skip or reverse some of the stages.
For example, a student buying a favourite hamburger would recognise the need (hunger) and go right to the purchase decision, skipping information search and evaluation. However, the model is very useful when it comes to understanding any purchase that requires some thought and deliberation.
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