The marketing concept
Identify and satisfy customers' needs and wants more effectively than competitors, rather than producing first and then trying to sell. The marketing process involves planning, organising, implementing and controlling marketing activities.
Marketing research
- Primary data: collected first-hand for the current purpose, e.g. surveys, interviews, focus groups, observation, experiments. Specific but costly and slow.
- Secondary data: already collected by others, e.g. government statistics, industry reports. Cheap and quick but may be outdated or not specific.
Sampling techniques: simple random, stratified random, systematic, cluster, convenience and quota sampling.
Consumer behaviour
Consumer decision-making process: need recognition → information search → evaluation of alternatives → purchase decision → post-purchase behaviour. Decisions are affected by socio-cultural factors (culture, reference groups, family) and psychological factors (motivation, perception, attitudes).
Segmentation, targeting and positioning
- Segmentation bases: geographic, demographic, psychographic, behavioural.
- Targeting strategies: undifferentiated (one mix for the whole market), differentiated (different mixes for different segments), concentrated (one segment only).
- Positioning: create a clear image of the product relative to competitors in the target customers' minds, based on a competitive advantage.
The marketing mix (4Ps)
- Product: features, quality, branding, packaging; product item and product line decisions.
- Price: affected by costs, demand, competition and objectives. New-product strategies:
- Penetration pricing: a low price at launch to gain market share quickly.
- Price skimming: a high price at launch for customers willing to pay more, lowered later.
- Place: direct or indirect distribution; intensive, selective or exclusive distribution.
- Promotion mix: advertising, sales promotion, personal selling, public relations, direct and digital marketing.
Product life cycle
| Stage | Sales | Profit | Typical strategy |
|---|---|---|---|
| Introduction | Low | Often negative | Build awareness |
| Growth | Rising fast | Rising | Expand distribution, build the brand |
| Maturity | Peak, levelling off | High but squeezed by competition | Modify the product, find new markets, promote |
| Decline | Falling | Falling | Cut costs, harvest or withdraw |
Services marketing
Services are intangible, inseparable (produced and consumed at the same time), heterogeneous (quality varies) and perishable (cannot be stored).
Customer relationship management (CRM)
CRM builds long-term relationships with profitable customers, e.g. loyalty programmes, personalised offers and good after-sales service. Keeping existing customers is usually cheaper than attracting new ones.