BSB126 - Mid-Semester Exam Notes (Summary of Lectures 1 - 6)

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Marketing Mid-Semester Notes Lecture 1: Introduction to Marketing and the Marketing Concept Market: People with the desire and ability to buy a specific product Marketing: Process of developing, pricing, promoting and distributing goods, services and ideas, to satisfy the needs of customers Target Market: Specific group of potential customers towards which an organisation directs is marketing program Evolution of Marketing – 5 Stages 1. Production concept: Assumes consumers favour products that offer the most quality for the price (risk is too much focus on product and not on consumer) 2. Product concept 3. Selling concept: Producing a product and then trying to persuade customers to purchase it. In effect, trying to alter consumer demand. It is internally focused 4. Marketing concept: The idea that organisations should strive to satisfy the needs of consumers while also trying to achieve the organisation's goals. 5. Marketing orientation: Focusing organisational efforts to collect and use information about customers’ needs to create customer value Relationship Marketing: Linking the organisation to individual customers, employees, suppliers and other partners for their mutual long-term benefit Marketing Program: Plan that integrates the marketing mix to provide a good, service or idea to prospective buyers Societal marketing concept: The idea that organisations should satisfy the needs of customers in a way that provides for society's well-being (social responsibility and ethical considerations). Marketing Mix -Controllable factors Four Ps: 1. Product 2. Price 3. Promotion 4. Place Environmental Forces -Uncontrollable factors: 1. Social 2. Economic Forces 3. Technological Forces 4. Competitive Forces 5. Regulatory Forces Christina Meyers BSB 126 Marketing 1 Lecture 2: Introduction to Marketing Growth Strategies and Planning Organisational Strategy Levels 1. Corporate: managing several business units 2. Business Unit: individual products and markets 3. Functional: focussed strategy within various business Mission: A statement of the organisation's scope, often identifying its customers, markets, products, technology and values. It often has an inspirational theme. Culture: System of shared values, attitudes & behaviours that distinguish organisation from others Strategic & Marketing Planning Stages 1. Situation Analysis: assesses where a firm/product has been, is now and is headed: (a) Understanding the marketing environment i. Customers ii. Competencies iii. Competitive advantage iv. Benchmarking v. Competitors (b) SWOT – Strength and Weaknesses (internal), Opportunities and Threats (external) (c) Points of difference – characteristics that make it superior to competitive substitutes (d) Business Portfolio Analysis – studies a firm’s business units as though they were a collection of separate investments i. BCG Analysis: growth-share matrix to identify business units as either:  Stars: high market share, high market growth rate  Cash-Cows: high market share, low market growth rate  Question-Marks: low market share, high growth rate  Dogs: low market share, low market growth rate ii. Strategies for BCG  Invest to build  Invest to hold  Harvest  Dig (e) Market-Product Analysis :Four expansion strategies involving products and markets. i. Market penetration: Expanding in the Current Market with the Current Product ii. Market development: Expanding in the New Market with a Current Product iii. Product development: Expanding in the Current Market with a New Product iv. Diversification: Expanding in a New Market with a New Product. 1. Porters 5 Forces 1. Rivalry 2. Threat of New Entry 3. Threat of Substitutes 4. Power of Buyers 5. Bargaining Power of Suppliers Christina Meyers BSB 126 Marketing 2 2. Goals: Targets of performance to be achieved, often by a specific time, for example: (a) Profit (b) Shareholder value (c) Sales (d) Customer Satisfaction (e) Quality (f) Employee Welfare (g) Social Responsibility 3. Strategies: How goals with be achieved 4. Budgets 5. Controls: comparing results with plans to identify deviation Marketing strategy includes: 1. Segmentation 2. Positioning 3. Marketing Mix Christina Meyers BSB 126 Marketing 3 Lecture 3: Scanning the Marketing Environment and Service Marketing Environmental Scanning: Acquiring information on events outside the organisation to identify potential trends External Uncontrollable Forces Macro-Environment 1. Social Forces: Demographics and Values/Culture 2. Economic Forces: Income, Expenditures and Resources 3. Technological Forces: Technological Impact and Advances 4. Competitive Forces: Pure Competition, Monopolistic Competition, Oligopoly and Monopoly 5. Regulatory Forces: Laws and Consumer Protection Micro-Environment 1. Suppliers 2. Marketing intermediaries 3. Customers Services Marketing Fours I’s of Services 1. Intangibility – cannot be touched, seen tasted, heard or felt 2. Inconsistency – less standardized 3. Inseparability – produced and consumed simultaneously 4. Inventory – characteristics of services that prevent them from being stored, warehoused, or inventoried Service continuum: A range from the tangible to the intangible or good-dominant to service- dominant offerings are available in the marketplace Product quality evaluation 1. Search qualities – determined pre- purchase 2. Experience qualities – discerned after purchase or during consumption 3. Credence qualities –characteristics hard or impossible to evaluation even after consumption Internal marketing: Service organisation must focus on its employees before successful programs can be directed at customers Capacity management: Integrating the service component of the marketing mix with efforts to influence consumer demand Christina Meyers BSB 126 Marketing 4 Competitive Forces Types of Competition 1. Pure competition: many sellers with nearly identical products 2. Monopolistic competition: many sellers competing with similar products 3. Oligopoly: common industry structure, occurs when just a few companies control the majority of industry sales 4. Monopoly: only one firm sells the product, it is regulated by the state/federal government Anti-Competitive Practices 1. Market Sharing: Dividing the market between sellers. 2. Misuse of Market Power: Taking advantage of market power in any way. 3. Exclusive Dealing: When suppliers refuse to supply goods unless the re-seller accepts their conditions. 4. Price Discrimination: Granting discounts to buyers if they meet certain conditions. 5. Predatory Pricing: Lowering prices so much that competitors cannot compete. 6. Price Fixing: Arranging between sellers to fix a price excessively high. 7. Resale Price Maintenance: Requiring a re-seller to sell products at a specific price. Christina Meyers BSB 126 Marketing 5 Lecture 4: Consumer Behaviour Consumer Decision Making Process 1. Need Recognition 2. Information Search (a)Internal (b)External i. Personal sources ii. Public sources iii. Marketer-dominated sources 3. Evaluation of Alternative (a) Analyse product attributes and rank by importance (evaluative criteria) (b) Evoked set: Group of brands that a consumer would consider acceptable form among all the brands in the product class of which they are aware 4. Purchase 5. Post-purchase behaviour: Value in consumption or use. Comparing the product to your expectations, and be either satisfied or dissatisfied. (a) Cognitive dissonance: a feeling of guilt associated with doubts about the advisability of a purchase decision that one experiences after making an expensive purchase Types of Consumer Buying Decisions Routine: The purchase process is virtually habit, such as salt or bread. Limited: Little thought is put into the decision, such as what to eat for dinner or which kettle to buy. Extended: Considerable time and effort is spent on information search, and identifying alternatives, such as for a car, house, or financial investment. Situational Influences on Customer Behaviour 1. Purchase Task: Why did I engage in this decision? 2. Social Surroundings: Who is present when the decision is made? 3. Physical Surroundings: Décor, music and crowding in shops. 4. Temporal Effects: Time of day or amount of time available. 5. Antecedent States: Mood or amount of cash on hand. Psychological Influences on Customer Behaviour 1. Motivation: Energising force that stimulates behaviour to satisfy a need 2. Perception: Select, organise and interpret information to create a picture of the world 3. Lifestyle: A way of living identified by activities, interests and opinions 4. Personality: Consistent behaviour or response to recurring situation Christina Meyers BSB 126 Marketing 6 Psychoanalytic theory: Markers must appeal to buyers’ dreams, hopes and fears. Yet at the same time must provided buyers with socially acceptable rationalisation for many purchases Maslow’s Hierarchy of Needs 1. Physiological: Basic to survival 2. Safety: Self-preservation and physical wellbeing 3. Social: Love and friendship 4. Personal: Need for achievement, status, prestige and self-respect 5. Self-actualisation: Personal fulfilment Selective Perception: Filtering information so that only some of it is understood or remembered by the conscious mind Selective Exposure: Where people pay attention to messages that are consistent with their current attitudes and beliefs Learning: Behaviours that result from repeated experience or reasoning. Cognitive Learning: Learning without direct experiences, though thinking, reasoning and mental problem solving Values, beliefs and attitudes: Tendency to respond to something in a consistently favourable or unfavourable way.
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