Essential Marketing & Business Concepts

Posted on Jun 23, 2025 in Business Administration and Management (BAM)

Management Orientations

Ethnocentric Orientation

Occurs when someone believes their own country is superior to others. This belief is often linked with national arrogance or assumptions of superiority, which may lead to a disregard for foreign markets, viewing only similarities across markets, and ignoring opportunities outside.

Polycentric Orientation

The opposite of ethnocentrism, this is the belief or assumption that each country in which a company does business is unique.

Regiocentric Orientation

A region becomes the relevant geographic unit; management’s goal is to develop an integrated regional strategy.

Geocentric Orientation

Sees the entire world as a potential market. Companies with this mindset develop integrated global strategies and do not prioritize any one country.

Ansoff Matrix: Strategic Growth Options

The Ansoff Matrix examines strategic options for growth by analyzing products and markets:

  • Market Penetration: Involves increasing sales of existing products in existing markets, often achieved by cutting prices or boosting advertising.
  • Market Development: Targets new markets with existing products.
  • Product Development: Means offering new or significantly improved products to existing markets.
  • Diversification: The riskiest strategy, involving introducing new products to new markets.

The 7Ps of Marketing Mix

The 7Ps framework includes:

  • Product
  • Price
  • Place
  • Promotion
  • People
  • Process
  • Physical Evidence

Market Research vs. Marketing Research

  • Market Research: Focuses on understanding the external environment (e.g., market size, trends, competitors, consumer needs).
  • Marketing Research: Supports internal decisions (e.g., product design, pricing, distribution, promotion).

Both aim to generate insights for better business decisions.

The Research Process Steps

A typical research process involves:

  1. Define what information is needed.
  2. Clarify the problem.
  3. Choose the analysis unit (e.g., country, region).
  4. Check existing data availability.
  5. Evaluate the value of the research.
  6. Design the study.
  7. Analyze the data.
  8. Interpret and present results.

Effective Customer Segmentation Criteria

For effective customer segmentation, consider these criteria:

  • Homogeneity: Segments should have similarities within themselves.
  • Heterogeneity: Segments should be unique and distinct from each other.
  • Measurability: The size, purchasing power, and characteristics of the segments can be measured.
  • Substantiality: Segments must be large and profitable enough to serve.
  • Accessibility: Segments can be effectively reached and served.
  • Responsiveness: Segments respond differently to various marketing mix elements and programs.

Targeting Strategies in Global Marketing

  • Standardized Global Marketing: Uses the same product and message for all markets, offering cost-efficiency and broad reach.
  • Concentrated Global Marketing: Focuses on one specific niche with a tailored approach.
  • Differentiated Global Marketing: Targets multiple segments with customized offerings (also known as multi-segment targeting).

Product Positioning Approaches

Effective product positioning can be based on:

  • Attributes or Benefits: Exploits a particular benefit (e.g., safety, quality).
  • Price and Quality: Positions based on luxury or value.
  • Use or User: Associates the brand with a specific user or class of users.
  • Competition: Differentiates the brand from rivals.

Cultural Orientation in Marketing

Different cultural positioning strategies include:

  • GCCP (Global Consumer Culture Positioning): Positions the brand as a global symbol.
  • FCCP (Foreign Consumer Culture Positioning): Associates the brand with foreign cultural traits (e.g., Toyota = Japanese quality).
  • LCCP (Local Consumer Culture Positioning): Reflects or fits the brand within the local culture.

Pricing Strategies and Adjustments

Core Pricing Strategies

  • Competition-Based Pricing: Sets prices in response to competitors, whether matching, undercutting, or exceeding them based on brand positioning.
  • Market Skimming: Sets high prices initially to attract early adopters, then lowers them over time as the market expands.
  • Penetration Pricing: Introduces products at low prices to quickly gain market share, useful in crowded or price-sensitive markets.
  • High-Low Pricing: Uses periodic discounts or promotions to attract price-conscious consumers.
  • Dynamic Pricing: Adjusts prices in real-time based on demand and market conditions, common in sectors like travel and events.

Product Mix Pricing

Strategies depending on the product portfolio:

  • Product Line Pricing: Sets different price points across a range to reflect value differences.
  • Optional Product Pricing: Charges separately for extras or upgrades.
  • Captive Product Pricing: Keeps the base product price low while pricing necessary add-ons higher.
  • Bundle Pricing: Offers multiple products together at a reduced rate.
  • By-Product Pricing: Seeks to generate revenue from the residuals of a production process.

Price Adjustments

  • Discounts and Allowances: Reward early payment, bulk purchases, or seasonal buying.
  • Segmented Pricing: Offers different prices based on customer type, location, or usage.
  • Psychological Pricing: Leverages price perception, making a product seem more affordable or premium.
  • Promotional Pricing: Temporarily lowers prices to drive short-term sales.
  • Geographical Pricing: Accounts for differences in shipping and taxes based on location.

Agent vs. Distributor in International Marketing

In international marketing, choosing between using an agent or a distributor has significant implications for control, cost, and market access.

  • Agent: Acts as a representative of the exporter and is not financially involved in the sale; they earn commissions and do not take ownership of goods. Their role is often to facilitate imports and build local relationships, but the exporter retains control of pricing, customer ownership, and service responsibilities.
  • Distributor: Essentially a customer of the exporter. They purchase the product, mark up the price, and resell it on their own account. Distributors manage import processes, provide after-sales service, and take full responsibility for local distribution. This offers the exporter less control but also less operational burden.

Marketing Communication Mix (Promotion Mix)

Key elements of the marketing communication mix include:

  • Advertising
  • Public Relations
  • Sales Promotion
  • Direct Marketing
  • Personal Selling
  • Online Marketing
  • Word of Mouth
  • Sponsorships
  • Fairs and Events

Digital Marketing Channels

Important digital marketing channels and strategies:

  • Search Engine Optimization (SEO)
  • Social Media Marketing (SMM)
  • Pay-Per-Click (PPC) Advertising
  • Email Marketing Automation
  • Content Marketing
  • Online Advocacy and Customer Advocacy