Marketing Essentials: From Concepts to Strategies

Posted on May 23, 2024 in Economy

Marketing Essentials

What is Marketing?

Marketing is the management process involved in identifying, anticipating, and satisfying consumer needs profitably.

Branding

Brand: Refers to the name, logo, design, font, colors, and slogan that represent a product or firm, differentiating it from others and generating trust.

Branding: The process of developing a firm’s identity and strengthening its image and loyalty.

Brand Recognition

Brand recognition is the extent to which a consumer can correctly identify a product or service by its logo, tagline, packaging, or advertising campaign. Audio cues like jingles can also trigger brand recognition.

Techniques used: Social media advertising, producing a short and memorable song.

Brand Awareness

Brand awareness is the degree of consumer recognition of a product by its name. Creating brand awareness is crucial for new products and reviving older brands. Ideally, brand awareness encompasses the qualities that set the product apart from competitors.

Techniques used: Slogan, packaging, taste, quality, smell, comfort.

Brand Preference

Brand preference occurs when a consumer chooses a specific company’s product or service over equally priced and available options. It reflects customer loyalty, successful marketing, and brand strengths. Brand preference often leads to repeat purchases and brand loyalty.

Techniques used: Similar to brand loyalty techniques.

Brand Loyalty

Brand loyalty is the habit of consistently buying a product with the same name, made by the same company.

Techniques used: Quality, brand values, experience, culture/habit/familiarity, loyalty programs, discounts.

Marketing Approaches Based on Objectives

Commercial Marketing

Commercial marketing aims to develop goods and services to generate profits, primarily used by for-profit organizations.

Objectives:

  • Convince customers to buy and generate profit
  • Strengthen brand loyalty
  • Develop brand image
  • Create brand awareness and recognition

Social Marketing

Social marketing aims to influence behavior and generate positive benefits for society, mainly used by non-profit organizations and governments.

Objectives:

  • Develop brand image
  • Create brand awareness and recognition
  • Encourage societal contributions to the organization’s mission and cause
  • Strengthen the credibility and reputation of the organization and its cause

Social Media Marketing

Social media marketing uses social networking applications and platforms to sell products and/or promote a cause, complementing other marketing techniques.

Objectives:

  • Expand the organization’s reach globally
  • Strengthen brand recognition
  • Interact directly with current and potential customers
  • Collect market data to investigate customer behavior and trends

Understanding the Market

Market: The place where buyers and sellers interact by exchanging goods and services.

Market Size

Market size represents the total sales of the market based on the number of current and potential buyers. (Adjectives: small/big, national/foreign, competitive)

  • By volume (units, tons, kilos): Measured by the quantity of goods/services produced.
  • By value ($): Measured by the amount spent by customers.

Market Growth

Market growth refers to the percentage change in market size, usually within one year.

Market Share

Market share is the percentage of a firm’s sales relative to the total sales in its operating market.

Market Leader

The market leader holds the largest market share.

Benefits:

  • Brand prestige and recognition
  • Higher sales potentially leading to higher profits
  • Competitive advantage in brand loyalty
  • Greater economies of scale
  • Inelastic demand even with price increases

Factors Influencing Needs and Wants

Various factors influence our evolving needs and wants:

  • Technology
  • Age
  • Education level
  • Profession
  • Stage of family life
  • Culture, tradition, religion, values
  • Income, purchasing power
  • Location
  • External factors: Pandemic, climate change, economic crisis, peace and order, political situation, trade policies, ethical considerations

The Marketing Mix (7 Ps)

Marketing encompasses the”7 P”:

  1. Product
  2. Price
  3. Promotion
  4. Place
  5. People
  6. Process
  7. Physical Evidence

Innovation

Innovation refers to creating new products or improving existing ones to create value for the customer and achieve sustainability in the marketplace.

Ethical and Cultural Concerns

Ethical concerns relate to what is considered right, correct, good, moral, and their opposites.

Cultural concerns refer to the way of life, how people and organizations live, including traditions, values, language, and religion.

Marketing Planning

Marketing planning involves creating a marketing plan by identifying objectives and developing a systematic strategy to achieve them.

Marketing Plan

A marketing plan is a document outlining a firm’s marketing objectives and strategies.

Elements of a Marketing Plan

  1. Marketing Objectives: Goals to be achieved within 12 months. Objectives must be SMART:
    • Specific
    • Measurable
    • Achievable
    • Relevant
    • Time-bound
  2. Key Strategic Plans: Tactics and techniques to achieve the objectives.
  3. Detailed Marketing Actions: Day-to-day/weekly objectives to achieve the plan.
  4. Marketing Budget: The allocated funds to execute the plan.

Main Objectives of Business Organizations

  • Generate profit
  • Create brand loyalty
  • Expand brand awareness
  • Expand to new markets
  • Increase customer base
  • Increase sales and market share
  • Strengthen brand image and reputation
  • Motivate the workforce

Market Segmentation

Market segmentation divides the market into distinct groups to better identify and satisfy their needs and wants.

Market Segment

A market segment is a group of people with similar needs/wants and purchasing behavior.

Importance of Market Segmentation

  • Efficiently identify and meet segment needs/wants.
  • Develop products that resonate with target segments.
  • Reduce the risk of product failure and increase sales and profits.
  • Contribute to differentiation, USP, and brand recognition.
  • Identify unfulfilled needs/wants “gap”) and develop products to expand the customer base.

Limitations of Market Segmentation

  • Time-consuming and costly, with potential opportunity costs if products fail.
  • Firms may lose focus by targeting multiple segments, potentially harming brand image.

Targeting

Targeting is the process of selecting specific market segments to focus on by developing tailored marketing strategies.

Target Market

A target market is a group of customers with common needs and wants that a business chooses to sell to.

Methods of Targeting

  1. Undifferentiated Mass Marketing: Targets a large, broad market without specific segmentation. (Examples: Coca-Cola, Lenovo, Nike, Adidas, Samsung)
  2. Differentiated Multi-Segment Marketing: Develops tailor-made products for each market segment. (Example: INDITEX: Bershka, Stradivarius, ZARA, Massimo Dutti, Zara Home, Pull & Bear)
  3. Niche Marketing: Focuses on a small, specialized group of customers. (Example: Babolat – Tennis)
  4. Micro-Marketing (Extension of Niche Marketing): Targets a highly specific niche, such as a neighborhood, specific stores, or even individuals.

Positioning

Positioning is a strategy to establish a distinct position for a brand in the customer’s mind relative to competitors.

Steps to Positioning

  1. Understand the market.
  2. Identify the firm’s competitive advantage.
  3. Choose the competitive advantage within your target market niche.
  4. Define your positioning strategy.
  5. Develop the marketing mix (4/7 Ps).

Product Position Map

: a visual representation of the market’s perception of the brand side-by-side its competitors. It focuses on two elements (characteristics) of the good, service, brand. Examples: quality – price / amenities – price / features – price / location -m