Marketing Principles and Strategies: A Comprehensive Guide

Posted on May 12, 2024 in Economy

Marketing Principles and Strategies

Universal Functions of Marketing

  • Buying: Looking for and evaluating goods and services.
  • Selling: Promoting the product.
  • Transporting: Movements of goods from one place to another.
  • Storing: Holding goods until customers need them.
  • Standardization and Grading: Sorting products according to size and quality.
  • Financing: Providing necessary cash and credit for marketing activities.
  • Risk Taking: Bearing uncertainties in the marketing process.
  • Market Information: Collection, analysis, and distribution of information for marketing activities.

Marketing Orientations

  • Production Orientation: Making products easy to produce and then trying to sell them.
  • Marketing Orientation: Offering customers what they need.
  • Purpose Orientation: Focusing on an organization’s reason for being beyond profit.

Marketing Strategy

A marketing strategy specifies a target market and related marketing mix.

  • Target Marketing: A similar group of customers to whom a company wishes to appeal.
  • Marketing Mix: The controllable variables the company puts together to satisfy a target group.
  • Mass Selling: Communicating with large numbers of customers at the same time.

The 4 P’s of Marketing

  • Product: Good or service for the target market’s need.
  • Price: The market rate at which you offered it.
  • Place: Where do you buy it.
  • Promotion: How do you sell it.

Advertising vs. Publicity

Advertising is a paid form of promotion, while publicity is an unpaid/earned form of promotion.

Market Segments

  • Segmenting: Clustering people with similar needs together.
  • Market Segment: Homogeneous group of customers who will respond to a marketing mix in a similar way (target market approach).

Target Market Approaches

  • Single TMA: Segmenting the market and picking one of the homogeneous segments as the firm’s target market.
  • Multiple TMA: Segmenting the market and choosing two or more segments, then treating each as a separate target market needing a different marketing mix.
  • Combined TMA: Combining two or more submarkets into one larger target market as a basis for one strategy.

Dimensions of Segmentation

  • Demographic: Divide the market based on demographic factors such as age, gender, income, education, family size, and occupation.
  • Psychographic: Lifestyles, values, interests, attitudes, and behaviors. Provides psychological and emotional aspects that influence buying decisions.
  • Behavioral: Behaviors, including purchasing habits, usage frequency, and brand loyalty.
  • Geographic: Countries, regions, climate zones. Recognizes preferences and needs of consumers in various locations.

5 Categorical Influences on the Consumer Decision Process

  1. Economics
  2. Needs
  3. Psychological Variables
  4. Social Influences
  5. Culture and Ethnicity
  6. Purchase Situation

Era of Marketing Research

Big Data

Data sets too large and complex to work with typical database management tools.

The 4 V’s of Big Data

  • Volume: So much data.
  • Variety: So many formats.
  • Velocity: Need to process quickly.
  • Veracity (Quality): Not always accurate.

NAICS Code

Codes used by the US government to collect and publish data about firms in a similar line of business.

Marketing Research Process

  1. Defining the problem.
  2. Analyzing the situation.
  3. Getting problem-specific data.
  4. Interpreting the data.
  5. Solving the problem.

Types of Data

  • Primary Data: Original information collected directly from the source for a specific purpose. Data was obtained firsthand (e.g., interviews).
  • Secondary Data: Data already obtained by someone else with a different purpose can be used by their analysis (e.g., academic journals).

Types of Research

  • Qualitative Research: Open-ended responses.
  • Quantitative Research: Numeric, structured responses.

Product Descriptors

  • Product Line: A set of individual products that are closely related.
  • Product Line Length: Number of individual products in a product line.
  • Product Assortment: Set of all product lines and individual products that a firm sells.

Branding

The use of a name, term, symbol, or design.

Six Stages of Brand Familiarity

  1. Brand Rejection: Potential customers won’t buy a brand unless its image is changed or if they have no choice.
  2. Brand Nonrecognition: Final customers don’t recognize a brand at all.
  3. Brand Recognition: Customers remember the brand.
  4. Brand Preference: Target customers usually choose the brand over other brands.
  5. Brand Insistence: Customers insist on a firm’s branded product and are willing to search for it.
  6. Brand Evangelism: Customers are so enthusiastic about a brand that they will actively spread positive word-of-mouth reviews and marketing.

Product Life Cycle

  1. Market Introduction: Sales are low as a new idea is introduced to a market.
  2. Market Growth: Sales grow fast, with industry profits rising and then starting to fall.
  3. Market Maturity: Industry sales level off and competition gets tougher.
  4. Sales Decline: New products replace the old.

Place: Distribution

Making goods and services available in the right quantities and locations.

Channel of Distribution

Any series of firms or individuals who participate in the flow of products from producer to final user or consumer.

Types of Channel Conflict

  • Vertical Channel Conflict: Between firms at different levels of the channel distribution.
  • Horizontal Channel Conflict: Between firms at the same level of the channel distribution.

Types of Marketing Channels

  • Direct Marketing Channel: No intermediaries (e.g., online sales).
  • Indirect Marketing Channel: Intermediaries (e.g., wholesalers selling to retailers then selling to consumers).

Buying Center

Thought to be everyone who participates in a purchase.

Logistics

Transporting, storing, and handling of goods in ways that match target customers’ needs within a firm’s marketing mix.

Stockturn Rate (Inventory Turnover)

The number of times the average inventory is sold in a year.

Adoption Curve

Shows when different groups accept ideas.

Types of Adopters

  • Innovators: First to adopt.
  • Early Adopters: Well-respected by their peers and often are opinion leaders.
  • Early Majority: Avoids risk and waits to consider a new idea after many early adopters have tried it (and like it).
  • Late Majority: Cautious about new ideas, late adopters.
  • Laggards or Non-Adopters: Prefer to do things the way they’ve been done in the past and are very suspicious of new ideas.

Sales Tasks

  • Order-Getting: Seeking possible buyers with a well-organized sales presentation designed to sell a good, service, or idea.
  • Order-Taking: Sell to regular or established customers, complete sales transactions, and maintain relationships with their customers.
  • Support: Help the order-oriented salespeople, but don’t try to get orders themselves (i.e., customer service).

Types of Advertising

  • Product Advertising: Tries to sell a product and has three categories:
    • Pioneering: Tries to develop primary demand for a product category rather than demand for a specific brand. This is done in the early stages of the product life cycle.
    • Competitive: Tries to develop selective demand for a specific brand.
    • Reminder: Tries to keep the product’s name in the public’s eye and mind.
  • Direct Advertising: Aims for immediate buying actions.
  • Indirect Advertising: Points out product advantages to affect future buying decisions.
  • Institutional Advertising: Focuses on the name and prestige of an organization or industry – it can seek to inform, persuade, or remind. The basic objective is to develop the goodwill of the organization in the public’s eye.

Social Commerce

Refers to an entire shopping experience occurring within a social media platform (e.g., TikTok).

Types of Advertising Media

  • Digital – Mobile
  • Digital – Desktop/Laptop
  • TV
  • Radio
  • Magazines
  • Out-of-home (i.e., billboards, cinemas, bus stops)

Types of Digital Ads

  • Banner Ads
  • Directories/Classifieds
  • Search Engine Ads
  • Social Media Ads
  • Mobile Advertising

Click-Through Rate (CTR)

The number of people who click on the ad divided by the number of people the ad is presented to (i.e.: 100 clicks / 1,000 sends = 10% CTR).

Pricing

  • Reference Prices: The price consumers expect to pay.
  • Leader Pricing: Setting some low prices – true bargains – to get consumers into the stores.
  • Bait Pricing: Setting low prices to attract customers and then trying to sell more expensive models or brands once customers are in the store.

Noise

Any distraction that reduces the effectiveness of the communication process.

AIDA Framework

  1. Getting Attention.
  2. Holding Interest.
  3. Arousing Desire.
  4. Obtaining Action.

Owned vs. Earned Media

  • Owned Media: Refers to promotional messages generated by a brand (communicated through a message channel the brand directly owns (i.e., their social media pages, website).
  • Earned Media: Promotional messages not directly generated by the company or brand, but rather by third parties (i.e., journalists, customers).

Social Media

Paid, Owned, Earned.

Major Social Media Platforms

: YouTube Facebook, Instagram, Pinterest, LinkedIn, Snapchat, Twitter (now X), TikTok.