Marketing Notes:

Remember for test: Unique selling positions

Unique Selling Propositions (USPs) refer to the distinctive features or characteristics of a product or service that differentiate it from competitors and provide a compelling reason for customers to choose it over alternatives. These could include superior quality, innovative features, exceptional customer service, or unique benefits that fulfill specific customer needs or preferences.

What is a Market?

• A market, also referred to as the marketplace, is a place where two parties (the buyer and the seller) can gather to facilitate the exchange of goods and services
• A market can also be used to describe all of the potential customers who have the ability and desire to purchase a particular product

Marketing: the process of creating, communicating, and delivering value to customers through products

1. Product Orientation:

• The primary focus of product-oriented marketing is on designing and producing high-quality products and then promoting them to customers.
• Companies using this approach believe that a superior product will naturally attract customers.
• Marketing messages revolve around highlighting the features, quality, and uniqueness of a product.
• “What does our product offer”

2. Sales Orientation

• Sales-oriented marketing places a strong emphasis on selling products quickly and generating revenue.
• Companies using this approach are proactive in pushing products onto customers, often using aggressive sales tactics.
• The focus is on meeting sales quotas and achieving short-term goals. The key question in sales-oriented marketing is: “How can we sell more of our existing products?”

3. Market Orientation

• Market-oriented marketing centers on understanding and meeting customer needs and preferences.
• This approach involves conducting thorough market research to identify customer demands and then tailoring products and strategies accordingly.
• Companies using this approach strive to create customer value and build long-term relationships.
• The key question in market-oriented marketing is: “What do customers want and how can we meet those wants?"

4. Customer Orientation

• Customer-oriented marketing focuses on creating exceptional customer experiences and building strong relationships.
• This approach involves anticipating and fulfilling individual customer needs, providing excellent service, and maintaining customer loyalty.
• Companies using this approach prioritize long-term customer satisfaction over short-term profits. The key question in customer-oriented marketing is: ” How can we exceed customer expectations and build lasting relationships?”

The Marketing Concept: the idea that companies should analyze the needs and wants of their customers, and then make decisions to satisfy those needs better than the competition

Industrial Goods: These are the goods that businesses use to be able to make their own products, they range from Raw materials- farming, mining, fishing, oil Processed goods- ex. flour for bakeries Finished goods- they no longer require processing

Consumer Goods: These are goods that are sold to the general public and not intended for use by a business For example hockey sticks- if a person goes to a sports store to buy the hockey stick for personal use it is a consumer good. If the Maple Leafs Equipment Manager goes to the store to buy the sticks for the team it is an industrial good.

Services (Industrial or Consumer): Services are viewed in the same way as Industrial goods vs. Consumer goods. For example, if you go on vacation and stay in a hotel that is a consumer service. If a business books a hotel for a conference, that is an industrial service.

The Consumer Market: This market consists of all consumers and potential consumers who do/will purchase the product. This market is usually called the Target Market. If the target market is everybody, it is called an aggregate market, if not it is called a differentiated market which divides consumers in specific ways (we will look at this in a later chapter)

Competitive Market: In this market, all companies (big or small, related/unrelated) compete for your money. If you have $50 to spend, every company that has something to sell for $50 or less wants your business!

The marketing mix:

• Product: This is what the company is selling!
• Price: This pillar consists of finding a right price!
• Place: This is basically where the product is sold!
• Promotion: consists of all the ways that you make your product known to your consumers. Some examples of promotion are, but not limited to:

Distribution Strategies:

• Push: This strategy is when marketers push the product on the consumer. It is used for products that are not heavily advertised or bought on impulse
• Pull: This is the opposite of the push strategy, this is where companies want to advertise so consumers pull their product off the shelves

Combination: This strategy is using the push and pull strategies together. This will increase sales for the company. The company will need to work with its retailers, manufacturers, and wholesalers for this to happen.

The customer is the person who makes the purchase

The consumer is the person who consumes (or uses) the product

2C’s - Customer

• First you need to know what the customer wants and/or needs are? Therefore, you must determine who your customer (or target market) is/or is going to be You must determine the common characteristics of your customer You must inform, persuade, and convince the customer with respect to your product/service

Competition:

• What products/service exists already? Who/what is your competition? How do you compare/differentiate your product/service from the competition? How do your stay a step ahead of your competition?

Why know your target market?

• Distribution Methods – how to best deliver product Advertising – helps create meaningful messages
• Product Design – consumers in a target market tend to like similar designs Media – know which media to use for promotions

Heavy Users

• Often most lucrative segment.
• Example: 30% of bottled water market are heavy users who account for 80% of all bottled water sold.
• Marketers try to build brand loyalty in this group

Medium and light users

• Attempt to turn them into Heavy Users with pricing deals, special contests, informative ads.

New-Users

• 2 Kinds… Those entering category for the first time (ex: new mothers buying diapers). Those who do not plan on using the products.

Demographics: is the study of obvious characteristics that categorize people.

Psychographics is a system for measuring consumers’ beliefs, opinions, and interests.” Much more difficult to measure than demographics

Geographics – where consumers live.

• Urban Consumers Live within the boundaries of the city. They usually live in apartments, condos, or houses with small yards. Spend on cultural events, restaurants, public transportation
• Suburban Consumers Typically owns a car (is a commuter), owns house with larger yards Spends on household furnishings, BBQs, gardens Rural Customers Often farmers with trucks and extremely

Supply: represents willingness to sell at certain price relationship between price and the quantity supplied (actually sell)

• Supply Curve Law of Supply: the higher the price of the product, the more the producer will supply Positive relationship with price, the curve is upward sloping

Demand: represents willingness and ability to buy at a certain price relationship between price and quantity demanded (actually buy)

• Demand Curve Law of Demand: the higher the price of the product, the less the consumer will demand Negative relationship with price, the curve is downward sloping

Demand is the quantity of a good or service that consumers are willing and able to buy at a certain price.

• Demand is the quantity of a good or service that consumers are willing and able to buy at a certain price.
• When prices increase consumers buy less and the quantity demanded goes down

Supply is the quantity of a good or service that a business is willing and able to provide at a certain price.

• When prices decrease businesses sell less and the quantity supplied goes down
• When prices increase businesses sell more and the quantity supplied goes up

Supply & Demand Curve …..

• Equilibrium is reached when both curves intersect. At this point, the price is just high enough so that the quantity people want to buy is equal to the quantity business want to sell the quantity demanded = the quantity supplied

The Buying Process:

• Awareness The consumer hears about the product (ie. hearing a new song on the radio)
• Search The consumer gathers information from users, advertisements, and salespeople
• Evaluation The consumer evaluates the information (alternatives?)
• Trial The consumer tries the product when possible (test drive a car)
• Purchase The consumer makes a decision and buys the product

Why do consumers make the purchases they do? Maslow

• Physiological Needs The most basic needs that are vital to survival, such as the need for water, air, food, and sleep
• Security Needs These include needs for safety and security. Examples: steady employment, health insurance, safe neighbourhoods, and shelter from the environment. Social Needs Belonging, love, acceptance and affection. Example: friendships, romantic companionship, involvement in social, community, or religious groups.
• Esteem Needs The need for things that reflect on self-esteem, personal worth, social recognition, and accomplishment.
• Self-actualizing Needs These people are self-aware, concerned with personal growth, less concerned with the opinions of others, and

interested fulfilling their potential.

The Benefits of Competition

• Increased Selection
• Alternative Choices – i.e. bad service
• Better Prices
• Increased Productivity
• Product Improvements
• Technology Advancements

Four major marketing structures:

• Perfect competition - large # of small companies; nobody controls market Agricultural Market, Amazon
• Monopolistic Competition – large # of companies; each of them has an opportunity for market control Most products e.g. detergent, fast food
• Oligopoly - small # of large companies, each with a substantial amount of market control Banking Industry, Apple Microsoft
• Monopoly – a single company has complete market control Hydro, Enbridge,

Direct competition: Products that are similar Consumers choose among products in the same category

Indirect competition: Every business is in competition with every other business for consumers’ discretionary income.

Competition leads to better products at better prices.

Competitive Advantage: Businesses look for advantages over their competition. A true advantage is one that is sustainable over the long term.

Sustainable competitive advantages

• company assets, attributes, or abilities that are difficult to duplicate or exceed and provide a superior or favorable long term position over competitors.
• Create a unique selling proposition (USP) – patented design, licensed products Lowering production costs: cost-efficient, high technology manufacturing systems Servicing a niche market – keep competitors out of that market Create customer loyalty – relationship marketing

Non-sustainable competitive advantages:

• Non-SP used by competitors to shift sales in their direction
• Promotion: “top of mind” Placement: more placement=more competitive (Chapters – category killer)
• Quality
• Benefits of use: do more and better than other products
• Price: all features being equal…
• Design features: catch consumers’ interest – product design

Service Competition:

• Service companies are in competition with other companies that perform the same service. e.g., UPS vs. FedEx
• Convenience Internet shopping, ease of use Degree of service e.g., Barber vs. Hair Salon Selection Reputation Price

A company can increase market share in one of two ways:

increase the size of the overall market E.g. Drink more juice

take sales away from its competitors. Other promotion effort School Cafeteria, etc.

Product Life Cycle

Introduction: Introducing a new product is costly due to expenses like warehouse space, packaging, and market research. Marketing focuses on selling to early adopters and can use either in-store placement (PUSH strategy) or advertising (PULL strategy) to create a positive image of the product.

Growth: Word of mouth advertising is crucial at this stage, product must be visible Companies will advertise heavily at this stage The product will either catch on or fail

Maturity: Sales of a product increase much slower Marketers keep the name of their brand visible Invest little $ in new advertising, while original promotional mix is less frequent More chance for profitability because costs are low

Decline: Happens when a company is unable to find new customers for their product(s) Marketers will try various tactics to get out of this stage (re-design/re-package/re- price)

Nontradtional PLCs (fads): A product that is extremely popular for a very brief period of time Becomes unpopular just as quickly, vanishing soon after it’s introduction to the marketplace When fads die, businesses run the risk of being caught with large amounts of unwanted inventory

Niche: A small section of the market that a product dominates Because the market is so small, there is little competition Example: the Pet Hotel in Peterborough, Ontario is a niche market because there are not enough consumers to make the market attractive to competitors, however the market is large enough to be profitable.

Seasonal: The impact that seasonal changes will have on the life of a product will depend on the product (I.e. Ice ceam parlours) Marketers of seasonal products and services anticipate periods of high and low demand These companies will work extra hard to create demand outside the peak season.