1.

Principles of Marketing
Marketing is about identifying human and social needs at a profit.
-Marketing management: the art and science of choosing target markets and getting,
keeping and growing customers, through creating, delivering and communicating superior
customer value.

-There is a social (marketing is the process by which individuals and groups obtain what they
need and want through creating, offering, and freely exchanging products and services of
value with others ) vs a managerial definition of marketing.

-Marketing is a process, not an event. As economies change with booms and recessions
marketers need to rethink their practices to deliver customer satisfaction within competitive
markets.
-Marketers must be skilled at simulating and managing demand. They must see and
unfulfilled need and launch an appropriate offering that matches the need profitably.
-Needs: basic human requirements such as food, air… stated needs, real needs, unstated
needs, delight needs, secret needs.
-Wants: need directed to a specific object that might satisfy the need. Marketers create
wants but need pre-exist!!
-Demand: wants for specific products backed by the ability to pay.
-Three transformation forces of the marketplace: technology, globalization and social
responsibility.
-Technology: marketing managers need to understand and embrace the current
range of digital technologies and monitor new and innovative technologies.
-Globalization:
-Social responsibility: because marketing’s effect extend to society as a whole,
marketers must consider the ethical, environmental, legal and social context of their
activities. They must preserve and enhance consumer’s and society long term well being.
Social responsibility can be a way to differentiate themselves.
-New consumer/company capabilities: internet usage
-Changing channels: growth of own brands, retail internationalization (tesco), fragmentation
of retail market, internet retailing and digital stores, proliferation of stores.
- Higher competition: mega-brands (intersection of two or more industries), deregulation
and privatization. Rising promotion costs and shrinking profit margins are the result of
higher competition.
-Marketing balance (right spending between digitalization and traditional marketing)
-Marketing accountability (justification of spending for revenue or value creation).
-Production philosophy: customers prefer products that are widely available and
inexpensive.
-Product philosophy: customers favour products with most quality, performance or
innovative features.

The selling concept holds that consumers and businesses, if left alone, will ordinarily not buy
enough of the organization's products

-Marketing philosophy: customer-centred, sense and response. There is a total company

effort to achieve customer satisfaction at a profit. Holistic marketing philosophy recognizes
the scope and complexity of marketing activities.

-Relationship marketing: aims to build long term mutually satisfying relationships in order to
earn and retain their business. Key components: customers, employees, marketing partners
and members of financial community. Outcome: marketing network (company and
stakeholders). CRM (Customer relationship management) and PRM (Partner relationship
management). The ultimate outcome of relationship marketing is a unique company asset
called the MARKETING NETWORK, consisting of the company and its supporting
stakeholders.
-Internal marketing: ensure staff is aware and aligned with the vision and marketing plan.
More important than external marketing, cant sell something the company isn’t aligned
with.
-Performance marketing: understanding the financial and non-financial returns from
marketing activities.

Preguntas:

-As economies advance, a growing proportion of their activities focuses on the production
of services.

- Unwholesome demand is demand for things which we know are bad for us. Ex: alcohol
- In negative type of demands, customer does not want the product even though product
might be necessary for the customer. Ex: pollution

- When consumers share a strong need that cannot be satisfied by an existing product, it is
called latent demand.

- Incorporating the holistic view of marketing, the four Ps of the marketing mix can be
updated to people, processes, programs, and performance

-A metamarket is a cluster of complementary products and services that are closely related
in the minds of consumers but are spread across a diverse set of industries.

- The value of an offering is described as the sum of the tangible and intangible benefits
and costs to customers.

2. Marketing Research
-Marketing insights provide diagnostic info about how and why we observe certain effects
in the marketplace and what that means to marketers.
-Marketing research budget 1-2% of company sales.
Step 1: define the problem, decision alternatives and research objectives
-Define the problem: not too narrow or too broad and spell out decisions it might
face.
-Objective: causal, descriptive, exploratory, …

Step 2: develop the research plan

-Decisions on data sources, research approaches, research instruments, sampling plan and
contract methods.
-Data sources: primary (costlier, but usually at least slightly used) and secondary data (less
costly so look here first).
-Research approaches (How to collect primary data): primary data collection through
observation (eg: ethnographic research), focus groups, surveys, experiments (cause-effect,
eliminate and control extraneous variables) and behavioural data (customers leave traces of
their purchasing behaviour in store-scanning data, catalogue purchases and customer
databases).
-Research instruments (Instruments for collecting primary data):
-Questionnaire: open end questions vs. closed end questions
 -Qualitative measures: word association, projective techniques (fill in the bubble or
comparison task), visualization (ZMET technique with collages made with images customers
think represent the brand), brand personification (what kind of person would the brand
be?), laddering (increasingly more specific why questions).
-Technological devices: galvanometer (measures interest or emotions aroused by
expose to an ad or picture). Tachistoscope (flashes pics and eye camera tracks eye
movement to see where eyes land first). Audiometers, gps…
-Sampling: sampling size of 1% of population can provide good reliability.

Step 5: present findings

-Creation of visual and artistic collages.
Step 6: make the decision
MDSS: Marketing Decision Support System helps marketing managers make better
decisions. It has been defined as a coordinated collection of data, systems, tools, and
techniques with supporting software and hardware by which an organization gathers and
interprets relevant information from business and environment and turns it into a basis for
marketing action.

-Field service firm: specialty-line marketing research firm

-Goal of ethnography research: immerse the researcher into consumers lives to uncover
unarticulated desires that might not surface in any other form of research.
-Avoid generalizing from research groups: size of the group is too small and the sample is
not randomly drawn.
-Questionnaires due to flexibility are the most common technique of collecting primary
data.
-Qualitative research: indirect in nature so consumers may be less guarded.
-Thematic Appreciation Test: respondent is shown a pic and asked for story of what is
happening
-Complete incomplete stimulus: projective techniques
-Word association: identify the range of possible brand associations in consumers’ minds.
-Most versatile contact method: personal interview
-Data collection: most expensive and prone to error phase
-Stakeholder performance scorecard: tracking satisfaction of suppliers, banks, distributors…
-Customer performance scorecard: records how well the company is doing year after year
based on measures such as the average perception of the company product quality relative
to competitors.

3. Consumer Behaviour

Consumer behaviour: culture, social groups and individual

-Culture: fund def of peoples wants and behaviour. Subculture, social classes (cimilar
values, interest and behaviours), National cultures (International Marketing).
-Social groups: reference groups (membership groups (primary or secondary group),
aspirational groups, dissociative groups (doesn’t belong and reject), disclaimant
groups(belongs and rejects)), opinion leader, market mavens, family (most important
consumer buyer organization), roles and status.
-Individual consumer: age and stage in life cycle, occupation and economic
circumstances, personality and self-concept (brand personality is a mix of traits: sincerity,
excitement, sophistication, ruggedness, competence), lifestyle and values

-The family in a buyers life consisting of parents and siblings is the family of orientation.

-Selective distortion can work to the advantage of marketers with strong brands when
consumers make neutral or ambiguous brand information more positive.

-Selective distortion is the tendency to interpret information in a way that will fit our
preconceptions.

-Learning theory teaches marketers that they can build demand for a product by
associating it with strong drives, using motivating cues, and providing positive
reinforcement.

-Memory encoding refers to the process in which information gets out of memory.
Positioning

CH. 10

- Blue Ocean Thinking It involves designing creative business ventures to positively

affect both a company's cost structure and its value proposition to consumers.
- The three criteria that determine whether a brand association can truly function as a
point-of-difference are desirability, deliverability, differentiability

CH. 11 Brand and brand equity

-Roles of brands: functional (performance of good or service) and emotional (emotional
branding, building emotional ties with customers).
-Lifestyle brand: brand that attempts to embody the interests, attitudes and opinions of a
group or a culture, to connect with them on a more personal level.
-Conspicuous consumption: acquisition of products and services mainly for the purpose of
maintaining social status.
-Brand identity (how company wants to be positioned in the mind of consumers) vs. Brand
image (how it is
actually
perceived).
-Strategic brand management: long term effort of consciously providing an offering with an identity
that is understood on all levels. Includes customers, employees, suppliers and retailers. Positioning
choices have to first be made.

-Brand vision: offers a clear and consistent message about the value of the brand. Involves
recognising the inherit potential of a brand.

-Brand value chain: is a structures approach to assessing the sources and outcomes of brand equity
and the manner in which marketing activities create brand value.

-Brand resonance model:

 - Brand element choice of criteria: memorable, meaningful, likeable, transferable, adaptable,
protectable

CH.9

-When a consumer expresses thoughts, feelings, images, experiences, and beliefs associated
with the brand, the consumer is expressing BRAND KNOWLEDGE

-BRAND PROMISE: When a marketer expresses his or her vision of what the brand must be
and do for consumers

-Perceived value of a brand: brand attitude

-Identify the four pillars of brand equity, according to brand asset valuator model: energized
differentiation, relevance, esteem, and knowledge

-breadth of a brand's appeal? RELEVANCE

6. Price
-Only element from marketing mix that produces revenue, rest only cost.
-Internet has changed how buyers and sellers interact. Buyers (get instant price comparisons
from thousands of vendors, name their price and have it met, get free products such as SW)
and sellers (monitor customer behaviours and tailor offers, give certain customers access to
special prices, let customers decide the price) and both can negotiate price in online
auctions and exchanges.
-Price strategy should begin with determining the true value of a company’s offerings to its
customers.
-There is often a gap between what customers will pay and what a business charges.
-Freemium strategy: marketing strategy that allows consumers to use a basic version of a
product or service for free with the hope that they will go on to pay a premium for the
whole thing.
Consumer psychology and pricing (reference pricing, price-quality inference and price
endings)
-We process and perceive price info compared to prior purchasing experiences, formal
communications (ads, brochures…), informal communications (friends, family…) or online
resources.
Reference Pricing
-Consumers have fairly good knowledge of price ranges but not for specific
prices.
Price-quality inferences
- A higher price might signal better quality and also price denotes the monetary
sacrifice the consumer must make to obtain the product (feeling of higher
purchasing power the more expensive, luxurious).
Price endings
-We process prices left to right rather than rounding. 299 nearer 200 than 300.
-9 looks like discount/bargain, if I want high price image I use round numbers.
-These strategies become less effective the more they are employed, more influential if
customer has poor price knowledge, purchase the item infrequently or are new to the
category, prices vary seasonally.

Setting the price

6 steps: selecting pricing objective, determining demand, estimating costs, analysing
competitors costs, prices and offers, selecting pricing methods and selecting final price.
1. Selecting pricing objective
 -Survival (for short run objective or it will extinct)
-Maximum current profit (must have knowledge of demand and cost functions)
-Maximum market share: like market penetration strategy. Assumptions of price
sensitive market. Higher sales volume, lower unit costs and thus higher long run
profit.
-Maximum market skimming: price starts high and slowly drops over time. Can be
risky if competitors price lower.
-Product-quality leadership

2. Determining demand
Each price will lead to a different level of demand (demand curve)

-Methods for estimating demand curve: surveys, price experiments and statistical analysis.

-Price elasticity of demand: can vary short to long term, can have a price indifference band
(wont know total effect of price change till time passes).

3. Estimating costs

-Fixed costs (rent) + variable costs (with level of production) =total costs
Average cost(per unit)

-ABC Activity Based Costing, cost of serving each customer, includes indirect costs.
-Average costs fall with accumulated production experience (experience curve or learning
curve).
 -Target costing: we set a price based on competition, appeal… deduct profit and stick to the
cost.

4. Analysing competitors price and offer

5. Selecting a pricing method
-Mark up pricing: adding profit to costs
-Target return pricing: determine the price that would yield its target rate of return on
investments.
-Perceived value pricing: based on customer’s perceived value
-Value pricing: low price for high quality, reengineering for lower costs maintaining quality.
-EDLP EveryDayLow Prices
-Going-rate pricing: based on competitors prices
-Auction type pricing

6. Selecting final price

-Impact on other marketing activities: high advertising leads to higher prices
-Consistency with company pricing policy
-Impact of price on other parties

Adapting the price

Companies do not set a single price, it realises different profit from each unit.
-Geographical pricing
-Discount (cash discount, quantity disc, functional disc, seasonal, allowance)
-Promotional pricing
-Differentiated pricing when companies sell a product at two prices that do not reflect a
promotional difference.

Price Cuts
Low quality trap, fragile market share trap, shallow pocket trap and price war trap.

REVISAR

CH4- Segmentation

Customerisation combines operationally driven mass customisation with customised

marketing in a way that empowers consumers to design the product and service offering of
their choice.

Sinus typology: combination of psychographic and demographic segmentation. Basic

Orientation vs social status

Vals: values and lifestyles: ideas, achievement, self-expression

Nielen prizm: geo-demographic segmentation (eg park bench seniors, hometown retired…)
Decision Roles (behavioural segment): initiator, influencer, decider, buyer, user
B2B segmentation: demographic, operating variables, purchasing approaches, situational
factors and personal characteristics

Useful market segment: measurable, actionable, accessible, substantial and differentiable.

CH9-Positioning

-Positioning= segmentation+differentiation
-Positioning creates customer-focus value proposition
-Requies: frame of reference +POP POD

POD desirability: relevant, distinct and believable

POD deliverability: feasible, communicable and sustainable
Brand attributes, values and benefits

Quantitative approach: perceptual maps or multidimensional scaling: mapping the similarities

and differences of objects in a multidimensional space
Qualitative: brand personification, ZMET

Brand positioning statement= long term

Value proposition: short term

Differentiation strategies: product, personnel, channel and image