UNIT REVISION: tips and guidance for the exam

1. UNIT REVISION:tips and guidance for the exam Lecture 11 Karen Knibbs Marketing Practice – U14210

2. Learning objectives • By the end of this session students should be able to:- • Understand the format of the exam • Reminder of key learning points • Revision tips! • Identify sources of further help / information for revision

3. Exam format • Choose 2 essay questions from a choice of 5 questions • 1 ½ hours • Exam mark accounts for 60% of the final mark for the unit as a whole • + 40% from assessed presentations • Get more marks by: • Write answer plans in notes first • Apply any relevant theory/models • Use as many examples from companies to illustrate your answer as possible

4. What we’ve covered this semester…

5. New Definition of Marketing? • New elements of “definition” • Creating value • Building brands • Nurturing innovation • Developing relationships • Good customer service • Communicating benefits • ROI and shareholder value • Stakeholders • Sustainability • “The strategic business function that creates value by stimulating, facilitating and fulfilling customer demand. It does this by building brands, nurturing innovation, developing relationships, creating good customer service and communicating benefits. By operating customer-centrically, marketing brings positive return on investment, satisfies shareholders and stakeholders from business and the community, and contributes to positive behavioural change and a sustainable business future.’” Charles (2007)

6. Broad Areas of Change & Developments • Marketing now not a management function • Expansion of marketing into new areas – e.g. e-commerce, social media, mobile apps, NFP, SME • Increasing complexity of marketing roles • Attitudes towards marketing • Ethics, sustainability , consumerism , CSR and social aspects • But some areas do not appear to be covered by the suggested new definition: • Services • Technology • Globalisation

7. MR definition summary • Market Research aims to describe and analyse markets (size, structure, growth etc) • Strictly speaking, Marketing Research is broader than Market Research • Marketing Research covers a much broader range of topics - customers, products, competitors, channels, suppliers etc

8. The Marketing Research Process Source: Baines and Chansarkar (2002), as cited in core textbook: Baines, Fill & Page (2008)

9. Components of Research Design Source: Baines et al 2008

10. Internal External Internal & External Current marketing situation or AUDIT Should include: • Market situation • Competitive situation • Macro environment situation • (PESTLE) • Product situation • Price situation • Promotion situation • Place (distribution) situation

11. Situation Audit

12. Customer Orientation and CRM • Move to customer orientation has lead to a need to understand customer’s needs better • Improvements in technology have driven organisations’ ability to gain and hold more information about consumers • Combined together, these have lead to the growth of Customer Relationship Management (CRM)

13. Role of CRM • To identify those customers that are most valuable to the organisation • To segment the organisation’s customers in the most useful way, e.g., by demographics, needs, value • To retain the customers that are most valuable to the organisation

14. How CRM is Carried Out • Relationships are based on (among other things) knowledge of the other party, in this case the customer • For organisation this means building and applying a picture of your customers • Generally this means using direct marketing • Also known as; • Database marketing • Direct and database marketing • Data driven marketing

15. Downside of CRM • Building a database is not always worthwhile, if; • The product is a once in a lifetime or very long term purchase, e.g. house • Where there is little loyalty shown to the product • Where the unit sale is very low, e.g., Heinz at Home • Where the cost of gathering data is too high • Can be difficult to get everyone to be customer centred • Not all customers want a relationship with organisations • Sometimes assumptions are false, e.g., sometimes loyal • customers get more expensive to serve as they get more demanding

16. Pros and Cons of Using Technology • Entry & Substitution Barriers Reduced: • Less need for physical assets • More difficult to protect adv. • New entrants in many industries • Easier substitution • Rivalry Increased: • Reduced differentiation • Increased price competition • Wider geographic market • Lower variable costs hence more discounting New Entrants Industry Rivalry Suppliers Buyers • Supplier Power Reduced: • Raises bargaining power over suppliers • Wider information available • Internet procurement gives equal market access • Buyer Power Increased: • Wider information available • Reduces switching costs • Bargaining power shifts to end users • Powerful channels eliminated Substitutes Porter (2001)

17. Technology and Marketing Technology has affected marketing in a number of ways. For example; • Products • Increasing speed, acceptance and expectation of innovation • Promotion • Increasing media fragmentation • Increased opportunities for information capture and manipulation

18. Technology and Marketing • Place • New distribution channels • Price • New technology becomes cheaper and more accessible, both B2C and B2B • Use of technology allows prices of various offerings to be decreased

19. Brand Management • A brand “consists of any name, design, style, words, or symbols, singly or in combination, that distinguish one product from another in the eyes of the customer.” (Brassington & Pettitt, 2006, P.301) • Needs to be something that can’t easily be copied by competitors • This serves as a sensory stimuli, a cue for the audience to attach to their experiences of products Brassington & Pettitt (2006)

20. Brand Management Terms • Trade Mark • A brand name symbol or logo protected by law for the owners sole use • Trade Marks Act 1994 allows registration of smells, sounds, product shapes and packaging • Includes Coca-Cola bottle, Toblerone Directline insurance Advert • Brand Mark • The elements of visual identity made up of design and symbols, not words • Also protectable by law • E.g., Lloyds TSB black horse, Apple’s apple Brassington & Pettitt (2006)

21. Branding Strategy • Brand extension • Using an established brand to introduce a new product • E.g., Mars ice cream, easyHotel • Sub-brand • A type of brand extension linking a new brand with an existing brand • E.g., Diet Coke • Parent brand • A brand that produces a brand extension • Family brand • A parent brand with a number of extensions Kotler & Keller, (2006)

22. Branding Strategy Brand extensions can be divided into two broad types; • (Product) line extension • Use parent brand to brand a new product aimed at a new market segment within the product category already served by parent brand, such as through different flavours, etc.., • (Product) category extension • Parent brand is used to enter a different product category than the one already served Honda Impossible Dream Kotler & Keller (2006)

23. Rationale for planning • to develop systematic, long-term thinking • to create an organised approach • to develop specificity & consistency • to get agreement from colleagues & support from non-marketers • common goals and mutual benefits • to identify sources of competitive advantage

24. The Strategic Marketing Planning Process Adapted from Morgan (1991), cited in Baines et al, p317

25. Problems with planning • Companies become obsessed with the process or technique rather than the actual content and delivery of the plan!! • Unreliable or insufficient market research data can make plans flawed from beginning! • New companies • too busy? • Small companies • not important/ no skills/ restrictive? • Mature companies • Unnecessary / cumbersome? • Fast changing markets • not useful / responsive? • However all organisations should plan!

26. Influences Shaping Organisational Buying Behaviour Baines, Fill & Page, (2008)

27. Characteristics of organisational markets (from Principles) • Fewer buyers • Larger buyers • Closer supplier-customer relationships • Geographically concentrated buyers • Derived demand • Inelastic demand • Fluctuating demand • Professional purchasing • Several buying influences • Direct purchasing • Reciprocity • Leasing / Contractual Agreements

28. Summary of Differences • Consumers often: • Purchase goods and services alone, which meet individual or family needs • Buy on impulse or switch supplier with minimal processes • Experience minor irritation if supply fails • Accept the stated price • Businessesoften: • Purchase goods and services, as part of a team, to meet specific business needs • Use formalised, lengthy purchasing policies and processes • Find switching supplier difficult • Experience major problems if supply fails • Negotiate on price

29. Marketing Planning for Small Businesses (SME) BUT, SME Marketing authors/researchers consistently state the need for effective marketing analysis and research: Chaston, (2000), Morgan & Hunt, (1996) and Mintzberg and Waters, (1982). Brassington & Pettitt, (2006)

30. SME Characteristics However there are advantages to being an SME: • Research evidence indicates staff are more loyal, have a harmonious workplace, “team” attitude and socialise more • Closeness to customers through small customer base and personalised, shorter lines of communication, which can lead to increased loyalty and decisions based on experience rather than purely on price • Increased speed and flexibility in dealing with customer need changes and environmental forces • Opportunity focussed – externally aware, decision making is quicker • Able to focus on smaller, profitable niches (e.g. Farmer’s markets) information through closer customer and competitive links • Informal, easy access to market as compared to larger MNE’s Carson, Cromie, McGowan & Hill (1995)

31. Further reading suggestions: • All chapters from core texts as per unit handbook • Additional recommended reading as per unit handbook • Previous lectures (files on victory) • Further reading suggestions as per previous lectures. • Self-test section of student website accompanying the core textbook.