Summary COM3701-study_notes

Marketing context (chapter 5)  Definition of marketing Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large’. (American Marketing Association, 2009) Key elements of the 2008 definition of marketing by the American Marketing Association (2009): Activity, processes Marketing is no longer a function – also an educational process Set of institutions Marketing is a science, and educational process and a philosophy, and not just a management system Creating Through creative messages, marketing management must try to change unfavourable conditions in market place into opportunities Communicating Marketing communication must include messages and media about product or service which, must include new media and social media platforms Delivering Marketing must ensure that promises that have been made to customer are kept Exchanging Marketing must persuade customers to buy; to engage in transactions Offerings Marketing must facilitate product, price, distribution and marketing communication, as well as efficient service from people and processes Value for customers, clients, partners, and society at large Customers, clients, partners and society can obtain satisfaction from resources and abilities of organisation Marketing can promote well-being of society in the long term  Relationship marketing perspective According to Baker (2003): Relationship marketing is the commercial activity between economic partners, service providers and consumers aiming to create, maintain and terminate these relationships to achieve mutually beneficial objectives based on profit and trust between these parties. According to Kitchen (1999: 406): Purpose of relationship marketing is establish, maintain and enhance relationships with customers and other partners at a profit, so that objectives of parties involved are met. This is achieved by mutual exchange and fulfilment of promises'. Relationship marketing objectives:  Create, maintain and build existing consumer relations through focused and cost-effective solutions based on consumers’ needs  Expand relationships through existing consumers  Ensure consumers are satisfied by offering collective products and services that address their needs  Offer services at a lower cost by decreasing operational and communication costs through an integrated approach  Enhance corporate brand organisation through strategic and tactical relationship building  Develop or use existing databases to integrate relationship marketing and interactions with consumers in order to ensure consumer retention, extension and selection Following elements are crucial to relationship marketing (Brink & Berndt 2004, Kitchen 1999):  Trust: Trust is crucial not only to marketing, but also to personal relationships. Therefore, it is equally important in relationship marketing. Trust is necessary for perceptions of seller and buyer to receive a fair division of available resources. Three points are crucial to trust: trust is about equity; looking ahead, using past and present behaviours to inform an understanding of what might occur in future; and trust is about allocation of scarce resources such as time, money and product benefits. Trust reduces conflict and increases satisfaction and confidence between partners. Trustworthiness comprises two elements: credibility and benevolence. Credibility is belief that a partner has expertise to perform a task effectively and reliably, and benevolence is the belief that a partner's intentions and motivations will be beneficial to both parties when circumstances arise.  Commitment: A desire to maintain a valued relationship. Commitment to a partnership implies that the partner is prepared to make an effort for relationship and avoid other partners in order to continue partnership's existence. Commitment also implies a degree of vulnerability.  Social support: Provides benefits such as reduction and control of uncertainty, an increase in self-acceptance, and social integration within larger community. Social support can also be key factor in development of relationships between organisations and customers.  Traditional marketing mix: explain and discuss all traditional marketing mix elements (4 P's). Product is a tangible good or an intangible service seen to meet specific customer need or demand. Products follow a product life cycle and it is vital for marketers to understand and plan for various stages and unique challenges. Benefits offered by product and all its features need to be understood and unique selling proposition of product need to be studied. Price is amount end user is expected to pay for product. How a product is priced will directly affect how it sells. This is linked to what the perceived value of product is to customer rather than an objective costing of product on offer. If a product is priced higher or lower than its perceived value, then it will not sell. It is imperative to understand how a customer sees what you are selling. If there is a positive customer value, then a product may be successfully priced higher than its objective monetary value. If a product has little value in eyes of consumer, then it may need to be underpriced to sell. Price may also be affected by distribution plans, value chain costs and markups and how competitors price rival product. Promotion - Marketing communication strategies and techniques all fall under promotion. These may include advertising, sales promotions, special offers and public relations. Whatever channel used, it is necessary for it to be suitable for product, price and end user it is being marketed to. It is important to differentiate between marketing and promotion. Promotion is communication aspect of entire marketing function. Place has to do with how product will be provided to customer. Distribution is a key element of placement. Placement strategy will help assess what channel is most suited to product. How product is accessed by end user also needs to compliment rest of product strategy