Define marketing and outline the steps in the marketing process.

The concepts customer needs,

wants, and demands with example. How would you design a customer-driven marketing strategy?
Building profitable relationships with your customers and partner?
“The goal of the marketing process is to capture value from customers to create profits and
customer equity.” Explain.
Building Customer Equity. The contrast between the selling concept and the marketing concept.
The environmental forces that affect the company’s ability to serve its
customers.
B) Changes in the demographic and economic environments affect
marketing decisions.
C) Discuss how companies can react to the marketing environment.

The stages in product adoption process.

Characteristics of business markets.
The business buying process and point out the major influences on
business buyer behavior.
The stages in product adoption process.
Characteristics of business markets.
The business buying process and point out the major influences on
business buyer behavior.
-The factors considered for setting prices.
-The general pricing approaches.
-Price strategies for new product, product mix pricing strategies, and price
adjustment strategies.

Meaning of STP? major basis for segmenting the consumer markets

How do companies evaluate and select target segments?
The positioning strategies with examples.

-Stages in productlife-cycle. Marketing strategies at the different

stages of product life cycle.
 -Distinguish between styles, fashions, and fads with examples.
-The new-product development process

Marketing is a process by which companies create value for customers and build strong
customer relationships to capture value from customers in return.

customer needs, wants, and demands with example:

• Needs
• States of deprivation
• Physical—food, clothing, warmth, safety
• Social—belonging and affection
• Individual—knowledge and self-expression

• Example: A person needs food to survive

• Wants
• is human needs take as they are shaped by culture and individual personality

• Example: A person may want to eat sushi for dinner.

• Demands
• Human wants backed by buying power

• Example: A person who is able and willing to pay for sushi.

design a customer-driven marketing strategy

A customer-driven marketing strategy is about making your marketing all about what the customer wants and needs,
not just about the product.
Steps are as follows:-
▪ Market Segmentation: It refers to dividing the markets into segments of customers
▪ Target marketing: It refers to which segments to go after.
▪ Positioning: The activity of positioning involves placing the product/service in the minds of
the target customers and making the image of the product/service superior as compared to
other similar products.
 ▪ Differentiation: It is the process of differentiating the market in order to have superior
customer value. Differentiation offers the business a competitive advantage. Differentiation
can be direct (i.e., improves quality) and indirect (improved positioning strategy).
Marketing myopia: Many sellers make the mistake of paying more attention to the specific products
they offer than to the benefits and experiences produced by these products
. i.e only thinking about what customers want right now and forgetting to consider what they really need in
the long run

Profitable relationships are those that benefit all parties involved and result in more business
opportunities. By building strong relationships with your clients, colleagues, and partners, you can create a
network that supports your growth and provides ongoing success.
How can you build profitable relationships with your customers and partners?
• Understand their needs and goals.
• Communicate clearly and regularly.
• Deliver on your promises and exceed expectations.
• Seek feedback and improve continuously.
• grow your relationships.
• Leverage technology and tools: Technology and tools can help you automate, and
optimize your relationship-building activities. You can use technology and tools to
manage your contacts, analyze your data, and measure your performance.

The goal of the marketing process is to capture value from customers to create profits
and customer equity.”
The goal of the marketing process is to capture value from customers, which means
creating a good exchange where customers feel happy with what they get and the
company makes money and builds customer loyalty. Here’s a simple breakdown:

• Capture Value: This means making sure that customers feel they get more than
what they pay for.
• Create Profits: When customers are happy, they buy more, leading to more
money for the company.
• Customer Equity: This is the total combined value of all the customers’ loyalty to
the company over time.

So, the marketing process is all about making customers happy and building a strong,
lasting relationship with them, which is good for both the customers and the company.

The contrast between the selling concept and the marketing concept.
contrast between the selling concept and the marketing concept in simpler terms:
1. The Selling Concept:
 the selling concept assumes that if consumers and businesses are left on their own,
they won’t naturally buy enough of the organization’s products. So, the organization
actively pushes sales through promotions and sales efforts

Starting Point: The selling concept begins with the factory..

o
Focus: The main attention is on the products themselves.
o
Approach: The organization aggressively sells and promotes these
o
products.
o Goal: The ultimate aim is to make profits through sales volume.
2. The Marketing Concept:

The marketing concept shifts from just focusing on the product to understanding
what customers truly want. It’s like tending a garden—nurturing relationships with
consumers and delivering value. In this approach, the customer is the king, and
marketing takes center stage.

• Starting Point: The marketing concept emerges from understanding the target
market.
• Focus: It revolves around customer needs.
• Approach:The organization adopts an integrated marketing approach,
considering product development, distribution, pricing, and promotion.
• End Goal: The ultimate objective is to achieve profits through customer
satisfaction

The environmental forces that affect a company’s ability to serve

its customers can be divided into two main categories: the macroenvironment and
the microenvironment.

Macroenvironmental Forces:

1. Demographic Environment: Involves the study of human populations in terms of size,

density, location, age, gender, race, occupation, and other statistics. Changes in
demographics can affect market composition and consumer behaviors1.
2. Economic Environment: Includes factors that affect consumer purchasing power and
spending patterns, such as growth rate, employment ratios, inflation, exchange rates,
and cost of living1.
3. Natural Environment: Encompasses the natural resources needed as inputs by
marketers or affected by marketing activities, including resource shortages and
environmental sustainability concerns1.
4. Technological Environment: Represents the forces that create new technologies,
creating new product and market opportunities. It’s crucial for companies to adapt to
technological advancements1.
5. Political Environment: Consists of laws, government agencies, and pressure groups that
influence and limit various organizations and individuals in a society. Political stability
and government policies play a significant role1.
6. Cultural Environment: Made up of institutions and other forces that affect a society’s
basic values, perceptions, preferences, and behaviors. Cultural shifts can impact market
needs and consumer decisions1.
Microenvironmental Forces:

1. The Company: Refers to the internal environment of the company, including its corporate
culture, production capabilities, and business strategies.
2. Suppliers: Provide the resources needed by the company to produce its goods and
services. Their reliability and pricing affect the company’s marketing capabilities.
3. Marketing Intermediaries: Include firms that help the company to promote, sell, and
distribute its goods to final buyers. They are crucial in making the products available to the
customer.
4. Competitors: Firms must gain strategic advantages over competitors to win customers in
the market.
5. Public: Any group that has an actual or potential interest in or impact on an organization’s
ability to achieve its objectives, including media and local communities.
6. Customers: The focal point of all marketing activities. Understanding customer needs and
building strong relationships are essential for success.

Each of these forces plays a significant role in a company’s ability to serve its customers
effectively. Companies must continuously monitor these environmental forces to adapt their
strategies and ensure long-term success1

Changes in the demographic and economic environments affect

marketing decisions
The demographic and economic environments play significant roles in shaping marketing
decisions. Let's delve into how changes in these environments affect marketing strategies:

Demographic Environment:

• Changing Age Structure and Population:

• Marketers need to adapt their strategies to cater to different generational
cohorts, such as baby boomers, Generation X, and Millennials. Each group has
distinct preferences, values, and purchasing behaviors.
• Generational marketing requires segmenting the market into smaller age-specific
groups and considering lifestyle, life stage, and values rather than solely relying
on birth dates.
• The Changing American Family:
• With evolving family structures, marketers must recognize diverse family
compositions and lifestyles. This includes targeting single individuals, unmarried
couples, working women, and stay-at-home dads.
• Geographic Shifts:
• Changes in population distribution, such as migration to metropolitan areas and
telecommuting trends, create new market opportunities. Marketers can target
consumers based on their location and work habits, leading to the growth of the
SOHO market.
• Changes in the Workforce and Increasing Diversity:
• Marketers should acknowledge shifts in the workforce towards higher education
and white-collar jobs. Additionally, increasing diversity, including ethnicity, sexual
 orientation, and disabilities, necessitates inclusive marketing strategies to reach
diverse consumer segments effectively.

Economic Environment:

1. Consumer Confidence and Spending Patterns:

• Economic factors influence consumer purchasing power and spending habits.
Marketers must be aware of changes in consumer confidence and adjust their
strategies accordingly to offer value-oriented products and services.
2. Income Distribution:
• Income distribution trends, including the growing wealth gap and the shrinking
middle class, impact market segmentation and pricing strategies. Marketers need
to tailor their offerings to cater to varying income levels while ensuring
affordability and perceived value.

Discuss how companies can react to the marketing environment.

• Uncontrollable

• React and adapt to forces in the environment

• Proactive

• Aggressive actions to affect forces in the environment

• Reactive

• Watching and reacting to forces in the environment

Uncontrollable (React and Adapt):

What it means: Companies understand that some things in the market are out of their hands. They pay attention to these
external factors and adjust their plans accordingly.

Example: Imagine a toy company notices that the economy is slowing down, so people might not spend as much on toys. They
react by making some of their toys more affordable or creating new ones that fit smaller budgets.

Proactive (Aggressive Actions):

What it means: Some companies like to take charge and try to shape the market instead of just reacting to it. They may come
up with new ideas or influence how people think about certain products.

Example: Think of a smartphone company that knows environmental concerns are growing. They start making phones with
eco-friendly materials before it becomes a big demand. By doing this, they create a new market for themselves.

Reactive (Watching and Reacting):

What it means: These companies don’t rush into things. They prefer to watch what other companies are doing and then
respond. They might imitate successful ideas or tweak them to make them better.

Example: Consider a fast-food restaurant that sees a rival chain offering a new type of burger that's selling really well. They
decide to introduce a similar burger on their menu to keep up with the competition and attract customers who liked the other
one

The four types of buying decision behavior, each with an example, are as
follows:
1. Complex Buying Behavior: This occurs when consumers are highly involved in the
purchase of expensive, infrequent, and high-risk products. They conduct extensive
research and consider the product’s benefits and costs.
o Example: Buying a house or a car, where the buyer evaluates various attributes
such as price, quality, style, and brand reputation.
2. Dissonance-Reducing Buying Behavior: This happens when consumers are highly
involved but see little difference between brands. After purchase, they may experience
post-purchase dissonance (buyer’s remorse) if they are not satisfied with the decision.
o Example: Choosing a wedding photographer when most offer similar packages
and prices, leading to a difficult decision-making process.
3. Habitual Buying Behavior: Consumers show low involvement in this type of behavior
because there is little significant difference between brands. As a result, they often buy
out of habit without much thought.
o Example: Purchasing everyday items like table salt or sugar, where brand
differences are not significant and decisions are made routinely.
4. Variety-Seeking Buying Behavior: In this case, consumers switch their selection often,
not due to dissatisfaction but because they seek variety. It’s common in low-involvement
decision scenarios where brand differences are perceived.
o Example: Trying different flavors of ice cream from the same or different brands,
not because of dissatisfaction but for the sake of variety.

The buyer decision process.

1. Problem Recognition: Identifying a need or problem within the organization.
2. General Need Description: Defining the nature and quantity of the needed items.
3. Product Specification: Detailing the technical or material requirements for the
items.
4. Supplier Search: Finding potential suppliers who can fulfill the requirements.
5. Proposal Solicitation: Inviting suppliers to bid or propose solutions.
6. Supplier Selection: Choosing the supplier that best meets the criteria.
7. Order-Routine Specifications: Setting terms for the delivery and payment.
8. Performance Review: Assessing the performance of the supplier and the quality
of the goods or services received.

A new product is a good, service, or idea that is perceived by some potential customers as new.

The adoption process is the mental process through which an individual passes from
first learning about an innovation to final adoption. Adoption is the decision by an individual to
become a regular user of the product.
Stages in the Adoption Process
 Consumers go through five stages in the process of adopting a new product:

Awareness: The consumer becomes aware of the new product, but lacksinformation
about [Link]: The consumer seeks information about
: The consumer considers whether trying the new product makes sense.
Trial: The consumer tries the new product on a small scale to improve his or her
estimate of its value.
Adoption: The consumer decides to make full and regular use of the new product.

Characteristics of business markets

The business buying process

Problem Recognition: Identifying a need or problem within the organization.

General Need Description: Defining the nature and quantity of the needed items.

Product Specification: Detailing the technical or material requirements for the

items.

Supplier Search: Finding potential suppliers who can fulfill the requirements.

Proposal Solicitation: Inviting suppliers to bid or propose solutions.

Supplier Selection: Choosing the supplier that best meets the criteria.

Order-Routine Specifications: Setting terms for the delivery and payment.

 Performance Review: Assessing the performance of the supplier and the
quality of the goods or services received.

STP stands for Segmentation, Targeting, and Positioning. It's a strategic approach used by
businesses to effectively target and communicate with specific customer segments.

major bases for segmenting consumer markets:

1. Geographic Segmentation: Dividing the market based on geographical units

such as nations, regions, states, cities, or neighborhoods.

2. Demographic Segmentation: Dividing the market into groups based on

variables such as age, gender, family size, family life cycle, income, occupation,
education, religion, race, and nationality.

3. Psychographic Segmentation: Dividing the market into groups based on social

class, lifestyle, or personality characteristics. This includes factors such as
socioeconomic status, lifestyle patterns, and personality traits.

4. Behavioral Segmentation: Dividing buyers into groups based on their

knowledge of the product, attitudes towards it, the way they use it, and their
responses to it. This includes variables such as occasion segmentation, benefit
segmentation, user status, usage rate, loyalty status, and readiness stage.

companies evaluate and select target segments?

Evaluating Market Segments: evaluating market segments, companies consider three
main factors to determine the best areas to target:

• Segment Size and Growth: Firms analyze data on current sales, growth rates, and
expected profitability. Segments with substantial size and positive growth are more
attractive because they promise greater potential returns1.
• Segment Structural Attractiveness: Firms assess the long-term attractiveness of a
segment by considering:
o The presence of strong and aggressive competitors.
o The threat of actual and potential substitute products.
o The bargaining power of buyers.
o The influence of powerful suppliers on prices and quality1

Company Objectives and Resources: Companies must also consider their own strategic
objectives and whether they have the necessary resources to effectively serve the segment.
This includes evaluating their skills, competencies, and financial capacity to compete in the
segment.
Selecting Target Market Segments

• Undifferentiated (Mass) Marketing: Targeting the whole market with one offer, focusing
on common needs rather than differences.
• Differentiated (Segmented) Marketing: Targeting several market segments with
separate offers for each, aiming for higher sales and a stronger position in each
segment.
• Concentrated (Niche) Marketing: Focusing on a large share of one or a few segments or
niches, suitable for companies with limited resources.
• Micromarketing (Local or Individual Marketing): Tailoring products and marketing to the
tastes of specific individuals and local customer groups, including cities, neighborhoods,
and individual stores

The positioning strategies

various positioning strategies along with examples:

• Attribute Positioning: Focusing on a specific attribute or feature of the product

or service.

• Quality or Price Positioning: Emphasizing either superior quality or favorable

pricing compared to competitors.

• Use or Application Positioning: Positioning the product as the best solution for
a particular use or application.

• .

• User Positioning: Targeting a specific user group or demographic.

• Product Category/Class Positioning: Establishing the product as a leader within

a particular category or class.

• .

• Competitor Positioning: Positioning the product as superior to competitors in

some way.

• Benefit Positioning: Focusing on the unique benefits or advantages the product

offers.
Types of Consumer Products with Examples:
1. Convenience Products: These are items that consumers buy frequently and with
minimal effort. Examples include bread, milk, and toothpaste1.
2. Shopping Products: These are purchased less frequently, and consumers compare
quality, price, and style before buying. Examples are furniture and clothing2.
3. Specialty Products: These have unique characteristics or brand identification, and
consumers put special effort into purchasing them. Luxury cars like Ferraris are
examples2.
4. Unsought Products: Items that the consumer does not know about or does not normally
think of buying, such as life insurance or funeral services2

Marketers make product and service decisions at three levels

to effectively meet consumer needs and differentiate their offerings from competitors.
Here’s an explanation of each level:
1. Individual Product Decisions: At this level, marketers focus on decisions related
to a single product. This includes designing the product’s attributes, choosing its
brand name, packaging, labeling, and determining the necessary product support
services1.
2. Product Line Decisions: Here, marketers decide on the range of products that
they will offer. They consider how to extend, fill, or prune the product line to
maximize profitability and market coverage1.
3. Product Mix Decisions: This involves decisions about the entire assortment of
products that a company offers. Marketers strategize on the width (number of
different product lines), length (total number of products), depth (variations
within each product), and consistency (how closely related the various product
lines are) of the product mix1.

Major Brand Strategy Decisions:

1. Brand Positioning: This involves deciding how to position a brand in the consumer’s
mind.
2. Brand Name Selection: Choosing a name that is memorable and reflects the brand’s
positioning.
3. Brand Sponsorship: Deciding whether to market a product as a manufacturer’s brand,
private brand, or under a licensing agreement.
4. Brand Development: Strategies include line extensions, brand extensions, multibrands,
or new brands4

Distinguish between styles, fashions, and fads with examples.

1. Style:
o Definition: A consistent way of expressing personal or collective identity
through aesthetic choices. It’s enduring and doesn’t change quickly over
time.
o Example: Wearing a leather jacket. It’s a style choice that has been
popular for decades and doesn’t go out of fashion.
2. Fashion:
 o Definition: Current trends that are popular at a particular time. Fashions
are more temporary than styles and can change with seasons.
o Example: High-waisted jeans. They are currently in fashion but may not be
as popular a few years from now.
3. Fad:
o Definition: A very short-lived trend that rises in popularity quickly and
fades away just as fast.
o Example: Silly Bands (shaped rubber bands). They were a craze for a short
time but quickly lost their appeal

Major price strategy

1. Price Strategies for New Products:
• Skimming Price: Setting a high initial price to "skim" revenue layers from the
market, typically used for innovative or unique products where early adopters are
willing to pay a premium.
• Penetration Price: Setting a low initial price to penetrate the market quickly and
gain market share, often used when the product faces stiff competition or when
the goal is to achieve economies of scale rapidly.
2. Pricing Strategies for Established Products:
• Maintaining the Price: Keeping the price stable over time, especially when the
product has a strong brand image or there is little competitive pressure.
• Reducing the Price: Lowering the price to stimulate demand, clear excess
inventory, or respond to competitive pressures.
• Increasing the Price: Raising the price due to increased demand, improved
product features, or inflationary pressures.
3. Price-Flexibility Strategy:
• One Price Strategy: Offering the same price to all customers, regardless of
factors such as quantity purchased, location, or timing.
• Flexible Price Strategy: Adjusting prices based on various factors such as
customer segment, geographic location, time of purchase, or purchase volume.
4. Product-Line Pricing Strategy:
• Setting prices for a range of products within a product line based on factors such
as features, quality, and target market perceptions.
5. Leasing Strategy:
• Offering products for lease rather than sale, allowing customers to use the
product for a specified period in exchange for periodic payments.
6. Bundling-Pricing Strategy:
• Offering two or more products or services together as a package at a single price,
often resulting in cost savings for the customer compared to purchasing each
item separately.
7. Price-Leadership Strategy:
• Setting prices in line with or just below the prices of competitors to signal market
leadership, often used by market leaders to maintain their dominant position.
8. Pricing Strategy to Build Market Share:
• Discount Pricing: Offering products at a discounted price to attract customers
away from competitors or to encourage trial among new customers.
• Value Pricing: Setting prices based on the perceived value of the product or
service to the customer rather than its cost, often used to differentiate from
competitors and build market share.
 Integrated Marketing Communication (IMC) is a strategic approach that
aligns and interconnects various platforms and communication channels to create a singular
branding message. It’s designed to maximize brand awareness and establish long-term
relationships with customers12

developing effective communication:

1. Identifying the Target Audience: Understand who the message is for and tailor
the communication to their needs, preferences, and behaviors1.
2. Determine the Communication Objectives: Define clear goals for what the
communication should achieve, such as awareness, interest, desire, or action1.
3. Design the Message: Create a compelling message that conveys the value
proposition and differentiates the product or service1.
4. Choose the Media: Select the appropriate channels to deliver the message,
considering where the target audience is most likely to be receptive1.
5. Selecting the Message Source: Decide on the voice of the message—whether it’s
a trusted influencer, a company spokesperson, or a satisfied customer1.
6. Collect Feedback: Gather responses from the audience to measure the
effectiveness of the communication and make necessary adjustments1.

The methods for setting promotional budget.

1. Affordable Method: This method involves setting the promotional budget at what
the company feels it can afford. It’s often used by small businesses but may
result in under-investment in marketing1.
2. Percentage-of-Sales Method: Companies set the promotional budget at a
certain percentage of current or projected sales. This method is simple but
doesn’t consider market opportunities or challenges1.
3. Competitive-Parity Method: The budget is set based on competitors’
spending. This method aims to prevent competitors from outspending the
company in promotional activities1.
4. Objective-and-Task Method: This involves defining specific objectives and then
determining the budget needed to achieve these objectives. It’s a more tailored
approach that aligns the budget with the company’s marketing goals1.