Marketing Introduction – MARK10100A.

A2020 Charles Bisson

Lecture #1 : Introduction to Marketing

Seller’s market: shortage of products or services.
Buyer’s market: abundance of products or services.
Marketer’s job: is to identify the needs and wants of customers and to try to meet them with the
right offer.
Need: state of lacking something
Want: the way to meet the needs.
Current dollar: change in demand without adjusting for the change in price.
Constant dollar: change in demand while eliminating inflation as a factor.
Market share: refers to the company’s share of demand: NOT the share of consumers
who buy the company’s products.
Contingency plan: proposes possible solutions to deal with unforeseen events.
Marketing: 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.
Four different orientations in the history of American business:

3 C’s (situation analysis):

1. Consumer
2. Competitors
3. Company
STP (marketing strategy):
1. Segmenting
2. Targeting
3. Positioning
4 P’s (marketing tactics/marketing mix):
1. Product
2. Price
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3. Place
4. Promotion

Integrated marketing model:

Strategy: an overall plan for a company or brand to achieve its objectives. The goal: the overall
plan to achieve the goal. Usually long-term oriented. Ex: gain 20% of the market share of the pet
food market in Montreal by…
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Tactic: elements from the marketing mix (4 P’s). The action: aims at specific tasks. Tactics
can be changed more frequently based on the situation. Ex: advertisement, offer coupons, open
more online/on-site stores, etc.

Controllable variables: elements of the marketing mix which are controllable, under the
marketer’s control. (4 P’s).
Uncontrollable variables: includes all forces which shape opportunities/threats, and which are
uncontrollable, not under the marketer’s control.

SWOT:
1. Strengths
2. Weaknesses
3. Opportunities
4. Threats

Analysis (components) of the internal environment:

1. Current objectives, strategy, and performance
2. Resources and core competencies
3. Current offerings
4. Past performance
5. Relation with business partners
6. Key factors of success and failure
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Benchmarking: a continuous process that lets companies measure their performance (products,
services, practices, etc.) against their most efficient competitors in their sector or leaders in other
sectors.
External environment analysis:

Microenvironment: established competitor, customers, suppliers, potential new entrants,

substitute products of an organisation.
Porter’s five competitive forces:
1. Competitive rivalry within an industry
2. Bargaining power of suppliers
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3. Bargaining power of customers

4. Threat of new entrants
5. Threat of substitute products and services

External environment: the larger societal forces that involves factors of political, legal,
economical, technological, and ecological and such. Includes the macroenvironment (PESTEL)
and the microenvironment (supplies, distributors, end users, current competitors, substitute
products, potential competitors).
General economic conditions: inflation, employment, income, interest rates, taxes, trade
restrictions, tariffs, business cycle.
Consumer issues: willingness to spend, confidence, spending patterns.
Underreported economy: the U.S. economy is dominated by intangibles such as services and
information. Innovation, creativity, and humans aren’t counted in the GDP stats.
Social environment: social and cultural influences that cause changes in attitudes, norms,
beliefs, customs, and lifestyles. Sociocultural forces can have a profound effect on the way
customers live and buy products. Changes in customer demographics and values have a
considerable impact on marketing.
Sociocultural trends:
1. Demographic trends
2. Lifestyle trends
3. Value trends
Technology: the processes used to create things considered to be new.
Frontstage technology: advances that are noticeable to customers.
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Backstage technology: advances that are not noticeable to customers. These advances make
marketing activities more efficient and effective.

Consumer goods market

Business market
Distribution intermediaries’ market: buys products and services to resell them.
Loyalty: length of consumer retention, customer share.
Lecture #2 : Introduction to Marketing
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Mission: reason for existence. Must be translated into objectives with specific
quantitative measurements.
1. Answers who and what
2. Defines the fundamental purpose of an organization
3. Describes why the organization exists and what it does
Vision: mental image of the future state.
1. Answers why and how
2. Outlines what the organization wants to be
3. A long-term view that is future oriented

Marketing myopia: defining a business too narrowly so that you lose sight of
opportunities and threats in the environment.
Marketing objectives:
1. Sales volume
2. Profitability per unit
3. % gain of market share
4. Sales per square foot
5. Average customer price
6. % customer in the firm’s target market who prefer a certain product
Good objectives:
1. Should relate to a result, not to an activity
2. Should be measurable
3. Should be challenging but achievable and relevant
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4. Should contain a deadline

Setting marketing objectives SMART:
1. Specific
2. Measurable
3. Attainable
4. Relevant
5. Time based
Marketing planning:

Marketing control: control involves examining all or some of the results of a marketing
action to asses its performance and make the necessary adjustments if there is a
difference between actual and forecast results.
Marketing audit: a comprehensive, systematic, and periodic critical examination of a
company’s main marketing orientations and its implementation of them.
Business portfolio: the collection of a company’s strategic business units (or products).
Strategic business units: a fully functional and distinct unit of a business that develops its
own strategic vision and direction toward specific target markets.
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Functional structure: appropriate for a business with limited or homogenous product mix.
The main advantage is that the functional director has direct authority over each unit
director. Effective as long as the business’ activities are simple.
Product or brand structure: when a business is undergoing intensive growth or
diversification. Suitable for businesses that make and market several products that are
distributed in a similar way. The product manager is responsible for all the marketing
activities related to a product or brand. They have no direct power over support activities.
Market or region structure: targeting customers that make up separate markets in terms of
their buying habits and preferences. Market managers are responsible for developing a
market: they do not have authority on other marketing units.
Matrix structure: combination of functional and market structures.
Inbound logistics: activities related to reception, storage, and procurement logistics, and
those related to management of inputs required for production of the good or service
offered in the market.
Outbound logistics: all aspects of distribution, including the storage of finished products
and their delivery to customers.
In other words, the items in a business’s portfolio can be called strategic business units
(SBUs).
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Analyzing current SBUs: Boston Consulting Group

1. Cash Cows
2. Stars
3. Question marks (problem children)
4. Dogs

Limitations of the BCG matrix:

1. Market growth is not the only indicator for attractiveness of a market. Other
factors beside growth rate affects market attractiveness.
2. High market shares are not the only success factor. Other factors beside market
share affect the competitive position.
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3. How you define the market is critical to proper understanding of the competitive
environment.
Ansoff’s matrix:

Market penetration: increase of sales of existing product. No change in the product line or
market served. Better advertising, lower prices, more retail outlets, etc.
Market development: introduce existing products in new markets.
Product development: sell a new product in an existing market.
Diversification: develop new products for new markets. Potentially high risk.
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Lecture #3: Competition

Competitor’s analysis:

Competitors: companies that are trying to satisfy the same customer needs and/or serve
the same customer group.
4 types of competitors:
1. Brand competitors: market products with similar features and benefits to the same
customers at similar prices.
2. Product competitors: compete in the same product class, but with products that are
different in features, benefits, and price.
3. Generic competitors: market very different products that solve the same problem
or satisfy the same basic customer needs.
4. Total budget competitors: compete for the limited financial resource of the same
customers.
Assessing competitors:
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Competitor’s reaction pattern:

1. Laid back competitor: does not react quickly
2. Tiger competitor: reacts swiftly and strongly to any assault
3. Selective competitor: reacts only to certain types of attacks
4. Stochastic competitor: no predictable reaction pattern
Creating a competitive advantage: based on creating value for customers.
Competitive strategies:

Market leader strategies: the leader has the largest market share and usually leads the
other firms in price changes, new product introductions, distribution coverage, and
promotion spending.
Market challenger strategies: challenge the current leader with aggressive strategies to
make itself the market leader. Second mover advantage: challenger observes what has
made the leader successful and improves on it.
Market follower strategies: play along with its competitors and not rock the boat. Copy or
improve on the leader’s products and programs with less investment. Brings distinctive
advantages. Keep costs and prices low or quality and service high.
Market niche strategies: an ideal market niche is big enough to be profitable with high
growth potential and has little interests from competitors. The key to market niching is
specialization.
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Marketing information system (MIS): a set of resources and procedures for collecting and
analyzing data from the organization and its environment and transforming it into useful
information that will be used in the marketing decision-making.

Internal data: typically, from the internal sources of the company, such as from the
accounting system, transactions records, customer databases, etc.
Marketing intelligence: systematic collection and analysis of publicly available
information or external secondary data about the company’s environment.
Marketing research: systematic design, collection, analysis, and reporting of data relevant
to a specific marketing situation facing an organization.
2 types of data:
1. Primary data: original data, methodology developed by researchers, caters to
specific needs. Ex: surveys, interviews, focus groups, experiments.
2. Secondary data: data already collected in the past for a different purpose. Ex:
internal, external: private and public.
Types of marketing research:
1. Exploratory research: understanding a problem or find new business opportunities.
Often requires qualitative research, observation, and secondary data.
2. Descriptive research: describing a problem in hand or to profile a population.
Often requires surveys.
3. Causal research: investigation of cause-and-effect. Experimentation.
Data: a collection of numbers or facts that have a potential to provide information.
Information: data that has been transformed or combined with other data in a manner that
make it useful to decision-makers.
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The benefits must outweigh the cost.

Lecture #4: Consumer Behavior

Consumer behavior: a set of processes that individuals or groups use when selecting,
securing, using or disposing of products, services, experiences or ideas, to satisfy their
needs and wants.
Integrated model of consumer behavior:
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Factors that influence consumer behavior:

1. Internal factors: motivation, perception, knowledge, emotions, attitude, values,
self-concept, lifestyle.
2. External factors: culture, subculture, reference groups.
3. Contextual factors: mood, time, physiological, social environment.
Motivation: a state of internal stimulation that provide the energy required to satisfy a
need.
Maslow’s hierarchy of needs:
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Perception: selecting, organizing, and interpreting information received by the 5 senses:

vision, hearing, taste, smell, and touch. Perfection is your reality!

Halo effect: the idea that you like one aspect of something you tend to be predisposed to
think positively about other aspects of it, even if they are totally unrelated.
Knowledge: mental associations, categorizations, and inferences that drive consumer
behavior.
Reference price: the price that the shopper believes or expects the item should cost based
on past experience or knowledge about the product.
Emotion: feeling toward a brand and/or feelings experienced when thought of a brand.
Consumer’s perception of brand is driven by emotion.
Attitude: an enduring evaluation of a concept (brand, person, product, etc.).
Self-concept: beliefs that a person holds about his or her own characteristics. The
product/brand you choose signals who you are as an individual.
Lifestyle: a consumer’s lifestyle decides their consumption choice and pattern.
Values: abstract, lasting beliefs about what is good or bad.
Cultural factors: culture is the accumulation of shared meanings, rituals, norms, and
traditions among the members of an organization or society. Cultural factors comprise of
a set of values, beliefs, preferences, and ideologies of a particular community or group of
individuals that are handed down from generation to generation. The most basic cause of
wants and behaviors: cultural factors decide the way consumer behave.
Subculture: a group whose members share beliefs and experiences that differentiate them
from other broader groups despite overlaps. Each culture further comprises of various
subcultures such as religion, age, geographical location, gender, social status, etc.
Subcultures share values.
Social influences: group think, peer pressure, reference group.
Peer pressure: the impact of groups and group norms can exhibit on individual behavior.
Social leaning theory suggests that peer pressure affects though compliance and
conformity. People make decisions to maintain positive social and self images due to the
need to affiliate. Failure to conform can lead to rejection, punishment or seclusion.
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Reference group influence: an individual or group conceived of having significant

relevance up an individual’s evaluations, aspirations, or behaviors.
Informational influences: sources of information on products, services and brands.
Normative influences: spread through the norms of conduct and consumption.
Comparative influences; procure a comparison point to evaluate one’s performance or
conduct.
Nature of the decision process:

Consumer decision making process:

Compensatory model: considers of all determinant attributes.

Non-compensatory model: considers only the most important determinant attributes.
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Lecture #5: Segmenting and Targeting

Market segmentation: the process of dividing the total market for a particular product or
product category into relatively homogeneous segments or groups. Should create groups
where members are similar to each other but dissimilar to other groups.

Bases for segmentation:

1. Geographic (region, city, size, density, climate)
2. Sociodemographic (age, gender, family size, race, generation, occupation, income)
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3. Psychographic (lifestyle, social class, personality)

4. Behavioral (occasions, benefits, status, uses, attitudes)
Selecting a target market:

Target market: a set of buyers who share common needs or characteristics that the
company decides to serve.
Factors influencing attractiveness of a segment:
1. Consumer analysis
2. Competitor analysis
3. Company analysis
4. Environmental analysis
Characteristics of a good segment:
1. Size
2. Growth
3. Accessibility
4. Competitive situation
5. Adaptation cost
Major types of targeting:
1. Mass marketing: same products to all consumers. No segmentation. Is an
undifferentiated approach which is vulnerable to competitors. Risky targeting
which works best when the needs of an entire market are homogenous. Only the
largest firms have the capacity to execute mass marketing.
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2. Segment marketing: different products to one or more segments. Some

segmentation. Involves dividing the market into groups of customers having
relatively common or homogenous needs and developing a strategy to pursue one
or more of these groups.
2.1 Market concentration: focusing on a single market segment and attempting to
gain maximum share in that segment.
2.2 Multisegmented approach: attracting buyers in more than one segment by
offering a variety of products that appeal to different needs.
3. Niche marketing: specific products to smaller or more specific segments. Greater
segmentation. Focuses marketing efforts on one small, well-defined market
segment (less than 10% of the market) or niche that has a unique, specific set of
needs. Requires that firms understand and meet the needs of target customers so
completely that the firm’s substantial share of the segment makes it highly
profitable.
4. Personalized marketing: products to suit the tastes or needs of individuals or
locations.
4.1 One-to-one marketing: involves creating an entirely unique product offering
for each customer.
4.2 Mass customization: an extension of the one-to-one marketing, refers to
providing unique solutions to individual customers on a mass scale.

Lecture #7: Positioning

Positioning: an effort that aims to make a brand occupy a distinct position, relative to
competing brands, in the mind of the consumers. Companies apply this strategy by
emphasizing the distinguishing features of their brand or creating a suitable imagine
through the marketing mix (4 P’s). Once a brand is positioned, it is difficult to reposition
it without destroying its credibility.
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Role of positioning:

Things to consider when positioning a brand:

1. Target consumers
2. Strengths and weaknesses of the brand
3. Positioning of the current competitors
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Perceptual map:

Key elements in a positioning statement:

1. Target market segment
2. What brand
3. Concept
4. Distinguishing characteristic
5. Comparative advantage
Positioning should be:
1. Consistent
2. Valuable to customers
3. Clear
Differentiation: a brand or company standing out from the others by getting the target
customers to perceive it as different from the competition, based on one or more
attributes. These attributes should represent real or symbolic advantages for the target
customers, and these advantages should not be easily imitated or offered by competitors.
4 elements of differentiation:
1. Product
2. Price
3. Distribution
4. Marketing communications
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How to differentiate:

B2B Market: Business to business.

B2B Segmentation: