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Part 1
An introduction to marketing
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1: An overview of marketing ________________________ 2
2: The marketing environment ____________________ 14
Part 2
28
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Customer infor mation
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3: Consumer decision making ____________________
4: Business decision making ______________________
5: Segmenting and targeting markets _____________
6:Marketing information, decision systems
and marketing research ________________________
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Brief contents
Part 3
Managing the marketing mix 28
48
62
82
98 7: Goods and services _____________________________ 98
8: Branding and packaging ______________________ 106
9: Developing and managing products __________ 116
10: Marketing channels and logistics decisions __ 132
1 1: Integrated marketing communication (IMC) __ 156
1 2: Promotions mix ________________________________ 176
1 3: Pricing_________________________________________ 198
Part 4
218
1 4: Global marketing______________________________ 218
1 5: Marketing strategy____________________________ 234
iStockphoto
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The world of marketing
iii
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Organisation mission
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Market opportunity analysis
Marketing objectives
Marketing mix
• Product
• Distribution
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Target market selection
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Marketing strategy
Environmental scanning
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• Promotion
• Price
Implementation
Evaluation
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3 Finding out what benefits people want the organisation
to deliver and what they want the organisation to satisfy
(market opportunity analysis – see Chapters 3, 4 and 6).
4 Developing a marketing strategy to satisfy the desires of
selected target markets by: deciding exactly which wants,
and whose wants, the organisation will try to satisfy
(target market strategy – see Chapter 5); by setting
marketing objectives; and by developing appropriate
marketing activities (marketing mix – see Chapters 7 to
13) to satisfy the desires of selected target markets.
5 Looking at the impact on marketing when dealing with
international and global markets (see Chapter 14).
6 Understanding the organisation’s mission and the
role that marketing plays in fulfilling this vision;
implementing the strategy; and periodically evaluating
marketing efforts and making changes if needed (see
Chapter 15).
As we can see in Exhibit 1.2, most of the emphasis in
marketing theory is placed on the organisation. However,
when you study marketing your base for understanding is
couched in your own experiences (we all like to buy things).
10
Learning objective
5 >>
Why study marketing?
Now that you have been introduced to the meaning of the
term marketing and to how the elements of marketing are
put into effect by organisations, you may be asking, ‘What’s in
it for me?’ or ‘Why should I study marketing?’ These are good
questions.
Shutterstock.com
Exhibit The marketing process
1.2
Part One \ An introduction to marketing
01_MKTG_2ed_SB_9780170193566_TXT_4pp.indd 10
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”
Branding is the main tool marketers use to distinguish
their products from those of competitors.
”
ST
Branding has three main purposes: product identification,
repeat sales and new-product sales. The first and most
important purpose is product
❉ brand
identification. Branding allows marketers
A name, term, symbol,
to distinguish their products from all
design or combination
others. Many brand names are familiar
thereof that identifies
to consumers and indicate quality. In
a seller’s products and
differentiates them from
addition, strong brands also have valuecompetitors’ products.
to-company boards and accountants,
where, like other commodities, they can
❉ brand name
be bought and sold. Brands are becoming
That part of a brand that
can be spoken, including
increasingly global in an attempt to
letters, words and
increase their potential markets and
numbers.
eventual profits.
The term brand equity refers
❉ brand mark
The elements of a brand
to the value of company and brand
that cannot be spoken.
names. A brand that has high awareness,
perceived quality and brand loyalty
❉ brand equity
among customers has high brand equity.
The value of company
and brand names.
A brand with strong brand equity is a
valuable asset.
What constitutes a good brand name? Most effective
brand names have several of the following features. They:
• are easy to pronounce (by both domestic and foreign buyers)
• are easy to recognise
• are easy to remember
• are short
• are distinctive, unique
• describe the product
• describe product use
• describe product benefits
• have a positive connotation
• reinforce the desired product image
• are legally protectable in home and foreign markets of
interest
• are translatable into other languages.
Obviously, no brand exhibits all of these characteristics. The
most important issue is that the brand can be protected for
exclusive use by its owner.
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The market uses of
branding
Benefits of branding
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Learning Objective
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This chapter will discuss the issues related to branding of goods and services. It will
commence with an overview of the purpose and role of branding in the marketing mix,
and will then follow with a discussion of branding strategies. The chapter will then move
into the related area of packaging before concluding with a discussion on warrantees and
guarantees and their role in creating brand perceptions for consumers.1
The success of any business or consumer product depends in
part on the target market’s ability to distinguish one product
from another. Branding is the main tool marketers use to
distinguish their products from those of competitors.
Tiger Airways: more a kitten
than a king
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Tiger Airways Group was launched
in 2004 into the Australian market as a low-cost option for
Singapore Airlines in direct competition to Qantas’ Jetstar. In
2011 the airline reported a $27.2 million operating loss mainly
due to the grounding of the airline for much of the 2011 year
due to problems with the air safety regulator in Australia. While
the airline initially seemed to meet a niche in the market with
the low-cost strategy, the lack of attention to the requirements
of CASA (the Australian safety regulator) not only saw the
airline grounded for two months, but also a loss of market share
with customers unwilling to take the risk even with low fares.
Indeed, the limited services offered by Tiger, along with the poor
performing website and customer service, has relegated the
airline to the bottom of the list when it comes to market share.
What remains to be seen is how this tarnish on Tiger’s brand
might transfer to its mother company, Singapore Airlines.
A brand is a name, term, symbol, design or combination
thereof that identifies a seller’s products and differentiates
them from competitors’ products. A brand name is that
part of a brand that can be spoken, including letters (GMH,
YMCA), words (Ford) and numbers (WD-40, 7-Eleven). The
elements of a brand that cannot be spoken are called the
brand mark – for example, the well-known MercedesBenz and Qantas Airlines symbols.
Chapter Eight \ Branding and packaging
08_MKTG_2ed_SB_9780170193566_TXT_4pp.indd 107
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AAP Image
Marketing strategy and
plans
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Financial performance
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It should now be apparent that the marketing strategies and
plans must be drawn from the organisational strategy. In the
same way, financial, information technology, human resource
management and any other key element of an organisation
must be aligned to the organisational strategy. This
section will look specifically at marketing strategy and the
subsequent marketing plan. Marketing strategy is the longerterm view of the marketing effort for an organisation. The
marketing plan provides the application planning tools and
This electric car recognises future demand for a car with no
emissions.
responsibilities necessary to ensure that marketing activities
are conducted at the appropriate time by the appropriate
An organisation’s strategic plan is normally based around
person in order to achieve the marketing strategy.
the five stages of:
Specifically, it can be said that
1 defining the company mission
marketing
strategy management ❉ marketing strategy
2 setting company objectives and goals
The activities of selecting
addresses
several
long-term decisions
3 designing the business portfolio
and describing one or
that will affect the organisation’s long4 planning the marketing and other functional activities
more target markets
term performance, its allocation of
and developing and
5 implementation, evaluation and control.
resources and, ultimately, its success.
maintaining a marketing
Hence, strategic planning covers the entire activities of
mix that will produce
These
issues
include:
the organisation. For larger organisations this will include
mutually satisfying
1What is the organisation’s main
the use of SBUs and each functional area. Developing
exchanges with target
marketing activity at a particular
functional strategies and plans is the fourth stage in the
markets.
time?
strategic planning process. One technique for identifying
❉ marketing
2 How will it reach its goals?
opportunities is to seek strategic windows. A strategic
planning
3 What are the appropriate target
window is the identification of an opportunity for a
Designing activities
market(s)?
limited period in the future and managing the organisation’s
relating to marketing
4What are the most appropriate
objectives and the
resources so that there is a fit between
changing marketing
marketing
objectives
for
the
❉ strategic window
the key market needs and the ability of
environment.
The limited period during
organisation
for
each
of
the
target
the organisation to meet those needs
which the ‘fit’ between
market(s)?
at an optimum level.
the key requirements of a
5
What is the appropriate marketing mix for each product
In the next section, we will focus on
market and the particular
in each market such that satisfactory exchanges of value
competencies of an
the development of marketing strategies
occur for the organisation and the customer?
organisation are at an
and plans that are in line with the
optimum.
In contrast, operating decisions, such as those made in
company’s overall strategic plan.
the development and implementation of the
marketing plans, probably won’t have a big
impact on the long-run profitability of the
company. For example, deciding to change
the supplier of cardboard boxes for packaging
cornflakes won’t impact directly on the longStrategic window
term goals of the organisation and are the sorts
of decisions that corporate management doesn’t
need to be involved in.
Marketing planning involves
designing activities relating to marketing
Today
Five years
objectives and the changing marketing
in the future
environment. Marketing planning is the basis for
all marketing strategies and decisions. Issues such
A graphic showing how existing and potential opportunities would map
Exhibit
over five years. The strategic window is to align the resources to take
as product lines, distribution channels, marketing
15.2 advantage of the opportunity in the future
communications and pricing are described in
238
Part 4 \ The world of marketing
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environmental management
When a company
implements strategies that attempt to shape the external
environment within which it operates.
SWOT analysis
Identifying internal strengths (S)
and weaknesses (W) and also examining external
opportunities (O) and threats (T).
IA
Marketing mix
(created by
management)
Product Place
Promotion
Price
External environment
(uncontrollable by
management)
Demographics
Competition
People born between 1943 and
1963.
Ever-changing
marketplace
Social change
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LO2 baby boomers
Internal
(within the
organisation)
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Collection and
interpretation of information about forces, events and
relationships in the external environment that may affect
the future of the organisation or the implementation of the
marketing plan.
how it affects an organisation
The external marketing environment consists of sociocultural, economic,
technological, political and legal, and competitive variables. Marketers
generally cannot control the elements of the external environment. Instead,
they must understand how the external environment is changing and the
impact of change on the target market. Then marketing managers can create
a marketing mix to effectively meet the needs of target customers.
ST
LO1 environmental scanning
LO1 Discuss the external environment of marketing and explain
AU
key terms
Learning Outcomes
Target market
Policitical and
legal factors
personalised economy
Delivering goods and
services at a good value on demand.
Generation X People born between 1964 and 1981.
Generation Y People born between 1981 and 2000.
Generation Z People born between 2000 and present.
component lifestyle The practice of choosing goods
and services that meet one’s diverse needs and interests
rather than conforming to a single, traditional lifestyle.
LO3 multiculturalism
When a society has more
than one ethnic culture, the society receives benefits as a
result of this diversity.
LO4 inflation The overall general upward price
movement of goods and services in an economy, usually
as measured by the Consumer Price Index. Over time, as
the costs of goods and services increase, the value of the
dollar falls because people won’t be able to purchase as
much with a dollar.
recession
OF
A period of general economic decline;
specifically, a decline in GDP for two or more consecutive
quarters.
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LO5 primary research Pure research that aims
to confirm an existing theory or to learn more about a
concept or phenomenon.
applied research
Attempts to develop new or
improved products.
LO7 global competition
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The strategy an
organisation adopts to provide the same product in all
markets around the world.
international competition
The strategy an
organisation adopts to provide products that are usually
different or modified in some way to different countries.
2
C Economic
conditions
G
review
chapter 02
Environmental scanning
(To monitor change in the
external environment)
Technology
LO2 Describe the sociocultural factors that affect marketing
Within the external environment, sociocultural factors are perhaps the most
difficult for marketers to anticipate. Several major social trends are currently
shaping marketing strategies. First, people of all ages have a broader range of
interests, defying traditional consumer profiles. Second, changing gender
roles are bringing more women into the workforce and increasing the number
of men who shop. Third, the greater number of dual-career families has led to
a poverty of time, creating a demand for time-saving goods and services.
LO3 Explain the importance to marketing managers of
multiculturalism and growing ethnic markets
Multiculturalism is the recognition and celebration of ethnic groups that add
diversity to society. Growing multiculturalism makes the marketer’s task
more challenging, as niches within ethnic markets may require
micromarketing strategies. A third strategy is to seek common interests,
motivations or needs across ethnic groups.
LO4 Identify consumer and market reactions to the state of the
economy
Marketers are currently targeting the increasing number of consumers with
higher discretionary income by offering higher-quality, higher-priced goods
and services. During a time of inflation, marketers generally attempt to
maintain level pricing in order to avoid losing customer brand loyalty. During
times of recession, many marketers maintain or reduce prices to counter the
effects of decreased demand; they also concentrate on increasing production
efficiency and improving customer service.
LO5 Identify the impact of technology on an organisation
Monitoring new technology is essential to keeping up with competitors in
today’s marketing environment. Often an organisation can develop a myopic
view of the world because it is constantly dealing with day-to-day activities
and not considering how things can change.
The Marketing Environment
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