1. Marketing Concepts
by Ron Newman

2. Welcome to the Marketing Concepts lecture of VDIS10017
the Consumer and the Designer. This lecture will examine
Marketing theories as they apply to designers. It is important
that designers understand these theories and practices
because in the most part designers are working directly with or
for marketing professionals.
Marketing is the process of communicating the value of a
product or service to customers. It is a critical business function
for attracting customers. From a societal point of
view, marketing is the link between a society’s material
requirements and its economic patterns of response.

3. Marketing satisfies these needs and wants through exchange
processes and building long term relationships. The process of
communicating the value of a product or service through
positioning to customers. Marketing can be looked at as an
organisational function and a set of processes for
creating, delivering and communicating value to
customers, and managing customer relationships in ways that
benefit the organisation and its shareholders.
Marketing chooses target markets through market analysis and
market segmentation, understanding consumer buying
behaviour and providing superior customer value.

4. There are five competing concepts under which organisations
can choose to operate their business; the production concept,
the product concept, the selling concept, the marketing
concept, and the holistic marketing concept.
The four components of holistic marketing are relationship
marketing, internal marketing, integrated marketing, and
socially responsive marketing. Successful marketing
management includes, capturing marketing insights, connecting
with customers, building strong brands, shaping the market
offerings, delivering and communicating value, creating long-
term growth, and developing marketing strategies and plans.

5. Customer Orientation: An organisation in the market
economy survives by producing goods and services that
persons are willing and able to buy.
Consequently, ascertaining consumer demand is vital for future
viability and even existence as a going concern. Many
organisations today have a customer focus (or market
orientation). They focus their activities and products on
consumer demands with designers involved. There are three
key approaches to doing this; ie: consumer-driven, market
change identification and/or product innovation.

6. In the consumer-driven approach, consumer wants are the
drivers of all strategic marketing decisions. No strategy is
pursued until it passes the test of consumer research. Every
aspect of a market offering, including the nature of the product
itself, is driven by the needs of potential consumers.
The starting point is always the consumer. The rationale for
this approach is that there is no reason to spend on Research
and Development and design developing products that people
will not buy. History attests to many products that were
commercial failures in spite of being technological
breakthroughs.

7. Market change identification is an important task to undertake
constantly through consumer research, as discussed in our
lecture; A Designers Guide to Research. Every aspect of a
market offering, can change regularly including the nature of
the product and/or service required. This is always driven by
the needs of potential consumers.
Product and service innovation is the area for Research and
Development and the Design professionals and in the
preceding lecture Emergent Design Methodologies and Ideas
we have discussed their processes in depth.

8. The Four Ps: A formal approach to this customer-focused
marketing is known as SIVA
(Solution, Information, Value, Access). This system is basically
the four Ps renamed and reworded to provide a customer
focus. The SIVA Model provides a demand/customer-centric
alternative to the well-known 4four Ps supply side model
(product, promotion, price, placement) of marketing
management.
Product Promotion Price Place (Distribution)
→ → → →
Solution Information Value Access

9. If any of the four Ps become problematic for an organisation or
are not a marketing factor of the business, the business could
find itself in trouble with competitors appearing in the market
place, and its consumer demand on this product decreasing.
In recent years service marketing has widened the domains to
be considered by marketers, increasing us to the seven P's of
marketing. The proposed additional three P's of service
marketing are: process, physical environment and people.
Some consider there to simply be a fifth "P": positioning.

10. Organisational orientation: An organisation's marketing
department is often seen as of prime importance within the
functional level of that organisation. Information from an
organisation's marketing department would be used to guide
the actions of other departments. As an example, a marketing
department could ascertain (via market research) that
consumers desired a new type of product, or a new usage for
an existing product. With this in mind, the marketing
department would brief the Research and Development (R&D)
department and designers to create a design of a product or
service based on the consumers' new desires.

11. The production department would then start to manufacture
the product, while the marketing department would focus on
the marketing; promotion, distribution, pricing, etc. of the
product. Additionally, a organisation's finance department
would be consulted, with respect to securing appropriate
funding for the development, production and promotion of the
product.
Often interdepartmental issues may arise: production may
oppose the installation, support and servicing of new capital
equipment and stock needed to manufacture a new product.
Finance may oppose the required capital expenditure, since it
could undermine the cash flow of the organisation.

12. Herd Behaviour: Herd behaviour in marketing is used to
explain the dependencies of customers' on mutual behaviour,
relying on marketing mechanisms to increase impulse buying
and get people to buy more by playing on the herd instinct.
People will buy more of products or services that are seen to
be popular, and several feedback mechanisms to get product
popularity information to consumers are known, including
smart card technology, social media activity, mobile device
connectivity and the use of radio frequency identification tags.
Online retailers often inform consumers of "which products are
popular with like-minded consumers” eg: Amazon, Ebay...

13. Market Research: As discussed in our lecture; A Designers
Guide to Research, market research, as a sub-set aspect of
marketing activities, can be divided into the following parts:
- Primary research (also known as field research), which
involves the conducting and compilation of research for a
specific purpose.
- Secondary research (also referred to as desk
research), initially conducted for one purpose, but often
used to support another purpose or end goal.

14. By these definitions, an example of primary research would be
market research conducted into health foods, which is used
solely to ascertain the needs/wants of the target market for
health foods. Secondary research in this case would be
research about health foods, but used by a firm wishing to
develop an unrelated product into a similar market area.
Primary research is often expensive to prepare, collect and
interpret from data to information. While secondary research is
relatively inexpensive, it often can become outdated and
outmoded quickly, given that it is used for a purpose other than
the one for which it was intended.

15. Primary research can also be broken down into quantitative
research and qualitative research, which, as the terms
suggest, relate to the numerical and non-numerical research
methods and techniques used, respectively.
The appropriateness of each mode of research depends on
whether data can be quantified (quantitative research), or
whether subjective, non-numeric or abstract concepts are
required to be studied (qualitative research).

16. Other additional modes of marketing research are:
- Exploratory research, research that investigates assumptions.
- Descriptive research, which, as the term suggests, describes
"what is”
- Predictive research, meaning research conducted to predict a
future occurrence.
- Conclusive research, for the purpose of deriving a conclusion
via a research process.

17. Market Segmentation: Market segmentation is the division of
a market of consumers into persons with similar needs and
wants. For instance, Kellogg's cereals, Frosties are marketed
to children. Crunchy Nut Cornflakes are marketed to adults.
Above are two similar products which are marketed to two
distinct groups of people, both with similar needs, traits, and
wants. In another example, Sun Microsystems can use
market segmentation to classify its clients according to their
promptness to adopt new products. Market segmentation
allows for a better allocation of a firm's finite resources.

18. Any organisation only possesses finite resources and must
make choices (and incur the related costs) in servicing
specific segments of its consumers. In this way, the
diversified tastes of contemporary consumers can be served
better.
With growing diversity in the tastes of modern
consumers, organisations are taking note of the benefit of
servicing a multiplicity of segmented new markets. Market
segmentation can be defined in terms of the STP
acronym, meaning Segment, Target and Position.

19. Marketing Strategy: Marketing strategy considers the total
marketing environment and its impacts on a company or
product or service. The emphasis is on "an in depth
understanding of the market environment, particularly the
competitors and customers.”
A given organisation may offer numerous products or services
spanning numerous and sometimes wholly unrelated
marketplaces. A marketing plan is required in order to
effectively serve the strategy, including weighing up how to
utilize finite resources such a communications
design, advertising (traditional and online) and direct
marketing.

20. For example, a start-up car manufacturing firm would face
little success should it attempt to rival Toyota, Ford, Nissan,
Chevrolet, or any other large global car maker. Such a
scenario would require a unique marketing strategy.
A marketing strategy differs from a marketing tactic in that a
strategy looks at the longer term view of the products, goods,
or services being marketed. A tactic refers to a shorter term
view. Mailing of a postcard or sales letter is a tactic, but a
campaign considering retail locations, regular postcards,
letters, internet advertising, editorial placement is a strategy.

21. Brand Management: Brand management is a communication
function that includes analysis and planning on how any given
brand is positioned in the market place, which segment of the
public the brand is targeted at, and maintaining a desired
reputation of the brand. Developing a good brand relationship
with a market is essential for brand management.
Tangible elements of brand include the product itself; the look
and feel, price, packaging. Intangible elements are
experiences that the consumer takes away from the
brand, and also the relationship that they have with the brand
such as after sales service. A brand manager would oversee
all of these things.

22. B2C Buying Behaviour: This behaviour concerns consumers
and their purchase of a given product such as a pair of
sneakers, the desire for a pair of sneakers would be followed
by an information search on available types/brands. This may
include perusing media outlets, and the internet and commonly
information from family and friends. Purchase decision is made
the consumer buys the product through an outlet or online.
Following this stage, a post-purchase evaluation is often
conducted, comprising an appraisal of the purchase. If the
value/utility is high, then repeat purchases may occur which
could develop consumer loyalty to the brand or organisation.

23. B2B Buying Behaviour: Relates to organisational/industrial
provider buying behaviour. Business buy either wholesale from
other businesses or directly from the manufacturer in contracts
or agreements.
B2B marketing involves one business marketing a product or
service to another business and often the strategies and plans
have to same content but with different targeting.
B2C and B2B behaviour are not precise terms, as similarities
and differences exist between and within them.

24. Use of Technologies: Marketing relies on various
technologies. Computer-based information systems are
employed, aiding in better processing and storage of data.
Most common of these are Customer Relationship
Management systems (CRM), software for direct marketing
and data collection.
Marketing researchers within organisations use information
systems, hardware and software components, to collect raw
market data through enhanced data gathering methods. The
data from information technology improves an organisation's
marketing decision-making process.

25. Information technology has typically progressed at a fast
rate, leading to marketing managers needing to be aware of
the latest technological developments. In recent years, the
notebook/laptop personal computer has gained significant
market share, largely due to its more user-friendly size and
portability.
Smartphones resulted from a demand among consumers for
more technologically advanced portable (mobile) and
convenient products. An organisation can lose out to its
competitors if it ignores these innovations in its industry.

26. Technological advancements can lessen barriers between
countries and regions. Using the internet, organisations can
quickly dispatch information from one country to another
without restrictions. Prior to the mass usage of the
Internet, such transfers of information would have taken much
longer.
More recently, there has been a large emphasis on data
analytics. Data can be mined from various sources such as
online forms, mobile phone applications, internet browsing
and more recently, social media activity.

27. Services Marketing: Services marketing is the marketing of
services, as opposed to tangible products. A service is typically
defined as a purchase which is used and consumed
simultaneously. It does not have material form, and therefore
requires a considered, different approach to its marketing.
The use of a service is inherently subjective, meaning that
several persons experiencing a service would each experience
it uniquely; ie: riding a train, viewing a movie or seeing a
consultant. Services can also be viewed as a spectrum; not
pure goods or pure services; ie: a restaurant, where a waiter's
service is intangible, but the food is tangible.

28. A Summary of Marketing Concepts: The purpose of this
lecture is for you as a designer to consider how you will work
with those in the marketing discipline and how your products
will serve your customers as either the product itself or as the
communication that promotes and positions the product or
service.
Designers have a lead role to play in this business continuum
and it is only by understanding the responsibilities and
methodologies of your business colleagues that you will be
able to appreciate their skills and work with them a s a team.

29. Marketing Concepts
by Ron Newman