Marketing: study notes
MARKETING
Study notes: Chapters 1–9
Contents
1 Marketing Principles and Society
2 Understanding Customer Behaviour
3 Market Research and Customer Insight
4 Marketing Environment and Strategy
5 Market Segmentation and Positioning
6 Proposition and Branding Decisions
7 Pricing and Value Creation
8 Marketing Communications Principles
9 Managing Channels and Distribution
How to read the boxes
Blue box = definition / core model. Grey first column in tables = the term to remember.
Page 1
, Marketing: study notes
Chapter 1: Marketing Principles and Society
Learning goals: define the marketing concept; how marketing developed; exchange and marketing mix; positive
and negative impact on society; sustainable marketing.
1.1 Definitions of marketing
Source Definition (key idea)
CIM (2015) "The management process responsible for identifying, anticipating and satisfying
customer requirements profitably."
AMA (2013) 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.
Lendrevie & Lévy (2014) The strategy of adaptation of organisations to competitive markets, to influence
the behaviour of the publics they depend on, through an offering whose perceived
value is durably superior to competitors. In commercial sector: create economic
value for the company by creating value as perceived by customers.
1.2 The development of marketing (4 stages)
Period Years Focus of the firm
1. Production 1890s–1920s Physical production and supply. Demand > supply, little
competition, limited range. After the Industrial Revolution.
2. Sales 1920s–50s Personal selling supported by market research and advertising.
After WWI.
3. Marketing 1950s–80s Customer needs. After WWII.
4. Societal marketing 1980s–present Social and ethical concerns; not-for-profits can also do
marketing. "Information revolution" (Enright, 2002).
1.3 The marketing mix
Origin
Neil Borden (Harvard, 1950s): managers are "mixers of ingredients". 12-item list (Borden, 1964): product
planning, pricing, branding, channels of distribution, personal selling, advertising, promotions, packaging,
display, servicing, physical handling, fact finding and analysis.
McCarthy (1960) simplified it to the memorable but rigid 4Ps.
P Meaning
Product The offering, how it meets the customer need, packaging, labelling.
Place (distribution) The way the offering reaches / meets customers' need.
Price Cost to the customer and cost-plus profit to the seller.
Promotion How benefits and features are conveyed to the potential buyer.
Extension to 7Ps for services (Booms & Bitner, 1981)
• Physical evidence: tangible components of the service are strategically important.
• Process: importance of service delivery; standardised processes make it easier to manage customer
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, Marketing: study notes
expectations.
• People: customer service personnel (often experts/professionals) interacting with the customer; how
they interact and how satisfied customers are is of strategic importance.
Example: marketing mix of the airline industry (service)
Aspect Airline industry
Basic customer need Safe long- and short-haul transportation, domestic and international.
Target market Mass market (economy), discerning traveller (economy plus), business people, high-
net-worth individuals (first class).
Offering Differentiated by class (seat size, check-in/boarding, food, ancillary services). Some
carriers focus on basic no-frills (Easyjet, Ryanair, Air Asia).
Price Differs by class of service, type of carrier, purchasing approach (e.g. cheaper via
internet).
Promotional tools (1) Internet, (2) press, magazine and radio advertising, (3) billboards.
Distribution Mobile apps/internet, third-party brokerages (Expedia), to a lesser extent physical
travel agents.
Process Self-service via web/apps; travel options tailored to customer needs (baggage
allowances, class, ancillary services); social media.
Physical evidence Loyalty cards/souvenirs, in-flight magazines, in-flight entertainment, class-based
amenities (lounges, bars, showers).
People Check-in staff, baggage handlers, cabin crew; interaction with the customer or their
belongings at different points in the experience.
1.4 Marketing's positive impact on society
• Wilkie & Moore (1999): the aggregate marketing system delivers a wide array of offerings (directly or via
business markets) to serve wants and needs; has improved the standard of living for many people.
• Many important inventions reached society through it (e.g. breakfast cereals, television, cartons, artificial
sweeteners, mobile phone, personal computer) because innovative individuals and companies brought them
to market.
1.5 Unsustainable marketing: the critical "turn"
Marketing is criticised for being unethical, manipulative, and creating wants where none existed (Packard, 1960).
Need for a critical approach next to mainstream marketing (Shankar, 2009). Critical analysis = "problematizing
hitherto uncontentious marketing areas" (Saren, 2011).
Key topic Idea
Marketing as manipulation Packard (1960): target audiences are beguiled, often covertly, frequently without
realising they are being manipulated.
Commodity fetishism Society is overly dominated by consumption: placing supreme importance on it.
Need versus choice Affluent societies seek more without long-term satisfaction; consumption is
superficial; appealing to fantasies and highlighting imperfections leads to
narcissistic tendencies (Alvesson, 1994).
Book pages 98–100 elaborate on these topics.
1.6 Sustainable marketing and CSR
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, Marketing: study notes
Sustainable marketing: the three Es
• Ecological marketing: should not negatively impact the environment.
• Equitable marketing: should not allow or promote inequitable social practices.
• Economic marketing: should encourage long-term (not short-term) economic development.
Corporate Social Responsibility (CSR)
Management concept: companies integrate social and environmental concerns in operations and stakeholder
interactions; balance of economic, environmental and social imperatives (Triple-Bottom-Line approach), while
meeting shareholder and stakeholder expectations.
Rationale for CSR irrespective of financial contribution (Buchholz, 1991):
• Corporations have responsibilities beyond producing goods and services at a profit.
• These include helping solve important social problems, especially those they helped create.
• They have a broader constituency than shareholders alone.
• They have impacts beyond simple marketplace transactions.
• They serve a wider range of human values than economic values alone.
1.7 Types of ethics
Type Concerned with
Normative ethics Rational enquiry into standards of right and wrong (norms) for character and
conduct that ought to be accepted by a class of individuals.
Social / religious ethics Right and wrong in character and conduct; implicit claim to allegiance to
something (e.g. God).
Positive morality Knowledge generally adhered to by a social group about right and wrong.
Descriptive ethics Study of the belief system and practices of a social group from outside that
group.
Metaethics Philosophical enquiry treating ethical concepts and belief systems as objects of
enquiry themselves.
1.8 Ethical norms in marketing decision-making
Ethics = "moral principles that govern a person's behaviour or the conducting of an activity" (Oxford Dictionaries,
2016); a 2,000+ year-old subdiscipline of philosophy. Professional marketing bodies have codes of practice.
AMA (2014) requires members to:
• Do no harm: consciously avoid harmful actions/omissions; high ethical standards; obey laws and
regulations.
• Foster trust in the marketing system: good faith and fair dealing; avoid deception in product design,
pricing, communication, distribution.
• Embrace ethical values: build relationships and consumer confidence by affirming honesty,
responsibility, fairness, respect, transparency, citizenship.
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MARKETING
Study notes: Chapters 1–9
Contents
1 Marketing Principles and Society
2 Understanding Customer Behaviour
3 Market Research and Customer Insight
4 Marketing Environment and Strategy
5 Market Segmentation and Positioning
6 Proposition and Branding Decisions
7 Pricing and Value Creation
8 Marketing Communications Principles
9 Managing Channels and Distribution
How to read the boxes
Blue box = definition / core model. Grey first column in tables = the term to remember.
Page 1
, Marketing: study notes
Chapter 1: Marketing Principles and Society
Learning goals: define the marketing concept; how marketing developed; exchange and marketing mix; positive
and negative impact on society; sustainable marketing.
1.1 Definitions of marketing
Source Definition (key idea)
CIM (2015) "The management process responsible for identifying, anticipating and satisfying
customer requirements profitably."
AMA (2013) 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.
Lendrevie & Lévy (2014) The strategy of adaptation of organisations to competitive markets, to influence
the behaviour of the publics they depend on, through an offering whose perceived
value is durably superior to competitors. In commercial sector: create economic
value for the company by creating value as perceived by customers.
1.2 The development of marketing (4 stages)
Period Years Focus of the firm
1. Production 1890s–1920s Physical production and supply. Demand > supply, little
competition, limited range. After the Industrial Revolution.
2. Sales 1920s–50s Personal selling supported by market research and advertising.
After WWI.
3. Marketing 1950s–80s Customer needs. After WWII.
4. Societal marketing 1980s–present Social and ethical concerns; not-for-profits can also do
marketing. "Information revolution" (Enright, 2002).
1.3 The marketing mix
Origin
Neil Borden (Harvard, 1950s): managers are "mixers of ingredients". 12-item list (Borden, 1964): product
planning, pricing, branding, channels of distribution, personal selling, advertising, promotions, packaging,
display, servicing, physical handling, fact finding and analysis.
McCarthy (1960) simplified it to the memorable but rigid 4Ps.
P Meaning
Product The offering, how it meets the customer need, packaging, labelling.
Place (distribution) The way the offering reaches / meets customers' need.
Price Cost to the customer and cost-plus profit to the seller.
Promotion How benefits and features are conveyed to the potential buyer.
Extension to 7Ps for services (Booms & Bitner, 1981)
• Physical evidence: tangible components of the service are strategically important.
• Process: importance of service delivery; standardised processes make it easier to manage customer
Page 2
, Marketing: study notes
expectations.
• People: customer service personnel (often experts/professionals) interacting with the customer; how
they interact and how satisfied customers are is of strategic importance.
Example: marketing mix of the airline industry (service)
Aspect Airline industry
Basic customer need Safe long- and short-haul transportation, domestic and international.
Target market Mass market (economy), discerning traveller (economy plus), business people, high-
net-worth individuals (first class).
Offering Differentiated by class (seat size, check-in/boarding, food, ancillary services). Some
carriers focus on basic no-frills (Easyjet, Ryanair, Air Asia).
Price Differs by class of service, type of carrier, purchasing approach (e.g. cheaper via
internet).
Promotional tools (1) Internet, (2) press, magazine and radio advertising, (3) billboards.
Distribution Mobile apps/internet, third-party brokerages (Expedia), to a lesser extent physical
travel agents.
Process Self-service via web/apps; travel options tailored to customer needs (baggage
allowances, class, ancillary services); social media.
Physical evidence Loyalty cards/souvenirs, in-flight magazines, in-flight entertainment, class-based
amenities (lounges, bars, showers).
People Check-in staff, baggage handlers, cabin crew; interaction with the customer or their
belongings at different points in the experience.
1.4 Marketing's positive impact on society
• Wilkie & Moore (1999): the aggregate marketing system delivers a wide array of offerings (directly or via
business markets) to serve wants and needs; has improved the standard of living for many people.
• Many important inventions reached society through it (e.g. breakfast cereals, television, cartons, artificial
sweeteners, mobile phone, personal computer) because innovative individuals and companies brought them
to market.
1.5 Unsustainable marketing: the critical "turn"
Marketing is criticised for being unethical, manipulative, and creating wants where none existed (Packard, 1960).
Need for a critical approach next to mainstream marketing (Shankar, 2009). Critical analysis = "problematizing
hitherto uncontentious marketing areas" (Saren, 2011).
Key topic Idea
Marketing as manipulation Packard (1960): target audiences are beguiled, often covertly, frequently without
realising they are being manipulated.
Commodity fetishism Society is overly dominated by consumption: placing supreme importance on it.
Need versus choice Affluent societies seek more without long-term satisfaction; consumption is
superficial; appealing to fantasies and highlighting imperfections leads to
narcissistic tendencies (Alvesson, 1994).
Book pages 98–100 elaborate on these topics.
1.6 Sustainable marketing and CSR
Page 3
, Marketing: study notes
Sustainable marketing: the three Es
• Ecological marketing: should not negatively impact the environment.
• Equitable marketing: should not allow or promote inequitable social practices.
• Economic marketing: should encourage long-term (not short-term) economic development.
Corporate Social Responsibility (CSR)
Management concept: companies integrate social and environmental concerns in operations and stakeholder
interactions; balance of economic, environmental and social imperatives (Triple-Bottom-Line approach), while
meeting shareholder and stakeholder expectations.
Rationale for CSR irrespective of financial contribution (Buchholz, 1991):
• Corporations have responsibilities beyond producing goods and services at a profit.
• These include helping solve important social problems, especially those they helped create.
• They have a broader constituency than shareholders alone.
• They have impacts beyond simple marketplace transactions.
• They serve a wider range of human values than economic values alone.
1.7 Types of ethics
Type Concerned with
Normative ethics Rational enquiry into standards of right and wrong (norms) for character and
conduct that ought to be accepted by a class of individuals.
Social / religious ethics Right and wrong in character and conduct; implicit claim to allegiance to
something (e.g. God).
Positive morality Knowledge generally adhered to by a social group about right and wrong.
Descriptive ethics Study of the belief system and practices of a social group from outside that
group.
Metaethics Philosophical enquiry treating ethical concepts and belief systems as objects of
enquiry themselves.
1.8 Ethical norms in marketing decision-making
Ethics = "moral principles that govern a person's behaviour or the conducting of an activity" (Oxford Dictionaries,
2016); a 2,000+ year-old subdiscipline of philosophy. Professional marketing bodies have codes of practice.
AMA (2014) requires members to:
• Do no harm: consciously avoid harmful actions/omissions; high ethical standards; obey laws and
regulations.
• Foster trust in the marketing system: good faith and fair dealing; avoid deception in product design,
pricing, communication, distribution.
• Embrace ethical values: build relationships and consumer confidence by affirming honesty,
responsibility, fairness, respect, transparency, citizenship.
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