Marketing and researches

Lekt. Indrė Žukauskaitė

MRU, 2011
 Marketing definition
The term marketing has changed and evolved over a period of time, today marketing is based around
providing continual benefits to the customer, these benefits will be provided and a transactional
exchange will take place.

The Chartered Institute of Marketing define marketing as 'The management process responsible for
identifying , anticipating and satisfying customer requirements profitably‘. If we look at this
definition in more detail Marketing is a management responsibility and should not be solely left to junior
members of staff. Marketing requires co-ordination, planning, implementation of campaigns and a
competent manager (s) with the appropriate skills to ensure success.

Philip Kothler defines marketing as ‘Satisfying needs and wants through an exchange process‘.

P.Tailor 'Marketing is not about providing products or services it is essentially about providing
changing benefits to the changing needs and demands of the customer’
Marketing objectives, goals and targets have to be monitored and met, competitor strategies analyzed,
anticipated and exceeded. Through effective use of market and marketing research an organization
should be able to identify the needs and wants of the customer and try to deliver benefits that will
enhance or add to the customers lifestyle, while at the same time ensuring that the satisfaction of these
needs results in a healthy turnover for the organization.

• Within this exchange transaction customers will only exchange what they value (money) if they feel that
their needs are being fully satisfied, clearly the greater the benefit provided the higher transactional
value an organization can charge.
Marketing definition
 Marketing management

Marketing management:

‘Programs designed to create, develop, maintain beneficial exchanges with target buyers in
the analysis, planning, implementation and control in order to achieve organizational
objectives’ (P.Kothler).

Marketing Planning: 

‘A written document which plans the marketing activities of an organization for a given
period. The document should include an environmental analysis, marketing mix
strategies and any contingency plans which organization should reach. ‘
 Marketing management
• Market regulation (demands of buyers);

• Creation of profitable relations with customers;

• Marketing management practice.

 Marketing environment
Marketing is about meeting needs and providing benefits and the customers
should be the central focus of the business. Despite this, the companies
marketing strategy should be focused around this concept, because there is
companies marketing environment.

The companies marketing environment can be defined as the: “controllable and

uncontrollable elements that influence the strategic direction of the
company”.

The companies marketing environment can be analyzed in two broad levels:

1. The macro environment involves looking at uncontrollable variables that

influence company strategy. For this companies should do PEST analysis.
2. The micro environment involves analysis of factors which are close to the
company and to which the company have an influence. This usually involves
undertaking a stakeholder analysis and SWOT.
 
 The marketing concept

• Production Oriented: The focus of the business is not the needs of the
customer, but of reducing costs by mass production. By reaching
economies of scale the business will maximize profits by reducing costs.

• Product Orientation: The company believes that they have a superior

product, based on quality and features, and because of this they feel their
customers will like it also.

• Sales Orientation: The focus here is to make the product, and then try to
sell it to the target market. However, the problem could be that consumers
do not like what is being sold to them.

• Market Orientation: Puts the customer at the heart of the business. The
organization tries to understand the needs of the customers by using
appropriate research methods, appropriate processes are developed to
make sure information from customers is fed back into the heart of the
organization. In essence all activities in the organization are based around
the customer. The customer is truly king!
 Marketing concept

Marketing
Concepts

Production Product Sales Marketing

orientation orientation orientation orientation

In today’s competitive world putting the customer at the heart of the

operation is strategically important. Those that follow the market
orientation concept have a greater chance of being successful.
 Ethical Marketing

Ethical marketing is about whether a firms marketing decision is morally right or wrong.
The morality of the marketing decision can encompass any part of marketing from advertising
to the pricing of their product or service, to the sourcing of their raw materials.

In today’s corporate world ethical marketing is playing a larger role in marketing strategy. An
increasing number of consumers are buying products/services because they feel that the
products, services or organizations responsible for those are ethical. In response to this
consumer demand organizations have increased their focus on ethical marketing.

When companies are reviewing marketing strategies they need to consider whether the
marketing decisions that they are making are ethical and reflect consumer and market
expectations.

An individual’s view of ethics and morality is influenced by a variety of things including their
culture, background, experience, upbringing/family, peers, community, religion and country.
 Ethical Marketing
After a company has decided to implement ethical marketing they will need to make the following
decisions:
1. Define what is ethical.
2. Which branch of ethics will they subscribe to.
3. How will the ethical approach to marketing be implemented.
4. In which areas of the firm’s operations should ethical marketing be implemented (e.g.
employees, suppliers, consumers/clients, production techniques, distribution or the whole value
chain)

The question of ethical is whether the firms decisions is right or wrong. A number of questions a firm
must ask itself include:
• Should the firm employ children to their products?
• Do the firm’s suppliers use child labour? Does the firm know?
• Today, child labour is a very big issue, does your firm want to associate itself with this?
Does the firm exaggerate the benefits of its products on its packaging?
• Are claims overstated? Many firms do make bold claims. The company needs to make sure these claims are fully
supported.
Does the firm conduct in high pressurized selling techniques or focus on customer groups that are vulnerable e.g.
pensioners?

Ethical marketing is based around making the right moral decisions. Balancing ethics and
remaining competitive can be difficult.
 Social responsibility (CSR)
Corporate social responsibility ("CSR" for short, and also called
corporate conscience, citizenship, social performance, or
sustainable responsible business) is a form of corporate self-
regulation integrated into a business model. It is an ethical ideology
or theory that an organization or individual, has an obligation to act
to benefit society at large. This responsibility can be passive, by
avoiding engaging in socially harmful acts, or active, by performing
activities that directly advance social goals.

• Businesses can use ethical decision making to secure their

businesses by making decisions that allow for government agencies
to minimize their involvement with the corporation. (Kaliski, 2001)
 Marketing MIX

• The marketing mix principles (also known as

the 4 p’s.) are used by business as tools to
assist them in pursuing their objectives.

• The marketing mix principles are

controllable variables, which have to be
carefully managed and must meet the needs
of the defined target group.

• The marketing mix is apart of the

organisations planning process and consists
of analysing the defined:

1. How will you design, package and add value to the

product. Product strategies.
2. What pricing strategy is appropriate to use Price
strategies.
3. Where will the firm or product locate? Place
strategies.
4. How will the firm promote its product Promotion
strategies.
 Product

When an organisation introduces a product into a market they must ask

themselves a number of questions.
• Who is the product aimed at?
• What benefit will they expect?
• How do they plan to position the product within the market?
• What differential advantage will the product offer over their competitors?

We must remember that ‘Marketing is not about providing products

or services it is essentially about providing changing benefits
to the changing needs and demands of the customer’ (P.Tailor
7/00)
 Price
Pricing is one of the most important elements of the marketing mix, as it is the only mix,
which generates a turnover for the organisation. The remaining 3p’s are the variable cost
for the organisation. It costs to produce and design a product, it costs to distribute a
product and costs to promote it. Price must support these elements of the mix.

Pricing is difficult and must reflect supply and demand relationship. Pricing a product too
high or too low could mean a loss of sales for the organisation. Pricing should take into
account the following factors:

• Fixed and variable costs.

• Competition
• Company objectives
• Proposed positioning strategies.
• Target group and willingness to pay.
 Place
• This refers to how an organisation will distribute the product or service they
are offering to the end user.

• The organisation must distribute the product to the user at the right place at
the right time.

• Efficient and effective distribution is important if the organisation is to meet

its overall marketing objectives. If an organisation underestimate demand
and customers cannot purchase products because of it, profitability will be
affected.
 Promotion
A successful product or service means nothing unless the benefit of such a service can be
communicated clearly to the target market. An organizations promotional strategy can
consist of:

• Advertising:  any non personal paid form of communication using any form of mass
media.

• Public relations: involves developing positive relationships with the organisation media
public. The art of good public relations is not only to obtain favorable publicity within the
media, but it is also involves being able to handle successfully negative attention.

• Sales promotion: commonly used to obtain an increase in sales short term. Could
involve special offers, etc.

• Personal selling: selling a product service one to one.

• Direct Mail: Is the sending of publicity material to a named person within an

organization.   Organizations can pay thousands of pounds for databases, which
contain names and addresses of potential customers. 
 Nowadays marketing complex (mix)
Complex
Functions
The development of the online marketing space initiated interactive communication with
consumers which are looking for information about your products or services. The
Interactive organization receives 100% consumers attention, because they can find all need
information about products and organization in the internet. Because of this reason,
organizations can communicate with consumers at “real time” offer customized solutions.
The organization can collect full information about users, because the Internet allows two-way
Information feedback between the company and the consumer. This information may be used by an
organization in marketing activities, user needs identification, etc.
Internet technologies allow the possibilities of integrated communication tools - the user can
directly interact with the organization in real time (the online company's website can be
Integration integrated by Web technologies), as well as the Internet can be used as a tool for
supporting the sales on promotional campaigns, when integrated all channels and forms of
communication: print, TV, Internet, etc.
Proposals for consumers in electronic space can be created to each user separately and only
Individualization offered acording to each individual needs, while the traditional business environment,
typically offering goods or services for the mass consumer group.

Here is very important to divide the stucture of the business. How shareholders, all stuff or
Industries partners will work and communicate together. Because e-business gives new ways of
business stuctures.
restructuration

Independence of Business development in the electronic environment allows access to global markets, the
location company can operate in one country and its market may be in another.
 Planning marketing

1. Mission

2. Purposes

3. Analysis (internal and external). PEST,

SWOT, Competitors
 PEST analysis
An organization's success is influenced by factors operating in it’s internal and external
environment;
Organization can increase it’s success by adopting strategies which manipulate these
factors to it’s advantage.
A successful organization will not only understand existing factors, but also forecast
change, so that it make advantage of change.

The following type of forces influence an organization's operating environment:

• Pest Factors – these are external forces which the organisation does not have direct
control over these factors. PEST is an acronym and each letter represents a type of
factor (Political, Economical Social and Technological).
• Micro environmental factors – these are internal factors, which the organisation can
control.

PEST analysis
A PEST analysis is used to identify the external forces affecting an organisation .This is a
simple analysis of an organisation’s Political, Economical, Social and Technological
environment.
 PEST analysis
Political

The first element of a PEST analysis is a study of political factors. Political factors
influence organizations in many ways. Political factors can create advantages and
opportunities for organizations. Conversely they can place obligations and duties on
organizations. Political factors include the following types of instrument:

- Legislation such as the minimum wage or anti discrimination laws.

- Voluntary codes and practices
- Market regulations
- Trade agreements, tariffs or restrictions
- Tax levies and tax breaks
- Type of government regime (eg communist, democratic, dictatorship)
 PEST analysis
Economical

All businesses are affected by national and global economic factors. National and
global interest rate and fiscal policy will be set around economic conditions. The
climate of the economy dictates how consumers, suppliers and other
organizational stakeholders such as suppliers and creditors behave within
society.

• A successful organisation will respond to economic conditions and stakeholder behavior.

Furthermore organizations will need to review the impact economic conditions are having on their
competitors and respond accordingly.

• In this global business world organizations are affected by economies throughout the world and not
just the countries in which they are based or operate from. For example: a global credit crunch
originating in the USA contributed towards the credit crunch in the UK in 2007/08.

• Cheaper labor in developing countries affects the competitiveness of products from developed
countries. For example weather conditions in India may affect the price of tea bought in an English
café.

• A truly global player has to be aware of economic conditions across all borders and needs to ensure
that it employs strategies that protect and promote its business through economic conditions
throughout the world.
 PEST analysis
Social

The third aspect of PEST focuses its attention on forces within society such as
family, friends, colleagues, neighbors and the media. Social forces affect our
attitudes, interest s and opinions. These forces shape who we are as people,
the way we behave and ultimately what we purchase (For example within the UK
peoples attitudes are changing towards their diet and health. As a result the UK is seeing an
increase in the number of people joining fitness clubs and a massive growth for the demand of
organic food. Products such as Wii Fit attempt to deal with society’s concern, about children’s lack of
exercise).

• Population changes also have a direct impact on organizations. Changes in

the structure of a population will affect the supply and demand of goods and
services within an economy. Falling birth rates will result in decreased demand
and greater competition as the number of consumers fall.

• Organizations must be able to offer products and services that aim to

complement and benefit people’s lifestyle and behavior. If organizations do not
respond to changes in society they will lose market share and demand for their
product or service.
 PEST analysis
Technological
Organizations use technology in many ways, they have:
1. Technology infrastructure such as the internet and other information exchange systems
including telephone
2. Technology systems incorporating a multitude of software which help them manage their
business.
3. Technology hardware such as mobile phones, Blackberrys, laptops, desktops, Bluetooth
devices, photocopiers and fax machines which transmit and record information.

• Technology has created a society which expects instant results. This technological revolution
has increased the rate at which information is exchanged between stakeholders. A faster
exchange of information can benefit businesses as they are able to react quickly to changes
within their operating environment.

• However an ability to react quickly also creates extra pressure as businesses are expected to
deliver on their promises within ever decreasing timescales. For example the Internet is having
a profound impact on the marketing mix strategy. Consumers can now shop 24 hours a day from
their homes, work, Internet café’s and via 3G phones and 3G cards. Employees have instant access
to e-mails through Blackberrys, etc.

• The pace of technological change is so fast that the average life of a computer chip is
approximately 6 months. Technology will continue to evolve and impact on consumer habits
and expectations, organizations that ignore this fact face extinction.

PESTLE

A PEST analysis is sometimes expanded to incorporate legal and environmental factors. This is
known as a pestle analysis.
 PEST analysis
Product Price Place Promotion

Political

Technological STRATEGY
Economical

Social
 Marketing environment
Micro Environmental Factors:

• Customers Competitors
• Employees
• Suppliers
• Shareholders Employees Suppliers
• Media
• Competitors
Organization

Media Shareholders

Customers
 SWOT
SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses,
Opportunities, and Threats involved in a project or in a business venture.

It involves specifying the objective of the business venture or project and identifying the internal and external
factors that are favorable and unfavorable to achieve that objective. The technique is credited to Albert
Humphrey, who led a convention at Stanford University in the 1960s and 1970s using data from Fortune
500 companies.

A SWOT analysis must first start with defining a desired end state or objective. A SWOT analysis is used as
a framework to help the firm develop its overall corporate, marketing, or product strategies. Note:
Strengths and Weaknesses are internal factors which are controllable by the organisation.
Opportunities and threats are external factors which are uncontrollable by the organisation.

Strength examples could include:

• A strong brand name.
• Market share.
Weaknesses could include:
• Low or no market share.
• No brand loyalty.
Opportunities could include:
• A growing market.
Threats could include:
• Competitors
• Government policy, eg taxation, laws.
• Changes in society not beneficial to your company.

Results raised from the analysis are then used to assist the organisation in developing their
marketing mix strategy. A SWOT analysis must form the part of any prudent marketing strategy.
SWOT ANALYSIS

INTERNAL FACTORS

EXTERNAL FACTORS
 Competitor analysis
Competitor analysis is a vital part of the marketing planning process. Competitor
analysis enables an organisation to:

• Collect information on competitors that will directly influence the firms’ strategy.
• Help the organization anticipate what the actions of their competitors will be.
• To exploit the competitor’s weaknesses so the firm can gain an overall competitive
advantage.
• Suppose possible competitioners or replacements.

How? Answer these questions:

• Who are your competitors?
• What is the size and dominance within the market.
• Which customer base are they aimed at?
• What is their positioning within the market?
• What are their objectives?
• What are their strengths and weaknesses?

A complete understanding of competitors will help the organization in preparing their

overall marketing plan. A competitor can easily slow down companies progress,
competitor analysis should allow to anticipate and react effectively to their move.
 Marketing research
Research is the only tool an organisation has to keep in contact with its external
operating environment. In order to be proactive and change with the
environment simple questions need to be asked:

• How are customer needs changing? Can you meet these changing needs? What do
your customers think about existing products or services?
• How are competitors operating within the environment? Are their strategies exceeding
or influencing yours? What should you do?
• How are macro and micro environmental factors influencing your organisation? Again
how will you react?
 Marketing research
Market Research and Marketing Research
A common mistake by many students, sometimes lecturers is that there is no
understanding of the clear distinction between market research and
marketing research.

• Market Research: Involves researching specific industry’s or markets.

Researching the banking industry to discover the number of competitors
and their market share will be an example of market research.

• Marketing Research: Marketing Research goes further. Marketing

Research analyses a given marketing opportunity or problem, defines the
research and data collection methods required to deal with the problem or
take advantage of the opportunity, through to the implementation of the
project. In essence marketing research aims to discover the root cause for a
specific problem within an organisation ( eg declining sales) and put forward
solutions to that problem.

Data types:
• Qualitative Data: Focuses on people’s opinions and attitudes towards a
product or service.
• Quantitative Data: Focuses on collecting data for numerical analysis.
 Primary Research
Primary research is research used to collect data for a specific task. Types of primary data
collection methods include:

• Personal Observation: The observation of the respondent by a trained observer or by

electronic equipment (camera). The aim is to observe consumer responses and
behavior to a product or customer service.

• Personal Interviews: Face to face interview between an interviewer and the

respondent at home or in shopping centers.

Advantages of personal interviews

• In-depth answers possible.
• Qualitative data obtained from small sample.
• Observation improves accuracy.
• Rapport leads to fewer refusals.

Disadvantage of personal interviews

• Cost: Professional Interviewer expensive.
• Interviewer bias.
• Can be slow and time consuming.
• People not at home.
• Invasion of privacy.
 Primary Research

Postal surveys:   Mailing or distributing door to door a written questionnaire to

a sample of buyers for their completion at home or at work.

Advantages of postal surveys

• No travel expenses so economic if good return rate.
• No interviewer Bias
• Anonymous returns
• Can be completed at respondents’ leisure.

Disadvantages of postal surveys

• Low response rate approximately 3%
• Take longer
• Have to be short.
• Questions may be misinterpreted, and there is no interviewer their to guide the respondent.
 Primary Research
Telephone Surveys: Involves the interviewer contacting the target respondent and
asking them questions and recording responses.

Advantages of telephone surveys

• Easy to administer
• Quick.
• Allows for reaction and some in-depth interviews.
• Questions can be modified.

Disadvantages of telephone surveys

• Professional interviewers are expensive.
• Invasion of privacy.
• Telephone charges can be high.
• Not everyone has a telephone, so not representative of the population.
• High non-response rate because of engaged/no answers, plain refusals.
 Primary Research
Focus Groups: A discussion between six to eight individuals with the aim to produce
qualitative data (opinions and attitudes) on the topic being discussed. The topic
may be their opinions on a new product the organisation wishes to introduce. The
person who monitors the group is called 'the moderator'

Advantages of focus groups

• Generates information helpful in structuring consumer questionnaires.
• Provides background information on product.
• Secures impressions on new product concepts.

Disadvantage of focus groups

• The group may have one or some dominant people within it who may actually dissuade some
other group member to make a full contribution.
• Difficult for moderator to interrupt once a discussion gets going.
• Bias from moderator.
 Secondary research
Secondary research is research already published, and is the cheapest form of
research because the data already exists for your acquisition. Secondary
research can be split into internal and external research.

Internal Research
Internally an organisation has access to a wealth of information, which can be a
useful tool for decision making for managers. Information for example, may
assist to discover why sales are decreasing, why customers are not satisfied,
customer usage rates and so on.

Sources of internal research may include:

• National product sales.
• Regional product sales.
• Customer usage rates.
• Guarantee cards.
• Customer comments or complaints.
• Sales people, research and development staff.
• Past research conducted.
• Clearly as this information can be generated internally the only cost implication will be of
staff time obtaining the data.
 Secondary research
External Secondary Research
Sources of external secondary data include:
• Periodicals.
• Specialist marketing reports.
• Industry magazines.
• Chamber of commerce.
• Government statistics.
• Internet.
• Professional bodies.
• Trade associations.

Limitations of secondary research.

• It is easy to find and collect secondary data, however, you need to be aware of the
limitations the data may have and the problems that could arise if these limitations.
• Secondary data can be general and vague and may not really help companies with
decision making.
• The information and data may not be accurate. The source of the data must always be
checked.
• The data maybe old and out of date.
• The sample used to generate the secondary data maybe small.
• The company publishing the data may not be reputable.
 Sampling
Before an organisation conducts primary research it has to be clear which respondents it
wishes to interview. A company cannot possibly interview the whole population to get their
opinions and views. This simply would be to costly and unfeasible. A sample of the
population is taken to help them conduct this research. To select this sample there are
again different methods of choosing your respondents, a mathematical approach called
'probability sampling' and a non-mathematical approach, simply called 'non-probability
sampling'.

• Probability Sampling Methods – A mathematical chance of selecting the respondent.

Simple Random Samples
With this method of sampling the potential people you want to interview are listed e.g. a group of 100 are
listed and a group of 20 may be selected from this list at random. The selection may be done by
computer.

• Systematic samples
Out of the 100 people (mentioned above), systematic sampling suggests that if we select the 5th person
from the above list, then we would select every 5th, 10th, 15th, 20th etc.

• Multi-Stage Samples
With this sampling process the respondents are chosen through a process of defined stages. For example
residents within Lithuania may have been chosen for a survey through the following process:
• Throughout Lithuania south may have been selected at random, ( stage 1), within the east of LT is
selected again at random (stage 2), west is selected as the borough (stage 3), then polling districts
from north (stage 4) and then individuals from the electoral register (stage 5).
• As demonstrated five stages were gone through before the final selection of respondents were selected
from the electoral register.
 Sampling
Non Probability Samples

• Convenience Sampling
The researcher gives questions anyone who is available. This method is quick and
cheap. However we do not know how representative the sample is and how reliable
the result.

• Quota Sampling
Using this method the sample audience is made up of potential purchasers of your
product. For example if you feel that your typical customers will be female between
40-60, male between 30-40, then some of the respondents you interview should be
made up of this group.

• Dimensional Sampling
The researcher takes into account several characteristics e.g. gender, age income,
residence education and ensures there is at least one person in the study that
represents that population. E.g. out of 10 people you may want to make sure that 2
people are within a certain gender, two a certain age group who have an income rate
between 15 000 litas and 20 000 litas, this will again ensure the accuracy of the
sample frame again.
 Tasks
1. Find no less than 4 definitions of marketing and marketing strategy (for each term)
and explain differences between these definitions.
2. Describe what is marketing mix and explain the importance of it.
3. What are main marketing management concepts and what differences between
them?
4. Porter`s Five Forces model is model that helps the company identify competitors and
potential competitor within their market and should be used in conjunction with a
general competitor analysis. Explain this model, what it includes?