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Marketing

Introduction
Outcomes
Marketing strategies
The Marketing Mix
Marketing plans
Revision and case studies
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Introduction and definition

Marketing is defined by Phillip Kotler et al in Marketing: Australia and New Zealand (1994, 3rd Edition, Prentice Hall) as "a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others" (page 5).

Alternatively, Kotler comments on the marketing management process as "... the analysis, planning, implementing and control of programs designed to create, build and maintain beneficial exchanges with target buyers for the purpose of achieving organisational objectives" (page 9).

Marketing should be seen as a combination of activities by businesses to promote awareness of their products in the minds of consumers. Businesses can do this by:

identifying target markets
developing products appropriate to those markets
focussing on the needs and wants of the consumers Ð being market-driven developing a marketing plan
developing a "marketing mix", commonly referred to as the "4 Ps"

Outcomes

HSC Topic 3: Marketing is covered in the Board of Studies Syllabus (June 1999) on pages 30 Ð 31. The specific syllabus outcomes for this topic are:

The student:

H1.2	critically analyses the role of business in Australia
H2.1	describes and analyses business functions and operations and their impact on business activities
H3.2	evaluates the effectiveness of management in the organisation and operations of business and its responsiveness to change
H4.1	critically analyses the social and ethical responsibilities of management
H5.1	selects, organises and evaluates information and sources for usefulness and reliability
H5.2	plans and conducts an investigation into business to present the findings in an appropriate business format
H5.3	communicates business information, ideas and issues, using relevant business terminology and concepts in appropriate forms.

Marketing strategies

What are they?

for a business to be successful with its marketing activities, it will need to: undertake a "situational analysis", including a SWOT analysis. A business must continually identify and take advantage of opportunities if it is to retain a competitive advantage over its rivals or competitors. This will also involve continual improvement in the organisation and operations of the business and the development of a marketing plan.
identify the target markets that the business wants to pursue. This is where a business distinguishes between the different groups that make up the market. This can be done on demographic (e.g. age and sex), geographic location or psychographic (consumer behaviour) variables.
develop a marketing mix appropriate to the target markets.
put a marketing management system in place to collect data on items such as the marketing strategies or product sales so that informed decisions can be made about future marketing activities.

Exercise

Imagine that you have developed a new golf ball that floats, glows in the dark, and contains a computer chip that can analyse information about its flight.

As the marketer of this new product:

do a quick SWOT analysis for the business and product
outline the target market for the product
explain 3 marketing activities that you could use to promote the ball.

The marketing mix

Product
Price
Place
Promotion
Extension of the 4 Ps

Product

A business needs to consider the products that it produces and the stage of the product life cycle that a product is at. Marketing strategies will vary according to the type of product and its stage in the life cycle.

Example 1 DVD players

Is the product unique?
At what stage of the product life cycle is it?
What sort of marketing strategies could you use?

Example 2 Toothpaste

How many brands are there?
What "brand differentiation" exists?
At what stage of the product life cycle are they?
What sort of marketing strategies could you use?

Price

Most businesses use a "cost plus" method for setting the prices of their products. This involves determining unit production costs and then adding in a profit margin. However, many other factors are involved. Consider "perceived price" (what you think consumers will be prepared to pay), demand elasticity (is it elastic or inelastic?), competitors' pricing (can you afford to undercut their prices?), pricing objectives (what do you want to achieve Ð increased market share? increased profits? market leadership? etc.)

Example 1 Luxury cars

What is the "perceived value" of such cars?
Will consumers be prepared to buy "cheap" cars?

Example 2 Perfume

How much does it cost to make?
Why is the price set so high?

Example 3 Soft drinks

Can businesses afford a "price war"?
Why is Coca Cola so successful?

Place

This generally refers to the physical locations of product sales as well as the methods of distribution. However, it is also considered to be the "place" or "position" in the market of the product; refer to information below. Businesses need to make many decisions related to "place": access, parking, competition, physical location etc.

Example 1 Medical specialists

The nature of their service generally means that consumers will travel to them.

Example 2 McDonalds

Is the area growing?
How many potential customers go past each day?
Where are other stores located?

Promotion

This refers to the promotion of the product to the target market. This is achieved through a combination of:

advertising: use of electronic and print media. The "reach" (how many people will see the advert), frequency (how many times will I advertise the product?) and impact of the advertising must also be evaluated.
personal selling: what happens in the "shop", contact between sales people and consumers or customers. sales promotion: use of gimmicks and incentives e.g. competitions.
sponsorship and promotional licensing: including specific products sold under licence that promote the business (e.g. football jumpers).
publicity or public relations: "advertorials" in local papers or special promotional materials.

Direct marketing and e-commerce are vital components of promotion which modern, dynamic businesses must be utilising.

Extension of the "4 Ps"

Good students of marketing will also be aware of these concepts too.

Positioning

This refers to the way that consumers "see" or "perceive" a product. It is the position or "place" that a product holds in the mind of the consumer. Positioning relies on some differentiation between products or brands, so that the product is positioned differently in the minds of consumers. Examples of this include:

Coca Cola - the drink to have if you want to be fashionable, attractive and lively
Minties - "it's moments like these"
Rip Curl surf/ski products - most appropriate for the beach/snow

Exercise: For the golf ball that you developed in the section on product, explain how you would try to position it in the minds of the target market you identified.

People

This includes not only the consumers, but also the people working in a business (and indeed, its competitors). Many businesses recognise that people are their most important asset. A large number of ideas can be generated from employees, and this will depend on the approach or style that management adopts (refer to work on Business Management and Change in HSC Topic 1). Businesses must think globally in relation to this and other aspects of marketing. The role of e-commerce must also be included in business organisation and operations.

Packaging

Packaging has become a very important component of marketing as businesses strive to attract consumers to their products. Consider the number of products that:

are attractively packaged
are over-packaged
contain "25% extra for free"
have "cashback" offers
contain competitions and incentives for consumers.

Exercise: For the golf balls developed in the first section, design a "package" that will attract the consumers you have identified in your target market and maintain the "position" that you want to establish for the product.

Marketing plans

Introduction

The marketing plan should be seen as a component of the firm's overall business plan. In large businesses, the marketing department will develop it, while in small and medium size enterprises, it may be the owner or an employee responsible for marketing who develops the plan.

The marketing plan obviously has to fit in with the goals and objectives of the business. The plan can also be strategic, operational or tactical in its format.

Suggested format for marketing plans

Sample marketing plans

It is very difficult to access actual marketing plans from a business Ð managers will guard them closely.

Students should liaise with local businesses or managers at places of employment to see if they can have a look at the marketing (and business) plan.

Alternatively, students could develop a marketing plan for a real or imaginary product. This could be done by a team of students (in conjunction with a teacher) who have information about a business and could put some creative thinking and "common sense" together to generate a plan.

Suggested format for marketing plans

The headings set out below are a suggestion only; they do not represent the only or correct way to do a marketing plan.

Executive summary
Marketing mission statement
Situation analysis
Goals and objectives
The target markets
The marketing mix
Budget
Marketing management information systems / Marketing controls

Plans should be written in "business style". Make use of points, summaries, graphs and diagrams.

Revision and case studies

This section contains 3 case studies relevant to marketing. Students and teachers are encouraged to download the case studies for use in the classroom.

Sport Marketing Exercises and materials are provided so that you can develop a case study of your favourite sport.

Jamberoo Recreation Park This is located on the South Coast of NSW and is popular with tourists as well as schools. Read this section to gain a full understanding of the operation and marketing of this business.

Sport marketing

NOTE: information in this section is designed to stimulate students' and teachers' thoughts and discussions in applying marketing concepts to a case study. It should be completed in relation to your favourite sport. The exercises provided will allow you to develop a case study of sport marketing.

What is sport marketing?

With the professionalism of sport increasing to the stage where players are on million dollar contracts and events are promoted and managed with heavy involvement of the media, sport, as we have traditionally known it, has become a business.

Sport marketing is defined by Shilbury, Quick and Westerbeek in Strategic Sport Marketing (1998, Allen & Unwin). They state: "Sport marketing is a social and managerial process by which the sport manager seeks to obtain what sporting organisations need and want through creating and exchanging products and value with others." The authors go on to discuss marketing "of" sport (that is, letting people know about the sport or events), and marketing "through" sport (that is, using sport as the vehicle for marketing products through their association with the sport).

Exercise Consider the Olympic Games, NRL or Australian Cricket Board

How are the sports marketed?
What sponsorship involvement is there?
What products are associated with the Olympic Games, Rugby League and Cricket?
How important is media coverage of the sport?
How have games been modified to attract spectators, sponsors and money?

A situational analysis

Exercise

Should sport be considered as a "product" or a "service"? What is the "product or service"? How has it changed over the last few years?
What is the impact of competition Ð this includes competition amongst different sports as well as the level of competition within the sport (e.g. standard of games or competitiveness of the teams/athletes)?
How are consumers targeted? What needs and wants are involved? What might the target markets be?
Complete a SWOT analysis for your favourite sport. Consider competition, costs, facilities, demographics, media involvement and sponsorship.

Goals and objectives

Remember that objectives must be SMART. That is:
Specific
Measurable
Achievable
Realistic
Time limited

Exercise

What would be the overall goal of your team, athlete or sport for the "season"?
What specific marketing goals or objectives could be developed? Consider media coverage, spectator attendance, increasing revenue, promotions, licensed products, pricing structures (e.g. for admission or membership) and ticketing.
What is the impact of the product life cycle?
What is the "break-even point"?
List any other objectives you can think of.

Target markets

Exercise

Outline the demographics relevant to your sport, team or athlete.
What geographic factors need to be considered?
Think critically about the psychographic behaviours of participants and spectators. Who are you really trying to attract as a participant, spectators or consumers of licensed products? Is consumer behaviour on a repeat or spontaneous basis?
Identify the target markets for your sport, team or athlete.

The marketing mix

The product has already been established in the exercises above. Work through the exercises below on the "other Ps".

Price
Exercise

What pricing strategies could you use?
What are your pricing goals? Is there market sensitivity to price? Do you want to maximise income or attendances?
Are there any constraints on pricing: laws, regulations, ethical issues?
Consider how the prices for tickets to the Olympic Games were set. Were they high because of demand or were there factors such as the uniqueness or time dependency (once the Games were over, you wouldn't be able see them again)?

Place
Exercise

Describe the sport facility required for your sport.
What are the tangible and intangible benefits of your facility? Consider seating, view, toilets, food and drink outlets, service, access etc.

Promotions

This section covers a large range of areas and issues. They have been grouped together to aid your investigations.

Exercise

Positioning strategies	How is your "brand" (that is, sport, team or athlete) perceived by the consumers or target market? Are there any benefits of direct and indirect consumption of your sport? (e.g. if you follow Rugby League, your team may not be playing in the "match of the day" but you may choose to watch the game on TV; will you be influenced by the marketing strategies of your "competition"?)
Advertising	What are the common avenues used for advertising your product? How effective are they? How do sponsors advertise their product? What is "venue advertising"? Watch a major sporting event on TV and analyse the advertising, sponsorship recognition and general signage. Are advertisers getting value for their investment? How much would it cost to run a 30-second commercial during the NRL Grand Final?
Publicity and public relations	Is it important that your product gets free media coverage e.g. in the pages of a newspaper or on TV? When do sports have to go into "public relations" mode?
Personal selling	How do sports utilise athletes and sponsorship to promote the product?
Sales promotion	Identify some promotional activities that you could conduct at the venue. These may include give-away items (e.g. hats, drinks), competitions and tickets to future games.
Sponsorship and promotional licensing	These are the 2 large areas for sport. What is the role of sponsorship in your sport? How do teams and athletes service their sponsors? Can you name the major sponsors for the Olympic Games, Tennis Australia, the Wallabies or the Kangaroos? What items can be sold with logos? How can you build consumer loyalty through selling licensed products?

Budget

Exercise

Imagine that you are the financial adviser to your sport. Develop an imaginary budget to cover your marketing expenses. Include items like player salaries, gate receipts, sponsorship, revenue from sales, and the cost of advertising, promotions etc.

Marketing controls

Exercise

List the 3 types of organisational controls.
Devise some controls that you could use to ascertain the success of your marketing program. Consider on-field success, attendance, participation, sponsorship, customer surveys, market research etc.

Want to know more?

Links to marketing web sites

The web sites listed below are a small sample of sites that are available on the Internet. Students and teachers are urged to conduct their own searches in areas that interest them, such as your favourite sport or sports team, marketing theory, large businesses such as BHP, Microsoft, Apple Computer, or any of the sites offering on-line shopping.

Sites with good approaches to marketing include:

The Sydney Morning Herald for all the latest information, including the marketing page on Thursdays and Icon on Saturdays.

Amazon.com Earth's biggest selection the worldwide retailer of books, CD-ROMs etc.

Triple j triple j triple j web site for radio station Triple J

The village web site for Triple M

National Rugby League for the latest from the National Rugby League

Coca Cola the headquarters for Coke

American Express Australia home has some good business ideas

The small business site is the site for the Small Business Show, essential viewing for all students of business studies

BRW the Business Review Weekly site

Commonwealth Bank of Australia Ð try other bank sites too

Australian Olympic Committee for a wide range of information. Also has good educational materials on marketing.