HSC Marketing Topic 2

The strategic role of marketing refers to the execution of a market plan to increase sales and therefore revenue, enabling a business to achieve profit maximisation

CLIMB:
Corporate social responsbility - the open and accountable business actions based on the respect of society and the broader environment.
Legal Compliance - to meet and exceed legal requirements in regard to the markets
Increase sales - Increase income via enticing customers to purchase and repeat purchase
Market share - the portion of a market controlled by a particular company
Brand awareness - the extent to which customers are familiar with a brand/your product

The production approach almost entirely focusses on the efficient production and sale of goods and services in order to satisfy demand.
This approach was in response to the onset of the Industrial Revolution.

Used from the 1820's to 1920's

The selling approach refers to the sales orientated aproach to marketing due to increased compeition post WWI, where businesses couldnt sell all of their output so had to use advertising to create demand.

Used from the 1920's - 1960's

The marketing approach was established post WWII where businesses began to focus on the needs and wants of customers, creating a customer centred marketing approach with the aim of satisfying customers. This was done via market research and the generating of the relevant g+s

Used from 1960's - Currently

Resource Markets
Industrial Markets
Intermediate Markets
Consumer Markets (mass/niche)

Resource markets consist of those individuals or groups that are engaged in all forms of primary production, such as mining and agriculture

Industrial markets consist of industries and businesses that purchase products to use in production processes. Eg; Car/televison Manufactures and/or bakeries

Intermediate markets consist of wholesailers and retailers who purchase finished products and then resell them. Eg: Wholesalers, fruit and vegetable markets and leasing companies. (car rental)

Consumer markets consist of individuals that purchase and consume products
- Mass markets are products that appeal to majority of customers and are mass-produced. Eg: Milk, bread
- Niche markets are highly specific, targeted micro-markets in which more specialised g+s are sold. Eg; Ferrari and womens weekly

'Feck'
Factors influencing customer choice
Ethics
Consumer Laws

Customer choice or buying behaviour refers to the decisions or actions of customers when they search for, evaluate, select and purchase products

PEGS
Psychological Factors
Economic Factors
Government Factors
Sociocultural Factors

Internal influences that affect an individuals buying behaviour. (LAMPS)
- Learning: chnages in buying behavior due to informtation and prior experience
- Attitude: overall feeling of a business based on previous experiences
- Motives: the reasons for buying a g+s (health, taste etc)
- Perception: the customers opinion of a product
- Self Image: how the customer views themselves

Economic factors refers to the influence of the general economic trends as well as the socioeconomic status of individuals
- Eg: income levels, unemployment, interest rates

Government factors relate to the influence of government in their legislation and regulation of consumer markets.
- Eg: Governments may stimulate/slow down economy

Sociocultural factors are external factors that affect the customers buying behaviours, including, social class, culture and peers/family

Consumer laws are concerned with protecting consumer rights through creating a unified set of expectations of business behaviour in markets. The Australian Consumer Law is enforced by the ACCC and businesses must be legally compliant in order to avoid legal implications/consequences. The ACL prohibits all/any cases of; deceptive and misleading advertising, price discrimination, implied conditions and warranties.

WIPD ('Whipped')
Warranties
Implied condtions
Price Discrimination
Deceptive and misleading advertising

Deceptive and misleading advertising as the name suggests is unfair amd false business behaviour such as overstating benefits or offering disocunts/sales that dont exist

- In 2015 the ACCC found that mcdonalds was not displaying the kj content for each item on their menu and thus mcdonalds swiftly avoided a fine by changing displays

The act of setting and charging different prices for the same product in different markets. Businesses often set prices higher in more wealthy geographical areas as it is believed they would be able to afford and pay the price

- In 2017 the Daily telegraph reported differing coffee prices across fiferent McCafe's, where chatswood was \$3.95 and Emu plains in the west was \$4.75 for the same item.

Implied condtions are the unspoken and unwritten terms of a contract which grants that products are fit for purpose. For example, the implied condition of buying a Mercedes AMG is that it will be highly reliable and will retain its horsepower over the years, but buying a second hand $300 car does not have such implied conditions.

Warranties are promises made by businesses in which promise to correct any defects in the G+S they deliver. Terms of a warranty must be clearly stated and honoured when the conditions are met.

For example, businesses are legally required to give a refund if the G+S is faulty or does not meet the implied conditions

TAPES
- Truth,
- Accuracy and good taste in advertising
- Products that may damage health
- Engaging in fair competition
- Sugging

Ethics refers to societies expectations of what is right and wrong and the expectations of others to act in a morally acceptable manner

Refers to how advertising must not make exaggerated claims (puffery), contain untruths/concealed facts and must be of appropiate nature. Eg; Womens cosmetics promising younger skin or protection against ageing. Whilst good tatse is highly subjective, its generally the same between cultures, for example degrading women in an advertisement about kitchen appliances is considered poor taste.

Products that may damage health are those that raise health concerns as medical professionals see the potential of the product to damage an individuals health.

Eg: Fast food is a major contributer to Australia's obesity crisis and thus Mcdonald's Australia has openly worked with qualified dieticians to improve the nutritional value of their menu, such as reducing their sugar in their signature cheese by 20% and the sodium content in buns by 5%.

Fair competition is upheld by the ACCC as they prohibit in anti-competitive behaviour such as exclusive dealing, misuse of market power (woolworths) and predatory pricing.

Eg: Mcdonalds was judged to be targeting and abusing children through advertising as they would advertise toys rather than food in an attempt to entice children. Since this, Mcdonalds has created an action plan which sets out to only advertise or market foodeverages to children under the age of 14 to eliminate any unfair competition complaints and better its public relations and thus assist in the achievement of marketing objectives

Selling under the guise of research. For example disguising market research/surveys as an attempt to sell or gather information.

S - Situational analysis (SWOT and product lifecycle)
M - Market research
E - Establish marketing objectives
I - Identify target market(s)
D - Develop marketing strategies
I - Implement, monitor and control

Situational analysis provides a precise understanding of the businesses current position and where it was heading

A study undertaken by a business to identify its internal strengths and weaknesses, as well as its external opportunities and threats.

Strengths: Brand image, market share, McCafe's Success (1st in market) and brand partnerships
Weaknessess: Employee satisfaction, Negative meida portrayal and Nutritonal value
Oppurtunities: Increased demand for healthier more premium menu options
Threats: Increasing competition, Negative media perception

Allows businesses to develop informed strategies, in regards to business oppurtunities and minimise and react better to external threats.

Gives an idea of where a businesses product lies and the stage of its success
- Introduction stage: Where businesses try to increase consumer demand and build market share
- Growth stage: Brand emergence and acceptance as the market share increases
- Maturity stage: The realisation of potential business challanges as sales begin to slow
- Post maturity stage: a business can either decline, renewal or continue at a steady state

Renewal - Increasing sales and revenue through exploiting new growth areas with a primary focus on what consumers are currently demanding

Steady state - Business neither declines nor grows as it continues to operate at the level it has, relying on what was previous successful

Decline - Sales begin to decline and profits fall reuslting in business failure

The steady sales of MA indicate its in the maturity phase of PLC and thus must carefully monitor the sales of individual items to ensure that decline isn’t occurring. Previous renewal success for MA includes the addition of ‘value offerings’ in 2016 which resulted in a 5% increase in same-store sales. PLC gives MA awareness of where a product is, assisting with decision making processes.

PLC gives a business awareness of where a product is, assisting with decision making processes. For example, PLC could indicate whether to launch, modify or discontinue a product depending on its success and ROI.

Market research is the systematic proccess of collecting, recording and interpreting information, determining information needs concerning a specific marketing plan from a range of primary and secondary sources

Primary data are the facts and figures collected from original sources such as within the business or by yourself
+ can be sure of the reliability and validity
- can be time consuming
EG: Surveys and focus groups

Secondary data is that already collected by other people
+ a large sample can be gathered quickly
- cannot be sure of the reliability and validity
EG: Research reports and the ABS

MA collected primary qualitative and quantitative data in its ‘Project discover’ campaign in 2005, involving 35, 2 hour interviews and 2602 telephone interviews. From these primary data initiatives, MA identified a common concern in the health of their products, translating into a menu change with a range of newer and healthier food options, such as salad ranges and grilled chicken burger options.

grants greater insight into the minds of customers and their feelings about a businesses products, enabling them to create informed marketing strategies which correspond with what the market is currently demanding.

Involves determining and identifying the realistic and measurable goals to be achieved through the marketing the plan (CLIMB)

This is achieved via a customer centred approach where customer services and the design of the product mix to meet what the consuers are currently demanding is most important.

To increase sales in restaurants by 2-3%

To increase market share from 19.5% to 22%

A target market is the set of customers sharing common needs and wants that a business intends on selling to. Target markets are be primary, secondary and niche

A Primary market is the market segment where most of the marketing resources are directed

A secondary market is the market segment that is usually smaller and less important

A niche market is a concentrated, narrowly selected and highly specific target market.

The process of dividing the total market into distinct subgroups of buyers who have different needs, characteristics, or behaviors. Following this a business selects the most appropriate market to be the target market.

Marketing strategies are actions undertaken to achieve the business marketing objectives through the marketing mix

The marketing mix is the combination of elements used by a business to enable it to meet the needs and expectations of customers. It includes Product, Place, Price, Promotion.

Products are good or services that can be offered to satisfy consumers needs and it incorporates the actual product design and its features. For example, quality, design, packaging/labelling and brand name

Price refers to the amount of money a customer is prepared to pay in exchange for a g+s and it involves determining the 'correct' price for a good or service. EG: above, at or below its competitiors

Promotion is the methods used by a business to inform, persuade and remind its target market abouts its products. EG: advertising, personal selling

Place refers to the activities that make products available to customers and the way a business gets their products to the customer. For example the use of retailers or wholesalers

Implementation is the process of putting the marketing strategies into operation

Monitoring is the process of measuring actual performance against planned performance

Controlling is the process of comparing planned and actual performance and taking corrective action on the respective criteria to ensure objectives are attained.

Implementation, monitoring and controlling (M+C) involves developing a financial forecast, comparing actual and planned results and revising the marketing strategies by taking corrective action to ensure objectives are attained

In October 2018, MA gathered information from M+C which indicated that there was success in its gourmet range and thus increased demand for a more luxury, premium product. Using this, MA revised their marketing strategy by introducing new burger options, including the BBQ Bacon lovers. Post-launch, the burger underwent further M+C to ensure it was achieving its planned results and continuing to be a profitable product

A financial forecast is a businesses predictions about the future. It involves revenue forecasts and expected expenditures.
Step 1: Cost estimate (How much is the marketing plan expected to cost?)
Step 2: Revenue estimate (How much revenue is the marketing plan expected to generate)

- Sales analysis (comparing sales with forecasted sales)
- Market Share analysis (comaparing marketing efforts to those of its competitors)
- Marketing Profitibility analysis (the effectiveness of each marketing strategy in generating profit)

The 4p's + PEG
- Product
- Price
- Promotion
- Place (channels of distribution)
P
- People
- Processes
- Physical evidence
E
- E-Marketing
G
- Global marketing

The process of developing and promoting differences between the businesses products and those of its competitors.

Products are goods (tangible) or services (non-tangible) that are offered in exchange for the purpose of satisfying the consumer need/want. Product involves the physical product and its features but we specifically look at:
- Branding
- Packaging

Branding is a name, term, design or any combination of these things that identifies a specific product and distinguishes it from its competition.

Effective branding allows businesses to gain repeat sales, introduce new products more successfully and encourage customer loyalty.

Effective branding allows consumers to easily identify specific products, gain a sense of trusteassurance with a brand's products and gain a psychological award (style ➡️buying a brand with prestige eg; gucci)

Mcdonalds is the most recognisable fast food chain in the world, in part due to its logo. The 'golden arches' or the letter M on the red background has been critical in ensuring brand visibility.

Packaging involves the development of a container and the graphic design for a product. Effective packagaing should: PAPADM
- Preserve the product
- Attract customers
- Protect the product from damage
- Assist with product display/aesthetic
- Divide the product into convenient units
- Make transportation/storage easier and more convenient

Mcdonalds aims to balance the environmental aspects of packaging with functionality, cost and availability of materials.
- In 2020, Mcdonalds Australia was one of the first restaurant groups to eliminate single-use plastic straws and cutlery nationally.
- In 2021, 87% of packaging contained renewable, recycled materials

Price inclduing pricing methods simply involves determining the 'correct price' for a good or service to be sold at. These prices differ in relation to a businesses objectives and competition.

Pricing methods include, cost-based pricing, market based pricing and competition based pricing.

Cost-based pricing is a pricing method derived from the cost of production or purchasing the product, then adding a mark-up.

Market-based pricing is a method of setting prices according to the interaction between levels of supply and demand. Whatever the market is prepared to pay Eg: Ski lodges

Competition-based pricing is where the price covers costs and is comparable to the competitors price. For example, above, equal to or below that of its competitors.

Mcdonalds uses the cost-based approach as they are a cost leader and can afford to deliver low prices for high-quality products.
- In 2022, Mcdonalds did however raise their prices in response to increasing inflation

Price Skimming
Price Penetration
Loss Leaders
Price Points

Occurs when a business charges the highest possible price for the product during the introductory stage of its life cycle.

- Mcdonalds charged \$4.95 for the frozen coke in 2013 when it was first released

Occurs when a business charges the cheapest or lowest possbile price that still grants a profit for a product in an attempt to achieve a larger market share.

- Mcdonald's 'loose change' menu features some products that are sold as cheap as possible to foster a sense of value and increase guest counts

A Loss Leader refers to seling products at or below the cost of production. This is commonly done by new businesses entering a market in an attempt to attract a customer base.

- Mcdonalds features some items on its 'loose change' menu such as soft serves in which cost more to bring to the market than they generate in profits. This is done as Mcdonalds understands it attracts customers and encourages further spending at their establishment in combination with its loss leader products.

Price Points is selling products only at certain predetermined prices in accordance to relatively stable demand, reflecting its target market.

- Mcdonalds employs price points through its soft drink, fries and sundae ranges to increase sales, through a perception of value. This predetermined price meets the needs of its consumers as those who wish to make a small purchase can still do so.

Simply refers to how products of superior quality are sold at higher prices and thus price fluctuates in accordance to quality

Mcdonalds for example has a gourmet burger range which is an example of a premium product, reflected in a premium price

Promotion describes the methods used to inform, remind and persuade a target market of a businesses products. Promotion involves; Advertising, Personal selling, Publicity/public relations and Sales promotion

Any paid form of a non-personal message and promotion through a mass medium

- Mcdonalds spends $83 million annually for its aggressive mass media marketing through television, bilboards and online marketing campaigns.

Marketing in which foccusess on ways to develop long-term relationships with individual customers to create customer loyalty by meeting the needs of customers on an individual basis, thereby keeping customers coming back.

- Mcdonalds has focussed on building a relationship with its customers through the MyMaccas App. The MyMaccas rewards point based system is a loyalty system which develops a long term and cost effective relationship between Mcdonalds and individual customers, translating to increased sales as 1 in 8 Australians have used the app in the last 90 days.

Publicity or Public relations is any free news about a businesses products and are those activities aimed at creating and maintaining favourable relationships between a business and its customers.

- Mcdonalds is a primary sponsership of global events like the FIFA World Cup or the Olympics. Other forms of publicity has been generated by Mcdonalds events such as Mchappy Day.

Sales promotion is the use of activities or materials as direct, short-term inducements to customers.

- MA sales promotions which are short-term, direct inducements to customers such as Macca’s Monopoly and ’30 days, 30 deals’, in-part, lead to the MyMacca’s app being the most downloaded app in 2022 which also corresponds to MA's market dominance and positive brand reputation.

The communication process involves a channel, word of mouth and usually an opinion leader who influence others. Customers are more willing to purchase a product if the businesses message is communicated via a respected and trusted channel such as by word of mouth or an opinion leader.

Opinion leader: highly respected and influential individuals (e.g. actors, athletes, best friends)

Word of mouth: people influencing each other in conversation, people tend to trust someone they know more than advertisements.

Distrubution channels or marketing channels are the routes taken by a business to get its product to the customer.
- Producer to customer
- Producer to retailer to customer
- Producer to wholesaler to retailer to customer

Distrubution channel choice refers to the number of outlets a firm chooses for its product. It includes intensive, selective and exclusive means of distrubution

Occurs when businesses wishes to saturate the market with its product. A customer can shop at local retailers and be able to purchase the product. EG: Milk, lollies

Occurs when a business only uses a moderate proportion of all specific outlets. Customers are prepared to travel and seek out a specific retail outlet that stocks a certain product. EG: Ryobi machinery sold at bunnings

The use of only one retail outlet for a product in a large geographic area. Commonly used for expensive, luxuary goods such as Rolex or Cartier.

Physical distrubution is all those activities concerned with the efficient movement of products from the producer to the customer. Issues arise surronding transportation, warehousing and inventory control

Mcdonalds has an intermediary in Martin Brower who stores goods from its suppliers. Martin Brower prevents physical distrubution issues from arising due to its effective use of distrubution centres where products are readily available.

Mcdonalds has an agggresive growth strategy with approximately 1034 stores in Australia, employing an intensive distrubution channel choice

The Marketing mix (product, price, promotion place) has three additional P's which apply particular to intangibles/services

The people element refers to the quality of interaction between the customer and those within the business who will deliver the service.

- Mcdonalds Employees are trained to be approachable, friendly and of expertise so they can attend to consumer concern which will imrpove customer service which translates to greater customer satisfaction

Processes refers to the flow of activities that a business will follow in its delivery of a service. Without a tangible product, processes must be highly efficient to achieve customer satisfaction

- Mcdonalds reduces wait times to under 3 minutes and has an efficient mobile ordering system

Physical evidence refers to the environment in which the service is delivered e.g. how staff look and act, shop layout, product packaging.

- Mcdonalds chains have a modern, clean and comfortbale interior decor, such as the renovation of thornleigh mcdonalds by 'Juicy Design'

Electronic marketing uses the internet to perform marketing activities. It involves webpages, email, SMS, blog, podcast, web 2.0 (social media, apps)

Mcdonalds has heavily invested in digital marketing to compliment their promotional strategies and target market.
- Mcdonalds uses online advertising via social media outlets and also personalised email communications to promote customer engagement and foster a relationship.

Market share of 19.5% (Situational analysis (strengths) and Price paragraph)
7% Increase in revenue in 2023 (Price linking sentence)
$83 million dollars annually on Marketing (needed for Promotion paragraph and Implementation, Montoring and Controlling paragraph) approximately 1034 stores in Australia QSR (Quick service restaurant) / Fast food industry market share of 54%

Marketing is concerned with persuading, informing and reminding potential customers of a businesses good or service, through the efficient use of a marketing plan and marketing strategies (OR Processes), to increase sales, and thus revenue, enabling a business to achieve its marketing objectives and profit maximisation. The Marketing Strategies (OR Processes) of ___, ___, ___ are extremely effective in the achievement of business goals if carefully implemented, monitored and controlled. McDonalds Australia (MA) is a leading fast-food franchise in Australia with a dominant QSR market share of 54% and approximately 1034 stores in Australia, thus it is crucial they continue to develop and create marketing strategies (OR Processes) that assist in the achievement of their business goals such as; to increase revenues by 2-3% and market share from 19.5% to 22%.

Global Branding
Standardisation
Customisation
Global Pricing
Competitive positioning

The worldwide use of a name, term, symbol or logo to identify the seller's products.

Standardisation: A global marketing strategy that assumes the way the product is used and the needs it satisfies are the same all over the world

Customisation: A global marketing strategy that assumes the way a product is used and the needs it satisfies are different between countries

How businesses coordinate their pricing policy across different countries.
- Customised pricing = charging different prices in different countries for the same product
- Market-based pricing = setting prices according to local market conditions

A marketing strategy that refers to how a marketing team can differentiate a company from its competitors. The position of the company depends on how the value it provides with goods and services compares to the value of similar goods and services in the market.