Marketing 506 Assignment 1 Marketing Models

Name: Jeremy Bodon Student ID: 43661602 The Apple Brand – Creating Value in Marketing and Customer Relationship Strategies Value in marketing refers to the “difference between the benefits the customer gains from having access to or owning and using an offering and the costs of obtaining it.” (Logman, 2013) Customers tend to attain a misconception of value, whereby judgements are made based on what customers think about a product and prior experiences with the product, a phenomenon referred to as perceived value. Hence, marketers must procure a positive perception of their product to customers, satisfying all elements of the marketing mix when delivering the intended value to target customers. Apple, for example, has acquired a public perception of innovation and nonconformity, through their implementation of effective product, pricing, promotional and placement strategies, in correspondence with satisfactory physical evidence, people and processes. In the contemporary market for consumergenerated content, Apple’s emphasis on product personalisation and creativity has created value for prospective and present customers, directly attributing to customer satisfaction, and hence, loyalty. The marketing mix is a set of marketing tools utilised in a marketing program which are used to implement its marketing strategy. In order to create value, organisations such as Apple have to identify consumer needs and wants, and then create a “need-satisfying market offering” in the form of a new product. Decisions on the pricing of the product must then be made, before determining the product’s domains of distribution (place). Then, marketers utilise communicative mechanisms to persuade customers into purchasing the product (promotion). Marketers must also take into account the extended marketing mix, with people shaping customer experience, processes ensuring customer satisfaction, and physical evidence persuading customers to purchase a product through appearance. Apple has utilised the creation of value through product positioning and branding in order to attain greater market share. Logman (2013) has noted that Apple, despite a perceived perception of increased product value, has smaller amounts of value in contrast with certain other competitors, as a result of the alternatives being cheaper, having replaceable batteries and offering enhanced features. However, as a result of public perception and product positioning, Apple is still highly regarded by consumers. Apple places significant emphasis on customer relationship management (CRM), citing that value is directly interrelated with customer satisfaction and loyalty, and the development of profitable customer relationships. One factor of customer satisfaction is the aforementioned concept of fair value, with consumers being satisfied if they believe the product is of fair value based on the price paid. Apple focuses on engaging consumers through customer managed relationships and consumer-generated marketing, empowering customers by their increasingly role in shaping their own brand experience. However, Logman has stated that Apple has been forced to suffer temporal inconsistencies in regard to product value when undertaking ongoing innovation strategies to satisfy customers. However, in the long run, Apple creates increased value for their customers through continuously updating and re-innovating products so as to maximise product satisfaction and increase profitable customer relationships. In summation, Logman reiterates that Apple’s primary mechanism of creating value is through the marketing mix, highlighting that through Apple’s thorough research and development and subsequent product quality, that “price was never an issue for apple buyers.” Such has been evidenced through the 2012 product implementation of the iPod mini, which was over “$100 more expensive than Google’s competitive product Nexus 7.” (Logman) Apple’s creation of value through the marketing mix, public perception and product positioning has allowed for the maintenance of market share despite inflated prices. Apple’s customer orientated marketing invokes customer satisfaction, and consequently, customer loyalty, ensuring profitable customer relationships. Reference (Journal Article): Logman, M., 2013. Limits to growing customer value: Being squeezed between the pat and the future. Business Horizons, 56 (5), 655-665. Name: Jeremy Bodon Student ID: 4366 1602 Market Research Market research refers to the procedure of systematically collecting, recording and analysing information. Market research can allow for the fundamental collection of student insights regarding their needs, wants and understandings. This report comprises the market research processes that can be utilised to decipher students’ perception of their first year experience at Macquarie University. The preliminary process involved in market research is to define the research objectives. This report fundamentally endeavours to determine student’ perceptions of their first year at Macquarie University. Subsequently, the first step of the marketing research process – determining information needs - is undertaken. The information essential to this report incorporate general contentment rates and the reasons for satisfaction/dissatisfaction. The second step of the marketing process necessitates the collection and analysis of data. Data may be collected through primary or secondary sources. Primary data are the figures collected from original sources. Pitkethly and Prosser (2001) elucidate that first year perceptions are dependent on strategies employed by the university to maximise adjustment capabilities of the students. Primary methods of data collection, particularly in the form of the research and contact approach, are the most appropriate forms of data collection in this case, as direct opinions of students must be retrieved through qualitative observations. By means of the research method of data collection, ethnographic and surveying research mechanisms must be employed to accumulate student perceptions of their first year experience. Ethnographic research involves directing observers, potentially trained psychologists and sociologists, to interact with and observe students on campus. Ethnographic research allows personal observation, a significant positive that allows the direct collection of data through qualitative measures, deciphering whether students are satisfied with the strategies employed to assist adjustment, with adjustment cited by Pitkethly and Prosser as being central to a satisfying first year experience. The survey approach to research involved the congregation of primary data through interviews and questionnaires, while the contact method involves information collected through mail, telephone, personal interviews or online. The survey and contact approaches foster insight through direct student opinions, being advantageous due to their fast and flexible nature. Alternatively, such methods may be negatively connotative to students as private information may not want to be disclosed, and some students may not have thought out the questions. In addition to primary data collection, secondary data collection, in the form of the accrual of internal retention rates, provide a quantitative insight with easy accessibility and low costs into student perceptions of their first year experience. Questions through survey and contact approaches must be streamlined and direct, fostering insight into the broad consensus of Macquarie University’s first year initiatives. Questions that should be asked include: What aspects of your first year at Macquarie University were you satisfied/ dissatisfied with? What improvements can be made to the University’s first year program? Did the academic orientation initiatives help you adjust to University? Once data is collected, the third step of the market research process must be expounded; the interpretation of data. As Pitkethly and Prosser specified, approximately one third of students entering university fail to graduate, and approximately half of those do so in their first year. Thus, through statistical interpretation analysis on the basis of deviations or correspondence with nationwide retention levels after the first year, and interpretation of qualitative primary research obtained through surveying and contact, the perception of first year students at Macquarie can be roughly garnered. In essence, through the identification of information needs, data collection, and the subsequent interpretation of such data, students’ perceptions of their first year experience at Macquarie University can be ascertained. Through a predominantly primary method of data collection, in unison with internal retention rates, as per secondary methods of data collection, improvements to Macquarie University’s first year experience can be made on the basis of students’ holistic satisfaction. Reference (Journal Article): Pitkethly, A. & Prosser, M., 2001. The First Year Experience Project: A model for university-wide change. Higher Education Research & Development, 20 (2), 185-198. Jeremy Bodon Student ID: 4366 1602 The Consumer Decision Making Process The consumer decision making process refers to the ‘problem-solving activity in which consumers move through a series of stages in order to solve a problem.’ (Mowen, 1988) There are 5 fundamental stages pertinent to the buyer decision process: Problem recognition; Information search; Evaluation of alternatives; Purchase decision; Post-purchase behaviour. (Kotler et al. 2013, p. 204) The process commences prior to the purchase of a product, and concludes long after, with numerous factors affecting consumer behaviour, including situational, group and individual factors. The recent non-habitual purchase – purchases that are made relatively infrequently, typically requiring high involvement – of choice I choose to elaborate on is my HP Pavilion 15 inch Notebook (laptop). There are a multitude of factors that may influence consumer behaviour at all stages in the decision making process. Situational factors are ‘temporary conditions that affect how buyers behave,’ (Tanner Jr. & Raymond, 2013). Group factors are the influences on a person relevant to particular groups in which they are part of. Individual factors are the personal characteristics influences consumer behaviour, including age, occupation and lifestyle. The consumer decision making process inaugurates with problem recognition, the process of recognising a problem or need. My purchase of the laptop was consequential of external stimuli, resultant of my old laptop becoming defunct and unusable. Individual factors were the principal contributor to my acknowledgement of a new laptop, primarily in regard to my occupation as a fulltime student, requiring me to utilise resources on the internet to optimise my educational capacity. Also, situational factors, in the form of entering a new university, procured an infrequent need. The next stage of the consumer decision making process constitutes an information search, whereby the consumer may search for more information if he is making a complex buying decision. The quintessential factor influencing my quest for information stemmed from personality, particularly in the form of self-conceptualisation. The self-concept and brand personality premise highlights that one’s possessions will directly contribute to their identities, procuring a ‘we are what we have’ (Kotler et al. 2013, p. 198) demeanour, resulting in me undertaking an information search for laptops representing professionalism. In correspondence, my individual economic situation required me to search for laptops within a reasonable price range, precisely below $1500. The third stage of the buyer decision making process is the evaluation of alternatives, the stage in which the consumer uses information to evaluate alternative options in the choice set. In actualising this process, I evaluated the positives and negatives of HP, Apple, Dell and Toshiba laptops. I happened to be influenced by group factors through my social group. As such, I metaphorically became part of an aspirational group of HP owners, a group in which an individual wishes to belong, enabling me to narrow down my search. Stage 4 of the consumer decision making process involves the eventual purchase decision, where the buyer actually buys the product. The main factor that affected this stage personality, chiefly in regard to openness. Considering I had only ever owned a HP laptop, I had inertia to change, and in collaboration with the factors that influenced the first 3 stages, I hence decided to choose the HP, principally considering it was on sale and coincided with my economic strictness. The final step of the buyer decision making process is post-purchase behaviour, whereby the consumer takes further action after the purchase based on their product satisfaction. I acquired notions of cognitive dissonance, feeling uneasy about the drawbacks of a HP, mainly the slower processor in comparison to the alternatives. However, through a pastiche of individual, group and situational factors such as such as self-conceptualisation (professionalism), aspirational grouping and entering a new university respectively, the negatives of the HP were presupposed by the positives.    References: Kotler, P, Suzan, B, Deans, K, Brown, L, Armstrong, G 2013, Marketing 9th Edition, Ninth edition, Pearson Australia, Frenchs Forest, NSW. Mowen, J.C., 1988. Beyond Consumer Decision Making. Journal of Consumer Marketing, 5 (1), 15-19. Tanner, J, Raymond, M.A 2010, Principles of Marketing, Second edition, Flat World Knowledge, Randolph, New Jersey. Name: Jeremy Bodon Student ID: 4366 1602 Market Segmentation Market segmentation alludes to ‘dividing a market into groups of buyers who might require separate products or marketing mixes.’ (Kotler et al. 2013, p. 246). The principal variables in which markets are segmented by include geographic, demographic, psychographic, and behavioural segmentation – all which strategically allow businesses to achieve marketing needs more efficiently with products that match each market’s unique requirements. Dickson and Ginter (1987) expounded that contemporaneous market segmentation has advanced significantly, paying homage to increases in analytical techniques, such as identifying the most profitable market. Dickson and Ginter (1987) emphasized the advantageous nature of product differentiation to consumers. Product differentiation refers to differing one product from competitors through physical or non-physical features. Firms must coherently expound its market positioning, the arrangement for a market offering to occupy a distinctive place relative to competing products, in order to differentiate itself from competitors. Market segmentation occurs through the subdivision of four primary consumer markets. Geographic segmentation refers to the division of markets on the basis of location. The attached advertisement does not highlight any segmentation techniques pertaining to geographic segmentation, choosing to appeal to a wider range of geographic consumers. Demographic segmentation pertains to the division of the market founded on variables such as age, gender, income, occupation and religion. Although BMW does not precisely utilise this form of segmentation in their advertisement, it is of widespread belief that BMW has a holistic appeal to the wealthy. Hence, it can be deciphered that BMW segments the market utilising demographics on the basis of income. Behavioural segmentations are the division of a market based on a consumer’s knowledge, attitude towards, uses for and responses to a product. BMW expends marketing on highlighting benefits associated with purchasing their vehicles, promising a ‘new benchmark of design, performance and driving dynamics,’ all tangible benefits that may appeal to a customer seeking luxury and enjoyment. Finally, the most predominant aspect of market segmentation for BMW is that of psychographic means. This refers to the division of groups based on personality traits, social class or values. BMW comprehensibly positions its product as being the ‘ultimate driving machine,’ appealing to individuals who enjoy a luxurious lifestyle and people of upper social class, who generally choose higher-priced alternatives to excogitate their status. The attached advertisement highlights BMW promoting its new 3 series sedan. The large font which states ‘SUPERIOR BY EVOLUTION’ coerces a market positioning scheme incorporating the ‘morefor-more’ positioning strategy, which involves providing upscale products at higher prices. Dickson and Ginter (1987) stated that firms ‘attempt to increase the importance customers associate with a product attribute on which it has a competitive advantage,’ highlighting that BMW promote advanced engineering and road handling, as it is here where they have a competitive advantage. Differentiation is a vital aspect of gaining a competitive advantage. BMW positions itself as being of superior quality relative to competitors. They have achieved means of differentiation through two primary aspects; product and image differentiation. Product differentiation has been achieved through superior design, performance and driving dynamics. The advertisement promotes the product as being the ‘ULTIMAT3’ car to drive, a subtle reminder that rivals don’t contain equivocal abilities in regard to performance and dynamics. Also, people’s perceptions of BMW, have procured an image differentiation of BMW being superior to competitors, resulting in BMW embracing that notion, and hence, conveying a singular and distinctive message that communicates the product’s positioning. In essence, market segmentation is vital for the development of efficient marketing strategies, as evidenced by BMW, who utilise psychographic and behavioural segmentation to coerce marketing strategies, all which coincide with BMW’s differentiation devices, and resultant marketing position. References:  Kotler, P, Suzan, B, Deans, K, Brown, L, Armstrong, G 2013, Marketing 9th Edition, Ninth edition, Pearson Australia, Frenchs Forest, NSW.  Dickson, P.R. & Ginter, L.G., 1987. ‘Market Segmentation: Product Differentiation and Marketing Strategy.’ Journal of Marketing, 51 (2), 1-10. Student ID: 4366 1602 Name: Jeremy Bodon Servicescape Servicescape is a generic term to describe the physical surroundings – the physical features a customer can see – of a service orientated company. As deciphered by Reimer and Kuehn (2004), servicescape is equitable with physical evidence, and is a necessity in customer perception as it helps to “decrease information asymmetries” between different service providers, paying homage to the “lack of market transparency.” (Reimer and Kuehn, 2004) This concept essentially recognises servicescape as being a fundamental influence on customer perception, particularly as services have simultaneous production and consumption, and hence requires the customer to enter the physical landscape of the service provider before making a purchase decision. Wakefield and Blodgett (1996) identify three primary dimensions of the servicescape that influence customer perceptions and perceived quality: ambient conditions (noise, temperature, odour); spatial layout and functionality (layout accessibility, facility aesthetics, cleanliness); and signs, symbols and artefacts (signage, electronic displays). Individually, these dimensions help differentiate one organisation from another, and if the perceptions of these dimensions are positive, the firm will attain a competitive advantage. Facility aesthetics are a fundamental contributor to both attraction and retention of customers. Facility aesthetics simply refers to the internal and external appearance of an organisation, often influencing perception through offering an accessible cue to customers who seek ‘an information seeking shortcut.’ (Reimer and Kuehn, 2004) Customers frequently evaluate the exterior attractiveness of the facility prior to choosing a service provider. In addition, once inside the service facility, customers will subconsciously observe the facility’s interior, with both external and internal evaluations ‘apt to influence their (customers’) attitudes towards the place.’ (Wakefield and Blodgett, 1996) According to the study manifested by Wakefield and Blodgett (1996), facility aesthetics is the primary determinant of product perception, and thus, is of great importance to the strategic and functional role of organisations. The study highlighted that it is a common occurrence that customers form a first impression based on the appearance of the facilities. Therefore, facility aesthetics are crucial in creating and maintaining a positive customer perception, and failure to ensure the implementation of satisfactory aesthetics will result in a loss of ancillary sales, while losing customers who are reluctant to repatronise the service provider as a result of the poor aesthetic quality of the servicescape. Servicescape is incorporated in both the strategic and functional roles of organisations. Strategically, business often run on a customer-driven marketing strategy. Therefore, facility aesthetics must facilitate this notion, particularly in the form of providing and ensuring a welcoming and inclusive environment, so as to ensure customer satisfaction and hence, repeat sales, the core of all marketing plans. This method must be done utilising the three aforementioned dimensions of the servicescape. Methods must be incorporated into strategic plans and operations, creating a positive ambience around the organisation, while extrinsic facilities such as appearance and signage must engage prospective customers, and excogitate marketing mechanisms in a simple yet effective way. This is a fundamental reason as to why firms use signage and the development of a brand image. Instant recognisation of a brand image through observing external facility aesthetics is vital in enticing customers. Alternatively, small-to-medium enterprises with a small customer base must use engaging signage that appeals to one’s unconscious, and consequently encourages the individual to visit the store. Quintessentially, businesses must incorporate facility aesthetics within their strategic and functional roles, ensuring that aesthetics coincide with a customer driven marketing strategy, while also delivering attractive physical evidence, so as to coerce customers to come to the store. In essence, servicescape not only functions as an indicator for expected service quality, as it serves as a factor that also influences post-purchase perception in the form of customer evaluation of intangible dimensions. Thus, servicescape procures both a direct and indirect effect on customer perception, with variables such as facility aesthetics impacting customers’ perception of a particular organisation. References:  Reimer, A, Kuehn, R, 2004. ‘The impact of servicescape on quality perception.’ European Journal of Marketing, 39 (7), 785-808.  Wakefield, K, Blodgett, J, 1996. ‘The effect of the servicescape on customers’ behavioural intentions in leisure service settings.’ Journal of Services Marketing, 10 (6), 45-61.


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