Introduction to Marketing

What is marketing?

Marketing is the management process that identifies, anticipates and satisfies customer requirements profitably

The Chartered Institute of Marketing

The right product, in the right place, at the right time, and at the right price

Marketing is a social and managerial process by which individuals and groups obtain what they want and need through creating, offering and exchanging products of value with others

Kotler 1991

Marketing is the human activity directed at satisfying human needs and wants through an exchange process

Kotler 1980

For an exchange to occur..

There are at least two parties. Each party has something that might be of value to the other party. Each party is capable of communication and delivery. Each party is free to reject the exchange offer. Each party believes it is appropriate or desirable to deal with the other party

What is Marketed?

Goods Services Events Experiences Persons

Places Properties Organizations Information Ideas

Key Customer Markets

Consumer markets Business markets International Markets/Global markets Nonprofit/Government markets

Evolution of Marketing

Production Era Sales Era Marketing Concept Era Societal Era

1. Production Orientation

Focuses on internal capabilities of firm. Field of Dreams strategy

If we build it, they will come competition is weak demand exceeds supply generic products competing solely on price

Best used when

Problem is that they dont understand wants/needs of marketplace.

2. Sales Orientation

People will buy more goods/services if aggressive sales techniques are used. High sales will result in high profits. Used with unsought products

life insurance encyclopedias

Problem is that they dont understand wants/needs of marketplace. I can sell everything, if I know how to sell it

3. Marketing Orientation
Marketing concept The social and economic justification for an organizations existence is the satisfaction of customer wants and needs, while meeting organizational objectives.

3. Marketing Orientation . . .

Focusing on customer wants so the organization can distinguish its products from competitors . Integrating all the organizations activities, including promotion, to satisfy these wants. Achieving long term goals for the organization by satisfying customer wants and needs legally and responsibly.

3. Marketing Orientation . . .

Requires:

Top management leadership A customer focus Competitor intelligence

strengths weaknesses

Interfunctional coordination to meet customer wants/needs and deliver superior values.

4. Societal Marketing Orientation

Organization exists not only to satisfy customer wants/needs and to meet organizational objectives, but also to preserve and enhance individuals and societys long-term best interests. Extends marketing concept to serve one more customer - society as a whole.

Differences between Sales & Marketing Orientations

Production/Sales Focus

Marketing Focus

Organizations needs Producing/Selling goods/services Everybody Profit through max. sales volume Intensive promotion

Customers needs Satisfying customer wants/needs Specific groups of people Profit through customer satisfaction Coordinated mktg. activities (4 ps)

Marketing Philisophies
Orientation Production Key Ideas Focus on efficiency of internal operations if we make it, they will buy it

Sales
Marketing

Focus on aggressive sales techniques and believe that high sales result in high profits
Focus on satisfying customer needs and wants while meeting objectives - if they will buy it, we will make it Focus on satisfying customer needs and wants while enhancing individual and societal well-being. I.e.-mfg using recyclables

Societal

Relationship Marketing

Forging long-term partnerships with customers and contributing to their success. Companies benefit from

repeat sales/referrals that lead to increases in sales, market share and profits, and decreased costs - its less expensive to serve existing customers than attract new ones.

3. Relationship Marketing. . .

Customers benefit from:

stable relationships with suppliers (especially in business-to-business) greater value and satisfaction discounts, (frequent flyer programs, shopper clubs, etc.)

3. Relationship Marketing . . .

Successful relationship marketers have:

customer-oriented personnel effective training programs employees with authority to make decisions and solve problems teamwork

Marketing Mix and the Customer

Four Ps Product Price Place Promotion Four Cs Customer solution Customer cost Convenience Communication

Core Concepts

Needs, wants, and demands Target markets, positioning, segmentation Offerings and brands Value and satisfaction

Marketing channels Supply chain Competition Marketing environment Marketing planning

Implications of marketing

Who are our existing / potential customers? What are their current / future needs? How can we satisfy these needs?

Can we offer a product/ service that the customer would value? Can we communicate with our customers? Can we deliver a competitive product of service?

Why should customers buy from us?

Successful marketing requires

Profitable Offensive (rather than defensive) Integrated Strategic (is future orientated) Effective (gets results)

Marketing management process

Analysis/Audit - where are we now? Objectives - where do we want to be? Strategies - which way is best? Tactics - how do we get there? Implementation - Getting there Control - Ensuring arrival

CONTROLLABLE FACTORS AFFECTING MARKETING DECISIONS

The Four Ps -the arrow

Place Product

Price Promotion

UNCONTROLLABLE FACTORS AFFECTING MARKETING DECISIONS

Social Natural Economic External Environmental Factors Technologic

Political and Legal Competitive

Helps identify market opportunities

Marketing Environment

All the actors and forces influencing the companys ability to transact business effectively with its target market

Market Environment

Includes: Microenvironment - forces close to the company that affect its ability to serve its customers. Macroenvironment - larger societal forces that affect the whole microenvironment

Demographic
Company

Cultural
Public

Economic Company
Suppliers Customers

Political

Competitors

Natural

Intermediaries

Technological

The Companys Microenvironment

Companys Internal Environment- functional areas such as top management, finance, and manufacturing, etc. Suppliers - provide the resources needed to produce goods and services. Marketing Intermediaries - help the company to promote, sell, and distribute its goods to final buyers.

Customers - five types of markets that purchase a companys goods and services. Competitors - those who serve a target market with similar products and services. Public - any group that perceives itself having an interest in a companys ability to achieve its objectives.

The Companys Macroenvironment

Demographic - monitors population in terms of age, sex, race, occupation, location and other statistics. Economic - factors that affect consumer buying power and patterns. Natural - natural resources needed as inputs by marketers or that are affected by marketing activities.

PEST analysis

Political factors Economic factors Socio-cultural factors Technological factors

Political/legal

Monopolies legislation Environmental protection laws Taxation policy Employment laws Government policy Legislation

Economic Factors

Inflation Employment Disposable income Business cycles Energy availability and cost

Sociocultural factors

Demographics Distribution of income Social mobility Lifestyle changes Consumerism Levels of education

Technological

New discoveries and innovations Speed of technology transfer Rates of obsolescence Internet Information technology

Technological - forces that create new product and market opportunities. Political - laws, agencies and groups that influence or limit marketing actions. Cultural - forces that affect a societys basic values, perceptions, preferences, and behaviors

Marketing Plan

Market Analysis Company Analysis Determining the Goals Determining the Strategies Determining the Tactics Control

Market Analysis

Customer Analysis

Segmentation Motivation Unmet Needs

Market Analysis

Competitor Analysis

Who are our competitors (Rivals)? What advantages do they have? What are their goals? What are their strategies? What are their organizational structures? What are their strengths and weaknesses?

Market Analysis

Structural Analysis

Industrial analysis Actual and potential size of the industry Growth of the industry Cost structure of the industry Distribution structure of the industry Changes in the industry

Company Analysis

SWOT analysis

SWOT analysis

Strengths (internal) Weaknesses (internal) Opportunities (external) Threats (external)