Introduction to Marketing

Introduction to Marketing

What is marketing? ‘Marketing is the management process that identifies, anticipate and satisfies customer requirements profitably’ ‘The right product, in the right place, at the right time, and at the right price’

Contd ‘Marketing is the human activity directed at satisfying human needs and wants through an exchange process’ Kotler 1980 ‘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

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” Best used when competition is weak demand exceeds supply generic products competing solely on price Problem is that they don’t 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 don’t 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 organization’s 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 organization’s 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 society’s long-term best interests. Extends marketing concept to serve one more customer - society as a whole.

Differences between Sales & Marketing Orientations Production/Sales Focus Organization’s needs Producing/Selling goods/services Everybody Profit through max. sales volume Intensive promotion Marketing Focus Customer’s needs Satisfying customer wants/needs Specific groups of people Profit through customer satisfaction Coordinated mktg. activities (4 p’s)

Marketing Philisophies Orientatio Key Ideas n Productio n Sales Focus on efficiency of internal operations – if we make it, they will buy it Focus on aggressive sales techniques and believe that high sales result in high profits Marketing 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 Societal wants while enhancing individual and societal well-being. I.e.-mfg using recyclables

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 - it’s 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

The Marketing Mix The marketing mix consists of four basic marketing strategies known as the 4 P’s. Product Promotion Place Price

The 4 P’s of Marketing explained Product 1. Is there a demand for the product or service? 2. How to make the product appeal to consumer 3. Packaging— includes the design, color, size, and brand names Promotion 1. Making customers aware of a product 2. Advertising 3. Coupons 4. Rebates 5. Sales 6. Free give aways 7. Publicity Place Price 1. Distribution 1. How much is getting are the right customers product to willing to the right pay? place at the 2. Is the price right time in competitive the right with other amount and products? in the right 3. Can the condition company 2. Storage make a 3. Warehousing profit? 4. Transporting

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 P’s -the “arrow” Price Price Promotion Promotion Place Place Product Product

UNCONTROLLABLE FACTORS AFFECTING MARKETING DECISIONS Social Social Natural Natural Economic Economic External External Environmental Environmental Factors Factors Technologic Technologic Political Politicaland andLegal Legal Competitive Competitive Helps identify market opportunities

Marketing Environment All the actors and forces influencing the company’s ability to transact business effectively with it’s 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 Economic Cultural Public Political Company Competitors Suppliers Customers Intermediaries Technological Natural

The Company’s Microenvironment Company’s Internal EnvironmentEnvironment 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.

Contd. Customers - five types of markets that purchase a company’s 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 company’s ability to achieve its objectives.

The Company’s 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 Natura - 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 society’s 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)

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