Chapter 1 The Field of Marketing

Copyright 2007 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing: A Practical Approach 6/e by Peter Rix

Slides prepared by Angela Tasevski1–1

Chapter 1

The Field of Marketing



Nature and scope of marketing

• Marketers:– Centre on attempts to understand consumers.– Seize an advantage over competitors.– Gain a foothold in a market.– Satisfy consumers.



Who and what is marketed?

• Marketing is diverse and complex and involves all of us through:– physical goods—clothes, machines, DVDs.– services—banks, theatres, health insurance.– ideas—’Clean Up Australia’, road safety.– people—Cathy Freeman, Barry Humphries

(people are a marketable product or brand).– places—Daintree Forest, a new business

estate.– experiences—travel, yoga.



Marketing defined

• Marketing can be described as any exchange activity intended to satisfy human needs or wants.

• Marketing is a system of business activities aimed at achieving organisational goals by developing, pricing, distributing and promoting products, services and ideas that will satisfy customers’ wants.



Needs, wants and exchange

• Needs— basic feeling of deprivation.• Want—the particular forms a need might take.• Exchange—offering something of value in

return for something else of value.



Production stage

Salesstage

Marketingstage

Societal marketing stage

The stages in the evolution of marketing



The evolution of marketing

• Typical thinking of the 1930s.• Focus on increasing production.• Production and engineering staff have control of

the organisation; there is a sales department but its function is simply to sell the company’s output at a price set by the production and financial managers.

The production-orientation stage



The sales stage

• Typical thinking from the 1930s–1960s (post-depression Australia)– The firm’s emphasis is on selling its output.– There are many similar products on the market.– This was the age of ‘hard sell’ (door-to-door

sales)– Supply usually exceeded demand.



The marketing-orientation stage (1960s)

• The firm’s goals become customer orientated and profitable sales volume.

• Attention is focused on marketing and satisfying customer needs and wants rather than on selling.

• Activities that were previously not considered marketing come under the control or influence of marketing staff, such as packaging, inventory control, warehousing, delivery, and some aspects of product planning.



The societal marketing concept

• Marketers must act in a socially responsible manner.

• The external environments influence on a firm’s realisation that our natural resources are finite.

• Increasing emphasis on the management of human resources.



Marketing versus selling

• Marketing– Company finds out what the customer wants

and develops a product to satisfy those wants, while yielding a profit.

• Selling– A company makes a product and then uses

various selling methods to persuade customers to buy it.



The marketing concept

Marketing concept• All company planning and operations should be

customer oriented, focussing on satisfying customers’ needs and wants.

• All the marketing activities in a firm should be coordinated and consistent.

• Customer-oriented, coordinated marketing activities are seen as the means of achieving the firm’s own objectives.



Three requirements for implementing the marketing concept

Marketing conceptCustomer orientation

Organisation’s performance objectives

Coordinated marketing activities

+

+

+Customer satisfaction

Organisational success



Marketing developments

• The marketing concept is not a static principle for business management. As the world changes, so too does the way in which the way marketing concepts are applied to organisations.

For example:• loyalty marketing schemes• value adding• mass customisation.



Relationship marketing

• Loyalty marketing schemes—customer rewarded for continuing to buy from the organisation.

• Value adding—increasing customer satisfaction by providing extra goods and services over and above the basic product being offered.

• Mass customisation—increasing the practice of developing many variations in a firm’s offerings.



Quality and marketing

• Reducing product quality variability.

• Increasing responsiveness to changing customer needs.

• Reducing costs through less wastage or reworking.



Fast changing technologies in marketing

Marketing uses different technologies to achieve its aims, such as:

• Relational databases that can store and sort large amounts of information.

• Communication technologies, such as telemarketing call centres, email and SMS (text messaging).

• The Internet—online retail, banks, insurance firms, supermarkets etc.



Globalisation

• Many markets are no longer limited by national or regional borders or boundaries. The speed of this trend for globalisation has been driven by international travel, global music, TV and movie distribution and, of course, the Internet.



Criticisms of marketing (some examples in terms of the elements of the marketing mix)Product Possible criticisms

Quality MP3 players do not work; clothes shrink; software programs have bugs.

Packaging Not enough information on labels; deceptive graphics; poor operating instructions.

Services Service is slow or uncaring; repair services are overpriced.

Range Too many brands or varieties with few real differences.



Criticisms of marketing (continued)

Price Structure

Possible criticisms

Levels Prices are too high; prices are controlled by large firms; price comparisons are difficult to make.

Discounts Quoted discounts are not genuine: some buyers are not able to get special deals: little real price competition between firms.



Criticisms of marketing (continued)Distribution system

Possible criticisms

Intermediaries Too many ‘middlemen'; each taking a ‘cut’.

Delivery Inflexible and slow: lack of care in storage and handling.



Criticisms of marketing (continued)

Promotional activities

Possible criticisms

Personal selling

Too many ‘middlemen'; each taking a ‘cut’

Advertising Inflexible and slow: lack of care in storage and handling.

Direct and digital marketing

Customers details are on lists without their permission; telemarketers phone at inconvenient times; mobile phones and PCs are flooded with annoying email and text promotions.



Marketing management



The planning sequence



The marketing mix

• The four key elements of marketing are referred to as the ‘marketing mix’.

• These elements are: Product, Price, Promotion and Place (distribution).

• These elements, also known as variables, are controllable by marketers and are the key to attracting a specific target market.



Marketing planElements of the marketing plan are:• Situation analysis—analysis of trends or changes in

the firm’s external environment; analysis of the specific market; analysis of competitors, analysis of the company/product situation, strengths and weaknesses.

• Marketing objectives—development of clearly expressed statements of what the plan is to achieve.

• Market segmentation, targeting and positioning strategy—identify groups of people or organisations to direct marketing strategies to, select a particular image to be used for the product or brand.



Marketing plan (continued)

• Marketing mix—develop specific, tactical action plans for the product, its pricing, distribution and promotion.

• Budgets and marketing controls—prepare forecasts of sales, costs, expenses and profits, prepare other measurements or metrics to be used to check actual performance against marketing objectives.



The marketing mix

Chapter 1 The Field of Marketing

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