lecture 1_fundamentals of marketing
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Transcript of lecture 1_fundamentals of marketing
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Course: Global Marketing
Lecturer: Mahreen Mamoon
Academic Year Fall 10/11
Lecture 1
Fundamentals of Marketing
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What is Marketing?
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Marketing is not concerned simply with selling andadvertising. This common misconception of
marketing only reflects one part of something knownas the Marketing Process
Chartered Institute of Marketing: Marketing isthe management process responsible for
identifying, anticipating and satisfyingcustomerrequirements profitably.
Philip Kotler (2005:12): Marketing meansmanaging markets to bring about exchangesandrelationships for the purpose of creating
value and satisfying needs and wants. American Marketing Academy: Is the process of
planning and executing the conception, pricing,promotion, and distribution of ideas, goods,services to create exchange that satisfies
individual and organisational goals
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Customer Needs, Relationships and
Exchange not just selling and adverts!
At the heart of modern marketing is the concept of
customer need
Theodore Levitt (Marketing Myopia, HBR 1960): products
and services are problem solvers that satisfy the needs ofindividual consumers
A consumer who enters a hardware store looking to buy a
inch drill actually needs a inch hole. Therefore the
company who is best able to fulfil this need will obtainoverriding competitive advantage
As a consequence of this marketing philosophy modern
organisations put customers and their needs at the centre of
their operations
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Two opposing marketing philosophies
Product Consumer (Production & Selling Concept)
Build a better mouse trap and the world will beat a
path to your door (R W Emerson)
Focus is on developing product and on selling it, noton consumer needs
Consumer Product (Marketing Concept)
Find out about customer needs and competition
(Market research, Market Segmentation, Positioning)
Product innovation follows changing customer needs
not the other way around
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The Production & Selling Concept in Marketing
Customers will prefer products that are widely
available and inexpensive
Strategy: cost reduction, product development, mass
production Focus: selling what company makes rather than what
market demands
Features: aggressive selling and promotion, uninspired
communication
Example:
Henry Ford any colour
providing its black
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The Marketing Concept
Vantage point: Customer Needs/Wants/Satisfaction
Adaptation of product according to changing
demands and delivering desired satisfactions more
effectively than competitors
Creating demands/desires/markets
Delivering BetterValue than the competition
(Competitive Advantage)
Societal Marketing
Concept: corporations also needto take wider societal welfare of
communities into account(environmental problems, global poverty,
shortage of raw materials)
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Core Marketing Concepts: Needs, Wants and
Demand
Needs, wantsand demands
Exchange, transactionsAnd relationships
Markets
Marketing offers
Values andsatisfaction
Needs can be defined ashuman states of deprivation
physical needs such as food
and warmth, individual needs
such as security or happiness
and social needs such as
status or acceptance.
Wants can be seen as the
form that human needs take
when they are shaped by
culture and individualpersonality (Desires).
Demands are wants that are
reinforced by the financial
power to realise them.
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Market offerings are what companies or individuals
offer to satisfy human needs or demands. They are
often described as value propositions bundles of
benefits which promise to satisfy needs and wants.
Products - BMW, Mobile Telephone, Sony PSP
Services - insurance policy, Barclays bank
account, operation on the NHS
Experiences - Club Med holiday, Tom Cruise Film,
Arsenal football match
Ideas - socialism, capitalist freedom, protest,environmental concerns
Marketers increasingly try to combine all three to
create powerful brands which offer meaning and
uniqueness
Market Offerings
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Customer Value and Satisfaction
Customer Value can be seen as the difference thebenefits the customer derives from owning or usinga product or service and the costs in purchasing it(money, time, effort). Benefits can be functional(rational) or representational (emotional).
Rational and emotional needs!
Customer Satisfaction is the perceivedperformance of a product relative to a customersexpectation. Quality, service, image are key factorshere.
In a competitive market environment the value,satisfaction and quality derived or promised fromone product e.g. a Mercedes - is relative to that ofanother e,g. a BMW or Lexus.
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The Marketing Process
Situation Analysis
Marketing Strategy
Marketing Mix Decisions
Implementation & Control
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The Marketing Process
Situation Analysis Examine the environmentwhich the company operates in both internal andexternal to find whether there is a current gap inthe market and whether the company is capable offilling this. Involves environmental scanning.
Marketing Strategy Once an opportunity to satisfyunfulfilled customer needs (a potential market) isdiscovered, market research will be required so asto target consumers, segment them into smaller
groups, position product in relation to price, qualityand competitors and create viable valuepropositions for the targeted markets.
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The Marketing Process
Marketing Mix Decisions formulation of detailedplans for the active marketing of the product. Thiswill include product specifications, pricing levels,distribution (or place) channels and promotioncampaigns. Each of these four elements must
interrelate and complement each other.
Implementation and Control Once the marketingplan has been completed the product is launchedand offered to the market. Constant feedback onthe market performance of the product should beestablished so as to facilitate change andadjustment in the marketing mix over time to ensurelong-term market success and dialogue withconsumers.
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The Marketing Environment
The marketing environment is comprised of theactors and forces outside marketing that affectmarketing managements ability to develop andmaintain successful relationships with its target
customers The constantly changing environment that
surrounds the market means that the customer product organisation relationship is never stable(Example: I-Pod)
The constantly changing nature of the marketingenvironment can be seen as a threat or anopportunity
The ever changing marketing environment regularlyenvironmental scanning
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The Marketing Environment
The Internal Environment consists of theemployees, groups, departments, divisions and overallstructure of the organisation. It also encompassesother intangibles such as organisational culture andethos.
The Micro-Environment incorporates the forcesclose to the company that affect its ability to serve itscustomers - the company, market channel firms,customer markets, competitors and publics (financial,media, governmental public, citizen groups), the overall
value delivery system. The Macro-Environment includes the larger societalforces demographic, economic, natural, technological,political and cultural forces. While the organisation isless able to influence these it should be able to adapt
to them especially in the medium to long-term.
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Environmental analysis
Shortages of raw materials such as oil and coal
Increased cost of energy
Increased pollution
Government intervention in natural resourcemanagement
Technological Environment: Fast pace oftechnological change; introduction of the internet
Political and Legal Environment: protectingcompanies, consumers, protecting the interests of
society; growth of public interest groups Cultural and Social Environment: shifts in cultural
values (body, marriage, sexuality,)
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Environmental Scanning
As an organisations environment is in constant fluxit should be constantly scanned for changes will
can impact on its market operations.
There are two standard ways of doing this:
SWOT analysis: Strengths, Weaknesses,Opportunities, Threats. This is often used to
examine the Microenvironment but does include
the Macro-.
PEST(LE) analysis:P
olitics, Economics, Social,Technological, Legal, Environmental