Marketing Lesson 1

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    MARKETING - Lesson 1

    AN OVERVIEW OF MARKETING

    DEFINITION

    According to the Institute of Marketing, marketing is the management process responsible foridentifying, anticipating and satisfying customer requirements profitably.

    Kotlers definition of marketing: the analysis, planning implementation, and control of programs

    designed to create , build, and maintain beneficial exchanges and relationships with target markets

    for the purpose of achieving organizational objectives.

    According to Theodore Levitt: The purpose of a business is to get and keep a customer.

    Marketing aims to decide what companies should do to achieve that purpose and then to ensure

    that it is done.

    The American Marketing Association defines marketing as: the process of planning andexecuting the conception, pricing, promotion, and distribution of ideas, goods, and services to

    create exchanges that satisfy individual and organizational objectives.

    Exchange is the key term in this definition of marketing. The concept of exchange means to give

    up something to receive something else which would rather have. Exchange does not require

    money, however. Two person may barterortrade something.

    Five conditions must be satisfied for any kind of exchange to take place, but they are not sufficient:

    1. there must be at least two parties

    2. each party must have something the other party values

    3. each party must be able to communicate with the other party and deliver the

    goods or services sought by the other trading party

    4. each party must be free to accept or reject the others offer

    5. each party must believe that it is appropriate or desirable to deal with the

    other party.

    MARKETING CONTEXT

    Needs, wants and demand

    According to Kotler The starting point for the discipline of marketing lies in human needs and

    wants. A human need is defined as a state of felt deprivation of some basic satisfaction. Humanwants are desires for specific satisfiers of these deeper needs. Marketers do not create needs, needs

    pre-exist marketers. Marketers along with other influentials in the society, influence wants

    Needs and wants are translated into demands for products and services from people who can and

    will pay for them, in the belief that they will provide satisfaction and value.

    Marketing is about developing products or services which will satisfy wants, communicating to

    existing and potential customers the benefits of the products or services on offer to them, and

    ensuring that demands are fulfilled to the satisfaction of both the customers (because they get what

    they want) and the business (because it achieves its financial and growth objectives).

    The creation of customer value

    Customer value is the difference between the amount of benefits a customer will get from a

    product (utilization value, plus quality, plus support services, plus brand image, plus warranties,plus trust), and what he or she has to give (price and cost of acquisition, plus utilization cost, plus

    maintenance cost, plus cost of possession, plus cost of getting rid of it) in order to have it.

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    Customer value is created when customer expectations regarding product quality, service quality,

    and value-based price are met or exceeded.

    The environment

    The process of marketing takes place within an economic, social and political environment which

    will affect what the business does and what it achieves. Marketing presents an entirely new set of

    problems if conducted in a turbulent rather than placid environment.

    Industrial and consumer markets

    Although basic marketing techniques may well be relevant in all types of markets, distinctions

    need to be made between industrial (where there are fewer and larger and more professional

    buyers) and consumer markets (which are much more heterogeneous and unpredictable).

    Why study marketing?

    First marketing affects the allocation of goods and services that influence a nations economy and

    standard of living. Second, an understanding of marketing is crucial to understanding most

    businesses. Third, career opportunities in marketing are diverse, profitable, and expected to

    increase significantly. Fourth, understanding marketing makes consumers more informed.

    MARKETING CONCEPTS EVOLUTION

    1. The production orientation, which holds that consumers will favor those products that are

    available and highly affordable, and therefore management should concentrate on improving

    production and distribution efficiency. This philosophy focuses on the internal capabilities of

    the firm rather than on the desires and needs of the marketplace.

    2. The sales orientation, which holds that consumers will not buy enough of the organizations

    products unless the organization undertakes a substantial selling and promotional effort. Thisphilosophy assumes that buyers resist purchasing items that are not essential. As with

    production orientation the fundamental problem here is a lack of understanding of the needs

    and wants of the marketplace.

    3. The marketing orientation is the foundation of the contemporary marketing philosophy. This is

    based on the understanding that a sale does not depend on an aggressive sales force but rather

    on a customers decision to purchase a product or service. To marketing-oriented firms,

    marketing means building relationships with customers. Relationship marketingis the name of

    a strategy of developing strong and customer loyalty and making long-term partnerships by

    creating satisfied customers who will buy additional products or services from the firm. This

    philosophy, called the marketing conceptis simple and intuitively appealing. It states that thesocial and economic justification for an organizations existence is the satisfaction of customer

    wants and needs while meeting the organizational objectives.

    4. The societal marketing orientation is the idea that an organization exists not only to satisfy

    customer wants and needs and meet organizational objectives but also to preserve or enhance

    individuals and societys long-term best interests.

    Differences between Sales and Marketing Orientations

    A sales-oriented firm defines its business (or mission) in terms of goods and services. A

    marketing-oriented firm defines its business in terms of the benefits its customers seek.

    Defining a business in terms of goods and services rather than in terms of the benefits thatcustomers seek is sometimes called marketing myopia.

    What is the How do you seek to

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    organizations focus? What business are

    we in?

    To whom is the

    product directed?

    What is your

    primary goal?

    achieve your goal?

    Sales orientation Inward, upon the

    organizations needs

    Selling goods and

    services

    Everybody Profit through

    maximum sales

    volume

    Primarily through

    intensive promotion

    Marketingorientation

    Outward, upon thewants and

    preferences of

    customers

    Satisfyingconsumer wants

    and needs

    Specific groups ofpeople

    Profit throughcustomer

    satisfaction

    Throughcoordinated

    marketing activities

    THE MARKETING PROCESS

    The marketing process includes scanning the environment, analyzing market opportunities, setting

    marketing objectives, selecting a target market strategy, developing and implementing a marketing

    mix, implementing the strategy, and evaluating marketing efforts and making changes if needed.

    Organization mission

    It is the long-term vision of what the organization is or is striving to become. It establishes the

    boundaries within which objectives, strategies, and actions must be developed. The mission

    statement is answering the question: What business are we in and where are we going?

    Environmental scanning

    Environmental scanning is the collection and interpretation of information about forces, events,

    and relationships that may affect the future of an organization.

    There are:

    social forces such as the social values of potential customers and the

    changing roles of families and women working outside the home

    demographic forces such as the ages, birth and death rates, and locations of

    various groups of people

    economic forces such as changing incomes, inflation, and recession

    technological forces such as advanced communications and data retrieval

    capabilities

    political and legal forces such as changes in laws and regulatory agency

    activities

    competitive forces from domestic and foreign-based firms

    Market opportunity analysis

    This analysis is the description and estimation of the size and sales potential of market segments of

    interest to a firm and assessment of key competitors in these market segments.

    Marketing strategy

    Marketing strategy involves three activities:1. selecting the one or more target markets

    2. setting marketing objectives

    3. developing and maintaining a marketing mix

    Target market strategy. There are three general strategies: undifferentiated

    targeting (try to appeal to the entire market with a single marketing mix), concentrated

    targeting (concentrate on only one segment of the market), or multisegment targeting

    (to attempt to appeal to multiple market segments using multiple marketing mixes).

    Marketing objectives. It is a statement of what is to be accomplished through

    marketing activities.

    Marketing mix. The term marketing mix refers to a unique combination of product,

    distribution (place), promotion, and pricing strategies (the four Ps) designed toproduce mutually satisfying exchanges with a target market.

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    Implementation

    Phase of the marketing process in which marketers turn their plans into action assignments and

    ensure that these assignments are executed in a way that will accomplish the marketing plans

    objectives.

    Evaluation

    Phase of the marketing process in which marketers estimate the extent to which objectives havebeen achieved during a specified time period.

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    Organizationmission

    Market opportunityanalysis

    Marketing strategy

    Target marketstrategy

    Marketingobjectives

    Marketing mix the 4 PsProduct

    PricePromotion

    Placement

    Environmentalscanning

    Implementation

    Evaluation

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    The 4 Cs in marketing and business:

    Company

    Consumer

    Channel

    Competitors

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