Marketing Lesson 1
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Transcript of 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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