INTRODUCTION TO PRINCIPLES OF MARKETING Definitions of marketing

INTRODUCTION TO PRINCIPLES OF MARKETING

Definitions of marketing ‘Marketing is the management process that identifies, anticipates and satisfies customer requirements profitably’ The Chartered Institute of Marketing

‘The right product, in the right place, at the right time, and at the right price’ Adcock et al

‘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

Marketing It is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others.

Five competing concepts Production Concept Product Concept Selling Concept Marketing Concept Societal marketing Concept

Production Concept It holds that consumers will favor those products that are widely available and low in cost. Managers of productionoriented organizations concentrate on achieving high production efficiency and wide distribution coverage.

Product Concept It holds that consumers will favor those products that offer the most quality, performance, and features. Managers in these productoriented organizations focus their energy on making good products and improving them over time.

Selling Concept It holds that consumers, if left alone, will ordinarily not buy enough of the organization’s products. The organization must therefore undertake an aggressive selling and promotion effort.

Marketing Concept It holds that the key to achieving organizational goals consists in determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors.

Societal Marketing Concept It holds that the organization’s task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfactions more effectively and efficiency than competitors in a way that preserves or enhances the consumer’s and the society’s well-being.

Four Pillars of Marketing Concept Market Focus/ Target Market Customer Orientation Coordinated marketing Profitability.

Market Focus/Target Market No company can operate in every market and satisfy every need. Nor can it even do a good job within a broad market.

Customer Orientation It requires the company to carefully define customer needs from the customer point of view, not from its point of view. Every product involves trade-offs, and management cannot know what these are without talking to and researching customers.

Coordinated Marketing First, various marketing functions – sales force, advertising, marketing research, etc. – must be coordinated among themselves. Second, marketing must be well coordinated with the other departments in the company.

Profitability The major goal of private firms is profit, for nonprofit, it is surviving and attracting enough funds to perform their work. A company makes money by satisfying customer needs.

Comparison of Selling and Marketing Concepts SELLING CONCEPT Starting Point Factory Focus Means Ends Products Selling and Profits through Promoting Sales volume MARKETING CONCEPT Market Customer Coordinated Profits through Needs Marketing Customer Satisfaction

Marketing Management in the 21 st Century OLD PRACTICES Was using tactics Built sales through advertising RECENT CHANGES Now focused on Marketing strategies Now build brands through a coordinated integrated marketing strategy that involves all points of contact between the company and the public

OLD PRACTICES Focused on short-term profitable transactions Company was the unit of analysis Was organized by product units Segmented on geographic or demographic variables RECENT CHANGES Now look at Customer’s lifetime value Now the whole value chain is the unit of analysis, meeting the end customers’ needs Now organized by customer segment Segmented in depth using all relevant variables, especially behavioural variables like usage rate, loyalty or benefit

OLD PRACTICES Focused on capturing new customers Performance is measured by financial metrics Focused on satisfying stockholders RECENT CHANGES Gives emphasis on keeping existing customers Performance is now measured by financial, strategic, and marketing metrics Satisfy stakeholders Everyone in the company does some marketing

OLD PRACTICES Was individual and hierarchal work structures Developing and implementing a marketing plan took years RECENT CHANGES Now Cross functional teams Now it takes months (or weeks)

Marketing in the 21 st Century Network Marketing E-Commerce Email Marketing

Marketing Essentials n Chapter 2 Basic Marketing Concepts Section 2. 1 The Marketing Concept 24

SECTION 2. 1 The Marketing Concept What You'll Learn = The marketing concept = The difference between customers and consumers = What a market is and how it can be described = The four Ps of the marketing mix 25

SECTION 2. 1 The Marketing Concept Why It's Important In order to participate in the world of marketing, you'll want to understand how businesses focus on the needs and wants of their customers in order to improve their products, remain competitive, and increase sales. 26

SECTION 2. 1 The Marketing Concept Key Terms = marketing concept = customer = consumer = market = target marketing = customer profile = marketing mix 27

SECTION 2. 1 The Marketing Concept The Basic Concept The marketing concept states that businesses must satisfy customers' needs and wants in order to make a profit. 28

SECTION 2. 1 The Marketing Concept Customers vs. Consumers Customers buy a product. Consumers use the product. = Example: Parents who buy video games from retailers are customers. The kids who play the video games are the consumers. 29

SECTION 2. 1 The Marketing Concept What is a Market? A market is all potential customers who share common needs and wants and who have the ability and willingness to buy the product. 30

SECTION 2. 1 The Marketing Concept U. S. Game Console Market A market can be described as the people who are potential customers of a product, as well as by the classification of a product in a category. Would you be considered part of the market for game consoles? Why or why not? What other markets are you part of? 31

SECTION 2. 1 The Marketing Concept The Marketing Mix The marketing mix comprises four basic marketing strategies known as the four Ps: = Product = Place = Price = Promotion Slide 1 of 3 32

SECTION 2. 1 The Marketing Concept The Marketing Mix Product strategies include what product to make, how to package it, what brand name to use, and what image to project. Place strategies deal with how and where a product will be distributed. Slide 2 of 3 33

SECTION 2. 1 The Marketing Concept The Marketing Mix Price strategies should reflect what customers are willing and able to pay. Promotion strategies deal with how potential customers will be told about the new product, what the message will be, when and where it will be delivered, and with what inducements to buy. Slide 3 of 3 34

SECTION 2. 1 The Marketing Concept Target Marketing Target marketing is focusing all marketing mix decisions on the specific group of people you want to reach. 35

2. 1 ASSESSMENT Reviewing Key Terms and Concepts 1. What does the marketing concept state? 2. Who are the customers of Sony Electronics and Hershey Chocolates? Who are their consumers? 3. What is a market? 4. What is target marketing? 5. What are the four Ps of the marketing mix? 36

2. 1 ASSESSMENT Thinking Critically Many women's magazines like Glamour and Elle publish advertisement for men's cologne. Explain the rationale for this practice. 37

2. 1 Graphic Organizer The Marketing Mix The Marketing Concept Marketing Research Product Marketing Segmentation Price Place Consumers 38 Promotion

Marketing Essentials End of Section 2. 1 39

Marketing Concept “. . The Marketing Concept means that an organization aims ALL its efforts at satisfying its customers. . . ” “… give the customers what they need/want seems so obvious”

the Marketing Concept All of the people in the company aim all efforts to satisfy the customer. 1. Customer satisfaction 2. A total company effort 3. Profit (not just Sales) as an objective