Post on 16-May-2015
Introduction to Marketing
Unit 1:
The Introduction
Subhajit Sanyal
Defining Marketing
• Marketing–The process of creating, distributing, promoting,
and pricing goods, services, and ideas to facilitate satisfying exchange relationships with customers in a dynamic environment
• Customers–The purchasers of organizations’
products; the focal point of all marketing activities
Marketing Focuses on Customers
• Target Market–A specific group of customers on whom an organization
focuses its marketing efforts• Large or small customer groups• Single or multiple product markets• Single or multiple products• Local to global markets
Marketing Deals with Products, Distribution, Promotion, and Price
• The Marketing Mix–Four marketing activities—product, distribution,
promotion, and pricing—that a firm can control to meet the needs of customers within its target market
ProductProduct
DistributionDistribution
PromotionPromotion
PricingPricing
TargetTargetMarketMarket
Marketing Mix Variables
ProductProduct
DistributionDistribution
PromotionPromotion
PricingPricing
Goods, services, or ideas that satisfy customer needs
The ready, convenient, and timely availability of products
Activities that inform customers about the organization and its products
Decisions and actions that establish pricing objectives and policies and set product prices
MARKETING ENVIRONMENTMARKETING ENVIRONMENT
The marketing environment consists of external forces that directly or indirectly influence an organisation’s acquisition of inputs and generation of outputs.
The marketing environment consists of six categories of forces: political, legal, regulatory, societal/green, economic and competitive, and technological.
Figure 1.4 Components of the marketing mix and marketing environment
Differential advantage / Competitive edge
People
Distribution(place)
Price
Product
PromotionLegal forces
Regulatory forces
Societal /
Politicalforces
Technologicalforces
Economic andcompetitive forces
Buyer/Consumer
Product / Target
forcesGreen
Differential advantage/ Competitive edge
Brandpositioning selection
market
Situation analysis
• Cultural & social influences,individual differences, decision processes
• Definition & identification of target groups• Segmentation & positioning• Competition• S.W.O.T.• 4 Ps & 4 Cs
SWOT analysis(source: Jobber 2001)
Strengths Weakness
Opportunities Threats
Source
Internal
(controllable)
External
(uncontrollable)
The 4Ps & 4Cs
• The product (C = Consumer)
• The price (C =Cost)
• Promotion (C = Communication)
• Place (C = Convenience)
Marketing Builds Satisfying Exchange Relationships
• Exchange–The provision or transfer of goods, services, or ideas in
return for something of value
FIGURE 1.2
Marketing Builds Satisfying Exchange Relationships (cont’d)
• Exchange Conditions–Two or more participants have something of value that
the other party desires.–Exchange provides mutual benefit/satisfaction.–Each party has confidence in the exchange value of the
other party’s offering.–Each party must meet the expectations of the exchange
to become trusted by the other parties.
Marketing Occurs in a Dynamic Environment
• Marketing Concept–A philosophy that an organization should try to satisfy
customers’ needs through a coordinated set of activities that also allows the organization to achieve its goals
–Customer satisfaction• Analysis of customers’ current and long-term needs• Analysis of competitors’ capabilities• Integration of firm’s resources
Evolution of the Marketing Concept
ProductProductOrientationOrientation
SalesSalesOrientationOrientation
MarketingMarketingOrientationOrientation
Late 19th century: efficient production of goods allowed firms to meet strong customer demand.
Mid-1920s–early 1950s: weakened demand required that products would have to be “sold.” (personal selling, advertising, and distribution was the focus)
Early 1950s–2000s: adopting a customer focus means a commitment to researching and responding to customer needs.
FIGURE 1.3
Implementing the Marketing Concept
• Becoming marketing oriented requires–establishing an information system to discover
customers’ needs and using the information to create satisfying products.
–coordinating all marketing activities by restructuring the organization.
–obtaining the support of all managerial and staff levels in the organization.
Managing Customer Relationships
• Relationship Marketing–Establishing long-term, mutually satisfying buyer-seller
relationships allowing for cooperation and mutual dependency
• Increased value of customer (loyalty) over time results in increased profitability.
Managing Customer Relationships (cont’d)• Customer Relationship Management (CRM)
–Using information about customers to create marketing strategies that develop and sustain desirable customer relationships
• Identifying buying-behavior patterns of customers• Using behavioral information to focus on the most
profitable customers
Value-Driven Marketing
• Value–A customer’s subjective assessment of benefits relative
to the costs in determining the worth of a product• Customer value = customer benefits – customer costs
–Customer benefits• Anything desired by the customer that is received in an
exchange
–Customer costs• Anything a customer gives up in an exchange for benefits
–Monetary price of the benefit
–Search costs (time and effort) to locate the product
–Risks associated with the exchange
Marketing Management
• Marketing Management–The process of planning, organizing, implementing, and
controlling marketing activities to facilitate exchanges effectively and efficiently
–Effectiveness• The degree to which an exchange
helps an organization achieve its objectives
–Efficiency• The process of minimizing the
resources an organization must spend to achieve a specific level of desired exchanges
Marketing Management (cont’d)
• Planning–Assessing opportunities and resources–Determining marketing objectives–Developing a marketing strategy and plans for
implementation and control• How, when and by whom are marketing activities
performed?
• Organising–Developing the internal structure of the marketing unit
• Functions, products, regions, customer types
Marketing Management (cont’d)
• Implementation–Coordinating marketing activities–Motivating marketing personnel–Developing effective internal communications within the
unit
• Control–Establishing performance standards–Comparing actual performance to established
standards–Reducing the difference between desired and actual
performance
Effective Marketing Control Process
• provides for quick detection of differences in planned and actual performance.
• accurately monitors activities and is flexible enough to accommodate changes.
• incurs low process costs relative to the costs of a “no-control” situation.
• is understandable by both managers and subordinates.
The Importance of Marketing in Our Global Economy
• Marketing Costs Consume a Sizable Portion of Buyers’ Dollars
• Marketing Is Used in Nonprofit Organizations• Marketing Is Important to Business and the
Economy• Marketing Fuels Our
Global Economy
The Importance of Marketing in Our Global Economy (cont’d)
• Marketing Knowledge Enhances Consumer Awareness
• Marketing Connects People Through Technology• Socially Responsible Marketing Can Promote the
Welfare of Customers and Society• Marketing Offers Many
Exciting Career Prospects
Important Terms
• Marketing–The process of creating, distributing, promoting,
and pricing goods, services, and ideas to facilitate satisfying exchange relationships with customers in a dynamic environment
• Customers–The purchasers of organizations’ products; the
focal point of all marketing activities
• Target Market–A specific group of customers on whom an
organization focuses its marketing efforts
Important Terms
• The Marketing Mix–Four marketing activities—product, distribution,
promotion, and pricing—that a firm can control to meet the needs of customers within its target market
• Product–Goods, services, or ideas that satisfy customer needs
• Distribution–The ready, convenient, and timely availability of
products
• Promotion–Activities that inform customers about the organization
and its products
Important Terms
• Pricing–Decisions and actions that establish pricing objectives
and policies and set product prices
• Exchange–The provision or transfer of goods, services, or ideas in
return for something of value
• Marketing Concept–A philosophy that an organization should try to satisfy
customers’ needs through a coordinated set of activities that also allows the organization to achieve its goals
Important Terms
• Relationship Marketing–Establishing long-term, mutually satisfying buyer-seller
relationships allowing for cooperation and mutual dependency
• Customer Relationship Management (CRM)–Using information about customers to create marketing
strategies that develop and sustain desirable customer relationships
• Value–A customer’s subjective assessment of benefits relative
to the costs in determining the worth of a product
Important Terms
• Customer Benefits–Anything desired by the customer that is received in an
exchange
• Customer Costs–Anything a customer gives up in an exchange for
benefits
• Marketing Management–The process of planning, organizing, implementing, and
controlling marketing activities to facilitate exchanges effectively and efficiently
Important Terms
• Effectiveness–The degree to which an exchange helps an
organization achieve its objectives
• Efficiency–The process of minimizing the resources an
organization must spend to achieve a specific level of desired exchanges