Charles Blankson, Ph.D., Department of Marketing & Logistics Introduction to Marketing Presentation...

Charles Blankson, Ph.D., Department of MCharles Blankson, Ph.D., Department of Marketing & Logisticsarketing & Logistics

Introduction to MarketingIntroduction to Marketing

Presentation and Presentation and DiscussionDiscussion


IntroductionIntroduction

Marketing is simple, yet Marketing is simple, yet complex. complex.

We are all involved in marketing We are all involved in marketing and: “the enigma of marketing is and: “the enigma of marketing is that it is one of man’s oldest that it is one of man’s oldest activities and yet it is regarded activities and yet it is regarded as the most recent of the as the most recent of the business disciplines (Baker, business disciplines (Baker, 1976).1976).


Introduction contd.Introduction contd.Marketing came into existence with the first Marketing came into existence with the first barter exchange (e.g. the barter trade in barter exchange (e.g. the barter trade in ancient Egypt, Songhai and Ghana empires ancient Egypt, Songhai and Ghana empires in Africa etc.) when someone realized that in Africa etc.) when someone realized that exchanges add value for both parties.exchanges add value for both parties.This was the first real step forward in This was the first real step forward in economic development.economic development.Marketing has evolved (like other practices Marketing has evolved (like other practices such as architecture, medicine, such as architecture, medicine, engineering) over the centuries to where it engineering) over the centuries to where it is today (Michael Baker).is today (Michael Baker).


Introduction contd.Introduction contd.According to Peter Drucker, the first According to Peter Drucker, the first test of any business is not the test of any business is not the maximization of profit but the maximization of profit but the achievement of sufficient profit to achievement of sufficient profit to cover the risks of economic activity cover the risks of economic activity and thus avoid loss.and thus avoid loss.Customers are the foundation of a Customers are the foundation of a business and their purpose of business and their purpose of existence.existence.In other words, customers are the In other words, customers are the mainstay of the business.mainstay of the business.


Introduction contd.Introduction contd.As Peter Drucker puts it: There is only As Peter Drucker puts it: There is only one valid definition of business one valid definition of business purpose: purpose: to create a customer.to create a customer.It is the customer who determines It is the customer who determines what business is…what business is…What the business thinks it produces What the business thinks it produces is not of first importance, especially is not of first importance, especially not to the future of the business and not to the future of the business and to its success in the market place.to its success in the market place.The customer determines what a The customer determines what a business is, what it produces and business is, what it produces and whether it will prosper (Drucker). whether it will prosper (Drucker).


What is Marketing?What is Marketing?

It is the most interesting, It is the most interesting, dynamic, versatile of all dynamic, versatile of all academic disciplines. academic disciplines.

It is both theoretical and It is both theoretical and practical in nature.practical in nature.

It yields real results in the form It yields real results in the form of profits and/or satisfaction of of profits and/or satisfaction of business aims/objectives.business aims/objectives.


What is Marketing? contd.What is Marketing? contd.It is a multidisciplinary (economics, It is a multidisciplinary (economics, psychology, sociology, history, statistics…) psychology, sociology, history, statistics…) management process of identifying and management process of identifying and satisfying consumer and organizational satisfying consumer and organizational needs profitably. needs profitably. The aim of marketing is to make profit The aim of marketing is to make profit and/or satisfy business objectives.and/or satisfy business objectives.Thus, overall, it enhances human and Thus, overall, it enhances human and national economic development/progress.national economic development/progress.Compare (a) Advanced countries and Compare (a) Advanced countries and underdeveloped countries? And (b) a underdeveloped countries? And (b) a profitable business and a less profitable profitable business and a less profitable business? business?


DefinitionDefinitionMarketing is the process of planning Marketing is the process of planning and executing the conception, and executing the conception, pricing, promotion, and distribution pricing, promotion, and distribution of ideas, goods, and services to of ideas, goods, and services to create exchanges that satisfy create exchanges that satisfy individual and organizational goals.individual and organizational goals.

Source: The American Marketing Source: The American Marketing Association (AMA) (see Association (AMA) (see www.ama.org).www.ama.org).


DefinitionDefinitionMarketing is the management Marketing is the management process responsible for process responsible for identifying, anticipating, and identifying, anticipating, and satisfying customer satisfying customer requirements profitably.requirements profitably.

Source: The Chartered Institute Source: The Chartered Institute of Marketing (CIM) (UK) (see of Marketing (CIM) (UK) (see www.cim.co.uk)www.cim.co.uk)


Recent formal Definition of Recent formal Definition of MarketingMarketing

Marketing is an organizational Marketing is an organizational function and a set of processes for function and a set of processes for creating, communicating, and creating, communicating, and delivering value to customers and for delivering value to customers and for managing customer relationships in managing customer relationships in ways that benefit the organization ways that benefit the organization and its stakeholders.and its stakeholders.

Source: American Marketing Association, Source: American Marketing Association, 2004 2004


Role of MarketingRole of Marketing Organizational ResourcesOrganizational Resources

Effective match Specification Effective match Specification

ofof Target MarketTarget Market

Customer SatisfactionCustomer Satisfaction

OrganizationalOrganizational Aims/objectives Aims/objectives


The Marketing ConceptThe Marketing Concept

The Marketing Concept states The Marketing Concept states that if a business or organization that if a business or organization is to achieve profitability, the is to achieve profitability, the entire organization must be entire organization must be oriented towards satisfying oriented towards satisfying consumer needs, wants and consumer needs, wants and aspirations. aspirations.


The Marketing Concept contd.The Marketing Concept contd.

In other words, The Marketing In other words, The Marketing Concept holds that the key to Concept holds that the key to success is through determining success is through determining the needs/wants/aspirations of the needs/wants/aspirations of target markets and delivering target markets and delivering these more effectively and these more effectively and efficiently than competitors.efficiently than competitors.


The Marketing Concept (key issues)The Marketing Concept (key issues)

Organizations must concentrate Organizations must concentrate on the customer and not the on the customer and not the product or the company.product or the company.Organizations should revolve Organizations should revolve round the customer and not the round the customer and not the other way around.other way around.The purpose of a business is to The purpose of a business is to create and keep a customer create and keep a customer (Theodore Levitt).(Theodore Levitt).


Elements of the Marketing ConceptElements of the Marketing Concept

Consumer/customer OrientationConsumer/customer Orientation

Total Organization effortTotal Organization effort

Profitability/achievement of Profitability/achievement of objectives.objectives.


Criticisms of the Marketing ConceptCriticisms of the Marketing Concept

Do customers really know their Do customers really know their needs/wants/aspirations?needs/wants/aspirations?The choice of either consumer or The choice of either consumer or competitive orientation.competitive orientation.Adapting to change Adapting to change (rigidity,inflexibility of the concept).(rigidity,inflexibility of the concept).Conflict with social responsibility.Conflict with social responsibility.Limits in the applicability of the Limits in the applicability of the concept (e.g. the arts, ideology such concept (e.g. the arts, ideology such as political parties, environmentalists as political parties, environmentalists – greenpeace, religions – – greenpeace, religions – churches/synagogues etc…… churches/synagogues etc……


Some Criticisms of MarketingSome Criticisms of MarketingToo many advertisements are Too many advertisements are annoying, misleading, or both.annoying, misleading, or both.

There are too many unnecessary There are too many unnecessary products.products.

Middlemen raise prices but don’t add Middlemen raise prices but don’t add value.value.

Marketing makes people materialistic.Marketing makes people materialistic.Most of the criticisms result from Most of the criticisms result from misunderstandings about marketing misunderstandings about marketing (Perreault & McCarthy, 1999).(Perreault & McCarthy, 1999).


Do you know your market?Do you know your market?What is the product or service being What is the product or service being offered?offered?What are the market trends in the industry?What are the market trends in the industry?What is the market?What is the market?Who are your customers? And what are they Who are your customers? And what are they looking for?looking for?Who are your competitors? And how do they Who are your competitors? And how do they operate/react/behave?operate/react/behave?Why do (should) your customers buy your Why do (should) your customers buy your product/service rather than that of your product/service rather than that of your competitors?competitors?


What is a Market ?What is a Market ?According to Kotler (2004), “a market According to Kotler (2004), “a market consist of all the potential customers consist of all the potential customers sharing a particular need or want who sharing a particular need or want who might be willing and able (i.e., might be willing and able (i.e., propensity to) to engage in exchange propensity to) to engage in exchange to satisfy that need or want”.to satisfy that need or want”.

Source: Kotler, P. (2004), Marketing Source: Kotler, P. (2004), Marketing Management, Prentice-Hall, Englewood Cliff, Management, Prentice-Hall, Englewood Cliff, NJ.NJ.


Market TypesMarket TypesConsumer Markets.Consumer Markets.Industrial/Business to Business Industrial/Business to Business Markets.Markets.Reseller (Retailers, Distributors) Reseller (Retailers, Distributors) Markets.Markets.Publics (Government Publics (Government agencies/departments/institutionagencies/departments/institutions).s).International/global Markets.International/global Markets.


What is Market(ing) Orientation?What is Market(ing) Orientation?The process of applying the The process of applying the marketing concept in the market marketing concept in the market place.place.Maintaining a customer orientation.Maintaining a customer orientation.All departments work together guided All departments work together guided by customer needs/wants/aspirations.by customer needs/wants/aspirations.Focus on profits/objectives.Focus on profits/objectives.

Source: Kohli and Jaworski (1990); Narver and Slater (1990).Source: Kohli and Jaworski (1990); Narver and Slater (1990).


Market OrientationMarket OrientationProduction OrientationProduction Orientation

--1850s -> 1930s--1850s -> 1930sSales OrientationSales Orientation

-- 1930s -> 1950s Time-- 1930s -> 1950s TimeMarketing OrientationMarketing Orientation

-- 1960s -> ??-- 1960s -> ??Consumer Relationship Marketing Consumer Relationship Marketing (CRM)(CRM)

-- 1990s -> ??-- 1990s -> ??


Production OrientationProduction Orientation

Focus on the means of Focus on the means of production, and assumes production, and assumes customers will want the customers will want the product/service.product/service.


Product OrientationProduct Orientation

Focus on the technical Focus on the technical perfection of the perfection of the product/service seen product/service seen through the producer’s through the producer’s (firm) eyes. Assumes (firm) eyes. Assumes customers will perceive customers will perceive product/service in the product/service in the same way and thus buy.same way and thus buy.


Selling OrientationSelling Orientation

Focus on persuading Focus on persuading ((usually aggressiveusually aggressive) customers ) customers to buy products which do to buy products which do not usually match their not usually match their requirements. This is requirements. This is unlikely to lead to repeat unlikely to lead to repeat buy/business. buy/business.


Customer OrientationCustomer Orientation

Focus on discovering Focus on discovering customer needs (customer needs (basic basic

survey/question & answer typesurvey/question & answer type) ) and satisfying them. This and satisfying them. This is unlikely to make best is unlikely to make best uses of production and uses of production and other organizational other organizational resources.resources.


Marketing OrientationMarketing Orientation

Focus on the identification of Focus on the identification of customers needs, organizational customers needs, organizational resources and objectives. resources and objectives. Achieve effective match through Achieve effective match through market segmentation, targeting, market segmentation, targeting, positioning and resource positioning and resource development (see also Role of development (see also Role of Marketing).Marketing).


So how do you define Market(ing) Orientation?So how do you define Market(ing) Orientation?

Market orientation is the Market orientation is the organization-wide generation of organization-wide generation of market intelligence pertaining to market intelligence pertaining to current and future customer current and future customer needs, dissemination of the needs, dissemination of the intelligence across departments, intelligence across departments, and organization-wide and organization-wide responsiveness to it (Kohli and responsiveness to it (Kohli and Jaworski, 1990).Jaworski, 1990).


Definition of Market Orientation Definition of Market Orientation contd.contd.

According to Narver and Slater According to Narver and Slater (1990), Market orientation (1990), Market orientation comprises three components:comprises three components:

Customer orientationCustomer orientation

Competitor orientation andCompetitor orientation and

Interfunctional co-ordination.Interfunctional co-ordination.


Measuring Market Orientation constructMeasuring Market Orientation construct

Top ManagementTop ManagementInterdepartmental DynamicsInterdepartmental DynamicsOrganizational SystemsOrganizational SystemsMarket (customer) OrientationMarket (customer) OrientationEmployeesEmployeesEnvironmentEnvironmentBusiness Performance.Business Performance.

Source: Kohli and Jaworski (1990)Source: Kohli and Jaworski (1990)


Measuring Market Orientation construct contd.Measuring Market Orientation construct contd.

Customer OrientationCustomer OrientationCustomer commitment activitiesCustomer commitment activitiesCreation of customer valueCreation of customer valueUnderstanding customer needsUnderstanding customer needsMeasuring customer satisfactionMeasuring customer satisfactionOffering after sales serviceOffering after sales serviceCompetitor OrientationCompetitor OrientationSalespeople share competitor informationSalespeople share competitor informationResponding rapidly to competitors’ actionsResponding rapidly to competitors’ actionsTop managers discuss competitors’ strategiesTop managers discuss competitors’ strategiesTargeting opportunities for competitive advantageTargeting opportunities for competitive advantageInterfunctional CoordinationInterfunctional CoordinationEngaging in interfunctional customer callsEngaging in interfunctional customer callsSharing information among functionsSharing information among functionsIntegrating all functions in strategyIntegrating all functions in strategyContribution of all functions to customer valueContribution of all functions to customer valueSharing resources with other functions.Sharing resources with other functions.Source: Narver and Slater (1990)Source: Narver and Slater (1990)


Social Responsibility and Social Responsibility and Marketing EthicsMarketing Ethics

Social responsibility concerns a Social responsibility concerns a firm’s obligation to improve its firm’s obligation to improve its positive effects on society and positive effects on society and reduce its negative effects.reduce its negative effects.

Marketing ethics are the moral Marketing ethics are the moral standards that guide marketing standards that guide marketing decisions and actions.decisions and actions.


Final comments on Market Final comments on Market OrientationOrientation

An organization’s success in a dynamic An organization’s success in a dynamic business environment is more dependent on business environment is more dependent on adaptation to changing and evolving adaptation to changing and evolving customer needs/wants.customer needs/wants.Higher degree of market orientation Higher degree of market orientation emanates from a changing and dynamic emanates from a changing and dynamic market environment.market environment.Lower degree of market orientation can be Lower degree of market orientation can be evidenced in a market with a fixed set of evidenced in a market with a fixed set of customers whose preferences are stable. customers whose preferences are stable. Here, few changes are expected in the Here, few changes are expected in the marketing mix deliberation.marketing mix deliberation.Kohli and Jaworski (1990) Kohli and Jaworski (1990)

Charles Blankson, Ph.D., Department of Marketing & Logistics Introduction to Marketing Presentation...

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