COURSE: PH 4201

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Market� “A market consists of all the potential customers

sharing a particular need or want who might bewilling and able to engage in exchange to satisfythat need or want” ………….Philip Kotler

� For Example: Pharmaceutical market, Agricultural market, � For Example: Pharmaceutical market, Agricultural market, Economical market (stock exchange)

Shifting Business Paradigms

Sellers’ markets

Buyers’ markets

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Definition of marketingDefinition of marketing� Marketing is the process of planning and executing the

conception, pricing, promotion, and distribution (4 Ps)of ideas, goods and services to create exchanges (withcustomers) that satisfy individual and organizationalobjectives.objectives.

� Create a Marketing Mix (4ps):Product

Price

Promotion

Place (Distribution)

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Marketing is a process… that is…

Managerial

Social

IndividualIndividual

And includes Needs, Wants, Demands –Products and/or Services

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�Marketing is the activity, set of instructions,and processes for creating, communicating,delivering, and exchanging offerings thathave value for customers, clients, partners,and society at large.

OLD view of marketing:

Making a sale—“telling and selling”

NEW view of marketing:

Satisfying customer needs

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The Marketing Process

A simple model of the marketing process:

� Understand the marketplace and customer needsand wants.

� Design a customer-driven marketing strategy.

� Construct an integrated marketing program thatdelivers superior value.

� Build profitable relationships and create customerdelight.

� Capture value from customers to create profits andcustomer quality.

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Needs, Wants, and Demands

Need: State of felt deprivation including physical, social, and individual needs.

� Physical needs: Food, clothing, shelter, safety

� Social needs: Belonging, affection

� Individual needs: Learning, knowledge, self-expressionexpression

Want: Form that a human need takes, as shaped by culture and individual personality.

Wants + Buying Power = Demand

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Need/ Want FulfillmentNeeds & wants are fulfilled through a Marketing

Offering:

� Products:

� Persons, places, organizations, information, ideas.

� Services:� Services:

� Activity or benefit offered for sale that is essentially intangible and does not result in ownership.

� Experiences:

� Consumers live the offering.

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Three elements - Customers are

concerned� Customer value: Difference between the values

that the customer gains from owning and using a product versus the costs of obtaining the product.

• Customer satisfaction: The extent to which a • Customer satisfaction: The extent to which a product’s perceived performance in delivering value matches a buyer’s expectations.

• Quality: the characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs.

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Customer Value and Satisfaction

Dependent on the product’s perceived performance relative to a buyer’s expectations.

Care must be taken when setting expectations:

� If performance is lower than expectations, satisfaction is low.is low.

� If performance is higher than expectations, satisfaction is high.

Customer satisfaction often leads to consumer loyalty.

Some firms seek to DELIGHT customers by exceeding expectations.

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Marketing Management

The art and science of choosing targetmarkets and building profitablerelationships with them.

�Requires that consumers and themarketplace be fully understood.marketplace be fully understood.

�Aim is to find, attract, keep, and growcustomers by creating, delivering,

� and communicating superior value.

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� Marketing managers must consider the following, to ensure a successful marketing strategy:

1. What customers will be served?

� — What is the target market?� — What is the target market?

2. How can be the best serve these customers?

� — What is the value proposition?

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Choosing a Value Proposition

The set of benefits or values a companypromises to deliver to consumers to satisfytheir needs.

�Value propositions dictate how firms will differentiate and position their brands in the marketplace.

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Customer Perceived Value

“Customer’s evaluation of the difference between all of the benefits and all of the costs of a marketing offer relative to those of competing offers.” (Armstrong & Kotler)

– Perceptions may be subjective – Perceptions may be subjective

– Consumers often do not objectively judge values and costs.

Customer value = perceived benefits – perceived sacrifice.

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Marketing Management

Marketing management is the process ofplanning and executing the conception,pricing, promotion, and distribution ofideas, goods, and services to createexchanges that satisfy individual andorganizational goalsorganizational goals

Philip Kotler

Marketing management has the task of influencing the level, timing, and composition of demand in a way that will help the organization achieve its objectives.

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Marketing Strategy

Customer-Driven Marketing Strategy

Requires careful customer analysis.

To be successful, firms must engage in:To be successful, firms must engage in:

�Market segmentation

�Market targeting

�Differentiation

�Positioning16

Market Segmentation

The process of dividing a market intodistinct groups of buyers with differentneeds, characteristics, or behavior whoneeds, characteristics, or behavior whomight require separate products ofmarketing programs.

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Key segmenting variables:

�Geographic

�Demographic

�Psychographic

�Behavioral�Behavioral

Different segments desire different benefits from products.

Best to use multivariable segmentation bases in order to identify smaller, better-defined target groups.

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Why Segment?� Meet consumer needs more precisely

� Increase profits

� Segment leadership

� Retain customers

Focus marketing � Focus marketing

communications

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Evaluating Market Segments

Segment size and growth:� Analyze current segment sales, growth rates, and

expected profitability.

Segment structural attractiveness:� Consider competition, existence of substitute � Consider competition, existence of substitute

products, and the power of buyers and suppliers.

Company objectives and resources:� Examine company skills and resources needed to

succeed in that segment.� Offer superior value and gain advantages over

competitors.

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Market targeting involves:

� Evaluating marketing segments.

Segment size, segment structural attractiveness, and company objectives and resources are considered.

Market Targeting

and resources are considered.

� Selecting target market segments.

Alternatives range from undifferentiated marketing to micromarketing.

� Being socially responsible.

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Market Differentiation

Creating superior customer value by actuallydifferentiating the market offering.differentiating the market offering.

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Market Positioning

Arranging for a product to occupy a clear,distinctive, and desirable place relative tocompeting products in the minds of targetcompeting products in the minds of targetconsumers.

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Differentiation and Positioning

A product’s position is:

�The way the product is defined byconsumers on important attributes—theplace the product occupies in consumers’place the product occupies in consumers’minds relative to competing products.

�Perceptual positioning maps can help definea brand’s position relative to competitors.

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Identifying possible value differences and competitive advantages:

�Key to winning target customers is to understand their needs better than competitors do and to deliver more value.

Competitive advantage:

�Extent to which a company can position itself as providing superior value.

Achieved via differentiation.

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Relationship marketing

The process of creating, maintaining, and enhancing strong, value-laden relationships with customers and other stakeholders.

Societal marketing

Generating customer satisfaction and long-run societal well-being are the keys to both achieving the company’s goals and fulfilling its responsibilities

Societal marketing

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Types of Marketing Management Practice

�Entrepreneurial marketing:

�Businesses started by individuals

�Creativity, drive, and perseverance are keys to successto success

• Formulated marketing:

– Professional, disciplined approach

– Achieving a market orientation

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Orientations towards marketing� Production concept (before 1930):

demand > supply

� Selling concept (1930-1950):

supply > demandsupply > demand

� Marketing concept (post-1960s):

analyze consumer needs before producing and selling, market orientation, competition…

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Marketing Concept versus Selling Concept

Starting Point Focus Means Ends

Customer Integrated Profits from

The Marketing Concept

Factory ProductSell and

Promote it

Profits through

sales volume

The Selling Concept

MarketCustomer

needs

Integrated

marketing

Profits from

satisfied customers

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PHARMACEUTICAL_MARKETING_L1_CONCEPT OF MARKETINGOF MARKETING

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