Introduction to Marketing. Discussion Question “Marketing” is everywhere and touches...
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Transcript of Introduction to Marketing. Discussion Question “Marketing” is everywhere and touches...
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Introduction to Marketing
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Discussion Question
“Marketing” is everywhere and touches everyone’s life in a way...
What is
marketing?...your own comments...
8 - 2
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Introduction to Marketing
Marketing deals with identfying and meeting human and social needs
“meeting needs profitably”
“generating customer value at a profit” “managing profitable customer
relationships by delivering superior value to customers”
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What is Marketing?
No single correct definition or approach Common subject matters:
The ability to satisfy customers, The identification of favorable marketing
opportunities, The need to create an edge over competitors, The capacity to make profits to enable a viable
future for the organization, The use of resources to maximize a business’
market position, The aim to increase market share mainly in
target markets
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Core Concepts of Marketing
Needs, wants, and demands
Productsand services
Value, satisfaction, and quality
Exchange, transactions,
and relationships
Markets
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Core Concepts of Marketing (cont.)
Needs, Wants, Demands Needs : Basic human requirements Wants : Needs directed to specific objects Demands : Wants for specific products
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ProductsAnything that can be Offered to a Market to Satisfy a Need or Want
ExperiencesExperiences PersonsPersons PlacesPlaces
OrganizationsOrganizations IdeasIdeasInformationInformation
Core Concepts of Marketing (cont.)
ServicesActivities or Benefits Offered for Sale That Are EssentiallyIntangible and Don’t Result in the Ownership of Anything
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Discussion Question
Consider Starbucks:
What do they market?
Goods? Services?
or?
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Core Concepts of Marketing (cont.)
Total Quality Management Involves Improving the Quality
of Products, Services, and Marketing Processes
Product’s Perceived Performance in Delivering Value Relative to Buyer’s Expectations is
“Customer Satisfaction”
Value Gained From Owning a Product and Costs of Obtaining the Product is
“Customer Value”
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Core Concepts of Marketing (cont.)
Exchange and Transactions Exchange : Obtaining a desired product from someone by
offering something in return Conditions for exchange to exist: There are at least 2 parties Each party has something that might be of value to the other
party Each party is capable of communication and delivery Each party is free to accept or reject the exchange offer Each party believes it is apropriate or desirable to deal with the
other party Transaction : Trade of values between two or more parties
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ExchangesExchanges TransactionsTransactions
Relationships Relationships Building a Marketing
Network Consisting ofThe Company and All
Its SupportingStakeholders
Core Concepts of Marketing (cont.)
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Core Concepts of Marketing (cont.)
Relationships and Networks Relationship Marketing: to build long-term relations
with its customers, suppliers and distributors Network : Entity consisting of the company itself and
its supporting key groups
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Core Concepts of Marketing (cont.)
Markets Market : All potential customers sharing a particular
need or want who might be willing and able to engage in exchange to satisfy that need or want
Marketers and Prospects Marketer : Someone seeking one or more prospects
who might engage in an exchange of values. Prospect : Someone is as potentially willing and able
to engage in an exchange of values
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Core Concepts of Marketing (cont.)
People Who Exhibit Need
Resources to Exchange
Willingness to Exchange
Potential Buyers
Market –
Buyers who share a
particular need or want that can
be satisfied exchange or relationships.
Actual Buyers
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A Simple Marketing System
Industry(a collection
of sellers)
Market(a collection
of buyers)
Goods/services
Money
Communication
Information
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Marketing defined as...
Process by which individuals and groups obtain what they need and
want through creating and exchanging products and value
with others.
Simply put: Marketing ğ the delivery of customer satisfaction at a profit.
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More Definitions of Marketing A social and managerial process by which individuals and
groups obtain what they need and want through creating, offering and exchanging products and services of value with others.
The management process responsible for identifying, anticipating and satisfying customer requirements profitably.
Marketing consists of individual and organizational activities that facilitate and enhance satisfying exchange relationships in a dynamic environment through the creation, servicing, distribution, promotion and pricing of goods, services and ideas
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More Definitions of Marketing (cont.)
From the societal perspective; some marketers describe marketing as the creation and delivery of a standart of living.
From the managerial perspective; marketing (management) is the process of planning and executing the conception, pricing, promotion and distribution of goods and services to create exchanges that satisfy individual and organizational goals.
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More Definitions of Marketing (cont.)
Marketing management ğ the art and science of choosing target markets and building profitable relationships with them. Getting, keeping, and growing customers through
creating, delivering, and communicating superior customer value
Marketing management can be defined in broader terms as “demand management”; Marketers aim to influence the level, timing and
composition of demand to meet organizational goals.
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Marketing Management as Demand Management
Marketing management is concerned not only with finding and increasing
demand, but also with changing or even reducing it :
Demarketing’s aim is to reduce the number of customers or to shift their demand temporarily or permanently
(e.g. move traffic away from a popular tourist attraction during peak demand times)
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Marketing Management
Marketing management is theart and science
of choosing target markets and getting, keeping, and growing
customers throughcreating, delivering, and communicating
superior customer value.
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Marketing Management Tasks
Developing marketing strategies
Capturing marketing insights
Connecting with customers
Building strong brands
Shaping market offerings
Delivering value
Communicating value
Creating long-term growth
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Evolution of Marketing Thought
Production Era (1850s-1920s) Industrial revolution; mass production Few products and little competition
Sales Era (1920s-1950s) The focus was on personal selling and advertising Sales seen as the major means for increasing profits
Mktg Era (1950s-present) Customer orientation replaced the “hard sell” of the
sales-led era Determination of the needs and wants of customers
before introducing products or services
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Evolution of Marketing Thought
Relationship Marketing Era: 1990s- Marketing era has recently shifted from being
“transaction-based” ğ to focusing on “relationships”
The argument ğ traditional marketing practices focused on attracting new customers rather than retaining existing ones.
It is equally important to hang on to such new customers so that they become repeat buyers and long term loyal customers
“customer relationship management”!
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Evolution of Marketing Thought:Customer Relationship Management
Customer relationship management ğ is seen as the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.
Marketers have began to devote their attention: to winning new customers (transaction mktg) to building up on-going relationships to maintain their
loyalty and custom (relationship mktg) Attracting, retaining, and growing customers Relationship building blocks ğ customer value and
customer satisfaction Customer retention and customer loyalty
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New Era in Marketing...The Millenium...
..from Relationship Marketing to... Network marketing E-marketing Community marketing Buzz marketing Digital marketing Mobile marketing ... ... ...
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Production ConceptProduction Concept
Product ConceptProduct Concept
Selling ConceptSelling Concept
Marketing ConceptMarketing Concept
Consumers prefer products that are widely available and inexpensive
Consumers favor products that offer the most quality, performance,
or innovative features
Consumers will buy products only ifthe company aggressively
promotes/sells these products
Focuses on needs/ wants of target markets & delivering value
better than competitors
Company Orientations Towards the Marketplace
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Production Concept
Consumers will favor those products that are widely available and low in cost.
Managers concentrate on achieving high production efficiency and wide distribution.
The assumption is valid at least in 2 situations : The demand for a product exceeds supply (suppliers will
concentrate on finding ways to increase production) The product’s cost is high and has to be decreased to
expand the market.
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Product Concept
Consumers will favor those products that offer the most quality, performance or innovative features.
Managers in product-oriented organizations concentrate on making superior products and improving them over time.
The assumption ğ the customers will admire well-made products and can evaluate product quality and performance
This concept may lead to marketing myopia
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Selling Concept
Agressive selling and promotion Assumptions are;
Consumers must be convinced of buying company products
Company is powerful in generating effective selling and promotion to stimulate more buying
This concept is mostly used by firms which have overcapacity.
The aim is “to sell what they make rather than make what the market wants.”
Short-term profits are more important and customer dissatisfaction may occur
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Marketing Concept
Key to achieving organizational goals consists of being more effective than competitors in creating, delivering and communicating customer value to target markets.
The marketing concept has 4 important components :
1. Target market2. Customer needs3. Integrated marketing4. Profitability through customer satisfaction
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MarketIntegratedmarketing
Profits throughcustomer
satisfactionCustomer
needs
(b) The marketing concept
FactoryExistingproducts
Selling andpromotion
Profits throughsales volume
Startingpoint Focus Means Ends
(a) The selling concept
Marketing and Sales Concepts Contrasted
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Marketing Concept (cont.)
Target market ğ homogenous group of customers to whom the company wishes to appeal
Customer needs Consumers may not be fully conscious of their needs It may not be easy to articulate these needs They may use words that require some interpretation Customer-oriented thinking ğ to define customer
needs from the customer’s point of view Sales revenue ğ New customers + Repeat customers “Customer Retention” vs. “Customer Attraction” Customer satisfaction is a function of the product
perceived performance and buyer’s expectations
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Marketing Concept (cont.)
Integrated Marketing1. Various marketing functions must work
together for customer satisfaction (coordination of 4Ps; marketing mix elements)
Marketing Mix ğ controllable variables the company puts together to satisfy its target market(s).
Product: Product variety, quality, design, features, brand name, packaging, sizes, services, warranties, returns
Price: List price, discounts, allowances, payment period, credit terms
Promotion: Sales promotion, advertising, sales force, public relations, direct marketing
Place: Channels, coverage, assortments, locations, inventory, transport
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Marketing Concept : The 4 Ps
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Marketing Concept : The The 44 Ps Ps ğğ The 4 Cs The 4 Cs
MarketingMix
Product
Price Promotion
Place
CustomerSolution
CustomerCost
Communication
Conven-ience
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Marketing Concept (cont.)
Integrated Marketing (cont.)2. Marketing must be well coordinated with
other departments in the company;all departments have to work together to satisfy customers’ needs and wants
Profitability through customer satisfaction
To achieve profits as a result of creating superior customer value
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Selling – Marketing...
“There will always be need for some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be
needed is to make the product or service available.”
Peter Drucker
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Customers
Front-line people
Middle Management
TopManagement
Marketing Concept (cont.) Traditional Organization Chart
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Marketing Concept (cont.) Customer-Oriented Organization Chart
Customers
Front-line people
Middle management
Topmanage-
ment
Customers Cus
tom
ers
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Societal Marketing Concept
Company’s negative effects on society Conflict between consumer wants and long-
term social welfare Marketing managers should be concerned
with social responsibility The societal marketing concept ğ
Company’s task is to determine needs and wants of target markets & to satisfy them more effectively and efficiently than competitors, in a way that preserves or enhances the consumer’s and society’s well-being
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Societal Marketing Concept
Societal Marketing
Concept
Company(Profits)
Consumers(Want Satisfaction)
Society(Human Welfare)