The Role of MarketingIng. Pablo San Andrés

IntroductionPeople have different needs and wantsNeeds.- They are the essential necessities that all humans must have in order to survive.

Shelter Water Food

IntroductionWants.- They are the desires that humans have. Irrespective of a person’s income or wealth, it is argued that we all have infinite wants

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IntroductionMarketing exists to address people’s needs and wants. It is about making customers want to buy the products.It therefore looks at the reasons behind people’s decision, such as the price, colour, size, or special features of the product

IntroductionMarketing must serve to meet needs and wants of the customer. This is essential for all business aiming to make profit.

IntroductionThe marketing department of an organization tends to have 4 main or generic objectives

1. Ensure that the right products are supplied to fulfill needs and wants of customers

2. Set the correct price so that customers can afford to buy the product and to ensure that they do not buy from a rival business.

3. Distribute the products to a place that is convenient for the customer to make the purchase

4. Ensure that there is an effective promotion to convince customers to buy from the business

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The marketA market.- It is a place or process whereby customers and suppliers trade. A market exists where there is demand for a particular product, such as

Textbooks Flowers plasma televisions

And where there is a willingness from businesses to supply these products

The marketWithin any particular market, there is likely to be a number of rival products and suppliers that can be used to satisfy the needs and wants of the customer. Ex: In luxury consumer clothing industry, the market consists of competitors such as:

The marketA business will be interested in three elements of the market in which they operate:1) The size of the market2) The growth rate within the market3) The firm’s share of the market

Market sizeIt refers to the magnitude of an industry, usually measured in terms of the value of sales revenue from all the businesses in a particular market, per time period. It can be measured in a number of ways:1)Customer base

This measures the total potential number of customers. It can be measured in terms of volume and valuehttps://www.youtube.com/watch?v=xqYPBKAh7Gs

Market size2) Barriers to entry

These determine the number of suppliers in the market and can also be a measure of a market’s size

In markets, such as aircraft manufacturing, the entry barriers are extremely high ( huge costs, huge economies of scale, market power)

Market Size3) LocationSome markets focus on a particular area, country or region. Ex:Adidas is the market leader in the supply of equipment for Taekwando (a popular form of martial arts), with around four fifths of the world’s black belt holders residing in Korea

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Market Growth• It refers to an increase in the size of a market

over a period of time, usually per year.• This can be measure by an increase in the

value or volume of sales in the market.

• Market growth is likely to lead to more suppliers entering the market as they are attracted by the potential profits that can be made

Market Share•It refers to an organization’s share of the

total value of sales of all products within a specific market.

Formula:

Market Share

Market Share

Market Share•There is a positive relationship between

market share and profits.•Firm with the largest market share is not

necessarily the most profitable.•Market leaders: They are firms that

dominate the market share in a particular market. For example: Nike and Adidas are market leaders in the mass market sports apparel industry

Market Share

A firm with high market share has better pricing power and is less threatened by competition

How to increase the market share?

•Promotion of brands•Product development, improvements and

innovation•Motivation and training of the workforce

to deliver better customer service•Establishment of property rights through

the use of copyright and patents•Use of more efficient channels of

distribution

Market ShareMarket concentration.- It measures the degree of competition within a market by calculating the market share of the largest firms in a market.

The sum of these market shares is known as the concentration ratio

SALES DATA ARE ALSO OLD OR OUT OF DATE SO ANY MARKET SHARE INFORMATION WILL REPRESENT A HISTORICAL SITUATION AND NOT NECESSARILY THE CURRENT POSITION.

Exercise No. 1

Answer

Exercise No. 2

Answer

Exercise No. 3

Exercise No. 4Nokia is the world’s largest mobile phone producer, with approximately 35% market share. Nokia’s market share is double that of its nearest rival, Motorola. Sales of Nokia handsets have soared recently mainly due to rising demand in India, China and Eastern European markets

a)Calculate the approximate two-firm concentration ratio in the mobile phone industryb)Outline what is meant by market share and show how it might be calculatedc)Explain two advantages that Nokia might enjoy by having a larger market share than its rivals such as Motorola

Answer

Answer

Definition and nature of MarketingMarketing.- The management role of predicting, identifying and meeting the needs and wants of customers in a profitable manner.

Ex: The movie industry is constantly trying to produce films that audiences may want to see

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Definition and nature of Marketing

•Marketing seeks to satisfy the consumer•Products must satisfy the consumer’s

need and want•Products must represent value for money•Price, availability and quality are

essential elements that consumers consider when assessing value for money = Loyal customers

Definition and Nature of Marketing

•Professor Philip Kotler argues that customers will buy products from the firm that offers the highest value for money (what he called customer delivered value). This is the difference between benefits and costs to the customer purchasing the product.

Definition and Nature of Marketing

Marketing alone does not ensure success since other aspects the business must also consider, such as:Operations management•The production department will work closely with the marketing people in using sales forecasts (from market research) to prepare their production schedules.

Definition and Nature of Marketing•The work together to research, develop

and launch products to meet the needs of customers

•There may be some conflict between them since production managers would prefer a longer time period in which to test and develop products whereas marketing managers would urge for a quick launch in order to maximize sales revenues

Definition and Nature of MarketingFinance•The marketing department will work closely with the finance department in order to set appropriate budgets.

•Conflict: It is likely that finance department would want prices to cover costs of production in order to generate profits, but marketers may feel that low prices (that do not necessarily cover all costs) are necessary in the short term to get foothold in the market

Definition and Nature of Marketing

Conflict: Marketers may also want to use extended credit facilities (such as interest free-credit instalment plans) to entice customers, but finance department will be conscious of the act that extended credit can lead to all sorts of liquidity problems.

Definition and Nature of Marketing

Human resource managementMarketing data can help the HRM department to identify staffing needs. For example: The introduction of a new product may require recruiting extra production staff (The right quantity and quality of workers) in order to meet needs of their customers.

Market and product orientation

Product orientationIt is a marketing approach adopted by business that are inward looking. They focus on selling products that they make, rather than making products that they can sell.Ex: Many hi-tech products that are used in daily life were created using a product orientation approach

Market and product orientationMarket orientationIt is also known as consumer orientation. It is a marketing approach adopted by business that are outward looking. They focus on making products that they can sell, rather than selling products that they can make.

Market and product orientation

Market orientationAdvantages

* Flexibility.- Able to anticipate changes in the market (access relevant data and information).* Less risk.- Firms can be confident that their products will sell and be successfulDisadvantage

* Market research tends to be very expensive

Market and product orientation

Marketing of goods and services

Service: It is an intangible product

Bank service: Tax-free savings, overdrafts, or mortgages

Services are heterogeneous (Customers gets a different experience)

Marketing of goods and services

Traditional marketing mix of goods

Marketing of goods and services

The marketing of services includes three additional elements

The Marketing of goods and services

PeopleThe provision of services relies on the goodwill of all employees.

The marketing of goods and servicesThe effectiveness of people in delivering a service may be measured in a number of ways•Appearance and body language

McDonald’s have a ‘Smiles are free” policy to ensure that their customers are greeted with a friendly smile.

The marketing of goods and services• Aptitudes and attitudesManagers will ask a range of questions concerning

the capability and behavior of their staff.Ex:

_ Proactive_ Attentive to the needs of their clients_ If they are caring, courteous and confident

The marketing of goods and servicesFeedbackComments made by various stakeholder groups can also provide useful information regarding the effectiveness of people in delivering good customer service.

The Marketing of goods and services

•EfficiencyStaff who do not keep customers waiting

and who do not make mistakes will help the business to gain a better reputation of reliability.

The Marketing of goods and servicesProcessesProcess refers to the way in which a service is provided or delivered. It includes:•Payment methods (cash, cheque or credit card). This makes the process more convenient for customers•Waiting time (poor image)•Customer service (attentiveness and politeness of staff towards customers)•After sales care (maintenance, guarantees and warranties)

The Marketing of goods and servicesPhysical evidence (or physical environment)The physical environment refers to the tangible aspects of a service. For example: 5 Star Hotel because we might expect to see a clean lobby with nice décor and well-groomed hotel staff.

The Marketing of goods and servicesChallenges facing managers in delivering quality customer services include:1)Correcting mistakes2)Measure productivity (Service is difficult to measure)3)People management (The lack of motivation from just one worker, could be enough to tarnish the reputation of the business)

It difficult to measure theproductivity of her

students

Marketing in non-profit organizationsNon-profit organizations don´t make an effort to make profits. Such as:•Charities•Religious organizations•Government department

Some governments use television advertisements to persuade

driversnot to drink and drive

Marketing in non-profit organizationsThey tend to use SOCIAL MARKETING STRATEGIES rather than market-led

estrategies used by profit-seeking organization

Governments are also adopting social marketing techniques to encourage recycling and protection of the environment

Marketing in non-profit Organizations

Strategies:1)Slogans

2) De-marketing

Marketing in non-profit Organizations

Strategies:3) Internet tecnologies

Newsletters are published online and there may be facilities to make online donations

4) Public relations (such as fund-raising events)

Elements of a Marketing Plan

Marketing Plan: It is a document outlining a firm’s marketing objectives and the marketing strategies to be used in order to achieve these objectives.

Marketing Plan1) SMART marketing objectives (specific,

measurable, agreed, realistic and time constrained)

2) Methods of market research to be used to identifying target markets

3) An assessment of strengths and weaknesses of competitors

4) Marketing Mix5) Details of the marketing budget6) SWOT and Pest analysis (To assess internal

and external factors affecting the business and its marketing objectives)

Wallington High School for Girls

Wallington High School for Girls, located in Surrey (UK) is a selective grammar school for girls. Selection is based on an academic entrance exam. There are several other selective and private fee-paying schools in the UK. Like all schools, Wallington High School for Girls is involved in marketing. Each year, the management team of the school will deliberately run events to market their organization. These events include: parents’ information evenings, charity events, celebration evening, music concerts and drama productions.

Wallington High School for girls

Wallington High School for girls gained its Engineering Status in 2004 (which gives it extra funding from the government) and proudly markets this achievement. The school also communicates its outstanding examination results to all key stakeholders.1)Explain two reasons why marketing is important to Wallington High School2)Analyze how people, process and physical evidence are vital elements of the marketing mix in the marketing of schools