Marketing Basics

Marketing

• Marketing is about identifying and meeting human and social needs.
• A good definition of marketing is "meeting needs profitably."
• Two examples of demonstrating marketing savvy are:
  • eBay creating an online auction clearinghouse to meet people's needs of finding items they desired most.
  • IKEA creating knockdown furniture to meet people's needs of good furnishings at substantially lower prices.

Core Marketing Concepts

Needs, Wants, and Demand

• Needs: basic requirements of any individual, not created by marketing people.
• Wants: described in terms of products that will satisfy needs, while human needs are limited and general, wants are unlimited and specific.
• Demand: when human wants are backed by purchasing power and willingness to buy, they become demands.

Marketing Offers

• A combination of products, services, information, or experiences offered to a market to satisfy a need or want.
• The largest share of marketing offers consists of physical (tangible) products, which include non-durable goods (fast-moving consumer goods or FMCG) and consumer durables.

Customer Value and Satisfaction

• Customer Value: the difference between the worth the customer gains from buying and using a product and the cost of buying the product.
• The main task of marketing becomes value-creation and value delivery.
• Customer Satisfaction: when customer expectations are fulfilled, resulting in customers buying the product again and telling others about their good buying experiences.

Exchange, Transactions, and Relationships

• Exchange: the act of obtaining an object one needs from another by offering some other thing in return.
• Market: refers to the different groups of consumers for a product or service, and is the set of actual and potential buyers of a product.

Marketing Function

• Marketing as a function: a process by which individuals or groups obtain what they need and want by creating and exchanging products and values with others.
• Managing markets to bring about profitable exchange relationships by creating value and satisfying needs and wants.
• Marketing activities:
  • Searching for customers
  • Product development
  • Market research
  • Communication
  • Sales promotion
  • Distribution channel management
  • Service

Marketing Management

• Marketing management: the art and science of choosing target markets and building profitable relationships with them.
• It involves getting, keeping, and growing customers through creating, delivering, and communicating superior value.
• Marketing management involves managing demand, which in turn, involves managing customer relationships.

Marketing Management Orientations or Concepts

• 5 concepts:
  1. Production Concept
  2. Product Concept
  3. Selling Concept
  4. Marketing Concept
  5. Marketing Mix (Four P's of Marketing)

Marketing Mix (Four P's of Marketing)

• 4 variables:
  1. Product: goods and services offered by a company to the target market to satisfy needs and wants.
  2. Price: the money value that consumers have to pay to buy the product or service.
  3. Promotion: activities of personal selling, advertising, and communicating product benefits and attributes to target consumers to persuade them to purchase.
  4. Place: physical distribution activities through which the product moves from the factory to the customer.

Role of Marketing Mix in Marketing Strategy

• Marketing mix has an important role to play in marketing planning and marketing strategy.
• The organization can choose, alter, and control its marketing mix variables according to environmental variables.
• The marketing mix is the most visible part of the marketing strategy of an organization.

Scanning the Marketing Environment

• Marketing activities do not take place in a vacuum, isolated from all external forces.
• A company's marketing environment consists of internal and external forces that affect management's ability to build and maintain successful relationships with target customers.

Micro-environment

• Consists of the following controllable actors close to the company that affect its ability to serve its customers:
  1. The Company
  2. The Suppliers
  3. The Marketing intermediaries
  4. The Customer markets
  5. The Competitors
  6. The Public

Macro Environment

• Forces that shape opportunities and pose threats to the company.