Introduction to Functional Areas of Management Unit 4

Introduction to Marketing

• Marketing is about identifying and meeting human and social needs profitably.
• It involves creating, communicating, and delivering value to customers and managing customer relationships in ways that benefit the organisation and its stakeholders.
• Marketing can be defined as both an organisational function and a set of processes.

What is Marketed?

• 10 types of industries are marketed:
  • Goods (physical products)
  • Services (intangible products)
  • Events
  • Experiences
  • Persons (celebrity marketing)
  • Places (cities, states, regions, nations)
  • Properties (intangible rights of ownership)
  • Organisations
  • Information
  • Ideas

Who Markets?

• A marketer is someone who seeks a response from another party, called the prospect.
• Marketers are responsible for demand management, influencing the level, timing, and composition of demand to meet the organisation's objectives.

Demand States

• 8 demand states exist:
  • Non-existent demand (consumers unaware or uninterested)
  • Negative demand (consumers dislike the product)
  • Latent demand (consumers have an unmet need)
  • Declining demand (consumers buy less frequently or not at all)
  • Irregular demand (consumer purchases vary)
  • Full demand (consumers adequately buy all products)
  • Overfull demand (too many consumers want the product)
  • Unwholesome demand (consumers attracted to products with undesirable social consequences)

Marketplaces, Marketspaces, and Meta Markets

• Marketplace: physical place where buyers and sellers gather
• Marketspace: digital platform for buyers and sellers
• Meta-markets: cluster of complementary products and services closely related in consumers' minds but spread across diverse industries

Types of Markets

• 5 basic markets and their connecting flows:
  • Resource markets (raw materials, labour, money)
  • Manufacturer markets
  • Intermediary markets
  • Government markets
  • Consumer markets
• Each nation's economy and the global economy consist of complex interacting sets of marketers linked through exchange processes.

Core Marketing Concepts

• Needs, Wants, and Demands:
  • Needs: basic human requirements
  • Wants: specific objects that might satisfy a need
  • Demands: wants for specific products backed by an ability to pay
• Target Markets, Positioning, and Segmentation:
  • Dividing the market into segments based on demographic, psychographic, and behavioural differences
• Offerings and Brands:
  • Value proposition: set of benefits offered to customers
  • Offering: combination of products, services, information, and experiences
  • Brand: offering from a known source with a unique image
• Value and Satisfaction:
  • Value: perceived tangible and intangible benefits and costs to customers
  • Satisfaction: judgement of a product's performance in relation to expectations
• Marketing Channels:
  • Communication channels: deliver and receive messages from target buyers
  • Distribution channels: display, sell or deliver the physical product or service
  • Service channels: facilitate transactions with potential buyers
• Supply Chain:
  • Series of companies and activities involved in producing and delivering a product to the end customer
• Competition:
  • Actual and potential rival offerings and substitutes a buyer might consider
• Marketing Environment:
  • Task environment: company, suppliers, distributors, dealers, and target customers
  • Broad environment: demographic, economic, physical, technological, political-legal, and social-cultural environments

Company Orientation towards the Marketplace

• The Production Concept:
  • Focus on achieving high production efficiency, low costs, and mass distribution
• The Product Concept:
  • Focus on making superior products and improving them continually
• The Selling Concept:
  • Focus on undertaking an aggressive selling and promotion effort to convince customers to buy### The Selling Concept
• The selling concept aims to sell more products to more people, more often, and for more money to make more profit.
• This concept is often used aggressively with unsought goods, such as insurance, encyclopedias, and cemetery blocks.
• Firms with overcapacity also practice the selling concept, focusing on selling what they make rather than making what the market wants.
• However, this approach carries high risk, assuming customers will like the product and ignoring the potential for negative word-of-mouth.

The Marketing Concept

• The marketing concept emerged in the mid-1950s, shifting from a product-centered "make and sell" philosophy to a customer-centered "sense and respond" approach.
• The focus is on finding the right products for customers, rather than finding the right customers for products.
• Dell Computers exemplifies this concept by providing product platforms that customers can customize to their desires.

The Holistic Marketing Concept

• The holistic marketing concept recognizes the need for a more complete and cohesive approach that goes beyond traditional marketing applications.
• It involves developing, designing, and implementing marketing programs, processes, and activities that recognize their breadth and interdependencies.
• Holistic marketing acknowledges that "everything matters" and requires a broad, integrated perspective.

Relationship Marketing

• Relationship marketing aims to develop deep, enduring relationships with people and organizations that affect the success of a firm's marketing activities.
• Four key constituents for relationship marketing are customers, employees, marketing partners, and members of the financial community.
• Marketers must respect the need to create prosperity among all these constituencies and develop policies to balance returns to all key stakeholders.
• The ultimate outcome of relationship marketing is a unique company asset called a marketing network.

Integrated Marketing

• Integrated marketing involves devising marketing activities and assembling fully integrated marketing programs to create, communicate, and deliver value for consumers.
• The marketing mix variables include product, price, place, and promotion (4Ps) or, from the customer's perspective, product, price, convenience, and communication (4Cs).
• Marketing mix decisions must be made for both trade channels and final consumers.
• All marketing activities are coordinated to maximize their joint efforts.

Internal Marketing and Socially Responsible Marketing

• Internal marketing ensures that everyone in the organization embraces appropriate marketing principles.
• It involves two levels: marketing functions working together and other departments embracing marketing and "thinking customer."
• Socially responsible marketing incorporates understanding broader concerns, including ethical, environmental, legal, and social contexts.

Shifts in Marketing Management

• Fourteen major shifts in marketing management include:
  • From marketing doing the marketing to everyone doing the marketing
  • From organizing by product units to organizing by customer segments
  • From making everything to buying more goods and services from outside
  • And ten more shifts, including a focus on customer lifetime value, building brands through performance, and prioritizing stakeholders over shareholders.

Learn about the basic concept of marketing, which is identifying and meeting human and social needs profitably. Examples of companies like eBay and IKEA are provided to illustrate marketing knowledge.