Principles of Marketing Overview

Reviewer Principles of Marketing

• Marketing is the creation and communication of value to customers, maintaining long-term relationships.
• It bridges the gap between societal needs and wants and providing solutions through exchange processes.
• The American Marketing Association (AMA) defines marketing as a set of processes for creating, communicating, and delivering value to customers, benefiting organizations and stakeholders.
• Philip Kotler defines it as a social and managerial process enabling individuals/groups to obtain desired products/services through exchange.

Customers' Needs and Wants

• Garovillas (2004) proposed that the marketing concept is a business philosophy centering on identifying target market needs and wants, exceeding competitors in delivering satisfaction.
• Customer satisfaction is paramount in most marketing philosophies.

Marketing Concepts

• Customer-Oriented: Marketing planning and execution must focus on customer needs.
• Coordinated Activities: Product planning, pricing, promotion, and distribution must combine to fulfill customer needs effectively.
• Performance-Driven: Achieving profit goals and objectives through planned customer-centric strategies involving increase in sales and customer patronage, optimizing product planning, pricing, promotion and distribution.
• Factors for Developing Marketing Concepts:
  • Capturing Marketing Insights: Aligning organizational goals with value creation for customers.
• Value of Human Resources: Developing employee commitment to quality product/service delivery and work ethics, strongly supporting marketing endeavors.
• Production Process: Maintaining quality standards in products; production processes should be driven by meeting customer wants and needs.
• Competitor Presence: Strategies to outperform competitors, develop loyal customer relationships.
• Societal Marketing Concept: Balancing consumer satisfaction with societal well-being.
• Traditional Concept Marketing: A strategy analyzing product viability, production capacity, and marketing methods to fulfill needs.

Traditional Marketing Approaches

• Production Concept: Focuses on internal capabilities rather than market needs.
• Marketing Concept: A customer-centric philosophy focusing on meeting customer needs to achieve organizational goals.
• Sales Concept: Achieving sales through aggressive selling and advertising.
• Relationship Concept: Building and improving long term relationships with customers, distributors, and suppliers.
• Societal Concept: Fulfilling consumer needs while benefiting society.

Goals of Marketing

• Focusing on customer needs and wants to differentiate from competitors
• Integrating company activities for customer value
• Achieving organizational goals by satisfying customer needs

Key Performance Indicators (KPIs)

• KPIs are metrics to ensure marketing activities are on track in achieving defined objectives.

Emerging Marketing Types

• Search Engine Optimization (SEO): Improving website visibility on search engine result pages (SERPs).
• Pay-Per-Click (PPC) Advertising: Paying for ads to display on search engine or website results.
• Email Marketing: Direct communication with customers through emails.
• Referral Marketing: Customer referrals for product advocacy.
• Affiliate Marketing: Commission for product referrals/promotions.
• Video Marketing: Building brand awareness and promoting products through video content.

Traditional Marketing

• Traditional marketing encompasses various channels (print, billboards, TV, radio, flyers/posters) used for advertising.
• Traditional marketing theories include Ansoff's Matrix.
• Ansoff's Matrix helps assess the attractiveness of growth strategies. It considers existing and new markets and products.

Market Segmentation

• Aggregating prospective buyers based on demographics, geography, behavior, or psychographics.
• Demographic Segmentation: Targeting customers based on age, income, gender, race, or education.
• Firmographic Segmentation: Analysing organizations based on employee count, customers, offices or revenue.
• Geographic Segmentation: Grouping customers by location, based on the assumption that customers in the same area have similar needs.
• Behavioral Segmentation: Grouping customers based on their behavior, actions, and purchase patterns.
• Psychographic Segmentation: Classifying consumers based on lifestyle, personality, opinions, and interests.

Micro & Macro Environments

• Microenvironment: Factors closely impacting the company, including suppliers, resellers, and customers.
• Macroenvironment: Broader factors, like economy, society, and technology.

Customer Types

• Strangers: Customers whose needs don't fit the company's offerings.
• Butterflies: Customers who don't consistently patronize specific brands and are less loyal
• True Friends: Loyal customers whose needs align with the company's offerings.
• Freeloaders: Loyal customers without significant profitability for the company

Relationship Marketing

• Creating, maintaining, and enhancing strong relationships with customers and stakeholders.
• Moving from individual transactions to value-laden relationships.
• Various levels of interaction with customers: Basic, Reactive, Accountable, Proactive and Partnership.

Marketing Research

• Analyzing consumer behavior and market trends to guide business strategies.

Tactical Marketing

• Short-term, intense efforts aimed at specific marketing targets.

Strategic Marketing

• Long-term vision and strategies for achieving company objectives; encompassing broader considerations.

Building Customer Value

• Customer value is the satisfaction derived from a choice in action, evaluated by considering the cost of that action.

Market Penetration, Development, Diversification, Mix

• Market penetration: Increasing sales of current products in existing markets.
• Market development: Selling current products in new markets.
• Product development: Introducing new products to existing markets.
• Diversification: Entering new markets with new products.
• Marketing Mix (7Ps): Product, Promotion, Price, Place, People, Process, Physical Evidence.

STP Marketing Model

• Segmenting the market into specific groups
• Targeting the ideal customer groups
• Positioning the offering/product to specific groups

Business Markets

• Companies and organizations engaging in transactions with other businesses.
• A B2B (Business-to-Business) market.