Intro to Marketing PDF

SCOPE AND MEANING OF MARKETING Marketing Defined: Kotler’s social definition: “Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with other...

SCOPE AND MEANING OF MARKETING Marketing Defined: Kotler’s social definition: “Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others.” The AMA managerial definition: “Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.” Simple definition: Marketing is the management process responsible for identifying, anticipating, and satisfying customer requirements profitably.” (CIM,2001)  WHAT IS MARKETED? Needs and wants are fulfilled through a Marketing Offering: 1 Goods: Physical goods constitute the bulk of production and marketing efforts. 2.Services: These are intangible products such as educational services, health services and others. 3. Events: Marketers promote time based events such as trade shows, artistic performances, football tournaments etc. 4. Experiences: By orchestrating services and goods, a firm can create and market experiences such as Dodzi Island 5. Persons: Celebrity, political personalities, etc  WHAT IS MARKETED (Con’t) 6. Places: Cities, regions, and a whole nation competes actively to attract tourist, investors and residents. 7. Properties: Are intangible rights of ownership of either real property (real estate) or financial property (stock and bonds). 8. Organisations: Organisations actively work to build strong, favourable and unique image in the minds of their publics 9. Information: Can be produced and marketed as a product. Universities, schools and others produce information and then market it. 10. Ideas: Every market offering includes a basic idea. Political ideologies, religious doctrines, consumerism, etc.  Core Marketing Concepts Needs-the basic human needs. People need air, food, water, clothing and shelter to survive. Wants- needs that are directed at specific objects for satisfaction Demand- wants for specific products backed by an ability to pay  The Marketing Mix: 4Ps The marketing mix is the set of controllable variables the marketer uses to develop marketing plans and programmes. The original and basic elements of the marketing mix are the 4ps: – Product – Price – Place – Promotion  Recently, because of the growth of services marketing, the original mix has been extended to include three further Ps namely: – People – Process – Physical Evidence Company Orientations-Marketing It is important to understand the historical background of the concept of marketing and its relationship with personal selling. In tracing the development of the marketing concept it is customary to understand how marketing has evolved and the various approaches to meeting customer needs: 1. Production concept 2. The product concept 3. The selling concept 4. The marketing concept 5. The societal marketing concept 6. The Holistic Marketing Concept  The Production Concept The production concept is one of the oldest concepts in business. This era was characterised by producing goods or services. It holds that consumers will prefer products that are widely available and inexpensive. Managers of production-oriented businesses concentrate on achieving high production efficiency, low costs, and mass distribution. Such a philosophy was initiated by Henry Ford when he mass produced the Model T Ford in Detroit in 1913. A production orientation to business is suited to an economic climate where potential demand outstrip supply, as was in the case in the USA at that time. However, times change, and such a philosophy is not conducive to doing business in today’s economic climate, where competition is intense and potential supply usually outstrips demand.  The Product Concept The product concept proposes that consumers favor products that offer the most quality, performance, or innovative features. Managers with focuse on making superior products and improving them over time. The objective was that, buyers admire well-made products and can evaluate quality and performance.  The Selling Concept The selling concept is where the focus of company effort switches to the sales function. The selling concept holds that consumers and businesses, if left alone, won’t buy enough of the organisation’s products. The organisation must, therefore undertake aggressive selling and promotion effort. The selling concept is practiced most aggressively with unsought goods, goods that buyers normally do not think of buying, such as insurance, encyclopedia. Most firms also practice the selling concept when they have over capacity. Their aim is to sell what they make, rather than make what the market wants. The risk associated with the selling concept may be leaving customers dissatisfied, negative word-of-mouth, and lack of customer loyalty.  The Marketing Concept The ideas associated with the marketing concept begun to emerge in the 1950’s. The marketing concept arose partly as a result of a dissatisfaction with the production and selling concepts, partly as a result of a changing environment, and partly as a result of fundamental business sense. The marketing concept holds that the key to successful and profitable business rests with identifying the needs and wants of consumers and providing products and services to satisfy them. Instead of a product-centered, “make-and-sell” philosophy, business shifted to a customer-centered, “sense-and-respond” philosophy. The job is not to find the right customers for your products, but to find the right products for your customers. The marketing concept holds that the key to achieving organisational goals is being more effective than competitors in creating, delivering and communicating superior customer value to your chosen target markets.  The Societal Marketing Concept It holds that the customer satisfaction may be at the expense of the welfare of the general society. Therefore, companies should demonstrate how to satisfy the needs of customers in a sustainable manner. This considers issues such as recycling, minimum use of natural resources, environmental pollution and several others are relevant today.  Holistic Marketing Concept Holistic marketing can be seen as the development, design, and implementation of marketing programs, processes, and activities that recognizes the breath and interdependencies of their efforts. Holistic marketing recognizes that “everything matters” with marketing—the consumer, employees, other companies, competition, as well as society as a whole. – Holistic marketing – Internal marketing – Socially responsible marketing – Integrated marketing – Relationship marketing 13 Figure 1.4 Holistic Marketing Dimensions 14  Relationship Marketing Relationship marketing has the aim of building mutually satisfying long- term relationships with key parties— customers, suppliers, distributors, and other marketing partners. Relationship marketing builds strong economic, technical, and social ties among the parties. 15 Relationship Marketing – Marketing must not only do customer relationship management (CRM) but also partnership relationship management (PRM). – Four key constituents for marketing are: » Customers. » Employees. » Marketing partners (channel partners). » Members of the financial community. » The ultimate outcome of relationship marketing is the 16  Internal Marketing – Holistic marketing incorporates internal marketing, ensuring that everyone in the organization embraces appropriate marketing principles. – Internal marketing must take place on two levels: – At one level, the various marketing functions (sales force, advertising, customer services, product management, and marketing research) must work together. – Secondly, marketing must be embraced by the other departments—they must “think customer.” Marketing is not a department so much as a company orientation. 17  Social Responsibility Marketing Holistic marketing incorporates social responsibility marketing and understanding broader concerns, and the ethical, environmental, legal, and social context of marketing activities and programs. Societal marketing concept: the organization’s task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfaction more effectively and efficiently than competitors. 18 Conflict between Marketing and Other Departments Although in principle all departments should cooperate, in practice there is often substantial rivalry and conflict between them. This is because department heads may have their own views as to what constitutes the effective management of their particular area of activity. Functions Source of Conflict Production Production often stress long production runs of standardized items, together with finite sales forecasting for planning processes. Differences occur on issues of lead times, modification changes, minimum ordering, scheduling, stockholding, etc. Marketing, on the other hand, will stress the need for a greater variety of products, shorter production runs, etc Research & Development R&D may emphasize a need for pure research, for experimentation and greater accuracy and development time. Marketing's emphasis will be on more applied research and they will become frustrated with overruns on time and budget. Functions Source of Conflict Purchasing Purchasing specialists will stress the need to choose between suppliers, to focus on price specifications and delivery times. Marketing may stress the need for high quality, higher priced items in line with what customers are demanding. Design Engineering design will seek to standardize, while marketing will seek to customize. Finance Potential conflict here is often over prices to charge and pricing methods, cost allocation, profitability targets, credit control and marketing budgets.