Introduction to Marketing Lecture Notes PDF

Week 5 – Lecture 2 What’s happening this week…. First week of Marketing Content Begins! This week, we cover chapter (1) Allocations for Group Project Assignment Watch for Lecturer Announcement  No Marketing class on Friday 25 Oct. Due...

Week 5 – Lecture 2 What’s happening this week…. First week of Marketing Content Begins! This week, we cover chapter (1) Allocations for Group Project Assignment Watch for Lecturer Announcement  No Marketing class on Friday 25 Oct. Due to assessment deadline (In-class QUIZZ on the MN151 Business Models part of the module at 11:00 am) Chapter (1) The Nature of Marketing An Introduction to Marketing By the end of this session, you will be able to: Understand and define marketing Understand the concept of customer value and satisfaction Understand marketing orientation Understand the marketing concept Understand the elements of the “Marketing Mix” Don’t worry if you haven’t studied marketing or business studies before. Marketing “is as old as commerce and has been practised for centuries. What the twentieth century brought that was new was a recognition of marketing as an independent discipline and what might be called the specialist marketer” (Ambler, 2004).  What is Marketing? Marketing is a process of value exchange. “Marketing is the delivery of value to customers at a profit” (Fahy & Jobber, 2022) Marketing Definitions “The management process which identifies, anticipates and supplies customer requirements profitably” (CIM, cited in Dibb et al, 1997) “A social and managerial process by which individuals and organisations obtain what they need and want through creating and exchanging value with others” (Armstrong & Kotler, 2005) Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchange and satisfy individual and organisational objectives (AMA, 2010)  ◼ Goods ◼ Places ◼ Services ◼ Properties ◼ Events ◼ Organizations What is ◼ Experiences ◼ Information Marketed? ◼ A person’s expertise ◼ Ideas  For value exchange to occur….. There are at least two parties Each party has something that might be of value to the other party Each party is capable of communication and delivery Each party is free to reject the exchange offer Each party believes it is appropriate or desirable to deal with the other party  The Nature of Customer Value Price Value Emotional Value ▪ Basic products at low prices ▪ Differentiation beyond performance attributes ▪ Forego extra features ▪ Branding & Brand Image Performance Value Relational Value ▪Innovative features Quality of service ▪Perceived quality (Dyson) High levels of trust  The Nature of Customer Value Customer Value = Perceived Benefits – Perceived Sacrifices Product Service Monetary Time Benefits Benefits Costs Costs Perceived Positive Customer Negative Perceived Benefits Value Sacrifice Relational Image Energy Psychological Benefits Benefits Costs Costs The Nature of Customer Value The value offered must exceed that of competition Customer Satisfaction depends upon the product’s perceived performance compared to buyer expectations → the purchase must meet or exceed buyers’ expectations Organisational Orientation Orientation of Organisations Evolution of the Business Orientation Integrated Market/Customer Long run profits customer Orientation through customer focus satisfaction Push! Push! Sales Short term Sell! Sell! Orientation gains in profit by promotion via sales increases Production Production & Orientation Profits through assembly line production controls refinement  Market-orientated businesses Internally orientated businesses Customer concern throughout Convenience comes first business Market-0riented vs Know customer choice criteria and Assume price and product Internally-orientated match with marketing mix performance key to most sales Businesses Segment by customer differences Segment by product Fahy & Jobber, “Foundations of Invest in market research (MR) and Rely on anecdotes and received Marketing, Sixth Edition" track market changes wisdom Welcome change Cherish status quo Try to understand competition Ignore competition Marketing spend regarded as an Marketing spend regarded as a investment luxury Innovation rewarded Innovation punished Search for latent markets Stick with the same Be fast Why rush? Strive for competitive advantage Happy to be me-too Marketing Orientation: Efficiency and Effectiveness Efficiency: doing things right Produces goods economically = Cost Focused Effectiveness: doing the right things Focus on current and latent market needs to attract and retain customers = Customer Focused Ineffective Effective Goes out of business Survives Inefficient quickly Efficient Dies Slowly Does well thrives 18  Critically Conceptualising Marketing Key Components of the Marketing Concept  Marketing Management Process A planned activity To identify, anticipate and satisfy customer requirements (needs, wants, demands) To do this efficiently and profitably To do this better than the competition Vital across all private and public sector; product and service industries; large and small companies A Simple Model of the Marketing Management (Armstrong & Kotler, 2005) Create value for customers Understand the Design a Construct a marketing marketplace, customer driven programme that delivers customer needs marketing superior value and wants strategy Capture value from customers Build profitable relationships to create profits & customer equity & create customer delight Capture value from customers in return The Marketing Mix Developing an Effective Marketing Mix (4Ps) The Marketing Mix: Product Development Management Features/benefits Branding Packaging After-sales service The Marketing Mix: Price Costs Profitability Value for money Competitiveness Incentives The Marketing Mix: Place Access to market Channel structure Channel management Retailer image Logistics The Marketing Mix: Promotion Communication mix Advertising Sales promotion World War II (1939-45) 1940s UK Marmite Sales marmite advertisement poster Magazine Advert Public relations Direct marketing 2017 Marmite Gene Project Advert https://www.youtube.com/watch?v=gWk9oKf_0BY  Criticising the 4Ps approach Oversimplifies the reality re. people, process, physical evidence (Booms and Bitner, 1981) Adequate for mass marketing of consumer goods - but these markets are fragmenting A supplier to consumer model - one way communication and ignores relationships More applicable for a society where the emphasis is on production rather than consumption (in most Western societies now) There is a shift towards CRM (Customer Relationship Marketing), with companies focusing on: delivering superior value and satisfaction, developing networks, and retaining loyal customers (Armstrong & Kotler, 2005)  Products vs. services A product is anything that can satisfy customer needs. It is physical/tangible. A service is mainly intangible Additional Ps Criticism of marketing!  We have introduced the idea of Marketing as an exchange of value We have learned about the dynamics of customer value We have understood customer orientation of organisations We have learned about the marketing concept and the elements of the Marketing Mix We have assessed the limitations of Marketing