BUS124 Session 1 1 (1).pdf

BUS 124/1241 Global Marketing Session 1 – The world of Marketing  Welcome! Lecturer : Amit Vyas [email protected] Unit Coordinator : Gina Sebastian [email protected] Please email me – I’ll reply within a few hours (most of the time) Meeting after tutorials possible – as long...

BUS 124/1241 Global Marketing Session 1 – The world of Marketing  Welcome! Lecturer : Amit Vyas [email protected] Unit Coordinator : Gina Sebastian [email protected] Please email me – I’ll reply within a few hours (most of the time) Meeting after tutorials possible – as long as it’s kept short Assessments The Prescribed Textbook Session 1 : Learning Outcomes By the end of this session, you’ll be able to : 1.Explain what marketing is, the marketing mix, what can be marketed, and the value of marketing 2.Explain the evolution of the marketing concept 3.Understand value from the perspectives of customers, producers, and society 4.Explain the basics of market planning The role of marketing Who is a typical marketer? Marketers have varying backgrounds apart from a Marketing Degree and may have qualifications to suit their particular industry Where do you find marketers? Marketers work in many areas including: Private enterprisers Multi-national corporations Not-for-profit industries Government departments The role of marketing (cont.) Some companies take a broader view Integrated Marketing’s wider role Integrated Marketing within the business Marketing Others take a more limited view Advertising Sales The value of marketing Marketing is about creating value and delivering value to everyone who is affected by a transaction Official definition of Marketing (American Marketing Association) Marketing is the activity, set of institutions and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners and society at large The value of marketing (cont.) Marketing aims to meet the needs of diverse stakeholders Stakeholders are any person or organisation that has a ‘stake’ in the outcome of the sale of goods and services Investors Sellers Stakeholders Buyers Citizens of other nations Community residents The value of marketing (cont.) The Consumer The ultimate user of goods, ideas and services Needs Wants The recognition of a difference The desire to satisfy needs in specific between a consumer’s actual state, ways that are culturally and socially and some ideal or desired state influenced The value of marketing (cont.) Gain long term profitability Provide products to satisfy those needs Identify consumer needs The value of marketing (cont.) Benefits create consumer demand Benefits – the outcome sought by a customer that motivates buying behaviour Demand – customers’ desire for products and resources to obtain them Benefit Demand Outcome = Desire + Satisfaction Resources The value of marketing (cont.) The Market: All current and potential customers who share a common need that can be satisfied by a specific product Who have the resources to exchange for it Who are willing to make the exchange And who have the authority to make the exchange The Marketplace: Any location or medium used to conduct an exchange e.g. the internet or an open-air market The value of marketing (cont.) Target Market - The market segments to which an organisation focuses its marketing plan and towards which it directs its marketing efforts Market Segment - A distinct group of customers within a larger market who are similar to each other in some way and whose needs differ from other customers in the larger market Mass Market - All possible customers in a market, regardless of the differences in their specific needs and wants The value of marketing (cont.) Marketing creates utility which is the usefulness consumers receive from buying, owning or consuming a product Form utility - transforms raw materials into finished products Place utility – makes products available where customers want them Time utility – storing products until needed Possession utility – shifting the ownership of a product The value of marketing (cont.) Marketing develops exchange relationships Exchange is the process where transfer of value occurs between a buyer and a seller Involves at least 2 people who are willing to trade Agreed value of exchange Free to accept or reject deal The buyer receives an object, service or idea that satisfies a need The seller receives something of equivalent value – usually money The evolution of marketing 1900-1930s Production era Producing the product as efficiently as possible. Goal to be most efficient producer in a mass market 1930s-1960s Selling era Where marketing was primarily viewed as a sales function 1960s Consumer era A philosophy focused on satisfying customers’ wants and needs 1970s-1990s New era Segmentation and targeting. Improving products so that they meet needs better than competitors. Also sought to benefit employees, shareholders and communities Mid 1990s New Creating and delivering value. Building long- onwards millennium term bonds with customers. Total quality management (TQM) and relationships. Customers exchange two things of value: money and information The evolution of marketing “Any customer can have a car painted any color that he wants so long as it is black” Henry Ford 1863-1947 The evolution of marketing Focus for the future Triple bottom line 1. Financial profits 2. Contribution to society 3. Sustainable business practices Societal marketing concept: both company profits and customers needs are satisfied and also of benefit to society Sustainability: products developed that won’t compromise future generations Green marketing: supports the environment and a differential benefit in the minds of consumers The evolution of marketing Sustainable, responsible, fair trade, organic, bio degradable and natural product ranges What can be marketed? ‘Products’ refers to both goods and services a product is a tangible good, service, idea or some combination of these that satisfies consumer needs through the exchange process a bundle of attributes including features, functions, benefits and uses products do not need to take a physical form What can be marketed? 1. Consumer goods - tangible goods purchased by individual consumers for personal or family use 2. Services - intangible products that are exchanged directly from the producer to the customer 3. Business-to-business - products exchanged from one organisation to another, industrial goods are bought for use in business operations and as components of the manufacturing processes What can be marketed? 4. Not-for-profit - includes charities, zoos, churches, museums and governments 5. Ideas, places and people Ideas (e.g. don’t drink and drive) Places (e.g. tourist locations and attractions) People (e.g. models, musicians, athletes and other celebrities) The marketing of value Value: The tangible and intangible benefits a customer receives from buying a product or service Value can be considered from both the buyer’s and seller’s perspective Value proposition: A marketplace offering that fairly and accurately sums up the value that will be realised if the product or service is purchased Value for buyers is different for each individual buyer and the product category includes a bundle of benefits which the company promises to deliver as well as the product benefits The marketing of value (cont.) Value for sellers is determined by profitability and: prestige among rivals pride in doing what they do well some sellers don’t make a profit e.g. not-for- profit organisations and some government departments shift in focus – to see customers as “partners” some companies calculate the lifetime value of a customer which is the profit they expect to make from a customer in the future companies aim to retain customers and maintain repeat purchases through customer loyalty programs The marketing of value (cont.) – Repeat purchase The marketing of value (cont.) The key is providing value to stakeholders by creating a competitive advantage Competitive advantage: A company’sability to outperform their competitors, and provide customers with a benefit the competitors cannot provide Distinctive competency: A company’s superior capability in comparison to its direct competitors Differential benefit: Properties of products that set them apart from competitors’ products by providing unique benefits e.g. Dyson products The marketing of value (cont.) Value can be added to products through the value chain: A series of activities involved in designing, producing, marketing, delivering and supporting any product Each link in the chain has the potential to add or remove value from the product The length of the chain depends on the product and method of sale Inbound Outbound Marketing & Customer INPUTS Operations MARGIN Logistics Logistics Sales Service The marketing of value (cont.) The Process of Making and Delivering Value Making marketing value decisions Understanding consumers’ needs Creating the value proposition Communicating the value proposition Delivering the value proposition Marketing as a Process Marketing planning analyses the firm within the marketing environment and assesses the strengths, weaknesses, opportunities and threats (SWOT) Marketing plan is developed which: Describes the marketing environment Outlines the marketing objectives and strategy Identifies who will be responsible for carrying out the marketing strategy Marketing as a Process - Product Product – the item being offered for exchange which includes: The design and packaging Augmented Physical features Actual Associated services Usually consists of 3 levels Core – all the benefits the product will provide for Core consumers Actual – the physical good or service that supplies the desired benefit Augmented – the actual product plus other supporting features e.g. delivery, warranty & after sales service Marketing as a Process - Product Core product Actual product Augmented product Marketing as a Process - Price Price – the value the customer gives up or exchanges in order to obtain the desired product Can be used to: Increase interest in a product Indicate quality Non-monetary elements: Time cost – time given up to buy product Social cost – if the wrong product purchased Lifestyle cost – to change product or behaviour Marketing as a Process - Promotion Promotion – activities to inform customers about products and to encourage potential consumers to buy those products Promotional mix includes: Personal selling Advertising Sales promotion Public relations Direct marketing Online marketing Sponsorship Word-of-mouth Marketing as a Process - Place Place – the availability of the product to the customer at the desired time and location Related to the channel of distribution – the set of companies working together to get a product from producer to consumer Critical that customer can access the product when required  DISCUSSION COMPANY DISTINCTIVE COMPETENCY DIFFERENTIAL BENEFIT COMPETITIVE ADVANTAGE SOUTHWEST AIRLINES Price Point Appeals to budget travelers 1st choice for the price- conscious traveler STARBUCKS Product Quality High customer satisfaction Strong brand appeal & loyalty AMAZON Distribution and Fulfilment Ease of access, product Brand usage range DISCUSSION PRODUCT PRICE PLACE PROMOTION Thank You