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MARKETING

MEANING OF MARKETING

KEY MARKETING CONCEPTS

MARKETING MANAGEMENT

UNDERSTANDING THE CONSUMER/CUSTOMER

MEANING OF MARKETING

What Is Marketing? Marketing can be described as the delivery of customer satisfaction at a profit.

Marketing is also viewed as a social and managerial process by which individuals, in groups, obtain what they need and want through creating and exchanging products and value with others. The goal of marketing is: To attract new customers by promising superior value. To keep current customers by delivering satisfaction.

Sound marketing is critical to the success of any organization large or small, for profit or non-profit.

Marketing is not about advertising and selling. It is about understanding consumer needs, developing products that provide superior value and prizes, distribution and effectively promoting them so that they sell easily.

KEY MARKETING CONCEPTS

What are the key Marketing concepts? a. Needs, Wants and Demands Needs Human needs reflect states of felt deprivation. They are the things that people require in order to survive or keep their bodies functioning properly. They include: Basic physical needs for food, clothing, shelter/warmth and safety. Social needs for belonging and affection. Individual needs for knowledge and self expression. Wants Wants are the form taken by human needs as they are shaped by culture and individual personality. Wants are described in terms of objects that will satisfy needs. For example, a

person in Swaziland may want a home with many small individual huts yet a person in America may want a large double storey house. People have almost unlimited wants but limited resources. Thus, they want to choose products that provide the most value and satisfaction for their money. Demands When backed by buying power, wants become demands. Given their wants and resources, people demand products with the benefits that add up to the most satisfaction. For example, a corrola imported car (Dubai) means basic transportation, low price and a variety of car accessories. A BMW means comfort, luxury and status.

Summary In order to succeed, people doing business must understand their customers or consumers needs, wants and demands. They need to stay close to their customers in order to better understand them. They must observe their own and competing products and look out for unfulfilled customer needs. These will provide important inputs for designing marketing strategies.

b. Products and Services A product is anything that can be offered to a market to satisfy a need or a want. The concept of products is not limited to physical objects but includes services, persons, places, organizations and ideas.

May sellers make the mistake of paying attention to the specific products they offer than the benefits produced by these products. This is called marketing myopia. They forget that a product is only a tool to solve a consumers problem. These sellers will have trouble if a new product comes along that serves customers needs better or less expensively.

c. Value, Satisfaction and Quality Value Customer value is the difference between the values the customer gains from owning and using the product and the course of obtaining the product. Customers do not often judge product values and costs accurately or objectively. They act of perceived value. Satisfaction

Customer satisfaction is the extent to which products perceived performance matches the buyers expectations. If the product falls short of the customers expectation, the buyer is dissatisfied. Satisfied customers may repeat purchases and they tell others about their good experiences with the product. The key is to match customer expectation with company performance. Smart companies aim to delight customers by promising only what they can deliver, then delivering more than they promised. Quality In the narrowest sense, quality can be defined as free from defects. Customer satisfaction is closely linked to quality. Quality has a direct impact on product performance and, hence, on customer satisfaction. In resent years, many companies have adopted total quality management (T.Q.M) programmes, designed to constantly improve the quality of their products, services and marketing processes. Quality begins with customers needs and ends with customers satisfaction.

d. Exchange, Transactions and Relationships Marketing occurs when people decide to satisfy needs and wants through exchange. Exchange is the act of obtaining a desired object from someone by offering something in return. Exchange is the core concept of marketing. People do not have to produce everything they want but can concentrate on what they know best and trade them for needed items. Transactions It is a trade between two parties that involves at least two things of value, agreed upon conditions, a time of agreement and a place of agreement. A transaction is a marketing unit of measurement. It is important to note that not all transactions involve money (e.g. a barter transaction). Relationships beyond creating short-term transactions, marketers need to build longterm relationships with valued customers, distributors, dealers and suppliers. If a marketer builds a good network of relationships with key stakeholders, profits will follow.

e. Market The concept of exchange and relationships lead to the concept of a market. A market is the set of actual and potential buyers of a product. The size of a market depends on the

number of people who exhibit the need, have resources to engage in exchange and are willing to offer these resources in exchange for what they want. The goal of marketers is to understand the needs and wants of specific markets, and select the market they can serve best.

MARKETING MANAGEMENT

Marketing management is the analysis, planning, implementation and control of programmes designed to create, build and maintain beneficial exchanges with target buyers for the purpose of achieving organizational objectives.

Demand Management Marketing management is concerned not only with finding and increasing demand but also with changing or reducing it. For example, Swazi MTN has higher rate charges during the day and lower charges in the evenings. The aim is not to destroy the demand but to reduce it so that the network is able to serve the market effectively. Thus, marketing management seeks to affect the level, timing and nature of demand in a way that helps the organization to achieve its goals.

Building Profitable Customer Relationships Traditional marketing theory and practice have focused on attracting new customers and making a sale. Today, however, the emphasis is on designing strategies to attract new customers as well as retaining current customers by building lasting customer relationships. Companies have realized that losing a customer means more than losing a single sale it means losing the entire stream of purchases that the customer would market over a lifetime of patronage. The key to customer retention is superior customer value and satisfaction.

UNDERSTANDING THE CONSUMER/CUSTOMER Consumer purchases are influenced strongly by cultural, social, personal and psychological characteristics.

Cultural Factors Cultural factors exert the broadest and deepest influence on consumer behaviour. The marketer needs to understand the role played by the buyers culture, subculture and social class. Culture Human behaviour is largely learned. Every group or society has a culture. Culture is one set of basic values, perceptions, wants and behaviours learned by a member of society

from family and other important institutions. For example, Swazi women wear all black clothes when mourning their husbands.

Marketers must understand the culture in each target market and adapt their marketing strategies accordingly. In addition, markets should try to spot cultural shifts in order to discover new products that might be wanted. For example, the cultural shift towards health and fitness has now opened up a new market for sports facilities, gymnasium facilities and appropriate food products. Subculture Each culture contains smaller subcultures or groups of people with shared value systems based on common life experiences and situation. Subcultures include: Nationalities, religions, racial groups and geographical regions Social Class Social classes are relatively permanent and ordered divisions whose members share similar values, interests and behaviours. Social class is not determined by a single factor, such as income, but is measured as a combination of occupation, income, education, wealth and others. Markets are interested in social class because people within a given social class tend to exhibit similar buying behaviour. Social classes show distinct products and brand preferences in areas, such as: clothing, home furnishing, leisure activity and motor vehicles.

Social Factors A consumers behaviour is determined by social factors, such as: consumers small group, family and status. Group A group is two or more people who interact to accomplish individual or mutual goals.

Types of Groups: Membership groups groups that have a direct influence and to which a person belongs.

Primary groups in these groups, there are regular but informal interactions e.g. consulting co-workers Secondary groups are formal and have less interaction Reference groups serve as direct or indirect points of comparison. Aspirational groups

Marketers try to identify the reference groups of their target markets. Reference groups expose a person to new behaviours and lifestyles, influence the persons attitudes and selfconcept and create pressures to conform.

Manufacturers of products and brands subject to strong group influence must figure out how to reach the opinion leaders in the relevant reference groups. Opinion leaders are people within a reference group who, because of skill or knowledge, exert influence on others.

Family

Family members can strongly influence buyer behaviour Marketers are interested in the roles and influence of husband, wife and children on the purchase of different products and services.

Roles and Status

A role consists of the activities people are expected to perform according to persons around them. Each role carries a status reflecting the general esteem given to it by society.

Personal Factors i. Age and life cycle stage People change the goods and services they buy over their lifetimes. Marketers often define their target markets in terms of life-cycle stage and develop appropriate products and marketing plans for each stage. Young singles Married couples Older adults without children

ii.

Occupation Marketers try to identify the occupational groups that have an above-average interest in their products and services. A company can even specialize in making products needed by a given occupational group.

iii.

Economic situation Marketers of income-sensitive goods watch trends in personal income, savings and interest rates. If economic indicators point to a recession, marketers can take steps to redesign, reposition and re-price their products closely.

iv.

Lifestyle Lifestyle is a persons pattern of living. When used carefully, the lifestyle concept can help the marketer understand changing consumer values and how they affect buying behaviour.

Psychological Factors i. Motivation A need becomes a motive when it is raised to a sufficient level of intensity. It is assumed that people are largely not conscious of the real psychological forces shaping their behaviour. It is, therefore, necessary for marketers to collect in-depth information from small samples of consumers to uncover the deeper motives for their product choices.

Human needs are known to be arranged in a hierarchy from the most pressing to the least pressing. In order of importance these needs are: Physiological needs hunger, thirst Safety needs security, protection Social needs sense of belonging Esteem needs self esteem, recognition, status Self actualization self-development and realization.

A person tires to satisfy the most important need first. When the need is satisfied, it will stop being a motivator and the person will then try to satisfy the next most important need.

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Perception A motivated person is ready to act. How the person acts is influenced by his or her perception of the situation. Perception is the process by which people select, organize and interpret information to form a meaningful picture of the world.

People can form different perceptions because of three perceptual processes:

- Selective attention This is the tendency for people to screen out most of the information to which they are exposed. Therefore, marketers have to work hard to attract the consumers attention.

- Selective distortion This is the tendency for people to interpret information in a way that will support what they already believe. Selective distortion means marketers must try to understand the mind-sets of consumers and how these will affect interpretations of advertising and sales information.

- Selective retention This is the tendency for people to retain information that supports their attitudes and beliefs.

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Learning Learning describes changes in an individuals behaviour arising from experience. Learning theorists say most human behaviour is learned.

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Beliefs and attitudes A belief is a descriptive thought that a person has about something. Marketers are interested in the beliefs that people formulate about specific products and services because these beliefs make up product and brand images that affect behaviour. If the beliefs are wrong and prevent purchase, the marketer will want to launch a campaign to correct them.

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Attitude this describes a persons relatively consistent evaluations, feeling and tendencies toward an object or idea. Attitudes put people into a frame of mind of liking or dislike things. Attitudes are difficult to change. Therefore, a marketer should try to fit his or her products into existing attitudes rather than attempt to change them.

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