Introduction to Marketing

Good Marketing is not an accident but the

result of careful planning and execution .
 What is Marketing?

• Social definition
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
 What is Marketing?
• Management definition
It 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 goals.
• Marketing is an art and science
• Finance, operations accounting , production
and other functions will not really matter if
there is no sufficient demand for the
products and services.
 What is Marketing?
• Marketing is meeting the needs profitably
both of marketers and customers.
• The aim of marketing is to know and
understand the customer so well that the
product or service fits him and sells itself.
e.g. Waiting lines and customer full
restaurants, waiting period for the vehicles
etc.
 Needs and Wants
• Needs are basic human requirements.
• Wants are needs directed to specific
objects/services that might satisfy the need.
 Demand
• This is the wants for specific products backed by
an ability to pay.
• Marketers should try to shape the wants. Many
customers don't know what they want when the
product is new, concept or service is new.
• So companies help the customers to learn what
they want.
• E.g. chips, soft drinks are the party
food, chocolates for celebrations, diet food
product, fitness and weight loss programs etc.
 Exchange
• Get something (product /service) by
offering something in return.
Eg. kind (barter) or money (value )
• Exchange is a value creating process
because it leaves both parties better off
(win – win situation)
 Transaction
• A transaction is an exchange between two
things of value on agreed conditions and a
time and place of agreement.
• To make successful transaction a marketer
should understand what each party expects
from transction.
 What is Marketed?
• Goods
• Services
• Events
• Experiences
• Persons
• Places
• Properties
• Organizations
• Information
• Ideas
 Concepts under which firms
conduct marketing activities
• Production concept
• Product Concept
• Selling Concept
• Marketing Concept
• Holistic Marketing Concept
• Societal marketing Concept
 Production concept

• Consumers will prefer products that are

widely available and inexpensive.
• Managers of production oriented businesses
concentrate on achieving high production
efficiency, low costs, mass distribution.
 Product Concept
• Consumers will favor those products that
offer the most
quality, performance, innovative features.
• Managers in these organizations focus on
making superior products and imporoving
them over time.
 Selling Concept

• Consumers ,if left alone,will ordinarily not

buy enough of the organization’s products.
The organization must therefore, undertake
and aggressive selling and promotion effort.
• The aim is to sell what companies make
rather that what the market wants.
 Marketing Concept

• Customer-centered, sense and response

philosophy.
• The job is to find right products for your
customers.
• The key to achieve organizational goals consists
of the company being more effective than
competitors in creating , delivering and
communication superior customer value to its
chosen target markers.
 Holistic Marketing Concept
• Based on development, design and
implementation of marketing
programs, processes and activities .(fig.1.3)
 Four Themes of Holistic Marketing

1.Relationship Marketing
• Building long term mutually satisfying
relations with customers, suppliers,
distributors in order to retain their long term
preference and business1.
 2.Integrated Marketing
• It is the tools that an organization employs
to pursue its marketing objectives in the
target market
• Product, Price, Place, Promotion
• 4 C’s – Customer
solution, Cost, Convenience, Communicatio
n
 3.Internal Marketing
• Marketing Department
• Senior Management
• Other departments
 4.Socially Responsible Marketing

Cause and effect if marketing clearly extend

beyond the company and the customers.
• Ethics
• Environment
• Legal
• Community
 Societal marketing Concept
• Organization’s tasks is to determine the
needs, wants and interests of target markets
and to deliver the desired satisfactions more
effectively and efficiently than competitors
in a way that preserves or enhances the
consumer’s and the society’s well being.
 Marketing and Customer Value

Value and Satisfaction

• Value = Benefits/Costs
• Benefits = Functional Benefits + Emotional
benefits
• Costs = Monetary costs + Time + Energy +
Psychic costs
Offer should contain value for the product.
 Value Creation and Delivery
sequence
Choose the value- “homework” marketer must
do before the product exists.
1. Customer segmentation
2. Market selection focus
3. Value positioning
(fig 2.1)
Providing the value
1. Product development
2. Service development
3. Pricing
4. Distribution
Communicating the value
1. Sales force
2. Sales promotion
3. Advertising
 The Value Chain
• A tool for identifying ways to create more
customer value .
The primary activities
i. Bringing materials to the business (inbound
logistics)
ii. Converting them into final products (operations)
iii. Shipping out final products (outbound logistics)
iv. Marketing them (marketing and sales)
v. Provide services
The support activities
i. Procurement
ii. Technology development
iii. Human resource management
iv. Firm infrastructure
• Value exploration -How can a company
identify new value opportunities?
• Value creation- How can a company
differently create more promising new value
offerings?
• Value delivery- How can a company use its
capabilities and infrastructure to deliver the
bew value offerings more efficiently?
 Strategic Planning

A game plan for achieving company’s long

term objectives.
Key areas
• Managing company’s business as an
investment portfolio
• Assessing each business that market.
• Establishing a strategy.
 Planning, Implementation and
Control
Planning Implementing
• Corporate planning • Organizing
• Division planning • Implementing
• Business planning
• Product planning Control
(fig.2.4) • Measuring results
• Diagnosing results
• Taking corrective actions
• A marketing plan is the central instrument
for direction and coordination the marketing
efforts.
• The strategic marketing plan lays out the
target markets and the value proposition
that will be offered based on an analysis of
the best market opportunities.
• The tactical marketing plan specifies the
marketing tactics including product
features, promotion, merchandising ,pricing
,sales channels and service.
 Marketing Plan
• It summarizes what the marketer has
learned about the marketplace and
indicated how the firm plans to reach its
marketing objectives.
• It contains tactical guidelines for marketing
programs and financial allocations over the
planning period.
Objectives of the marketing plan
• Acts as a roadmap
• Assist in management control and
monitoring the implementation strategy
• Informs new participants in the plan of their
role and function
• To obtain resources for implementation
• To stimulate thinking and make better use
of resources.
 Contents of the Marketing Plan

• Executive summary and table of content.

Brief summary of main goals
• Situation analysis
Data on sales, costs, the market competitors and the
various forces in the microenvironment. How is
market defined, how big it is, how fast it is
growing?
• Marketing strategy
• Financial projections
Sales forecast an expense forecast and break even
analysis.
• Implementation controls
Review of each period’s results, steps to be taken in
response to specific environmental developments
such as price wars.
 Implications of Marketing

• Who are our existing/potential customers?

• What are their current/future needs?
• How can we satisfy these needs/
• Can we offer a product/service that the
customer would value?
• Can we communicate with our customers?
• Can we deliver a competitive product or
service?
• Why should customers buy from us?
 MarketingEnvironment
• The marketing environment consists of actors and
forces outside the organization that affect
management’s ability to build and maintain
relationships withtarget customers.

• Environment offers both opportunities and threats.

• Marketing intelligence and research used to collect

information about theenvironment.

3-
 MarketingEnvironment

• Includes:
– Microenvironment:actorsclosetothe companythataffectits
abilitytoserveits customers.
– Macroenvironment:largersocietalforcesthat affectthe
microenvironment.
• Consideredtobebeyondthecontrolofthe organization.

3-
 TheCompany’s Microenvironment
• Company’sInternal Environment:
– Areasinside a company.
– Affects the marketing department’s planning
strategies.
– All departments must “think consumer” and work together to
providesuperiorcustomervalueand satisfaction.

3-
ActorsintheMicroenvironment

3-
TheCompany’s
Microenvironment

• Suppliers:
– Provideresources neededto
producegoodsandservices.
– Importantlinkinthe “value
delivery system.”
– Mostmarketerstreat supplierslike
partners.

3-
 TheCompany’s Microenvironment

• MarketingIntermediaries:
– Helpthecompanytopromote,sell,anddistribute itsgoodstofinalbuyers
• Resellers
• Physicaldistribution firms
• Marketingservices agencies
• Financialintermediaries

3-45
PartneringWith Intermediaries

Coca-Cola provides
Wendy’s withmuch
more than just soft
drinks. It also pledges
powerful marketing
support.

3-46
TheCompany’s Microenvironment

• Customers:
– Five types of
markets that
purchase a
company’s goods
and services

3-47
CuCustom
Customer st
Mark
omereets
r
MaMarke rMarkets
ke
International Consumer

ts
Markets
ts
Company
Government Business
Markets Markets

Reseller
Markets

3-48
 TheCompany’s Microenvironment
• Competitors:
– Those whoserve a targetmarketwithproducts and services thatare
viewedbyconsumersas beingreasonable substitutes
– Companymustgainstrategicadvantageagainsttheseorganizations
• Publics:
– Group thathasaninterestinorimpactonan organization'sabilityto
achieveits objectives

3-49
Typesof Publics

3-50
 TheMacroenvironment

• The company and all of the other actors

operate in a larger macro environment of
forces that shape opportunities and pose
threats to the company.

3-51
TheCompany’s Macro environment

3-52
TheCompany’s Macroenvironment

• Demographic:
– The study of human populations in terms of
size, density, location, age, gender, race,
occupation, and other statistics.
– Marketers track changing age and family
structures, geographic population shifts,
educational characteristics, and population
diversity.

3-53
 EconomicEnvironment

Consists of factors that affect consumer

purchasing power and spending patterns.

• Changes in Income • Income Distribution

– 1980’s – consumption
frenzy
– 1990’s – “squeezed
consumer”
– 2000’s – value marketing
– Upper class
– Middle class
– Working class
– Underclass

3-54
 NaturalEnvironment

• Involves the natural

resources that are
needed as inputs by
marketers or that are
affected by marketing
activities.

3-55
FactorsImpactingtheNatural Environment

ShortagesofRawMaterials

IncreasedPollutionIncreasedGovernmentIntervention

EnvironmentallySustainableStrategies

3-56
EnvironmentalResponsibility

McDonald’s has made a substantial commitmentto the so-called

“green movement.”
3-57
TechnologicalEnvironment

• Most
dramatic
force now
shaping our
destiny.

3-58
 TechnologicalEnvironment
• Changes rapidly.
• Creates new markets
and opportunities.
• Challenge is to make
practical, affordable
products.
• Safety regulations result
in higher research costs
and longer time between
conceptualization and
introduction of product.

3-59
 PoliticalEnvironment

Includes Laws,
Increasing Legislation
Government
Agencies, and
Pressure Groups
Changing Government
that Influence or Agency Enforcement
Limit Various
Organizations and
Individuals In a Increased Emphasis on Ethics
Given Society. &Socially Responsible Actions

3-60
Cause-RelatedMarketing

Kitchen Aiddonates
$50 to breast cancer
research for every
pink mixer it sells
and encourages
consumers to host a
“Cook for the Cure”
dinner party.

3-61
 CulturalEnvironment

• The institutions
and other forces
that affect a
society’s basic
values,
perceptions,
preference, and
behaviors.
3-62
 CulturalEnvironment

• Core beliefs and values are passed on

from parents to children and are reinforced
by schools, churches, business, and
government.
• Secondary beliefs and values are more
open to change.

3-63