Introduction to Marketing

“The future isn’t ahead of us.

It has already happened.”

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 1 in Chapter 1
 What Can Be Marketed?

 Goods  Places
 Services  Properties
 Experiences  Organizations
 Events  Information
 Persons  Ideas
©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 2 in Chapter 1
 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.”

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 3 in Chapter 1
 Marketing Defined

 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.”

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 4 in Chapter 1
 4 Types of Markets

 Consumer Markets
 Business Markets
 Global Markets
 Nonprofit and Governmental
Markets

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 5 in Chapter 1
 Core Marketing Concepts

 Target markets and  Exchange and

market segmentation transactions
 Marketplace, market-  Relationship and
space, metamarkets networks
 Marketers & prospects  Marketing channels
 Needs, wants, demands  Supply chain
 Product offering and  Competition
brand  Marketing environment
 Value and satisfaction  Marketing program
©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 6 in Chapter 1
 Core Marketing Concepts

 Target markets & segmentation

– Differences in needs, behavior,
demographics or psychographics
are used to identify segments.
– The segment served by the firm is
called the target market.
– The market offering is customized
to the needs of the target market.
©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 7 in Chapter 1
 Simple Marketing System

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 8 in Chapter 1
 Modern Marketing System

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 9 in Chapter 1
 Core Marketing Concepts

 Shopping can take place in a:

– Marketplace (physical entity, BATA)
– Marketspace (virtual entity, Amazon)
 Metamarkets refer to complementary
goods and services that are related
in the minds of consumers.
 Marketers seek responses from
prospects.
©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 10 in Chapter 1
 Core Marketing Concepts

 Needs describe basic human

requirements such as food, air, water,
clothing, shelter, recreation, education,
and entertainment.
 Needs become wants when they are
directed to specific objects that might
satisfy the need. (Fast food)
 Demands are wants for specific
products backed by an ability to pay.
©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 11 in Chapter 1
 Core Marketing Concepts

 A Product is any offering that can satisfy a

need or want, while a brand is a specific
offering from a known source.
 When offerings deliver value and
satisfaction to the buyer, they are
successful.
 Value = Benefits/Costs

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 12 in Chapter 1
 Enhancing Value

 Marketers can enhance the value of

an offering to the customer by:
– Raising benefits.
– Reducing costs.
– Raising benefits while lowering costs.
– Raising benefits by more than the
increase in costs.
– Lowering benefits by less than the
reduction in costs.
©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 13 in Chapter 1
 Core Marketing Concepts

 Exchange involves obtaining a

desired product from someone by
offering something in return.
 Transaction involves at least two
things of value, agreed-upon
conditions, a time of agreement,
and a place of agreement.

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 14 in Chapter 1
 Core Marketing Concepts

 Relationship marketing aims to

build long-term mutually satisfying
relations with key parties, which
ultimately results in marketing
network between the company and
its supporting stakeholders.

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 15 in Chapter 1
 Core Marketing Concepts

Marketing  Deliver messages to

Channels and receive
messages from
target buyers.
 Communication
channels  Includes traditional
media, non-verbal
 Distribution communication, and
channels store atmospherics.
 Service channels
©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 16 in Chapter 1
 Core Marketing Concepts

Marketing  Display or deliver

Channels the physical
products or
 Communication services to the
channels buyer / user.
 Distribution
channels
 Service channels
©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 17 in Chapter 1
 Core Marketing Concepts

Marketing  Carry out

Channels transactions with
potential buyers
 Communication by facilitating the
channels transaction.
 Distribution
channels
 Selling channels
©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 18 in Chapter 1
 Core Marketing Concepts

 A supply chain stretches from raw

materials to components to final
products that are carried to final
buyers.
 Each company captures only a
certain percentage of the total value
generated by the supply chain.

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 19 in Chapter 1
 Core Marketing Concepts

 Four levels of competition can be

distinguished by the level of product
substitutability:
– Brand competition
– Industry competition
– Form competition
– Generic competition
©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 20 in Chapter 1
 Core Marketing Concepts

 The following forces in the broad

environment have a major impact on
the task environment:
– Demographics
– Economics
– Natural environment
– Technological environment
– Political-legal environment
– Social-cultural environment

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 21 in Chapter 1
 Core Marketing Concepts

 The marketing program is developed

to achieve the company’s objectives.
Marketing mix decisions include:
 The 4 Ps
– Product: provides customer solution.
– Price: represents the customer’s cost.
– Place: customer convenience is key.
– Promotion: communicates with customer.

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 22 in Chapter 1
 Core Marketing Concepts

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 23 in Chapter 1
 Core Marketing Concepts

 4 Ps  4 Cs
- Product - Customer solution
- Price - Cost
- Place - Convenience
- Promotion - Communication

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 24 in Chapter 1
 Company Orientations

 The orientation or philosophy of the

firm typically guides marketing efforts.
Several competing orientations exist:
– Production concept
– Product concept
– Selling concept
– Marketing concept
– Societal marketing concept

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 25 in Chapter 1
 MARKETING MANAGEMENT PHILOSOPHIES

 The role that marketing plays within a company

varies according to the overall strategy and
philosophy of each firm.
 There are five alternative concepts under which
organizations conduct their marketing activities:
– Production concept
– Product concept
– Selling concept
– Marketing concept
– Societal marketing concepts

©2003 Prentice Hall, Inc.

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 Production Concept

The philosophy that consumers

will favour products that are
available and highly affordable
and that management should
therefore focus on improving
production and distribution
efficiency.
©2003 Prentice Hall, Inc.
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 Product Concept

The philosophy that consumers

will favour products that offer
the most quality, performance,
and innovative features.

©2003 Prentice Hall, Inc.

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 Selling Concept

The idea that consumers will not

buy enough of the organization’s
products unless the organization
undertakes a large – scale selling
and promotion effort.

©2003 Prentice Hall, Inc.

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 Marketing Concept

The marketing management

philosophy that holds that achieving
organizational goals depends on
determining the needs and wants of
target markets and delivering the
desired satisfactions more effectively
and efficiently than competitors do.

©2003 Prentice Hall, Inc.

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 The Marketing Concept

 Achieving organizational goals requires

that company be more effective than
competitors in creating, delivering, and
communicating customer value.
 Four pillars of the marketing concept:
– Target market
– Customer needs
– Integrated marketing
– Profitability
©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 31 in Chapter 1
 Societal Marketing Concept

The idea that the organization should

determine the needs, wants, and
interests of target markets and deliver
the desired satisfactions more effectively
and efficiently than competitors in a way
that maintains or improves the
consumer’s and society’s well – being.

©2003 Prentice Hall, Inc.

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 Company Orientations

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 33 in Chapter 1
 The Marketing Concept

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 34 in Chapter 1
 The Marketing Mix

©2003 Prentice Hall, Inc.

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 Product

©2003 Prentice Hall, Inc.

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 Product
• Methods used to
improve/differentiate
the product and increase
sales or target sales more
effectively to gain
a competitive advantage e.g.
– Extension strategies
– Specialised versions
– New editions
– Improvements – real or
otherwise!
– Changed packaging
– Technology, etc. Image copyright: www.freeimages.co.uk

©2003 Prentice Hall, Inc.

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 Price

©2003 Prentice Hall, Inc.

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 Promotion

©2003 Prentice Hall, Inc.

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 Place

©2003 Prentice Hall, Inc.

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©2003 Prentice Hall, Inc.
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 People

©2003 Prentice Hall, Inc.

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 Process

©2003 Prentice Hall, Inc.

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 Process

©2003 Prentice Hall, Inc.

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 The Product Life Cycle

• The product lifecycle looks at the sales of

a product over time

©2003 Prentice Hall, Inc.

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Stages in the Product Lifecycle
Development – high costs but no sales
Launch – high expenditure on promotion and
product development, low sales
Growth – sales increase and product should
break-even
Maturity – sales stabilise, less expenditure on
promotion needed, revenue & profit should be
high
Decline – sales decline, extension strategies can
be adopted or the product withdrawn
©2003 Prentice Hall, Inc.
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 Extension Strategies

Extension strategies should maintain or

increase sales. They include:
• Modifying the product
• Reducing the price
• Adding a feature
• Promoting to a
different market
sector
©2003 Prentice Hall, Inc.
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 Physical Environment

• The ambience, mood or physical presentation of

the environment
– Smart/shabby?
– Trendy/retro/modern/old fashioned?
– Light/dark/bright/subdued?
– Romantic/chic/loud?
– Clean/dirty/unkempt/neat?
– Music?
– Smell?

©2003 Prentice Hall, Inc.

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