CONTEMPORARY ISSUES & PRINCIPLES OF MARKETING

PART 1: UNDERSTANDING THE ROLE OF THE MARKETING FUNCTION

UNIT REFERENCE NUMBER: A/618/1614

UNIT LEVEL: 7

NUMBER OF CREDITS: 20

SECTOR SUBJECT AREA (SSA): MARKETING & SALES

Tutor: Mr. Gordon Carter

 SECTION 1

UNDERSTANDING
THE ROLE OF THE
MARKETING FUNCTION
UNDERSTANDING THE ROLE OF THE MARKETING FUNCTION

 Concepts & Orientations of Marketing

 Key Elements of the Marketing Function
 The Role of Leaders & Managers in an Effective Marketing Strategy
 Entrepreneurial Marketing
CONCEPTS OF ORIENTATION IN MARKETING

 WHAT IS MARKETING?

‘MARKETING is the process of identifying - the needs and wants of target markets, and
delivering the product or service more efficiently and effectively than competitors’.

(Kotler)
‘MARKETING is managing profitable
business relations.

1. Attracting new customers by promising

superior value
2. Keeping and growing current customers
by delivering satisfaction
The Marketing Concept vs The Selling Concept

Factory Existing Products Selling & Profits through

Promoting sales volume

The Selling Concept

Market Customer Integrated Profits through

needs Marketing customer satisfaction

The Marketing Concept

NEEDS, WANTS & DEMANDS
NEEDS - The most basic concept underlying marketing

State of felt deprivation

Physical needs; social needs;

individual needs for knowledge
and self-expression
Needs are not invented by
marketers but are part of human
make-up
Dip.Mktg – Yr 1 M Pocock
WANTS - The second basic concept to Marketing

Needs are shaped by culture, society

and personality.

Wants are how people communicate

their needs.
Dip.Mktg – Yr 1 M Pocock
DEMANDS - We know that people have
almost unlimited wants, but also have
Limited resources ......

So they choose products that give them

most satisfaction for their money

DEMANDS = Wants backed by

purchasing power
Dip.Mktg – Yr 1 M Pocock
SOME RELEVANT TERMS

Value and Satisfaction –

A product is successful if it delivers

value and satisfaction to the target
buyer.

The customer obtains benefits and

assumes costs
Dip.Mktg – Yr 1 M Pocock
 Value and Satisfaction

VALUE = Benefits = Functional benefits + Emotional benefits

Costs Monetary + time + energy + psychic COSTS

Dip.Mktg – Yr 1 M Pocock
 How can the Marketer increase Value
of the customer offering?

• Raise benefits
• Reduce costs
• Raise benefits and reduce costs
• Raise benefits by more than the raise in
costs
• Lower benefits by less than the
reduction in costs

Management – Yr 2 M Pocock
 Market Offering:

products, services, people, places, information,

organisations (combination offered)

Exchange – Obtaining something by

offering something in return
Market – Set of actual and potential
buyers of a product
Dip.Mktg – Yr 1 M Pocock
BUILDING VALUE & RELATIONSHIPS

 When Benefits outweigh Costs – The value is higher and therefore this
will create Customer Satisfaction.
 Conversely, if the Costs Outweigh the Benefits – this will create
Customer Dissatisfaction.
THE DEVELOPMENT OF THE MARKETING CONCEPT
THE MARKETING ACTIVITY CHAIN

1 2 3 4 5

Client Analyse Gaps Provide Promote

needs Competition Product/ &
Service Sell
The Development of Marketing
Thought

MARKETING ORIENTATIONS
FIVE ALTERNATIVE CONCEPTS
ORIENTATIONS

1. The Production Concept

2. The Product Concept
3. The Selling Concept
4. The Marketing Concept
5. The Societal Marketing Concept
1. The Production Concept

Emphasis here is that consumers will

favour products which are available
and highly affordable.

Focus on operations to improve

production and distribution

Risk of ‘Marketing Myopia’

‘You can get it in any colour as
long as it’s black’ Henry Ford
Dip.Mktg – Yr 1 Miriam Pocock
2. The Product Concept

Emphasis here is that consumers will

favour products with the highest
levels of quality and innovation.

Focus on product development and

improvements.

Risk of ‘Marketing Myopia’

3.The Selling Concept
Emphasis here is that consumers will
not purchase products unless it
engages in heavy selling and
promotional effort.

Focus on Hard Selling; Unique Selling

Propositions and Sales Transactions as
opposed to creating and sustaining
Customer Relationships.
4.The Marketing Concept

Emphasis here is on knowing the

needs and wants of target markets
and delivering these needs and wants
better than competitors.

Focus on the customer and value –

for sales and profits.
4.The Marketing Concept

...Focus on the customer and value –

for sales and profits.
The importance of the Customer

“ If you are not thinking customer,

you are not thinking”

Jack Welch, former GE CEO

.
The Marketing Concept, also implies:

...Understanding customer needs

even better than customers themselves
do and creating products and services
that meet existing and latent needs,
now and in the future.
4.The Marketing Concept

“Our goal is to lead customers

where they want to go before they
know where they want to go”

(Executive at 3M)
The Marketing Concept vs The Selling
Concept

The Marketing Concept

outside-in perspective

The Selling Concept

inside – out perspective
The Marketing Concept vs The Selling
Concept

Factory Existing Products Selling & Profits through

Promoting sales volume

The Selling Concept

Market Customer Integrated Profits through

needs Marketing customer satisfaction

The Marketing Concept

The Selling Concept focuses on
existing products and heavy selling.

The aim is to sell what the company

makes rather than making the
customer wants.
5.The Societal Marketing Concept

Considers the potential conflicts

between consumer short-term wants
and society’s long term interests.
The Societal Marketing Concept
questions the Marketing Concept in
the light of the following:

Shortage of Resources worldwide

Environmental problems
Worldwide Inflation
Population growth
Neglected social Services
 Society
(Human Welfare)
The Considerations
underlying the
Societal Marketing
Concept
Societal
marketing
concept

Consumers Company
(Want satisfaction) (Profits)
The Need for an Integrated Plan and
Programme, based on all the elements of
the Marketing Mix
The Marketing Mix – The 4Ps

PRICE PLACE

PROMOTION PRODUCT
The Marketing Concept

...Focus on the customer and value –

for sales and profits.
The Societal Marketing Concept
questions the Marketing Concept in
the light of the following:

Shortage of Resources worldwide

Environmental problems
Worldwide Inflation
Population growth
Neglected social Services
Teas from Rainforest
Alliance Certified

Dove which supports

self-esteem
programmes for girls
Dip.Mktg – Yr 1
Ultimately we need to devise
MARKETING STRATEGIES which
are CUSTOMER DRIVEN
Marketing Strategy involves:
‘the allocation of the company’s
resources to develop & sell products
& services that consumers will
perceive to provide more value than
competitor products or services’
The Marketing Mix – The 4Ps

PRICE PLACE

PROMOTION PRODUCT
The Marketing Mix, as a Tool,
Presents AND links ALL the
Important Elements of the
Product Offering/Package….
The Extended Marketing Mix for
Services
PROCESS

PRICE PLACE

PHYSICAL
EVIDENCE

PROMOTION PRODUCT

PEOPLE
Factors which distinguish a
Physical PRODUCT from a
SERVICE
 Four Service Characteristics

Intangibility Inseparability

Services

Variability Perishability
Intangible Means that it can be difficult for service
quality to be measured & assessed

Inseparable from the service provider–this influences

quality levels -depends on staff skills etc
& importance of staff training & customer
orientation
Variable
Service is never really exactly repeated
in the same way – always some variable
might be difficult to standardise -
importance of procedures

Perishable Can lead to dissatisfaction if demand

cannot be met
The Product Element PRODUCT

In physical products, the product element

refers to Product Characteristics, options,
assortment ,Brand name, quality,
packaging, quantity, guarantees....
 The Levels of a Product
Augmented Product
Tangible Product

Core The fundamental benefit

Product or service the customer
is really buying

Eg. wrist watch – to know

the time;
Car – for transportation
Dip.Mktg – Yr 1 Miriam Pocock
The Levels of a Service
Supplementary
Service
Aspects

Core
Service
The Importance of Augmenting our
Product Offering to:

Differentiate our offering

To give more Value to the Client

Implications...
The Product Life Cycle.......
The Marketing Mix – The 5Ps

PRICE PLACE

PRODUCT

PROMOTION PEOPLE
The Price Element PRICE

This is the sum of all the values that

customers give up in order to gain the
benefits of having or using a product or
service.
The Price Element PRICE

Price is one of the most important

elements determining a firm’s market
share and profitability

Why?..............
Possible Options Price
More The Same Less
The
More More More WINNING
for for the for VALUE
Benefits More more same less propositions

The same
for
The Same less

The LOSERS Less for

Less much
less
Pricing Strategy Options

1. Price Skimming

2. Sequential Skimming

3. Penetration Pricing

4. Neutral Pricing
Price Skimming

In Price Skimming, prices are usually

HIGH in relation to what most buyers
in a segment are willing to pay.
Dip.Mktg – Yr 1 Miriam Pocock
In Sequential Skimming, the firm;

1. Starts with a high price, attracting first

the least price-sensitive buyers – to ‘skim
the cream’.

2. Once this market segment has been

exhausted, the company then lowers its
price enough to sell to the next most
lucrative segment.......
In Penetration Pricing, the firm;

1. Sets a price LOW enough to ATTRACT

and HOLD a large base of customers.

Penetration Prices are not necessarily

cheap, but they are:

LOW RELATIVE TO PERCEIVED VALUE in

that TARGET SEGMENT
Possible Options Price
More The Same Less
The
More More More WINNING
for for the for VALUE
Benefits More more same less propositions

The same
for
The Same less

The LOSERS Less for

Less much
less
Neutral Pricing:

With this pricing Strategy, Companies decide

not to use price as a marketing tool to gain
market share., but again do not allow price to
restrict market share gain.
The Company will thus focus on other elements
of the marketing mix.
The Marketing Mix – The 5Ps

PRICE PLACE

PRODUCT

PROMOTION PEOPLE
The Place Element PLACE

PLACE means making the Product or Service

‘available’.

There is no value in a product or service

until it is in the hands of the customer or
consumer
The Place Element PLACE

In itself ‘availability’ is a complex concept

influenced by many factors. (as applicable)

Physical location of outlet, supermarket etc.

Opening hours e.g of restaurant, spa, museum
Delivery frequency and order cycles,for materials
Timing of delivery
Delivery reliability
Salesperson visits
Stock levels
On the Internet…………..
Place -Online PLACE

All products can extend themselves online

not just digitisable products and services
by considering their online representation
for place of purchase and distribution.
The Marketing Mix – The 5Ps

PRICE PLACE

PRODUCT

PROMOTION PEOPLE
The Marketing Mix – The 5Ps

PRICE PLACE

PRODUCT

PROMOTION PEOPLE
The Promotion Element PROMOTION

Promotion usually embraces three types of

business effort:

Advertising
Public Relations
Promotion Techniques
1.The Brand Management Cycle.

Brand
Weak Strong

Different

Product*

Banal Competition &

changes in customers’
expectations
Source: J-N Kapfrerer – ‘The New Strategic Brand Management’ *Differentiation
Dip.Mktg – Yr 1
 Corporate Brand Name

Monolithic Endorsed Branded

Strategy Strategy Strategy

e.g. Philips, VW Beetle Herbal Essences

Shell, BMW (Procter & Gamble)

Wally Olins (1990)

Marketing – Yr 2 Miriam Pocock
Dip.Mktg – Yr 1
 Corporate Brand Name

Monolithic Endorsed Branded

Strategy Strategy Strategy

e.g. Philips, VW Beetle Herbal Essences

Shell, BMW (Procter & Gamble)

Wally Olins (1990)

Promotion - Tools
PROMOTION
Advertising
Promotion schemes
Internet
Conferences & Seminars
Direct Mail
Personal Selling
Networking
P.R./ Press Visits
Fairs & Exhibitions
Consumer Promotion Techniques
PROMOTION

(some examples)

Price –offs
Package deals/Product Bundles
Introductory offers
Coupons/ Vouchers
Membership cards/ Loyalty cards
Gifts; etc...
Public Relations:
Conferences, Seminars
Participation in exhibitions
Service launches eg opening of new Spa etc
Organising Press Days
Sponsorships
Celebrating events – press releases, sending
corporate gifts
Newsletters
Creating News….. Announcements
Making use of databases
Networking
The Marketing Mix – The 5Ps

PRICE PLACE

PRODUCT

PROMOTION PEOPLE
The People Element PEOPLE

The role of the ‘people element’ in

marketing varies according to;

Whether it is a product or a service

The situation – whether employees
encounter clients
The level of interaction/ contact with
the client
The People Element PEOPLE

Naturally the ‘people element’ becomes

more and more important:

- in situations when there is contact with

the client eg product demonstration...
- the level of interaction is high
- the client is present or is directly
participating in the product/service
delivery
The People Element PEOPLE

In some cases, the ‘people element’ is eg

the service package itself eg. a Hotel
entertainer, while sometimes the ‘people
element’ accompanies the more tangible
elements which comprise a service offering
eg. a stewardess; a waiter.
 The People Element PEOPLE

Important Considerations:

Staff Selection and Recruitment

Training and Development

Marketing Strategy

This involves:

1. An analysis of the market

2. Market segmentation
3. Developing marketing mix
strategies
4. Implementation
THE IMPORTANCE OF INTER-RELATIONSHIPS OF FUNCTIONAL
UNITS IN AN ORGANISATION

Marketing is a strategic discipline which underpins most activities of the business and is an
essential ingredient of corporate strategy as communicated in the corporate plan. Drucker
also said that marketing is:

"The whole business seen from the customer's point of view“

Marketing needs to be well-integrated into almost every function of a business, because marketing is

responsible for the brand, and the way customers experience the brand is through every interaction they
might have with a company and its products.
OPERATIONS MANAGEMENT/PRODUCTION

 Operations management/production
 The marketing department will need to work closely with the production department to ensure
that:
• Adequate research and development is planned to satisfy current and future customer needs
• The item can be manufactured to the quality and design specifications laid down by the consumer
• The volume of orders generated by marketing can be met within the time schedule required for
delivery
 It is likely that the marketing department will set deadlines that may stretch the capabilities of the
production department. Marketers will wish to get products to market as soon as possible to
ensure competitive advantage, whereas production will want to test and develop products fully to
ensure that they do not have to repair or replace defective items and that they meet health and
safety requirements.
FINANCE DEPARTMENT

 Finance department
 The marketing department will need to work closely with the finance department to ensure
that:
• There is an adequate budget to meet the needs for research, promotion and distribution
 The finance department have a whole organisation brief to ensure that all the business
operates within its financial capabilities. They will want all departments to work within their
allocated budgets. Like all departments, marketing may wish to overspend if profitable
marketing opportunities emerge over the year. The marketing department is likely to
concentrate on sales volume and building market share, while the finance department may
be more focused on cash flow, covering costs and paying back investment as quickly as
possible.
HUMAN RESOURCE MANAGEMENT

 Human Resource Management

 The marketing department will need to work closely with the HRM to ensure that
appropriate skills and staffing levels are in place to:
• Research and develop new product ideas
• Meet production targets
• Create an ambitious and competent sales team
 The HRM department will have many recruitment and training demands from across the
organisation. It will have to balance its obligations to marketing with those to other
departments.
IT DEPARTMENT

 IT is quickly becoming the most important department in most organizations. The advance of new
technologies and the pressure to digitize and automatize every aspect of a business’s operations is
forcing companies to invest more and more money into IT and development.
 One solution is to create separate IT departments, one for marketing, one for product, one for finance,
with higher level managers coordinating between teams, divvying up resources, and setting strategy.
Another solution is to keep the department as is, and prioritize projects from all departments on one list,
putting the most important, highest impact projects at the top of the list, then assign resources to each
project as it comes up.
IT DEPARTMENT

 For marketing, IT will be extremely helpful in the following efforts:

• Website development and ecommerce
• Database development and CRM
• Marketing automation and triggers
• Product enhancements
• Data analysis
IT DEPARTMENT

 In order to succeed in today’s marketing landscape, a marketing team needs to know everything there is
to know about their customers and the way they interact with the products and services you’re selling.
The information is out there, but it usually takes dedicated IT resources to get it ready for analysis.
 The relationship between IT and marketing is growing more important by the day. It will take open,
ongoing communication between departments, with both maintaining some level of accountability for
outcomes in order to be successful.
MARKETING LEADERS & MANAGERS

 The difference between managers and leaders has been subject to much
debate amongst business writers and academics over the years. A basic but
well-known distinction comes from the management guru, Warren Bennis,
who said, “Managers manage tasks. Leaders lead people”.
MARKETING LEADERS & MANAGERS

 Leaders will have a vision of what can be achieved and then communicate this to
others and evolve strategies for realizing the vision. They motivate people and are
able to negotiate for resources and other support to achieve their goals.
 Managers ensure that the available resources are well organized and applied to
produce the best results.
 In the resource-constrained and difficult environments of many low – to middle-
income countries, a manager must also be a leader to achieve optimum results.
MARKETING LEADERS & MANAGERS

 While marketing managers will often do their best to manage and

minimise risk for the business, leaders will introduce new ideas -
challenging preconceptions, their peers, and themselves.
THE ROLE OF MARKETING LEADERS & MANAGERS

 What are a marketing manager's responsibilities?

 A marketing manager's work is highly collaborative. They often bring together the
different functions (such as product marketing, digital specialists, content and 
creative teams), aligning all the groups whose work contributes to a successful program or
campaign.
 Besides working closely with their marketing colleagues, marketing managers also
represent the marketing team to cross-functional groups including product management,
sales, or customer support. They may collaborate with these groups to ensure new
offerings are communicated in a seamless way or locate new channels to reach customers.
 THE ROLE OF MARKETING LEADERS & MANAGERS
Implementing strategy
Creating programs and campaigns
Overseeing content
Marketing managers follow a strategic plan (typically set by a more senior marketing
leader) for how their organization will achieve and maintain a competitive advantage in the
market. They help implement this strategy via prioritized activities on the 
marketing roadmap.
Every company wants to deliver breakthrough programs and campaigns. Marketing
managers own the process of building these plans, making sure creative and content are
aligned with the company's strategic objectives. They also come up with ideas for future
programs and campaigns.
Marketing managers may set the content strategy and put together an editorial calendar
 that supports the company's goals. Besides reviewing each piece of content to ensure that
it conveys the right message and tone, they may also write blog posts, edit ad copy, craft
marketing collateral materials, or work to improve SEO rankings by writing meta
descriptions.
THE ROLE OF MARKETING LEADERS & MANAGERS
Planning events Some marketing managers are heavily involved in planning and producing events.
These can range from massive product launches and conferences to smaller efforts
such as webinars.

Handling external communications Many marketing managers build relationships with the media in order to promote the
company's message. They often need to engage with other people outside the
company too, such as vendors, partners, or advertising agencies.

Managing projects, budgets, and In addition to managing their own projects, marketing managers may also manage
people the budgets for their campaigns and tools. They also lead members of the marketing
team (such as content creators or graphic designers).
THE ROLE OF MARKETING LEADERS & MANAGERS

Coordinating cross-functional Marketing managers provide cross-functional leadership. They keep everyone
teams informed of the marketing plans and are the go-to people for any internal
marketing-related questions or requests.

Supporting sales Marketing managers often help with the sales process. This might entail
everything from producing informational materials to training sales reps on how
to move customers along the buyer's journey more effectively.

Analyzing marketing data Marketing managers track, analyze, and report on the impact of all their
activities. They look for ways to improve their efforts and better engage with
prospective customers. They may also evaluate competitors and compile and
share industry trends.
TRANSFORMATIONAL LEADERSHIP THEORY

 Creating high-performance workforce has become increasingly important and to do so business

leaders must be able to inspire organizational members to go beyond their task requirements. As
a result, new concepts of leadership have emerged - transformational leadership being one of
them.
 Transformational leadership may be found at all levels of the organization: teams, departments,
divisions, and organization as a whole. Such leaders are visionary, inspiring, daring, risk-takers, and
thoughtful thinkers. They have a charismatic appeal. But charisma alone is insufficient for changing
the way an organization operates. For bringing major changes, transformational leaders must
exhibit the following four factors:
TRANSFORMATIONAL LEADERSHIP THEORY
TRANSFORMATIONAL LEADERSHIP THEORY
ENTREPRENEURIAL MARKETING

One of the most widely used definitions is provided by Morris et al. (2002, p.5), who defined
entrepreneurial marketing as: “proactive identification and exploitation of opportunities for
acquiring and retaining profitable customers through innovative approaches to risk
management, resource leveraging and value creation.” This definition incorporates elements
of both concepts: entrepreneurship (proactiveness, risk-taking, opportunity, and innovation)
and marketing (customer focus, resource leveraging, and value creation).
ENTREPRENEURIAL MARKETING

 How does entrepreneurial marketing differ from traditional marketing?

 Some of the differences between traditional and entrepreneurial marketing are summarized along
four dimensions: business orientation, collecting information, tactical perspective, and strategic
perspective (Stokes, 2000). Table 1.1 also presents some of the main differences between
entrepreneurial and traditional marketing.
 In terms of business orientation, entrepreneurial marketing is oriented towards entrepreneurs and
innovations, while traditional marketing is more customer-oriented.
 According to traditional marketing, the entrepreneur should initially identify and assess market
needs and then develop a new product/service; according to entrepreneurial marketing,
ENTREPRENEURIAL MARKETING

 The entrepreneur should generate initially an (unique) idea, convert that idea to a new product/service, and
then find a market. From the second dimension, collecting information from the market, entrepreneurial
marketers usually use informal methods such as personal observation or personal networks/contacts. They
usually do not use formal research methods due to their higher costs.
 From the tactical perspective, entrepreneurial marketers use an interactive marketing approach, which is based
on personal and direct contacts with consumers. For entrepreneurial marketers, word-of-mouth and references
from consumers are very important.
 From a strategic perspective, entrepreneurial marketing uses a bottom-up approach, while traditional marketing
uses a top-down approach. The top-down approach requires a clearly defined order of activities, such as
segmentation, targeting, and then positioning. The entrepreneurial bottom-up approach initially requires
identification of an opportunity, which needs to be tested. The company satisfies the needs and desires of a
limited number of consumers in the beginning and then expands these sales through direct contact with
consumers. Some of the several definitions of entrepreneurial marketing are presented in the next table:
ENTREPRENEURIAL MARKETING

The Concepts of Entreprenurial Marketing

 Customer Intensity
 Continuous Innovation
 Calculated Risk-Taking
 Strategic Flexibility
 Proactiveness & Resource Leverage
DIFFERENCE BETWEEN TRADITIONAL MARKETING &
ENTREPRENEURIAL MARKETING
DIFFERENCE BETWEEN TRADITIONAL MARKETING &
ENTREPRENEURIAL MARKETING
ENTREPRENEURIAL MARKETING

 ●  Customer intensity. This aspect focuses on the enthusiasm, passion, zeal, and belief in marketing that help to make the company successful. It is
believed that a customer-intensity element strengthens the core values of the company and the passion for the customer.
 ●  Continuous innovation. An entrepreneurial company should continuously generate creative ideas and convert them into new or adapted
products/services or processes.
 ●  Strategic flexibility. An entrepreneurial company should show a willingness to continuously review and adjust its strategies, action plans,
methods of resource allocation, structure, culture, and management systems.
 ●  Calculated risk-taking. Risk-taking means pursuing new opportunities. Entrepreneurs take calculated risks, but some can be fatal for the future of
the company.
 ●  Proactiveness. Entrepreneurs are aware of the importance of the external marketing environment, but they do not take it as a given. They
perceive it as a horizon of possibilities. In other words, entrepreneurs try to redefine the elements of the external environment to reduce its
uncertainty, reduce the dependence and vulnerability of the company, and/or modify the environment in which the company operates.
 ●  Resource leverage. Since entrepreneurs’ ambitions usually exceed their resources, they are forced to use their resources in the best possible way.
They leverage their resources: they use resources for much longer than others have used them in the past; they use resources that others do not
view as resources; they use other people’s/companies’ resources to fulfill their own goals; and they blend one resource with another to create a
greater combined value.