An overview of marketing - Lecture 1 Marketing Marketing is a social and managerial process by which individuals and organisations obtain what they need and want through creating and exchanging value with others (Kotler et al 2010). 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 (American Marketing Association, 2007). The marketing process implements the definition of marketing Organizations doing the following Gather, analyze and interpret information about the environment (environmental scanning) Find out what needs or wants people want the organization to satisfy (market opportunity analysis) Develop a marketing strategy that Decides exactly which wants and whose wants are the ones which the organization will try to satisfy (target marketing) Set objectives and develop marketing activities (marketing mix) to satisfy the target market s wants Implement the strategy and evaluate marketing efforts - making changes if needed The Marketing Mix, The 4 P s Target Customer Product- Goods and services combination that a company offers a target market Price- Amount of money that consumers have to pay to obtain the product Promotion- Activities that persuade target customers to buy the product Place- Company activities that make the product available
What is marketing? Marketing plays a key role in our everyday lives and experiences A definition of marketing An activity, set of institutions and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners and society at large Activities and processes include pricing, promotion, distribution and product considerations Marketing is not just for products Local schools, hospitals, universities and charities are all examples of not-for-profit organisations that engage in marketing activities Ideas can be marketed Marketing is used for political policies, environmental and social causes to inform, persuade and change the behaviours of people Social marketing is the use of commercial marketing concepts and tools in programs designed to bring about social change People can be marketed Marketing can be used to change people s attitude about a person Places can be marketed Cities, states, regions and whole nations compete to attract tourists, residents, factories and company headquarters Even employees are marketed to Internal marketing involves promoting the organisation to employees as if they are the internal customers of the firm Heightens employee commitment and satisfaction, so performance is increased This encourages employees to deliver high quality service to customers, translating into loyalty and sales
Customer needs, wants and demands Needs are states of felt deprivation, e.g. a physical need for food Wants are the objects that will satisfy needs, as shaped by culture and individual personality When backed by buying power, wants become demands Market offerings A market offering is a product that can be offered to a market to satisfy a need or want - A product can be a physical good, service or experience Customer value The customer s evaluation of the difference between all the benefits and all the costs of a market offering relative to those of competing offers Marketer aims to ensure that the customer is happier to have the product than to have what they exchanged for the product > More value for the consumer Customer satisfaction Occurs when a customer feels that a product has met or exceeded their expectations Going beyond satisfaction is to delight a customer - This can result in loyal or even fanatical customers Customer dissatisfaction Dissatisfied customers might switch to competitors or disparage the product to others Marketing exchange Exchange is the act of obtaining a desired object from someone offering something in return For it to occur, the following conditions are necessary: - At least two parties present - Something of value the other wants - Ability to communicate offer - Freedom to accept or reject - Desire to deal with other party A transaction 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 Successful transactions can pave the way for long-term relationships - A good relationship is mutually beneficial - Trust occurs on both sides - Must be a two way street Markets A market is the set of all actual and potential buyers of a product - As opposed to an industry, which is a collection of sellers
Five marketing philosophies The production philosophy Emphasis is on manufacturing efficiency - Focus on the internal capabilities of the organisation to develop and produce better, cheaper and widely available products - Doesn't consider whether the products also meet the needs of the marketplace - But allows continuous improvements to be made The sales philosophy Focus on selling existing products - Large-scale and aggressive selling and promotional efforts are used, so there is an inward focus on the staff - Buys into the belief that high sales equate to high profits - Useful when organisations have over capacity The marketing philosophy Emphasis is on customer needs and wants and delivering the desired satisfaction better than competitors Customer satisfaction happens when the focus is on the customer Previous philosophies focussed first on the organisation s needs
The relationship philosophy Expands the marketing orientation focus from making a sale that meets the needs and wants of the marketplace to the value of the repeat sale - Establishing a relationship with the customer rather than a one-time exchange Recognises other parties that complement or aid in facilitating the exchange as being essential to success, e.g. suppliers The societal marketing phiosohpy Marketing decisions should consider customer wants, company requirements and consumer and society s long-run interests - E.g. The Body Shop The marketing process
Introducing the 4Ps The marketing mix - Is the set of Marketing tools used to implement strategy and produce the response desired from the target market Identify a want and then: P for Product; What is a product that satisfies this? What features are important? Does brand play a role? P for Place; Where can this be bought? P for Price; How does price play a role? P for Promote; What messages are used to promote the product? How are these communicated? The Marketing Mix, The 4 P s Target Customer Product- Goods and services combination that a company offers a target market Price- Amount of money that consumers have to pay to obtain the product Promotion- Activities that persuade target customers to buy the product Place- Company activities that make the product available Positioning strategy Positioning; Arranging for a product to occupy a clear, distinctive and desirable place relative to competing products in the minds of target consumers. (Kotler et.al. 2013). Therefore every P of the Marketing Mix must be consistent with both: - the Position the marketer wants the product to occupy in consumers minds (relative to competing products.) - the other P s for that product