1. MARKETING
• What is a market? What is marketing?
• A market is a customer or group of customers.
• Marketing on the other hand is a management
process responsible for identifying, anticipating
and satisfying customer needs profitably.
Marketing more than any other business function
deals with customers. Building customer
relationships based on customer value and
satisfaction is at the heart of modern marketing.
2. Marketing
• To be successful companies must be market orientated.
• According to Percy a market orientation is a mgt culture
where beating competition through the creation of superior
customer value is the paramount objective throughout the
business not only to the people in the marketing department.
• The element of a market led orientation are
culture, value, norms, mindset, behaviour, capabilities i.e. the
ability to sense what the customer wants and to tie in these
with what the company can do, strategic thinking and the
organisation. All of these are directed towards
understanding, satisfying and retaining customers.
• According to Percy organisations have no choice they have to
follow the market in order to survive.
3. Marketing defined
• What does the term marketing mean? Many people think of
marketing only as selling and advertising. No wonder everyday we
are bombarded with television commercials, newspaper ads, direct
mail offers, sales calls and internet ads. Although they are
important they are only two of many marketing functions and are
often not the most important ones. Selling and ads are only the tip
of the marketing iceberg.
• Today marketing must be understood not in the old sense of
making a sale, but in the new sense of satisfying customer needs. If
the Marketer does a good job of understanding customer
needs, develops products that provide superior value, and
prices, distributes and promotes them effectively, these will sell
very easily. So selling and advertising are only a part of a larger
“marketing mix”.
4. Value Based Marketing
Today there has been much more focus on shareholder
value in many organisations than there was in the past.
Marketers today must deliver customer value that in
turn builds shareholder/owner value. Proponent of
value based marketing argue that to compete
effectively, a co needs to do more than build a brand or
build relationships, it has to build value. Companies
need to deliver value proposition to their customers.
As Doyle says “it is by delivering superior value to
customers that mgt can in turn deliver superior value
to shareholders.
5. Marketing
• Broadly we will define marketing as a social and
managerial process by which individuals and groups
obtain what they need and want thru creating and
exchanging products and value with others.
• NEEDS, WANTS, & DEMANDS
The most basic concept underlining marketing is that of
human needs. Human needs are states of felt
deprivation. They include basic physical needs for
food, clothing, warmth, safety; social needs for
belonging and affection etc. These needs were not
created by marketers they are a basic part of human
makeup.
6. Wants & Demand
• Wants are the form of human needs that are shaped by culture and
individual personality. A student may need food but may want Big
Mac, chips and drink from McDonald’s. Wants are shaped by one’s
society and are described in terms of objects that will satisfy needs.
When backed by purchasing power they become DEMANDS. Given
their wants and resources, people demand products with benefits
that add up to the most value and satisfaction.
Outstanding marketing companies go to great lengths to learn about
and understand their customers’ needs, wants and demands. They
conduct customer research and analyse thousands of customer
sales, warranties and service data. They stay very close to the
customer. E.g. supermarket managers sometimes mingle with
customers to learn more about how to offer them superior value.
7. Value and Satisfaction
• Customers usually face a broad array of products and
services that might satisfy a need. How do they choose
among these many marketing offers? Consumers make
choices based on their perceptions of the value and
satisfaction that various products and services deliver.
Customer Value – this is the difference between the values
the customer gains from owing and using a product and the
cost of obtaining the product.
Customers form expectations about the value of various
marketing offers and buy accordingly. How do they form
their expectations? Customers expectations are based on
past buying experiences, the opinions of friends, and
marketer and competitor information and promises.
8. Customer Satisfaction
• Customer satisfaction with a purchase depends on how
well the products performance lives up to the customer’s
expectations. Customer satisfaction is a key influence on
future buying behaviour. Satisfied customers buy again and
tell others about their good experiences. Dissatisfied
customers often switch to competitors and say negative
things about the product to others.
• Marketers must be careful to set the right level of
expectations. If they set expectations too low, they may
satisfy those who buy but fail to attract enough buyers. If
they raise expectations too high, buyers will be
disappointed. Customer value and customer satisfaction
are key building blocks for developing and managing
customer relationships.
9. The concept of a Market
In marketing terms a customers needs or wants tend to mean a product. The product
may be tangible or intangible. It is still something that the customer wants to in
other to solve a problem or it is something they wish to have.
People can satisfy their requirements or wants in 4 ways:
1. Self solution (coming up with the answer to the problem themselves).
2. Force (threatening or stealing)
3. Begging
4. Exchange (offering something of value to the owner)
The last method exchange, is based on a mutually beneficial outcome to both parties.
This form of exchange summarises marketing. In every case, both parties give or
exchange something of value to each other.
TYPES OF MKTS:
In marketing there are two types of markets. CONSUMER AND INDUSTRIAL MKTS.
DIFFERENCES BTN THEM
10. Industrial Consumer
• Promotion specific or more • Mass marketing
specific • Shorter product life cycle
• Usually longer product life • Lower price levels
cycle • Mass sales
• Higher price levels • After sales warranties are
• Technical sales people usually more general
professionally qualified • Advertising TV or press more
• After sales spares and general
warranties are features in the • High volume market
sales offering
• Low volume market
• Advertising – technical press
highly specific
11. Marketing Management Orientation
• There are 5 alternative concepts under which
organisations conduct their marketing
activities:
The Production concept
The Product concept
The selling concept
The Marketing concept
The Societal marketing concept
12. The Production Concept
• The production concept holds that consumers will favour
products that are available and highly affordable. Therefore
management should focus on improving production and
distribution efficiency. This concept is one of the oldest
orientation that guides sellers.
• The production concept becomes useful only when
demand for a product exceeds supply. Here management
should look for ways to increase supply. Or where product’s
cost is too high and improved productivity is needed to
bring it down. For example Henry Ford’s whole philosophy
was to perfect the production of the Model T ford so that
its cost could be reduced and more people can afford it.
13. The Production Concept
• Although useful in some situations, the
production concept can lead to marketing
short-sightedness. Companies adopting this
orientation run a major risk of focusing too
narrowly on their own operations and losing
sight of the real objectives – satisfying
customer needs.
14. The Product Concept
• The product concept holds that consumers will
favour products that offer the most in
quality, performance and innovative
features, thus an organisation should devote
energy to making continuous improvements.
Some manufacturers believe that if they can build
a better mousetrap, the world will beat a path to
their door. But they are often shocked, customers
may be looking for a better solution to the mouse
problem but not necessarily a better mouse trap.
They might be looking for a chemical mouse
spray or something that works better than a
mousetrap.
15. The Selling concept
• Many companies follow the selling
concept, which holds that consumers will not buy
enough of the firm’s products unless it
undertakes a large-scale selling and promotion
effort. The concept is typically practiced with
unsought goods. Those that buyers do not
normally buy. Example insurance or blood
donations. Most firms practice the selling
concept when they face overcapacity. Their aim is
to sell what they make rather than make what
the market wants.
16. The Marketing Concept
• The marketing concept holds that achieving
organisational goals depends on knowing the needs
and wants of target markets and delivering the desired
satisfactions better than competitors do. Under the
marketing concept, customer focus and value are the
paths to sales and profits. Instead of a product centred
philosophy, the marketing concept is a customer
centred “sense and respond” philosophy. Many
successful well known companies have adopted the
marketing concept. For example Dell computer, Virgin
group, Tesco, Asda etc. The aim is to build customer
satisfaction and customer retention.
17. The marketing Concept
The marketing concept has been expressed in
many different colourful ways:
Meeting needs profitably
Find wants and fill them.
Love the customer not the product
Have it your way (Burger King)
You are the Boss (United Airlines)
Putting people first (British Airways)
19. The Societal Marketing Concept
• The Societal marketing concept holds that the
organisation should determine the needs, wants and
interests of the target markets. It should then deliver
superior value to customers in a way that maintain or
improve the customer’s and the society’s well being.
• Consider the fast food industry. Most people see them
as offering tasty and convenient food at reasonable
prices, yet many consumers and environmental groups
have voiced their concerns. They argue that the fried
chicken, chips, burgers are high in fat and salt.
20. The marketing mix (7ps)
• Product
• Price
• Place
• Promotion
• People
• Process
• Physical Evidence
22. Marketing Mix
PROMOTION PLACE
Advertising Channels
Sales Promotion Coverage
Personal selling/Sales force Assortments
Public Relations Locations
Direct Marketing Inventory
Transport
(Direct mail, telemarketing,
And Internet)
23. 4Ps / 4Cs
FOUR Ps Four Cs
Product Customer solution
Price Customer cost
Place Convenience
Promotion Communication
24. Product
• What is a Product?
• A product is anything that can be offered to a market for
attention, acquisition, use or consumption that might satisfy a want
or need.
• OR Skinner defines a product as “anything that satisfies a need or
want and can be offered in an exchange”.
• The iphone, DVD player, Toyota Rav4, BMW 5 series, tea at
Starbucks, and advice from the doctor are all products. Broadly
defined products include physical
objects, services, events, persons, places, ideas, organisations and
so on.
• Services are a form of products that consists of
activities, benefits, or satisfactions offered for sale that are
intangible and do not result in the ownership of anything. Examples
are Banking, hotel, airline seeing the lawyer or doctor, or the nurse.
25. Product
• A product is a key element in the marketer
offering. Marketing mix planning begins with
the formulation of an offering that brings
value to the customer and satisfies a need.
This offering becomes the basis upon which
the company builds profitable relationship
with customers.
26. LEVELS OF PDTS AND SERVICES
• Product planners need to think about
products and services on three levels. Each
level adds more customer value. The most
basic is the CORE BENEFIT, which addresses
the question “WHAT IS THE CUSTOMER
REALLY BUYING”. When designing
products, marketers must first define the
CORE, problem-solving benefit or services that
consumers seek.
27. LEVELS OF PDTS AND SERVICES
• At the second level, product planners must
turn the core benefit into an actual product.
They need to develop product and service
features, design, a quality level, a brand name
and packaging. For example a Sony camera is
an actual product. It’s name, parts
styling, features, packaging and other
attributes have all been combined carefully to
deliver the CORE benefit – a convenient, high
quality way to capture important moments.
28. LEVELS OF PDTS AND SERVICES
Finally there must be an AUGMENTED product around
the core benefit and actual product by offering
additional consumer services and benefits . Sony must
offer more than just a camera. It must provide
consumers with a complete solution to their picture
taking problems. Thus when customers buy the
camera, Sony and its dealers might also give buyers a. -
Warranty on parts,
quick repair services,
instructions on how to use the products and
a free number to call should they have any problems.
29. Product and Service Classification
• Products and services fall into two broad classes: Consumer
products and Industrial products.
CONSUMER PRODUCTS:
Products bought by the final consumer for personal consumption.
Marketers usually classify these products based on how consumers go
about buying them.
1. CONVENIENCE PDTS: these are products which are usually bought
frequently, immediately and with a minimum of comparison and
buying effort. E.g. soap, newspaper, fast food.
These products are usually low priced, and marketers place them in
many locations to make them readily available when customers
need them.
30. PRODUCT & SERVICES CLASSIFICATION
2. Shopping Products:
These are less frequently purchased consumer products
and services that customers compare carefully on
suitability, quality, price and style.
When buying shopping products consumers spend much
time and effort in gathering info and making
comparison. E.g. furniture, clothing, used
cars, airline, hotel, electrical appliances.
Shopping product marketers usually distribute their
products thru fewer outlets but provide deeper sales
support to help the customers in their comparison
efforts.
31. PRODUCT & SERVICES
CLASSIFICATTION
3. Speciality Products:
These are consumer products and services with
unique characteristics or brand identification
for which a significant group of buyers are
willing to make a special purchase effort. E.g.s
include specific brands of cars, designer
clothes and so on.
32. PRODUCT & SERVICES
CLASSIFICATTION
4. Unsought Products:
These are products that the consumer either does
not know about or knows about but does not
normally think of buying. Most major new
innovations are unsought until the consumer
becomes aware of them thru advertising. E.g.s
include life insurance, blood donations etc. By
nature unsought products require a lot of
advertising, personal selling and other marketing
efforts.
33. Industrial Products
• These are products that are purchased for further
processing or for use in conducting a business. So
the distinction between a consumer product and
Industrial product is based on the PURPOSE for
which the product is bought. E.g.. If a consumer
buys a car for family use, this is a consumer good.
If he same consumer buys he same car for use as
a taxi, this becomes an industrial product
• The 3 groups of Industrial products and services
include: Materials and Parts, Capital items &
Supplies and Services.
34. Industrial Products
• Materials and Parts include raw materials and
manufactured materials and parts. Raw materials
consist of farm products
(wheat, cotton, livestock, fruits, vegetable) and
Natural products (fish, lumber, crude
petroleum, iron, ore)
• Capital items are industrial products that aid in
the buyer’s production or operations. Eg.s include
generators, large computer systems, elevators. In
offices they may even include fax
machines, computers, desks etc.
35. Industrial Products
• Supplies and Services:
These may include operating supplies such as
(lubricants, coal, paper, pencils) repairs and
maintenance items (paint, nails, brooms).
Supplies are the convenience products of the
Industrial field because they are usually
purchased with minimum effort.
Business Services may include window
cleaning, computer repair etc.
