Marketing Fundamentals

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Marketing Fundamentals
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Aim of
publication

To provide the reader or the learner with
an overview of the basic principles and
practices of marketing


Learning Objectives
After developing the KeyPoints outlined in this publication, you should mainly
be able:
☺explain what marketing is
☺distinguish between micro- and macro-marketing
☺define consumer behavior
☺discuss the importance of defining personal needs
☺explain how consumers may be influenced
☺explain what marketers mean by "product“
☺discuss the importance of brand familiarity
☺explain the role of packaging in the marketing process
☺define and explain the purpose of sales prospecting


Marketing Fundamentals – Summary.
☺ Marketers and marketing managers perform a
range of activities to deliver goods and
services into the hands of customers.
☺ Marketing provides direction for production by
helping to make sure the right goods and
services are produced and deliver to
consumers.
☺ The universal functions of marketing are
buying, selling, transporting, storing,
standardization and grading, financing, risk
taking, and market information.
☺ To understand the buying behavior of
consumers, marketers turn to the behavioral
sciences of psychology, sociology, and
economics.
☺ A product is the need-satisfying offering of a
firm.
☺ Marketers use packaging to help sell products,
reinforce a promotional message.


Marketing Fundamentals - Sections list

☺ (Section 1) Define Marketing
☺ (Section 2) Individual Consumer Behavior
☺ (Section 3) Product Planning
☺ (Section 4) Personal Selling Process


(Section 1) Define Marketing – Summary
☺ define what marketers do
☺ explain the relationship between marketing and
production
☺ point out how marketing affects daily life
☺ distinguish between micro-marketing and
macro-marketing
☺ explain how planned economic systems and
market-directed economic systems work
☺ explain how marketing is related to the
economy
☺ identify the stages of economic development
☺ discuss the universal functions of marketing


(Section 1) Define Marketing – HighPoints
☺ What is marketing?
☺ Micro- versus macro-marketing
☺ Marketing and the economy
☺ Stages of economic development


(Section 1) HighPoints – What is marketing?
☺ Marketers and marketing managers perform a
range of activities that deliver a company's
goods and services into the hands of its
customers.
☺ Marketing provides direction for production by
helping to make sure that the right goods and
services are produced and that they find their
way to consumers.
☺ Marketing can affect many aspects of daily
life, including the radio and TV programs that
are broadcast, the cost of goods and services,
career options, and an individual's choices
about what goods and services to buy and
where.


(Section 1) HighPoints – Micro- vs. Macro-marketing
☺ Micro-marketing is the performance of
marketing activities that aim to accomplish an
organization's objectives.
☺ Macro-marketing is a social process that
directs an economy's flow of goods and
services from producers to consumers.


(Section 1) HighPoints – Marketing and the economy
☺ An economic system organizes how an economy
uses its resources to produce goods and
services and to distribute them to various
people and groups in society.
☺ In a planned economic system, government
agencies decide the type and quantity of goods
and services produced in the economy.
☺ In a market-directed economic system, the
individual decisions of producers and consumers
affect the whole economy.
☺ An economy needs an effective macro-
marketing system in order to develop.
☺ Less-developed economies need market-
oriented intermediaries to move surplus output
to markets where there is more demand.


(Section 1) HighPoints – Stages of economic development
☺ The main stages of economic development are:
☺ self-supporting agriculture
☺ pre-industrial
☺ primary manufacturing
☺ nondurable and semi-durable
☺ consumer products manufacturing
☺ capital equipment and consumer
☺ durable products manufacturing
☺ exporting manufactured products
☺ The universal functions of marketing are
buying, selling, transporting, storing,
standardization and grading, financing, risk
taking, and market information.


(Section 2) Individual Consumer Behavior – Summary
☺ define consumer behaviour
☺ explain how consumers may be influenced
☺ identify the consumers who make choices


(Section 2) Individual Consumer Behavior – HighPoints
☺ Defining consumer behavior
☺ Influencing consumers
☺ Making choices


(Section 2) HighPoints – Defining consumer behaviour
☺ To understand the buying behavior of
consumers, marketers turn to the behavioral
sciences of psychology, sociology, and
economics.
☺ Economic buyers are people who logically
compare choices in terms of cost and value
received to get the greatest satisfaction from
spending their time and money.
☺ Economic needs are concerned with making the
best use of consumers' time and money.
☺ An individual's buying behavior is affected by
psychological variables, such as motivation,
perception, learning, attitudes, and lifestyle.
☺ Needs are the basic forces that motivate
people.
☺ Wants grow from needs - they are learned
needs.


☺ Wants grow from needs - they are learned
needs.
☺ A drive is a strong stimulus that encourages
action to reduce a need.
☺ Maslow's hierarchy of needs shows that there
are different levels of needs from basic
physiological ones to higher level personal ones.
☺ Perception is the way individuals interpret the
world; it determines how they will seek to
fulfill their needs.
☺ Marketing and promotional efforts do not
affect all consumers in the same way because
each person has a unique perception of the
world.
☺ Learning can be defined as gaining knowledge
from experience.
☺ The learning process consists of three main
steps: cues, response, and reinforcement.


☺ Consumers' attitudes affect their selective
and learning processes and so affect their
buying habits.
☺ Researching and understanding consumer
attitudes and beliefs can give marketers a
better picture of markets, but attitudes and
beliefs are not always good predictors of
intentions to buy.
☺ Ethical issues may arise when companies
reinforce consumers' inaccurate beliefs.
☺ Consumer expectations often focus on the
value and benefits expected from a company's
marketing mix.
☺ Lifestyle analysis is the analysis of a person's
day-to-day pattern of living as expressed in
that person's activities, interests, and opinions.


(Section 2) HighPoints – Influencing consumers
☺ Consumer behavior is often influenced by
interpersonal relationships in families.
☺ Marketers must direct their promotional
efforts not only at the purchaser but also at
those who influence the purchaser.
☺ The social class that a consumer belongs to
influences his or her purchasing behavior.
☺ Consumers are subject to a myriad of
influences, including others' opinions, cultural
forces, and the purchase situation.


(Section 2) HighPoints – Making choices
☺ Consumers tend to use a problem-solving
process when making a purchase.
☺ This process involves the following steps:
becoming aware of the problem, gathering
information about possible solutions, evaluating
possible solutions, deciding on the appropriate
solution, and evaluating the decision.
☺ Consumers use three levels of problem solving:
extensive problem solving, limited problem
solving, and routinized response behavior.
☺ When consumers are faced with a completely
new idea, they accept or reject it by using the
adoption process.


(Section 2) HighPoints – Making choices
☺ The adoption process is similar to the problem-
solving process and includes the following main
steps: awareness, interest, evaluation, trial,
decision, and confirmation.
☺ When analyzing consumer behavior in
international markets, marketers sometimes
fail to understand the cultural variables at play
and hold inappropriate stereotypes.


(Section 3) Product Planning – Summary
☺ define product planning
☺ describe product life cycles
☺ explain product development
☺ explain what marketing channels are


(Section 3) Product Planning – HighPoints
☺ Definition of a product
☺ Business products
☺ Branding and brand familiarity
☺ Packaging


(Section 3) HighPoints – Definition of a product
☺ A product is the need-satisfying offering of a
firm.
☺ From a marketing viewpoint, quality is a
product's ability to satisfy customer needs.
☺ A company's product may be a tangible good, an
intangible service, or a mixture of both.
☺ Goods are usually produced and stored before
they are sold.
☺ Services are usually sold before they are
produced and cannot be stored or transported,
making it difficult to balance supply and
demand and apply economies of scale.


(Section 3) HighPoints – Definition of a product
☺ A product assortment is all the products and
product lines sold by a firm, whereas a product
line is a set of closely related individual
products.
☺ Consumer products are meant for a final
consumer; business products are used in the
process of making other products.
☺ There are four main groups of consumer
products: convenience, shopping, specialty, and
unsought.


(Section 3) HighPoints – Business products
☺ The demand for business products is classified
as derived demand because it is derived from
the demand for final consumer products.
☺ An expense item is a business product, the
total cost of which is treated as a business
expense the year it's purchased.
☺ A capital item is a long-lasting business product
that can be used and depreciated for many
years.
☺ Six different product classes are installations;
accessory equipment; raw materials; component
parts and materials; maintenance, repair, and
operating (MRO) supplies; and professional
services.


(Section 3) HighPoints – Branding and brand familiarity
☺ Branding is the use of a name, term, symbol, or
design to identify a product.
☺ Conditions that help a brand to become
successful include the following: the product is
easy to identify by brand or trademark;
product quality can be maintained easily;
product quality is the best value for the price;
dependable and widespread availability is
possible; demand is strong; economies of scale
exist; and favorable shelf space or display
space in stores is available.
☺ Brand familiarity is the level at which
consumers recognize and accept a brand.
☺ Five levels of brand familiarity are useful for
strategy planning: rejection, nonrecognition,
recognition, preference, and insistence.
☺ A family brand is the same brand name for
several products.


(Section 3) HighPoints – Branding and brand familiarity
☺ Licensed brands are well-known family brands
that producers pay a fee to use.
☺ Individual brands are used when a company
produces several different products with
separate brand names.
☺ Generic products have no brand at all, other
than the identification of their contents and
the manufacturer.
☺ Manufacturer brands are created by producers
and distributed nationally or globally.
☺ Dealer brands are brands created by
middlemen.
☺ Manufacturer brands and dealer brands are
currently competing in a "battle of the brands"
to determine which brands are more popular.


(Section 3) HighPoints – Packaging
☺ Packaging entails promoting and protecting a
product.
☺ Marketers use packaging to help sell products,
reinforce a promotional message, and reduce
losses due to damage, spoilage, or theft.
☺ In some countries, a label must give accurate
information about product contents and allow
value comparisons between products.
☺ A warranty is what the seller promises the
consumer about a product.
☺ If a company chooses to offer a warranty, it
must be clearly written and available for
inspection before purchase.
☺ The stronger a warranty is, the more
attractive it is to the consumer.


(Section 4) Personal Selling Process – Summary.
☺ explain the purpose of sales prospecting
☺ describe a typical sales presentation
☺ explain the importance of defining personal
needs


(Section 4) Personal Selling Process – HighPoints.
☺ Sales prospecting
☺ A sales presentation
☺ Identifying customers’ needs
☺ Making a sale


(Section 4) HighPoints – Sales prospecting
☺ A prospect is a person or organization that has
the potential to purchase a company's products
or services.
☺ Prospects are not the same as leads, which are
people or organizations a salesperson suspects
might be prospects.
☺ Qualified prospects should have the money to
buy, the ability to buy, and the desire to buy.
☺ In the cold canvas prospecting method, reps
approach leads they don't know. With the
endless chain referral method of prospecting,
salespeople use existing customers as sources
of information about prospects.
☺ A referral is a person or organization
recommended to a salesperson.
☺ Orphaned customers - people or organizations
previously handled by a salesperson who has
now changed jobs - are a rich source of
prospects.


(Section 4) HighPoints – Sales prospecting
☺ Salespeople can expand their range of
prospects by participating in sales lead clubs
and trade shows.
☺ Other ways of gathering prospects include the
center of influence method, the observation
method, networking, direct-mail prospecting,
and telemarketing.
☺ Salespeople should follow three guidelines to
enhance their prospecting methods: customize
the method to suit the particular needs of the
firm; focus on high potential customers to
start with, leaving prospects with lower
potential until later; and always return to
prospects who didn't buy.
☺ To ensure a steady flow of potential customers,
salespeople try to maintain a prospect pool - a
list of names collected from four main sources:
leads, referrals, orphans, and customers.


(Section 4) HighPoints – A sales presentation
☺ The type of sales presentation given by a rep is
determined by the sales call objective, the
firm's customer relations policy, and the rep's
knowledge of the prospect.
☺ The choice of sales presentation affects how
much of the interaction will be directed by the
rep.
☺ With structured techniques - such as prepared
presentations - the salesperson directs the
conversation; customer's participation is
limited to direct responses to planned
questions, which include the rep's request for
an order.


(Section 4) HighPoints – A sales presentation
☺ Prepared presentations (also known as
memorized or canned presentations) are not
suited to complicated situations because the
same presentation is used for all customers.
☺ The selling formula method tries to combine
the structure of a planned presentation with
the flexibility of a customized presentation.
☺ It usually begins with a planned segment but
ends with the customers clarifying their
requirements.


(Section 4) HighPoints – Identifying customers’ needs
☺ The consultative selling method aims to
identify the customer's needs at the beginning
of the presentation.
☺ The consultative aspect is giving the customer
equal or more participation time in the sales
presentation.
☺ The consultative selling approach can be broken
down into three phases: need development,
need awareness, and need fulfilment.
☺ Salespeople use a combination of open
questions and closed questions to discover a
prospect's needs.
☺ Closed questions are designed to elicit brief
yes or no responses. Open questions are
intended to encourage more expansive
responses from the prospect.


(Section 4) HighPoints – Identifying customers’ needs
☺ The multiple question approach (SPIN) outlines
the sequence of the four questions types a rep
asks in a presentation: situation, problem,
implication, and need-payoff.
☺ During a presentation, a salesperson must
continually assess the customer's reactions.
☺ In addition to verbal responses, nonverbal
communication through body and facial
gestures can signal positive or negative
reactions to the salesperson's approach.


Marketing Fundamentals – Conclusion
☺ At this point you should be able to be familiar
with the following:
• define what marketers do
• explain the relationship between
marketing and production
• distinguish between micro-marketing and
macro-marketing
• explain how marketing is related to the
economy
• discuss the universal functions of
marketing
• define consumer behavior
• explain how consumers may be influenced
• define product planning
• describe product life cycles
• say what marketing channels are
• explain the purpose of sales prospecting


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