Introduction & Orientation of Marketing

Myth 6 No difference between marketing & selling

Myth buster Selling focuses on the needs of the seller; marketing on the needs of the 2 buyer.

Introduction to Marketing

The future isnt ahead of us. It has already happened.

Marketing Concept versus Selling Concept

Starting Point Focus Means Ends

The Marketing Concept

Market Customer needs Integrated marketing Profits from satisfied customers

The Selling Concept

Factory Product

Sell and Promote it

Profits through sales volume

What Can Be Marketed?

Goods Services Experien ces Events Persons Places Properties Organizatio ns Information Ideas

Simple Marketing System

Modern Marketing System

Common marketing problems

How can we identify and choose profitable market segments? How can differentiate our offer from our competition? How should we react to competitors? How can we satisfy our customers and build brand loyalty? How can we measure the effectiveness of an add campaign, of Public Relations, of a promotion, etc?

The Need for Change

SATURATION The Changing Market GLOBALISATION The Changing Competition
PRESSURES FOR MARKETING CHANGE

FRAGMENTATION DOWNSIZING Organisation

The Changing Consumer The Changing

Concept of Marketing

Discussion Questions

Can you name a category of products for which your negative feelings have softened? What precipitated this change?

Define the following concepts

Market Products Services Needs Wants Desire Prospect Customer CRM Environment .Marketing .Selling .Company .Retailers .Segmentation .Target .Positioning .Promotion .Advertising

Image of Marketing

Difference between Marketing & selling

In order to understand Marketing let us begin with the

Marketing Triangle

Customers

Company
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Competition

Interactive Student Assignment

Pair with another student to discuss the following questions: In what ways does the buying behavior of you and your parents differ? In what ways does the buying behavior of you and your grandparents differ? What selling strategies would work best for: You Your parents

Introduction To Marketing
Simple Marketing System
Communication

Goods/services

(a collection of sellers)

Industry

Money

(a collection of Buyers)

Market

Informatio

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WHAT IS MARKETING?
American Marketing Association 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 goals.

Marketing = Using Exchanges to Satisfy Needs

THE BREADTH & DEPTH OF MARKETING What Is Marketed?

Goods

Services

Ideas

Who Buys and Uses What Is Marketed? Ultimate Consumers Organizational Buyers

The Evolution of Marketing

Production Era Sales Era Marketing Era Relationship Marketing Era
Dr. Rosebloom

Philosophies of Marketing
A philosophy should guide the marketing strategy to any company. The philosophy could be one or more of the following;

1. Production; affordability and availability.

2. Product -- quality and innovation.

3. Selling -- promotion and hard selling.

4. Marketing -- customer satisfaction and relationships.

5. Societal long-term value to both

1- Production philosophy; it holds that consumers will favor products that are available and highly affordable. Its effective strategy in two situations: -When a demand for a product exceeds the supply. -When the product cost is too high, and improve productivity is needed to reduce the cost, to gain market share. Example; Evian water, McDonalds.

2- Product philosophy; holds that consumers will favor a products that offer the most in quality, performance, and innovative features. In this case the company should focus on the continuous improving. Examples; Nokia Mobile, Motorola, Sony..

3- Selling philosophy; Holds that the customer will not buy enough of the firms products unless it under-takes a large-scale selling and promotion effort. Example; Life-Insurance
4- Marketing philosophy; Holds that achieving organizational goals depends on knowing the needs and wants of target markets and deliver value to compete in the marketplace. The job is not to find the right customers for your product, but the right products for your customers. Dell, Marriott, Disney

5-Societal marketing philosophy;

Balances human welfare, company profits and consumer satisfaction Example; Johnson & Johnson Credo honesty, integrity, and people before profit. Figure 4 Many calls from the Healthy Associations warn people form the consequences results from Fast Food chains.

Core Concepts of Marketing

Needs, wants demands

Products

Utility, Value & Satisfaction

Markets

Marketing & Marketers

exchange, Transaction Relationships

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Core Concepts of Marketing

Need

food ( is a must )

Want

Pizza, Burger, French fry's ( translation of a need as per our experience )

Burger ( translation of a want as per our willingness and ability to buy ) Have a Burger in a five star
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Demand

Desire

hotel

Who is a Customer ??
CUSTOMER IS . . . . .

Anyone who is in the market looking at a product / service for attention, acquisition, use or consumption that satisfies

a want or a need
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How Do Consumers Choose Among Products & Services?

Value - the value or benefits the customers gain from using the product versus the cost of obtaining the product. Satisfaction - Based on a comparison of performance and expectations. Performance > Expectations => Satisfaction Performance < Expectations => Dissatisfaction

Marketing Environment

All the actors and forces influencing the companys ability to transact business effectively with its target market

Marketing Environment
Demographic
Company

Cultural
Public

Economic Company
Suppliers Customers

Political

Competitors

Natural

Intermediaries

Technological

Market Environment Includes: Microenvironment - forces close to the company that affect its ability to serve its customers. Macro environment - larger societal forces that affect the whole microenvironment

The Microenvironment
Company

Publics

Forces Affecting a Companys Ability to Serve Customers

Suppliers

Competitors

Intermediaries

Customers

Actors in the Microenvironment

The Companys Microenvironment

Companys Internal Environment: Areas inside a company. Affects the marketing departments planning strategies. All departments must think consumer and work together to provide superior customer value and satisfaction.

The Companys Microenvironment

Suppliers: Provide resources needed to produce goods and services. Important link in the value delivery system. Most marketers treat suppliers like partners.

Marketing Intermediaries
Help to promote, sell and distribute goods to final buyers Include resellers, physical distribution firms, marketing services agencies and financial intermediaries Effective partner relationship management is essential Defined as independent business organisations that directly assist the flow of products and services between a marketing organisation and its markets.

Partnering With Intermediaries

Coca-Cola provides Wendys with much more than just soft drinks. It also pledges powerful marketing support.

The Companys Microenvironment

Customers: Five types of markets that purchase a companys goods and services

Customer Markets

International Markets

Consumer Markets

Company
Government Markets Business Markets

Reseller Markets

Competition

Competition refers to the alternative firms that could provide a product to satisfy a specific markets need.

Competition
Companies face competition from three main sources: Brandfrom manufacturers of similar products. Substitute products dissimilar products satisfying the same needs. Indirectother firms trying to win customers purchasing power.

Publics:
Publics: Group that has an interest in or impact on an organization's ability to achieve its objectives

Types of Publics

The Macroenvironment The company and all of the other actors operate in a larger macro environment of forces that shape opportunities and pose threats to the company.

The Companys Macro environment

The Macro environment

Demographic Cultural
Forces that Shape Opportunities and Pose Threats to a Company

Economic

Political Technological

Natural

The Companys Macro environment

Demographic: The study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics. Marketers track changing age and family structures, geographic population shifts, educational characteristics, and population diversity.

The Seven U.S. Generations

Key U.S. Demographic Trends

Changing Age Structure Population is getting older Changing Family Structure Marrying later, fewer children, working women, and nonfamily households Geographic Shifts Moving to the Sunbelt and suburbs (MSAs) Increased Education Increased college attendance and white-collar workers Growing Ethnic and Racial Diversity 73% Caucasian, 12% African-American, 10% Hispanic & 3.4% Asian

Demographic Environment Changing age structure of the U.S. population is the single most important demographic trend Baby boomers, Generation X, and Generation Y are the key groups

Demographic Environment
Key Generations
Born between 1946 and 1964 Represent 28% of the population; earn 50% of personal income
Earn more than half of all personal income Almost 25% belong to racial or ethnic minority Spend a lot on anti-aging products and services Are likely to postpone retirement

Baby Boomers Generation X Generation Y

Demographic Environment
Key Generations

Baby Boomers Generation X Generation Y

Born between 1965 and 1976 First latchkey children Maintain a cautious economic outlook Respond to socially responsible companies Will be primary buyers of most goods by 2010

Demographic Environment
Key Generations
Born between 1977 and 1994 72 million strong; almost as large a group as their baby boomer parents New products, services, and media cater to GenY Challenging target for marketers

Baby Boomers Generation X Generation Y

Economic Environment
In order for an economy to exist there must be a

market. A market exists where consumers have money to spend and are willing to spend it. The economic environment is a significant force that affects the marketing of any organisation: eg unemployment, inflation, interest rates. also influences business cycles such as: prosperity recession recovery. These impact on what people buy, when and how.

Income Distribution

Walt Disney markets two distinct Pooh bears to match its two-tiered market.

Natural Environment
Involves the natural resources that are needed as inputs by marketers or that are affected by marketing activities.

Environmental Responsibility

McDonalds has made a substantial commitment to the so-called green movement.

Technological Environment
Most dramatic force now shaping our destiny.

Technology Technology has had an impact on our lifestyles, work, leisure, consumption patterns and economic well-being. Technology is a mixed blessing: it may improve our lives in one area while creating environmental and social problems in another.

Technological Environment
Changes rapidly. Creates new markets and opportunities. Challenge is to make practical, affordable products. Safety regulations result in higher research costs and longer time between conceptualization and introduction of product.

Political Environment
Includes Laws, Government Agencies, and Pressure Groups that Influence or Limit Various Organizations and Individuals In a Given Society.

Increasing Legislation
Changing Government Agency Enforcement

Increased Emphasis on Ethics & Socially Responsible Actions

Cultural Environment The institutions and other forces that affect a societys basic values, perceptions, preference, and behaviors.

Cultural Environment
Core beliefs and values are passed on from parents to children and are reinforced by schools, churches, business, and government. Secondary beliefs and values are more open to change. - forces that affect a societys basic values, perceptions, preferences, and behaviors.

Cultural Environment
Themselves
Societys Major Cultural Views Are Expressed in Peoples Views of:

Others Organizations
Society Nature

The Universe

Assignment
Can you identify the trends that have made the marketing concept, the customer concept, and the societal marketing concept more attractive models for contemporary marketing managers? Give Reasons to Support your answers.

Marketing Research Defined

The systematic and objective process of generating information for aid in making marketing decisions

Purpose

The Marketing Research Process

Defining the problem Analyzing the situation

Getting Problem specific data

Solving the problem Interpreting the data

Marketing Research Process

Step 1. Defining the Problem
Gathers preliminary information that will help define the problem and suggest hypotheses.

Exploratory Research

Descriptive Research

Describes things as market potential for a product or the demographics and consumers attitudes.

A marketing manager should understand the target market and what needs the firm can satisfy.

2.Analyzing the situation

when the marketing manager thinks the real problem has begun to surface, a situation analysis is an informal study of what information is already available in the problem area. It can help define the problem and specify what additional information if any needed. The situation analysis should also find relevant secondary data information & primary data.

Analyzing Situation
Inside companyCompany filed,intranet,reports, MIS people ,sales, Out side CompanyInternet,liabraries, government, trade associations,universities. Observation Equipment, personal approaches

Secondary data sources

All data Sources

Primary data sources

Questioning- In depth and focus group interviews ,online,mail,

Exhibit 7-3 Sources of Primary and Secondary Data

2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwinfor use only with Essentials of Marketing

Secondary Research

Develop the Research Plan

Gathering Secondary Information
Both Must Be: Information That Already Exists Somewhere. + Obtained More Quickly, Lower Cost. - Might Not be Usable Data.
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Relevant Accurate Current Impartial

Information Collected for the Specific Purpose at Hand.

3.Getting problem specific data

The next step is to plan a formal research project to gather primary data. There are two basic methods for obtaining information about customers: Questioning and observing.

Primary Data Collection Process

Step A. Research Approaches
Observational Research
Gathering data by observing relevant people, actions, and situations (Exploratory Information)

Survey Research
Asking individuals about attitudes, preferences or buying behaviors (Descriptive Information) Experimental Research Experimental Research Using groups of people to determine cause-and-effect relationships (Causal Information)

Develop the Research Plan Planning

Primary Data Collection
Probability or Non-probability sampling?

Sampling Plans
Sample representative segment of the population

Who is to be surveyed? (What Sampling Unit?)

How should the sample be chosen?

How many should be surveyed?

4.Interpreting the data

After someone collects the data, it has to be analyzed to decide what it all means. After collection they are to be classified and tabulated into statistical summarization. They may be in percentage, average, ratios, so as to give the greatest value in the interpretation work. A marketing manager must consider whether the analysis of the data supports the conclusions drawn in the interpretation step.

5.Solving the problem

In the problem solution step, managers use the research results to make marketing decisions. When the research process is finished , the marketing manager should be able to apply the findings in marketing strategy planning- the choice of the target market or the mix of the four Ps

 Can you name a company that uses targeted mailings to promote new products, or regional offerings?

Marketing Information System

Assessing Marketing Information Needs

MIS provides information to the companys marketing and other managers and external partners such as suppliers, resellers, and marketing service agencies

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The Importance of Information

Marketing Environment

Customer Needs

Why Information Is Needed

Strategic Planning

Competition

Marketing Info. System

Marketing Information System (MIS) Consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers.

Elements of a Complete Marketing Information System

2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwinfor use only with Essentials of Marketing

Data Warehouse

A place where databases are stored so that they are available when needed. Data warehouse is a sort of electronic library where all of the data is indexed extremely well. where data from internal and external sources are collected, organized and stored for future analysis.

Decision Support System (DSS)

A computer programan interfacebetween the manager and the MIS Makes it easy to get needed information Search engines are a powerful tool for finding whats needed Easy access to databases in a data warehouse Makes it easy to analyze the information May involve marketing modelsto show the relationships among different marketing variables Is used as the manager is making decisions

 A computer programme that makes it easy for a marketing manager to get and use information as he or she is making decisions. Market segment analysis Market share analysis Sales analysis

 A marketing model is a statement of relationships among marketing variables In short the decision support system puts managers online so they can study available data and make better marketing decisions faster.