Introduction to Marketing

Marketing 11

What do you know…

• What is marketing? Try to come up with a definition

What is Marketing?

“A social and managerial process by which individuals and groups obtain what they need and want through

creating and exchanging productsand values with others”

(McDougall, Kotler and Armstrong)

Or put another way…

• The process of convincing someone to take favourable action

• Ex – convincing your parents to let you go to a party when you have lots of homework to do

• Ex – Rock and Republic convincing you to buy their $250 jeans when you have $30 Levis that are just fine

Core Marketing Concepts

Needs

Wants

Demands

ProductsExchange

Transactions

Markets

Needs

• A state of felt deprivation• Physical needs

– Food, clothing, shelter, safety• Social needs

– Belonging, affection• If need not satisfied

– Seek to satisfy need– Try to reduce need

Wants

• Everything else• Needs can be wants• Wants can be needs• Depends on the

individual personality, circumstances, culture

Demands• Wants + buying power = demands• Products and services provide benefits• Benefits satisfy wants• Consumers choose

products that maximizebenefits/satisfies wantsfor amount of moneythey can afford– Hyundai vs. Mercedes vs. Cervelo bikes

Products

• Anything that might satisfy a need or want• Can be goods, services, places, activities,

etc.• Need/want pants

– Consignment jeans - $15– Levi’s 501s - $50– Rock and Republic - $200

Exchange• Act of obtaining a product by offering something

in return• Exchanges occur under these conditions:

– At least 2 parties– Must have something the other party values– Must want to deal with the other party– Must be free to accept or reject offer– Must be able to deliver product/service

• Exchanges leave everyone better off (or not worse off)

Transactions

• Trading values between 2 parties• Usually involves money

– Starbucks gives a Mocha Frappuccino to Ms. James and gets $4.50 in return

• But doesn’t have to involve money– Barter

• Marketers try to generate a response to an offer

Markets

• “A market is a set of actual and potential buyers of a product”

• Evolution to market– Self-sufficient– Decentralized exchange– Centralized exchange / merchant

• Not necessarily a physical place– China / stock market / farmer’s market /

teenage market

Marketing Management

• “the analysis, planning, implementation, and control of programs designed to create, build, and maintain beneficial exchanges with target buyers for the purpose of achieving organizational objectives”

Management Philosophiesof Marketing

Product Orientation

• Firm is concerned with what it does best rather than with what the consumer wants.

When do companiesfollow this concept?

• Demand is greater than supply• Product cost is too high

– Ford Model T – could offer a car of any colour as long as it was black

Sales Orientation• Assumes that more goods and services will be

purchased if aggressive sales techniques are used.

• Similar to product orientation, as focus is on the firm and not the customer– Profit through sales volume, not customer satisfaction

When do companiesfollow this concept?

• Often used with goods people don’t think of buying (“unsought goods”)– Insurance– Burial plot

Market Orientation

• Primary goal is the satisfaction of customers’ wants and needs

• People will buy the products because it is something that they need or want

Societal Orientation

• Similar to Market orientation but also factors in society’s long-term interests.

• It serves three bodies – the customer, the firm, and society- in that order.

CAN YOU THINK OF A COMPANY THAT DOES AN

EXCELLENT JOB OF MARKETING THEIR PRODUCT

OR SERVICE?