Marketing. What is Marketing? Many people think of marketing only as selling and advertising. Many people think of marketing only as selling and advertising

MarketingMarketing

What is Marketing?What is Marketing?

• Many people think of marketing only as Many people think of marketing only as selling and advertising .selling and advertising .• Selling and advertising are only the tip of Selling and advertising are only the tip of the marketing iceberg.the marketing iceberg.• Selling and advertising are only part of the Selling and advertising are only part of the large ‘Marketing Mix’.large ‘Marketing Mix’.• Marketing mix is a set of marketing tools Marketing mix is a set of marketing tools that work together to satisfy customer needs that work together to satisfy customer needs and build customer relationships.and build customer relationships.

Marketing IcebergMarketing Iceberg

Selling will be Selling will be easyeasy

Understanding Customer NeedsUnderstanding Customer Needs

Develops Products that provide Develops Products that provide superior valuesuperior value

Prices, Distributes, and Prices, Distributes, and Promotes them effectivelyPromotes them effectively

What is marketingWhat is marketing

• Marketing is an organizational function Marketing is an organizational function and a set of processes for creating, and a set of processes for creating, communicating, and delivering value to communicating, and delivering value to customers and for managing customer customers and for managing customer relationships in ways that benefit the relationships in ways that benefit the organization and its stakeholders. organization and its stakeholders.

Marketing wasMarketing was

Telling and Telling and SellingSelling

Marketing nowMarketing now

Satisfying Satisfying Customer Customer

NeedsNeeds

Marketing is the process by which companies Marketing is the process by which companies create value for customers and build strong create value for customers and build strong

customer relationship in returncustomer relationship in return

MarketerMarketer

Customer needs Customer needs and wantsand wants

understand

understand

MarketplaceMarketplace

understand

understand

InteractionInteraction

We see marketing management as the art and We see marketing management as the art and science of choosing target markets and getting, science of choosing target markets and getting,

keeping, and growing customers through keeping, and growing customers through creating , delivering and communicating creating , delivering and communicating

superior customer value superior customer value

The aim of marketing is to know and The aim of marketing is to know and understand the customer so well that the understand the customer so well that the

product or service fits him and sells itself. product or service fits him and sells itself.

Marketing ManagementMarketing Management

The Four PsThe Four Ps

MarketingMix

Product

Price Promotion

Place

The Four CsThe Four Cs

CustomerSolution

CustomerCost

Communication

convenience

Simple Marketing System

Industry(a collection

of sellers)

Market(a collection

of Buyers)

Goods/services

Money

Communication

Information

Customers

Front-line people

Middle Management

TopManagement

Traditional Organization Chart

Customer-Oriented Organization Chart

Customers

Front-line people

Middle management

Topmanage-ment

Customers Cus

tom

ers

Evolving Views of Marketing’s Role

a. Marketing as anequal function

FinanceProduction

Marketing Humanresources

b. Marketing as a moreimportant function

Finance

Humanresources

Marketing

Production


c. Marketing as themajor function

Marketing

Finance

Hum

an

resources

Production

d. The customer as thecontrolling factor

Customer

Human

reso

urces

FinanceProductio

n

Marketing


e. The customer as the controllingfunction and marketing as the

integrative function

Customer

Marketing

Production

Hum

an

resources

Finance

What is marketedWhat is marketed??

1.1. Goods.Goods.

2.2. Services.Services.

3.3. Events.Events.

4.4. Experience.Experience.

5.5. Persons.Persons.

6.6. Places.Places.

7.7. Properties.Properties.

What is marketedWhat is marketed??

8. Organizations.8. Organizations.

9. Information.9. Information.

10. Ideas.10. Ideas.

Customer needs Customer needs and wantsand wants

MarketplaceMarketplace

NeedsNeeds WantsWants DemandsDemands

Products, Services and Products, Services and ExperiencesExperiences

MarketMarket ExchangeExchange

Customer needs, wants, and demandsCustomer needs, wants, and demandsThe marketer must try to understand the target The marketer must try to understand the target market's needs, wants and demand.market's needs, wants and demand.

Needs:Needs:• Needs are the basic human requirements.Needs are the basic human requirements.

• Marketers do not create needs ; Needs preexist Marketers do not create needs ; Needs preexist marketers.marketers.

• Marketers influence wants, simply giving Marketers influence wants, simply giving customers what they want isn't enough to gain an customers what they want isn't enough to gain an edge, companies must help customers learn what edge, companies must help customers learn what they want. they want.

Demands Backed by an ability to pay

Marketer impact to

shift wants into

demands

NeedsThe basic human requirements

WantsNeeds directed to objects that might satisfy the need, regarding culture

Offerings and Brands:Offerings and Brands:

•Companies address needs by putting a value Companies address needs by putting a value proposition , a set of benefits that they offer to proposition , a set of benefits that they offer to customers to satisfy their needs.customers to satisfy their needs.

•A brand name such as McDonald`s carries many A brand name such as McDonald`s carries many associations in people`s minds that make up the associations in people`s minds that make up the brand image : burgers , fun, childern, fast food, brand image : burgers , fun, childern, fast food, convenience and golden arches. convenience and golden arches.

Value and Satisfaction:Value and Satisfaction:

•The offering will be successful if it delivers value and The offering will be successful if it delivers value and satisfaction to the target buyer. satisfaction to the target buyer.

•The buyer chooses between different offerings based The buyer chooses between different offerings based on which he/she perceives to deliver the most value.on which he/she perceives to deliver the most value.

• Value reflects the sum of the perceived benefits and Value reflects the sum of the perceived benefits and costs to customers. costs to customers.

•Satisfaction reflects a person`s judgments of a Satisfaction reflects a person`s judgments of a product`s perceived performance ( or outcome) in product`s perceived performance ( or outcome) in relationship to expectations. relationship to expectations.

• If the performance falls short of expectations, the If the performance falls short of expectations, the consumer is dissatisfied and disappointed. consumer is dissatisfied and disappointed.

• If it matches expectations, the customer is satisfied . If it matches expectations, the customer is satisfied .

• If it exceeds them, the customer is delighted.If it exceeds them, the customer is delighted.

Value and Satisfaction:Value and Satisfaction:

consumer-driven approach:consumer-driven approach:

• The four p`s represent the seller`s view of the The four p`s represent the seller`s view of the marketing tools available for influencing buyers.marketing tools available for influencing buyers. •From a buyer`s point of view , each marketing tool is From a buyer`s point of view , each marketing tool is designed to deliver a customer benefit.designed to deliver a customer benefit.

• consumer wants are the drivers of all strategic consumer wants are the drivers of all strategic marketing decisions. marketing decisions.

ProductProduct→→SolutionSolution

PromotionPromotion→→InformationInformation

PricePrice→→ValueValue

PlacementPlacement→→AccessAccess

SIVA modelSIVA model

The four elements of the SIVA model are:The four elements of the SIVA model are:

• Solution: How can I solve my problem?Solution: How can I solve my problem?

• Information: Where can I learn more about it?Information: Where can I learn more about it?

• Value: What is my total sacrifice to get this Value: What is my total sacrifice to get this solution?solution?

• Access: Where can I find it?Access: Where can I find it?

SIVA modelSIVA model

WantsWants::

• Wants are the form human needs take as they are Wants are the form human needs take as they are shaped by culture and individual personality .shaped by culture and individual personality .

• needs become wants when they are directed to specific needs become wants when they are directed to specific objects that might satisfy the need.objects that might satisfy the need.

• An American needs food but wants a big Mac, French An American needs food but wants a big Mac, French fries, and a soft drink .fries, and a soft drink .

Demand:Demand:• Demands are wants for specific products Demands are wants for specific products backed by an ability to pay. Many people backed by an ability to pay. Many people want a Mercedes; only a few are willing and want a Mercedes; only a few are willing and able to buy one.able to buy one. • Marketing must learn about and Marketing must learn about and understand customer needs, wants, and understand customer needs, wants, and demands.demands.

• The company conduct consumer research The company conduct consumer research and analyze customer data. and analyze customer data.

Exchange and transactionsExchange and transactions

• Exchange is the core concept of marketing, is the Exchange is the core concept of marketing, is the process of obtaining a desired product from process of obtaining a desired product from someone by offering something in return. For someone by offering something in return. For exchange potential to existexchange potential to exist , , five conditions must be five conditions must be satisfied;satisfied;

1.1. There are at least two parties.There are at least two parties.

2.2. Each party has something that might be of value to Each party has something that might be of value to the other party.the other party.

3.3. Each party is capable of communication and Each party is capable of communication and delivery. delivery.


4. Each party is free to accept or reject the exchange 4. Each party is free to accept or reject the exchange offer.offer.

5. Each party believes it is appropriate or desirable to 5. Each party believes it is appropriate or desirable to deal with the other party. deal with the other party.

• When an agreement is reached, we say that a When an agreement is reached, we say that a transaction takes place. transaction takes place.

• A transaction is a trade of values between two or A transaction is a trade of values between two or more partiesmore parties


• A transaction involves several dimensions :A transaction involves several dimensions :

1.1. At least two things of value.At least two things of value.

2.2. agreed-upon condition.agreed-upon condition.

3.3. A time of agreement.A time of agreement.

4.4. A place of agreement.A place of agreement.

5.5. A legal system to support and enforce the A legal system to support and enforce the transaction. transaction.

Markets:Markets:• A market is the set of actual and potential A market is the set of actual and potential buyers of a product.buyers of a product.• These buyers share a particular need or These buyers share a particular need or want that can be satisfied through exchange want that can be satisfied through exchange relationships.relationships.• Sellers must Search for buyers ,identify Sellers must Search for buyers ,identify their needs, design good marketing offers, their needs, design good marketing offers, set prices for them, promote them, and set prices for them, promote them, and store and deliver them.store and deliver them.

Manufacturermarkets

ServicesServices,,moneymoney

Governmentmarkets


ServicesServices


TaxesTaxes

TaxesTaxes,,goodsgoods



MoneyMoney MoneyMoney

Consumermarkets

IntermediarymarketsGoods, servicesGoods, services Goods, servicesGoods, services

ResourcesResources ResourcesResources

Resourcemarkets

MoneyMoney MoneyMoney

Structure of Flows

To design a winning marketing strategy To design a winning marketing strategy the marketing manager must answer the marketing manager must answer

two important questions:two important questions:“ “ What customers will we serve( what What customers will we serve( what our target market) ? and How can we our target market) ? and How can we serve these customers best ( what`s our serve these customers best ( what`s our

value proposition?) value proposition?)

Production ConceptProduction Concept

Product ConceptProduct Concept

Selling ConceptSelling Concept

Marketing ConceptMarketing Concept

Consumers prefer products that are widely available and inexpensive

Consumers favor products that offer the most quality, performance,

or innovative features

Consumers will buy products only ifthe company aggressively

promotes/sells these products

Focuses on needs/ wants of target markets & delivering value

better than competitors

Company Orientations Towards the Marketplace

MarketIntegratedmarketing

Profits throughcustomer

satisfactionCustomer

needs

(b )The marketing concept

FactoryExistingproducts

Selling andpromotion

Profits throughsales volume

Startingpoint Focus Means Ends

(a )The selling concept

Customer Delivered Value

Marketing Management Orientation Marketing Management Orientation The Production ConceptThe Production Concept

• The production concept holds that consumers will The production concept holds that consumers will favor products that are available and highly favor products that are available and highly affordable.affordable.• Management should focus on improving production Management should focus on improving production and distribution efficiency .and distribution efficiency .• This concept is one of the oldest orientation that This concept is one of the oldest orientation that guide sellers.guide sellers.• The production concept is still a useful philosophy in The production concept is still a useful philosophy in two types of situations:two types of situations:1.1.When the demand for a product exceeds the supply, When the demand for a product exceeds the supply, the management should look for ways to increase the management should look for ways to increase productions. productions.

Marketing Management Orientation Marketing Management Orientation The Production ConceptThe Production Concept

•2. When the product`s cost is too high and improved 2. When the product`s cost is too high and improved productivity is needed to bring it down.productivity is needed to bring it down.• On the other hand, the production concept can lead On the other hand, the production concept can lead to marketing myopia.to marketing myopia.• Companies adopting this orientation run a major Companies adopting this orientation run a major risk of focusing only on their own products, and losing risk of focusing only on their own products, and losing sight of the real objective of satisfying customer needs. sight of the real objective of satisfying customer needs.

Marketing Management Orientation Marketing Management Orientation The Product ConceptThe Product Concept

• The production concept holds that consumers will The production concept holds that consumers will favor products that offer the most in quality favor products that offer the most in quality performance, and innovative features.performance, and innovative features.• Marketing strategy focuses on making continuous Marketing strategy focuses on making continuous product improvement s .product improvement s .• depending on products will not sell unless producers depending on products will not sell unless producers design, package and price it attractively and places it design, package and price it attractively and places it in convenient distribution channels.in convenient distribution channels.

Marketing Management Orientation The selling Concept

•Consumers will not buy enough of the firm`s products Consumers will not buy enough of the firm`s products unless it undertakes a large-scale selling and unless it undertakes a large-scale selling and promotion effort .promotion effort .• This concept fit only unsought products those that This concept fit only unsought products those that buyers do not normally think of buying such as buyers do not normally think of buying such as insurance .insurance .• Most firms practice the selling concept when they Most firms practice the selling concept when they face overcapacity .face overcapacity .•Their aim is to sell what they make rather than make Their aim is to sell what they make rather than make what the market want, and this strategy carries high what the market want, and this strategy carries high risks, it focus on creating sales transactions rather risks, it focus on creating sales transactions rather than on building long-term customer relationship.than on building long-term customer relationship.

Marketing Management Orientation Marketing Management Orientation The Marketing conceptThe Marketing concept

•Holds that achieving organizational goals on knowing Holds that achieving organizational goals on knowing the needs and wants of target markets and delivering the needs and wants of target markets and delivering the desired satisfactions better than competitors do..the desired satisfactions better than competitors do..

Social Marketing ConceptSocial Marketing Concept

A principle of enlightened marketing that make a A principle of enlightened marketing that make a good marketing decisions by considering consumer`s good marketing decisions by considering consumer`s wants, the company`s requirements , consumers` wants, the company`s requirements , consumers` long-run interests and society`s long run interests long-run interests and society`s long run interests ( deliver value to customers in a way that maintains ( deliver value to customers in a way that maintains or improves both the consumer`s and the society well or improves both the consumer`s and the society well – being). – being).

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Marketing. What is Marketing? Many people think of marketing only as selling and advertising. Many people think of marketing only as selling and advertising