Marketing Concepts Chapter 1

By: Jason Wong

Learning Objectives
Learn the tasks of marketing. Become familiar with the major concepts and tools of marketing. Understand the orientations exhibited by companies. Learn how companies and marketers are responding to new challenges.

What is Marketing
Simple Definition: Marketing is managing profitable customer relationships. Goals: Attract new customers by promising superior value. Keep and grow current customers by delivering satisfaction.

The AMA managerial 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 objectives.

Marketing Defined
Kotlers social definition:
Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others.

Core Marketing Concepts

Needs, wants, demands Target markets and market segmentation Marketers & prospects
Product offering and brand Value and satisfaction Exchange and transactions Relationship and networks Market

This is a Need

Needs - state of felt deprivation including physical, social, and individual needs.

Maslows Hierarchy of Needs

This is a Want
Wants Needs become wants when they are directed to specific objects that might satisfy the need.

This is Demand
Wants Buying Power

Demand

Types of needs
Stated needs Real needs Unstated needs Delight needs Secret needs

Need / Want Fulfillment

Needs and Wants Fulfilled through a Marketing Offer : Some combination of products, services, information, or experiences offered to a market to satisfy a need or want.

What Satisfies Consumers Needs and Wants?

Anything that can be Offered to a Market to Satisfy a Need or Want

Products

Persons

Places

Organizations

Information Experiences Events Services

Ideas Properties

Activity or Benefit Offered for Sale That is Essentially Intangible and Does Not Result in the Ownership of Anything

Four Levels of Competition

Generic competition Form competition Industry competition

Brand competition

Core Marketing Concepts

Target markets & segmentation Differences in needs, behavior, demographics or psychographics are used to identify segments. The segment served by the firm is called the target market. The market offering is customized to the needs of the target market.

Marketplace, Marketspace,Metamarkets
The Marketplace is physical, as when one goes for shopping in a store. Marketspace is digital, as when one goes shopping on the internet. Metamarket is described as a cluster of complementary products and services that are closely related in the minds of consumers but are spread across a diverse set of industries.

Exchange & Transactions

Exchange involves obtaining a desired product from someone by offering something in return. Five conditions must be satisfied for exchange to occur. It is value-creating process. There must be at least two participants in the process. Each party must offer something of value to the other. Both parties must want to deal with each other. Both participants have the right to accept or to reject the offer. Both groups must have the ability to communicate and deliver on the mutual agreement.

Transaction
Transaction is a trade of values between two or more parties. It involves at least two things of value, agreed-upon conditions, a time of agreement, and a place of agreement.

Relationship Marketing
Relationship marketing aims to build long-term mutually satisfying relations with key parties, which ultimately results in marketing network between the company and its supporting stakeholders.

Relationship Marketing
Four key constituents for marketing are: Customer Marketing Partners ( channel, suppliers, distributors, dealers and agencies) Employee Members of financial community (shareholders, investors) The development of strong relationships requires an understanding of the capabilities and resources of different groups, as well as their needs, goals and desires.

Marketing Mix

7 Ps in Services Marketing
3 additional Ps in services marketing People: Any person coming into contact with customers can have an impact on overall satisfaction. Process: Process(es) involved in providing a service and the behaviour of people, which can be crucial to customer satisfaction. Physical evidence

Matching Mix Concepts (A & S)

4 As Acceptability Affordable Accessible Awareness 4 Ss Solution Sense Spread Supports

Marketing Channels
Marketing ChannelsTo reach Target market
Communication channels Distribution channels Service channels

Deliver messages to and receive messages from target buyers. Includes traditional media, non-verbal communication, and store atmospherics.

Marketing Channels
Marketing Channels
Communication channels Distribution channels Service channels
Display or deliver the physical products or services to the buyer / user.

Marketing Channels
Marketing Channels
Communication channels Distribution channels Service channels
Carry out transactions with potential buyers by facilitating the transaction.

Marketing Management Philosophies

Societal Marketing Concept

Marketing Concept
Selling Concept Product Concept Production Concept

Production Concept
Consumers will favour those products that are widely available and low in cost.

Therefore increase production and cut down costs. And build profit through volume.

The Production Concept

A customer can have any colour he likes for his car so long as it's black

Henry Ford

Product Concept
Consumers will favour those products that offer the most quality, performance, or innovative features. Therefore, improve quality, performance and features. This would lead to increased sales and profits.

Marketing Myopia
Managements failure to recognize a companys scope of business. Sellers pay more attention to the specific products they offer than to the benefits and experiences produced by the products.

They focus on the wants and lose sight of the needs.

The Selling Concept

Consumers , if left alone , will not buy enough of companys products.

Therefore, promote sales aggressively.

And,build profit through quick turnover.

The Marketing Concept

The key to achieving organizational goals consist in determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors. And build profit through customer satisfaction and loyalty.

Marketing and Sales Concepts Contrasted

The Societal Marketing Concept

The societal marketing concept holds that the organizations task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors in a way that preserves or enhances the consumers and the societys well being. - It addresses conflicts between consumers and firms short run wants and long term welfare.

Societal Marketing Concept

The Holistic Marketing Concept

It is based on the development, design and implementation of marketing programmes, processes and activities that recognises their breadth and interdependencies. Four components are: Relationship marketing Integrated marketing Internal marketing Social responsibility marketing

Marketing deptt

Senior Mgt

Other Deptt

Communications Products & Services

Channels

Internal Marketing

Integrated marketing

Holistic Marketing
Social Responsibility Marketing

Relationship Marketing

Ethics

Community

Customers

Partners Channels

Environment

Legal

Marketing System

Marketing System
Marketing is concerned with the flow of goods and services from the points of production to the points of consumption. There is a systematic arrangement of these functions of marketing to move the goods and services to the needy persons.

This system is essential to the creation of time, place and possession utilities.

Marketing System
A dynamic marketing system must be willing to undertake the following specific activities : 1. Define market area. 2. Research consumer wants and needs. 3. Develop and redevelop product / service. 4. Select, train, motivate and control human resources. 5. Develop sales approach and advertising support.

 A market consists of all the potential customers sharing a particular need or want who might be willing and able to engage in exchange to satisfy that need or want. Potential Market (have sufficient level of interest in a market offer)

WHAT IS MARKET ?

Available Market (who have interest, income and access to a particular offer)
Target Market or Served Market (a co. can go for serving whole available market or can concentrate on certain segments) Penetrated Market (set of buyers who are buying the co.s product)

Marketer & Prospect

A marketer is someone seeking a response (attention, a purchase, a donation) from another party, called the prospect. If two parties are seeking to sell something to each other, we call both of them marketers.

How Business and Marketing are Changing/ Marketing themes in the new economy
Changing Technology Globalization Customer Empowerment Customization Customer relationship marketing Customer lifetime value Target marketing Integrated marketing communication Channels as partners Every employee a marketer