Introduction to Marketing

Marketing
3. Semester HA – Fall 2023

Jochen Reiner
[email protected]
F i b i g e r s t r æ d e 11 , O f f i c e 3 2

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Agenda for today

The value of Marketing

The scope of marketing
[European] marketing challenges
Marketing philosophy
Overview of marketing management
To d a y s l e a r n i n g o b j e c t i v e s

Explain why marketing is important

Define the scope of marketing
Justify the importance of marketing for the
firm and society
Describe how technology, globalization, and
CSR are changing marketing practices
Identify the tasks necessary for successful
marketing management

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Marketing – the short version

Meeting customer needs profitably

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Marketing is central

“The purpose of business is to create a customer. The business enterprise has two – and only
two – basic functions: marketing and innovation. Marketing and innovation produce results; all
the rest are costs. Marketing is the distinguishing, unique function of the business.”
Peter Drucker, in
Kotler et al. , p. 5

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What is marketing?

”Marketing is an organizational function, a

philosophy of business and a set of
processes for creating, communicating and
delivering value to customers and for
managing customer relationships in ways that
benefit the organization and its stakeholders”

Kotler et al. (2019)

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What is marketing? (cont’d)

Marketing is a business philosophy which

puts the customer at the center of profitable
companies.

“Successful Marketing builds demand for

products and/or services…”

”Marketing is not the art of finding clever

ways to dispose of what you make. It is the
art of creating genuine customer value”
(Philip Kotler)

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The iceberg phenomenon of Marketing

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A changing marketplace

New consumer capabilities New company capabilities

Use internet as a powerful information, Use internet as a powerful information and
interaction and purchasing aid sales channel for personalization and
customization
Embrace mobile – searching,
communicating and purchasing on the move Use data analytics as a core and to gain
richer insights about markets, customers,
Tap into social media and sharing economy
and competitors
Can reject marketing practices they find
Embrace mobile and location-dependent
inappropriate
engagement
Are moving to increase cost and efficiency
through automation, robotics and the
Internet of Things
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Challenges for Marketing

Marketing (in Europe) faces three transformative forces:

Technology
Globalization
Social Responsibility

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Te c h n o l o g y

The ongoing rise of the internet, smartphones, and social media offers a wide
array of innovative technologies, business models and applications
IoT, augmented / virtual reality, chatbots, wearables, data analytics, machine learning,
AI…

Never before
have companies had such powerful technologies for interacting directly with
customers, collecting and mining information about them, and tailor their offerings
accordingly
have customers expected to interact so deeply with companies, and each others, to
shape the products and services they use [Roland Rust in Kotler et al. p. 11]

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Digital Disruption

We are in the early stages of an era of great

technological change. Digital innovations are
remaking our industries, economy, and
society just as steam, electricity, and internal
combustion did before them.

Eric Brynjolfsson
Professor at MIT

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D i g i t a l Tr a n s f o r m a t i o n s

Companies are increasingly exploring how to

utilize digital technology to compete better in
its competitive environment

Digital transformation involves reconfiguring:

1. Customer value proposition
2. Operation model

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Differences in usage of technologies

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Globalization

The world becomes a “global village”

The entire world becomes more connected due to advances in transportation, media technology, etc.

Opportunity or threat:
Globalization has made it possible for companies to market products and services all over the world.
Globalization has also intensified the competition in domestic markets, making it even more difficult
to create superior customer value

The recent COVID pandemic has led to a rethinking of the being global strategies (especially
in production) of many firms

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Tr a d e a n d
Globalization
Over the past two centuries,
international trade has grown
exponentially.
Lower trade costs allowed the
unbundling of production and
consumption.
ICT has made it possible to
coordinate different stages of
manufacturing at great distance
leading to greater fragmentation and
offshoring

https://www-statista-com.zorac.aub.aau.dk/statistics/264682/worldwide-export-volume-
in-the-trade-since-1950/
Social Responsibility

Many companies have implemented a corporate social responsibility (CSR) strategy in

response to their actions impact major social issues such as wealth concentrations, poverty,
pollution, water shortages, climate change and wars social.

https://www.starbucks.com/responsibility/reporting-hub/ PAGE
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The Need to be Sustainable
is Increasing

Another mega trend that is affecting

marketing is sustainability.
Customers no longer accept marketing
practices that they consider inappropriate.
Companies are increasingly exploring ways
to incorporate social responsibility to
differentiate themselves (e.g., B Corp).

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Societal Marketing

The marketing task is to determine the

needs, wants, and interests of target
markets and satisfy them more
effectively and efficiently than
competitors while preserving or
enhancing customers and society’s
long-term well-being.
Marketing Philosophy

What philosophy should guide a company’s marketing efforts?

Production
Marketing Philosophy
Philosophy

Product Philosophy Selling Philosophy

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Production Philosophy

One of the oldest concepts in business

It holds that consumers prefer products that are widely
available and inexpensive
This philosophy requires a high production efficiency,
low costs and mass distribution
There is not necessarily demand for a product, just
because it is produced

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Product Philosophy

Consumers favor products the most quality,

performance or innovative features
Strong assumption that “a better product sells itself
alone”
Risk of “better mouse trap” fallacy
This philosophy requires a high innovativeness and
customers able/willing to buy the product

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Selling Philosophy

It holds that consumers and businesses, if left alone,

won’t buy enough
Focusses on the need of the firm  selling products
Hard selling
Firms sell what the make, rather than make what the
market wants
Sales representatives talk you into buying products

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Marketing Philosophy

Customer-centered, sense- and respond philosophy

Aims to create customer satisfaction (at a profit)
Being more effective than competitors in creating,
delivering and communicating superior value

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M a r k e t i n g ’s R o l e i n
Creating Demand

Marketers must be skilled at stimulating and

managing demand.
Demand refers to the willingness and ability
of purchasers to buy a company’s products
and/or services.
Demand requires both willingness and ability
to be present.

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U n d e r s t a n d i n g c u s t o m e r s - A L i f e Wi t h o u t M a r k e t
Research

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What do these brands have in common?

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M o t i v a t i o n a n d Wi l l i n g n e s s t o B u y

UNSATISFIED NEED SEARCH BEHAVIOR REDUCTION OF

TENSION SATISFAC- THE TENSION
TION OF
NEED

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N e e d s a n d Wa n t s

Demand is closely linked to needs and wants

Needs are basic human requirements (e.g., air, food, water, clothing and shelter)
Consumers are driven by particular needs at particular times (e.g., Maslow’s hierarchy of
needs)
Needs may become a want when directed to a specific object that might satisfy the need.
Demands are wants for specific products or services backed by an ability to pay.

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Wr a p u p

Superior performance is the result of providing superior customer value.

Marketing is a business philosophy and set of processes focusing on creating, communicating
and delivering customer value.
Marketing tasks include capturing market insights, market segmentation and targeting,
deciding on value proposition and positioning, and designing the marketing mix.
Developments in the external environment (i.e., technology, globalization, and sustainability)
are changing the marketplace forcing firms to adapt their marketing.

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Introduction to Marketing

Marketing
3. Semester HA – Fall 2023

Jochen Reiner
[email protected]
F i b i g e r s t r æ d e 11 , O f f i c e 3 2

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