Huddersfield Business School

BMO0272
Fundamentals of Management

Week 3 Online
The Marketing Function
Today…

• Define marketing and explain how it is more than just

advertising
• Know the role of marketing in organisations
• Understand how and why customer groups are marketed
• Be able to develop a coherent marketing mix
Today…

• As a management philosophy, the marketing concept

represents a strategy involving three basic propositions:

– Customer orientation – the primary focus of the organisation is

on the needs of the customer
– Organisational integration – everyone in the organisation
accepts and implements a customer orientation. It is not just the
responsibility of the marketing department
– Mutually beneficial exchange – there has to be a balance
between the needs of the customer and the strengths of an
organisation so that it too can get its needs met.
What is marketing..

It is about putting the right product or a combination thereof

in the place, at the right time, and at the right price
Barrow, 2016

Marketing is the promotion of business products or services to a target

audience. ...

Marketing is defined by the American Marketing Association as:

"the activity, set of institutions, and processes for
creating, communicating, delivering, and exchanging
offerings that have value for customers, clients, partners,
and society at large.“
American Marketing Association
 Is Marketing about selling?

‘There will always be need for some

selling. But the aim of marketing is to
make selling superfluous. The aim of
marketing is to know and understand
the customer so well that the product
or service fits him and sells itself.
Ideally, marketing should result in a
customer who is ready to buy. All that
should be needed is to make the
product or service available’.

- Peter Drucker 5
(1973)
Essence of Marketing
What is marketing?

• The process of identifying and predicting customer needs,

selecting target markets, then using all the organisation’s
resources to satisfy them better than competitors - profitably

“Marketing – a social and managerial process by which individuals

and organisations obtain what they need and want through creating
and exchanging value with others”
Kotler, Armstrong, Harris and He

“The achievement of corporate goals through meeting and

exceeding customer needs and expectations better than
competition”
Jobber
Creating customer value

Customer Perceived Perceived

value benefits sacrifices
 The FIVE Concepts in Marketing

The five marketing concepts are a

good example of how marketing has
changed throughout the years.

It has shifted its focus from products

to users.

Modern companies have to put

users first, and build not only a good
product (or service), but also a good
experience around it.
The assumptions behind and the
evolution of marketing …

• Production concept - The idea that consumers will favour products

that are available and highly affordable. Organisation focusses on
improving production and distribution efficiency
• Product concept - The idea that consumers will favour products that
offer most quality, performance and features. Organisation focusses
on making continuous product improvements
• Selling concept - The idea that consumers will not buy enough of
the firms products unless there is large scale selling and promotion
effort
• Marketing concept - A philosophy based on achieving an
organisations goals through knowing the needs and wants of target
markets and delivering satisfaction better than competition
• Societal marketing concept - The idea that a company’s marketing
decisions should consider customer wants, the company’s
requirements and the long term interests of consumers and society
Evolution of the marketing concept
Or, another way to look at this…
Needs and wants in marketing
Marketing consumer wants into needs

• By focusing on the benefits resulting from goods and services,

effective marketing converts needs to wants
• A need for clothing may be translated into a desire (or want) for
designer clothes
• Wants aren’t essential for humans to survive, but
it’s associated with needs. For example, if we
always manage to satisfy our wants, it may
transform into a need.
The marketing context

• market dynamics
• stakeholders
• analysing the marketing environment
• situation analysis
What is a market?
What is being offered?

• What are organisations ‘selling’?

The interrelationship between marketing and
corporate strategy
Corporate Strategy

· Specifying the organisation’ mission

· Allocation of resources across the
whole organisation
· Portfolio of activities for the
organisation · Guides
· Defining organisational objectives · Directs
· Controls
· Co-ordinates

· Informs
· Achieves Marketing Strategy
· operationalise
s · Competing in a product market
· Selecting market segments
· Designing the mix

Frances & Pettitt (2006)

Marketing strategy
(A managerial approach to marketing)

1. Situational analysis-with a purpose to determine where we are and

where are we going.
2. Determine the objectives – these goals should be specific and
realistic
3. Select and measure target markets-identify present and potential
customers
4. Design marketing mix strategies and tactics – How do we get to
where we want to go.
5. Prepare annual marketing plan-the how to do it guide to yearly
marketing operations.
6. Implementation and evaluation – How are we doing? Did we do
what we said we would do?

Staton
Marketing
Back to effectiveness & efficiency
Product life cycle
The marketing process

1. Understand the marketplace and customers needs and

wants
2. Design a customer-driven marketing strategy
3. Construct an integrated marketing programme that
delivers superior value
4. Build profitable relationships and create customer
delight
5. Capture value from customers to create profits and
customer equity
Market segmentation, targeting
& positioning

Segmentation – identify and describe

Market segmentation market segments

Targeting – evaluate segments and

Targeting decide which to go after

Positioning – designing a service or

Positioning product to meet a segment’s need
and develop a marketing mix that will
create a competitive advantage in the
minds of the selected target market
Market Segmentation

• Market segmentation is the identification of the portions of

the market that are different from one another.
• Market Segmentation allows the firm to better satisfy the needs of
its potential customers.
• The market is segmented in to meaningful, relatively similar and
identifiable groups, the purpose of which is to enable the marketer
to tailor marketing mixes to meet the needs of one or more specific
groups.
• These groups are known as segments and
the process is known as market segmentation.
The need for market segmentation

• In general, customers are willing to pay

a premium for a product that meets
their needs more specifically than does
a competing product.

• Better matching of customer needs

• Enhanced profits for business
• Retain more customers
• To target marketing communications
• Gain market share
Segmentation types

Geographic Demographic

Psychographic Behavioural
Behavioural segmentation
Segmentation, targeting & positioning
Segmentation targeting & Positioning
(STP)
Limitations?

• Are there any problems of segmenting your market?

Customer Analysis

• Analyzing and using customer data while strategizing an

organization's business plan
Communicating with new & existing
customers

• It is essential to create a bond with your customers that they

do not forget.

• A customer stays loyal to a brand, through which they have

received excellent products and their requirements were
acknowledged by the brand efficiently.
Benefits of customer analysis
Customer value proposition

• A promise of potential value that a business delivers to

its customers 
Making a customer value proposition
Approach to marketing

• Mass marketing

• Differentiated marketing

• Niche marketing
Market research

• You are considering setting up a take­away pizza

business in Huddersfield.
• What market research would you require before you
decide?
Marketing
mix (7P’s)
 Product (/service)

• What does the customer want from the product/service? What needs does
it satisfy?
• What features does it have to meet these needs?
– Are there any features you've missed out?
– Are you including costly features that the customer won't actually use?
• How and where will the customer use it?
• What does it look like? How will customers experience it?
• What size(s), color(s), and so on, should it be?
• What is it to be called?
• How is it branded?
• How is it differentiated versus your competitors?
• What is the most it can cost to provide and still be sold sufficiently
profitably? (See also Price)
Price

• What is the value of the product or service to the buyer?

• Are there established prince points for products or services in this
area?
• Is the customer price sensitive? Will a small decrease in price gain
you extra market share? Or will a small increase be indiscernible,
and so gain you extra profit margin?
• What discounts should be offered to trade customers, or to other
specific segments of your market?
• How will your price compare with your competitors?
Place

• Where do buyers look for your product or service?

• If they look in a store, what kind? A specialist boutique or in a
supermarket, or both? Or online? Or direct, via a catalog?
• How can you access the right distribution channels?
• Do you need to use a sales force? Or attend trade fairs? Or make
online submissions? Or send samples to catalog companies?
• What do your competitors do, and how can you learn from that
and/or differentiate?
Promotion

• Where and when can you get your marketing messages across to
your target market?
• Will you reach your audience by advertising online, in the press, on
TV, on radio, or on billboards? By using direct marketing mailshots?
Through PR? On the internet?
• When is the best time to promote? Is there seasonality in the
market? Are there any wider environmental issues that suggest or
dictate the timing of your market launch or subsequent promotions?
• How do your competitors do their promotions? And how does that
influence your choice of promotional activity?
After Eights (mints)
People
Process
Physical
Re-positioning
Brand strategy
The psychology of brands
Brand strategy
Ansoff Matrix
BCG Matrix
Success and Disaster sequence
 Strategies of BCG

1. Build – by increasing investment

E.g., push a Question mark  Star  Cash cow (success sequence)

2. Hold – hold product in same quadrant

E.g., hold star

3. Harvest – reduce the amount of investment and extract cash

flow from product to increase overall profitability

4. Divest – release money stuck in the business

E.g. Dogs
BCG Vs Ansoff

• Both matrices  Help organisations assess how to build

their product portfolio

• BCG – creating a success sequence, to turn new

products into stars, and cash cows in the long-term
• Ansoff – building a product portfolio based on whether to
work on existing/new products or existing/new markets
 Marketing communication

Richness
- Bandwidth or
amount of data that
can be transmitted
- Ability to customize
product or service
to an individual
buyer’s needs
- Interactivity
between buyer and
seller
- Operating hours Reach
24/7 - Number of people/customers who can be
approached
- Geographic spread
Summary

• Marketeers satisfy needs and create wants

• The customer should be at the center
• Companies have moved their focus from transaction based to
relationship centered
• One time purchases alone do not keep companies in
business, repeat purchases are the key to success
• 80/20 rule does have merit
• Customer Lifetime Value (CLTV)
– Happy customers spend increasing amounts on the
purchase of a specific product/service over time