MARKETING - Lesson 1 AN OVERVIEW OF MARKETING DEFINITION According to the Institute of Marketing, marketing is the management process responsible for

identifying, anticipating and satisfying customer requirements profitably. Kotlers definition of marketing: the analysis, planning implementation, and control of programs designed to create , build, and maintain beneficial exchanges and relationships with target markets for the purpose of achieving organizational objectives. According to Theodore Levitt: The purpose of a business is to get and keep a customer. Marketing aims to decide what companies should do to achieve that purpose and then to ensure that it is done. The American Marketing Association defines marketing as: 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. Exchange is the key term in this definition of marketing. The concept of exchange means to give up something to receive something else which would rather have. Exchange does not require money, however. Two person may barter or trade something. Five conditions must be satisfied for any kind of exchange to take place, but they are not sufficient: 1. there must be at least two parties 2. each party must have something the other party values 3. each party must be able to communicate with the other party and deliver the goods or services sought by the other trading party 4. each party must be free to accept or reject the others offer 5. each party must believe that it is appropriate or desirable to deal with the other party. MARKETING CONTEXT Needs, wants and demand According to Kotler The starting point for the discipline of marketing lies in human needs and wants. A human need is defined as a state of felt deprivation of some basic satisfaction. Human wants are desires for specific satisfiers of these deeper needs. Marketers do not create needs, needs pre-exist marketers. Marketers along with other influentials in the society, influence wants Needs and wants are translated into demands for products and services from people who can and will pay for them, in the belief that they will provide satisfaction and value. Marketing is about developing products or services which will satisfy wants, communicating to existing and potential customers the benefits of the products or services on offer to them, and ensuring that demands are fulfilled to the satisfaction of both the customers (because they get what they want) and the business (because it achieves its financial and growth objectives). The creation of customer value Customer value is the difference between the amount of benefits a customer will get from a product (utilization value, plus quality, plus support services, plus brand image, plus warranties, plus trust), and what he or she has to give (price and cost of acquisition, plus utilization cost, plus maintenance cost, plus cost of possession, plus cost of getting rid of it) in order to have it.
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Customer value is created when customer expectations regarding product quality, service quality, and value-based price are met or exceeded. The environment The process of marketing takes place within an economic, social and political environment which will affect what the business does and what it achieves. Marketing presents an entirely new set of problems if conducted in a turbulent rather than placid environment. Industrial and consumer markets Although basic marketing techniques may well be relevant in all types of markets, distinctions need to be made between industrial (where there are fewer and larger and more professional buyers) and consumer markets (which are much more heterogeneous and unpredictable). Why study marketing? First marketing affects the allocation of goods and services that influence a nations economy and standard of living. Second, an understanding of marketing is crucial to understanding most businesses. Third, career opportunities in marketing are diverse, profitable, and expected to increase significantly. Fourth, understanding marketing makes consumers more informed. MARKETING CONCEPTS EVOLUTION
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The production orientation, which holds that consumers will favor those products that are available and highly affordable, and therefore management should concentrate on improving production and distribution efficiency. This philosophy focuses on the internal capabilities of the firm rather than on the desires and needs of the marketplace. The sales orientation, which holds that consumers will not buy enough of the organizations products unless the organization undertakes a substantial selling and promotional effort. This philosophy assumes that buyers resist purchasing items that are not essential. As with production orientation the fundamental problem here is a lack of understanding of the needs and wants of the marketplace. The marketing orientation is the foundation of the contemporary marketing philosophy. This is based on the understanding that a sale does not depend on an aggressive sales force but rather on a customers decision to purchase a product or service. To marketing-oriented firms, marketing means building relationships with customers. Relationship marketing is the name of a strategy of developing strong and customer loyalty and making long-term partnerships by creating satisfied customers who will buy additional products or services from the firm. This philosophy, called the marketing concept is simple and intuitively appealing. It states that the social and economic justification for an organizations existence is the satisfaction of customer wants and needs while meeting the organizational objectives. The societal marketing orientation is the idea that an organization exists not only to satisfy customer wants and needs and meet organizational objectives but also to preserve or enhance individuals and societys long-term best interests.

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Differences between Sales and Marketing Orientations A sales-oriented firm defines its business (or mission) in terms of goods and services. A marketing-oriented firm defines its business in terms of the benefits its customers seek. Defining a business in terms of goods and services rather than in terms of the benefits that customers seek is sometimes called marketing myopia.
What is the How do you seek to

organizations focus? Sales orientation Marketing orientation Inward, upon the organizations needs Outward, upon the wants and preferences of customers

What business are we in? Selling goods and services Satisfying consumer and needs wants

To whom is the product directed? Everybody Specific groups of people

What is your primary goal? Profit through maximum sales volume Profit through customer satisfaction

achieve your goal? Primarily through intensive promotion Through coordinated marketing activities

THE MARKETING PROCESS The marketing process includes scanning the environment, analyzing market opportunities, setting marketing objectives, selecting a target market strategy, developing and implementing a marketing mix, implementing the strategy, and evaluating marketing efforts and making changes if needed. Organization mission It is the long-term vision of what the organization is or is striving to become. It establishes the boundaries within which objectives, strategies, and actions must be developed. The mission statement is answering the question: What business are we in and where are we going? Environmental scanning Environmental scanning is the collection and interpretation of information about forces, events, and relationships that may affect the future of an organization. There are: social forces such as the social values of potential customers and the changing roles of families and women working outside the home demographic forces such as the ages, birth and death rates, and locations of various groups of people economic forces such as changing incomes, inflation, and recession technological forces such as advanced communications and data retrieval capabilities political and legal forces such as changes in laws and regulatory agency activities competitive forces from domestic and foreign-based firms Market opportunity analysis This analysis is the description and estimation of the size and sales potential of market segments of interest to a firm and assessment of key competitors in these market segments. Marketing strategy Marketing strategy involves three activities: 1. selecting the one or more target markets 2. setting marketing objectives 3. developing and maintaining a marketing mix Target market strategy. There are three general strategies: undifferentiated targeting (try to appeal to the entire market with a single marketing mix), concentrated targeting (concentrate on only one segment of the market), or multisegment targeting (to attempt to appeal to multiple market segments using multiple marketing mixes). Marketing objectives. It is a statement of what is to be accomplished through marketing activities. Marketing mix. The term marketing mix refers to a unique combination of product, distribution (place), promotion, and pricing strategies (the four Ps) designed to produce mutually satisfying exchanges with a target market.

Implementation Phase of the marketing process in which marketers turn their plans into action assignments and ensure that these assignments are executed in a way that will accomplish the marketing plans objectives. Evaluation Phase of the marketing process in which marketers estimate the extent to which objectives have been achieved during a specified time period.

Organization mission

Market opportunity analysis

Target market strategy

Marketing objectives

Environmental scanning

Marketing strategy Marketing mix the 4 Ps Product Price Promotion Placement

Implementation 4 Evaluation

The 4 Cs in marketing and business: Company Consumer Channel Competitors