mkt mgt # chap01

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Chapter 1Chapter 1

Defining marketing for Defining marketing for

the twenty-first centurythe twenty-first century

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Definition of marketDefinition of market

Traditional View was a physical place where buyer and

seller gather to buy and sell goods.

Economics now define market as a collection of buyer

and seller who transact over a particular product and

product class.

Marketer view the sellers as constituting the industry andthe buyers as constituting the market .

Thus market is a set of actual and potential buyer of a

specific good or service.

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Definition of marketingDefinition of marketing

Marketing means managing markets to bring aboutprofitable exchange relationships by creating value and

satisfying needs and wants. Marketing is a societal process by which individuals andgroups obtain what they need and want through creating,offering and freely exchanging products and services of value with others.

Marketing is the process of planning and executing theconception, pricing, promotion, and distribution of ideas,goods, and services to create exchanges that satisfyindividual and organizational goals.

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Market:Market:

a collection of a collection of

buyersbuyers

Industry:Industry:

a collection of a collection of

sellerssellers

CommunicationCommunication

Products/ServicesProducts/Services

MoneyMoney

InformationInformation

Simple marketing system

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Marketing can create value/Utility

• Form utility

• Time utility

• Place utility

• Possession utility

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Definition of marketing ManagementDefinition of marketing Management

As the arts and science of choosing target markets

and getting, keeping and growing customer through

creating, delivering, and communicating superior

customer value.

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The scope of marketingThe scope of marketing

Goods: Constitute the bulk of most countries' marketingeffort.

Services: Services include the work of hotels, barbers etc.

Experiences: Firm can create, and market experiences-Climbing Everest.

Events: Marketers promote events-Olympic, Eid, Nationalday.

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Persons: Celebrity marketing-Artists, musicians, lawyer etc.

Places: Cities, states, regions, and whole nations.

Properties: Real (Real state), Financial (stocks and bonds)

Organizations: Work build a strong, favorable image in themind of their target publics.

Information: Info can be produced and marketed.

Ideas: Market offering includes a basic idea-family planning.

The scope of marketing (cont ..)The scope of marketing (cont ..)

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Demand states andDemand states and

marketing tasksmarketing tasksNegative: Major part dislikes, even pay a price to avoid it-

gallbladder operation-redesign, lower price, more

promotion.

No: Unaware and uninterested - new firming method

-connect benefit with people’s natural needs and interested.

Latent: Need can not be satisfied by existing product-harmless cigarettes - measure size of the market.

Declining: Causes of decline, restimulated the target

market changing feature, design, effective communication.

(Creative Marketing)

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Demand states and marketingDemand states and marketing

tasks (cont ..)tasks (cont ..)Irregular: Varies on seasonal, daily or even hourly basis –

flexible pricing, promotion and other incentives

(Synchromarketing – find ways to alter demand pattern. )Full: Maintain, changing customer preferences, competition,

improve product quality and measure customer satisfaction.

Overfull: Discourage-raising price, reducing promotion

(De-marketing)

Unwholesome: discourage consumption of unwholesome

products like alcohol, cigarettes, large family - fear message,

price hikes, reduce availability-alcohol, handguns.

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Marketing concepts and toolsMarketing concepts and tools

Target markets and Segmentation

Market segments-can be identified by examine

demographic, psychographics, and behavioral differences

among buyers.

The marketer then decides which segments present thegreatest opportunity-which are its target market.

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Marketplace, Marketspace, and Metamarket:

The marketplace is physical, as when one goes shoppingin a store:

Marketspace is digital, as when one goes shopping on the

internet.

Metamarket-cluster of complementary products and

services that are closely related in the minds of consumers

but are spread across a diverse set of industries-

automobile.

Marketing concepts and toolsMarketing concepts and tools

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Marketers and Prospects:A marketer is someone seeking a response from another

party, called the prospect.

Needs, Wants, and Demands: Needs are the basic human requirements-food, air, water,

clothing, shelter etc.

Needs become wants when they are directed to specific

objects that might satisfy the need- rice, soft drink, mango

etc.

Marketing concepts and tools (Cont...)Marketing concepts and tools (Cont...)

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Product, Offering and Brand:

Product - is anything that can be offered to satisfy a needor want.

Offering which can be a combination of products, services,

information, and experiences.

A brand is a offering from a known source.


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Value: Benefits / Costs =

(Functional benefits + Emotional benefits) /(Monetary costs + Time costs + Energy costs +

Psychic costs)

Satisfaction : The extend to which Product Perceived

Performance matches with Customer Expectation

PPP>CE= Highly Satisfied Customer

PPP<CE= Dissatisfied Customer

PPP=CE= Satisfied Customer


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Exchange: the act of obtaining a desired product from

someone by offering something in return-self produce, by

beg, by force and money. Five conditions: two parties, value to the other party,

capable to communicate and delivery, free to accept and

reject and appropriate or desirable.

Transaction:A transaction is a trade of values between two or more

parties.


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Relationship marketing has the aim of building mutuallysatisfying long-term relations with key parties-customers,

suppliers, distributors,-in order to earn and retain their

business.

A marketing network consists of the company and itssupporting stakeholders (customers, employee,suppliers,

distributors, retailers, ad agencies, university scientists,

and others)

Relationships and networks:


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Marketing Channels:

Communication channels deliver and receive message from

target buyers, and include newspapers, magazines, radio,

television, mail, telephone, billboards, posters, fliers and the

internet.

A distribution channels include distributors, wholesalers,retailers and agents.

Services channels to carry out transactions with potential

buyers-warehouse, transportation, banks and insurance.


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Supply Chain:Describes a longer channel stretching from raw materials to

components to final products that are carried to final buyers.

Competition:Includes all the actual and potential rival offerings and

substitutes that a buyer might consider.

Four levels of competition - Example (Thirst)Form - Diet Coke, Diet Pepsi, Diet RC.

Category - Sprite, Miranda, Uro-Lemon.

Generic - Mineral Water, Ice-cream, Tea, Juice, Soft Drink

Budget - Cinema, Park, Zoo, Browse.


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Consists of the task environment and the broad

environment.

The task environment-includes the immediate actors –the

company, suppliers, distributors, dealers, and the target

customers.

The broad environment- consists of six components:

demographic, economic, natural, technological,

political-legal, social-cultural environment.

Marketing Environment:


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Marketing Program:

Consists of numerous decisions on the mix of marketing

tools to use.

The marketing mix is the set of marketing tools the firmsuses to pursue its objectives in the target market.

Four Ps• Product• Price• Place

• Promotion

Four Cs• Customer solution• Customer cost• Convenience

• Communication


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Marketing Mix

TargetCustomers

ProductVariety

Quality

Design

Features

Brand namePackaging

Size

Service

Warranties

Returns

PriceList price

Discount

Allowances

Payment period

Credit terms

PromotionAdvertising

Personal selling

Sales promotion

Personal selling

Direct marketing

PlaceChannel

Coverage

Assortment

Locations

TransportationInventory

Logistics

Marketing Mix – Four Ps

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Products

Servicesprices

Company

Direct mail,

telemarketing

and internet

Publicrelations

Sales force

Advertising

Sales

Promotion

Distributionchannel

Targetcustomer

Offering mix

Promotion mix

Marketing mix strategy

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Marketing Management

PhilosophiesProduction Concept

Product Concept

Selling Concept

Marketing Concept

Societal Marketing Concept

Marketing Concept

Customer Concept

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This concept holds that consumers are interested

primarily in product availability at low prices.

•Marketing objectives:

–Cheap, efficient production

–Intensive distribution

–Market expansion

Production Concept

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Product Concept

The concept holds that consumers will buy the

product that offers them the highest quality, the

best performance, and the most features Marketing

objectives:

–Quality improvement

–Addition of features

•Tendency toward Marketing Myopia

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Selling Concept

The concept holds that consumers will not buy

enough of the organization’s products unless the

organization undertakes a large-scale selling and

promotion effort.

Marketing objectives:

–Sell, sell, sell

•Lack of concern for customer needs and

satisfaction

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Marketing Concept

This philosophy holds that to be successful, a

company must determine the needs and wants of specific target markets and deliver the desired

satisfactions better than the competitors.

•Marketing objectives: –Profits through customer satisfaction

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Factory ExistingProducts

Selling

andPromoting

Profits

throughVolume

The Selling Concept

StartingPoint

Focus Means Ends

MarketCustomer

Needs

Integrated

Marketing

Profits

through

Satisfaction

The Marketing Concept

Sales & Marketing

Concepts Contrasted

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The concept holds that the organization shoulddetermine the needs, wants, and interests of targetmarkets and deliver the desired satisfactions moreeffectively and efficiently than do competitors in a waythat maintains or improves the consumer’s andsociety’s well being.

Societal MarketingConcept

Society

(Human Welfare)

Company

(Profits)Consumers

(Wants)

Societal Marketing Concept

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-Separate offers, services, and message to individual

customers.

-One to one marketing

Startingpoint Focus Means Ends

Individual

customer

Customer

Needs andvalues

One to one

marketingintegration

and value

chain

Profits growth

throughCapturing customer

share, loyalty, and

lifetime

Individualcustomer

Customer Needs and

values

One to one

marketing

integration

and value

chain

Profits growth

through

Capturing customer

share, loyalty, and

lifetime

The Customer Concept

mkt mgt # chap01

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