What is a Market?Necessary Conditions

Types of markets

Defining MarketingMarketing is the process of ascertaining consumer needs, converting them into a product or service and then moving the product or service to the final consumer, to satisfy such needs & wants of specific consumer segment(s) with emphasis on profitability,ensuring the optimal use of the resources available to the organisation

Core Concepts of Marketing Product or Offering Value and SatisfactionNeeds, Wants, and Demands Exchange and Transactions Relationships and Networks Target Markets & Segmentation Marketing Channels Supply Chain Competition Marketing EnvironmentMarketers & Prospects

Target Market & Segmentation

Every product or service contains features which a marketer must translate into benefits for a target market.

It is these benefits the consumer perceives to be available in a product and directly impacts the perceived ability to meet the consumer need(s) or want(s).

Simple Marketing SystemGoods/servicesMoney

Structure of FlowsManufacturermarkets

Marketers & Prospects

A marketer is someone actively seeking one or more prospects for an exchange of values.

A prospect has been identified as willing and able to engage in the exchange.

Needs, Wants, and Demands

To need is to be in a state of felt deprivation of some basic satisfaction.

Wants are desires for specific satisfiers of needs.

Demands are wants for specific products that are backed by an ability and willingness to buy them.

Product or Offering

Anything offered for sale that satisfies a need or want.

Products consist of three primary components: goods, services and ideas.

Physical product provides the desired service or action.

Value and Satisfaction

Value is the consumers estimate of the products overall capacity to satisfy his or her needs determined according to the lowest possible cost of acquisition, ownership and use.

Exchange & TransactionExchange means obtaining a desired product by offering something desirable in return.

Conditions for ExchangeNecessary Conditions for Exchange

A Transaction is the trade of values

Relationships and Networks

R.M. seeks long-term,win-win transactions between marketers and key parties (suppliers, customers, distributors).

The ultimate outcome of relationship marketing is a unique company asset called a marketing network of mutually profitable business relationships.

Marketing Channels

Reaching the target market is critical. Marketer can use two-way communication channels (media- newspapers through the Internet), versus more traditional means.Marketer also must decide on the distribution channel, trade channels and selling channels (to effect transactions).

Supply Chain

Long channel process that reaches from the raw materials and components to the final product / buyers. Perceived as a value delivery system.

Competition

Includes actual & potential rival offerings & substitutes.

Broad view of competition assists the marketer to recognize the levels of competition.

Marketing Environment

Includes the task (immediate actors in the production, distribution and promotional environments) and the broad environments (demographic, economic, natural, technological, political-legal and social-cultural)

Marketing Management Philosophies

Marketing concepts

Marketing Management PhilosophiesCompetingPhilosophies

Marketing Management PhilosophiesFocus on internal capabilities rather than on desired needs

Marketing Management PhilosophiesFocus on products that offer the most quality,

performance,

or innovative features

Marketing Management PhilosophiesPeople will buy more goods and services when sales are aggressive

High sales result in high profits

Marketing Management PhilosophiesOrganizations exist to satisfy the needs and wants of their customer

Meeting the long term goals.

The Marketing Concept

Marketing Concept Assumptions Customer needs ProfitabilityCoordinated marketing

No company can operate in every market Target Market

Company may define its target market but fail to fully understand the customer needsE.g. Citibank (customer retention more critical than customer attraction) Customer needs

Satisfied Customer

Hence companies..Aims is to delight the customerDelighted Customer are effective advertisersCompanies should regularly measure customer satisfaction Make it easy for customer to complain e.g. hotline Complaint properly resolvedtell many more e.g. IBM report on lost cus

all of a companys departments must work together to serve the customers interests.

Begins among the various marketing functions and carries out into other departments.

Coordinated marketing

Traditional Organization ChartCustomersFront-line peopleMiddle Management

TopManagement

Customer-Oriented Organization Chart

Ultimate purpose of marketing is to help organizations achieve profitability goals.

Profitability

Evolving Views of Marketings Role

Evolving Views of Marketings Role

Evolving Views of Marketings Role

Marketers argumente. Companies assets have little value without existence of customers Key tasks to attract & retain customers Customers attracted to superior offers & retained through satisfaction Marketers tasks is to develop a superior offer & deliver customer satisfaction Customer satisfaction is affected by the performance of other departments Marketing needs to influence these other depts. To cooperate in delivering customer satisfaction

Customer Delivered Value

Marketing Management PhilosophiesMarketing that preserves or enhances an individual's and societys long-term best interests.SocietalOrientationFocus on satisfying customers needs and wants while considering societal well beingEnvironmental deterioration, world hunger & poverty e.g. fast food indy-fat contents & packingAuto industry-big cars/used tyresSoft drink industry

The Four PsMarketingMixThe Four CsCustomerSolutionCustomerCostCommu-nicationConvenience

Target markets and segmentation Every product or service contains features which a marketer must translate into benefits for a target market. It is these benefits the consumer perceives to be available in a product and directly impacts the perceived ability to meet the consumer need(s) or want(s). You work for a company that sells high-end stereos. It makes no sense to market to the entire country. Why waste your money, time, and energy on people who have no interest in your products, or who lack the resources to purchase them even if they wanted to? What segment of the population has the most interest in your product and the ability to pay for it?One of your most important jobs as a marketer is to find likely customers, to identify the target market for your products. For each target market, your company will develop a market offering. The offering is then positioned in the minds of the potential customers as providing some particular benefit the target buyers value. How might you go about each step of this process? What do you need to know in order to successfully complete the chain of events that leads from targeting to sale?

Needs, wants, and demands to need is to be in a state of felt deprivation of some basic satisfaction. Wants are desires for specific satisfiers of needs. Demands are wants for specific products that are backed by an ability and willingness to buy them You are hungry. You need to eat. But you dont want to eat just anything. You want to eat pizza. Moreover, you have ten dollars in your pocket. So you have the means to translate your want into a demand. Youre a marketer for a pizza company. You know that people need to eat. Some of them want pizza. Some of the people who want pizza have the ability to pay for it. These are the people who create demand for your product.Product or offering - Anything offered for sale that satisfies a need or want. Products consist of three primary components: goods, services and ideas. The physical product provides the desired service or action.

Value and satisfaction Value is the consumers estimate of the products overall capacity to satisfy his or her needs determined according to the lowest possible cost of acquisition, ownership and use.Value is the ratio between what the customer gets and what he or she gives. Satisfaction is the feeling of pleasure or displeasure that customers feel when they compare the experience of a product with their expectations. What can you do to increase the value of a customer offering? Is value objective or subjective?

Exchange and transactions Exchange is a process in which:1. There are at least two parties present. 2. Each party have something that might be of value to the other party. 3. Each party is capable of communication and delivery. 4. Each party is free to accept or reject the exchange offer. 5. Each party believes it is appropriate or desirable to deal with the other party.A transaction occurs when the parties agree to exchange values.What other ways can goods and services be created or transferred from one party to another?

Relationship marketing seeks long-term, win-win transactions between marketers and key parties (suppliers, customers, distributors) The ultimate outcome of relationship marketing is a unique company asset called a marketing network of mutually profitable business relationships.Take a closer look at the elements of an exchange listed above. What is being described is a relationship between buyer and seller. The stronger that relationship is, the more likely that values will be exchanged. This is the idea at the heart of relationship marketing. If your customers trust you, feel desired, feel that you are looking out for their needs, they are going to want to continue their relationship with you. They are going to be less price-sensitive, more loyal, and what is more, they are going to market your product for you by telling others of their satisfaction with your product. How would you go about building such a relationship with customers? How do you turn customers into advocates?Of course, companies are rarely self-sufficient. They rely on a network of supporting stakeholders with which they have built profitable business relationships. It is the strength of the network as a whole that determines how much value a company can deliver to its customers. xxxxxxCompetition

A broad view of competition assists the marketer to recognize the levels of competition, based on substitutability: brand, industry, form and generic.You work for a company that sells designer suits. You want to beat the competition. But what does that mean? Does it mean that you want to outperform the brand competition, the companies that offer suits of similar quality and price as yours? Or does it mean you want to outperform the industry competition, that is all companies that make suits, regardless of quality or price? Maybe you see yourself in competition with all companies that make any form of clothing, from business suits to bathing suits. But arent you really in competition with all companies that compete for the same consumer dollars, the generic competition? After all, if consumers see themselves as having to choose between a designer suit and a diamond ring, you are as much in competition with Tiffany as you are with Armani.A. The Production Concept - Assumes consumers will favor those products that are widely available and low in cost.

The production concept holds that consumers will prefer products that are widely available and inexpensive.

The product concept holds that consumers will favor those products that offer the most quality, performance, or innovative features

A. The Product Concept - Assumes consumers will favor those products that offer the best combination of quality, performance, or innovative features.

e.g. Dupont fibreA. The Selling Concept - Assumes organizations must undertake aggressive selling and promotion efforts to enact exchanges with otherwise passive consumers.

The selling concept holds that consumers and businesses, if left alone, will ordinarily not buy enough of the organizations products. The organization must, therefore, undertake an aggressive selling and promotion effort.Which do you find most convincing? Why? What are the strengths and weaknesses of each approach? What kinds of products and services are the best match for each concept? The marketing concept In the 1950s, a new philosophy emerged to challenge these three older concepts, the marketing concept.The marketing concept holds that the key to achieving organizational goals consists of the company being more effective than competitors in creating, delivering, and communicating customer value to its target audience.Lets take a closer look at this definition. To start, under the marketing concept, company efforts are aimed at a target audience. The first question the company asks is who are our customers? Next, the company investigates the target audiences needs, both stated and unstated. What would be of real value to our customers? Having identified the target audience and its needs, the company does everything it can to insure that all aspects of its operations work together to meet those needs. The result is superior customer value, which translates into profits. In what ways does the marketing concept challenge the production, product, and selling concepts? How does it differ in its basic assumptions about the marketplace? If the marketing concept is superior, why have so many companies been slow to adopt it?

The Marketing Concept _- Assumes: 1. The key to achieving organizational goals consists of being more effective than competitors in integrating marketing activities toward determining and satisfying the needs and wants of target markets.2. Target Market - no company can operate in every market and satisfy every need.3. Customer Needs - its not enough to just find the market; marketers must also understand their customer's needs and wants. This is not a simple task.4. Integrated Marketing - all of a companys departments must work together to serve the customers interests. This begins among the various marketing functions and carries out into other departments.5. Profitability - the ultimate purpose of marketing is to help organizations achieve profitability goals.6. Hurdles to Adopting a Marketing Concepta) Organized Resistance - some departments see marketing as a threat to their power in the organizationb) Slow Learning - despite efforts by management, learning comes slowc) Fast Forgetting - there is a strong tendency to forget marketing principlesProfitability The key to achieving organizational goals consists of being more effective than competitors in integrating marketing activities toward determining and satisfying the needs and wants of target markets.

Target Market - no company can operate in every market and satisfy every need.

Customer Needs - its not enough to just find the market; marketers must also understand their customer's needs and wants. This is not a simple task.

Integrated Marketing - all of a companys departments must work together to serve the customers interests. This begins among the various marketing functions and carries out into other departments.

The Societal Marketing Concept Societal Marketing Concept - 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.

The societal marketing concept With out a doubt, the customer is the most important person in the marketing concept. But what if customer wants conflict with larger social interests? Customers may want big cars, but should that want override the need for all people to breath clean air? You might want to smoke, but do companies have the right to produce dangerous products just because there is a demand for them? The societal marketing concept has emerged in recent years in response to just such questions.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 the competitors in a way that preserves or enhances the consumers and the societys well being.What do you think? Whose interests do marketers represent? Where should your primary loyalty lie? Marketing Mix - the set of marketing tools the firm uses to pursue marketing objectives with the target market. Involves recognition and use of the four Ps and the four Cs in the short run and the long run.