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Marketing 571
What Is Marketing?Marketing deals with identifying and meeting human andsocial needs. One of the shortest definitions of marketingis "meeting needs profitably."
When eBay recognized that people were unable to locatesome of the items they desired most and created anonline auction clearing house or when IKEA noticed thatpeople wanted good furniture at a substantially lower
price and created knock-down furniture, theydemonstrated marketing savvy and turned a private orsocial need into a profitable business opportunity.
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The Marketing Concept
The marketing concept emerged in the mid-1950s. Instead of a
product-centered, "make and-sell" philosophy, business
shifted to a customer-centered, "sense-and-respond"
philosophy. Instead of "hunting," marketing is "gardening."
The job is not to find the right customers for your products,
but the right products for your customers.
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Do marketers create needs or wants? Or what came first, the
chicken or the egg?
Today with the advent of the global economy and the internet, the conceptof marketing has taken on a whole new meaning and offers a myriad of
ways to advertise your presence to your target market. Interestingly
enough, customers dont always know they have a need or want for a
service or product until educated by the marketer.
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Do marketers create needs or wants continued
again.
Can you think of a product, service or technology
that you cannot live without but never would have thought you
needed it until it was presented to you? I can think of my cell
phone, car washes, microwave ovens, air conditioners, anddishwashers to name a few.
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The Marketing Rat Race
The global economy now has a plethora of marketers who
compete with each other to capture the same customers.
This challenge for marketers then is to create a marketing mixso outstanding as to leave other marketers in the dust.
It requires much more creativity, intelligence, technology, and
capital on the part of the marketer to be able to compete,survive and surpass its competition in the marketplace to gain
the ultimate prize, that being the customer.
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Relationship Marketing
A key goal of marketing is to develop deep, enduring relationships with all
people or organizations that could affect the success of the firm'smarketing activities.
Relationship marketing has the aim of building mutually satisfying long-
term relationships with key parties-customers, suppliers, distributors, and
other marketing partners-in order to earn and retain their business.
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The Marketing Network
Marketing must not only do customer relationship
management (CRM), but also partner relationship
management (PRM) as well.
Key constituents for marketing are customers, employees,
marketing partners (channels, suppliers, distributors, dealers,
agencies), and members of the financial community
(shareholders, investors, analysts).
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The Marketing Network continued.
The ultimate outcome of relationship marketing is the
building of a unique company asset called a marketing
network.
A marketing network consists of the company and its
supporting stakeholders (customers, employees, suppliers,
distributors, retailers, ad agencies, university scientists, and
others) with whom it has built mutually profitable business
relationships.
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The Marketing Network and friends
I have found in my years of experience as a business owner,
it is sometimes beneficial to make friends of your
enemies (i.e. your competitors) especially if you are newto the industry. They can often be a sounding board for
new ideas you want to launch and give you sage advice
about what works best in the industry and what will not
work. As a business owner, I have saved myself manyheadaches, money, and time by following their advice.
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Marketing Networks again.
Increasingly, competition is not between companies but between marketingnetworks, with the prize going to the company that has built the better
network.
The operating principle is simple: Build an effective network of relationships
with key stakeholders, and profits will follow.
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What is the broad purpose of the marketing concept?
a) Customer/market orientation
b) Sales orientation
c) Product orientation
d) Production orientation
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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 superior customer value to its chosen target
markets.
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Consumer Orientation
This is the most customer-centric approach among all ofthem.
A customer orientation strategy is the way that a businessfocuses its product or service to consumers.
There are many specific ways of doing this, but in generalthere are three ways that you can orient a product to
consumers: aiming at price sensitive customers, aiming atquality sensitive customers and aiming at niche customers.
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Consumer Orientation
Consumer Orientation is the focus on meeting the needs ofone's customers, internal or external.
This service establishes specific customer satisfaction
standards and actively monitors client satisfaction, takingsteps to clarify and meet customer needs and expectations.
At lower levels the service involves courteous and timelyresponsiveness to the requests of customers, while at the
higher levels, it involves developing the relationship ofpartner and trusted advisor.
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Consumer Orientation
These companies respond to marketing research and tailor their
products in accordance with what they perceive to be the
demands of the market.
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Consumer Orientation
A business with this type of orientation is essentially led by the
needs of its customers. Marketing research outcomes
determine how much of a product is produced--old products
may be discontinued and new products invented based on the
needs or desires of consumers.
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Consumer Orientation
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4 Basic Stages for Customer Orientation
Development has to be done keeping customer needs into
mind.
Manufacture the best products to the customer. Do not
compromise quality.
Market by identifying and targeting the right customer.
Processing the demand as early as possible. Customization
of the products for the market.
Deliver to the target customer. Reduce delivery time.
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Price Sensitive Strategy
To be successful with this strategy, you need to be anefficient company with the lowest possible overhead.
This will allow you to have low costs which means that you
can afford to sell your products or offer your services at adiscount compared to competitors in the marketplace.
This strategy casts a very wide net for consumers and canbe effective in gaining a large market share in price
sensitive industries (such as commodities).
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Quality Sensitive Strategy
It aims for the company to become recognized as the market leaderby being perceived as the best company on a non-price basis.
This means that the product or service must have an added value,
and the company can demand a higher price where quality is
considered more important than price.
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Niche Strategy
The niche strategy has a very narrow customer orientation.
The strategy involves finding a small audience and aiming a particular
product at that audience.
This means that the product is not necessarily the best, or thecheapest, but it is the one that best fits the needs of a particularconsumer.
Can you think of a niche marketer with a familiar name around town?
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Sales Orientation
This concept is the most practiced and follows the path of selling an offering thatthe public generally knows nothing about nor has asked for it.
Therefore, management undergoes large-scale selling and promotion on it to get
the message out.
In some respects, this concept is like a shot in the dark. You are showering a giant
market with your message and hoping that in the fallout, some will stick as your
customers.
Can you think of any products that have been promoted this way? From your
perspective, do you think it was the best way for the company to advertise?
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Sales Orientation
Sales-oriented companies can generate positive short-termsales since customers initially feel good that they are getting
more for less. As customers realize they are paying less but
getting less, they eventually realize they are not making a
good purchase. Discounting your product may eventually
cheapen its reputation in the marketplace.
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Sales Orientation
A sales-oriented company focuses on strategies and tactics
that push people toward buying products, while a product
orientation tries to pull people into buying.
Offering discounts is an example of a sales tactic, while adding
a new feature to a product to increase demand is an example
of a product-oriented strategy.
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Sales Orientation
A sales orientation often attempts to get people to buy things
they dont really need or want, while a product orientation
focuses on getting people to buy things they are looking for.
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Product-Oriented Organizations
Product-oriented companies keep in mind the adage, Build a
better mousetrap and world will beat a path to your door.
This strategy assumes that if you offer a superior product or
service, customers will buy from you without your having to
resort to discounts or other gimmicks.
Product-oriented companies work with marketing
departments to learn what the marketplace wants,
developing or modifying products to meet these needs.
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Product-Oriented Organizations
A product-oriented approach to sales might take too long to help
a company struggling financially, while a sales orientation
might result in fewer long-term customers and eventual
financial instability
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Product Orientation
Product orientation does have challenges and is often
downplayed by marketing professionals. Management
that is overly focused on technology development and
endless pursuit of an optimized product may lose touch
with the marketplace.
Consumer-oriented companies research and stay
connected with changing consumer tastes. This puts
product-oriented companies at a special disadvantage in
rapidly changing marketplaces where customer needs
and product offerings are constantly evolving.
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Product-Oriented Organizations
Product-oriented companies may take longer to generate sales,but their sales may be more stable long-term because buyers
come to believe they are getting the value they need from a
product or service.
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Product Orientation
Whereas production orientation exists whenmanagement is more concerned with productionefficiency, a product orientation is when management
is more concerned with product quality. Managers areoften obsessed with their products.
Managers typically believe their products are uniqueand offer distinct benefits. They focus on consistent
improvement of the product with the belief that anideal product will effectively sell itself.
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Production Orientation
With production orientation, the focus is more on theprocesses of production than what is actually produced.
Narrow product lines, pricing based on production costs,
technical product research, packaging focused on productprotection, and minimal marketing are all common traits
associated with a production orientation.
These traits are all opposite a marketing orientation, wherethe company attempts to drive demand through marketing
efforts.
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Production Orientation
I am going to use food in this example because it is one of my favoritetopics.
What product can you think of in this example? I am thinking icecream. Take a look in the freezer section the next time you are in agrocery store, WalMart or Target.
There are companies out there that only mass produce ice cream anddistribute it to the above-mentioned types of stores. It may comein a carton or in popsicle form but it is always the same product. Itis always ready to buy off the shelves and it is cheap.
It does not require much educating on the part of marketers to remindconsumers of its existence.
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Consumer Societal Experiences
Can you think of other examples in which consumers of different cultures digress
from basic needs and want something more specifically related to their
comfort or familiarity level?
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The 4 Ps of Marketing
Know your market. What types of people or consumers are out there and
what is it they need and want?
Create your plan to figure out which consumers you want to target. It
wont include everyone so select the very best markets that will give you
the most profit.
Next, design your strategy or program that will enable you to deliver your
market offering to your target market. This strategy is your action plan
and includes your marketing mix; that is the tools you use to get the plan
off the ground.
These tools consist of the 4 Ps which are product, price, placement, and
promotion.
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The 4 Ps
Product - satisfy the need of your market
Price - how much will you charge your market?
Placement - where will the offering be located to be
purchased?
promotion - letting the market know of the productsavailability. Where can it be found to buy?
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Choosing a Value Proposition
How will a company differentiate itself in the market?
What makes it special and unique? Why should target
markets lend importance to this offering over that of other
offerings?
Think big when you seek out your unique value proposition.
Being the best in price, selection or shipping time is often not
enough to separate you from your competition.
What can you do with your idea and knowledge of your
market to really improve their lives, health, financial situation,
status, prestige, etc...?
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Examples of Value Propositions
Burger Kings Have it your way to indicate that the target
market will get exactly what they want on their terms unlike
their competition that does not offer that value proposition.
Instead, you just get what it says on their menu.
Your customers will often tell you what they want today or
yesterday, but trends and patterns will tell you what they will
want next year and the year after that.
Mix short-term market research with longer term research.
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Target Marketing
Target marketing is being facilitated by the rapid spread ofspecial-interest magazines, TV channels, and Internet
newsgroups. Information systems assemble information about
individual customers' purchases, preferences, demographics,
and profitability.
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TARGET MARKET STRATEGIES
Single-segment strategy- One market segment (not the entire market) is served with one marketing mix.
A single-segment approach often is the strategy of choice for smaller companies with limited resources.
Selective specialization- Different marketing mixes are offered to different segments. The product itself
may or may not be different in many cases only the promotional message or distribution channels vary.
Product specialization- The firm specializes in a particular product andtailors it to different market
segments. An example of this marketing is when State Tourism Boards advertise the various things to do
and see in their State and encourage tourists from different market segments to visit their State.
Market specialization- The firm specializes in serving a particular market segment and offers that segment
an array of different products. As simple as it sounds, when Pep Boys or AutoZone advertise, they are
serving car owners and are advertising or offering an array of automobile products for a consumer to buy to
care for their cars.
Full market coverage- The firm attempts to serve the entire market. This coverage can be achieved by
means of either a mass market strategy in which a single undifferentiated marketing mix is offered to the
entire market, or by a differentiated strategy in which a separate marketing mix is offered to each segment.3
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Marketing trends taking place.
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The Societal Marketing Concept
This path questions whether the immediate wants and desires
of the consumer are harming the future of the consumer and
the planet. It calls for sustainable marketing, which is the
creation of products that are socially responsible, serve the
current needs of the consumer but at the same time, preserve
the ability of future generations to get their needs met.
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The Societal Marketing Concept
Should all companies that make and sell products to
consumers be required to follow certain protocols in keepingthe planet clean?
Should there be a system for proper disposal of their product
once it is done being useful?
What is your opinion of companies that are fined for social
and ecological recklessness and polluting the environment?
Should more be done about it?
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A broader brand presence across channels
With the range of available marketing channels growing all
the time, businesses will start to recognize the value of
connecting up their marketing approach across the web,
social media and other channels.
Instead of relying on one or two channel marketing
approaches, more and more companies will link up their
activities to create a truly coherent brand across multiple
channels.
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The rise and rise of user-generated content
Whether it is a YouTube video showing a customer
using a product or customers sharing their
experiences within a selective online community,
content that comes direct from the potential orexisting customer is likely to grow in value. The key
test of this trend will be how successfully companies
inspire and facilitate user-generated content.
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Mobile marketing reaches critical mass
Mobile is going centre stage. A third of smartphone owners
have used their device to buy a product online and this
number is growing.
This demands targeted, mobile-ready content and a
willingness to adapt internal marketing processes.
With 59% of UK consumers now in possession of a
smartphone and 18% owning a tablet device, mobile
marketing is a trend that businesses cant afford to ignore.
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The gap closes between business brands and
social media
Companies will start taking social media more seriously as aprofessional marketing tool.
But it wont just be the big companies using social media to
actively connect with customers. Many more companies willstart to interact, meaning customer service and customerinteraction via social media will evolve even further.
The user or the customer will take centre stage with the riseof the brand advocate in recommending, recruiting customersand connecting with companies.
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A clearer vision on the value of analytics
With increased channels and brand presence, businesses will
look to clarify and streamline their marketing data.
Companies will recognize the value of analytics that allow
them to maximize on the flexibility of social media marketing
by adapting their content according to live viewer response.
Add to this an increasing focus on cost management and
online marketing analytics look set to become the vital flipside
of business marketing.
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Marketing becomes more personalized
Tailored content that is customized to the needs and interests
of a specific market or audience will grow in value and
popularity due to the growing presence of online, niche
communities, for example.
As people become more and more accustomed to selecting
which brands and businesses can join them within their own
online community, the value of personalized marketing
approaches and content will continue to grow.
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The voice of the customer will get louder
Social media word of mouth will keep growing, with people
increasingly relying on their own online social circles to advise
and comment on their choice of services or products.
The companies that actively embrace this shift will be the
ones that boost their profile and credibility .
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Geotargeting and localized marketing
Local discount websites like Groupon and local review sites
like Yelp make it easy for consumers to find deals and reviews
about businesses in their neighborhoods and beyond.
Creating targeted, local marketing campaigns using these
popular tools will become the norm.
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Co-marketing
The economy is still struggling, which means small businesses
can benefit from economies of scale by partnering with
complementary businesses to develop co-marketing
programs.
Promotional partnerships not only lead to reduced costs but
also can lead to increased exposure to new audiences.
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Centralization and Decentralization
Both global and local firms are adopting a combination of
centralization and decentralization to better balance local
adaptation and global standardization.
The goal is to encourage more initiative and
"entrepreneurship" at the local level, while preserving the
necessary global guidelines and standards.