Introduction to Marketing

Unit 1:

The Introduction

Subhajit Sanyal

Defining Marketing

• Marketing–The process of creating, distributing, promoting,

and pricing goods, services, and ideas to facilitate satisfying exchange relationships with customers in a dynamic environment

• Customers–The purchasers of organizations’

products; the focal point of all marketing activities

Marketing Focuses on Customers

• Target Market–A specific group of customers on whom an organization

focuses its marketing efforts• Large or small customer groups• Single or multiple product markets• Single or multiple products• Local to global markets

Marketing Deals with Products, Distribution, Promotion, and Price

• The Marketing Mix–Four marketing activities—product, distribution,

promotion, and pricing—that a firm can control to meet the needs of customers within its target market

ProductProduct

DistributionDistribution

PromotionPromotion

PricingPricing

TargetTargetMarketMarket

Marketing Mix Variables

ProductProduct

DistributionDistribution

PromotionPromotion

PricingPricing

Goods, services, or ideas that satisfy customer needs

The ready, convenient, and timely availability of products

Activities that inform customers about the organization and its products

Decisions and actions that establish pricing objectives and policies and set product prices

MARKETING ENVIRONMENTMARKETING ENVIRONMENT

The marketing environment consists of external forces that directly or indirectly influence an organisation’s acquisition of inputs and generation of outputs.

The marketing environment consists of six categories of forces: political, legal, regulatory, societal/green, economic and competitive, and technological.

Figure 1.4 Components of the marketing mix and marketing environment

Differential advantage / Competitive edge

People

Distribution(place)

Price

Product

PromotionLegal forces

Regulatory forces

Societal /

Politicalforces

Technologicalforces

Economic andcompetitive forces

Buyer/Consumer

Product / Target

forcesGreen

Differential advantage/ Competitive edge

Brandpositioning selection

market

Situation analysis

• Cultural & social influences,individual differences, decision processes

• Definition & identification of target groups• Segmentation & positioning• Competition• S.W.O.T.• 4 Ps & 4 Cs

SWOT analysis(source: Jobber 2001)

Strengths Weakness

Opportunities Threats

Source

Internal

(controllable)

External

(uncontrollable)

The 4Ps & 4Cs

• The product (C = Consumer)

• The price (C =Cost)

• Promotion (C = Communication)

• Place (C = Convenience)

Marketing Builds Satisfying Exchange Relationships

• Exchange–The provision or transfer of goods, services, or ideas in

return for something of value

FIGURE 1.2

Marketing Builds Satisfying Exchange Relationships (cont’d)

• Exchange Conditions–Two or more participants have something of value that

the other party desires.–Exchange provides mutual benefit/satisfaction.–Each party has confidence in the exchange value of the

other party’s offering.–Each party must meet the expectations of the exchange

to become trusted by the other parties.

Marketing Occurs in a Dynamic Environment

• Marketing Concept–A philosophy that an organization should try to satisfy

customers’ needs through a coordinated set of activities that also allows the organization to achieve its goals

–Customer satisfaction• Analysis of customers’ current and long-term needs• Analysis of competitors’ capabilities• Integration of firm’s resources

Evolution of the Marketing Concept

ProductProductOrientationOrientation

SalesSalesOrientationOrientation

MarketingMarketingOrientationOrientation

Late 19th century: efficient production of goods allowed firms to meet strong customer demand.

Mid-1920s–early 1950s: weakened demand required that products would have to be “sold.” (personal selling, advertising, and distribution was the focus)

Early 1950s–2000s: adopting a customer focus means a commitment to researching and responding to customer needs.

FIGURE 1.3

Implementing the Marketing Concept

• Becoming marketing oriented requires–establishing an information system to discover

customers’ needs and using the information to create satisfying products.

–coordinating all marketing activities by restructuring the organization.

–obtaining the support of all managerial and staff levels in the organization.

Managing Customer Relationships

• Relationship Marketing–Establishing long-term, mutually satisfying buyer-seller

relationships allowing for cooperation and mutual dependency

• Increased value of customer (loyalty) over time results in increased profitability.

Managing Customer Relationships (cont’d)• Customer Relationship Management (CRM)

–Using information about customers to create marketing strategies that develop and sustain desirable customer relationships

• Identifying buying-behavior patterns of customers• Using behavioral information to focus on the most

profitable customers

Value-Driven Marketing

• Value–A customer’s subjective assessment of benefits relative

to the costs in determining the worth of a product• Customer value = customer benefits – customer costs

–Customer benefits• Anything desired by the customer that is received in an

exchange

–Customer costs• Anything a customer gives up in an exchange for benefits

–Monetary price of the benefit

–Search costs (time and effort) to locate the product

–Risks associated with the exchange

Marketing Management

• Marketing Management–The process of planning, organizing, implementing, and

controlling marketing activities to facilitate exchanges effectively and efficiently

–Effectiveness• The degree to which an exchange

helps an organization achieve its objectives

–Efficiency• The process of minimizing the

resources an organization must spend to achieve a specific level of desired exchanges

Marketing Management (cont’d)

• Planning–Assessing opportunities and resources–Determining marketing objectives–Developing a marketing strategy and plans for

implementation and control• How, when and by whom are marketing activities

performed?

• Organising–Developing the internal structure of the marketing unit

• Functions, products, regions, customer types

Marketing Management (cont’d)

• Implementation–Coordinating marketing activities–Motivating marketing personnel–Developing effective internal communications within the

unit

• Control–Establishing performance standards–Comparing actual performance to established

standards–Reducing the difference between desired and actual

performance

Effective Marketing Control Process

• provides for quick detection of differences in planned and actual performance.

• accurately monitors activities and is flexible enough to accommodate changes.

• incurs low process costs relative to the costs of a “no-control” situation.

• is understandable by both managers and subordinates.

The Importance of Marketing in Our Global Economy

• Marketing Costs Consume a Sizable Portion of Buyers’ Dollars

• Marketing Is Used in Nonprofit Organizations• Marketing Is Important to Business and the

Economy• Marketing Fuels Our

Global Economy

The Importance of Marketing in Our Global Economy (cont’d)

• Marketing Knowledge Enhances Consumer Awareness

• Marketing Connects People Through Technology• Socially Responsible Marketing Can Promote the

Welfare of Customers and Society• Marketing Offers Many

Exciting Career Prospects

Important Terms

• Marketing–The process of creating, distributing, promoting,

and pricing goods, services, and ideas to facilitate satisfying exchange relationships with customers in a dynamic environment

• Customers–The purchasers of organizations’ products; the

focal point of all marketing activities

• Target Market–A specific group of customers on whom an

organization focuses its marketing efforts

Important Terms

• The Marketing Mix–Four marketing activities—product, distribution,

promotion, and pricing—that a firm can control to meet the needs of customers within its target market

• Product–Goods, services, or ideas that satisfy customer needs

• Distribution–The ready, convenient, and timely availability of

products

• Promotion–Activities that inform customers about the organization

and its products

Important Terms

• Pricing–Decisions and actions that establish pricing objectives

and policies and set product prices

• Exchange–The provision or transfer of goods, services, or ideas in

return for something of value

• Marketing Concept–A philosophy that an organization should try to satisfy

customers’ needs through a coordinated set of activities that also allows the organization to achieve its goals

Important Terms

• Relationship Marketing–Establishing long-term, mutually satisfying buyer-seller

relationships allowing for cooperation and mutual dependency

• Customer Relationship Management (CRM)–Using information about customers to create marketing

strategies that develop and sustain desirable customer relationships

• Value–A customer’s subjective assessment of benefits relative

to the costs in determining the worth of a product

Important Terms

• Customer Benefits–Anything desired by the customer that is received in an

exchange

• Customer Costs–Anything a customer gives up in an exchange for

benefits

• Marketing Management–The process of planning, organizing, implementing, and

controlling marketing activities to facilitate exchanges effectively and efficiently

Important Terms

• Effectiveness–The degree to which an exchange helps an

organization achieve its objectives

• Efficiency–The process of minimizing the resources an

organization must spend to achieve a specific level of desired exchanges