Marketing What is Marketing? • Many people think of marketing only as selling and advertising . • Selling and advertising are only the tip of the marketing iceberg. • Selling and advertising are only part of the large ‘Marketing Mix’. • Marketing mix is a set of marketing tools that work together to satisfy customer needs and build customer relationships. Selling will be easy Prices, Distributes, and Promotes them effectively Develops Products that provide superior value Understanding Customer Needs Marketing Iceberg What is marketing • Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders. Marketing was Marketing now Telling and Selling Satisfying Customer Needs Marketing is the process by which companies create value for customers and build strong customer relationship in return Marketer Customer needs and wants Marketplace Interaction Marketing Management We see marketing management as the art and science of choosing target markets and getting, keeping, and growing customers through creating , delivering and communicating superior customer value The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. The Four Ps The Four Cs Marketing Mix Place Product Customer Solution convenience Price Promotion Customer Cost Communication Simple Marketing System Communication Goods/services Industry (a collection of sellers) Money Information Market (a collection of Buyers) Traditional Organization Chart Top Management Middle Management Front-line people Customers Customer-Oriented Organization Chart Customers Front-line people Middle management Top management Evolving Views of Marketing’s Role Finance Production Marketing Finance Human resources a. Marketing as an equal function Production Human resources Marketing b. Marketing as a more important function Evolving Views of Marketing’s Role Production Marketing c. Marketing as the major function Customer d. The customer as the controlling factor Evolving Views of Marketing’s Role Production Marketing Customer e. The customer as the controlling function and marketing as the integrative function What is marketed? 1. Goods. 2. Services. 3. Events. 4. Experience. 5. Persons. 6. Places. 7. Properties. What is marketed? 8. Organizations. 9. Information. 10. Ideas. Customer needs and wants Needs Wants Demands Marketplace Market Products, Services and Experiences Exchange Customer needs, wants, and demands The marketer must try to understand the target market's needs, wants and demand. Needs: • Needs are the basic human requirements. • Marketers do not create needs ; Needs preexist marketers. • Marketers influence wants, simply giving customers what they want isn't enough to gain an edge, companies must help customers learn what they want. Needs The basic human requirements Wants Needs directed to objects that might satisfy the need, regarding culture Demands Backed by an ability to pay Marketer impact to shift wants into demands Offerings and Brands: •Companies address needs by putting a value proposition , a set of benefits that they offer to customers to satisfy their needs. •A brand name such as McDonald`s carries many associations in people`s minds that make up the brand image : burgers , fun, childern, fast food, convenience and golden arches. Value and Satisfaction: •The offering will be successful if it delivers value and satisfaction to the target buyer. •The buyer chooses between different offerings based on which he/she perceives to deliver the most value. • Value reflects the sum of the perceived benefits and costs to customers. Value and Satisfaction: •Satisfaction reflects a person`s judgments of a product`s perceived performance ( or outcome) in relationship to expectations. • If the performance falls short of expectations, the consumer is dissatisfied and disappointed. • If it matches expectations, the customer is satisfied . • If it exceeds them, the customer is delighted. consumer-driven approach: • The four p`s represent the seller`s view of the marketing tools available for influencing buyers. •From a buyer`s point of view , each marketing tool is designed to deliver a customer benefit. • consumer wants are the drivers of all strategic marketing decisions. SIVA model Product Promotion → Solution → Information Price → Value Placement → Access SIVA model The four elements of the SIVA model are: • Solution: How can I solve my problem? • Information: Where can I learn more about it? • Value: What is my total sacrifice to get this solution? • Access: Where can I find it? Wants: • Wants are the form human needs take as they are shaped by culture and individual personality . • needs become wants when they are directed to specific objects that might satisfy the need. • An American needs food but wants a big Mac, French fries, and a soft drink . Demand: • Demands are wants for specific products backed by an ability to pay. Many people want a Mercedes; only a few are willing and able to buy one. • Marketing must learn about and understand customer needs, wants, and demands. • The company conduct consumer research and analyze customer data. Exchange and transactions • Exchange is the core concept of marketing, is the process of obtaining a desired product from someone by offering something in return. For exchange potential to exist , five conditions must be satisfied; 1. There are at least two parties. 2. Each party has something that might be of value to the other party. 3. Each party is capable of communication and delivery. Exchange and transactions 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. • When an agreement is reached, we say that a transaction takes place. • A transaction is a trade of values between two or more parties Exchange and transactions • A transaction involves several dimensions : 1. At least two things of value. 2. agreed-upon condition. 3. A time of agreement. 4. A place of agreement. 5. A legal system to support and enforce the transaction. Markets: • A market is the set of actual and potential buyers of a product. • These buyers share a particular need or want that can be satisfied through exchange relationships. • Sellers must Search for buyers ,identify their needs, design good marketing offers, set prices for them, promote them, and store and deliver them. Structure of Flows Resources Resources Resource markets Money Services, money Taxes, goods Services, money Manufacturer markets Taxes, goods Taxes Government markets Goods, services Consumer markets Services Services, money Money Money Taxes, goods Intermediary markets Money Goods, services To design a winning marketing strategy the marketing manager must answer two important questions: “ What customers will we serve( what our target market) ? and How can we serve these customers best ( what`s our value proposition?) Company Orientations Towards the Marketplace Production Concept Consumers prefer products that are widely available and inexpensive Product Concept Consumers favor products that offer the most quality, performance, or innovative features Selling Concept Consumers will buy products only if the company aggressively promotes/sells these products Marketing Concept Focuses on needs/ wants of target markets & delivering value better than competitors Customer Delivered Value Starting point Focus Means Ends Factory Existing products Selling and promotion Profits through sales volume (a) The selling concept Market Customer needs Integrated marketing Profits through customer satisfaction (b) The marketing concept Marketing Management Orientation The Production Concept • The production concept holds that consumers will favor products that are available and highly affordable. • Management should focus on improving production and distribution efficiency . • This concept is one of the oldest orientation that guide sellers. • The production concept is still a useful philosophy in two types of situations: 1. When the demand for a product exceeds the supply, the management should look for ways to increase productions. Marketing Management Orientation The Production Concept •2. When the product`s cost is too high and improved productivity is needed to bring it down. • On the other hand, the production concept can lead to marketing myopia. • Companies adopting this orientation run a major risk of focusing only on their own products, and losing sight of the real objective of satisfying customer needs. Marketing Management Orientation The Product Concept • The production concept holds that consumers will favor products that offer the most in quality performance, and innovative features. • Marketing strategy focuses on making continuous product improvement s . • depending on products will not sell unless producers design, package and price it attractively and places it in convenient distribution channels. Marketing Management Orientation The selling Concept •Consumers will not buy enough of the firm`s products unless it undertakes a large-scale selling and promotion effort . • This concept fit only unsought products those that buyers do not normally think of buying such as insurance . • Most firms practice the selling concept when they face overcapacity . •Their aim is to sell what they make rather than make what the market want, and this strategy carries high risks, it focus on creating sales transactions rather than on building long-term customer relationship. Marketing Management Orientation The Marketing concept •Holds that achieving organizational goals on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do.. Social Marketing Concept A principle of enlightened marketing that make a good marketing decisions by considering consumer`s wants, the company`s requirements , consumers` long-run interests and society`s long run interests ( deliver value to customers in a way that maintains or improves both the consumer`s and the society well – being).