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Lesson 1: Understanding Marketing
Lesson 1
Objectives
The objective if this course is to understand what marketing is;
Its role and significance in business
Lesson 1
Topics
1.Definition of marketing
2.Marketing’s role in business
3.The Evolution of Marketing
4.The Importance of Marketing in an organisation
The definition of Marketing
Experts’ definitions of Marketing
The Aim of Marketing is to make
selling Superfluous. The aim is to
know and to understand the
customer so well the product or
service fits him/her and sells
itself!- Peter
Drucker
Experts’ definitions of Marketing
The Marketing concept holds
that the key to achieving
organisational goals lies in
determining the needs and
wants of target markets and
delivering the desired
satisfaction more efficiently and
effectively than competition.
CIM defines Marketing as…
Marketing is the management process
responsible for identifying,
anticipating and satisfying customer
requirements profitably-
Marketing’s Role in Business
Marketing is an Exchange Process
Broadly viewed, the essence of marketing is a transaction – an
exchange. Exchange is the act or process of receiving something
from someone by giving something in return. The ‘something’
could be a physical good, service, idea or money.
Marketing is about a satisfying exchange process
– Buyers, Sellers, Value, Money, Goods and Services
– Two or more persons must participate
– Each party must possess something of value that the other one
desires
– Each must be willing to give up what they possess in order to achieve
what the other has.
– Parties to the exchange must be willing and able to communicate
with each other.
– Its about Recruiting, Retaining, Extended Usage, Long term
relationships.
Marketing is a Philosophy of Business
The definition of marketing – applicable in a business or a
nonprofit organization – is as follows:
Marketing is a total system of business activities designed to
plan, price, promote, and distribute want-satisfying products to
target markets to achieve organizational objectives.
This definition has two significant implications:
• The entire system of business activities should be customer
oriented. Customers wants must be recognized and satisfied
effectively.
• A marketing program should start with an idea about a new
product (good, service, idea) and should not end until the
customers’ wants are completely satisfied, which may be some
time after the sale is made.
Jobber, D. Principles and Practice of Marketing, 2010.
Do these Campaigns say something about the
philosophy of the organisations?
If so, what?
https://www.youtube.com/watch?v=uIBHuqeis3U
https://www.youtube.com/watch?v=uIBHuqeis3U
Marketing is a Managerial Function
Management is the process of planning, implementing, and
evaluating the efforts of a group of people working towards a
common goal. The management process as applied to marketing
consists basically of:
• Planning a marketing program,
• Implementing it, and
• Evaluating its performance.
• The planning stage includes setting goals and selecting
strategies and tactics to reach these goals.
• The implementation stage includes forming and staffing the
marketing organization and directing the actual operation of
the organization according to the plan.
• The evaluation stage is both a look back and a look ahead
comparing past performance, current performance and future
planning and operations.
How Marketing Evolved
Evolution of the Marketing Concept
Production Era
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2nd half of the 19th Century-(the industrial revolution)
Emphasis was on efficient production.
Production churned out goods into the market place
There was strong demand for manufactured goods
What was produced was guaranteed to be sold!
E.g. E.A.I (currently known as Unilever) in Kenya in the
1970’s and early 80’s was highly production driven
Evolution of the Marketing Concept
Sales Era
• 1920’s to the early 1950’s – the strong consumer demand for
goods subsided.
• Companies considered sales as the major means of increasing
profits.
• Business owners believed that the most important marketing
activity was personal selling and advertising
• E.g. Insurance Sales are driven
Evolution of the Marketing Concept
The Marketing Era
• From the 1960’s- they realised that efficient production and strong sales
did not guarantee that customers would buy
• The key activity is to find out what customers want, rather than trying to
influence them to buy what they did not necessarily need.
• The major objective of this era was customer satisfaction
• Companies started to embrace the concept of ‘customer orientation’ and
established fully fledged Marketing Departments
http://bit.ly/1OlZtPI- Read about the 12 most successful marketing
campaigns of all time.
Evolution of the Marketing Concept
Relationship Marketing Era
• Long term success is achieved by retaining customer loyalty to company
products
• Create long term satisfying mutual relationships,
• Deepen customer trust in the company and company understanding of
customer.
• Extend to suppliers , distributors and other 3rd parties
Evolution of the Marketing Concept
Value Based Marketing
• Demands for the discipline to show credibility and importance to the
organisation
• What is the financial worth of Marketing?
• Prove that there is short –term customer value and long-term value to
shareholders.
• Example- The Diageo Way of Brand Building http://bit.ly/1K8qdkNRead on the objectives of DWBB
Evolution of the Marketing Concept
Consumer to Consumer communications
• Due to Digital marketing, Consumers generally share news and
information with each other- they don’t just rely on product
information from brand managers
• Consumers trust product peer reviews more than the company info
• Digital Marketing is key
• Example- http://bit.ly/1VYMAQr- Read how Obama won the 2012 US
elections using social media
Marketing 3.0
• Find out about this new concept
• https://www.youtube.com/watch?v=6rxj8pGPxZc
• Read the attached Pdf. Marketing 3.0. Values Driven Marketing
by Phillip Kotler
The Importance of Marketing in an
Organization
Marketing is about satisfying customer needs.
– Buyer must be satisfied with the goods, service or idea
– Seller must be satisfied with the financial reward from the
exchange
– Companies MUST strive to maintain a positive relationship
with their customers.
– With time, a buyer usually develops an expectation from
the seller
– To fulfil these expectations, the seller MUST deliver on
promises made.
– A healthy relationship leads to interdependencies between
the two parties
Marketing occurs in dynamic environments
• The marketing environment is an everchanging one
– External influences like laws, regulations, political
activities, societal pressures, technological
advancements and changing economic conditions
– These changes have an impact on how effectively
marketing activities can facilitate and expedite
exchanges.
• Examples- The Alcohol advertising code, Cigarettes
advertising (Dark Market), development and acceptance
of internet on PC and on mobile, EU regulations
The Nature of Marketing is thus..
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It is a process
Performed both by individuals and organisations
Facilitates satisfying exchange relationships
Occurs in a dynamic environment- (only change is
constant)
• Marketing involves products, distribution, promotion,
pricing, people, processes
• Marketing focuses on goods, services and ideas
• It is an organisational function,
What does a company want to achieve?
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Satisfying Customers
Increasing the company’s profitability
Identification of marketing/business opportunities
Targeting the right customers
Facilitating exchange relationships
Staying ahead in dynamic environments
Beating the competition
Increasing market share
Satisfying organisation stakeholders
Marketing as a Source of Competitive Advantage
A competitive advantage may be derived from decisions about the 4Ps of
marketing, that is:
• Product – what goods or services or combinations of these should be
offered to a particular group of customers.
• Price – The representation on a unit basis what the company receives
for the product being marketed. An organization may adopt a low costs
strategy or Luxury high price strategy as competitive advantage
• Promotion – By means of the promotional mix (advertising, public
relations, etc.) target audiences are made aware of the existence of a
product and what benefits it confers to customers.
• Place – Involves the decisions concerning the distribution channels to be
used and their management, the locations of these outlets, methods of
transportation and inventory levels to be held.
Importance of Marketing to the organisation
• Marketing activities are carried out in almost
every organisation
• Marketing generates revenue and funds for the
organisation- hence it’s the lifeline.
• Marketing generates commercial activity (trade)
that keeps the economy vibrant
• Marketing knowledge enhances consumer
awareness
• Marketing drives business perfomancemeasures to satisfy consumers
Questions
• In your own words, define Marketing.
• How is Marketing practised in your
organisation?
Questions
• What examples can you name of companies/ brands that have
become really successful due to marketing?
• Do small businesses also engage in Marketing or it is a reserve
for established companies?
…marketing – small or established companies?
- chances are the small business is already carrying out more
marketing than they think.
- this is because marketing is often seen by small businesses as
equivalent to selling, promotion and advertising.
- in reality, it covers a much broader range of activities, many of
which small businesses do without calling them marketing.
…marketing – small or established companies?
- they probably make a particular effort to know their customers
well.
- their instincts tell them that getting to know what customers
want on an individual basis, and providing it, is what will keep
them in business.
- they know that they need to improve and extend existing
products, and sometimes develop new ones.
This is marketing
• The next lesson will cover the process of developing a
marketing plan
Lesson 1
1.3 – The structure of an outline marketing plan.
1.4 – Undertaking a basic external and internal marketing audit.