Download What is Marketing?

Chapter 1
Welcome to the World of
Marketing
©2003 Prentice Hall, Inc
1-0
Chapter Objectives
 Know what marketing is all about
 Define the marketing mix
 Understand the basics of marketing
planning
 Describe the evolution of the marketing
concept
 Explain why marketing is important
©2003 Prentice Hall, Inc
Marketing: Real People, Real Choices 3rd edition
1-1
What is Marketing?
 Marketing is the process of
planning and executing the
conception, pricing, promotion,
and distribution of ideas, goods,
and services to create
exchanges that satisfy individual
and organizational objectives.
©2003 Prentice Hall, Inc
Marketing: Real People, Real Choices 3rd edition
1-2
What is marketing??
 Identify needs of consumers and
fill them in the right place, time
and way.
 Consumer: the ultimate end user
of a good or service.
©2003 Prentice Hall, Inc
Marketing Satisfies Needs
 Most successful firms practice
the marketing concept
first identify consumer needs
and then provide products that
satisfy those needs
©2003 Prentice Hall, Inc
Marketing: Real People, Real Choices 3rd edition
1-4
Marketing Satisfies Needs
 A need is the difference between
a consumer’s actual state and
some ideal or desired state
physical needs (water)
psychological needs (looking
good)
©2003 Prentice Hall, Inc
Marketing: Real People, Real Choices 3rd edition
1-5
Needs versus Wants
 A need is the difference between
the actual and ideal states of
being
 A want is a desire for a particular
product used to satisfy that need
wants are culturally and socially
influenced
©2003 Prentice Hall, Inc
Marketing: Real People, Real Choices 3rd edition
1-6
Needs, Benefits, Demand,
and Markets
 A product delivers a benefit when
it satisfies a need or want
 Benefit: the outcome sought by a
consumer that motivates buying
behavior to satisfy a need or want.
 The challenge: identify what
benefits people are looking for??
©2003 Prentice Hall, Inc
Marketing: Real People, Real Choices 3rd edition
1-7
Needs, Benefits, Demand,
and Markets
 Desire coupled with the
resources to satisfy a want
results in demand
 A market consists of all the
consumers with that need and
the resources to make the
exchange
©2003 Prentice Hall, Inc
Marketing is an Exchange
of Value
 Exchange - the heart of every
marketing act
 An exchange occurs when
something is obtained for
something else in return
 “Value is in the eye of the beholder”
©2003 Prentice Hall, Inc
Marketing: Real People, Real Choices 3rd edition
1-9
Marketing is an Exchange
of Value
 Appropriate value exchange occurs
when both parties are satisfied,
making it more likely to continue
business in the future.
–
–
–
–
–
Making marketing value decision (I)
Understanding consumer’s value needs (II)
Create value proposition (III)
Communicating the value proposition (IV)
Delivering the value proposition (V)
©2003 Prentice Hall, Inc
Anything Can Be Marketed!!
 Consumer Goods and Services
• Goods: Tangibles purchased for
personal/family use (EXAMPLE??!)
• Services: intangibles we pay for and use
but never own (EXAMPLE??!)
• Both must have value that come from
competing goods and services
 Business-to-Business Marketing
• Industrial goods
©2003 Prentice Hall, Inc
Marketing: Real People, Real Choices 3rd edition
1-11
Anything Can Be Marketed!! Cont.
 Not-for-profit Organizations
• Organizations with charitable,
educational, community and other
public-service goals, that buy goods and
services to support their functions and
to attract and serve their members.
• Museums, zoos, Gov,
 Idea, Place, and People Marketing
©2003 Prentice Hall, Inc
Anything Can Be Marketed!! Cont.
 Idea, Place, and People
Marketing
• Endorse ideas Change behavior
(seat belts)
• Places; tourism Ads, (Turkey)
• People; “Stars are made, not
born”, resumes, YOU
©2003 Prentice Hall, Inc
The Marketing Mix
 It is a combination of the product itself,
the price of the product, the place where it
is made available, and the activities that
introduce it to consumers that creates a
desired response among a set of
predefined consumers
©2003 Prentice Hall, Inc
The Marketing Mix (4 P’s)
 Product
 Place
 Price
 Promotion
©2003 Prentice Hall, Inc
Marketing: Real People, Real Choices 3rd edition
1-15
Product
 Good, service, idea, place, person...etc
 Design package, physical features,
associated services, product design,
developing new products, introducing new
products, find new uses of old products,
product identity, management of the
product.
©2003 Prentice Hall, Inc
Price
 Price is the amount to exchange to receive the
offering.
 Price decisions, market conditions, people
willingness to pay, price analysis, price will lure
new customers to the product, price creates
value.
 Do people buy only for a lower price??!
©2003 Prentice Hall, Inc
Promotion
 Is the coordination of a marketer's
marketing communications efforts to
influence attitudes or behavior; the
coordination of efforts by marketer to
inform or persuade consumers or
organizations about goods, services, or
ideas.
©2003 Prentice Hall, Inc
Promotion Cont.
 Personal selling
 Advertising & publicity (TV Ads)
 Public relation (conferences)
 Promotional activities (store coupons)
©2003 Prentice Hall, Inc
Place
 Availability of the product to the customer
at the desired time and location.
 Channels of distribution, get the product
from producer to consumer
 Retailers, internet sites…
©2003 Prentice Hall, Inc
Marketing is a Process
 “Process of planning and
executing”
 Successful marketing exchanges
occur continually over time.
©2003 Prentice Hall, Inc
Marketing is a Process cont.
 Customer Relationship
Management (CRM) emphasizes
the importance of building longterm relationships with customers
to keep them satisfied and coming
back.
“Selling products that don’t come
back to people that do.”
©2003 Prentice Hall, Inc
Marketing: Real People, Real Choices 3rd edition
1-22
How is marketing done?
 Marketing planning
 Finding and reaching the target
market
 Looking for customers
©2003 Prentice Hall, Inc
Marketing: Real People, Real Choices 3rd edition
1-23
Marketing Planning
 Analyze the organization’s current
strengths, weaknesses, opportunities,
and threats
How is our firm different from the
competition?
Which customer groups should we pursue
in the future?
How will changes in the environment
affect our marketing mix?
©2003 Prentice Hall, Inc
Marketing: Real People, Real Choices 3rd edition
1-24
Finding and Reaching a
Target Market
 Mass Market - all possible
customers regardless of differences
in their specific needs and wants
 Market segments - distinct groups
of customers within a larger market
 A target market - an organization’s
chosen segment
©2003 Prentice Hall, Inc
Marketing: Real People, Real Choices 3rd edition
1-25
The Evolution of Marketing
 Production
Orientation
 Selling Orientation
 Consumer
Orientation
 New Era Orientation
 The E-marketing era
©2003 Prentice Hall, Inc
•Production concept
•Selling concept
•Product concept
•Marketing concept
•Societal marketing
concept
Marketing: Real People, Real Choices 3rd edition
1-26
Production orientation
 Emphasize the most efficient ways to
produce and distribute.
 Ford’s T-model
 Demand is greater than supply
 Take whatever is available
 No strong competition
 Soviet Union (quotas, shoppers lines)
©2003 Prentice Hall, Inc
Production orientation Cont.
 Market is a homogeneous group
 Satisfied with the basic functions
 Example??
©2003 Prentice Hall, Inc
Selling orientation
 Managerial view of marketing as
a sales function, or a way to
move product out of warehouse
to reduce inventory.
 After world war II the race for
consumer pockets started.
©2003 Prentice Hall, Inc
Selling orientation cont.
 Consumers don’t like to be pushed…
right?
 Will be successful in one-time sale, not
building a relationship with the consumer.
 Good for unsought goods.
 Goods that we don’t tend to buy without
prodding.
©2003 Prentice Hall, Inc
Consumer orientation
 A management philosophy that focuses
on ways to satisfy customers’ needs and
wants.
 Consumers don’t mind to pay more
 Consumer are the most important
©2003 Prentice Hall, Inc
Consumer orientation cont.
 Competition
 Market segmentation
 Tailoring products, customization,
marketing messages,
 More features
 Better quality
 Early 1990s TQM
©2003 Prentice Hall, Inc
New era orientation
 A management philosophy in which
marketing means a devotion to excellence
in designing and producing products that
benefit customers plus the firm’s
employee, shareholders and communities.
©2003 Prentice Hall, Inc
New era orientation cont.
 Customer is still No. 1
 CRM
 Social marketing concept (Customer VS. Society VS
profit???)
 Cleaner, safer, environment, sponsorship.
 Why social marketing??!
 DOES MARKETING HELP OR USE CONSUMER?
©2003 Prentice Hall, Inc
The E-marketing era
 SIMPLY, using the internet to connect with
consumers.
 Connect:
•
•
•
•
•
©2003 Prentice Hall, Inc
Personalization
Products and new products
Advertising
News
Relationship
Marketing Creates Utility
 Utility: usefulness or benefit
consumers receive from a product.
 Form utility (Raw -> products)
 Place utility (availability of products)
 Time utility (storing products)
 Possession utility (own, use, enjoy!)
©2003 Prentice Hall, Inc
Marketing: Real People, Real Choices 3rd edition
1-36
Pop Culture and Myths
 Popular Culture
Music, Movies, Sports, Books,
Celebrities
Marketers provide the materials
that become part of this culture
TV at dinner, cosmetics made of
natural materials
©2003 Prentice Hall, Inc
Marketing: Real People, Real Choices 3rd edition
1-37
Marketing and Myths
 Marketing messages
communicate stories containing
symbolic elements that may
express shared emotions and
ideas of a culture
 Examples?
©2003 Prentice Hall, Inc
Marketing: Real People, Real Choices 3rd edition
1-38
Exercise!!!
1.
Copy or clip three advertisements from newspapers or
magazines. What customer needs are the advertisers
trying to meet?
2.
Select two companies of your choice (in the same
market), determine how they differ in their marketing mix
elements!! How the different marketing mix elements are
affecting each of the company’s business and “selling”.
©2003 Prentice Hall, Inc