Principles of Marketing Now Marketing

Learning Objectives
Define ‘marketing’ and discuss its core concepts.
Define marketing management and examine how marketers manage demand and build profitable customer relationships.
Compare the five marketing management philosophies.
Differentiate the parts of the marketing process and show how they relate to each other.

Introduction
Provides an overview of marketing
Illustrates the impact of marketing and how it affects us all
Marketing has evolved based upon the belief that organisations do best by focusing upon customers.
Marketing is all about sensing, serving and satisfying the needs of customers in well-defined target markets

What is Marketing?
We define marketing as a “social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others.” Kotler
"Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitably." Chartered Institute of Marketing (2001).

Core Marketing Concepts
Figure 1.1 Core marketing concepts

Marketing Involves:
A management process.
Identifying, anticipating and satisfying customer requirements.
Making a profit.

Needs, Wants and Demands
Human Need
A state of felt deprivation
Human Want
The form that a human need takes as shaped by culture and individual personality.
As society evolves, the wants of its members expand.
People have narrow basic needs but almost unlimited wants.
Demands
Human wants that are backed by buying power.

The market offering- products, services and experiences
Companies address needs by establishing a ‘value proposition’,
a set of benefits that they promise to consumers to satisfy their needs.
This ‘value proposition’ is fulfilled through the marketing offer,
a combination of products, services, information or experiences offered to a market to satisfy a need or want.

Value, Satisfaction and Quality
Consumers make buying choices based upon their perceptions of the value that various products and services deliver.
Customer value is based upon the consumer’s assessment of the product’s overall capacity to satisfy his or her needs.

Exchange, Transactions and Relationships
Exchange is the core concept of marketing.
Marketing occurs when people decide to satisfy needs and wants through exchange.
Exchange is the act of obtaining a desired object from someone by offering something in return.
A transaction is a marketing organisation unit of measurement.
A transaction is trade between two parties
involves at least two things of value, agreed upon conditions, a time of agreement and a place of agreement.

Markets
A market is defined as a set of actual and potential buyers of a product or service.
Sellers constitute an industry
Consumers and customers constitute a market.
Figure 1.2 A simple marketing system

Concept of Marketing
Means managing markets to bring about exchanges and relationships for the purpose of creating value and satisfying needs and wants.
Figure 1.3 Main actors and forces in a modern marketing system

Marketing Management
Defined as an art and science that determines and chooses target markets and attempts to build profitable relationships with them.
Managing customer demand and customer relationships.
Different approaches to the marketing function
evolved over time
directly affect the way marketing takes place.

Principles of Marketing Management
Demand management
Promotional activities to increase demand
‘Demarketing’ to temporarily or permanently reduce demand.
Building profitable customer relationships
Attracting
Retaining
Building customer lifetime relationships and value
Marketing management practice
Entrepreneurial marketing
Formulated marketing

Marketing Management Philosophies
The production concept
Focus on production and distribution
The product concept
Focus on quality, performance and innovation
The selling concept
Undertakes large-scale selling and promotion efforts
The marketing concept
Determining needs and wants of the target markets
The societal marketing concept
Determining needs, wants and interests of the target markets
Effective and efficient achieving desired satisfactions
Improves consumer’s and society’s well being

Societal Marketing Concept
Society
(human welfare)
Consumers
(want satisfaction)
Company
(profits)

Societal Marketing Concept
DaimlerChrysler exhibit societal marketing by investing in technology that reduces accidents. This often means systems such as BAS (Brake Assist), Electronic Stability Programme (ESP) and Sensotronic Brake Control that take control away from the driver.
Source: DaimlerChrysler AG Stuttgart/Auburn Hills. Reproduced with permission.

Marketing Now
Ever-changing markets are not a threat, but the lifeblood of marketing. Creating multiple opportunities:
An existing brand
BBC championing digital radio technology
New products
Market shift to small and retro. BMW re-launching the Mini.
Communications
Globalisation meaning 24/7 communication with customers.
New markets
VW’s growth of 40% in China.

Macro and Micro Environments
PEST analysis systematically examines the macro-environmental issues regarding Political, Economic, Social and Technological elements.
Close interconnectivity between the macro and micro environments and as the macro environment shifts, so too does the micro environment

E-Marketing, Society and Globalisation
E-marketing: marketing in the Internet age
Marketing and society: social responsibility and marketing ethics
Globalisation: the global marketplace

Competitive Strategy
Market leaders
have the largest market share and usually lead on price changes, new product introductions, distribution coverage and promotional spend.
Market challengers
are smaller firms with smaller market share that want to increase their market share.
A market follower
is a firm that wants to maintain status quo and not rock the boat.
A market nicher
is a firm that serves a specific smaller segment of the market that other firms ignore or overlook.

Marketing Mix
Product
Price
Place
Promotion
People
Physical evidence
Processes