Week 1 Part 2 History of Marketing & Marketing Mix for Blackboard

• Rhydian Harry– rhh16@aber.ac.uk

– Room 3.13, Rheidiol building

– 01970 622153

• Seminars

– Jean Chitanda Bright jec36@aber.ac.uk

– Assessed (20%)

Marketing Principles Week 1, part 2

• Learning Outcomes

– Define the marketing concept & marketing mix.

– Explain how marketing has developed over the twentieth century.

– Describe the three major contexts of marketing application, i.e.

consumer goods, business to business and services marketing.

– Assess critically the impact marketing has on society. Coca Cola.

• Reading: Ch:1 Marketing Principles and Society

History of Marketing Thought & The Marketing Mix

• What is Marketing?

“ The management process of anticipating, identifying and satisfying customer requirements profitably.”

Chartered Institute of Marketing, 2001.

History of Marketing Thought & The Marketing Mix

Source: The Marketing and Sales Standards Setting Board (2006)

What do Marketers Do?

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To Reform Marketing Practice

• Marketing practitioners tend to be held in low respect (Bartels, 1983; Kotler, 2006). To reform we need to:-

• Make marketing a strategic corporate staff function.

• Head of marketing reports directly to CEO (Board level)

• Provide marketing with capital expenditure budgets in addition

to operating expenditure.

• Ensure that marketing controls branding, key account

management and business development.

The Three Components of Market Orientation

Marketing Sales

Tends towards long-term satisfaction of customer needs

Tends towards short-term satisfaction of customer needs; part of the value delivery process as opposed to designing and development of customer value processes

Tends to greater input into customer design of offering (co-creation)

Tends to lesser input into customer design of offering (co-creation)

Tends to high focus on stimulation of demand

Tends to low focus on stimulation of demand, more focused on meeting existing demand

Marketing and Sales Compared

The Original developed by Bordenin his teaching but not written up until 1964:

• Product planning• Pricing• Branding• Channels of distribution• Personal selling• Advertising• Promotions• Packaging• Display• Servicing• Physical handling• Fact finding and analysis

(Borden, 1964).

The Shortened simplified version by Eugene McCarthy and now more commonly used:

• Product• Place (distribution)• Price and • Promotion (McCarthy, 1960).

The Marketing Mix

The 4Ps of the Marketing Mix

• Product: The offering and how it meets the customer’s need, its packaging and labeling.

• Successful companies will find out what the customer wants, then develop the right product.

• Does not have to be tangible.

• Price: Cost to the customer, and cost plus profit to the seller.

• Price positions you in the marketplace.• More expensive means higher expectations, all customer dealings

must be consistent with these expectations.

The 4Ps of the Marketing Mix

• Place: Where customers buy a product, and means of distributing product to that place.

• Must be appropriate and convenient for the customer i.e. available in the right place, right time and quantity.

• Displaying your product to customer groups.

• Promotion: Use of communications to persuade individuals or organisations to purchase products.

• Good promotion is two way communication with customers.• Should communicate the benefits that a customer obtains from

that product, not just its features.

• Booms and Bitner (1981) • Physical evidence – A service cannot be experienced

before it is delivered. To emphasize that the tangible components of services were strategically important since customers used these to infer what the quality of society might be.

• Process –because service delivery is inseparable from the customer consumption process. There is a need to manage customer expectations and satisfaction. Where processes are standardized, it is easier to manage customer expectations.

• People – Services are delivered by customer service personnel, sometimes experts and often professionals who interact with the customer. Many customers cannot separate the product or service from the staff member who provides it - people are so important.

Extension from 4-7 Ps for Services

Marketing Exchange: European Airlines

The Marketing Mix: the Airline Industry

Table 1.3

The Relationship Pyramid

Types of Products and Services

• Production period, 1890s-1920s – characterized by a focus on physical production and supply, where demand exceeded supply. This phase took place after the industrial revolution.

• Sales period, 1920s-1950s – characterized by a focus on personal selling supported by market research and advertising. This phase took place after the First World War.

• Marketing period, 1950s – 1980s – characterized by a more advanced focus on the customer’s needs. This phase took place after the Second World War.

• Societal marketing period, 1980s to present – characterized by a stronger focus on social and ethical concerns in marketing. This phase is taking place during the ‘information revolution’ of the late twentieth century.

The Development of Marketing

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Coca-Cola 2020 Vision

• Vision is to double its revenue to $200bn (£123.4bn) by 2020.

• Ranked no.1 brand in the world by Interbrand (2012), no.5 by Millward Brown (Brandz top 100 2013). Valued at $74billion.

• Average consumption of 89 Coca-Cola drinks per year per person.

• 72 million Facebook followers.

Use 72 million-strong Facebook community to crowdsource ideas to help make the world a happier place.

Give power to community and local agencies e.g. Share a Coke campaign

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Coca-Cola 2020 Vision

The business has been a marketing-led company for its entire existence. While the bottling operations and supply chain make up one of the corporate world’s greatest distribution systems, what the Coca-Cola Company itself has to sell are products, innovation and the promise of its powerful brands; in other words, marketing. (Marketing Week 26 May 2011)

Brand Perception:

YouGov BrandIndex’s average of perception measures rose from 9.6 on 30 April to 12.4 on 10 September.

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Is it working?

• Company Growth

• Foodbusinessnews.net (3/7/2013) Coca-Cola is coming off a year in which higher global volume contributed to a 5% increase in income.

• Coca-Cola’s value sales increased 4.93 per cent year on year to £765 million in the 52 weeks to 17 August 2013 (IRI Worldwide data).

• Volume sales for the Coca-Cola brand grew 3.88 per cent. The total soft drinks market’s volume sales grew just 0.98 per cent (IRI Worldwide data).

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• Define the marketing concept.• Looked at Marketing Mix• Explain how marketing has developed over the

twentieth century.• Describe the three major contexts of marketing

application, i.e. consumer goods, business to business and services marketing.

• Assess critically the impact marketing has on society.

• Relationship Pyramid• Coca Cola as an example of established market

orientated organisation.

Summary