Introduction to Marketing

Introduction to Marketing

Miss Mary Lynn Mundell

Introduction to Marketing

What Is Marketing?Simple definition:

Marketing is the management process responsible for identifying, anticipating, and satisfying customer requirements profitably.” (CIM,2001)

Goals: 1. Attract new customers by promising superior value.

2. Keep and grow current customers by delivering satisfaction.

Introduction to Marketing

Marketing Defined• Marketing is the activity, set of instructions, and

processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

OLD view of marketing:

Making a sale—“telling and

selling”

NEW view of marketing:

Satisfying customer needs

Introduction to Marketing

Why is Marketing Important?Shifting Business Paradigms

Sellers’ markets

Buyers’ markets

Introduction to Marketing

The Marketing ProcessA simple model of the marketing process:• Understand the marketplace and customer

needs and wants.• Design a customer-driven marketing strategy.• Construct an integrated marketing program that

delivers superior value.• Build profitable relationships and create

customer delight.• Capture value from customers to create profits

and customer quality.

Introduction to Marketing

Needs, Wants, and Demands

Need: State of felt deprivation including physical, social, and individual needs.

• Physical needs: Food, clothing, shelter, safety• Social needs: Belonging, affection• Individual needs: Learning, knowledge, self-expression

Want: Form that a human need takes, as shaped by culture and individual personality.

• Wants + Buying Power = Demand

Introduction to Marketing

Need/ Want FulfillmentNeeds & wants are fulfilled through a Marketing

Offering:• Products:

Persons, places, organizations, information, ideas.

• Services:Activity or benefit offered for sale that is essentially

intangible and does not result in ownership.

• Experiences:Consumers live the offering.

Introduction to Marketing

Customer Value and Satisfaction

Dependent on the product’s perceived performance relative to a buyer’s expectations.

Care must be taken when setting expectations:• If performance is lower than expectations, satisfaction is

low.• If performance is higher than expectations, satisfaction

is high.

Customer satisfaction often leads to consumer loyalty.

Some firms seek to DELIGHT customers by exceeding expectations.

Introduction to Marketing

Marketing Management

The art and science of choosing target markets and building profitable relationships with them.

• Requires that consumers and the marketplace be fully understood.

• Aim is to find, attract, keep, and grow customers by creating, delivering, and communicating superior value.

Introduction to Marketing

Marketing ManagementMarketing managers must consider the following,

to ensure a successful marketing strategy:

1. What customers will we serve?— What is our target market?

2. How can we best serve these customers?

— What is our value proposition?

Introduction to Marketing

Choosing a Value PropositionThe set of benefits or values a company promises

to deliver to consumers to satisfy their needs.• Value propositions dictate how firms will

differentiate and position their brands in the marketplace.

Introduction to Marketing

The Marketing ConceptThe marketing concept:• A marketing management philosophy that holds

that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfaction better than competitors.

Introduction to Marketing

Customer Perceived ValueCustomer perceived value:

“Customer’s evaluation of the difference between all of the benefits and all of the costs of a marketing offer relative to those of competing offers.” (Armstrong & Kotler)

– Perceptions may be subjective – Consumers often do not objectively judge

values and costs.Customer value = perceived benefits – perceived sacrifice.

Introduction to Marketing

The set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the target market.

• Product: Variety, features, brand name, quality, design, packaging, and services.

• Price: List price, discounts, allowances, payment period, and credit terms.

• Place: Distribution channels, coverage, logistics, locations, transportation, assortments, and inventory.

• Promotion: Advertising, sales promotion, public relations, and personal selling.

The Marketing Mix

Introduction to Marketing

Introduction to Marketing

Introduction to Marketing

Marketing Strategy

Introduction to Marketing

Customer-Driven Marketing Strategy

Requires careful customer analysis.To be successful, firms must engage in:• Market segmentation• Market targeting• Differentiation• Positioning

Introduction to Marketing

Segmentation:• The process of dividing a market into distinct

groups of buyers with different needs, characteristics, or behavior who might require separate products of marketing programs.

Targeting:• Involves evaluating each market segment’s

attractiveness and selecting one or more segments to enter.

Market Segmentation and Targeting

Introduction to Marketing

Differentiation and Positioning

Differentiation:• Creating superior customer value by actually

differentiating the market offering.

Positioning:• Arranging for a product to occupy a clear,

distinctive, and desirable place relative to competing products in the minds of target consumers.

Introduction to Marketing

Market SegmentationKey segmenting variables:• Geographic• Demographic• Psychographic• Behavioral

Different segments desire different benefits from products.

Best to use multivariable segmentation bases in order to identify smaller, better-defined target groups.

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Market SegmentationWhy Segment?:• Meet consumer needs more precisely• Increase profits• Segment leadership• Retain customers• Focus marketing

communications

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Evaluating Market SegmentsSegment size and growth:• Analyze current segment sales, growth rates, and

expected profitability.Segment structural attractiveness:• Consider competition, existence of substitute products,

and the power of buyers and suppliers.Company objectives and resources:• Examine company skills and resources needed to

succeed in that segment.• Offer superior value and gain advantages over

competitors.

Introduction to Marketing

Market TargetingMarket targeting involves:• Evaluating marketing segments.

Segment size, segment structural attractiveness, and company objectives and resources are considered.

• Selecting target market segments.Alternatives range from undifferentiated marketing to

micromarketing.

• Being socially responsible.

Introduction to Marketing

Differentiation and PositioningA product’s position is:• The way the product is defined by consumers on

important attributes—the place the product occupies in consumers’ minds relative to competing products.

• Perceptual positioning maps can help define a brand’s position relative to competitors.

Introduction to Marketing

Differentiation and PositioningIdentifying possible value differences and

competitive advantages:• Key to winning target customers is to understand

their needs better than competitors do and to deliver more value.

Competitive advantage:• Extent to which a company can position itself as

providing superior value.Achieved via differentiation.

Introduction to Marketing

Thank you.