©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 1 in Chapter 1

Advanced CoursesAdvanced Courses

Lecture 2By

Eng. Yasser Fouad Abd El Aziz

MBA, BSc, CEng.

Sales & Marketing Director

IBE Technologies

Tel.: (+202) 3372267 – Mobiles: (+2012) 2462228

Fax: (+202) 3371987

E-mail: yasser_fouad@ibetech.com

www.ibetech.com

www.biomed-bahgat.com.eg

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 2 in Chapter 1

Introduction to MarketingIntroduction to Marketing

“The future isn’t ahead of us.

It has already happened.”

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 3 in Chapter 1

ObjectivesObjectives

Understand the new economy.

Learn the tasks of marketing.

Become familiar with the major concepts and tools of marketing.

Understand the orientations exhibited by companies.

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 4 in Chapter 1

ObjectivesObjectives

Learn how companies and marketers are responding to new challenges.

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 5 in Chapter 1

The New EconomyThe New Economy

Consumer benefits from the digital revolution include:

– Increased buying power.– Greater variety of goods and services.– Increased information.– Enhanced shopping convenience.– Greater opportunities to compare product

information with others.

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 6 in Chapter 1

The New EconomyThe New Economy

Firm benefits from the digital revolution include:

– New promotional medium.

– Access to richer research data.

– Enhanced employee and customer communication.

– Ability to customize promotions.

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 7 in Chapter 1

Marketing TasksMarketing Tasks

Marketing practices may pass through three stages:

– Entrepreneurial marketing– Formulated marketing– Intrepreneurial marketing

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 8 in Chapter 1

What Can Be Marketed?What Can Be Marketed?

Goods

Services

Experiences

Events

Persons

Places

Properties

Organizations

Information

Ideas

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 9 in Chapter 1

Marketing DefinedMarketing Defined

Kotler’s social definition:

“Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others.”

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 10 in Chapter 1

Marketing DefinedMarketing Defined

The AMA managerial definition:

“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. To accompany A Framework for Marketing Management, 2nd Edition Slide 11 in Chapter 1

Marketing =Demand Marketing =Demand ManagementManagement

Negative demand

No demand

Latent demand

Declining demand

Irregular demand

Full demand

Overfull Demand

Unwholesome demand

©2003 Prentice Hall, Inc.

4 Types of Markets 4 Types of Markets

Consumer Markets

Business Markets

Global Markets

Nonprofit and Governmental Markets

To accompany A Framework for Marketing Management, 2nd Edition Slide 12 in Chapter 1

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 13 in Chapter 1

Core Marketing ConceptsCore Marketing Concepts

Target markets and market segmentation

Marketplace, market-space, metamarkets

Marketers & prospects

Needs, wants, demands

Product offering and brand

Value and satisfaction

Exchange and transactions

Relationship and networks

Marketing channels

Supply chain

Competition

Marketing environment

Marketing program

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 14 in Chapter 1

Core Marketing ConceptsCore Marketing Concepts

Target markets & segmentation

– Differences in needs, behavior, demographics or psychographics are used to identify segments.

– The segment served by the firm is called the target market.

– The market offering is customized to the needs of the target market.

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 15 in Chapter 1

Simple Marketing SystemSimple Marketing System

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 16 in Chapter 1

Modern Marketing SystemModern Marketing System

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 17 in Chapter 1

Core Marketing ConceptsCore Marketing Concepts

Shopping can take place in a:

– Marketplace (physical entity, Lowe’s)– Marketspace (virtual entity, Amazon)

Metamarkets refer to complementary goods and services that are related in the minds of consumers.

Marketers seek responses from prospects.

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 18 in Chapter 1

Core Marketing ConceptsCore Marketing Concepts

Needs describe basic human requirements such as food, air, water, clothing, shelter, recreation, education, and entertainment.

Needs become wants when they are directed to specific objects that might satisfy the need. (Fast food)

Demands are wants for specific products backed by an ability to pay.

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 19 in Chapter 1

Core Marketing ConceptsCore Marketing Concepts

A Product is any offering that can satisfy a need or want, while a brand is a specific offering from a known source.

When offerings deliver value and satisfaction to the buyer, they are successful.

Value = Benefits/Costs

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 20 in Chapter 1

Enhancing ValueEnhancing Value

Marketers can enhance the value of an offering to the customer by:

– Raising benefits.– Reducing costs.– Raising benefits while lowering costs.– Raising benefits by more than the

increase in costs.– Lowering benefits by less than the

reduction in costs.

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 21 in Chapter 1

Core Marketing ConceptsCore Marketing Concepts

Exchange involves obtaining a desired product from someone by offering something in return.

Transaction involves at least two things of value, agreed-upon conditions, a time of agreement, and a place of agreement.

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 22 in Chapter 1

Core Marketing ConceptsCore Marketing Concepts

Relationship marketing aims to build long-term mutually satisfying relations with key parties, which ultimately results in marketing network between the company and its supporting stakeholders.

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 23 in Chapter 1

Core Marketing ConceptsCore Marketing Concepts

Marketing Channels

Communication channels

Distribution channels

Service channels

Deliver messages to and receive messages from target buyers.

Includes traditional media, non-verbal communication, and store atmospherics.

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 24 in Chapter 1

Core Marketing ConceptsCore Marketing Concepts

Marketing Channels

Communication channels

Distribution channels

Service channels

Display or deliver the physical products or services to the buyer / user.

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 25 in Chapter 1

Core Marketing ConceptsCore Marketing Concepts

Marketing Channels

Communication channels

Distribution channels

Selling channels

Carry out transactions with potential buyers by facilitating the transaction.

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 26 in Chapter 1

Core Marketing ConceptsCore Marketing Concepts

A supply chain stretches from raw materials to components to final products that are carried to final buyers.

Each company captures only a certain percentage of the total value generated by the supply chain.

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 27 in Chapter 1

Core Marketing ConceptsCore Marketing Concepts

Four levels of competition can be distinguished by the level of product substitutability:

– Brand competition

– Industry competition

– Form competition

– Generic competition

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 28 in Chapter 1

Core Marketing ConceptsCore Marketing Concepts

The following forces in the broad environment have a major impact on the task environment:– Demographics– Economics– Natural environment– Technological environment– Political-legal environment– Social-cultural environment

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 29 in Chapter 1

Core Marketing ConceptsCore Marketing Concepts

The marketing program is developed to achieve the company’s objectives. Marketing mix decisions include:

The 4 Ps – Product: provides customer solution.– Price: represents the customer’s cost.– Place: customer convenience is key.– Promotion: communicates with customer.

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 30 in Chapter 1

Core Marketing ConceptsCore Marketing Concepts

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 31 in Chapter 1

Core Marketing ConceptsCore Marketing Concepts

4 Ps

- Product

- Price

- Place

- Promotion

4 Cs

- Customer solution

- Cost

- Convenience

- Communication

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 32 in Chapter 1

Company OrientationsCompany Orientations

The orientation or philosophy of the firm typically guides marketing efforts. Several competing orientations exist:– Production concept– Product concept– Selling concept– Marketing concept– Societal marketing concept

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 33 in Chapter 1

Company OrientationsCompany Orientations

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 34 in Chapter 1

The Marketing ConceptThe Marketing Concept

Achieving organizational goals requires that company be more effective than competitors in creating, delivering, and communicating customer value.

Four pillars of the marketing concept:– Target market– Customer needs– Integrated marketing– Profitability

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 35 in Chapter 1

The Marketing ConceptThe Marketing Concept

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 36 in Chapter 1

Marketing RoleMarketing Role

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 37 in Chapter 1

Changes in the MarketplaceChanges in the Marketplace

Globalization, technological advances, and deregulation have created many challenges:

– Customers– Brand manufacturers– Store-based retailers

Both companies and marketers have been forced to respond and adjust.

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 38 in Chapter 1

Company vs. Marketer Company vs. Marketer ResponsesResponses

Company- Reengineering- Outsourcing- E-commerce- Benchmarking- Alliances- Partner-suppliers- Market-centered- Global & Local- Decentralized

Marketer- Relationship marketing

- Customer lifetime value

- Customer share

- Target marketing

- Individualization

- Customer database

- Integrated communications

- Channels as partners

- Every employee a marketer

- Model base decision making