Marketing: An Overview

Marketing

• According to Kotler, Marketing as a social managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others.• Marketing deals with identifying and meeting

human and social needs. One of the shortest definitions of marketing is “meeting needs profitably.”

Marketing

• The AMA defines marketing as an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

Selling is only the tip of the iceberg

‘There will always be need for some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be

needed is to make the product or service available’.

Peter Drucker

Needs, Wants, and Demands• Needs are states of felt deprivation, personal

requirements that motivate behavior and things that people cannot live without, like food, clothing and shelter. Needs are not invented by marketers; they are basic parts of the human makeup. When a certain need is not satisfied, a person may either find a way to reduce the need or look for an object that will satisfy it.

Needs, Wants, and Demands• Wants are the form taken by human needs as

they are shaped by culture and individual personality. These are needs translated into specific satisfiers that may differ from person to person.

Needs, Wants, and Demands• Demands are wants backed by purchasing power

or the ability to buy.

What is Marketed?

Goods

• Physical goods constitute the bulk of most countries’ production and marketing effort. Not only do companies market their goods, but thanks in part to the Internet, even individuals can effectively market goods.

Services

• As economies advance, a growing proportion of their activities is focused on the production of services. The US economy today consists of a 70:30 services-to-goods mix. • Many market offering consist of a variable mix of

goods and services.

Events

• Marketers promote time-based events, such as major trade shows, artistic performances, and company anniversaries.

Experiences

• By orchestrating several services and goods, a firm can create, stage, and market experiences. • The goal of experiential marketing is to establish

the connection in such a way that the consumer responds to a product offering based on both emotional and rational response levels.

example

• Samuel Jackson's movie, Snakes on a Plane, had an interactive feature on their website. A person could enter the name and phone number of a friend, and they would receive a pre-recorded message inviting them to see the movie. It worked. Opening night for the movie was a huge success.

Persons

• Marketing activity aimed at creating target market awareness, and a favorable opinion, of a particular person• Celebrity marketing is a major business.

Places

• Cities, states, regions, and whole nations compete actively to attract tourists, factories, company headquarters, and new residents.

Properties

• Properties are intangible rights of ownership of either real property or financial property.

Organizations

• Organizations actively work to build a strong, favorable, and unique image in the minds of their target market. Companies spend money on corporate identity ads.

Information

• Information can be produced and marketed as a product. • Example: Information on a particular good /

service / company may actually be marketed and actually sold.

Ideas

• Every market offering includes a basic idea. Goods and services are platforms for delivering some idea or benefit.• Example: “A mind is a terrible thing to waste”

(an example of idea being promoted by social marketers )

Structure of Flows in a Modern Exchange Economy

A Simple Marketing System

Value, Satisfaction, and Quality• Customer value is the difference between the

value of buying, owning and using the product and the cost of the product. The customer compares the cost of the product with the benefits he gains from using the product. (if the benefit exceeds the cost, there is positive customer value and the customer usually decides to buy the product; if the cost exceeds the benefit, there is negative customer value and the customer would most likely avoid the product and look for something else)

Value, Satisfaction, and Quality• Customer satisfaction refers to the difference

between the buyer’s expectation and the perceived performance of the product. Before making any purchase, a customer would already have an expectation in mind and his task is to look for a product that he thinks would perform and deliver according to his expectations. (if the product performs less than expected, the customer is dissatisfied; if it performs as expected, the customer is satisfied; if it performs better than expected, the customer is delighted.

Value, Satisfaction, and Quality• Quality is what the customer says it is. The

ultimate evaluator of quality is the customer.• Quality is the unyielding and continuing effort by

everyone in an organization to understand, meet and exceed the needs of customers.

Marketing Management

• Marketing guru Philip Kotler defines marketing management as the analysis, planning, implementation, and control of programs designed to create, build, and maintain beneficial exchanges with target buyers for the purpose of achieving organizational objectives. • Art and science of choosing target markets and

getting, keeping, and growing customers through creating, delivering, and communicating superior customer value.

Marketing Management Philosophies

Production Concept

• This concept holds that given a wide array of products in the market, consumers will prefer to buy products that are widely available and highly affordable. This is one of the oldest philosophies guiding sellers. In this concept, the primary factors affecting the decision to buy are place of distribution (availability) and price (affordability). Management must focus on improving production and distribution efficiency.

Product Concept

• This concept holds that consumer favor products that offer the best quality, performance, and innovative features. From the name itself, the primary focus is the product. Thus, an organization must devote energy to making continuous product improvements, research, development, and innovations.

Selling Concept

• This concept holds that consumers will not buy enough of the company’s products unless the company undertakes an extensive and large-scale selling and promotional effort. Consumers need a lot of coaxing, persuasion and motivation to buy the company’s products. This concept may hold particularly true for unsought goods, goods that people do not normally think of buying like memorial plans.

Marketing Concept

• This concept holds that achieving the goals of an organization depends on knowing the needs and wants of the target market and delivering the desired satisfaction more effectively and efficiently than others. The focus would be the consumer needs and wants and the competition. This concept shifts the drive from a product-focused marketing effort to a market-focused or customer-driven marketing effort.

Societal Marketing Concept

• This concept holds that organizations must not only study and satisfy the customer’s needs and wants but also deliver superior value in way that maintains or improves the customer’s as well as the society’s well-being. This concept is the newest of the five marketing management philosophies.

How Business and Marketing Are Changing

Changing Technology

• The digital revolution has created an Information Age. It promises to lead to more accurate levels of production, more targeted communications, and more relevant pricing. • Much of today’s business is carried on over

electronic networks: intranet, extranets, and the internet.

Globalization

• Technological advances in transportation, shipping, and communication have made it easier for companies to market in other countries and easier for consumers to buy products and services from marketers in other countries.

Deregulation

• Many countries have deregulated industries to create greater competition and growth opportunities.

Privatization

• Many countries have converted public companies to private ownership and management to increase their efficiency.

Customer Empowerment

• Customers increasingly expect higher quality and service and some customization. They are more and more time-starved and want more convenience. They perceive fewer real product differences and show less brand loyalty.

Customization

• The company is able to produce individually differentiated goods whether ordered in person, on the phone, or online.

Heightened Competition

• Brand manufacturers are facing intense competition from domestic and foreign brands, which is resulting in rising promotion costs and shrinking profit margins.

Industry Convergence

• Industry boundaries are blurring at an incredible rate as companies are recognizing that new opportunities lie at the intersection of two or more industries.

Retail Transformation

• Small retailers are succumbing to the growing power of giant retailers and “category killers.”

Disintermediation

• In response to disintermediation, many traditional companies engaged in reintermediation.

New Consumer Capabilities

A substantial increase in buying power

•Credit Cards•Checks•Schemes such as “buy now, pay later”, lay-away or installment

A greater variety of available goods and services

•The availability of a variety of goods and services makes companies strengthen the purchasing power of buyers.

A great amount of information about practically anything• The internet is a very powerful tool

Greater ease in interacting and placing and receiving orders• There are many ways of buying products. Aside

from the traditional direct selling strategies, or the dependence on several channels of distribution, we also depend much on the internet.

An ability to compare notes on products and services• There are websites and magazines designed to

accommodate the evaluation of people regarding the products and services that they use. They can be relied upon especially when making purchasing decisions.

An amplified voice to influence public opinion.• A lot of websites have been designed to publish

what people think about goods and services in the market. • Freedom of speech has further amplified that

“voice”

The Holistic Marketing Concept• This is based on the development, design, and

implementation of marketing programs, processes, and activities that recognizes their breadth and interdependencies. Holistic marketing recognizes that “everything matters” with marketing – and that a broad, integrated perspective is often necessary. Holistic marketing is thus an approach to marketing that attempts to recognize and reconcile the scope and complexities of marketing activities.

Holistic Marketing Dimensions

Marketing Management Tasks• Develop market strategies and plans• Capture marketing insights• Connect with customers• Build strong brands• Shape market offerings• Deliver value• Communicate value• Create long-term growth