1. Introduction to Marketing

2. Discussion Question What is marketing? ...your own comments...
“Marketing” is everywhere and touches everyone’s life in a way...
What is marketing?
...your own comments...
(First : What do you understand by “marketing”?)
You already know a lot about mktg. Marketing ğ is part of all our lives and touches us in some way every day.
You see mktg in the increasing number of products in your nearby shopping mall,
You see mktg in the advertisements that fill your TV, your magazines or mailbox,
At home, at the university, where you work, even on the streets ğ you are exposed to mktg, in almost everything you do!
What does the term “mktg”mean?
Many people think of mktg only as selling or advertising.
However, selling&adv. ğ are only the tip of the mktg iceberg.
Today, mktg must be understood not in the old sense of making a sale – “telling&selling”-, but in the new sense of satisfiying customer needs.
Although they are important; they are only 2 of many mktg functions; and are not always the most important ones.
(only a part of a larger “mktg mix” – a set of mktg tools that work together to affect the marketplace!)
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3. Introduction to Marketing
Marketing deals with identfying and meeting human and social needs
“meeting needs profitably”
“generating customer value at a profit”
“managing profitable customer relationships by delivering superior value to customers”

4. What is Marketing? No single correct definition or approach
Common subject matters:
The ability to satisfy customers,
The identification of favorable marketing opportunities,
The need to create an edge over competitors,
The capacity to make profits to enable a viable future for the organization,
The use of resources to maximize a business’ market position,
The aim to increase market share mainly in target markets

5. Core Concepts of Marketing
Needs, wants,
and demands
Markets
Products
and services
Exchange,
transactions,
and relationships
Value,
satisfaction,
and quality

6. Core Concepts of Marketing (cont.)
Needs, Wants, Demands
Needs : Basic human requirements
Wants : Needs directed to specific objects
Demands : Wants for specific products

7. Core Concepts of Marketing (cont.)
Products
Anything that can be Offered to a Market to Satisfy a Need or Want
Experiences
Persons
Places
Organizations
Ideas
Information
Services
Activities or Benefits Offered for Sale That Are Essentially
Intangible and Don’t Result in the Ownership of Anything

8. Discussion Question Consider Starbucks: What do they market? Goods?
Services?
or?

9. Core Concepts of Marketing (cont.)
Value Gained From Owning a Product and Costs of Obtaining the Product is “Customer Value”
Product’s Perceived Performance in Delivering Value Relative to Buyer’s Expectations is “Customer Satisfaction”
Total Quality Management Involves Improving the Quality of Products, Services, and Marketing Processes

10. Core Concepts of Marketing (cont.)
Exchange and Transactions
Exchange : Obtaining a desired product from someone by offering something in return
Conditions for exchange to exist:
There are at least 2 parties
Each party has something that might be of value to the other party
Each party is capable of communication and delivery
Each party is free to accept or reject the exchange offer
Each party believes it is apropriate or desirable to deal with the other party
Transaction : Trade of values between two or more parties

11. Core Concepts of Marketing (cont.)
Exchanges
Transactions
Relationships
Building a Marketing
Network Consisting of
The Company and All
Its Supporting
Stakeholders

12. Core Concepts of Marketing (cont.)
Relationships and Networks
Relationship Marketing: to build long-term relations with its customers, suppliers and distributors
Network : Entity consisting of the company itself and its supporting key groups

13. Core Concepts of Marketing (cont.)
Markets
Market : All potential customers sharing a particular need or want who might be willing and able to engage in exchange to satisfy that need or want
Marketers and Prospects
Marketer : Someone seeking one or more prospects who might engage in an exchange of values.
Prospect : Someone is as potentially willing and able to engage in an exchange of values

14. Core Concepts of Marketing (cont.)
People Who Exhibit Need
Potential Buyers
Market – Buyers who share a particular need or want that can be satisfied exchange or relationships.
Actual Buyers
Resources to Exchange
Willingness to Exchange

15. A Simple Marketing System
Communication
Industry
(a collection
of sellers)
Market
of buyers)
Goods/services
Money
Information

16. Marketing defined as...
Process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others.
Simply put: Marketing ğ the delivery of customer satisfaction at a profit.

17. More Definitions of Marketing
A social and managerial process by which individuals and groups obtain what they need and want through creating, offering and exchanging products and services of value with others.
The management process responsible for identifying, anticipating and satisfying customer requirements profitably.
Marketing consists of individual and organizational activities that facilitate and enhance satisfying exchange relationships in a dynamic environment through the creation, servicing, distribution, promotion and pricing of goods, services and ideas

18. More Definitions of Marketing (cont.)
From the societal perspective; some marketers describe marketing as the creation and delivery of a standart of living.
From the managerial perspective; marketing (management) is the process of planning and executing the conception, pricing, promotion and distribution of goods and services to create exchanges that satisfy individual and organizational goals.

19. More Definitions of Marketing (cont.)
Marketing management ğ the art and science of choosing target markets and building profitable relationships with them.
Getting, keeping, and growing customers through creating, delivering, and communicating superior customer value
Marketing management can be defined in broader terms as “demand management”;
Marketers aim to influence the level, timing and composition of demand to meet organizational goals.

20. Marketing Management as Demand Management
Marketing management is concerned
not only with finding and increasing demand,
but also with changing or even reducing it :
Demarketing’s aim is to reduce the number of customers or to shift their demand temporarily or permanently
(e.g. move traffic away from a popular tourist attraction during peak demand times)

21. Marketing Management Marketing management is the art and science
of choosing target markets
and getting, keeping, and growing
customers through
creating, delivering, and communicating
superior customer value.

22. Marketing Management Tasks
Developing marketing strategies
Capturing marketing insights
Connecting with customers
Building strong brands
Shaping market offerings
Delivering value
Communicating value
Creating long-term growth

23. Evolution of Marketing Thought
Production Era (1850s-1920s)
Industrial revolution; mass production
Few products and little competition
Sales Era (1920s-1950s)
The focus was on personal selling and advertising
Sales seen as the major means for increasing profits
Mktg Era (1950s-present)
Customer orientation replaced the “hard sell” of the sales-led era
Determination of the needs and wants of customers before introducing products or services

24. Evolution of Marketing Thought
Relationship Marketing Era: 1990s-
Marketing era has recently shifted from being “transaction-based” ğ to focusing on “relationships”
The argument ğ traditional marketing practices focused on attracting new customers rather than retaining existing ones.
It is equally important to hang on to such new customers so that they become repeat buyers and long term loyal customers
“customer relationship management”!

25. Evolution of Marketing Thought: Customer Relationship Management
Customer relationship management ğ is seen as the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.
Marketers have began to devote their attention:
to winning new customers (transaction mktg)
to building up on-going relationships to maintain their loyalty and custom (relationship mktg)
Attracting, retaining, and growing customers
Relationship building blocks ğ customer value and customer satisfaction
Customer retention and customer loyalty

26. New Era in Marketing... The Millenium...
..from Relationship Marketing to...
Network marketing
E-marketing
Community marketing
Buzz marketing
Digital marketing
Mobile marketing

27. Company Orientations Towards the Marketplace
Consumers prefer products that are
widely available and inexpensive
Production Concept
Consumers favor products that
offer the most quality, performance,
or innovative features
Product Concept
Consumers will buy products only if
the company aggressively
promotes/sells these products
Selling Concept
Focuses on needs/ wants of target
markets & delivering value
better than competitors
Marketing Concept

28. Production Concept
Consumers will favor those products that are widely available and low in cost.
Managers concentrate on achieving high production efficiency and wide distribution.
The assumption is valid at least in 2 situations :
The demand for a product exceeds supply (suppliers will concentrate on finding ways to increase production)
The product’s cost is high and has to be decreased to expand the market.

29. Product Concept
Consumers will favor those products that offer the most quality, performance or innovative features.
Managers in product-oriented organizations concentrate on making superior products and improving them over time.
The assumption ğ the customers will admire well-made products and can evaluate product quality and performance
This concept may lead to marketing myopia

30. Selling Concept Agressive selling and promotion Assumptions are;
Consumers must be convinced of buying company products
Company is powerful in generating effective selling and promotion to stimulate more buying
This concept is mostly used by firms which have overcapacity.
The aim is “to sell what they make rather than make what the market wants.”
Short-term profits are more important and customer dissatisfaction may occur

31. Marketing Concept
Key to achieving organizational goals consists of being more effective than competitors in creating, delivering and communicating customer value to target markets.
The marketing concept has 4 important components :
Target market
Customer needs
Integrated marketing
Profitability through customer satisfaction

32. Marketing and Sales Concepts Contrasted
Factory
Existing
products
Selling and
promotion
Profits through
sales volume
Starting
point
Focus
Means
Ends
(a) The selling concept
Market
Integrated
marketing
Profits through
customer
satisfaction
Customer
needs
(b) The marketing concept

33. Marketing Concept (cont.)
Target market ğ homogenous group of customers to whom the company wishes to appeal
Customer needs
Consumers may not be fully conscious of their needs
It may not be easy to articulate these needs
They may use words that require some interpretation
Customer-oriented thinking ğ to define customer needs from the customer’s point of view
Sales revenue ğ New customers + Repeat customers
“Customer Retention” vs. “Customer Attraction”
Customer satisfaction is a function of the product perceived performance and buyer’s expectations

34. Marketing Concept (cont.)
Integrated Marketing
Various marketing functions must work together for customer satisfaction (coordination of 4Ps; marketing mix elements)
Marketing Mix ğ controllable variables the company puts together to satisfy its target market(s).
Product: Product variety, quality, design, features, brand name, packaging, sizes, services, warranties, returns
Price: List price, discounts, allowances, payment period, credit terms
Promotion: Sales promotion, advertising, sales force, public relations, direct marketing
Place: Channels, coverage, assortments, locations, inventory, transport

35. Marketing Concept : The 4 Ps

36. Marketing Concept : The 4 Ps ğ The 4 Cs
Mix
Product
Place
Promotion
Price
Conven-
ience
Customer
Solution
Customer
Cost
Communication

37. Marketing Concept (cont.)
Integrated Marketing (cont.)
Marketing must be well coordinated with other departments in the company;
all departments have to work together to satisfy customers’ needs and wants
Profitability through customer satisfaction
To achieve profits as a result of creating superior customer value

38. “There will always be need for
Selling – Marketing...
“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

39. Marketing Concept (cont.) Traditional Organization Chart
Top
Management
Middle Management
Front-line people
Customers

40. Marketing Concept (cont.) Customer-Oriented Organization Chart
Customers
Front-line people
Customers
Middle management
Top
manage-
ment

41. Societal Marketing Concept
Company’s negative effects on society
Conflict between consumer wants and long-term social welfare
Marketing managers should be concerned with social responsibility
The societal marketing concept ğ Company’s task is to determine needs and wants of target markets & to satisfy them more effectively and efficiently than competitors, in a way that preserves or enhances the consumer’s and society’s well-being

42. Societal Marketing Concept
Society
(Human Welfare)
Societal
Marketing
Concept
Consumers
(Want Satisfaction)
Company
(Profits)