Slides prepared by Petra Bouvain University of Canberra

Chapter 1 An overview of marketing

Learning objectives 1Define the term marketing 2Explain the marketing exchange conditions and their influence on marketing 3Discuss the differences between the sales and marketing concept orientations 4Give several reasons for studying marketing 5Describe the marketing process

Learning objective 1 Define the term marketing

What is marketing? All of the above, plus much more Personal selling? Advertising? Making products available in stores? Maintaining inventories? 1

What is marketing? (cont.) plus A set of activities, including: products pricing promotion distribution. A philosophy An attitude A perspective A management orientation 1

What is marketing? (cont.) 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 organisational goals. American Marketing Association definition 1

Learning objective 2 Describe four marketing management philosophies. Explain the marketing exchange conditions and their influence on marketing

Five conditions of a marketing exchange 2 At least two parties Something of value Desire to deal with other party Ability to communicate offer Freedom to accept or reject

Learning objective 3 Describe four marketing management philosophies. Discuss the differences between the sales and marketing concept orientations

Marketing management philosophies 3 Production Sales Marketing Relationship. Competing marketing management philosophies:

Marketing management philosophies (cont.) Philosophy Key ideas Production Sales Marketing Relationship Focus on efficiency of internal operations – better and cheaper products Sale depends on customer’s decision to purchase product Focus on keeping existing customers and suppliers Focus on aggressive techniques for overcoming customer resistance 3

Competitive advantage The idea that a product can solve a set of customer problems better than any competitors product. 3

Market orientation requirements Top management leadership A customer focus Competitor intelligence Inter-functional coordination Customer relationships 3

Societal marketing orientation Marketing that preserves or enhances an individual’s and society’s long-term best interests. Less toxic products More durable products Products with reusable or recyclable materials 3

The marketing concept The idea that the social and economic justification for an organisation’s existence is the satisfaction of customer wants and needs while meeting organisational objectives. 3

The marketing concept (cont.) Focusing on customer wants and needs can be a source of competitive advantage by: creating customer value maintaining customer satisfaction building long-term relationships. 3

Customer value The ratio of benefits to the sacrifice necessary to obtain those benefits. 3

Customer value requirements Offer products that perform. Give consumers more than they expect. Avoid unrealistic pricing. Give the buyer facts. Offer organisation-wide commitment in service and after-sales support. 3

The feeling that a product has met or exceeded the customer’s expectations. Customer satisfaction 3

Maintaining customer satisfaction Meet or exceed customer’s expectations. Focus on delighting customers. Provide solutions to customer’s problems. 3

Relationship marketing The name of a strategy that entails forging long-term partnerships with customers and which is based on the marketing orientation. 3

Relationship marketing’s importance Attracting a new customer may be ten times the cost of keeping an old customer. 3

Building long-term relationships Customer-oriented personnel Effective training programs Empowered employees Teamwork 3

Learning objective 4 Describe several reasons for studying marketing

Why study marketing? Plays an important role in society Vital to business survival, profits and growth Offers career opportunities Affects your life every day 4

‘Marketing is too important to be left to the marketing department.’ David Packard, Hewlett-Packard Why study marketing? (cont.) 4

Global opportunities Fastest route up the corporate ladder Important in all business sectors Understanding everyday life Professional selling Marketing research Advertising Retail buying Distribution management Product management Product development Wholesaling Why study marketing? (cont.) 4

Half of every dollar spent by consumers pays for marketing costs. Become a better-informed consumer. Why study marketing? (cont.) 4

Learning objective 5 Describe the marketing process

The marketing process Organisation mission Market opportunity analysis Marketing strategy Target market selection Marketing objectives Marketing mix product distribution promotion price Implementation Evaluation Environ- mental scan 5

Marketing process activities Understand the organisation’s mission. Set marketing objectives. Gather, analyse, interpret ‘SWOT’ information. Develop a marketing strategy. Implement the marketing strategy. Design performance measures. Evaluate marketing efforts – change if needed. 5

Environmental scanning Collection and interpretation of information about forces, events and relationships in the external environment that may affect the future of the organisation or the marketing plan implementation. 5

Environmental scanning (cont.) Examination of macro- environmental forces, including:  social  demographic  economic  technological  political/legal  competitive. Helps identify market opportunities. Provides guidelines for design of marketing strategy. 5

A unique blend of:  product,  distribution,  promotion, and  pricing strategies designed to produce mutually satisfying exchanges with a target market. The marketing mix 5

Marketing mix: The ‘four Ps’ Product Place Promotion Price 5

Product strategies The starting point of the ‘four Ps’ Includes physical unit, package, warranty, service, brand, image and value 5

Distribution (place) strategies Product availability – where and when customers want them Involves all activities from raw materials to finished products Impact of the Internet 5

Promotion strategies Role is to bring about exchanges with target markets Includes integration of personal selling, advertising, sales promotion, and public relations, direct marketing and Internet marketing 5

Pricing strategies What is given up in an exchange to acquire a good or service. 5