1. What is Marketing?.
A social and Managerial process by which individuals and groups obtain what they need and want through creating, offering, and exchanging products of value with others.
(Philip Kotler)
The process of planning and executing the conception, pricing, promotion, distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals. (AMA)

2. Marketing as a set of activities?
Market Research Selling Distribution Branding
Promotion Customer service

3. What is customer satisfaction?
Customer satisfaction is the extent to which a product or service meet customer’s expectations. The primary goal of every organization is to meet or exceed customer’s expectations.

4. What are the benefits of customer satisfaction?
Improve profits Increase revenue Increase customer referrals Increase customer Loyalty or customer retention Reduce marketing costs
A highly satisfied customer:
-stays loyal longer
-Buys more as the co. introduces new products.
-Talks favorably about the co. and its products
-Pays less attention to competing brands and is less sensitive to price.
-Offers product or service ideas to the company
-cost less to serve than new customers because transactions are routine.

5. Key Marketing Concepts
Needs, Wants, Demand Products (goods, services, and ideas) Value, Costs Exchange, Transaction, Markets

6. Needs, Wants & Demand
A need is a state of felt deprivation. For example, a need is created when one feels thirsty, lonely, threatened etc Wants are needs based on who we are. Demand consists of human wants backed by purchasing power.

7. Products & Services
A product is anything that can be offered to satisfy a need or want. A product can be either tangible or intangible or both. Service is an intangible product.

8. Value & Costs
Value is the ratio of benefits to the sacrifice necessary to obtain those benefits.
The sacrifice include costs in terms of money, time, image, and energy etc. Costs also include forgone opportunities.

9. Exchange, Transaction, Markets
Exchange is the act of obtaining something by offering something in return. A transaction occurs when two or more parties enter into an exchange agreement (i.e. the parties agree on terms of exchange) A Market consists of people & organizations with needs and wants, who have the means to pay & the willingness to buy.

10. Conditions of exchange:
There must be at least two parties( a buyer & a seller) Each party must have something of value to offer. Each party must be capable of communicating with the other party and of delivering the goods. Each party must be free to accept or reject the other’s offer. Each party must want to deal with the other party.

11. Marketing Orientations
Production Orientation Product Orientation Sales Orientation Marketing Orientation Societal Marketing Orientation Relationship Marketing

12. Production Orientation
Assumes that consumers prefer products that are widely available and affordable. Focuses on improving production and distribution processes to make them more efficient.
Less emphasis is put on customer needs & wants. Hence, leading to Marketing myopia. The assumption holds where demand exceeds supply and where costs are high and needs to be decreased to expand the market.

13. Product Orientation
Assumes that consumers favor products that offer the most in terms of quality, performance or innovative features. E.g. manufacturers of mobile phones, TV sets, radio, cars etc. Ignores customer needs & focuses on producing the best product. Also leads to marketing myopia

14. Sales Orientation
Assumes that consumers will not ordinarily buy enough of the firm’s products unless the firm engaged in aggressive selling tactics. Focuses more on selling what the firm has rather than what the consumers really need or want. Also leads to marketing myopia Assumption holds when supply exceeds demand. Political parties use selling concept.

15. Marketing Orientation
Assumes that the key to achieving organizational goals is to know the needs and wants of target consumers and deliver desired goods and services better than competitors. Focuses on satisfying the needs and wants of target market Use long-term planning approach

16. Societal Marketing Orientation
Organizations must determine the needs and wants of target consumers and deliver desired satisfactions in ways that also enhances society’s well- being. Calls marketers to build social and ethical considerations into their marketing practices. Call for balance between profits, customer wants satisfaction and public interests.

17. The Marketing Environment
Comprise of the actors and forces outside marketing that affect marketing manager’s decisions.
The marketing environment is constantly changing and presents both opportunities & threats to the organization’s marketing efforts.

18. Micro-environment
Forces close to the firm that affect its ability to serve its customers including the company Suppliers
Marketing intermediaries Customers Competitors Publics.

19. Macro-environment
Broader societal factors that affect marketing decisions: Demographic ; Economic; Natural, Technological; Political & Cultural Forces
The effects of the macro-environment on marketing decisions are uncontrollable.

20. Consumer Behavior.
The study of how consumers select, buy, use, and dispose of goods, services, or experiences to satisfy their needs and wants.
The process through which consumers select, buy, use, and dispose of goods, services, or experiences to satisfy their needs and wants.

21. Development of consumer behavior as a field of study
Psychology- the study of behavior & mental processes of people. Sociology – the study of the behavior of people is a social setting. Anthropology – the study of people in relation to their culture Economics – the study of people as rational beings

22. Why do we have to study consumer behavior?
To gain insights into our own consumption patterns as consumers.
To gain insights into why consumers act the way they do and to influence that behavior to achieve organizational goals.
To help us make informed decisions as public policy makers.
To help us effectively represent consumer interests and rights.

23. Consumer Buying Decision Process.
Need recognition
Information search
Evaluation of Alternatives
Purchase Decision
Post Purchase Behavior

24. Factors Influencing Consumer Behavior
Personal Factors: lifestyle (AIOs), Occupation, Education, Income, Economic situation, Age, sex,.
Psychological Factors: Perception, Learning, Motivation, attitudes, Personality, Self-concept.
Social Factors: Family, Reference Groups, Social Class, Culture
Cultural factors- norms, values , belief systems

25. Organizational buyer behavior
The decision-making process by which formal organizations establish the need for purchased products and services and identify, evaluate, and choose among alternative brands and suppliers. (Kotler, 1997p 204)

26. Organization Vs Consumer Markets
Individuals or households
Buy for personal use
Individual or group purchase decision
Organisations Buy to use in producing other products or for resale to final consumers Purchase decision by group

27. Buying situations
Straight rebuy – routine purchases. Modified rebuy- the buyer wants to modify product specifications, prices, delivery requirements or other items. New task- Buying for the first time.

28. Key players in organizational buying process
Gatekeepers Initiators Users Influencers Deciders Approvers Buyers

29. Organizational Buying Process
Problem Recognition General Need Description Product Specification Supplier Search Proposal Solicitation Supplier Selection Order Routine Specification Performance Review

30. Factors Influencing Organizational Purchasing
Environmental factors e.g. Economic, political and technological factors. Organizational factors. E.g. Buying policies and or procedures Interpersonal factors e.g. Authority, status, interests of those certain people. Individual factors . E.g. personality, attitudes towards risk, education etc.

31. Marketing Segmentation
Division of a market into distinct groups of consumers with common characteristics and who might requires separate products or marketing mixes.

32. Rational for Market Segmentation
Consumers differ in one or more ways. Different consumers require different marketing tools. Organizational resources are limited.

33. Common Bases for segmenting consumer mkts
Geographic factors:- country, location Demographic factors:- age, gender, education, family size, occupation Psychographic characteristics;- lifestyle(, personality (independent, impulsive, self confident)
Socio-cultural factors:-culture, religion, social class
Use-related characteristics:- Usage rate (heavy, medium, light users); awareness; loyalty
Use-situation:- time; occasion objective
Benefits sought:- convenience
Combination of the above

34. Requirements for effective segmentation
Measurable:-size, purchasing power etc
Accessible:-Can be reached easily
Substantial’:- Large enough to make profits.
Differentiable:-respond differently to different marketing programs
Actionable:-Effective marketing programs
can be developed to serve the segments

35. Market Targeting
The process of evaluating and selecting market segments.
Three factors used in evaluation:
Segment size & growth
Segment structural attractiveness
Co. objectives & resources

36. Undifferentiated Targeting
Also known as mass marketing, ignores market segments and goes for the whole market with one product and one marketing program. The firm relies on mass distribution & mass advertising Coca cola & Ford cars
Saves production and marketing costs through economies of scale.

37. Concentrated targeting
Focus on one market segment or niche Firm develops strong knowledge of the market Attains a strong market position
Involves high risks due to changes in consumer tastes or competition.

38. Multi segment targeting
Also known as differentiated targeting. Operates in Different market segments are selected. Different marketing program for each segment.
GM produced a car for every purse, purpose, and personality. Toyota etc Creates more total sales than undifferentiated targeting High costs

39. Micro Marketing
Tailoring products and marketing programs to the needs of specific individuals or location. Local marketing- focus on local consumer groups. Individual marketing-focus on individual needs

40. Choosing a targeting strategy
Depends on:
Company resources
Product variability
Market variability
Competitor’s marketing strategies

41. Positioning
Defined by Ries and Trout(1986) in the book “Positioning: The Battle for your mind” as: the place a firm, product or brand occupies in consumer’s minds relative competing offerings. Kotler(2000) defined positioning as the act of designing the company’s offering and image to occupy a distinct place in the target market’s mind.

42. Differentiation
The processes of identifying something unique/different about the firm or its products. Differentiation variables for : Products :- features, reliability, style , durability, serviceability etc Services: - Delivery, installation, Personnel:- Competence, courtesy Channel:- Coverage, expertise Image:- Symbol, events,

43. Differentiating criteria
Preemptive –cannot be easily copied Communicable- easy to see or explain Affordable – afforded by buyers Profitable- co. can make profit Distinctive-distinctively offered. Superior –the difference is superior.

44. Marketing Mix or 4Ps
Marketing mix: tools used to develop marketing strategies. These are: Product, Price, place (Distribution) and promotion. The organisation must come up with a blend of the marketing mix elements that can help it achieve its objectives more efficiently and effectively than competitors.

45. Product
A product is anything that can be offered to satisfy a need or want including goods and services.

46. Product levels A product can be conceptualized as:
Core Benefit;- A core benefit is the fundamental benefit that the consumer is really buying
Basic product :-Transformation of a core benefit into a product with basic features.
Expected product:-A set of attributes/features and conditions that buyer expects to find in a product in a given situation.
Augmented product:- A product that not only meets the customers’ expectations but exceeds them
Potential product:- A product viewed in terms of its future potentials

47. Product Classifications
Consumer products:-purchased by final users for personal use.. Industrial products:- used to manufacture other goods or services. Product line :–a group of closely related product items Product mix- All products that an organization sells. Brand:- A name, term, symbol, design or combination thereof that identifies a seller’s products.

48. Types of consumer products
Convenience product –an inexpensive item that merits little shopping effort. Shopping products-usually more expensive that requires more shopping effort. Specialty products- unique products, with significant shopping effort. Unsought products-unknown to the potential buyer or buyer does not actively seek.

49. Steps in New Product Development
Idea generation Idea screening Concept development & testing Business analysis Development stage Test marketing Commercialization

50. Concept development & testing
Product concept is a detailed version of the product idea stated in meaningful consumer terms. E.g. A low cost car used to run errands & visiting friends around town. Concept testing entails presenting the concept (picture, drawing, miniature) to target consumers to gauge their reaction.

51. Product Life Cycle (PLC)
The pattern of a product’s sales and profits over its lifetime
Introduction
Growth
Maturity
Decline

52. Price
A price is what the buyer must give up in exchange for a goods or service.

53. Factors influencing Product pricing
Internal factors:
Marketing objectives
Product costs
Organizational policies
Marketing mix

54. Factors influencing product pricing
External factors:
The market and Demand
Competition
Economic conditions
Government policies
Distributors

55. Traditional pricing methods
Cost-plus pricing. Breakeven pricing Value based pricing. Competition based pricing Target return(ROI) pricing

56. New product pricing
Skimming price - A high price set for a new product in order to maximize initial revenues
Penetration pricing – A lower initial price for a new product designed to penetrate the market quickly.

57. Promotion
The manner in which a firm communicates with the target market.
Promotional messages aim to:
Inform
Remind
Persuade

58. Promotion Mix Tools used to communicates to target customers:
Advertising
Sales promotion
Public relations
Personal selling
Direct marketing

59. Advertising
A paid from of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor.

60. Advertising Adv. & Disadv.
- Reach many geographically dispersed people at lower cost per viewer.
Allows message to be repeated many times.
Allows the co. to dramatize its products through artful use of sound, visuals & color.
Disadvantages: Expensive No direct contact with the customer Too impersonal

61. Personal selling
Personal presentation by the firm’s sales people for the purpose of making sales and building customer relationships.

62. Disadvantages: Expensive Limited coverage
Personal selling
Advantages: Involves personal interaction with the audience. Message can be tailor made. Affords development of long-term customer relationships .
Disadvantages: Expensive Limited coverage

63. Sales promotion
Short-term incentives to encourage the purchase or sale of a product or service.

64. Sales promotion
Advantages: Attract consumer attention Offer strong incentives to purchase Invites and rewards quick response
Disadvantages: Effects short lived Can tarnish image Not effective in building long term brand preference.

65. Public relations
Building good relations with the company’s various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events.

66. Public relations
Advantages:
Very believable
Can reach many people.
Disadvantages: Impact difficult to measure. Message is not sales directed.

67. Direct Marketing
Direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships.

68. Direct Marketing Advantages: Message is immediate
Message is customized.
Allows for interaction with customer.
Effective in building one-to- one relationships
Convenient
Disadvantages: Consumer cannot see the actual product before buying Low reach out High per unit costs

69. Place (Distribution)
The movement of goods and services from where they are produced to the final consumer/user.

70. Channel of distribution
A set of interdependent organisations that help make a product or service available for use or consumption by the consumer or business user.

71. Functions of a distribution channel (chain)
Information gathering and dissemination Promotion Matching demand & supply Physical distribution Financing Negotiation Risk taking

72. Channel levels for consumer goods
Producer – consumer Producer – retailer – consumer Producer –wholesaler –retailer- consumer.

73. Channel levels for industrial goods
Producer – Business customer Producer – Business Distributor – business customer. Producer – manufacturers’ representative or sales branch – business distributor – business customer.

74. Channel design decisions
Analyze consumer needs. Set channel objectives. Identifying major channel alternatives Evaluate channel alternatives

75. Channel management
Select channel members Motivate channel members. Evaluate channel members.

76. Marketing Information System (MIS)
MIS consists of people, equipment and procedures to gather sort, analyze, evaluate and distribute needed information timely and accurately.

77. Assessing information needs of the organization
Who needs the information What kind of information Where and how can the information be obtained At what cost How feasible

78. Developing MI: sources
Internal Data bases Marketing Intelligence Marketing Research

79. Internal Data Bases
Collection of electronic information obtained from data sources within the company Sources of internal data includes records of sales, costs, production schedules. Internal data is easily accessible and cost less Disadvantage is that information may be incomplete or in wrong form

80. Marketing intelligence
Systematic collection and analysis of publicly available information about competitors and developments in the marketing environment. Main objective is to improve strategic decision making, assess and track competition and provide early warning of opportunities and threats.

81. Marketing Research
Systematic design, collection, analysis and reporting of data relevant to a specific marketing situation facing an organization. To assess market potential, market share; customer satisfaction, consumer behavior etc

82. Marketing of Services
Intangibility-Services cannot be seen, tasted, felt, heard or smelled before purchase. Inseparability-Services cannot be separated from their providers. Variability-Quality of services depends on who provides them, when, where and how. Perishability-Services cannot be stored for later use.

83. Determinants of service quality
Reliability-the ability to perfr4om the promised service dependably and accurately. Responsiveness- the willingness to help customers and to provide prompt service. Assurance – The knowledge and courtesy of employees and their ability to convey trust and confidence. Empathy- The provision of caring, individualized attention to customers. Tangibles- The appearance of physical facilities, equipment, personnel and communication materials.