Slides prepared byPetra BouvainUniversity of Canberra

Chapter 1An overview of marketing

Learning objectives

1 Define the term marketing

2 Explain the marketing exchange conditions and their influence on marketing

3 Discuss the differences between the sales and marketing concept orientations

4 Give several reasons for studying marketing

5 Describe 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 topurchase 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 satisfaction3

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 customermay 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 reasonsfor 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 processOrganisation mission

Market opportunity analysis

Marketing strategy

Target marketselection

Marketing objectives

Marketing mix•product•distribution•promotion•price

Implementation

Evaluation

Environ-mentalscan

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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 mix5

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