1 Marketing Intro....UNDERSTANDING MARKETING

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My Friends Project..

UNDERSTANDING MARKETINGEvolution, Orientations and Concepts


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What is Marketing?

Marketing is the process of planning andexecuting the conception, pricing, promotion,and distribution of ideas, goods, and servicesto create exchanges that satisfy individual and

organizational objectives.

More simply: Marketing is all aboutsatisfying needs (...profitably andfairly)!!!


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Marketing is an Exchange of Value

An exchange is the process by which sometransfer of value occurs between a buyer and aseller. At least two people or organizations must be willing to

make a trade, and

Each must have something the other values.

Most exchanges occur in the form of a monetarytransaction.


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Why is Marketing

Important? Marketing Creates Utility Form Utility

Place Utility

Time Utility

Possession Utility

Marketings Role in the Firm

A firms marketing-related decisions must affect andbe affected by its other operations such as accounting

and manufacturing.


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Why is Marketing Important?

Marketings Role in Our Daily Lives Marketings Role in Society


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Production Concept

Production Concept

Product Concept

Product Concept

Selling Concept

Selling Concept

Marketing Concept

Marketing Concept

Consumers prefer products that arewidely available and inexpensive

Consumers favor products thatoffer the most quality, performance,

or innovative features

Consumers will buy products only if

the company aggressivelypromotes/sells these products

Focuses on needs/ wants of targetmarkets & delivering value

better than competitors

Company Orientations Towards

the Marketplace


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When Did Marketing Begin?

Product OrientationProduct Orientation

Selling OrientationSelling Orientation

Customer OrientationCustomer Orientation

Most Efficient Production &DistributionSellers Market

Satisfies Customers Needsand Wants

Total Quality

New Era OrientationNew Era OrientationBenefits to Customers, PlusFirms Employees,Shareholders, and Communities.

Marketing as a Sales FunctionBuyers Market


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The PILLSBURY

First Era in 1869 - 1930s.The idea for the formation of the company

came from the availability of high quality

wheat and the proximity of water power NOT from the availability and proximity of

growing major market areas or the demand

for better less expensive, more convenientflour products.

The principal concern here was with

PRODUCTION


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The PILLSBURY

In this Era The companys Philosophymight have been stated as: We are

professional flour millers. Blessed with a

supply of the finest North American wheat,plenty of water power, and excellent milling

machinery, we produce flour of high

quality. Our basic function is to mill highquality flour, and of course we must hire

salesman to sell it just as we hire

accountants to keep our books.


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The PILLSBURY

Second Era in 1930s 60s (Sales

Orientation).

This was the era of sales when for the first

time the co began to be highly conscious of

the consumer, her wants and her prejudices

as a key factor in business equation. The first

step along the road to become a marketingcompany has been taken.

The principal concern here was with SALES.


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The PILLSBURY

In this Era The companys Philosophy might have

been stated as: We are a flour milling company,

manufacturing a number of products for the

consumer market. WE must have a first ratesales organization which can dispose of all the

products we can make at a favorable price. We

must back up this sales force with consumer

advertising and market intelligence. We want oursalesman and our dealers to have all the tools

they need for moving the output of our plants to

the consumer.


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The PILLSBURY

Second Era in 60s and beyond (Marketing

Orientation).

This was the era of product research and for the

first time co felt the need to select the best newproducts. The first step the co took to set up a

marketing department which developed criteria for

determining which products to market. The criteria

were nothing more or less than those of theconsumer itself.

The principal concern here was with Consumer

Markets


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The PILLSBURY

In this Era The companys Philosophy might havebeen stated as: We make and sell products for

consumers.


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MarketIntegratedmarketing

Profits throughcustomer

satisfaction

Customerneeds

(b) The marketing concept

Factory

Existing

products

Selling and

promotion

Profits through

sales volume

Startingpoint Focus Means Ends

(a) The selling concept

Customer Delivered Value


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How is Marketing Done?

Marketers Develop and Implement a Marketing

Plan Based on the Following Information:

Organizations Strengthsand Weaknesses

Organizations Strengthsand Weaknesses

Organizations Overall ObjectivesOrganizations Overall Objectives

Opportunities and Threats to the

Organization in the Marketplace

Opportunities and Threats to the

Organization in the Marketplace


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The Substance of Marketing

Want To Enter the Watch Business!!!

You Must Make A Set Of Important(Marketing Related) Decisions!!!

WHAT ARE THESE DECISIONS???


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The Probable Decisions are!!!

To which consumer should I sell my

watches?

How should I define the consumer I hope to

serve?Should I think in terms of geography,

perhaps the country in which my consumer

lives?Or may be the consumers income or sex

or fashion orientation is more important?


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What Product or Products should I offer?

For example should I offer digital or

analog, ornate or simple, multifunction orsingle function?

How much should I charge for each watch?

Should I offer discounts to people who pay

cash or who buy in large amounts?


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Should I sell direct to consumers or throughstores, and if through stores, what type of

stores?

Do I want to offer my product in severaltypes of outlet or only in one type?

How do I select and service the particular

outlets I Chose?

Finally, How do I convince the store to carry

my brand?


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How should I communicate to the

consumers to whom I wish to sell?

Do I use advertising, and if so in whatmedia?

How do I reach the stores? Do I use sales

people?

Should the salespeople visit the stores orshould they just telephone them?


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Needs, Wants and Benefits

NeedsNeeds

WantsDesire to Satisfy Needs in

Ways That are Culturally andSocially Influenced. Lets go

eat a cheeseburger.

BenefitsOutcome Sought by a

Consumer That MotivatesBuying Behavior. Now Im

full; I feel better.

Difference Between aConsumers Actual State andSome Ideal or Desired State.

Im Hungry!


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Markets, Consumers and Demand

Market

Customers

who share a commonneed that can besatisfied by a

specific productAND

who are willing, ableand have the authorityto make the exchange.

Customers

PotentialCustomers

DEMAND


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The Four Ps: The ToolsThe Four Ps: The Tools

Marketing

Mix

Product

Price Promotion

Place

The Four Cs: The EndsThe Four Cs: The Ends

Customer

Solution

Customer

Cost

Communication

Conven-ience


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The Other 4Cs: The Participants

Company

Consumer Channel

Competitors

The

Participants


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Marketings Tools: The Marketing Mix

ProductGood, Service, Idea, Place, Person

ProductGood, Service, Idea, Place, Person

PriceAssignment of Value

PriceAssignment of Value

PlaceAvailability of Product

PlaceAvailability of Product

PromotionActivities to Inform Consumers

PromotionActivities to Inform Consumers

Tools that Are Used Together to Create a Desired

Response Among a Set of Defined Customers

Tools that Are Used Together to Create a Desired

Response Among a Set of Defined Customers


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Customers

Front-line people

Middle Management

Top

Management

Traditional Organization Chart


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Customer-Oriented

Organization Chart

Customers

Front-line people

Middle management

Top

manage-

ment

Cus

tomers

Custom

ers


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Evolving Views of Marketings Role

a. Marketing as an

equal function

FinanceProduction

Marketing Humanresources

b. Marketing as a more

important function

Finance

Humanresources

Marketing

Production


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c. Marketing as the

major function

Marketing

Fina

nce

Hum

an

resou

rces

Production

d. The customer as the

controlling factor

Customer

Hu

man

resou

rces

Finan

cePro

duction

Ma

rketing


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e. The customer as the controllingfunction and marketing as the

integrative function

Customer

Marketing

Production

Hum

an

resources

Fin

ance


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Changing Marketing Architecture

INDUSTRIAL AGE

(Past)

Customer Driven

One-way

Finite Reach

Time Delay

InformationConstraints

INFORMATION AGE

(Current and Future)

Customer Driving

Infinite Reach

Time Saving

Information

Abundance


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How Marketing is Changing?

From Exchange / Transaction to Customer Value

From Suppliers Making Marketing Decisions to

Customers Driving Those Decisions

From Physical Channels to Seamless Channels

From Market Segments to Segments of Size One

From Personal Based Communication Campaign

to Permission Based Communication Campaign


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Views on the Marketing Processes

5-C Analysis

Customer

Competitor

Company

Context

Collaborators

S-T-P Marketing

SegmentationTargeting

Positioning

4 Ps Marketing Plan

ProductPricing

Promotion

Place

The Functional View


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Views on the Marketing Processes

Understanding

CustomerValue

Creating

CustomerValue

The Process View

Capturing

CustomerValue

Delivering

CustomerValue

Sustaining

CustomerValue


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Understanding Customer Value

Value is defined as the perceived worth inmonetary units of the of the set ofeconomic functional / technical and

psychological benefits received by thecustomer in exchange for the price paidfor for a product offering, taking intoconsideration the available offerings andprices.

- Anderson, Jain and Chintagunta(1993)


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Understanding Customer Value

Psychological

Functional Economic


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MARKETINGS CONTRIBUTION

WITHIN THE FIRM

Corporate / Business Unit Level

The Policy Question: How to develop a

Customer Focus?

Marketings Answer: Bring the Voice of the

customer in the organization

Tools: Mkt Research, Customer Visits, Market

Orientation Audits


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WITHIN THE FIRM

Product Level

The Policy Question: How to best adapt to the

market?

Marketings Answer: Develop a value

proposition and competitive positioning based

on customer needs

Tools: Customer and Competitor analysis


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WITHIN THE FIRM

Executional Level

The Policy Question: How to best take the

product to market?

Marketings Answer: Integrate the product,

pricing, placement and promotion policies to

deliver what the target market wants.

Tools: Consumer Research, Product Testing,Communication Research, Channel Audits etc.


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Plea From an Anonymous

Customer

Dont Sell me Clothes, Sell me a sharp appearance,style and attractiveness.

Dont Sell me a House, Sell me comfort, contentment,a good investment and a pride of ownership.

Dont Sell me Toys, Sell my children happy moments.

Dont Sell me Insurance, Sell me peace of mind, and agreat future for my family and me.

Dont Sell me Books, Sell me pleasant hours and the

profits of knowledge. Dont Sell me Computers, Sell me the pleasure and

profits of the miracles of modern technology.


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The Moral is..

Dont Sell me THINGS, Sell me Ideas,

Feelings, Self-respect, Home, Life and

Happiness.

PLEASE DONT SELL ME

THINGS


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Scanning the MarketingScanning the Marketing

EnvironmentEnvironment


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Objectives

Tracking & Identifying Opportunities in the

Macroenvironment

Demographic, Economic, Natural,

Technological, Political, & Cultural

Developments


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Macroenvironmental Influences on

the Marketing Mix

MarketingMarketing

MixMix

PhysicalPhysical

environ.environ.

Socio-Socio-

culturalcultural

Demo-Demo-

graphicgraphic

PoliticalPolitical

&&

LegalLegal

EconomicEconomic

&&

CompetitionCompetition

ScienceScience

&&

Tech.Tech.

M i t


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Macroenvironment:

Physical Environment

Ecological systems

Natural resources

Climate

Geography

Pollution levels

Water & Air


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Demographic Environment

Worldwide Population GrowthWorldwide Population Growth

Population Age MixPopulation Age Mix

Ethnic MarketsEthnic Markets

Household PatternsHousehold Patterns

Educational GroupsEducational Groups

Geographical Shifts in PopulationGeographical Shifts in Population

Shift from Mass Market to Micro marketsShift from Mass Market to Micro markets


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Economic Environment

Income DistributionIncome Distribution

Subsistence economiesSubsistence economiesRaw-material-exporting economiesRaw-material-exporting economies

Industrializing economiesIndustrializing economies

Industrial economiesIndustrial economies

Savings, Debt, &

Credit AvailabilitySavings, Debt, &

Credit Availability


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NaturalEnvironment

Higher PollutionLevels

Higher PollutionLevels

Increased Costsof Energy

Increased Costsof Energy

Shortage ofRaw Materials

Shortage ofRaw Materials

Changing Roleof Government

Changing Role

of Government


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Political-LegalEnvironment

Political-Legal

Environment

Increased

Legislation

Increased

Legislation

Special-Interest

Groups

Special-Interest

Groups


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Social/Cultural Environment


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THE FOUR Cs

Company


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The Four Cs: Company

Total organization

Interactive

Flexibility Entrepreneurial approach

Intrapreneurial approach


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The Four Cs: Customers -

Economic Utility

Form Utility

Place Utility Time Utility

Possession Utility


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The Four Cs: Competitors

Levels Product class

Product category

Brands

Type

Price

Form

Time

Location


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Four Types of CompetitionFour Types of Competition

Price-basedPrice-based

Quality-basedQuality-based

Time-basedTime-based

Location-basedLocation-based


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The Four Cs:Collaborators

Alliances

Networks

Informal partnerships Suppliers

Virtual corporations

1 Marketing Intro....UNDERSTANDING MARKETING

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