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BMM4422Marketing Fundamentals
Week 1
THE NATURE OF MARKETING
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Key Objectives
To Reflect on the following Questions:-
What is Marketing?
How Marketing has Developed?
How Marketing Relates to Business Performance?
The Scope of Marketing?
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…so what is marketing all about?
Marketing plays a key role in the success of virtually all organisations!
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The Marketing Concept
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The modern marketing concept requires
A focus on customer satisfaction
An integrated effort throughout the company and..
A belief that corporate or organisational goals can be achieved through customer satisfaction
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The Marketing Concept
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Marketing conceptThe achievement of corporate
goals through meeting and exceeding customer needs
better than the competition
Customer orientation
Corporate activities are focused upon
providing customer satisfaction
Integrated effort
All staff accept the responsibility for
creating customer satisfaction
Goal achievementThe belief that
corporate goals can be achieved through
customer satisfaction
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…so how does an organisation achieve customer satisfaction?
…by creating customer value!
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How is customer value created?
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Creating Customer Value
Product benefitsService benefitsRelational benefitsImage benefits
Monetary costsTime costsEnergy costsPsychological costs
Positive NegativeCustomer value
Perceivedsacrifice
Perceivedbenefits
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What is the key message that Innocent is trying to convey in this advert?
Innocent is highlighting a tangible benefit of its product to potential consumers i.e. healthy ingredients. Innocent outlines that the ingredients of their product contribute to customers' health requirements by providing 2 of their 5 a day. Innocent are conveying this tangible benefit in order to effectively position themselves within the healthy drinks sector.
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L’Oreal ElvivePresents
favourable benefits
What are they?
The benefits might include intangible benefits such as feeling good, increased attractiveness and self confidence. Tangible benefits might be enhanced hairstyling, fresh fragrance, shiny hair.
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Creating Customer Satisfaction
It is not enough to simply match performance and expectations.
Expectations need to be exceeded so that customers are delighted with the outcome to ensure commercial success
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Creating Customer Satisfaction
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Delight
Neutral
Dissatisfaction
Absent FulfilledPresence of the characteristic
Cus
tom
er s
atis
fact
ion
‘Delighters’
‘More is better’
‘Must be’
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The big problem for marketers is that they must constantly strive to offer more, finding new ways to delight consumers!
Innovative thinking and listening to customers are key ingredients to this.
So obviously marketers are always trying to delight their customers.
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Let’s think about Customer Value for a minute!There are 4 forms of customer value
Price value-powerful motivator for consumers
Performance value- some consumers are more motivated by product performance
Emotional Value- here we are talking about perception
Relational value- a personal factor relating to levels of service; organisations are able to develop relationships with customers to increase lifetime value
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The primary objective is to create a clearly
defined customer value proposition or
unique selling point so that
customers return time and time again.
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What is the term that we use when a Company has a strong USP that has not been copied by another company?
Competitive advantage
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Essentially, Marketing is about Delivering value to Customers at a Profit
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Marketing has its origins in the Industrial Revolution, as production became cheaper, products more sophisticated and consumers more demanding.
Distribution needed to become more sophisticated and it became more important to inform customers about products.
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Productionorientation
Salesorientation
Customerorientation
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Market Versus Internally Driven BusinessesMarket driven businesses
Customer concern throughout business
Know customer choice criteria and match with marketing mix
Segment by customer differences Invest in market research and track
market changes Welcome change Try to understand competition Marketing spend regarded as an
investment Innovation rewarded Being fast Strive for competitive advantage
Internally orientated businesses
Convenience comes firstAssume price and product performance are the key to most salesSegment by productRely on anecdotes and received wisdomCherish the status quoIgnore competitionMarketing spend regarded as luxuryInnovation punishedStick with the sameWhy rush?Happy to be me-too
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The Marketing Mix(also known as the Marketing Concept)
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Product
The Marketing Mix Price
Place
Promotion
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An Effective Marketing Mix
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Effective marketing
mix
Matches customer needs
Creates a competitive advantage
Well balanced
Matches corporate resources
Effective marketing
mix
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Place
PromotionPrice
Product
C
Each element is a controllable variable, which has to be managed to meet the needs of the defined target group. All elements are linked and
support each other.
Marketing Mix
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Selectionof TargetMarket
All Four Ps Contribute to the Whole
Product
Place
Promotion
Price
Understanding the Target Market Leads to Good Strategies!Understanding the Target Market Leads to Good Strategies!
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Product Decisions
Branding Quality Features
We must remember that Marketing is fundamentally about providing the correct bundle of benefits to the end user.
Benefits offered
Marketing Mix - Product
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Examples of Channels of Distribution
AOL Nissan DelMonte
Procter &Gamble
Wholesaler
Wholesaler
Retailer
Consumer
Wholesaler
RetailerRetailer
The Place Element of the Marketing Mix
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Pricing Strategies
Penetration
Skimming
Competition
Product Line
Bundle
Psychological
Pricing is the only mix which generates a turnover for the organisation. The remaining 3p’s are the variable cost for the organisation. It costs to produce and design a product. It costs to distribute a product and costs to promote it. Price must support these elements of the mix. Pricing is difficult and must also reflect supply and demand relationship.
The Pricing Element of the Marketing Mix
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Marketing and Business Performance:
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Does Marketing work?
Market Orientation
Improved business
performance
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The Scope of Marketing
Marketing activity is used in various fields such as not –for profit,Sport and music
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Chapter SummaryThe marketing concept and market orientation is a business philosophy that puts the customer at the centre of things.Customer value is the difference between perceived benefits and perceived sacrifices involved in consuming a product or service.Customer value is delivered through the marketing mix.There is a strong relationship between the marketing philosophy and business performance.The scope of marketing is broad, involving business and non-business contexts.
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