Introduction to Marketing

Course Facilitator: Khurshid Alam Swati

Lecture No: 1

Email your query to: Khurshidalamswati@yahoo.com

1st Week Objectives Definition of Marketing Importance and scope of Marketing Nature and Concept of Marketing Marketing and the society

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The New Economy - Trends

Extensive increase in buying powerbuying power A greater variety of goods and servicesvariety of goods and services A greater amount of information greater amount of information about practically anything A greater ease in interacting and placing and receiving placing and receiving

ordersorders An ability to compare notes compare notes on products and services

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What is Marketing…???

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The future is not ahead of us. It has already happened. Unfortunately, it is

unequally distributed among

companies, industries and

nations

Kotler on Marketing

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Important Terminologies

To explain marketing definition, we examine the following important terms: Needs, wants, and demands Products and services Value, satisfaction and quality Exchange, transactions, and

relationships Markets

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Needs, Wants, and Demands Needs: The most basic concept underlying marketing is that of

human needs. Human have many complex needs:

Physical needs for food, clothing, warmth, and safety Social needs or belonging and affection Individual needs for knowledge and self – expression E.g. Basic Needs- Hunger, Thirst. Such type product

don’t need pushing

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Wants(Cont’d) Want are the form taken by human needs as

they are shaped by culture and individual personality

People have almost unlimited wants but limited resources

They want to choose products that provide the most value and satisfaction for their money

E.g. Thirst – Water, Milk, Cold Drink, Coffee etc E.g. Baby Need is milk but he/she want CANDY etc Only Desire Create value and image of some product

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Demands (Cont’d) When backed by buying power, wants

become demands Consumers view products as bundles of

benefits and choose products that give them the best bundle for their money

Wants converts to demand when you have purchasing power E.g. Buying BMW, Stay in 7 star hotel Desire plus Purchasing power

Such Type products need Pushing by attracting potential buyers

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Needs, Wants and Demands

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Products and Services Product: Anything that can be offered to a market to

satisfy a need or want Tangible - building, vehicle, gadget, or clothing Intangible- insurance policy, JPG and MP3 files Result ownership of some thing

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Services Which are activities or benefits offered

for sale that are essentially intangible and do not result in the ownership of anything

Service it will not be uniform and will vary according to who is performing, where it is performed and on whom/what it is being performed Hotel Service, Rescue Service Should be efficient

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Values, Satisfaction, and Quality

Value: Sum total of benefits which a vendor promises a customer Perception about a product and its price The difference between what a customer gets from a

product, and what he or she has to give in order to get it

Satisfaction: Customer satisfaction depends on a product’s perceived

performance in delivering value relative to a buyer’s expectation

If the product’s performance falls short of the customer’s expectations, the buyer is dissatisfied

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Quality (Cont’d) Customer satisfaction is closely linked

to quality Quality has a direct impact on product

performance Quality can be defined as “freedom

from defects” TQM programs designed to constantly

improve the quality of products, services, and marketing processes

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Exchange, Transactions, and

Relationships Exchange : The act of obtaining a desired object from

someone by offering something in return Transaction : A trade between two parties that involves at least

two things agreed – upon conditionsconditions a time of agreement, and a place of agreementplace of agreement

Cash involvement Cash involvement Relationship marketing : The process of creating, maintaining, and

enhancing strong, value – laden relationships with customers and other stakeholders

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Markets

The set of all actualactual and potentialpotential buyers of a product or service

A simple marketing system

Industry (a collection

of sellers)

Market (a collection of buyers)

Communication

Products / Services

Money

Information

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What is a Market ? According to Kotler (2004), “a market

consist of all the potential customers potential customers sharing a particular need or want need or want who might be willing and able to engage in exchangeexchange to satisfysatisfy that need or want”

Source: Kotler, P. (2004), Marketing Management, Prentice-Hall, Englewood Cliff, NJ

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What is Marketing? Marketing is the human activity

directed at satisfyingsatisfying human needs needs and wants and wants through an exchangeexchange process

(Kotler 1980)NEW view of marketing:

Satisfying customer needs

OLD view of marketing:

Making a sale —“Telling and selling”

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“The right product, in the right place, at the right time, and at

the right price”Adcock et al Adcock et al •Managing Profitable customer Profitable customer

relationshipsrelationships•The process by which company create value for customers value for customers and build strong customer relationships customer relationships in order to capture value from customers in return.

•E.g. Wall Mart- Always Low Price. Always•Dell: Be Direct- Door Step Service

Marketing Defined - Importance Many people think of marketing only as selling and advertising Selling and advertising are only the tip of the marketing ice-

berg Marketing is one of three key core functions that are central to

all organizations Marketers act as the customers’ voice within the firm and

marketers are responsible for many more decisions than just advertising or sales: 1. Analyze industries to identify emerging trends2. Determine which national and international markets to

enter or exit3. Conduct research to understand consumer behavior4. Design integrated marketing mixes – products, prices,

channels of distribution, and promotion programs

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What is Marketed? Goods – Laptops, Mobiles, Printers Services – Hotel, Hospital, Repairing Events - Sports event, music festival, fair or concert Experiences – Sharing ideas and plans Persons – Cultivate attention towards a person Places – Swat, Pakistan Monument Organizations- Dell, Apple, Nokia, Q Mobile Information – Media , Advertising and publicity Ideas – Research & Development

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Marketing Process1. Understand the market place and customer need and wants2. Design customer driven and attractive marketing strategy

Ads, Publicity, Sampling etc Mufti Ihsan Scandal - Religious oriented strategies

3. Construct integrated marketing program that delivers superior value

Create image of company and product or service Personal marketing, E marketing etc

4. Build profitable relationship and create customer happiness Take feedback after some time Long term customer relationship

5. Capture value from customer in return Tell to family, friends and society

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PricePrice

PromotionPromotion

PlacePlace

ProductProduct

The Four P’s-the “arrow”

CONTROLLABLE FACTORS AFFECTING MARKETING

DECISIONS

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SocialSocial

NaturalNatural

EconomicEconomic

TechnologicTechnologic

Political and LegalPolitical and Legal

CompetitiveCompetitive

External Environmental

Factors

External Environmental

Factors

Helps identify market opportunities

UNCONTROLLABLE FACTORS AFFECTING MARKETING

DECISIONS

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The Goal of Marketing is:

To attract new customer by promising superior value, and to keep current customers by delivering satisfaction

Marketing, more than any other business function, deals with customers

Creating customer value and satisfaction are at the very heart of modern marketing thinking and practice

Some people believe that only large business organizations operating in highly developed economies use marketing, but sound marketing is critical to the success of every organization – whether large or small, for profit or non – profit, domestic or global

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The Goal of Marketing is: (Cont’d)

Who are our existing / potential customers?

What are their current / future needs? How can we satisfy these needs?

Can we offer a product/ service that the customer would value?

Can we communicate with our customers? Can we deliver a competitive product of service?

Why should customers buy from us?

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