l1 the nature of marketing

8/8/2019 L1 the Nature of Marketing

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The Nature of Marketing

Relevant Reading

Chapter 1 of Jobber & Fahy


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Learning Objectives

To introduce and outline the marketing concept

To introduce the concepts of customer satisfaction andvalue

To identify the relationship between the marketingconcept and business performance

To introduce the role and importance of marketingplanning

To demonstrate that marketing has a role to play in not-for-profit as well as profit making organisations


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Marketing influences all of us

University of Greenwich Study

Only 8% of respondents could differentiate between tap and

bottled water.

University of Plymouth Study Asked respondents to assess various waters based on

perceived purity, taste, price and packaging

Tap water was substituted for mineral water contents

Respondents perceived differences that did not exist, andindicated that the brands with the best packaging were thepurest, tastiest and most expensive


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Price, Packaging & Perception

At the time of the study Sainsburys own brand water cost19p per litre, whilst Ty Nant cost 1.70 per litre

Conclusion if marketing affects us in such artificial

circumstances, can you be sure that your choice of coffee is

made on taste grounds, or your jeans on the basis of quality?


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Good Marketing is

not just advertising

not about persuading people to buy products or

services that they do not want or need

is concerned with identifying and satisfying

customers needs and wants marketing research is

therefore vital!


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Marketing Definition

The Chartered Institute of Marketing define marketing asThe management process which identifies, anticipates andsupplies customer requirements efficiently and profitably

Emphasis is therefore on customers a market orcustomer orientation

Flaws of this definition: assumes profitability only objective;organisations must always make a profit strategicallythere may be reasons for not doing so in the short term


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The Marketing Concept

The achievement of corporate goals through meeting andexceeding customer needs better than thecompetition. (Jobber & Fahy, 2009: 3)

Procter & Gamble must win at the first and second

moments of truth that is, in the shop where the customerdecides which brand to select and in the home when he /she uses it. (Jobber & Fahy, 2009: 3)

Customer satisfaction should be the driving force within theorganisation

Customer satisfaction / marketing concept are not the soleresponsibility of the marketing department


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Marketing Concept / Orientation

8

Marketing Concept

Customer Orientation Integrated Effort Goal Achievement

T h e a c h i e v e m e n t o f corporate goals throughmeeting and exceedingcustomer needs better than

the competition

Corporate activitiesare focused uponproviding customersatisfaction

All staff accept ther espons i b i l i t y f o r creat ing customersatisfaction

T h e b e l i e f t h a tcorporate goals canbe achieved throughcustomer satisfaction

Source: Jobber & Fahy (2009: 4)


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Traditional Alternative BusinessOrientations

Sales orientation - aggressive hard selling will sell

any product

Product orientation - a good product will sell itself /

excessive focus upon product features (at expense

of customer needs)

Production orientation - almost exclusive focus upon

production efficiency and effectiveness


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Traditional Business Orientation -Examples

Statement 1 - We believe that our products are the most

innovative on the market. Our quality is second to none and

weve gone all out to develop the best design team in thebusiness

Statement 2 -Our salespeople understand how to get the

customer to sign on the dotted line. Most customers really

want to purchase our product when they see it: they just needa little push to make up their minds.


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Traditional Business Orientation -Examples

Statement 3 -Customers can be fickle sometimes. Weve just

had to change a specification because the customer wanted

something else at the last minute. This also affected ourproduction and delivery department, and everything had to berecosted. Still at least everyone pulled together on this one.

Statement 4 - The customer can have any colour so long as it

is black


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Marketing and the rest of theorganisation

Viewed as a philosophy, everybody in an organisationshould be a part-time marketer

Marketing is so basic that it cannot be considered to bea separate function. It is the whole business seen fromthe point of view of its final result, that is, from thecustomer's point of view". (Drucker, 1973: 24)


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Jobber & Fahy BusinessOrientations

Jobber & Fahy (J & F) reduce the traditional orientations tojust two alternatives marketing orientation and productionorientation

When J & F refer to production orientation they areeffectively combining all of the non-marketing orientations

J & F are therefore using production orientation in a muchbroader manner than that described under the traditionalbusiness orientations perspective

J & F also refer to production o. as internally driven


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Production Orientation

ProductionCapability

ManufactuerProduct

AggressiveSales Effort

Customers



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Marketing Orientation

CustomerNeeds

PotentialMarket Opport.

MarketingProdts & Serv.

Customers



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Market versus Internally Driven Businesses

Market driven businesses

Customer concern throughoutbusiness

Know customer choice criteria andmatch with marketing mix

Segment by customer differences

Invest in market research and track

market changes

Welcome change

Internally orientatedbusinesses

Convenience comes first

Assume price and productperformance are the key to mostsales

Segment by product

Rely on anecdotes and

received wisdom


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Market versus Internally Driven Businesses

Market driven businesses

Try to understand competition

Market spend regarded as aninvestment

Reward innovation

Search for latent market

Being fast

Strive for competitive advantage

Internally orientatedbusinesses

Cherish the status quo

Ignore competition

Marketing spend regarded

as luxury

Innovation punished

Stick with the same

Why rush?

Happy to be me-too


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Creating Customer Value

Product benefits

Service benefits

Relational benefits

Image benefits

Monetary costs

Time costs

Energy costs

Psychological costs

CustomerValue

Perceived

Benefits

Perceived

Sacrifices



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Creating Customer SatisfactionDelight

Neutral

DissatisfactionAbsent Fulfilled

Presence of the characteristic

Customers

atisfaction

Delighters

More is better

Must be



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The Marketing Mix (i)

Product

Price

Place Promotion

People

Processes

Physical evidence

4 Ps

7 Ps - ServiceExtended

Marketing Mix


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The Marketing Mix (ii)


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An Effective Marketing Mix

Effectivemarketing

mix

Matchescustomer needs

Creates acompetitiveadvantage

Wellbalanced

Matches corporateresources



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Market Driven Management

Sharedvalues and

beliefs

Customerfocus

Market-ledstrategy

Structureand

systems

Implementation

Marketintelligence

Shared valuesand beliefs

customer first

Marketintelligence

Skills in understandingand responding to

customers

Structure andsystems

structure based onstrategy

team work

Market-ledstrategy

Linking distinctivecompetencies tomarket opportunities

Competitive advantagethe driving force

Implementation

people

incentives

communications

persuasion


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Efficiency & Effectiveness (i)

Marketers should ensure that their organisations marketingis both efficient and effective

Efficiency is concerned with inputs and outputs. Anefficient firm produces goods economically it does thingsright. The benefit is that cost per unit of output is low (Jobber & Fahy, 2009: 12)

Effectiveness means doing the right things. This impliesoperating in attractive markets and making products thatconsumers want to buy. (Jobber & Fahy, 2006: 12)


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Efficiency & Effectiveness (ii)

Ineffective

Goes out ofbusiness quickly

Dies Slowly

Survives

Does wellThrives

Effective

Efficient

Inefficient



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Marketing and BusinessPerformance

Market OrientationImprovedbusiness

performance


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Not for Profit and Small BusinessMarketing

Marketing principals increasingly being used by not-

for-profit organisations, e.g. charities, government

agencies Rising expectations of users of these organisations

Often, their environment is becoming more competitive

Objectives - performance instead of profit

Small Businesses Necessity not a luxury


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Marketing Planning Process & relevantchapters in set text book

Chapters 2, 3 & 4

Chapter 5

Chapters 6 to 11

Chapters 12


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Ensure you are familiar with the various businessorientations that exist e.g. marketing orientation

Be able to differentiate between the four traditionalbusiness orientations, and the two advocated by Jobber &Fahy

Be able to outline the 3 key components of the marketingconcept, namely customer orientation, integrated effort andgoal achievement

Identify characteristics of market driven versus internallyorientated organisations

Outline what customer value is, and the elements thatcontribute to it

Key Concepts to Remember


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Discuss must be, more is better and delighters withregards to creating customer satisfaction

Identify elements of both the original and serviceextended marketing mix

Outline hallmarks of an effective marketing mix

Discuss dimensions of market-driven management

Distinguish between effectiveness and efficiency, andtheir implications for business performance

Key Concepts to Remember

l1 the nature of marketing

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