lecture 1_fundamentals of marketing

8/7/2019 lecture 1_fundamentals of marketing

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Course: Global Marketing

Lecturer: Mahreen Mamoon

Academic Year Fall 10/11

Lecture 1

Fundamentals of Marketing


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What is Marketing?


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Marketing is not concerned simply with selling andadvertising. This common misconception of

marketing only reflects one part of something knownas the Marketing Process

Chartered Institute of Marketing: Marketing isthe management process responsible for

identifying, anticipating and satisfyingcustomerrequirements profitably.

Philip Kotler (2005:12): Marketing meansmanaging markets to bring about exchangesandrelationships for the purpose of creating

value and satisfying needs and wants. American Marketing Academy: Is the process of

planning and executing the conception, pricing,promotion, and distribution of ideas, goods,services to create exchange that satisfies

individual and organisational goals


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Customer Needs, Relationships and

Exchange not just selling and adverts!

At the heart of modern marketing is the concept of

customer need

Theodore Levitt (Marketing Myopia, HBR 1960): products

and services are problem solvers that satisfy the needs ofindividual consumers

A consumer who enters a hardware store looking to buy a

inch drill actually needs a inch hole. Therefore the

company who is best able to fulfil this need will obtainoverriding competitive advantage

As a consequence of this marketing philosophy modern

organisations put customers and their needs at the centre of

their operations


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Two opposing marketing philosophies

Product Consumer (Production & Selling Concept)

Build a better mouse trap and the world will beat a

path to your door (R W Emerson)

Focus is on developing product and on selling it, noton consumer needs

Consumer Product (Marketing Concept)

Find out about customer needs and competition

(Market research, Market Segmentation, Positioning)

Product innovation follows changing customer needs

not the other way around


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The Production & Selling Concept in Marketing

Customers will prefer products that are widely

available and inexpensive

Strategy: cost reduction, product development, mass

production Focus: selling what company makes rather than what

market demands

Features: aggressive selling and promotion, uninspired

communication

Example:

Henry Ford any colour

providing its black


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The Marketing Concept

Vantage point: Customer Needs/Wants/Satisfaction

Adaptation of product according to changing

demands and delivering desired satisfactions more

effectively than competitors

Creating demands/desires/markets

Delivering BetterValue than the competition

(Competitive Advantage)

Societal Marketing

Concept: corporations also needto take wider societal welfare of

communities into account(environmental problems, global poverty,

shortage of raw materials)


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Core Marketing Concepts: Needs, Wants and

Demand

Needs, wantsand demands

Exchange, transactionsAnd relationships

Markets

Marketing offers

Values andsatisfaction

Needs can be defined ashuman states of deprivation

physical needs such as food

and warmth, individual needs

such as security or happiness

and social needs such as

status or acceptance.

Wants can be seen as the

form that human needs take

when they are shaped by

culture and individualpersonality (Desires).

Demands are wants that are

reinforced by the financial

power to realise them.


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Market offerings are what companies or individuals

offer to satisfy human needs or demands. They are

often described as value propositions bundles of

benefits which promise to satisfy needs and wants.

Products - BMW, Mobile Telephone, Sony PSP

Services - insurance policy, Barclays bank

account, operation on the NHS

Experiences - Club Med holiday, Tom Cruise Film,

Arsenal football match

Ideas - socialism, capitalist freedom, protest,environmental concerns

Marketers increasingly try to combine all three to

create powerful brands which offer meaning and

uniqueness

Market Offerings


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Customer Value and Satisfaction

Customer Value can be seen as the difference thebenefits the customer derives from owning or usinga product or service and the costs in purchasing it(money, time, effort). Benefits can be functional(rational) or representational (emotional).

Rational and emotional needs!

Customer Satisfaction is the perceivedperformance of a product relative to a customersexpectation. Quality, service, image are key factorshere.

In a competitive market environment the value,satisfaction and quality derived or promised fromone product e.g. a Mercedes - is relative to that ofanother e,g. a BMW or Lexus.


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The Marketing Process

Situation Analysis

Marketing Strategy

Marketing Mix Decisions

Implementation & Control


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Situation Analysis Examine the environmentwhich the company operates in both internal andexternal to find whether there is a current gap inthe market and whether the company is capable offilling this. Involves environmental scanning.

Marketing Strategy Once an opportunity to satisfyunfulfilled customer needs (a potential market) isdiscovered, market research will be required so asto target consumers, segment them into smaller

groups, position product in relation to price, qualityand competitors and create viable valuepropositions for the targeted markets.


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Marketing Mix Decisions formulation of detailedplans for the active marketing of the product. Thiswill include product specifications, pricing levels,distribution (or place) channels and promotioncampaigns. Each of these four elements must

interrelate and complement each other.

Implementation and Control Once the marketingplan has been completed the product is launchedand offered to the market. Constant feedback onthe market performance of the product should beestablished so as to facilitate change andadjustment in the marketing mix over time to ensurelong-term market success and dialogue withconsumers.


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The Marketing Environment

The marketing environment is comprised of theactors and forces outside marketing that affectmarketing managements ability to develop andmaintain successful relationships with its target

customers The constantly changing environment that

surrounds the market means that the customer product organisation relationship is never stable(Example: I-Pod)

The constantly changing nature of the marketingenvironment can be seen as a threat or anopportunity

The ever changing marketing environment regularlyenvironmental scanning


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The Marketing Environment

The Internal Environment consists of theemployees, groups, departments, divisions and overallstructure of the organisation. It also encompassesother intangibles such as organisational culture andethos.

The Micro-Environment incorporates the forcesclose to the company that affect its ability to serve itscustomers - the company, market channel firms,customer markets, competitors and publics (financial,media, governmental public, citizen groups), the overall

value delivery system. The Macro-Environment includes the larger societalforces demographic, economic, natural, technological,political and cultural forces. While the organisation isless able to influence these it should be able to adapt

to them especially in the medium to long-term.


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Environmental analysis

Shortages of raw materials such as oil and coal

Increased cost of energy

Increased pollution

Government intervention in natural resourcemanagement

Technological Environment: Fast pace oftechnological change; introduction of the internet

Political and Legal Environment: protectingcompanies, consumers, protecting the interests of

society; growth of public interest groups Cultural and Social Environment: shifts in cultural

values (body, marriage, sexuality,)


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Environmental Scanning

As an organisations environment is in constant fluxit should be constantly scanned for changes will

can impact on its market operations.

There are two standard ways of doing this:

SWOT analysis: Strengths, Weaknesses,Opportunities, Threats. This is often used to

examine the Microenvironment but does include

the Macro-.

PEST(LE) analysis:P

olitics, Economics, Social,Technological, Legal, Environmental

lecture 1_fundamentals of marketing

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