Marketing 1.3
Chapter 1 – What is marketing?
The main difference between marketing and selling is the difference between a society in which
consumers can choose from products and services designed to meet their specific needs and wants,
and a society in which people have very little if any choice.
The main purpose of marketing-oriented companies is to anticipate and satisfy the needs and wants
of the customer.
Marketing builds a bridge between production and consumption. Selling is ‘trying to get rid of what
you have on the shelves’. Marketing is ‘making sure that what you have on the shelves is what the
customer wants’.
If any of the 4 elements of the marketing mix is lacking, a product will not achieve the sales and profit
objectives as listed in its annual plan or marketing plan. Not only will the company fail to maximise
sales and profits, the target market will probably be left with unsatisfied needs and wants.
Marketing is the process of developing, pricing, promoting and distributing products, services or
ideas that are tailored to the market.
The marketing mix:
- Product: goods, services or ideas that meet the wants and needs of the customer
packaging, brand image, product image, product range and customer service.
- Price: the amount of money exchanged for a product or service also competitors pricing
and how an increase or reduction in the price is likely to affect demand.
- Place: how the product gets into the buyers hands distribution
- Promotion: the suppliers activities to communicate with the market and to promote sales.
Companies must concentrate on the desires of a specific group of potential buyers the target
market.
Exchange process between buyer and seller:
Something of value: money labour, effort etc.
Buyer (market, demand) Seller (industry, supply)
Something of value: product, service, idea
MacromarketingMesomarketingMicromarketing
Macromarketing: at this level the role of marketing is described only in general terms. Primarily
interested in the system that a society has developed to arrange the exchange of goods and services
to ensure that its scarce resources will meet its needs as effectively as possible.
Mesomarketing: devision of labour, specialisation and the principle of exchange gave rise to a system
of production and trade in which different parties within society were depended on one another
the supply chain.
,Simplified supply chain for consumer products:
Producer
Product and Wholesaler Money and
product information market information
Retailer
Consumer
Micromarketing: the focus is on the individual firm
Marketing management is the analysis, planning, implementation and constant evaluation of all
activities designed to ensure that the products and services produced and provided by an
organisation are tailored to meet the needs and wants of potential customers as effectively as
possible.
Production product selling marketing relationship
Orientation orientation orientation orientation marketing
1900 1950 2000
Product orientation: everything possible to make its production process highly efficient
Product orientation: improve the quality
Selling orientation: buyers’ market
Marketing orientation: companies learned to tailor their products and services to meet the needs
and wants of the buyers more effectively. Market-oriented companies consider not only customers,
but also intermediaries and competitors.
Relationship marketing: companies are working to strengthen long-term relationships with suppliers.
Product orientation vs. marketing orientation p.41
Selling orientation vs. marketing orientation p.41
Transactional marketing vs. relationship marketing p.43
Society (human welfare)
Societal
Marketing concept
Company (profit motive) Consumer (satisfaction of needs)
The marketing concept is an attitude or mindset in which the needs and wants of customers are
factored into virtually every decision. This should be actively supported by senior management.
Marketing concept:
1. Customer satisfaction the firm must be dedicated to satisfying customer needs. To make
sure that customers are satisfied, we have to make choices: offering a very wide range or
focussing on certain groups. Marketing-oriented companies make sure that they provide
great customer service and that they handle customer complaints well.
2. Integrated approach the difference between a product- and marketing-oriented approach
is the extent to which the various activities are systematically integrated into the overall
marketing policy.
, 3. Broad business definition self-limiting definitions can lead to marketing myopia. These
companies fail to recognise that their cherished products may fall out of flavour.
To facilitate a rapid adjustment to the changing needs of the market, many companies now
choose to formulate a business definition as well as a mission in broad, customer-oriented
terms.
4. Competitive analysis firms understand products will someday be obsolete. Hopefully, the
company itself, rather than the competitor, is able to develop an alternative product or
service that replaces the existing products. Regular analysis of the competition is
indispensable if any company is to gain and develop competitive advantages.
5. Marketing research and target market selection managers can obtain information by
consciously observing the environment. Companies select segments on which to
concentrate.
6. Profit contribution it is important to know how much profit sales contribute to the
enterprise, is it satisfying a customer or a societal need?
Every company has to strive, for example by building brand equity, to make profit in the long
term.
By implementing a demarketing strategy companies are focusing on consumers that make for
example more calls and use other services, such as data bundles. Their objective is to gain the loyalty
of the most profitable subscribers.
The first task of marketing is to anticipate and identify the needs and wants of the market.
Marketing research on needs and wants
Ideas about ‘ideal’ products and services
Potential buyers: the market
Needs
Wants consumer behaviour
Search behaviour
Demand
Buying behaviour
Use of consumption
The second task is catering to demand with the 4P’s and 3R’s.
The 4P’s are necessary as marketing instruments, but have become less important as ‘weapons’ in
the fierce competitive battle.
The 3R’s:
Reputation: brand image
Relationship: interaction with customers
Response: marketing offers, customizing for each customer.
Increasing customer equity is the value of the relationships the company maintains with its
customers.
Customer equity can be increased by:
- Reducing the cost of getting new customers
- Retaining more customers longer
- Increases profits from retained customers by selling them.
More products at higher margins and with lower marketing costs.
Chapter 1 – What is marketing?
The main difference between marketing and selling is the difference between a society in which
consumers can choose from products and services designed to meet their specific needs and wants,
and a society in which people have very little if any choice.
The main purpose of marketing-oriented companies is to anticipate and satisfy the needs and wants
of the customer.
Marketing builds a bridge between production and consumption. Selling is ‘trying to get rid of what
you have on the shelves’. Marketing is ‘making sure that what you have on the shelves is what the
customer wants’.
If any of the 4 elements of the marketing mix is lacking, a product will not achieve the sales and profit
objectives as listed in its annual plan or marketing plan. Not only will the company fail to maximise
sales and profits, the target market will probably be left with unsatisfied needs and wants.
Marketing is the process of developing, pricing, promoting and distributing products, services or
ideas that are tailored to the market.
The marketing mix:
- Product: goods, services or ideas that meet the wants and needs of the customer
packaging, brand image, product image, product range and customer service.
- Price: the amount of money exchanged for a product or service also competitors pricing
and how an increase or reduction in the price is likely to affect demand.
- Place: how the product gets into the buyers hands distribution
- Promotion: the suppliers activities to communicate with the market and to promote sales.
Companies must concentrate on the desires of a specific group of potential buyers the target
market.
Exchange process between buyer and seller:
Something of value: money labour, effort etc.
Buyer (market, demand) Seller (industry, supply)
Something of value: product, service, idea
MacromarketingMesomarketingMicromarketing
Macromarketing: at this level the role of marketing is described only in general terms. Primarily
interested in the system that a society has developed to arrange the exchange of goods and services
to ensure that its scarce resources will meet its needs as effectively as possible.
Mesomarketing: devision of labour, specialisation and the principle of exchange gave rise to a system
of production and trade in which different parties within society were depended on one another
the supply chain.
,Simplified supply chain for consumer products:
Producer
Product and Wholesaler Money and
product information market information
Retailer
Consumer
Micromarketing: the focus is on the individual firm
Marketing management is the analysis, planning, implementation and constant evaluation of all
activities designed to ensure that the products and services produced and provided by an
organisation are tailored to meet the needs and wants of potential customers as effectively as
possible.
Production product selling marketing relationship
Orientation orientation orientation orientation marketing
1900 1950 2000
Product orientation: everything possible to make its production process highly efficient
Product orientation: improve the quality
Selling orientation: buyers’ market
Marketing orientation: companies learned to tailor their products and services to meet the needs
and wants of the buyers more effectively. Market-oriented companies consider not only customers,
but also intermediaries and competitors.
Relationship marketing: companies are working to strengthen long-term relationships with suppliers.
Product orientation vs. marketing orientation p.41
Selling orientation vs. marketing orientation p.41
Transactional marketing vs. relationship marketing p.43
Society (human welfare)
Societal
Marketing concept
Company (profit motive) Consumer (satisfaction of needs)
The marketing concept is an attitude or mindset in which the needs and wants of customers are
factored into virtually every decision. This should be actively supported by senior management.
Marketing concept:
1. Customer satisfaction the firm must be dedicated to satisfying customer needs. To make
sure that customers are satisfied, we have to make choices: offering a very wide range or
focussing on certain groups. Marketing-oriented companies make sure that they provide
great customer service and that they handle customer complaints well.
2. Integrated approach the difference between a product- and marketing-oriented approach
is the extent to which the various activities are systematically integrated into the overall
marketing policy.
, 3. Broad business definition self-limiting definitions can lead to marketing myopia. These
companies fail to recognise that their cherished products may fall out of flavour.
To facilitate a rapid adjustment to the changing needs of the market, many companies now
choose to formulate a business definition as well as a mission in broad, customer-oriented
terms.
4. Competitive analysis firms understand products will someday be obsolete. Hopefully, the
company itself, rather than the competitor, is able to develop an alternative product or
service that replaces the existing products. Regular analysis of the competition is
indispensable if any company is to gain and develop competitive advantages.
5. Marketing research and target market selection managers can obtain information by
consciously observing the environment. Companies select segments on which to
concentrate.
6. Profit contribution it is important to know how much profit sales contribute to the
enterprise, is it satisfying a customer or a societal need?
Every company has to strive, for example by building brand equity, to make profit in the long
term.
By implementing a demarketing strategy companies are focusing on consumers that make for
example more calls and use other services, such as data bundles. Their objective is to gain the loyalty
of the most profitable subscribers.
The first task of marketing is to anticipate and identify the needs and wants of the market.
Marketing research on needs and wants
Ideas about ‘ideal’ products and services
Potential buyers: the market
Needs
Wants consumer behaviour
Search behaviour
Demand
Buying behaviour
Use of consumption
The second task is catering to demand with the 4P’s and 3R’s.
The 4P’s are necessary as marketing instruments, but have become less important as ‘weapons’ in
the fierce competitive battle.
The 3R’s:
Reputation: brand image
Relationship: interaction with customers
Response: marketing offers, customizing for each customer.
Increasing customer equity is the value of the relationships the company maintains with its
customers.
Customer equity can be increased by:
- Reducing the cost of getting new customers
- Retaining more customers longer
- Increases profits from retained customers by selling them.
More products at higher margins and with lower marketing costs.
