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Chapter 1Chapter 1
Defining marketing for Defining marketing for
the twenty-first centurythe twenty-first century
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Definition of marketDefinition of market
Traditional View was a physical place where buyer and
seller gather to buy and sell goods.
Economics now define market as a collection of buyer
and seller who transact over a particular product and
product class.
Marketer view the sellers as constituting the industry andthe buyers as constituting the market .
Thus market is a set of actual and potential buyer of a
specific good or service.
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Definition of marketingDefinition of marketing
Marketing means managing markets to bring aboutprofitable exchange relationships by creating value and
satisfying needs and wants. Marketing is a societal process by which individuals andgroups obtain what they need and want through creating,offering and freely exchanging products and services of value with others.
Marketing is the process of planning and executing theconception, pricing, promotion, and distribution of ideas,goods, and services to create exchanges that satisfyindividual and organizational goals.
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Market:Market:
a collection of a collection of
buyersbuyers
Industry:Industry:
a collection of a collection of
sellerssellers
CommunicationCommunication
Products/ServicesProducts/Services
MoneyMoney
InformationInformation
Simple marketing system
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Marketing can create value/Utility
• Form utility
• Time utility
• Place utility
• Possession utility
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Definition of marketing ManagementDefinition of marketing Management
As the arts and science of choosing target markets
and getting, keeping and growing customer through
creating, delivering, and communicating superior
customer value.
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The scope of marketingThe scope of marketing
Goods: Constitute the bulk of most countries' marketingeffort.
Services: Services include the work of hotels, barbers etc.
Experiences: Firm can create, and market experiences-Climbing Everest.
Events: Marketers promote events-Olympic, Eid, Nationalday.
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Persons: Celebrity marketing-Artists, musicians, lawyer etc.
Places: Cities, states, regions, and whole nations.
Properties: Real (Real state), Financial (stocks and bonds)
Organizations: Work build a strong, favorable image in themind of their target publics.
Information: Info can be produced and marketed.
Ideas: Market offering includes a basic idea-family planning.
The scope of marketing (cont ..)The scope of marketing (cont ..)
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Demand states andDemand states and
marketing tasksmarketing tasksNegative: Major part dislikes, even pay a price to avoid it-
gallbladder operation-redesign, lower price, more
promotion.
No: Unaware and uninterested - new firming method
-connect benefit with people’s natural needs and interested.
Latent: Need can not be satisfied by existing product-harmless cigarettes - measure size of the market.
Declining: Causes of decline, restimulated the target
market changing feature, design, effective communication.
(Creative Marketing)
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Demand states and marketingDemand states and marketing
tasks (cont ..)tasks (cont ..)Irregular: Varies on seasonal, daily or even hourly basis –
flexible pricing, promotion and other incentives
(Synchromarketing – find ways to alter demand pattern. )Full: Maintain, changing customer preferences, competition,
improve product quality and measure customer satisfaction.
Overfull: Discourage-raising price, reducing promotion
(De-marketing)
Unwholesome: discourage consumption of unwholesome
products like alcohol, cigarettes, large family - fear message,
price hikes, reduce availability-alcohol, handguns.
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Marketing concepts and toolsMarketing concepts and tools
Target markets and Segmentation
Market segments-can be identified by examine
demographic, psychographics, and behavioral differences
among buyers.
The marketer then decides which segments present thegreatest opportunity-which are its target market.
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Marketplace, Marketspace, and Metamarket:
The marketplace is physical, as when one goes shoppingin a store:
Marketspace is digital, as when one goes shopping on the
internet.
Metamarket-cluster of complementary products and
services that are closely related in the minds of consumers
but are spread across a diverse set of industries-
automobile.
Marketing concepts and toolsMarketing concepts and tools
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Marketers and Prospects:A marketer is someone seeking a response from another
party, called the prospect.
Needs, Wants, and Demands: Needs are the basic human requirements-food, air, water,
clothing, shelter etc.
Needs become wants when they are directed to specific
objects that might satisfy the need- rice, soft drink, mango
etc.
Marketing concepts and tools (Cont...)Marketing concepts and tools (Cont...)
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Product, Offering and Brand:
Product - is anything that can be offered to satisfy a needor want.
Offering which can be a combination of products, services,
information, and experiences.
A brand is a offering from a known source.
Marketing concepts and tools (Cont...)Marketing concepts and tools (Cont...)
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Value: Benefits / Costs =
(Functional benefits + Emotional benefits) /(Monetary costs + Time costs + Energy costs +
Psychic costs)
Satisfaction : The extend to which Product Perceived
Performance matches with Customer Expectation
PPP>CE= Highly Satisfied Customer
PPP<CE= Dissatisfied Customer
PPP=CE= Satisfied Customer
Marketing concepts and tools (Cont...)Marketing concepts and tools (Cont...)
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Exchange: the act of obtaining a desired product from
someone by offering something in return-self produce, by
beg, by force and money. Five conditions: two parties, value to the other party,
capable to communicate and delivery, free to accept and
reject and appropriate or desirable.
Transaction:A transaction is a trade of values between two or more
parties.
Marketing concepts and tools (Cont...)Marketing concepts and tools (Cont...)
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Relationship marketing has the aim of building mutuallysatisfying long-term relations with key parties-customers,
suppliers, distributors,-in order to earn and retain their
business.
A marketing network consists of the company and itssupporting stakeholders (customers, employee,suppliers,
distributors, retailers, ad agencies, university scientists,
and others)
Relationships and networks:
Marketing concepts and tools (Cont...)Marketing concepts and tools (Cont...)
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Marketing Channels:
Communication channels deliver and receive message from
target buyers, and include newspapers, magazines, radio,
television, mail, telephone, billboards, posters, fliers and the
internet.
A distribution channels include distributors, wholesalers,retailers and agents.
Services channels to carry out transactions with potential
buyers-warehouse, transportation, banks and insurance.
Marketing concepts and tools (Cont...)Marketing concepts and tools (Cont...)
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Supply Chain:Describes a longer channel stretching from raw materials to
components to final products that are carried to final buyers.
Competition:Includes all the actual and potential rival offerings and
substitutes that a buyer might consider.
Four levels of competition - Example (Thirst)Form - Diet Coke, Diet Pepsi, Diet RC.
Category - Sprite, Miranda, Uro-Lemon.
Generic - Mineral Water, Ice-cream, Tea, Juice, Soft Drink
Budget - Cinema, Park, Zoo, Browse.
Marketing concepts and tools (Cont...)Marketing concepts and tools (Cont...)
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Consists of the task environment and the broad
environment.
The task environment-includes the immediate actors –the
company, suppliers, distributors, dealers, and the target
customers.
The broad environment- consists of six components:
demographic, economic, natural, technological,
political-legal, social-cultural environment.
Marketing Environment:
Marketing concepts and tools (Cont...)Marketing concepts and tools (Cont...)
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Marketing Program:
Consists of numerous decisions on the mix of marketing
tools to use.
The marketing mix is the set of marketing tools the firmsuses to pursue its objectives in the target market.
Four Ps• Product• Price• Place
• Promotion
Four Cs• Customer solution• Customer cost• Convenience
• Communication
Marketing concepts and tools (Cont...)Marketing concepts and tools (Cont...)
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Marketing Mix
TargetCustomers
ProductVariety
Quality
Design
Features
Brand namePackaging
Size
Service
Warranties
Returns
PriceList price
Discount
Allowances
Payment period
Credit terms
PromotionAdvertising
Personal selling
Sales promotion
Personal selling
Direct marketing
PlaceChannel
Coverage
Assortment
Locations
TransportationInventory
Logistics
Marketing Mix – Four Ps
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Products
Servicesprices
Company
Direct mail,
telemarketing
and internet
Publicrelations
Sales force
Advertising
Sales
Promotion
Distributionchannel
Targetcustomer
Offering mix
Promotion mix
Marketing mix strategy
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Marketing Management
PhilosophiesProduction Concept
Product Concept
Selling Concept
Marketing Concept
Societal Marketing Concept
Marketing Concept
Customer Concept
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This concept holds that consumers are interested
primarily in product availability at low prices.
•Marketing objectives:
–Cheap, efficient production
–Intensive distribution
–Market expansion
Production Concept
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Product Concept
The concept holds that consumers will buy the
product that offers them the highest quality, the
best performance, and the most features Marketing
objectives:
–Quality improvement
–Addition of features
•Tendency toward Marketing Myopia
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Selling Concept
The concept holds that consumers will not buy
enough of the organization’s products unless the
organization undertakes a large-scale selling and
promotion effort.
Marketing objectives:
–Sell, sell, sell
•Lack of concern for customer needs and
satisfaction
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Marketing Concept
This philosophy holds that to be successful, a
company must determine the needs and wants of specific target markets and deliver the desired
satisfactions better than the competitors.
•Marketing objectives: –Profits through customer satisfaction
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Factory ExistingProducts
Selling
andPromoting
Profits
throughVolume
The Selling Concept
StartingPoint
Focus Means Ends
MarketCustomer
Needs
Integrated
Marketing
Profits
through
Satisfaction
The Marketing Concept
Sales & Marketing
Concepts Contrasted
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The concept holds that the organization shoulddetermine the needs, wants, and interests of targetmarkets and deliver the desired satisfactions moreeffectively and efficiently than do competitors in a waythat maintains or improves the consumer’s andsociety’s well being.
Societal MarketingConcept
Society
(Human Welfare)
Company
(Profits)Consumers
(Wants)
Societal Marketing Concept
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-Separate offers, services, and message to individual
customers.
-One to one marketing
Startingpoint Focus Means Ends
Individual
customer
Customer
Needs andvalues
One to one
marketingintegration
and value
chain
Profits growth
throughCapturing customer
share, loyalty, and
lifetime
Individualcustomer
Customer Needs and
values
One to one
marketing
integration
and value
chain
Profits growth
through
Capturing customer
share, loyalty, and
lifetime
The Customer Concept