introduction to marketing lecture and discussion, mba and ba

8/13/2019 Introduction to Marketing Lecture and Discussion, Mba and Ba

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INTRODUCTION TOMARKETING

Chapter 1


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Introduction contd.

Marketing came into existence with the first barterexchange (e.g. the barter trade in ancient Egypt,Songhai and Ghana empires in Africa etc.) whensomeone realized that exchanges add value for both

parties. This was the first real step forward in economic

development.

Marketing has evolved (like other practices such asarchitecture, medicine, engineering) over thecenturies to where it is today (Michael Baker).


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Introduction contd.

According to Peter Drucker, the first test ofany business is not the maximization ofprofit but the achievement of sufficient profitto cover the risks of economic activity andthus avoid loss.

Customers are the foundation of a businessand their purpose of existence.

In other words, customers are the mainstayof the business.


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Introduction contd.

As Peter Drucker puts it: There is only onevalid definition of business purpose: tocreate a cus tomer.

It is the custom er who determ ines w hat

business is What the bus iness th inks i t produces is notof f i rst impo rtance, especial ly no t to thefuture of the business and to i ts success in

the market place. The customer determ ines what a businessis , what it produces and whether it wi l lprosper (Druc ker).


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What is Marketing?

It is the most interesting, dynamic, versatile

of all academic disciplines.

It is both theoretical and practical in nature.

It yields real results in the form of profits

and/or satisfaction of business

aims/objectives.


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What is Marketing? contd.

It is a multidisciplinary (economics,psychology, sociology, history, statistics)management process of identifying andsatisfying consumer and organizational

needs profitably.

The aim of marketing is to make profit and/orsatisfy business objectives.

Thus, overall, it enhances human andnational economic development/progress.


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Definition

Marketing is the process of planning andexecuting the conception, pricing,promotion, and distribution of ideas, goods,and services to create exchanges thatsatisfy individual and organizational goals.

Source: The American Marketing

Association (AMA) (see www.ama.org).


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Definition

Marketing is the management processresponsible for identifying, anticipating,and satisfying customer requirements

profitably.

Source: The Chartered Institute ofMarketing (CIM) (UK) (see www.cim.co.uk)


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Recent formal Definition of

Marketing

Marketing is an organizational function and aset of processes for creating,communicating, and delivering value tocustomers and for managing customerrelationships in ways that benefit theorganization and its stakeholders.

Source: American Marketing Association, 2004


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Role of Marketing

Organizational Resources

Effective match Specification

ofTarget Market

Customer Satisfaction

Organizational

Aims/objectives


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The Marketing Concept

The Marketing Concept states that if a

business or organization is to achieve

profitability, the entire organization must be

oriented towards satisfying consumerneeds, wants and aspirations.


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The Marketing Concept

contd.

In other words, The Marketing Concept

holds that the key to success is through

determining the needs/wants/aspirations of

target markets and delivering these moreeffectively and efficiently than competitors.


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The Marketing Concept (key issues)

Organizations must concentrate on thecustomer and not the product or thecompany.

Organizations should revolve round thecustomer and not the other way around.

The purpose of a business is to create andkeep a customer (Theodore Levitt).


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Elements of the Marketing Concept

Consumer/customer Orientation

Total Organization effort

Profitability/achievement of objectives.


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Criticisms of the Marketing Concept

Do customers really know theirneeds/wants/aspirations?

The choice of either consumer orcompetitive orientation.

Adapting to change (rigidity,inflexibility ofthe concept).

Conflict with social responsibility.

Limits in the applicability of the concept (e.g.

the arts, ideology such as political parties,environmentalistsgreenpeace, religionschurches/synagogues etc


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Some Criticisms of Marketing

Too many advertisements are annoying,

misleading, or both.

There are too many unnecessary products.

Middlemen raise prices but dont add value.

Marketing makes people materialistic.

Most of the criticisms result from

misunderstandings about marketing (Perreault &McCarthy, 1999).


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Do you know your market?

What is the product or service being offered?

What are the market trends in the industry?

What is the market?

Who are your customers? And what are they lookingfor?

Who are your competitors? And how do theyoperate/react/behave?

Why do (should) your customers buy your

product/service rather than that of yourcompetitors?


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What is a Market ?

According to Kotler (2004), a market consist

of all the potential customers sharing a

particular need or want who might be willing

and able (i.e., propensity to) to engage inexchange to satisfy that need or want.

Source: Kotler, P. (2004), Marketing Management,

Prentice-Hall, Englewood Cliff, NJ.


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Market Types

Consumer Markets.

Industrial/Business to Business Markets.

Reseller (Retailers, Distributors) Markets.

Publics (Governmentagencies/departments/institutions).

International/global Markets.


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What is Market(ing) Orientation?

The process of applying the marketingconcept in the market place.

Maintaining a customer orientation.

All departments work together guided bycustomer needs/wants/aspirations.

Focus on profits/objectives.

Source: Kohli and Jaworski (1990); Narver and Slater (1990).


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Market Orientation

Production Orientation

--1850s -> 1930s

Sales Orientation

-- 1930s -> 1950s Time Marketing Orientation

-- 1960s -> ??

Consumer Relationship Marketing (CRM)-- 1990s -> ??


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Production Orientation

Focus on the means ofproduction, and assumes

customers will want the

product/service.


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Product Orientation

Focus on the technicalperfection of the

product/service seen throughthe producers (firm) eyes.Assumes customers will

perceive product/service in thesame way and thus buy.


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Selling Orientation

Focus on persuading (usually

aggressive) customers to buy

products which do not usuallymatch their requirements. This

is unlikely to lead to repeat

buy/business.


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Customer Orientation

Focus on discoveringcustomer needs (basicsurvey/question & answer type

) andsatisfying them. This isunlikely to make best uses of

production and otherorganizational resources.


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Marketing Orientation

Focus on the identification of customers

needs, organizational resources and

objectives. Achieve effective match

through market segmentation, targeting,positioning and resource development (see

also Role of Marketing).

introduction to marketing lecture and discussion, mba and ba

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