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REVISITING CORE

MARKETING CONCEPTS

THE BUILDING BLOCKS

OF MARKETING

STRATEGY

REVISITING CORE

MARKETING CONCEPTS

THE BUILDING BLOCKS

OF MARKETING

STRATEGY


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Needs Necessities

Need is a state of felt deprivation

Basic & common for all human beings

Physical needs, safety needs, social needs,individual needs

Wants

Preferences

Human needs shaped by culture & personality

Needs are generic, wants vary

Demand

AWantbacked by Purchasing Power

NEEDS, WANTS, & DEMANDSNEEDS, WANTS, & DEMANDS


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Combinations of products, services, information, &/ or experiences offered to a market to satisfyneeds & wants

Goods

Goods along with services

Services

Information

Ideas

Experiences

MARKET OFFERINGSMARKET OFFERINGS


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Exchange A transaction where both parties agree to give the

other party something of value

Conditions Involvement of more than one party

Willing parties

Each party having something to offer

Parties must communicate

EXCHANGES & RELATIONSHIPSEXCHANGES & RELATIONSHIPS


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Relationships Goes beyond attracting the customer

Goes beyond transactions

Through marketing activities, marketers wish todevelop relationships with customers

Consistently deliver value & satisfaction

Value & satisfaction are building blocks of developing& retaining customer relationships

EXCHANGES & RELATIONSHIPSEXCHANGES & RELATIONSHIPS


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A set of all actual & potential buyers for a marketoffering

Actual & potential buyers for a market offering

have common needs or wants that can be satisfiedthrough the exchange relationship

MARKETSMARKETS


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Marketing is a social & managerial process bywhich individuals & organizations obtain

what they need & want through creating &exchanging value with others

Marketing is the set of activities undertaken tofacilitate and generate an exchange processthat satisfies human or organizational needs

and wants

MARKETINGMARKETING


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According to the AMA

Marketing is the total system of businessactivities designed to plan, price, promoteand distribute want-satisfying products to

target markets in order to achieveorganizational objectives

Both parties have to gain customers & the

organization

Organization wants long-term profitability

MARKETINGMARKETING


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Hence Marketing is the management of markets tobring about profitable customer relationships

Marketing is profitably managing customerrelationships

MARKETINGMARKETING


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COMPANY ORIENTATIONSTOWARDS THE MARKETPLACE

COMPANY ORIENTATIONSTOWARDS THE MARKETPLACE


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We often confuse Marketing with Selling

As a function, Selling is part ofMarketing

In broad terms

Focus ofMarketing is the customer

Focus ofSelling is the product

COMPANY ORIENTATIONS TOWARDSTHE MARKETPLACE

COMPANY ORIENTATIONS TOWARDSTHE MARKETPLACE


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PRESENT-DAY COMPANYORIENTATIONS TOWARD THE

MARKETPLACE

PRESENT-DAY COMPANYORIENTATIONS TOWARD THE

MARKETPLACEProduction

Concept

Marketing

Concept

Product

Concept

Selling /

Sales

Concept


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Production Concept

Producing, & producing at a low cost, is important

To keep production costs low, standardization isimportant Mass Production

Variety is not desirable as it raises production cost

Production managers love standardization, opposeproduct assortment

Their aim is production efficiency

Myopic short-term view

COMPANY ORIENTATIONS TOWARDTHE MARKETPLACE



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Production Concept

May lead to Marketing Myopia - the mistake ofpaying more attention to products than to benefits &experiences these products bring to customers




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Product Concept

People will buy products that have quality,performance, & innovation

Differs from Production Concept

Production-oriented managers do not favor muchproduct-related innovation

Product innovation means increase in production cost

Product-oriented managers focus on bringingcontinuous product improvement

May also lead to Marketing Myopia




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Selling Concept

Focuses on selling & sales targets

Too much focus on selling False claims, deception

Sales targets become more important than customersatisfaction & customer retention

Sales approach focuses not on customer, but onproduct make, then sell

Did you check if this is what the consumer wants?




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Selling Concept

Does not recognize that if companies determinewhat consumers want before going into production

They will make what sells

Rather than putting effort & money into selling whathas been made




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Selling Concept

This approach believes that people will buy productsonly if products are aggressively sold / promoted

Does work for some products

Customers do not think of buying unless exposed toadvertising & aggressive selling

Insurance

But as a company approach, the Selling Conceptmakes marketers / sales managers myopic, short-term, & deceptive




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Marketing Concept

Achieving organizational objectives depends ondetermining needs & wants of target markets

Determining needs & wants of target markets

Responding to those needs & wants

Delivering satisfaction better than competition

Make a product that sells




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Most Pakistani companies have a production, atbest a sales orientation towards the marketplace

They believe the customers are there to buy theirproducts

Most common in monopolistic industries

Telecom was monopolistic when only PTCL was there

Power sector is still monopolistic




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Change has come due to multinationals in Pakistan

Consumer orientation

Need recognition

Research and analysis

Handout # 1 15 Points Marketing Managers MustRemember to Ensure TheyAre Adhering to theMarketing Concept




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Service sector companies follow the MarketingConceptas well

Banking

Round-the-clock banking

Internet banking

ATMs

Cellular service providers

Value added services Bill payment options

Airline, tourism, hotel industries

Superior services




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Handout # 2 Adopters of The MarketingConcept Versus Production- or Sales-OrientedManagers




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Equally important for non-profit sector

Colleges, hospitals, societies, religiousorganizations

Face competition for support from donors

Examples

Handout # 3 SHAUKATKHANUMMEMORIALCANCER HOSPITAL & RESEARCHCENTER

(SKMC&RC)

THE MARKETING CONCEPT & NOT-FOR-PROFIT ORGANIZATIONS



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Examples WORLD WIDE FUND FOR NATURE (WWF) formerly

known as the WORLD WILDLIFE FUND

Conservation & restoration of the environment

Works in > 90 countries

Has > 5 million supporters worldwide

Supports 1300 environment conservation &restoration projects worldwide




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HOLISTIC MARKETING

CONCEPT

HOLISTIC MARKETING

CONCEPT


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Handout # 4 Marketing Right andWrong

The HolisticMarketing Concept recognizes theimportance of a broad, integrated perspective

towards Marketing everything matters!! Itrecognizes that the development, design, andimplementation of marketing programs,

processes, and activities are allinterdependent

HOLISTIC MARKETINGHOLISTIC MARKETING


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4 broad concepts Relationship Marketing

Integrated Marketing

Internal Marketing

Performance Marketing

HOLISTIC MARKETINGHOLISTIC MARKETING


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HOLISTICMARKETINGHOLISTIC

MARKETING

INTERNAL

MARKETING

Marketing

Department

Senior

Management

Other

departments

PERFORMANCE

MARKETING

Ethics Brand &

Customer

Equity

Sales

revenue

Community

Environment

Legal

RELATIONSHIP

MARKETING

Customers Channels Partners

INTEGRATED

MARKETING

Communications

Products &

Services Channels

Prices


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HOLISTIC MARKETING

CONCEPT

RELATIONSHIP MARKETING

HOLISTIC MARKETING

CONCEPT

RELATIONSHIP MARKETING


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Aims to build long-term and mutually satisfyingrelationships with key constituents

Constituents

Customers

Marketing partners suppliers, distributors

Employees

Members of financial community

Investors

Lenders

Shareholders

RELATIONSHIP MARKETINGRELATIONSHIP MARKETING


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Outcome ofRelationship Marketing is aMarketing Network

A company asset

Consists of company & its stakeholders

Customers

Employees

Suppliers

Distributors

Advertising agencies

Supporting Academia Investors

Others with whom company builds profitable businessrelations



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The 1st

constituent the Customer CustomerRelationship Marketing

Companies today customize their marketing offers

to suit the wants of different target markets Based on information about past transactions,demographics, media & distribution preferences



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CustomerRelationship Marketing (CRM) aims tobuild long-term and mutually satisfyingrelationships with customers

CustomerRelationship Management (CRM) is theoverall process of building and maintainingprofitable customer relationships bydelivering superior customer value &

satisfaction



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Keys to building long-term relationship withcustomers

Value: consistently creating & delivering superiorcustomer value

Customer satisfaction



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Value customer must perceive the product /brand to give value as compared to the rest

In a market with several brands, the consumerchooses the brand that he thinks gives him the mostvalue

Value is perceived in terms of

What benefits the brand gives the consumers

How much better they are than the benefits offered bycompetitors

; Walking shoes comfort, durability

; Electronic appliances performance consistency,reliability, safety

CUSTOMER RELATIONSHIP MARKETINGCUSTOMER RELATIONSHIP MARKETING


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Value Value is also perceived in terms of

How much more, in quantity, a brand gives him ascompared to the competing brand

Customer PerceivedValue (CPV)

The customers evaluation of the differencebetween all the benefits and all the costs of

a marketing offer relative to those ofcompeting offers

Consumers evaluation of brand value is based onperception rather than on objectivity



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Customer Satisfaction

The extent to which a products perceivedperformance matches a buyers expectations

Product performance < customer expectations

DISSATISFACTION

Product performance = customer expectations

SATISFACTION

Product performance > customer expectations

DELIGHT



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Customer Satisfaction Aim is to delight the customer

Examples of companies striving to create high levelsof customer satisfaction

FrequencyMarketing Programs programsdesigned to generate brand loyalty & cultivate a long-lasting relationship with customers

; Rewards ongoing purchase

; Airlines: frequent flyer programs

; Hotels: frequent guests



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Customer Satisfaction Examples of companies striving to create high levels

of customer satisfaction

Club Marketing Programs special privileges aregiven to customers; member communities are created

; MOBILINKS CLUB INDIGO dedicated CorporateAccount Managers, exclusive event invitations

Delightedcustomers become BrandLoyalCustomers

ConsumerLoyaltyis the ultimate aim of marketers



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Customer Satisfaction Loyal customers

Patronize the company permanently

Become brand ambassadors

Spread positive WOM

Consumer-GeneratedMarketing

Includes marketing messages, ads, & other brand

exchanges created by consumers themselves bothinvited & uninvited



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Customer Satisfaction Consumer-GeneratedMarketing

Consumers share information about brands via blogs,social networks, audio, video, & web sites

DIET COKE & MENTOS Video Links 1 & 2

Companies want consumers to play active role inshaping brand messages & ads

Companies like COCA-COLA take consumer-generatedcontent from YouTube & make it a part of theiradvertisements



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CustomerRelationship Management (CRM) Deals with all aspects of acquiring, retaining, &

growing customers

Marketers work hard to retain their customers

Research shows it costs 5 times as much to get anew customer than to retain an existing one

Retention of customers as well as profitability Organizational objectives have to be met

Marketing aims to generate CustomerValue

profitably



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Build long-term profitable relationships withmarketing partners

PartnerRelationship Marketing (PRM)will bediscussed later

PARTNER RELATIONSHIP MARKETINGPARTNER RELATIONSHIP MARKETING


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HOLISTIC MARKETING

CONCEPT

INTEGRATED MARKETING

HOLISTIC MARKETING

CONCEPT

INTEGRATED MARKETING


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Marketers job is to Create value

Communicate value

Deliver value

Marketing activities are divided into 4 Ps identified by McCarthy

Product

Price

Place

Promotion

Known as the Marketing Mix

INTEGRATED MARKETINGINTEGRATED MARKETING


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Product defines the characteristics of the goods/ services that will satisfy the customers needs


Quality

Features

Packaging

Services

Returns

Product variety

Design

Brand name

Sizes

Warranties


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Price amount a company charges for the goods /services


Discounts

Payment methods

List price

Allowances

Payment periods


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Place the route or channel of distribution.Includes all the firms / individuals that participatein the process of getting the market offerings fromthe producer to the consumer


Coverage

Locations

Transport

Channels

Assortments

Inventory

Logistics


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Promotion the means of communicating withthe target market


Sales Promotion

Personal Selling

Advertising

PR & Publicity

Direct Marketing


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Some people believe Marketing has

7Ps

People

Process

Physical Evidence

Marketers

Customize their offerings for groups of targetcustomers

Inform customers about offerings

Set prices that will give value to customers

Choose places where the offerings will be available


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The

4Cs of Marketing

4 Ps is the companys view of marketing toolsavailable for influencing customers

Look at it from customers point of view

Each marketing tool is designed to give some benefit tocustomer

The 4 Cs model is based on the 4 Ps model but

looks at marketing tools from the customers angle


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Different definitions of the 4 Cs

Customer

Cost

Communication

Competition

Customer Solution

Customer Cost

Convenience

Communication Source

Product = Customer Solution

Price = Customer Cost

Place = Convenience Promotion = Communication

Some experts add a 5th C - Customer


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Marketing has to create, communicate, & delivervalue

IntegratedMarketing has 2 underlying themes

Many different marketing activities communicate &deliver value

When coordinated, marketing activities maximizetheir joint effect / impact

When the 4 Ps are coordinated, they complementeach other

Their combined impact is what creates,communicates, and delivers value in the best waypossible


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INTERNAL MARKETINGINTERNAL MARKETING

Often, departments in an organization work inisolation divergent goals

Production managers focus on production efficiency

Marketing managers desire product variety,innovation

Finance managers want maximum ROI

HR managers are concerned with HR budgets, headcounts

HolisticMarketing opposes isolated thinking itdemands InternalMarketing

Departments work in coordination

Customer satisfaction becomes the driving force for

everyone


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Coordination No room for isolated goals

Synergy can only be created if all sub-systems of aSystem work together the Systems Theory

Views an organization as a System

Each department or functional area as a component /sub-system

All components of a System are linked together, & tothe environment

All components have to work in coordination

The whole is greater than the sum of the parts =Synergy


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Everyonethinks customer

Customer satisfaction should be the goal of everydepartment

Marketing is no longer only the job of the Marketingdepartment

This thinking has to start from top management Integrated goals

All departmental goals guided by customer value &satisfaction

No isolated goals no clash of interests

The company then becomes a Marketing Company


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InternalMarketing requires Vertical alignment with top management

Horizontal alignment with other departments

Handout # 5 AMarketing Company


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HOLISTIC MARKETING

CONCEPT

PERFORMANCE MARKETING

HOLISTIC MARKETING

CONCEPT

PERFORMANCE MARKETING


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PERFORMANCE MARKETINGPERFORMANCE MARKETING

HolisticMarketing recognizes Not only financial returns to company from

marketing activities

But also importance of broader legal, ethical, social,& environmental effects

In addition to financial accountability, marketershave to justify impacts of their activities on society& environment

Concept ofSocietalMarketing


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SOCIETAL MARKETINGSOCIETAL MARKETING

SocietalMarketing has happened in response totwo major forces

Consumerism

Environmentalism

CONSUMERISMCONSUMERISM


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Industrialization gave rise to several workforce-related problems & thus criticism

Low minimum wages

Unsafe / unhealthy working conditions

Child labor

Criticism also included marketing & productionactivities

Automobile manufacturers (environment)

Oil exploration & marketing (health &

environment) Sugar mills (waste disposal issues)

Cigarette industry (health)

Plastic industry (health & environment)



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Criticism also included marketing & productionactivities

Planned Obsolescence firms deliberately makeproducts that do not last long

Burden on natural resources

Financial burden on consumer

Examples: disposable razors, disposable lighters Proponents ofPlanned Obsolescence argue that

it gives consumers flexibility, convenience, &savings



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Criticism affected company image & ultimatelysales

Todays public is conscious & aware rebelsagainst firms that

Make unsafe, polluting, or hazardous products

Purposefully mislead consumers

Offer restricted choice of alternatives



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The force of the Consumer - Consumerism

The set of activities undertaken by individuals,independent organizations, government

agencies and business organizationsdesigned to protect the consumer from

unethical marketing practices andconditions



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Purpose ofConsumerism is to ensure consumerrights in the process of exchange

The right to be informed

The right to be told the truth

The right to be given sufficient number ofalternatives

The right to be assured of safety in the process of

consumption



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Three types of organizations make up theconsumer movement

Consumer action groups

Concerned with increasing consumer awareness

Making them more informed

Giving them the option to act better



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Government agencies protecting consumer rightsthrough laws & legislation Handout #6

Deceptive advertising FederalTradeCommission (FTC)

Advertising to children Federal CommunicationsCommission (FCC)

Product safety standards to protect consumers from

risk or injury Consumer Product SafetyCommission (CPSC)

Warning labels on hazardous products / packaging



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Government agencies

Ingredients / nutritional information on foodproducts Food & Drug Administration (FDA)

Monopolistic practices - FTC

Environmental protection EPA



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Business organizations reactive or proactive

Reactive companies change practices to conform tothe law & imposed regulation

Proactive approach: self-regulation as a matter ofethics

Most companies act proactively only because theyknow this will become regulation soon enough, due

to Consumerism

ENVIRONMENTALISMENVIRONMENTALISM


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Strives to ensure that company operations do notharm the environment

Environmentalism is an organized movement ofconcerned citizens, businesses, andgovernment agencies to protect and

improve peoples current and future livingenvironment

Environmentalists want companies to care for the

environment while going about their business

Today companies follow a policy ofEnvironmental Sustainability



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Environmental Sustainability is a managementapproach that involves developing

strategies that both sustain theenvironment & produce profits for the

company

Policies ofEnvironmental Sustainability&Social Sustainabilitymake business sense

THE SOCIETAL MARKETING CONCEPTTHE SOCIETAL MARKETING CONCEPT


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In response to Consumerism &

Environmentalism, companies have adoptedthe SocietalMarketing Concept

ConsumersWant Satisfaction

THE SOCIETAL

MARKETING

CONCEPT

CompanyProfits / Revenue

SocietyHuman Welfare



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Who all are included in Society??

Consumers Buyers and / or users of companys products

Community

Everyone affected by companys operations

Everyone that is affected, is a customer, & thecompany is responsible to them



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Several products / industries that negativelyaffect environment & human health

Cigarette manufacturing companies

Waste disposal of several production processes

Manufacturing of paper products



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Two important concepts

Companies must think of everyone affected bythem as their customers suppliers, distributors,

creditors, community members, etc.

Companies must focus on long-term interests

rather than short-term interests of customers



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Levels of Social Responsibility

Economic responsibility

Legal responsibility

Ethicalresponsibility

Discretionary

responsibility

Total Corporate SocialResponsibility



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Economic Responsibility Company should sell products at profit for company

owners

Organizations should not undertake economically

unfeasible social actions

ProfitMaximizing View Maximizing profits is acompanys only social responsibility

; Non-economic activities take funds away from

company owners & stockholders; Also distract managers from their primary duty

This concept is not acceptable to society any more



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Legal Responsibility Company should stay within the boundaries of the

law

Economic activities must be undertaken lawfully

Ethical Responsibility

Managers often have to choose between alternatives

; None of them are illegal

; But not all of them are ethical

What is right?in contrast to what is legal?



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Discretionary Responsibility Voluntary

Companys own discretion

Companies may want to make social contributionsover & above what is required by law & what isethical

; Donations to hospitals

; Building schools for the orphans

Such behavior is demanded by society today Corporate SocialResponsibility (CSR) is a mustfor companies to win goodwill


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Examples

PROCTER & GAMBLE&UNILEVER opening schools,providing safe drinking water

JOHNSON& JOHNSON shifting from plastic bottlesto safe non-polycarbonate containers

Handout # 7 Socially Responsible MarketingPractices Toward Various Sections of Society



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Why the SocietalMarketing Conceptmakes

business sense Until 1960s, natural resources were seen as

abundant

Companies realize that resources are depleting

According to B

US

INESS

WEEK

Out of the worlds natural resources that arebeing used annually, 70% are being used by25% of the people in industrialized nations

Serving people beyond the definition of actualconsumers does bring monetary & intangiblebenefits to companies



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Methods of institutionalizing social responsibility

Advocacy

Philanthropy

Cause-RelatedMarketing



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Advocacy

When an organization adopts a cause tosupport and throws its financial, material,

and managerial resources behind the cause

Support of an organization to cultural activities,like a cultural festival

Support of an organization to an activity likeThe WorldHandwashing Day



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Philanthropy

The donation of money, time, goods, or servicesto charitable, humanitarian, or educational

institutions

Corporate sector engages in corporatephilanthropy

Donations to schools, hospitals, NGOs



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Cause-RelatedMarketing (CRM) or Cause

Marketing

An activity in which the company contributes aspecified amount to a designated cause

when customers buy the companysproducts

CRM refers to the cooperative efforts of a for-

profit business and a non-profitorganization for mutual benefit


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Cause Marketing

Part ofCorporate SocialMarketing

Corporate SocialMarketing (CSM) refers tomarketing efforts that have at least one non-

economic objective related to social welfare& use the resources of the company & / or of

its partners



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Cause Marketing

Khwabon Se Aageycampaign by PROCTER &GAMBLEin partnership with PAKISTANMEDICALASSOCIATION

Aimed to save lives of new-born babies

Provided life-saving equipment to hospitals acrossPakistan

Ran from Dec 2007 Mar 2008

Portion ofP&G sales proceeds was donated toprovide life-saving equipment

Training programs for doctors & hospital staff



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Cause Marketing

A successful CRM program can

Improve social welfare

Create a differentiated positioning for the brand /company

Build a favorable public image

Enhance company image with govt. & decision-

making, grant-giving agencies

Boost employee morale

Drive sales in the long run improve market value


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ETHICS IN MARKETINGETHICS IN MARKETING


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ETHICSETHICS


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ETHICSETHICS

Ethics is the code of moral principles and values

that governs the behaviors of a person orgroup with respect to what is right or wrong

ManagerialEthics is the practice of decision

making in an organization in the context ofrules of conduct or moral standards

Ethical Behavior refers to individual conduct

that is consideredright orwrong in thecontext of a governing moral code

ETHICSETHICS


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ETHICSETHICS

Ethical behavior conforms to the law

Also conforms to a broader set of moral principlesexpected by all or some segments of society

Managers are often faced with EthicalDilemmas

An EthicalDilemma is an issue that has two

conflicting but arguably valid sides

ETHICSETHICS


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ETHICSETHICS

EthicalDilemmas

Should tobacco companies be allowed to advertise,or at all be in business?

Companies can do business more effectively if they

collect information about customers / clients Companies have the right to conduct business

Consumers have the right to privacy

If companies pursue consumers for information,consumers privacy might be invaded

Whose rights are more important?

ETHICSETHICS


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ETHICSETHICS

EthicalDilemmas

Is it right for companies to get information aboutcompetitors?

Salesmen must sell the products they are given to

sell Should they tell customers about any harmful

effects or defects?

Or should they aim to just sell?

ETHICSETHICS


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ETHICSETHICS

EthicalDilemmas

Drugs / products whose sale is disallowed in onecountry

Should they be sold in other countries where thereis no law against their use?

Every individual has the right to keep himself & hisfamily safe

Should individuals be allowed to keep weapons withthem?

ETHICSETHICS


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ETHICSETHICS

Unethical behavior allegations on Marketing

Misleading advertising

Products wear out quickly PlannedObsolescence

Materialism Marketing encourages people to bematerialistic, even compulsive

Advertising forms unrealistic expectations

Encourages managers to be unethical

ETHICSETHICS


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ETHICSETHICS


Lures in customers manipulative techniques

Pollution of environment

Depletion of natural resources


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ETHICSETHICS


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ETHICSETHICS


Promotes Injurious Consumption

Unhealthy foods & drinks are marketed as trendy,fun, cool consumables

Cigarettes & alcohol

Gambling Las Vegas is the city of gambling

Every year 10 million Americans suffer financiallosses from their addiction to gambling There are

currently 10 million alcoholics & 80 millioncigarette smokers in the US Every year 25,000people die as a result of alcohol related trafficaccidents All of these behaviors result from

consumption gone wrong

CODE OF ETHICSCODE OF ETHICS


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Companies strive to instill ethical conduct among

employees - create an organizational culture thatvalues ethics

Approaches

Commitment from the top management

Standards &Codes of Ethics

Ethical Standards are the guidelines of moralconduct in a given profession or group

Code ofEthics a formal statement of theorganizations values, ethical principles, &

specific ethical rules



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Approaches

Standards &Codes of Ethics Handout 8 Code of Ethics of TOYOTA

Training

During orientation of new employees

In-depth training on ethical decision-making forsenior executives

Ombudsmanship

An informal review process that provides anindirect, non-threatening means of obtaininga response from senior management about

an ethical conflict



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CO O CSCO O CS

Approaches

Ombudsmanship

An Ethical Ombudsman is an official of theorganization given the responsibility to act as

the corporate conscience. He hears andinvestigates ethics complaints and points outpotential ethical failures by top management

Trusted intermediary between organization & some

constituency

Appointed by the organization or constituency

May investigate complaints, recommend solutions,

point out potential ethical dilemmas



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Approaches

Ethics committees & ethical audits

Ethics Committees are standing committees ofthe board of directors assigned the job of

overseeing the ethical aspects of thecompanys policies & practices


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SOCIAL MARKETINGSOCIAL MARKETING



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Term used for marketing efforts employed to

further a cause

The application of marketing tools & techniquesto achieve specific behavioral goals for a

social good

Applied to promote products good for society

Convincing people to wear seatbelts while traveling

Follow speed limits

Applied to discourage use of products bad forsociety

Asking people not to smoke in public areas



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SocietalMarketing

A commercial company earns profits while showingconcern for society & environment

Looks after long-term interests of consumers

Cause Marketing A commercial company supports a good, social

cause

SocialMarketing

Marketing of a good cause by NGOs, the Govt,societies, associations, etc.

Primary aim is social good as opposed tocommercial marketing whose aim is mainly

financial



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Is described as having two parents

A social parent: social sciences & social policy A commercial parent: commercial & public sector

marketing approaches

Was born as a discipline in the 1970s Philip Kotler&Gerald Zaltman* realized that

marketing principles used to sell products toconsumers can be used to sell ideas, attitudes &behaviors

* Zaltman: a professor of Business Administration at theHARVARD BUSINESS SCHOOL



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Defined by Kotler&Alan R. Andreasen*

SocialMarketing differs from other areas ofmarketing only with respect to the

objectives of the marketer & his

organization. SocialMarketing seeks toinfluence social behaviors not to benefit themarketer, but to benefit the target audience

& the general society

* Professor of Marketing at the MCDONOUGH SCHOOL OFBUSINESSofGEORGETOWNUNIVERSITYand ExecutiveDirector of the SOCIALMARKETING INSTITUTE



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Used extensively in international health programs

Drug abuse Heart diseases

AIDS

Pakistan MINISTRYOFHEALTH campaigns Expanded Program on Immunization (EPI)

National Aids Control Program

National Tuberculosis Control Program

National Program for Prevention &Control ofHepatitis

National Program for Family Planning & PrimaryHealth Care



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In-depth research & constant re-evaluation of

every aspect of the program form thecornerstone of a SocialMarketing program

Drug abuse

Heart diseases

AIDS

The Ps ofSocialMarketing

Product

Price Place

Promotion

Publics

Partnership Policy

Purse Strings


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Price: refers to what the consumer must do in

order to obtain the product Cost may be monetary

Or might require the consumer to

Give time & effort Risk embarrassment or disapproval from different

quarters

If costs outweigh benefits, CPV of the offering will

be low; it will not be adopted


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Price

Role of research Determine consumer perceptions of cost & benefits

Use information to position the offering


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Promotion

Integrated use of advertising, PR, promotions,media advocacy, personal selling, & entertainmentvehicles

Focus is on creating & sustaining demand for theproduct

Methods of promotion include

Public service announcements

Paid ads Coupons

Media events

Editorials In-store displays



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Promotion

Role of research Determine most effective & efficient vehicles to

reach target audience & to increase demand

Publics Social Marketing programs have to addressdifferent audiences

External publics

Target audience

Secondary audiences

Policy makers

Gatekeepers



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Publics

Internal publics People involved with approval or implementation of

the program

Partnerships Organizations in the community have to team upto make a SocialMarketing program effective

Figure out which organizations have similar goals asthe firm carrying out the program not necessarily

the same goals Identify how they can work together



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Policy

Individual behavior can easily be motivatedthrough such programs

But such programs need support from theirenvironment in order to be sustainable

Policy change is often needed



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Purse Strings

Funds from government & foundations are needed

Where to get the money to create the program?

Example: a Marketing Mix strategy for a cancerscreening campaign for older men & women

Product: could be

Getting annual tests & checkups

Following a self-examination routine

Following a dietary routine



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Example: a Marketing Mix strategy for a cancer

screening campaign for older men & women Price of engaging in these could include

Monetary costs of tests

Potential discomfort, inconvenience, orembarrassment

Time

Finding out one has the disease

Place where these services are offered could

include A mobile van

Hospitals

Clinics

Worksites



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screening campaign for older men & women Promotion could be done through

Public service announcements

Billboards

Mass mailings

Media events

Community outreach

Publics that need to be addressed

Target audience low income men & women aged50 yrs & above

Influencers spouses, physicians

Policy makers

Company BOD & office staff



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screening campaign for older men & women Partnerships could be established with

Local / national groups of people of that age-group

Corporate sponsors

Medical organizations

Media outlets

Policycould focus on

Increasing access to testing & examination by

offering them at lower costs Requiring insurance coverage of tests

Increasing federal funding for cancer research


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MACRO & MICRO MARKETINGMACRO & MICRO MARKETING

MACRO MARKETINGMACRO MARKETING


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A company and its products are part of a muchbigger Macro-Marketing System

An economy needs thousands of products, services& companies to satisfy people

Food products

Housing/construction

Home appliances

Automobiles

Electronics

Insurance

Banking

Airline

Defense products, and so on



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Macro-Marketing System is part of an overallEconomic System

An Economic System is one in which goods andservices are produced & distributed for

consumption of people, in order to satisfy the

needs of the society

Types ofEconomic Systems

PlannedEconomies

Market-Driven Economies


l d i


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PlannedEconomic Systems

The Government decides:

What will be produced, & in what quantity

Who will distribute it, & where

Govt sets production quotas for industries

Govt sets prices of products

Its most extensive form is called a Command

Economy, or Centrally PlannedEconomy, orCommand & ControlEconomy

The state controls all major sectors of the economy

Makes decisions about their use

Makes decisions about income distribution


Pl d i S


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Consist of:

State-owned enterprises

Private enterprises directed by the state

Or both

According to some experts An economy in which the means of production are

totally publicly owned is a CommandEconomy

An economy which also has private enterprises & he

govt regulates production, distribution, prices, etc. is aPlannedEconomy

So a CommandEconomyis a PlannedEconomy,but not necessarily the reverse


Pl d E i S t


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Other experts argue that both terms mean the samething

A Planned Economic System usually works duringwar, drought, floods, political instability

Does not work long-term

Planned Economic Systems of the past

Soviet Union for a time it was the 2nd largesteconomy in the world

China

India prior to economic reforms of 1991

Afghanistan under Soviet occupation & under Taliban

Iraq under Saddam Hussein (1979-2003)


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M k t D i F E i S t


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Market-Driven or Free Economic Systems

Economic decisions & pricing of goods & servicesare guided solely by the aggregate

interactions of a countrys citizens &businesses, & there is little government

intervention or central planning

Work on the assumption that market forces likesupply / demand are best determinants of what

should sell


M k t D i F E i S t


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Market-Driven or Free Economic Systems

Private owners ofFactors of Production makedecisions about production, pricing, distribution, &investment

Factors of Production are the inputs / resources

used to produce goods & services

Factors of Production include:

Raw material

Land

Labor

Capital


M k t D i F E i S t


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Market-Driven or Free Economic System

Forces of supply & demand determine

Goods & services to be produced

Quantity to be produced

Customers have freedom of choice

Downside

Many harmful products are produced


Mix of Controlled & Market Driven Economic


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Mix ofControlled&Market-Driven EconomicSystems

Most economies are a mix of the two

Or less extensive forms of planned economy usingIndicative Planning

Government uses influence, subsidies, grants, & taxes But does not compel

Role ofGovernment

Facilitate free market practices

Check monopolistic practices

Encourage foreign investment

Lay down regulation to protect consumers as well asproducers


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ADVANTAGES OF MACRO MARKETINGADVANTAGES OF MACRO MARKETING

Essential for the operation of an Economic System


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Essential for the operation of an Economic System

Important for economic development

Greater realization & better implementation of theMarketing Concept leads to more economicdevelopment, e.g.

Better availability of newer products Imported products

Better services

Standard of living is enhanced

ADVANTAGES OF MACRO MARKETINGADVANTAGES OF MACRO MARKETING

Gives consumers in a given market the freedom of


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Gives consumers in a given market the freedom ofchoice

Encourages healthy competition more choices better prices better quality

Encourages new ideas & innovation

Establishes a macro-system

Mass production - economies of scale

Mass communication

Mass transportation

Cross-country & cross-continental networks

International trade is enhanced - globalization

ADVANTAGES OF MICRO-MARKETINGADVANTAGES OF MICRO-MARKETING

Revenues & profits from companies


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Revenues & profits from companies

Marketing is the only activity generating revenuedirectly

Links producers with consumers

Gets products to consumers at the right time, right

place, right price

Applicable to all types of companies


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Types of Utility


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Types ofUtility

Ownership Utility: Created when the customerowns the product

Which comes first??

Possession Utilitymay be created before

Ownership Utility; Car financing

Ownership Utilitymay be created beforePossession Utility

; Making full advance payment for a product beforegetting possession

Possession Utilitymay be created but noOwnership Utility

;Renting a car


Advantages to a person


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Advantages to a person

Information & awareness

Choices

More responsible consumers

Career options


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THE OVERALL PROCESS

PUTTING THE PIECESTOGETHER

THE OVERALL PROCESS

PUTTING THE PIECESTOGETHER

THE OVERALL PROCESSTHE OVERALL PROCESS


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Marketing is the process by which companiescreate value for customers and build strongcustomer relationships in order to capture

value from customers in return


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Understand themarketplace &customer needs &wants

Design a customer-driven marketingstrategy

Construct anintegrated marketingprogram thatdelivers superiorvalue

Build profitable

relationships &create customerdelight

Capture value from

customers to createprofits & customerequity

THE OVERALL PROCESSTHE OVERALL PROCESS

Handout # 10 An Expanded View of the


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Handout # 10 An Expanded View of theMarketing Process

Market Segmentation & Targeting

Identify target segment(s)

Decide on target market approach(es)

Market

Analysis


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Product Positioning

Key product differentiation

variables

Position relative to competition

Developing Marketing Mix

Product features

Price level

y Promotional appeal

y Place (distribution)

Consumer Decision Process

Problem recognition

Information searchy Alternative evaluation

y Outlet selection & Purchase

y Post-purchase processes

EXTERNAL

INFLUENCES

INTERNAL

INFLUENCES

SITUTATIONAL

INFLUENCES

Preparing the

Marketing Plan

Take Marketing Mix

to the Consumers

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