MARKETING PRINCIPLES MARK201

HAZ.: DR. IZZET SERDAR TETIK

COURSE DESCRPTON
An introduction to the basic concepts of market definition, consumer behavior, and the principal marketing functions: product line development, pricing, distribution, promotion, sales force management, advertising, research, and planning.
Review Syllabus

COSTS About 50% of total Product/service costs are marketing costs.

CAREERS About 25 to 33% of the nations work force hold marketing positions.

WHY STUDY MARKETNG?

CONTRBUTONS TO INDVDUAL ORGANZATONS Critical to the success of the firm. CONTRBUTONS TO SOCETY Marketing decisions affect the lives of individual consumers and society as a whole.

THE IMPORTANCE OF MARKETNG

Marketing is Valuable to a Variety of Organizations:

Corporate For-Profit Nonprofit The Military Religious & Ethnic Groups Small Firms Individual Marketers

HOW BUSNESS AND MARKETNG ARE CHANGNG

CHANGNG TECHNOLOGY (i.e. internet) GLOBALZATON (i.e. chinese products) DEREGULATON (i.e. fly market) PRVATZATON (i.e. Poste Italiane) CUSTOMER EMPOWERMENT (i.e. associations, laws, green number) CUSTOMZATON (taylor made product and message)

HOW BUSNESS AND MARKETNG ARE CHANGNG CONT.

HEIGHTENED COMPETITION domestic and foreign brands / owerful retailers INDUSTRY CONVERGENCE mergers RETAIL TRANSFORMATION giant retailers and category killers DISINTERMEDIATION Amazon, eBay, ETrade, etc.

WHO MARKETERS ?
A marketer is someone who seeks a response from another party, called the prospect. Marketing manager seek to influence the level, timing and composition of demand to meet the organizations objectives.

MARKETS
A market is the set of actual and potential buyers of a product. These buyers share a particular need or want that can be satisfied through exchanges and relationships. The size of the market depends on the number of people (1) who have the need, (2) have resources (money) for the exchange and (3) want to spend these resources in the exchange.

MARKET ?
HAVE DIFFERENT MEANING & TELL TO US; PLACE : i.e., Gzelyurt pazaar ATMOSPHERE : i.e. Amazon.com TYPE OF GOODS ; i.e. Bookstore, SALES QUANTITY : i.e. 14.000 cars SALES OPPORTUNITY for the DIFFERENT TYPE OF GOODS COMPETITION TYPES ; Hard, Shared, etc., CUSTOMER PROFILE PAYMENT TYPE ; i.e. Credit card, Cash

MARKET COMPONENTS
SELLERS & BUYERS DEMAND & SUPPLY REGULATIONS CONFIDENCE ( Assertives)

EGHT DEMAND STATES ARE POSSBLE

NEGATIVE DEMAND consumer dislike the product NONEXISTENT DEMAND consumer may be uninterested in the product LATENT DEMAND consumer may share a strong need that cannot be satisfied by an existing product DECLINING DEMAND consumer buy a product less frequently

EGHT DEMAND STATES CONT.

IRREGULAR DEMAND consumer purchases vary on seasonal, monthly, etc. FULL DEMAND consumer are adequately buying all products OVERFULL DEMAND more consumers would like to buy the product UNWHOLESOME DEMAND consumer may be attracted to products that have undesiderable social consequences

sing i t r e A dv

Sale s

ions t o m o Pr
Catal ogues

Public re lations

e Servic

Co

upo ns

E-com

WHAT S MARKETNG, els ANYWAY? n n a h c e ng me r c Shoppi

ry Delive
Spons orship s

Retail ing
Pricing
Packa g ing

ail m t c e Dir

Re

sea r

ch

Billb oard s

Partly.

WHAT ARE THEY DONG? WHAT ARE THEY NEED?

WHAT S MARKETNG?
The process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organization goals. American Marketing Association

WHAT IS MARKETNG?
Marketing is a total system of activities
designed to plan, price, promote, and distribute need-satisfying products, services, and ideas to target markets in order to achieve the objectives of both the customer and the organization.

It involves all aspects of how the organization interacts with the customer
that have the potential to influence the customers satisfaction with the organization and its value proposition

KEY WORDS N THE DEFNTON

total system: not an ad hoc approach business activities: but not just for businesses plan, price, promote, distribute: the application of the marketing mix need-satisfying: meeting customers needs products, services, ideas: not just products target markets: not a broad-brush approach objectives: the customers as well as the firms

EVOLUTON OF MARKETNG THNKNG

Marketing has evolved through five stages:
in the product-focus stage
emphasis is on producing ( BC TO 1800 s)

at the sales-orientation stage

focus shift to selling, moving product from ( 1800 1930s)

at the customer-interest stage

emphasis shifts to the customer and the ( 1950 1980s)

the customer-service stage places

emphasis on customer ( 1980 - 1990)

the customer-relationship stage sees a

longer-term focus on building ( 1990 Today )

EVOLUTON OF MARKETNG

COMPARISON OF OLD & NEW MARKETING

THE OLD MARKET MARKETNG TH THNK NKNG THE NEW MARKET MARKETNG TH THNK NKNG

Connections with customers Be sales and product centered Practice mass marketing Focus on products and sales Make sales to customer Get new customers Grow share of market Serve any customer Communicate through mass media Max. standardized products Connections with marketing partners Leave customer satisfaction and value to sales and marketing Go it alone Connection with the world around us Market locally Assume profit responsibility Market for profits Conduct commerce in marketplace

Connections with customers Be market and customer centered Target selected market segments or individuals Focus on customer satisfaction and value Develop customer relationships Keep old customers Grow share of customer Serve profitable customer, fire losing ones Connect with customers directly Develop customized products Connections with marketing partners Enlist all departments in the cause of customer satisfaction and value Partner with other firm Connection with the world around us Market locally and globally Assume social and environmental responsibility Market for nonprofits Conduct e-commerce in marketplace

THE NEW VEW OF MARKETNG

The marketing emphasis today is on keeping existing customers as well as getting new ones Four principles guide marketing:
retention: keeping them referrals: encourage them to relationships: build an recovery: solve problems as they

MARKETNG THNKNG DRVES THE VALUE PROPOSTON

Stages of Marketing Thinking Product Focus Scope of the Value Proposition Core Product

Sales Orientation Customer Interest Customer Service Customer Relationships

Value for Customer functional Efficient Service Building emotional

THE MODERN MARKETNG CONCEPT

All planning and operations are designed to create long-term customer satisfaction:
everyone in the firm is involved in

All marketing activities of the organization should be

designed and delivered across departments

All planning and operations are

meeting customer and achieving

All activities are focused on

the long-term and designed to create an

CORE MARKETNG CONCEPTS

Needs, Needs,Wants, Wants, and and Demands Demands

Markets Markets

CORE MARKETNG CONCEPTS

Products Productsand and Services Services

Exchange, Exchange, Transactions, Transactions, and andrelationships relationships

Value, Value, Satisfaction, Satisfaction,

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MARKETNG MARKETNG CONCEPT CONCEPT

Customer satisfaction

Total company effort

The marketing concept

Profit (or another measure of long-term success) as an objective

MARKETNG FUNCTONS

CREATE DEMAND

SERVE TO DEMAND

MARKETNG FUNCTONS
Exchange functions
Buying, selling.

Physical distributions
Transporting, storing.

Facilitating functions
Standardization and grading, financing, risk taking, securing marketing information

TYPES OF UTLTY AND HOW THEY ARE PROVDED

Provided by production with guidance of marketing Provided by marketing

FORM FORM UTLTY: Value that comes from satisfying human needs

T TME ME

PLACE PLACE

TASK TASK

POSSESS POSSESSON ON

THE GVE AND GET OF MARKETNG

MARKETNG ENVRONMENT

The actors and forces outside marketing that affect marketing managements ability to build and maintain successful relationships with target customers.

MACROENVRONMENT
The larger societal forces that affect the microenvironment demographic, economic, natural, technological, political, and cultural forces.

MACRO ENVIRONMENT

MCROENVRONMENT
The actors close to the company that affect its ability to serve its customers the company, suppliers, marketing intermediaries, customer markets, competitors, and publics.

THE MARKETNG MX
PRODUCT PRCE PROMOTON PLACE (DSTRBUTON)

POWER PEOPLE PHYSICAL DISTRIBUTION( GLOBAL)

CUSTOMER
customer, is usually used to refer to a current or potential buyer or user of the products of an individual or organization, called the supplier, seller, or vendor. This is typically through purchasing or renting goods or services.

CUSTOMERS
HUMAN POTENTIAL BUYER BUYER CUSTOMER CLIENT LOYAL CLIENT

BEHAVIOR
refers to the actions or reactions of an object or organism, usually in relation to the environment OR exhibited by human beings and influenced by culture, attitudes, emotions, values, ethics, authority, rapport, hypnosis, persuasion, coercion and/or genetics.

FACTORS AFFECTING BEHAVIOR

GENETICS - NEEDS - MOTIVES - PERCEPTION - PERSONALITY - ATTITUDES & BELIEVES SOCIAL - CULTURE - REFERANS GROUPS - SOCIAL CLASSES - FAMILY

HIERARCHY OF NEEDS

MOTIVES & MOTIVATION

Drives and desires can be described as a deficiency or need that activates behaviour that is aimed at a goal or an incentive. Motivation is the activation or energization of goal-oriented behavior. Motivation may be intrinsic or extrinsic

PERCEPTION
Perception is the process of attaining awareness or understanding of sensory information.

PERSONALITY
Personality can be defined as a dynamic and organized set of characteristics possessed by a person that uniquely influences his or her cognitions, motivations, and behaviors in various situations

ATTITUDES & BELIEVES

Attitudes are generally positive or negative views of a person, place, thing, or event-- this is often referred to as the attitude object. People can also be conflicted or ambivalent toward an object. Attitudes are expected to change as a function of experience. The relationship between belief and knowledge is that a belief is knowledge if the belief is true, and if the believer has a justification (reasonable and necessarily plausible assertions /evidence /guidance) for believing it is true.

CULTURE
is most commonly used in three basic senses: Excellence of taste in the fine arts and humanities, also known as high culture An integrated pattern of human knowledge, belief, and behavior that depends upon the capacity for symbolic thought and social learning The set of shared attitudes, values, goals, and practices that characterizes an institution, organization or group

WHAT IS DIFFERENTIATION BETWEEN CULTURE & CIVILIZATION ?

SUB CULTURE
is a group of people with a culture (whether distinct or hidden) which differentiates them from the larger culture to which they belong. If a particular subculture is characterized by a systematic opposition to the dominant culture, it may be described as a counterculture. HOW DOES SUB-CULTURE AFFECT TO THE HUMAN BEHAVIOR ?
Subcultures can be distinctive because of the age, ethnicity, class, location, and/or gender of the members. The qualities that determine a subculture as distinct may be linguistic, aesthetic, religious, political, sexual, geographical, or a combination of factors

REFERANCE GROUPS
groups that people refer to when evaluating their [own] qualities, circumstances, attitudes, values and behaviors. It becomes the individual's frame of reference and source for ordering his or her experiences, perceptions, cognition, and ideas of self. It is important for determining a person's selfidentity, attitudes, and social ties CLOSE-RANGE GROUPS; Family, Friends, etc. DISTINGUISHED GROUPS; Politicians, Academicians, Bureaucrats, Players, Singers, Showmans, etc.

SOCIAL CLASS
are the hierarchical arrangements of people in society as economic or cultural groups

Dennis Gilbert, 2002 Class Typical characteristics

William Thompson & Joseph Hickey, 2005 Class Typical characteristics

Leonard Beeghley, 2004 Class Typical characteristics

Capitalist class (1%)

Top-level executives, high-rung politicians, Upper class 1% heirs. Ivy League education common.

Top-level executives, celebrities, heirs; income of $500,000+ common. Ivy league education common.

Multi-millionaires whose incomes commonly exceed $350,000; includes The super-rich (0.9%) celebrities and powerful executives/politicians . Ivy League education common.

Upper middle class[1] (15%)

Highly educated (often with graduate degrees), most commonly salaried, Upper middle class[1] professionals and (15%) middle management with large work autonomy

Highly educated (often with graduate degrees) The Rich (5%) professionals & managers with household incomes varying from the high 5-figure range to commonly above $100,000 Semi-professionals and craftsman with some work autonomy; household incomes commonly range from $35,000 to $75,000. Typically, some college education

Households with net worth of $1 million or more; largely in the form of home equity. Generally have college degrees.

Lower middle class (30%)

Semi-professionals and craftsmen with a roughly average Lower middle class standard of living. (32%) Most have some college education and are white collar.

Middle class (plurality/ majority?; ca. 46%)

College educated workers with incomes considerably aboveaverage incomes and compensation; a man making $57,000 and a woman making $40,000 may be typical.

class (30%)

Clerical and most blue collar workers whose work is highly routinized. Standard of living varies depending on number of income earners, but is commonly just adequate. High school education.

Working class (32%)

Clerical, pink and blue collar workers with often low job security; common household incomes range from $16,000 to $30,000. High school education. Working class (ca. 40% - 45%)

Working poor (13%)

Service, low-rung clerical and some blue collar workers. High economic insecurity and risk of poverty. Some high school education. Those who occupy poorly-paid positions Lower class (ca. 14% - or rely on 20%) government transfers. Some high school education. The poor (ca. 12%)

Blue collar workers and those whose jobs are highly routinized with low economic security; a man making $40,000 and a woman making $26,000 may be typical. High school education.

Underclass (12%)

Those with limited or no participation in the labor force. Reliant on government transfers. Some high school education.

Those living below the poverty line with limited to no participation in the labor force; a household income of $18,000 may be typical. Some high school education

FAMILY
One of the primary functions of the family is to produce and reproduce persons, biologically and socially.[1][2] Thus, one's experience of one's family shifts over time. the family serves to locate children socially, and plays a major role in their enculturation and socialization.[3] From the point of view of the parent(s), the family is a family of procreation the goal of which is to produce and enculturate and socialize children.[

FAMILY TYPES
PATRIARCHAL FAMILY MATRIARCHAL FAMILY MODERN FAMILY DEMOCRATIC FAMILY

ROLE DISTRIBUTION
RESEARCHERS ADVISOR ( EVALUATE ALTERNATIVES) DECDER BUYER USER

PRODUCT
A product is a physical good, merchandise, service, idea, person or place or anything that is capable of offering tangible and intangible attributes that satisfy individuals or organisations and they are prepared to exchange money to acquire it

THE ANATOMY OF A PRODUCT

THE ANATOMY OF A PRODUCT

a. CORE PRODUCT:- core benefits of a product; the reason for a products existence and purchase b. TANGBLE PRODUCT:- real product that clearly represents and communicates the offer of the core benefits, e.g. design, specification, product features, quality level, branding and packaging

THE ANATOMY OF A PRODUCT

c. AUGMENTED PRODUCT:- add-on extras that are used by producers or retailers to increase the products benefits or attractiveness, e.g. such as after-sale services, user training for purchase of PC d. POTENTAL PRODUCT:- possible growth and evolution of the product in the future

PRODUCT CLASSIFICATIONS
PRODUCT BASED USER BASED B 2 B BASED

PRODUCT-BASED CLASSFCATONS
Products that serve different purpose/markets DURABLE PRODUCTS - last long and for many uses before having to be replaced, e.g. fridge, cars etc NON-DURABLE PRODUCTS - can be used once or a few times before being replaced, e.g. FMCG or office consumables SERVCE PRODUCTS - intangible products entailing activities or benefits that are not part of the physical products, e.g. financial services, etc

USER-BASED CLASSFCATONS: CONSUMER GOODS/SERVCES

CONVENENCE GOODS - relatively inexpensive, frequent purchases which respond to routine response buying situations SHOPPNG GOODS - represent more of a risk and an adventure to consumers SPECALTY GOODS - high risk, expensive and infrequently purchased products UNSOUGHT GOODS goods that are not often thought about

USER-BASED CLASSFCATONS: B2B GOODS/SERVCES

CAPTAL GOODS - buildings and fixed equipment that contribute to production. ACCESSORY GOODS - items that give peripheral support to the production process. RAW MATERALS products in their natural state SEM-FNSHED GOODS, e.g. cloth still needs cutting COMPONENTS AND PARTS, e.g. finished goods as part of another product SUPPLES AND SERVCES maintenance, repairs, operations

copyrights@2009

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PRODUCT LIFE CYCLE

Development

Growth

Maturity

Decline

Few:
trial of early adopters

Growing adopters: Growing selectivity Saturation of trial of of purchase users product/service Repeat purchase reliance Entry of May be many Fight to maintain competitors share

Drop-off in usage Exit of some competitors

THE BOSTON MATRX (GROWTH/SHARE MATRX) Market Share

High 1. Stars Market Growth

3. Question Mark (Problem Child)

Low

2. Cash Cows

4. Dogs

High

Low

THE BOSTON MATRX - CHOCOLATE BARS Market Share

High FUSE Market Growth KIT KAT MARS BAR

Maverick Miniature Heroes

Low

TOPIC BOUNTY

High

Low

ANSOFFS MATRX (PRODUCT/MARKET MATRX) Existing Markets

Existing Products

New Markets

Market Penetration

Market Development

New Products

Product Development

Diversification

ANSOFFS MATRX (PRODUCT/MARKET MATRX) Existing Markets

Existing Products

New Markets

E.g. Realignments of the marketing mix

E.g. Geographical expansion

New Products

Same outlets and sales strategy - new product

Diversification related or unrelated

THE PRODUCT MX
The product is the sum of all the products and variants offered by an organisation according to:a. Product lines groups of closely-related products b. Product items individual products in a line c. Product line length range of products in a line; may upward or downward stretch later d. Product line depth has many variants of product lines e. Product mix width the number of products lines in a company copyrights@2009 66