Introductio

ProblemnSolving
to
marketing
concepts

What youll learn...

What is
marketing?

Marketing

What does it
involve?
What is the
marketing mix?

About
Marketing

Marketing in the 21
century

WHY

What is marketing?
Marketing
is not ADVERTISING
is not SELLING
is not PROMOTION

The aim of marketing is to make

selling unnecessary. Peter
Drucker (1973)

What is marketing?
Businesses need to

sell products if they

are to achieve their
objectives.

Marketing is about

ensuring that
businesses can sell as
many products as
possible in order to
make profits.

What does it involve?

Marketing is a very complex

concept.
It involves:
Research
Product design
Setting prices
Making sure the customer knows
about products
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Why is it needed?
Each year millions of new products
are launched:

Without careful
marketing
these products
would fail
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Marketing is the science and art of

exploring, creating and delivering value to
satisfy the needs and wants of a target
market maintaining loyalty at a profit.
Professor Philip Kotler
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Needs

Eat, Dress, Move

Wants

Cheeseburger, Tuxedo, Car

Marketer

10

This Is
Demand
Wants

Buying Power

Demand
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First Task: Detect Needs

12

Marketings first task: discovering consumer

needs

Organizations
marketing focus
Discover consumer needs

Information about needs

Potential consumers:The market

13

What is a Market?
Potential consumers make up a
market, which is:
1.

People

2.

with the Desire and

3.

with the Ability to Buy a

specific product.

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Marketings Second Task: Satisfying Consumer

Needs

Organizations marketing focus

Concepts
for
products

Discover consumer needs

Information about needs

Satisfy consumer needs

Find the right combination of:
Product
Price
Promotion
Place

Goods, services, ideas

Potential consumers:The market

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The Target Market

Because the organization obviously
cant satisfy all consumer needs, it
must concentrate its efforts on
certain needs of a specific group of
potential consumers
This is the target market -- one or
more specific groups of potential
consumers toward which an
organization directs its marketing
programme
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Customer Development
Suspects

First-time

Repeat

Prospects customers customers

Disqualified
prospects

Clients Advocates Partners

Inactive or
ex-customers
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Marketing Vs Sales

Is there a
difference?

18

The Marketing Concept

Organizations must concentrate
on the customer and not the
product or the company
Organizations should revolve
round the customer and not the
other way around
The purpose of a business is to
create and keep a customer

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The Selling Concept

Focuses on matching your product or

service features and benefits in a way

that suits the prospect sales
process is any thing that you do to
close the sale and get signed
agreement or contract
It is any thing that engages you with
the prospect or customer on a
personal level rather than at a
distance
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The Major Role of

Marketing and Selling
People DO NOT buy
products people buy

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Marketing
Management

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Building Customer
Relationships

23

Relationship Marketing
Relationship marketing is linking the
organization to its individual customers,
employees, suppliers, and other partners
for their mutual long-term benefits.

Mutual long-term benefits between the

organization and its customers require
links to other vital stakeholders-including suppliers, employees, and
partners such as wholesalers or
retailers in a manufacturers channel of

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How Marketing became so

important?

25

Four different orientations in the history of business

Production era
Sales era
Marketing concept era
SocietalMarketing era

1860188019001920194019601980
2000
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The Marketing Mix

The marketing mix is the combination
of variables that a business uses to
carry out its marketing strategy and
meet customer needs.
The marketing mix is often called the
4Ps:
Product
Price
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Place

The Marketing Mix

The tools available to a business to gain
the reaction it is seeking from its target
market in relation to its marketing
objectives
7Ps Price, Product, Promotion, Place,
People, Process, Physical Environment
Traditional 4Ps extended to cope with
today's changing environment

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The Marketing Mix

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Product

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Product
Product refers to the functions and

features of a good or service

Should satisfy the needs of the
customer
May have a Unique Selling Proposition
(USP)
Product also includes a range of factors
such as packaging, quality,
warranties, after-sales service and
branding

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Product
The firm must come up with a

product or service that people will

want to buy.

It must fulfil some need

or want.

It must be (or at least seem)

unique.

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Product
Methods used to

improve/differentiate
the product and increase
sales or target sales
more effectively to gain
a competitive advantage
e.g.
Extension strategies
Specialised versions
New editions
Improvements real
or otherwise!
Changed packaging
Technology, etc.

Image copyright: www.freeimages.co.uk

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The Product Life Cycle

The product lifecycle looks at the
sales of a product over time

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Stages in the Product

Lifecycle
Development high costs but no sales
Launch high expenditure on promotion
and product development, low sales
Growth sales increase and product should
break-even
Maturity sales stabilise, less expenditure
on promotion needed, revenue & profit
should be high
Decline sales decline, extension strategies
can be adopted or the product withdrawn 35

Extension Strategies
Extension strategies should maintain
or increase sales. They include:
Modifying the product
Reducing the price
Adding a feature
Promoting to a
different market
sector

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Product or service or
brand

BMW

Core
Product

Freedom to travel

Sheraton
Flight

Zamalek Football Club

Excitement and
leisure

ALICO

Room service

An airline journey

T-shirts photos
with players

Insurance policy
Cooling

Augmented
Product

A motor car
Rooms

Egypt Air

UNIONAIR

Actual
Product

Finance
Warranty
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Price

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Price
The price of a product will depend on:
The cost to make it
The amount of profit desired
Other objectives of the business
The price competitors charge
The price customers are willing to
pay
Is there a high demand?
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Is demand sensitive to changes in price?

Price
The price must be one

that the customer thinks

is good value for money.
This is not the same as
being cheap!
Prices have a great
psychological effect on
Pricing Strategy customers.
- International
Comparative
Cost plus

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Price Leader/Taker
Price leader businesses that
dominate the market can often
dictate the price charged for a
product. Other businesses follow this
lead
Price taker businesses have to
charge the market price. This is
often the case where there are many41

Pricing Strategies & Tactics

Skimming
Launching with a high price when

there is little competition, then

reducing the price later. Often used
with technology.
Penetration
Low price charged initially to
penetrate the market and build
brand loyalty; prrice is then
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Pricing Strategies & Tactics

Competitive
A similar price is charged to that of

competitors products.
Loss leader
Products may be sold at a price lower
than the cost to produce it. Often
used by supermarkets to encourage
people into the store where it is
hoped they will buy other products. 43

Pricing Strategies & Tactics

Psychological
A price is set which customers

perceive as lower than it is e.g.

39.99 instead of 40

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Price
Pricing Strategy
Importance of:

knowing the market

elasticity
keeping an eye
on rivals

Image copyright: www.freeimages.co.uk

45

Promotion

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Promotion
Strategies

to make the
consumer aware
of the existence
of a product
or service
NOT just
advertising

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Promotion
The aims of promotion are to:
Raise awareness
Encourage sales
Create or change a brand image
Maintain market share
Increase market share

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49

Promotion
Above-the-line promotion
This uses advertising media over which
a firm has no direct control e.g.
television, radio and newspapers
Below-the-line promotion
This uses promotional media which the
firm can control e.g. direct mail,
sales promotions and sponsorship
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The promotional message should

Grab

Attention

Stimulate

Create

Interest

Desire

Promote

Action
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Promotional Activities
Advertising e.g. TV, billboards and

internet.
Sales promotions e.g. Loyalty
cards, BOGOF, discounts & free gifts
Sponsorship a business pays to
be associated with another firm,
event or cause
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Promotional Activities
Direct mailing promotional

material is sent to potential

customers by post/email
Public relations building the
relationship between the firm and
the public by enhancing its
reputation
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Promotional Mix
Most businesses use a combination of
different promotional activities.
The chosen promotional mix will
depend on:
Cost
Target market
Product
Competitors
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Place

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Place
The means by which products and

services get from producer

to consumer and where they can be
accessed by the consumer
The more places to buy the product
and the easier it is made to buy it,
the better for the business (and the
consumer?)
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Place
Products should be conveniently

available for customers to buy

Places include:
Stores
Mail order
Telesales
Internet - The use of e-commerce (promoting

and selling on the internet) has grown massively over

recent years

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58

Jobber
One that buys merchandise from

manufacturers and sells it to retailers

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People

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People
People represent the business
The image they present can be important
First contact often human what is the lasting

image they provide to the customer?

Extent of training and knowledge of the
product/service concerned
Do staff represent the desired culture
of the business?

61

People
People represent the business
The image they present can be important
First contact often human what is the lasting
image they provide to the customer?
Extent of training and knowledge
of the product/service concerned
Mission statement how relevant?
Do staff represent the desired culture
of the business?

62

People
People represent the business
The image they present can be important
First contact often human what is the lasting
image they provide to the customer?
Extent of training and knowledge
of the product/service concerned
Mission statement how relevant?
Do staff represent the desired culture
of the business?

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Process

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Process
How do people consume services?
What processes do they have to go
through to acquire the services?
Where do they find the availability
of the service?

Contact
Reminders
Registration
Subscription
Form filling
Degree of technology
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Physical Environment

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Physical Environment
The ambience, mood or physical presentation of the

environment
Packaging.
Internet/web pages.
Paperwork (such as invoices, tickets,..).
Brochures.
Furnishings.
Uniforms.
Business cards.
The building itself (such as prestigious offices or scenic
headquarters).
Mailboxes and many others . . . . . .

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68

Physical Environment
The ambience, mood or physical
presentation of the environment

Smart/shabby?
Trendy/retro/modern/old fashioned?
Light/dark/bright/subdued?
Romantic/chic/loud?
Clean/dirty/unkempt/neat?
Music?
Smell?
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Stages in Consumer
WordDecision Process
of- Mouth
Awareness

Advertising

Interest
Channel
Decision
Product /
Service
Action
Price
Satisfaction
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The Marketing Mix

Blend of the mix depends upon:

Marketing objectives
Type of product
Target market
Market structure
Rivals behaviour
Global issues culture/religion, etc.
Marketing position
Product portfolio
Product lifecycle
Boston Matrix
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Marketing Model
Target Market
Aware
Intention to
Purchase

Understand

Above the
Line
Below the
Line
Point of
Purchase
Experienc
e

Behavior

Co
st

Believe
Want
Find
Buy

Revenue

Use
Pref
er
Loyal

Valu
e

72

Marketing Management
Philosophies
Production
Production
Sales
Sales

Competing
Competing
Philosophies
Philosophies

Market
Market
Societal
Societal Marketing
Marketing
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Marketing Management
Philosophies
Philosophy
Philosophy

Key Ideas

Production
Production Focus on efficiency of internal operations
Sales
Sales
Market
Market
Societal
Societal

Focus on aggressive techniques for

overcoming customer resistance
Focus on satisfying customer needs and wants
Focus on satisfying customer needs and
wants while enhancing individual and
societal well-being
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The Marketing Concept

Focus on
Customer Wants
and Needs

Integrate Organizations
Activities to Satisfy
Customer Needs and
Wants

Achieve Organizations
Long Term Goals by
Satisfying Customer
Wants and Needs

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Comparing Sales and Market

Orientations
Organizations
Focus

Sales
Orientation

Market
Orientation

Firms
Business

For
Whom?

Primary
Tools to
Profit Goal? Achieve

Inward

Selling goods Everybody Maximum Primarily

promotion
and services
sales
volume

Outward

Satisfying
wants and
needs

Specific
Customer
groups
of people satisfaction

Coordinated
use of all
marketing
activities

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Developing Competitive
Advantage
Competitive
Advantage

Customer
Value

Customer
Satisfaction

Customer
Relationships
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Evolving Marketing Mix

The marketing mix will evolve over

time
The product portfolio may grow as a
business becomes more established
More expensive promotional
activities may be adopted as a firms
revenue increases
More outlets may be opened, or
products sold via the internet
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Value and Satisfaction

Expectatio
n
8

Performanc
e
10

Expectatio
n
10

Performanc
e
8

If performance is lower than expectations, satisfaction is

low.
If performance is higher than expectations, satisfaction is
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high.

Why Do So Many Products Fail?

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