Marketing

Marketing is an organizational function

and a set of processes for creating,
communicating, and delivering value to
customers and for managing customer
relationships in ways that benfit the
orgnization and its stakeholders.
----The American Marketing Association
 Market
Traditionally, a market was a physical place
where buyers and sellers gathered to exchange
goods.
Economists now describe a market as a
collection of buyers and sellers who transact
over a particular product class.
Marketers view the sellers as constituting the
industry and the buyers as constituting the
market.
Need market; product market; demographic
markets; voter markets; labor markets; donor
markets
 Marketing Concept
The production concept
The product concept
The selling concept
The Marketing concept : a management
orientation that focuses on identifying and
satisfying consumer needs to ensure the
organizations long-term profitability.
 Needs, Wants and Demands
Consumer: the ultimate user of a good or service.
Needs describe basic human requirements.
Needs become wants when they are directed to
specific objects that might satisfy the need.
Demands are wants for specific products backed by
an ability to pay.
Benefit: the outcome sought by a customer that
motivates buying behavior---that satisfies a need or
want.
Marketers create needs.-------?
Marketers get people to buy things they dont want.--
-----?
 Value and Satisfaction
V=B/C

Benefits: functional benefits+emotional

benefits

Costs: monetary costs+time costs+energy

costs + psychic costs
 Exchange
Exchange, which is the core concept of
marketing, involves obtaining a desired
product from someone by offering
something in return.
Marketing consists of actions undertaken
to elicit desired response from a target
audience.
 The Scope of Marketing
Goods
Services
Experiences
Events
Persons
Places
Properties
Organizations
Information
Ideas
 Relationships and Networks
Relationship marketing has the aim of building
long-term mutually satisfying relations with key
partiescustomers, suppliers, distributors, in
order to earn and retain their long-term
preference and business.
The ultimate outcome of relationship marketing
is the building of a unique company asset called
a marketing network. A marketing network
consists of the company and its supporting
stakeholders. Increasingly, competition is not
between companies but rather between
marketing networks.
 Marketing Channels
Communication channels

Distribution channels

Selling channels
 Supply Chain
The supply chain is a long channel
stretching from raw materials to
components to final products that are
carried to final buyers.
 Competition
Competition includes all the actual and
potential rival offerings and substitutes that
a buyer might consider.
 Marketing Environment
Demographic environment
economic environment
natural environment
technological environment
political-legal environment
social-cultural environment
 Marketing Mix
Marketing mix is the set of marketing tools
that the firm uses to pursue its marketing
objectives in the target market.
 4Ps
Product: is a good, a service, an idea, a
place, a personwhatever is offered for
sale in the exchange.

product variety; quality; design; features;

brand name; packaging; sizes; services;
warranties; returns
 4Ps
Price: is the assignment of value, or the
amount the consumer m8ust exchange to
receive the offering.

list price; discounts; allowances; payment

period; credit terms
 4Ps
Promotion: is the coordination of a marketers
marketing communications efforts to influence
attitudes or behavior; the coordination of efforts
by a marketer to inform or persuade consumers
or organizations about goods, services, or ideas.

sales promotion; advertising; store coupons;

sales force; public relations; direct marketing
 4Ps
Place: refers to the availability of the
product to the customer at the desired
time and location.
channels; coverage; assortments;
locations; inventory; transport
 4Ps 4Cs
Product Customer solution
Price Customer Cost
Place Convenience
Promotion Communication
 Attracting and Retaining Customers
A highly satisfied customer:
Stay loyal longer
Buys more as the company introduces new products
and upgrades existing products
Talks favorably about the company and its products
Pays less attention to competing brands and
advertising and is less sensitive to price
Offers product or service ideas to the comapy
Costs less to serve than new customers because
transactions are routinized
 Smart Remarks about Customers
A customer is the most important person ever in this
officein person or by mail.
A customer is not dependent on uswe are
dependent on him.
A customer is not an interruption of our workhe is
the purpose of it. We are not doing a favor by serving
himhe is doing us a favor by giving us the
opportunity to do so.
A customer is not someone to argue or match wits
with. Nobody ever won an argument with a Customer.
A customer is a person who brings us his wants. It is
our job to handle them profitably to him and to
ourselves.
 Customer Retention---Why?
Acquiring new customers can cost five times
more than the costs involved in satisfying and
retaining current customers. It requires a great
deal of effort to induce satisfied customers to
switch away from their current suppliers.
The average company loses 10 percent of tis
customers each year.
A 5 percent reduction in the customer defection
rate can increase profits by 25 percent to 85
percent , depending on the industry.
The customer profit rate tends to tends to
increase over the life of the retained customer.
 Customer Retention---How?
Relationship marketing, the key

Adding financial benefits: Frequency marketing

program (FMPs); Club marketing program

Adding Social Benefits

Adding Structural Ties

 In-class Discussion Topic:

What does marketing mean to

you and how does it change
your daily life?
 Discussion Questions

1. What have been the key success factors for

Coca-Cola?
2. What do you think is Coca-Cocas
vulnerability? What should they watch out for?
3. What recommendations would you make to
their senior marketing executives going forward?
What should they do to ensure that their
marketing efforts are successful?
 Discussion Questions

Why did Amway have to change its basic

operating models twice in China?
When entering a new market, should
MNCs put localization or globalization first?