INTRODUCTION TO MARKETING

WHAT IS MARKETING?
Simple definition:
Marketing is the management process responsible for
identifying, anticipating, and satisfying customer
requirements profitably. (CIM,2001)

Goals:
1. Attract new customers by promising superior value.
2. Keep and grow current customers by delivering
satisfaction.
MARKETING DEFINED
Marketing is the activity, set of instructions, and
processes for creating, communicating,
delivering, and exchanging offerings that have
value for customers, clients, partners, and
society at large.
OLD view of
marketing:
Making a sale
telling and selling
NEW view of
marketing:
Satisfying
customer needs
WHY IS MARKETING IMPORTANT?
Shifting Business Paradigms
Sellers markets
Buyers markets
THE MARKETING PROCESS
A simple model of the marketing process:
Understand the marketplace and customer
needs and wants.
Design a customer-driven marketing strategy.
Construct an integrated marketing program that
delivers superior value.
Build profitable relationships and create
customer delight.
Capture value from customers to create profits
and customer quality.
NEEDS, WANTS, AND DEMANDS
Need: State of felt deprivation including physical, social,
and individual needs.
Physical needs: Food, clothing, shelter, safety
Social needs: Belonging, affection
Individual needs: Learning, knowledge, self-expression
Want: Form that a human need takes, as shaped
by culture and individual personality.

Wants + Buying Power = Demand


NEED/ WANT FULFILLMENT
Needs & wants are fulfilled through a Marketing
Offering:
Products:
Persons, places, organizations, information, ideas.
Services:
Activity or benefit offered for sale that is essentially
intangible and does not result in ownership.
Experiences:
Consumers live the offering.

CUSTOMER VALUE AND SATISFACTION
Dependent on the products perceived
performance relative to a buyers expectations.
Care must be taken when setting expectations:
If performance is lower than expectations, satisfaction is
low.
If performance is higher than expectations, satisfaction is
high.
Customer satisfaction often leads to consumer loyalty.
Some firms seek to DELIGHT customers by exceeding
expectations.
MARKETING MANAGEMENT
The art and science of choosing target markets
and building profitable relationships with them.
Requires that consumers and the marketplace
be fully understood.
Aim is to find, attract, keep, and grow customers
by creating, delivering, and communicating
superior value.
MARKETING MANAGEMENT

Marketing managers must consider the following,
to ensure a successful marketing strategy:
1. What customers will we serve?
What is our target market?
2. How can we best serve these
customers?
What is our value proposition?
CHOOSING A VALUE PROPOSITION
The set of benefits or values a company promises
to deliver to consumers to satisfy their needs.
Value propositions dictate how firms will
differentiate and position their brands in the
marketplace.

THE MARKETING CONCEPT
The marketing concept:
A marketing management philosophy that holds
that achieving organizational goals depends on
knowing the needs and wants of target markets
and delivering the desired satisfaction better than
competitors.
CUSTOMER PERCEIVED VALUE
Customer perceived value:
Customers evaluation of the difference between all of the
benefits and all of the costs of a marketing offer relative to
those of competing offers. (Armstrong & Kotler)
Perceptions may be subjective
Consumers often do not objectively judge values and costs.
Customer value = perceived benefits perceived sacrifice.
THE MARKETING MIX
The set of controllable, tactical marketing tools that
the firm blends to produce the response it wants in
the target market.
Product: Variety, features, brand name, quality,
design, packaging, and services.
Price: List price, discounts, allowances, payment
period, and credit terms.
Place: Distribution channels, coverage, logistics,
locations, transportation, assortments, and
inventory.
Promotion: Advertising, sales promotion, public
relations, and personal selling.
CUSTOMER-DRIVEN MARKETING STRATEGY
Requires careful customer analysis.
To be successful, firms must engage in:
Market segmentation
Market targeting
Differentiation
Positioning
MARKET SEGMENTATION AND TARGETING
Segmentation:
The process of dividing a market into
distinct groups of buyers with different
needs, characteristics, or behavior who
might require separate products of
marketing programs.
Targeting:
Involves evaluating each market segments
attractiveness and selecting one or more
segments to enter.
DIFFERENTIATION AND POSITIONING
Differentiation:
Creating superior customer value by
actually differentiating the market offering.
Positioning:
Arranging for a product to occupy a clear,
distinctive, and desirable place relative to
competing products in the minds of target
consumers.
MARKET SEGMENTATION
Key segmenting variables:
Geographic
Demographic
Psychographic
Behavioral


Different segments desire different benefits from
products.
Best to use multivariable segmentation bases in order
to identify smaller, better-defined target groups.
MARKET SEGMENTATION
Why Segment?:
Meet consumer needs more precisely
Increase profits
Segment leadership
Retain customers
Focus marketing
communications
EVALUATING MARKET SEGMENTS
Segment size and growth:
Analyze current segment sales, growth rates, and
expected profitability.
Segment structural attractiveness:
Consider competition, existence of substitute products,
and the power of buyers and suppliers.
Company objectives and resources:
Examine company skills and resources needed to
succeed in that segment.
Offer superior value and gain advantages over
competitors.
MARKET TARGETING
Market targeting involves:
Evaluating marketing segments.
Segment size, segment structural attractiveness,
and company objectives
and resources are considered.
Selecting target market segments.
Alternatives range from undifferentiated
marketing to micromarketing.
Being socially responsible.
DIFFERENTIATION AND POSITIONING
A products position is:
The way the product is defined by
consumers on important attributesthe
place the product occupies in consumers
minds relative to competing products.
Perceptual positioning maps can help define
a brands position relative to competitors.

DIFFERENTIATION AND POSITIONING
Identifying possible value differences and
competitive advantages:
Key to winning target customers is to
understand their needs better than
competitors do and to deliver more value.
Competitive advantage:
Extent to which a company can position
itself as providing superior value.
Achieved via differentiation.