Introduction to Marketing

Lou Minakakis

Wednesday, February 2, 2011

MG6073 – Marketing Spring 2011
Polytechnic Institute of New York University
Room: RH615
Discussion agenda
1. Review course objectives
– Schedule
– Course Package
2. Introduction to Marketing
– History
– Definitions and concepts
– Methodologies

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Instructor Background
• Louis Minakakis, Adjunct Professor
• Graduate from Polytechnic University in 1999 - Master of Science in Management (MSM)
• Graduated from Pace University in 1995 - Bachelor of Science in Operations Management
• Working as Senior Project Manager in Software Engineering at Citigroup (since 2005)
• Certified Project Management Professional (PMP)
• Certified Lean Six Sigma Green Belt

2
Course Objectives
• Understand foundational elements of marketing: concepts, theories – and how to use them in
corporate environment
• Marketing in practice: develop marketing strategy, research markets, design and implement
market plans, measure marketing results

• How are we to accomplish this?

– Lecture

– Case analysis (in groups)

• Mid term exam (multiple choice) 30 multiple questions, 35 minutes to complete

• Final exam (multiple choice)

– Final Exam is CUMULATIVE – will include content from entire semester

• Individual Assignments

• Group projects

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Recommended Books

• No required textbook for the course

• Recommended books will be discussed in an

Individual Assignment during the semester

4
Grading

• Syllabus contains the grading formula for the course:

Activities Percentages
Mid-term exam 30%
End-term exam 30%
Group Presentations 20%
Class Participation 10%
Individual Assignments 10%

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What does marketing mean to you?

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Marketing defined
• It is about identifying and meeting human and social needs
• An organizational function and a set of processes for creating, communicating, and delivering
value to customers, and for managing customer relationships in ways that benefit the
organization and its stakeholders
• Ensures that the right combination of product qualities, service, support and delivery at a
reasonable price.

Peter Drucker: “The aim of marketing is to know and

understand the customer so well that the product or
service fits him and sells itself.”

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Marketing defined
• Needs - state of felt deprivation for basic items such as food and clothing and complex needs
such as for belonging -- i.e. I am thirsty.
• Wants - form that a human need takes as shaped by culture and individual personality -- i.e., I
want a Coca-Cola.
• Demands - human wants backed by buying power -- i.e., I have money to buy a Coca-Cola.

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Marketing elements

Element Description

 Process that links the marketer to the market by providing information and insights to marketing decision
Research
making

 Group customers into market segments by using different sets of criteria including personal
Segmentation
characteristics, benefits sought, and behavioral measures of the consumer

Positioning  Develop a unique selling proposition for the target market

Branding  Develop the product or service message

 Art and science of choosing target markets and getting, keeping, and growing customers through
Management
creating, delivering, and communicating superior customer value

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Products vs. Services
• Products - anything that can be offered to
a market for attention, acquisition, use or
consumption and that might satisfy a
need or want.
• Examples: persons, places,
organizations, activities, and ideas.
• Services - activities or benefits offered for
sale that are essentially intangible and
don’t result in the ownership of anything.
• Examples: banking, airlines, amusement
parks, and hotels.
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Customer value and satisfaction

• Customer Value - benefit that the • Customer Satisfaction - depends on the

customer gains from owning and using a product’s perceived performance in
product compared to the cost of obtaining delivering value relative to a buyer’s
the product. expectations. Linked to Quality and Total
Quality Management (TQM).

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What is marketed?
• Events
• Experiences
• Places
• Persons
• Properties
• Organizations

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Who purchases products and services?

Actual
Market - buyers Buyers
who share a
particular need
or want that can
be satisfied by a
company’s products Potential
or services. Buyers

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Who uses marketing?

Tourism

Individuals High-Tech

Financial
Services Marketing Media

Govts Sports

Nonprofits

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Marketplace mechanisms
• Exchanges - act of obtaining a desired object from someone by offering something in return.

• Transactions - trade of values between parties. Usually involves money and a response.

• Relationships - building long-term relationships with consumers, distributors, dealers, and

suppliers

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Customer markets
• Consumer markets
• Business markets
• Global markets
• Nonprofit and government markets

3. Communication

1. Products/Services
Market
Industry
2. Money (consumer)

4. Information

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Marketing mix
• Also known as the ―4 Ps‖:

Product Price Place Promotion

• Collection of features • Reflects more than the • Location, distribution • Advertising, direct
and benefits that provide economic cost of channels and logistics marketing, relationship
customer satisfaction producing a product— marketing, public
includes value perceived relations, sales
by the customer promotions, and word-of-
mouth

These can also be viewed as:

Customer Value Cost to customer Convenience Communication

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Marketing Philosophies

 Consumers favor products that are available

Production Concept and highly affordable
 Improve production and distribution

 Consumers favor products that offer the most

Product Concept quality, performance, and innovative features

 Consumers will buy products only if the

Selling Concept company promotes/ sells these products

 Focuses on needs/ wants of target markets

Marketing Concept and delivering satisfaction better than
competitors

 Focuses on needs/ wants of target markets

Societal Marketing Concept and delivering superior value
 Society’s well-being

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Marketing and Sales Concepts Contrasted

Starting Point Focus Means Ends

Profits through
Factory Existing Products Selling & Promoting
Volume

The Selling Concept

Profits
Customer Integrated
Market through
Needs Marketing
Satisfaction

The Marketing Concept

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Sales vs. Marketing

Sales Focus Marketing Focus

 Organization’s needs  Customer’s needs

 Selling goods/services  Satisfying customer wants/needs
 Everybody  Specific groups of people (target market)
 Profit through max. sales volume  Profit through customer satisfaction
 Intensive promotion  Coordinated mktg. activities (4 P’s)

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Marketing elements

Profitable
Marketing Demand
Customer
Management Management
Relationships

 Implementing  Finding and  Attracting new

programs to create increasing demand, customers and
exchanges with also changing or retaining existing
target buyers to reducing demand customers
achieve organization
goals

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Demand management
• Marketer is someone who seeks a response: attention, a purchase, a vote, a donation, from
another party (which is called a prospect).
• Marketer seeks to influence the level, timing, and composition of demand to meet the
organization’s objectives:
1. Negative demand
2. Nonexistent demand
3. Latent demand
4. Declining demand
5. Irregular demand
6. Full demand

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Marketing is Everything - Regis McKenna (HBR, 1991)

Key Idea
Technology is creating greater customer choice, and choice is altering the marketplace

McKenna’s 6 Principles
1. Marketing is a way of doing business that pervades the entire company
2. Companies must dispel their limiting market-share mentality
3. Technology promises to open up almost limitless choice for customers
4. A feedback loop is making advertising's one-way communication obsolete
5. The line between services and products is eroding
6. The marriage of marketing and technology is inevitable

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Marketing is Everything - Regis McKenna (HBR, 1991)

―Old Approach‖ Knowledge-based Experience-based

• Identify product or service
idea
• Conduct market research
• Develop product
• Test product
• Introduce product or
service offering to market
• Integrate customers • Interactivity
into design process • Connectivity
• Generate niche • Creativity
thinking to leverage
channels and
markets to ―own‖
customers
• Develop
relationships with
suppliers, vendors,
partners to support
company reputation
and technological
edge

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Evolution of Marketing Thought

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Evolution of Marketing Thought

High demand for

manufactured goods

P&G product manager

uses the term ‘marketing management’

Emergence of concepts like

advertising, selling, branding

Adam Smith
– classical economics

1776 1850 - 1900 1920 - 1930 1950

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Transition from 1950s
21st-century
marketplace

The IT Revolution

Logistics/
digitization
Market
Cost-cutting orientation
re-engineering
Levitt article
Price competition
Growing emphasis towards
Rise of quality competitiveness
– emergence of strategic
marketing concept

Globalization

Re-emergence of Rediscovery of the

competition marketing concept

1950 - 1960 1970 1980 1990 2000

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Next Session and Case Study

 Branding

 Case Analysis: Coke vs. Pepsi 2006

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