PRINCIPLES OF MARKETING Introduction to Marketing

Importance of marketing in the global economy

Nations depend upon marketing to sell their RMs & industrial output to other nations Companies now compete in markets all over the world Foreign companies now build > 2 million cars & light trucks p.a. in the U.S., up from nothing 15 years ago And now 54K jobs in USA due to Indian demand

Marketing in the global socioeconomic system

Place utility Time utility
Make product accessible to potential customers where they want it Make product available when they want it Inform prospective buyers that a product exists Emotional / psychological value that customer attaches to product / brand When ownership transferred to buyer

Information utility Image utility

Possession utility

Importance of marketing in organizations Raison d'tre of firms existence

Customers want satisfaction.

Marketing the only revenueproducing activity for firm Marketing become increasingly important for service firms & nonprofit organizations alike

Importance of marketing in your life Marketing is a large part of your daily life. Consumers are exposed to 3,000 commercial messages a day. Studying marketing will make you a better-informed customer. Marketing probably relates -directly or indirectly -- to your career aspirations.

Evolving Discipline of Marketing

Early 20c from Economics
Role of middlemen and role of non-price functions in determination of demand levels and characteristics neglected

Economics concerned with resource allocation Marketing concerned with process of exchange underlying that reallocation

History of the Definition of Marketing

the performance of business activities that direct the flow of goods and services from producers to consumers. the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational objectives.

1935 1985
an organizational function & a set of processes for creating, communicating & delivering value to customers & for managing CRs in ways that benefit the organization & its stakeholders.

the activity, set of institutions & processes for creating, communicating, delivering & exchanging offerings that have value for customers, clients, partners & society at large.

2004

2007

PRODUCTION ORIENTATION Some industries and organizations remain at the production-orientation stage.

PRODUCTION ORIENTATION

SALES ORIENTATION

Other industries and organizations have progressed only to the sales-orientation stage.

PRODUCTION ORIENTATION

SALES ORIENTATION

MARKETING ORIENTATION

Many industries and organizations have progressed to the marketing-orientation stage.

Late 1800s

Early 1930s

1-9 Mid-1950s

1900s

For an exchange to occur..

> two parties. Each has something that might be of value to the other Each capable of communication and delivery Each free to reject exchange offer Each believes it is appropriate or desirable to deal with the other

What is Marketed?
Goods Services Events Experiences Persons Places Properties Organizations Information Ideas

Demand States
Negative
Dislike product & may pay price to avoid (vasectomies) Redesign, tinker with price, promo

Declining
(government schools) Restimulate demand, tinker with features, communication, new target markets creative remarketing

Nonexistent
Unaware or disinterested (new farming methods) Connect benefits with needs & interests

Irregular
Varying demand (hotel rooms) Synchro marketing alter demand thro pricing, promos

Latent
Strong need not satisfied by current products (harmless cigarettes, fuel-efficient cars) Estimate potential & develop offerings

Unwholesome
Discourage consumption (alcohol) Fear, price, availability

Overfull
Demarketing reduce not destroy

Full

Marketing Mix and the Customer

Four Ps Product Price Place Promotion

Four Cs Customer solution Customer cost Convenience Communication

I want it, I need it..

5 Types of Needs Stated needs Real needs Unstated needs Delight needs Secret needs

1-14

Marketing Management Tasks

Developing marketing strategies Capturing marketing insights Connecting with customers Building strong brands Shaping market offerings Delivering value Communicating value Creating long-term growth

The Value Proposition

The whole cluster of benefits the company promises to deliver

1-16

Determinants of Customer Delivered Value

Image value Personnel value Services value Product value Monetary cost Time cost Total customer cost Total customer value Customer delivered value

Energy cost
Psychic cost

Levi Strauss Value-Delivery Network

Order Du Pont (Fibers) Delivery Milliken (Fabric)

Order
(Apparel)

Order Levis Sears (Retail) Delivery

Order Customer

Delivery

Delivery

Competition is between networks, not companies. The winner is the company with the better network.

Satisfied Customers
Are loyal longer Buy more (new products & upgrades) Spread favorable word-of-mouth Are more brand loyal (less price sensitive) Offer feedback Reduce transaction costs

Customer Development
Suspects

Prospects

First-time customers

Repeat customers

Clients

Advocates

Partners

Disqualified prospects

Inactive or ex-customers

Overview of Marketing
Vision, Mission, SBU Strategy Opportunity identification, Strategic planning

Customer analysis Product Policy, The Idea, Branding fundamentals Segments

Competitor

Bundle of benefits

Target

Differentiation

Positioning Tactical marketing