2. Lecture Outcomes
The components of marketing environment
The key elements of the environment
How firms go about analyzing the environment
How the environmental factors changing markets
Factors involved on internal environments
Key tracking and identifying opportunities in the
microenvironment
Dynamic and complex marketing environments
Example of each environment.
p. 02
3. What is marketing ?
Marketing is the delivery of customer satisfaction at a profit-
it is the simplest definition.
The twofold goal of marketing are-
To attract the new customers by promising superior
value, and
To keep current customers by delivering satisfaction.
To attract new customer by promising superior value, and to
keep current customers by delivering satisfaction.
Introduction
p. 03
4. Marketing defined
Many people think of marketing only as selling and advertising.
Selling and advertising are only the tip of the marketing ice-berg.
Marketing is one of three key core functions that are central to
all organizations.
Within these stages are to be found the main managerial activities of:
• Planning
• Decision-making
• Control.
Marketing is a social and managerial process by which
individuals and groups obtain what they need and want through
creating and exchanging products and value with others.
5. Marketers act as the customers’ voice within the firm and
marketers are responsible for many more decisions than just
advertising or sales:
Analyze industries to identify emerging trends.
Determine which national and international markets to
enter or exit.
Conduct research to understand consumer behavior.
Design integrated marketing mixes – products, prices,
channels of distribution, and promotion programs.
6. Chartered Institute of Marketing defines it as:
“. . . the management process for identifying, anticipating and
satisfying customer requirements profitably.”
A slightly longer but conceptually similar definition of marketing
was proposed by the American Marketing Association (AMA):
“Marketing is 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.”
Keywords: Self-centered; customer-oriented; competitor-
centered; market-driven; competitor emphasis; customer
emphasis.
7. AMA definition presents marketing as
• a functional process conducted by the organization’s
marketing department,
• whereas the general thrust of the more recent literature
on marketing theory is that
• marketing is increasingly being conceptualized as an
organizational philosophy or
• ‘an approach to doing business’.
McDonald (1989, p. 8) defines:
“Marketing is a management process whereby the
resources of the whole organization are utilized to satisfy
the needs of selected customer groups in order to achieve
the objectives of both parties. Marketing, then, is first and
foremost an attitude of mind rather than a series of
functional activities.”
8. Selling occurs only after a product is produced.
By contrast, marketing starts long before a company has a
product. Marketing is the homework that managers
undertake to assess needs, measure their extent and
intensity, and determine whether a profitable opportunity
exists.
Marketing continues throughout the product’s life, trying to find
new customers and keep current customers by improving product
appeal and performance, learning from product sales results and
managing repeat performance.
Sellers must search for buyers, identify their needs, design
good products and services, set prices for them, promote
them, and store and deliver them.
9. “Marketing management as the
• analysis,
• planning,
• implementation, and
• control
of programs designed to create, build, and maintain beneficial
exchanges with target buyers for the purpose of achieving
organizational objectives.”
Marketing within the customer market is aimed out by:
►Sales managers, ►sales people, ►adverting and promotion
managers, ►market managers, and ►marketing vice- president.
Each job carries well-defined tasks and responsibilities.
Marketing Management
10. Some Definitions
Human needs are states of felt deprivation.
They include:
basic physical needs for food, clothing, warmth,
and safety;
social needs for belonging and affection; and
individual needs for knowledge and self
expression- they are a basic part of the human
makeup.
Needs
• When a need is not satisfied, people will try either to reduce
the need or look for an object that will satisfactory.
• People in less develop society may try to reduce their desire
and try to satisfy what is available.
• People in mid-level society may try to find develop objects
that will satisfy them or reduce their desire and try to satisfy.
11. Wants are the form of human needs take as they are
shaped by culture and individual personality.
A person in the USA needs food but wants a
hamburger, french fries, and a coke.
A person in Mauritius needs food but wants a mango,
rice, lentils and beans.
A hungry person in Bangladesh needs food but wants
rice or bread and a glass of water.
As society evolves, the wants of its numbers expands. As
people are exposed to more objects that their interest and
desire, producer try to provide more wants satisfying product
and services.
Wants
12. Human wants that are backed by buying power is
defined as demand.
People have almost unlimited wants but limited
resources. Thus, they want to choose products
that provide the most value and satisfaction for
their money. When backed by buying power, wants
become demands.
A Honda 100 CC means basic transportation;
affordable in price, and fuel economy.
A Lexus means comfort, luxury and status. Given
their wants and resources, people demand
products with the benefits that add up to the most
satisfaction.
Demands
13. Customer value is the difference between the values
that the customer gains from owing and using a
product and the costs of obtaining the product.
Customer usually faced a board array of products and
services that might satisfy a given need.
For example, FedEx customers gain a number of
benefits. The most obvious and first and reliable
package delivery. However, when using FedEx,
customer also may receive some status and image.
Using FedEx usually makes both the package sender
and the receiver feel more important. Thus, FedEx is
the best in USA that other shippers- UPS, Airborne,
the US Postal Service.
Value
14. A product is anything that can be offered to a
market for attention, acquisition, use, or
consumption that might satisfy a want or need.
It includes
• physical objects,
• services,
• persons,
• places,
• organizations, ideas etc.
A manufacturer of a drill bits may think that the
customer needs the drill bits, but what the customer
really needs? The answer is a hole. The sellers may
suffer from Marketing Myopia
Product
15. Service is any activity or benefit that one party
can offer to another that is essentially intangible
and does not result in the ownership of anything.
Examples include Banking, Airlines, Hospital,
Hotels, Tax preparation, Home repair services etc.
The extent to which a product’s perceived
performance matches a buyer’s expectations. If the
product’s performance falls short of expectations,
the buyer is dissatisfied. If performance matches
or exceeds expectations, the buyer is satisfied or
delighted.
Satisfied customers and delighted customers.
Service
Customer
Satisfaction
16. Total quality management is a program designed to
constantly improve the quality of products, services and
marketing processes.
Quality has a direct impact on product performance and
hence on customer satisfaction.
The Vice-president of quality at Motorola Company says-
‘if the customer doesn’t like it, it’s a defect.’
The American Society for Quality Controls defines –
‘quality as the totality of features and characteristics of a
product or service that bear on its ability to satisfy
customer needs.’
Total Quality Management
17. Exchange is the act of obtaining a desired object
from someone by offering something in return.
Example – Hungry people could find food by hunting,
fishing, or gathering fruits. They could beg for food,
or take food from someone else. Or, they could offer
money, another goods, or services in return for food.
A transaction consists of a trade of values between
two parties that involves at least two things of value,
agreed upon conditions, a time of agreement, and a
place of agreement.
Example, you may pay Tk. 10,000 for a television
set; this aims a classic monetary transaction. But
not all transactions involve money.
Exchange
Transaction
18. Relationship marketing is the process of creating,
maintaining and enhancing strong, value-laden
relationships with customers and other stockholders.
Marketers need to build long-term relationships with
valued customers, distributors, dealers, and suppliers.
They want to build strong economic and social
connections by promising and consistently delivering
high quality products, good service, and fair prices, also
tying to maximize the profit.
To build a mutually beneficial relationship with customers
and to other parties, a company wants to build a unique
company asset called a marketing network.
Relationship Marketing
19. Market
A market is the set of al actual and potential buyers of a
product or service. These buyers share a particular need
and want that can be satisfied through exchanges and
relationships.
Originally, the term market stood for the place where
buyers and sellers gather to exchange their goods, such
as village square.
Economist uses the term market to refer to a collection of
buyers and sellers who transact in a particular product.
Sellers and the buyers are connected by four flows:
(i) sellers send products, (ii) services and communication
(iii) inter-loop , and (iv) upper loop for exchange of information.
20. Industry
(a collection
of sellers)
Market (a
collection of
buyers)
Communication
Products / Services
Money
Information
A simple marketing system
Suppliers
Competitors
Company
(marketer)
Marketing
intermediaries End user market
Main actors and forces in a
modern marketing system
The set of all actual and potential
buyers of a product or service
21. Demarketing
Demarketing is the marketing to reduce demand
temporarily or permanently; the aim is not to destroy
demand, but only to reduce or shift it.
Managing demand means managing customers. A
company’s demand comes from two groups:
• New customers and
• Repeated customers.
The organization has a desired level of demand for its
products. At any point in time, there may be no
demand, adequate demand, irregular demand, or too
much demand; and marketing management must find
out ways to deal with these different states.
22. Customers
A customer is the most important person ever in the
company- in person or by mail.
A customer is not dependent on us, we are dependent
on him;
A customer is not an interruption of our work, he is the
purpose of it;
We are not doing a favor by serving him, he is doing us
a favor by giving us the opportunity to do so;
A customer is a person who brings us his wants- it is
our job to handle the profitably to him and to ourselves.
23. MARKETING MANAGEMENT PHILOSOPHIES
• The role that marketing plays within a company varies according
to the overall strategy and philosophy of each firm.
• There are five alternative concepts under which organizations
conduct their marketing activities:
• Production concept
• Product concept
• Selling concept
• Marketing concept
• Societal marketing concepts
24. Production Concept
The philosophy that consumers will favour products that are
available and highly affordable and that management should
therefore focus on improving production and distribution efficiency.
25. 25
Product Concept
The philosophy that consumers will favour products that offer the
most quality, performance, and innovative features.
26. 26
Selling Concept
The idea that consumers will not buy enough of the organization’s
products unless the organization undertakes a large – scale selling
and promotion effort.
27. 27
Marketing Concept
The marketing management philosophy that holds that achieving
organizational goals depends on determining the needs and wants of target
markets and delivering the desired satisfactions more effectively and
efficiently than competitors do.
28. 28
Societal Marketing Concept
The idea that the organization should determine the needs, wants,
and interests of target markets and deliver the desired satisfactions
more effectively and efficiently than competitors in a way that
maintains or improves the consumer’s and society’s well – being.
30. 30
Three Considerations Underlying The Societal Marketing
Societal
marketing
concept
Society
(Human welfare)
Company
(Profits)
Consumers
(Want satisfaction)
31. Marketing Management Philosophies
There are five alternative concepts under which organizations conduct their marketing activities:
(a) The Production Concept, (b) The Product Concept, (c) The Selling Concept,
(d) The marketing Concept, and (e) The Societal Marketing Concept.
Production Concept
Production Concept holds that customers will favor products that are available and highly
affordable and that management should, therefore, focus on improving production and
distribution efficiently. This concept is one of the oldest marketing concept.
The production concept is still a useful philosophy in two types of situations.
When the demand for a product exceeds the supply; here management should look for
ways to increase production,
When the product cost is too high and improved productivity is needed to bring is down.
Example: Henry Ford
32. Product Concept
Product Concept holds that customers will favor products
that offer the most quality, performance and features that the
organization should, therefore, devote its energy to making
continuous product improvement. A detailed version of the
new product idea stated in meaningful customer terms.
For example- mouse trap vs chemical spray. Delighted
customer come back again and again. American Express
loves to tell stories about how its people have rescued
customer from deserters ranging from civil wars to
earthquakes, no matter what the cost.
33. Selling Concept
The selling concept holds that the customer will not buy enough of the organization’s product unless it undertakes a large-scale selling and promotion effort.
Most firms practices the selling concept when they have over capacity. Their aim is to sell what they make rather than make what the market wants. Such marketing carries h
Starting
point
Focus Mean
s
Factory
Existing
product
Selling &
Promotio
Ends
Profit
through
sales volume
Fig- The selling conceptMost studies show that dissatisfied customers do not buy again. Whereas, the average satisfied customers tells three others about good experiences, the average dissatisfie
34. Marketing Concept
The marketing management philosophy that holds achieving
organizational goals depends on determining the needs and
wants of target markets and delivering the desires
satisfactions more effectively and efficiently than competitors
do.
The marketing concept has been stated in colorful ways,
such as – Marriott says, “We make it happen for you”;
British Airways says, “To fly to serve”; General Electronics
says, “We’re not satisfied until you are”.
Many successful and well-known companies have adopted
the marketing concept, such as – Proctor and Gamble (P&G),
Disney, Wal-Mart, Marriot, Nordstrom, Dell Computer, and
Southwest Airlines. L. L. Bean, the highly successful catalog
retailer follow marketing concept on the words- “ Perfect
satisfaction in every day”.
Starting
point
Focus Mean
s
Ends
Marke
t
Custome
r
needs
Integrate
d
marketin
g
Profit
through
customer
satisfaction
Fig- The marketing concept
35. Societal marketing Concept
The societal marketing concept holds that the organization
should determine the needs, wants, and interests of target
markets and deliver the desired satisfactions more effectively
and efficiently than do competitors in a way that maintains or
improves the customer’s and society’s well-being.
The societal marketing concept is the newest of the five
management philosophies. Three considerations underlying
the societal marketing concept: Customers , Company through
profit, Society (Human welfare).
The societal marketing concept questions whether the pure
marketing concept is adequate in an age of environmental
problems, resources shortages, rapid population growth,
world-wide economic problems and neglected social services.
According to the societal concept, the pure marketing concept
overlooks possible conflicts between consumer short-term
wants and consumer long-term welfare.
The societal marketing concept calls on marketers to balance
the three considerations in selling their marketing policies,
company profit, consumer wants and society welfare.
Examples are Coca-Cola, Johnson & Johnson, McDonald’s,
etc.
