Mark1012: Marketing Fundamentals Lecture1:Marketing:AnIntroduction:Mohammed

Objective of the lecture

Mohammed Abdur Razzaque

Associate Professor Room 3017: Quadrangle Building g g Email: ma.razzaque@unsw.edu.au

Lecture 1 Marketing: An Introduction

Define marketing Understand basic concepts such as needs, wants, demands, products, value, satisfaction and quality, exchange, transaction and relationships and Markets Familiarise with various marketing management philosophies Understand the marketing challenges of today

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What does marketing function and marketers do?

The benefits or customer value received by users of the product.

Marketers
identify customer need; design goods and services (& ideas) to meet those needs, communicate information about those to prospective buyers; make them available to prospective buyers; price them to reflect costs, competition and customers ability to buy; provide necessary after-sale service and follow-up to ensure customer satisfaction Marketing converts societal needs into profitable opportunities. create customers through the creation of utilities

Utilities
Place
makes a product accessible to ibl t potential customers where they want it.

Possession Time Ti
makes a product available when they want it. created when ownership is p transferred to the buyer.

Information

Image I
the emotional or psychological value that the customer attaches to a product or brand.

created by informing g prospective buyers that a product exists.

Marketing is the management function responsible for assuring that every aspect of the organization focuses on customer relationships by delivering superior value.
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1 Some of the slides have been adapted from Marketing 5th Ed Copyright 2001 Prentice Hall

Mark1012: Marketing Fundamentals Lecture1:Marketing:AnIntroduction:Mohammed

Development of Marketing
Consumer (goods) marketing
Major areas of mark keting focus

Marketing Defined III

Needs

Industrial marketing Non-profit & societal marketing Services marketing S i k ti Customer Satisfaction, Global Marketing, DirectMarketing Online one-to-one marketing
Relationships And Customer Retention

Wants and and Marketing is a social and managerial process by Demands Marketer which individuals and groups obtain what they need and want through creating, offering, and exchanging products of value with others. (K l ) h i d f l ih h (Kotler)

Marketing

Exchange transactions & relationships

1950s 1960s 1970s 1980s 1990s

2000s
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Core MarketingConcepts

Needs, Wants and Demand

Needs: A state of felt deprivation of some basic satisfaction. Not created by society or by marketers, they are natural and exist in the very texture of human biology.
Products

Needs, wants, and demands

Human needs for food, clothing, shelter

Markets

Core Marketing Concepts

Value, satisfaction, and quality

Wants: Desires for specific satisfiers of the deeper needs needs. Continually shaped and reshaped by social forces such as families, religion, schools, business organizations
Muslims want halal meat

Exchange, transactions, and relationships

Demands: Wants for specific products that are backed by an ability and willingness to buy them. Wants become demand when backed by purchasing power.
Many people want a Lexus, only a few are able to buy
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2 Some of the slides have been adapted from Marketing 5th Ed Copyright 2001 Prentice Hall

Mark1012: Marketing Fundamentals Lecture1:Marketing:AnIntroduction:Mohammed

Products, Value, Cost & Satisfaction

Products: Anything that can be offered to satisfy a need or want. Value, cost, satisfaction: Consumers product choice set Value = perceived benefits gained from having or g product - (minus) cost of obtaining it. ( ) f g using the p Customers are value maximizers within the bounds of search costs and limited mobilty, knowledge and income. Their satisfaction is linked to value. Satisfaction is the level of a persons felt state resulting from comparing a products perceived performance or outcome in relation to persons expectation.
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Quality In Marketing

Three dimensions of Quality:

Meeting and striving to exceed customers requirements The absence of variation Total organisational commitment. g

Customer satisfaction>> best indicator of quality

More than quality control

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Customer satisfaction
Experience with a product or service meets
More Repeat Purchases More New Customers

Quality and Profitability

Relative Product Quality Positive Customer Word of Mouth

Increased Customer Loyalty L lt

+
Relative Market Position

Relative Cost Position

Expectation
+
Return on Investment

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3 Some of the slides have been adapted from Marketing 5th Ed Copyright 2001 Prentice Hall

Mark1012: Marketing Fundamentals Lecture1:Marketing:AnIntroduction:Mohammed

Exchange, transactions and relationships

Exchange : way to obtain products or services.

Spectrum of Value Exchange Relationships

Manufacturer Reseller Dentist Teacher Sports team Gov. agency Food bank
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Marketing occurs when people decide to satisfy needs and wants through exchange. Conditions that must be satisfied for an exchange to take place are:

Reseller Consumer Patient Student Fans Citizen Needy

Source: Redrawn from Fredrick E. Webster, Jr. The Changing Role of Marketing in the Corporation, Journal of Marketing, Vol. 56 (October 1992), p. 5.

there must be two parties; each must have something to offer; each must be willing to deal and free to decide; and each must be able to communicate and deliver

Transactions : the basic unit of exchange; Relationship : building long-term relationship.

Markets and Marketers

Managing Demand

Markets: all the potential customers sharing a particular

need or want who might be willing and able to engage in exchange to satisfy that need or want.

Marketing management involves managing demand, which in turn involves managing customer relationship.

Negative demand: major part of the market dislikes the product No demand: target consumers are unaware or uninterested in the p product Latent demand: demand is more than being satisfied Declining demand: demand for the product is declining Irregular demand: demand pattern is irregular, i.e., seasonal Full demand: company is satisfied with the volume it sells Overfull demand: demand is more than the company can handle Unwholesome demand: demands for unwholesome products
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Marketing : managing markets to actualize potential

exchanges for the purpose of satisfying human needs and wants. Involves works that marketers have to perform.

Marketer: someone seeking a resource from someone else

and willing to offer something of value in exchange.

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4 Some of the slides have been adapted from Marketing 5th Ed Copyright 2001 Prentice Hall

Mark1012: Marketing Fundamentals Lecture1:Marketing:AnIntroduction:Mohammed

Marketing Highlight 1
DEMAND STATE
Negative demand No demand Latent demand Faltering demand Irregular demand Full demand

Macro- vs Micro-Marketing
SOME ACTIONS
changed attitudes? connect attributes & needs, AIOs develop product add blue beads add beads.. red spot specials measure performance demarket kissing a smoker is like licking the bottom of an ashtray

MARKETING TASK
disabuse demand create demand? develop demand revitalise demand synchronise maintain demand reduce demand destroy demand

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Macromarketing is the study of the aggregate flow of a nations goods and services to benefit society. Micromarketing is how an individual organization directs its marketing activities and allocates its resources to benefit its customers.
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Overfull demand Unwholesome demand

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A simple Marketing System

Main actors and forces in a modern marketing System

Environment

Communication Company (marketer) Suppliers Competitors Information Marketing intermediaries End user market

Industry (a collection of sellers)

Products and Services

Money

Market (a collection of buyers)

Environment
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5 Some of the slides have been adapted from Marketing 5th Ed Copyright 2001 Prentice Hall

Mark1012: Marketing Fundamentals Lecture1:Marketing:AnIntroduction:Mohammed

Evolution of Marketing Philosophies

1. Production Concept 2. Product Concept 5. Societal Concept Key Marketing Concepts

Marketing Orientation
Refers to an organizational perspective that encourages: the systematic gathering of intelligence, the dissemination of this intelligence across all units, and a coordinated organizational response to the intelligence gathered. th d Marketing has a lead role in TQM by identifying the needs and concerns of customers. Achieving the inter-functional coordination necessary to implement the marketing concept is difficult. A marketing orientation may be measured by using certain criteria.
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4. Marketing Concept

3. Selling Concept

Five competing concepts of how marketing activities are conducted

Five competing concepts of how marketing activities are conducted II

The production concept: Consumers will favor those products that are widely available and low in costs. Example : Hong Kong based HNH International, marketing its Naxos Label low-cost classical music. The Product concept: Consumers will favor those products that are of high quality, performance or innovative features.. Example: Goldstars Chaos washing machine. The Selling concept: Consumers if left alone, will not buy enough of companys products. Management emphasis must be on aggressive selling and promotion efforts. Examples: Most Asian firms practice this.

The Marketing Concept:

the key to achieving organizational goals consists in determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors. Four main pillars of marketing concept are; target market, customer needs, coordinated marketing and profitability. The organizations task is to determine the needs, wants and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors in a way that preserves or enhances the consumers and the societys well being. Three main pillars of societal marketing concept are: company profit, customer need and want satisfaction, and public interest
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The Societal Marketing Concept:

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6 Some of the slides have been adapted from Marketing 5th Ed Copyright 2001 Prentice Hall

Mark1012: Marketing Fundamentals Lecture1:Marketing:AnIntroduction:Mohammed

Marketing & Sales Concepts

1. The Selling Concept
Starting Point Factory Focus Existing Products Means Selling and promoting p g Ends Profits through sales volume

The Societal Marketing Concept

Society (Human Welfare)

2. The Marketing Concept

Customer needs Integrated Marketing Profits through customer satisfaction Consumers (Satisfaction)

Societal Marketing Concept

Company (Profits)

Market

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Three Dimensions of Marketing Concepts

A customer orientation [Give customers what they want] An integrated company effort [Achieving the interfunctional coordination necessary to implement the marketing concept. >> a difficult task.] Goal-directed behavior [Marketing plans and corporate goals must be closely coordinated.]
Anorganizationhavingtheseissaidtohaveamarketing orientation.Anorganizationhavingmarketingorientationis likelytoencourages:
thesystematicgatheringofintelligence, thedisseminationofthisintelligenceacrossallunits,anda coordinatedorganizationalresponsetotheintelligencegathered. Amarketingorientationmaybemeasuredbyusingcertaincriteria.

Basic requirements for developing and maintaining customer orientation

Customer-oriented values and beliefs supported by top management Integration of marketing and customer focus into strategic planning process Development of strong marketing managers and programs Creation of market-based measures of performance Development of customer commitment throughout the organization.
Fred Webster, The rediscovery of Marketing Concept, Business Horizons, May June 1988.

7 Some of the slides have been adapted from Marketing 5th Ed Copyright 2001 Prentice Hall

Mark1012: Marketing Fundamentals Lecture1:Marketing:AnIntroduction:Mohammed

The Marketing Global Superhighway

Customer Relationships

The Range of Marketing Relationships

1.
Distributor Relationships Supplier Relationships

2.
Repeated Transactions

3.
LongLong-Term Relationships

Transactions

Marketing Facilitator Relationships

Producer Relationships

7.
Vertical Integration

6.
Network OrganizaOrganizations

5.
Strategic Alliances
(Inc. Joint Ventures)

4.
BuyerBuyer-Seller Partnerships
(Mutual, Total Dependence)

Internal/Employee Relationships

Source: Redrawn from Fredrick E. Webster, Jr. The Changing Role of Marketing in the Corporation, Journal of Marketing, Vol. 56 (October 1992), p. 5.

Challenges and changes

New Marketing Challenges

Integration of Marketing with Other Business Functions

New Marketing landscape Globalization Changing world economy Technology dependence Nonprofit marketing

New Marketing System Goals

Maximise Quality of Life Maximise Choice Maximise Consumption Maximise Satisfaction

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Human Resources

8 Some of the slides have been adapted from Marketing 5th Ed Copyright 2001 Prentice Hall

Mark1012: Marketing Fundamentals Lecture1:Marketing:AnIntroduction:Mohammed

Bad Aspects of Marketing

Wasteful Propagation of materialism High prices; High costs (Promotion, Distribution) Excessive Markups; Deceptive Pricing High-Pressure Selling Shoddy and Unsafe Products; unnecessary products Planned Obsolescence Poor Service Marketing orientation change from customer 's satisfaction to maximum sales and profit Invasion of privacy of citizens
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9 Some of the slides have been adapted from Marketing 5th Ed Copyright 2001 Prentice Hall