Marketing Principles Week 1, part 2 Rhydian Harry

rhh16@aber.ac.uk
Room 3.13, Rheidiol building 01970 622153

Seminars
Jean Chitanda Bright jec36@aber.ac.uk

Assessed (20%)

History of Marketing Thought & The Marketing Mix

Learning Outcomes Define the marketing concept & marketing mix. Explain how marketing has developed over the twentieth century. Describe the three major contexts of marketing application, i.e. consumer goods, business to business and services marketing.

Assess critically the impact marketing has on society. Coca Cola.

Reading: Ch:1 Marketing Principles and Society

History of Marketing Thought & The Marketing Mix

What is Marketing? The management process of anticipating, identifying and satisfying customer requirements profitably. Chartered Institute of Marketing, 2001.

What do Marketers Do?

Source: The Marketing and Sales Standards Setting Board (2006)

To Reform Marketing Practice

Marketing practitioners tend to be held in low respect (Bartels, 1983; Kotler, 2006). To reform we need to: Make marketing a strategic corporate staff function.

Head of marketing reports directly to CEO (Board level)

Provide marketing with capital expenditure budgets in addition

to operating expenditure.
Ensure that marketing controls branding, key account management and business development.
5

The Three Components of Market Orientation

Marketing and Sales Compared

Marketing Sales

Tends towards long-term satisfaction Tends towards short-term of customer needs satisfaction of customer needs; part of the value delivery process as opposed to designing and development of customer value processes Tends to greater input into customer design of offering (co-creation) Tends to lesser input into customer design of offering (co-creation)

Tends to high focus on stimulation of Tends to low focus on stimulation of demand demand, more focused on meeting existing demand

The Marketing Mix

The Original developed by Borden in his teaching but not written up until 1964: The Shortened simplified version by Eugene McCarthy and now more commonly used:

Product planning Pricing Branding Channels of distribution Personal selling Advertising Promotions Packaging Display Servicing Physical handling Fact finding and analysis (Borden, 1964).

Product Place (distribution) Price and Promotion (McCarthy, 1960).

The 4Ps of the Marketing Mix

Product: The offering and how it meets the

customer s need, its packaging and labeling.

Successful companies will find out what the customer wants, then develop the right product. Does not have to be tangible.

Price: Cost to the customer, and cost plus profit to

the seller.
Price positions you in the marketplace. More expensive means higher expectations, all customer dealings must be consistent with these expectations.

The 4Ps of the Marketing Mix

Place: Where customers buy a product, and

means of distributing product to that place.

Must be appropriate and convenient for the customer i.e. available in the right place, right time and quantity. Displaying your product to customer groups.

Promotion: Use of communications to

persuade individuals or organisations to purchase products.

Good promotion is two way communication with customers. Should communicate the benefits that a customer obtains from that product, not just its features.

Extension from 4-7 Ps for Services

Booms and Bitner (1981)
Physical evidence A service cannot be experienced before it is delivered. To emphasize that the tangible components of services were strategically important since customers used these to infer what the quality of society might be. Process because service delivery is inseparable from the customer consumption process. There is a need to manage customer expectations and satisfaction. Where processes are standardized, it is easier to manage customer expectations. People Services are delivered by customer service personnel, sometimes experts and often professionals who interact with the customer. Many customers cannot separate the product or service from the staff member who provides it - people are so important.

Marketing Exchange: European Airlines

The Marketing Mix: the Airline Industry

Table 1.3

The Relationship Pyramid

Types of Products and Services

The Development of Marketing

Production period, 1890s-1920s characterized by a focus on physical production and supply, where demand exceeded supply. This phase took place after the industrial revolution. Sales period, 1920s-1950s characterized by a focus on personal selling supported by market research and advertising. This phase took place after the First World War. Marketing period, 1950s 1980s characterized by a more advanced focus on the customers needs. This phase took place after the Second World War.

Societal marketing period, 1980s to present characterized by a stronger focus on social and ethical concerns in marketing. This phase is taking place during the information revolution of the late twentieth century.

Coca-Cola 2020 Vision

Vision is to double its revenue to $200bn (123.4bn) by 2020.

Ranked no.1 brand in the world by Interbrand (2012), no.5 by Millward Brown (Brandz top 100 2013). Valued at $74billion.

Average consumption of 89 Coca-Cola drinks per year per person.

72 million Facebook followers.
Use 72 million-strong Facebook community to crowdsource ideas to help make the world a happier place. Give power to community and local agencies e.g. Share a Coke campaign

16

Coca-Cola 2020 Vision

The business has been a marketing-led company for its entire existence. While the bottling operations and supply chain make up one of the corporate worlds greatest distribution systems, what the Coca-Cola Company itself has to sell are products, innovation and the promise of its powerful brands; in other words, marketing. (Marketing Week 26 May 2011)

Brand Perception:
YouGov BrandIndexs average of perception measures rose from 9.6 on 30 April to 12.4 on 10 September.
16

Is it working?
Company Growth Foodbusinessnews.net (3/7/2013) Coca-Cola is coming off a year in which higher global volume contributed to a 5% increase in income. Coca-Colas value sales increased 4.93 per cent year on year to 765 million in the 52 weeks to 17 August 2013 (IRI Worldwide data). Volume sales for the Coca-Cola brand grew 3.88 per cent. The total soft drinks markets volume sales grew just 0.98 per cent (IRI Worldwide data).

18

Summary
Define the marketing concept. Looked at Marketing Mix Explain how marketing has developed over the twentieth century. Describe the three major contexts of marketing application, i.e. consumer goods, business to business and services marketing. Assess critically the impact marketing has on society. Relationship Pyramid Coca Cola as an example of established market orientated organisation.