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Chapter # 14

An Introduction to
Marketing
By: Abdul Jaleel Mahesar
Outline
What is marketing?
Marketing strategy
Marketing Tactics
The product lifecycle
What is Marketing? (A
Philosophy)
Marketing as the process by which companies create
value for customers and build strong customer
relationships in order to capture value from customers in
return.
Marketing is managing profitable customer relationships.
Marketing is defined as the management process
responsible for identifying, anticipating and satisfying the
requirements of customers profitability.
What is Marketing? (A
Philosophy)
To understand the marketing philosophy, consider some
alternative approaches.
The production-oriented firm
Concentrates on efficient, low-cost production in the
expectation that the goods will find a market provided the
price is low enough. Hence this firm strives for productive
efficiency rather than responding to customer needs.
Production-oriented Firm
1. Product-Oriented Firm
assumes that the supplier knows best. It will produce high-
quality goods and expect customers to buy them.
2. Sales-Oriented Firm
Focuses on the skills of selling rather than on the needs of
the buer.
Marketing-Oriented Firm
This firm will seek to produce what the customer wants rather
than sell what the firm has produced. The market-oriented firm
places the customer at the Centre and devises an integrated
strategy to satisfy the customer to the mutual advantage of buyer
and seller.
It is no part of market orientation that goods be sold
(permanently) at a loss or within an unsatisfactory level of
profits.
The market orientation remains consistent with the profit
objective of the firm.
Marketing Strategy
Marketing in terms of strategy (involving a coordinated
plan of action) to identify, anticipate, and satisfy customer
demand and thereby achieve the organizations objectives.
The components of the strategy can be identified as:
Market Research: identifying customer needs.
Marketing Strategy
Product planning and development: creating products
to satisfy these needs ;
Pricing: determining the value placed on the product key
customers;
Distribution: the movement of the product to customers;
Promotion: an exercise in communications that includes
advertising and selling.
Marketing Tactics
Tactics can be seen as the details within a broad strategy.
Marketing tactics refer to the tools and techniques by
which the marketing department will seek to achieve its
objective.
Hence, advertising, sales promotion, personal selling and
publicity can be regarded as tactics or activities within the
overall strategy
The product lifecycle
A basic fact of business life is that all products (including
services) pass through a number of phases from
introduction to eventual elimination.
1. Product Development Phase
.Research & development of the product.
.High cost.
.Preparation of marketing plan prior to launch.
The Product Lifecycle
(continued)
2. Launch: The introduction phase
.Low volume of Sales
.High costs.
.Heavy promotional spending.
.High risk
.The aim of the promotional strategy is to create awareness.
.The product is purchased by innovators.
.Growth in sales revenue, but high unit production costs (because of
low volume)
The Product Lifecycle
(continued)
3. The Growth Phase
.A higher volume of sales enables the firm to benefit from
economies of scale.
.Profits grow as sales rise and costs fall.
.The product penetrates the market.
.The product is bought by early adaptors.
.The firm attempts to build up customers loyalty before the
entry of competitors.
The Product Lifecycle
(continued)
4. Maturity
.Sales continue to rise, but at a slower rate.
.The product is now bought by the majority.
.Brand preference is a crucial factor in continuing success.
.Packaging, therefore, plays a significant part in the
marketing effort.
.The firm aims to retain its share of the market by capturing
sales from weaker rivals.
The Product Lifecycle
(continued)
5. Saturation
.The saturation phase sees a continuation of the trends of
the mature phase.
.The major difference, however, is that sales level off
rather than rise at a slower rate.
.As the name suggests, most people who are likely to buy
the product have purchased it (if it is a product we only
buy one of) or are purchasing it at a rate that is unlikely to
rise.
The Product Lifecycle
(continued)
6. The decline Phase
.Sales and profits decline.
.Substitutes appear and the product becomes obsolete.
.The firm seeks to cut its losses either by cutting costs or
by elimination of the product.
The Product Lifecycle
(continued)
7. Elimination
.When firm faced with a decline in sales for a particular
product, the firm has to decide whether the decline is:
Temporary;
Terminal and irreversible; or
Capable of being reversed by an adjustment in the marketing mix.
The Product Lifecycle
(continued)
8. Extension
.Extension strategies aim to rejuvenate the product to
prolong its life. Common strategies involve change in:
The product;
Its packaging;
The way it is promoted;
The channel of distribution used.
The End