2 introduction to marketing

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ADVERTISING PRACTICE 2

Understanding Marketing

Management


What Marketing is Not• One of the most common misconceptions is

associating “marketing as selling”.While selling is an important activity of marketing and is a central function in daily business, marketing is not selling.

• Another common misconception – “marketing equals advertising”It is often reinforced when some of the companies spend their huge advertising budget.Selling and advertising are merely a part of many functions of marketing. Thus, selling and advertising are only the tip of the marketing iceberg.


The Marketing Overview

Advertising

Creative Evaluation Response Evaluation

Revision

EvaluationStage

Creative Decisions

Media DecisionsTiming/Size

ImplementationStage

Direct Marketing

Point of Sale/ Packaging

Sales Promotion

Marketing Public

Relations

Personal Selling

Price DistributionCommunication ProductTacticalStage

Determine Objectives

Strategic Decisions Marketing Mix

StrategicStage

Environmental Assessment

Consumer Assessment

ResearchStage


Definition of Marketing• The simplest definition is: Marketing is the

delivery of customer satisfaction at a profit.• In a general sense, marketing is any

exchange activity intended to satisfy human wants. It is practiced by individuals, businesses and non-profit organization.

• Marketing is the process of continuously and profitably satisfying the target customer’s needs, wants and expectations superior to competition.

- Josiah Go -

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Definition of Marketing• Marketing is an organizational function and a set

of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakes holders.

- American Marketing Association -

• 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.

- Philip Kotler -


Twofold Goal of Marketing• To attract new customers by promising

superior values• To keep and grow current customers by

delivering satisfaction.

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What is Marketed?

– Goods– Services– Experiences– Events– Persons

– Places– Properties– Organizations– Information– Ideas

• Marketing is typically seen as the task of creating, promoting and delivering products to consumers and businesses.

• Marketing people are involved in marketing the following entities:


Goods


Services


Events

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Experiences


Persons


Places


Properties

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Organizations


Information


Ideas


CoreMarketingConcepts

Core Marketing Concept

Exchange, transactions and

relationships Value and satisfaction

Markets

Needs, wants& demands

Marketing offers (products, services &

experiences)

Marketing offers (products, services &

experiences)

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Markets• The set of all actual and potential buyers of

a product or service.• The size of the market depends on the

number of people who exhibit the need, have resources to engage in exchange and are willing to exchange these resources for what they want.


Types Of Markets• Consumer Markets • Business Markets (Industrial Markets)• Reseller Markets• Government Markets • International Markets


Types Of Markets• Consumer Markets

– It consist of individuals and households that buy goods and services for personal consumption.

• Business Markets (Industrial Markets)– Companies that buy goods and services for further

processing or for use in their production process.• Reseller Markets

– Wholesalers, retailers and distributors who buy finished or semifinished products to resell at a profit.


Types Of Markets• Government Markets

– Made up of government agencies that buy goods and services to produce public services or transfer the goods and services to others who need them.

• International Markets – Consist of buyers in other countries,

including consumers, producers, resellers and governments.

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Needs• These are states of felt deprivation. They are

a basic part of the human makeup.• 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.


Wants• These are the form taken by human needs

take as they are shaped by culture and individual personality.

• Needs become wants when they are directed to specific objects that might satisfy the need.


Demands• These are human wants supported by the

willingness and ability to pay for them.• Demand = Want + willingness to buy +

ability to buy• Demand is brand specific.


Needs, Wants & Demands• Marketing companies must learn about and

understand their customers’ needs, wants and demands.

• Companies must measure not only how many people want their product but also how many would actually be willing and able to buy it.

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Needs, Wants & Demands• Simply giving customer what they want isn’t

enough anymore – to gain an edge companies must help customers learn what they want.

BACKADVERTISING PRACTICE 2

Marketing Offers/Products• Product is any offering that can satisfy a

need or want.• Major types of basic offerings: goods,

services, experiences, events, persons, places, properties, organizations, information and ideas.

• A Brand is an offering from a known source.


Marketing Offers/Products• Goods

– It is a physical entity you can touch, objects, devices or things.

– Physical goods constitute the bulk of most countries’ production and marketing effort.

• Services– It 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.

• Ideas– It is a concept, philosophy, image or issue


Is it a Goods, Service or Idea?• Overnight stay in a

hotel • DVD player• This marketing

subject• Dry cleaning• Political party platform• Pair of jeans• Toothpaste• Lawyers• Save the environment

• Advice from a marriage counselor

• Utilities, such as electricity

• Meal at Red Crab• A movie at a theater• Candy bar• Airplane flight• Beauticians• Shampoo• Insurance

(S)

(G)

(S)

(S)

(I)(G)

(I/S)

(S)

(S)(G/S)

(G)(S)

(G)(S)(I)

(S)(G)(S)

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Customer Value • Customer value is the difference between

the values the customer gains from owning and using a product and the costs of obtaining the product.

• A ratio between what the customer getsand what he gives.

• The buyer chooses between different offerings on the basis of which is perceived to deliver the most value.


Customer Value • Value = Benefits/Costs

– Benefits = Emotional benefits + Functional benefits

– Costs = Monetary + Time + Energy + psychic• Value can be increased through

– Lowering costs– Increasing benefits– Combination of both– Raise benefits by more than the raise in costs– Lower benefits by less than the reduction of

costs


Customer Satisfaction • Customer satisfaction is the extent to

which a product’s perceived performance matches a buyer’s expectations.

• It is meeting or exceeding customer expectations.

BACKADVERTISING PRACTICE 2

Exchange• Exchange is the act of obtaining a desired

object from someone by offering something in return.

• A person can obtain product in four ways:– Self-produce– Use force to get a product– Beg– Offer a product, service or money for

something he or she desires.

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Exchange

INDUSTRY (a collection of sellers)

MARKET (a collection of buyers)

Product/services

Money

Information

Communication

For exchange potential to exist, it must satisfy the following conditions:1. There are at least two parties.2. Each party has something that may be valuable to the other party.3. Each party must have the ability to communicate with and make

available what is being offered to the other.4. Each party is free to accept or reject the exchange offer.5. Each party believes it is appropriate or desirable to deal with the

other party.ADVERTISING PRACTICE 2

Transactions • Transactions is a trade of values between

two or more parties. – Monetary transaction– Barter transaction

• It involves several dimensions:– at least two things of value– agreed-upon conditions– a time of agreement – a place of agreement.


Relationship Marketing • It is the process of creating, maintaining

and enhancing strong, value-laden relationships with customers and other stakeholders (employees, suppliers, distributors, retailers, etc.)

• Beyond attracting customers and creating transactions, the goal is to retain customers and grow their business with the company.


Exchange, Transactions and Relationships

Learning Environment

Tuition

Votes

Promised Action

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Exchange, Transactions and Relationships

Fee

Consulting

Products/services

MoneyADVERTISING PRACTICE 2

You Can Be A Marketing Expert!

Marketing is a simple concept. We all see lots of advertising,

and we know what works.

Marketing is just common sense!



Would you sell more Sony Discmans at P500 or P5,000?

Your experience helped you pick the right answer.



In a magazine article, a well-known actress said she often play badminton for fun and

exercise.

What was the reaction of the badminton apparel company? (a) delighted, (b) upset, or (c) somewhere in between?

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Marketing Management• The art and science of choosing target

markets and building profitable relationships with them.

• Involves getting, keeping and growing customers through creating, delivering and communicating superior customer value.

• It is customer management and demand management.


Marketing Management Orientations• The Production Concept• The Product Concept• The Selling Concept• The Marketing Concept• The Societal Marketing Concept


The Production Concept• The idea that consumers will favor products

that are available and highly affordable.

Management should concentrate on achieving high production efficiency, low

costs and mass distribution.


The Product Concept• The idea that consumers will favor products

that offer the most quality, performance and innovative features.

The organization should therefore devote its energy to making continuous product

improvements.

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Marketing Myopia• Sellers pay more attention to the specific

products they offer than to the benefits and experiences produced by the products.

• They focus on the “wants” and lose sight of the “needs.”


The Selling Concept• The idea that the consumers will not buy

enough of the organization’s products unless the organization undertakes a large-scale selling and promotion effort.

This concept assumes that consumers typically show buying resistance and must

be coaxed into buying.It is typically practiced with unsought goods –

those that buyers do not normally think of buying.


The Selling Concept


The Marketing Concept• The marketing concept holds that the key

to achieving organizational goals consists of the company being more effective than competitors in creating, delivering and communicating customer value to its chosen target markets.

The job is not to find the right customers for your product, but the right products for your

customers.

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The Marketing Concept

Profit

CustomerSatisfaction

Total CompanyEffort

TheMarketingConcept


The Marketing Concept• The marketing concept rests on four pillars:

– Target market– Customer needs– Integrated marketing– Profitability


Customer Delivered Value

Market Integratedmarketing

Profits throughcustomer

satisfactionCustomer

needs

(b) The marketing concept

Factory Existingproducts

Selling andpromotion

Profits throughsales volume

Startingpoint Focus Means Ends

(a) The selling concept


The Societal Marketing Concept• The idea that 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 consumer’s and society’s well-being.

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The Societal Marketing Concept• Three considerations underlying the

societal marketing concept:

Societal Marketing Concept

Society (Human Welfare)

Consumers (Want Satisfactions)

Company(Profits)


The Societal Marketing Concept


How Marketing Are Changing?• Changing technology• Globalization• Deregulation• Privatization• Customer Empowerment• Customization• Heightened Competition• Industry Convergence• Retail Transformation• Disintermediation

2 introduction to marketing

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