chapter 1 marketing today

CHAPTER 1MARKETING TODAY

part one: this is marketing

an opening challengeYou tell friends who are studying sciences that you are doing a marketing course. One says, ‘You’re studying advertising, what fun.’

Is he right – is marketing just another name for advertising?

agenda• marketing defined• origins of marketing• demand and supply theory• the concept of exchanges

– types of exchange• strategic orientations• customers or consumers?• modern marketing

marketing definitions

‘The management process which identifies, anticipates and satisfies customer requirements efficiently and profitably.’ (The Chartered Institute of Marketing, n.d.)

marketing definitions 2‘Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.’ (The American Marketing Association, 2007)

what is a market?

a place where buyers and sellers meet

photo courtesy of Dave Pickton

the marketing processmarket research & analysis

marketingobjectives

marketing tasks

feedback& control

market research and analysis where and who we are now

• market research • competitive research

– what is our position in the market? • organisation research

– what are we good at? – what are we bad at?

• what worked well in the past? • are we risk takers?

marketing objectiveswhere and who we want to be

• aims• targets

– e.g. market share, sales, brand image, brand awareness, number of sales outlets, new product launches, customer satisfaction levels, etc.

marketing taskshow we are going to make it happen

• planning • staffing• budgets• promotion• sales• pricing

• distribution• product management• branding• market entry• customer service • customer management

feedback and controlhow we will keep track of things

• objectives• customer feedback• checklists and deadlines• market position

why marketing?

mass production

excess supply

competition

urban development

middlemen

market classifications market typical purchase descriptions consumer personal purchases industrial things used to make other products b2b things used in the course of another business

not for profit purchases made by charities, trades unions, associations, etc.

government purchases by central and local government, health services, schools, libraries, armed forces, police, etc.

reseller goods to be sold on overseas all the above categories – but in other countries internal other divisions, subsidiaries or employees

the theory of demand and supply

price

quantity demanded, i.e. sales volume

supplyof goods

demandfor goods

the equilibrium point

price

quantity demanded, i.e. sales volume

supplyof goods

demandfor goods

X

supply equalling demand

the relationship between price and

sales

as pricegoes up

sales volumegoes down

and vice versa:as price goes down, sales volume (demand) goes up

exchanges

products/services

customer seller

payment

value

strategic orientations

orientation focuses on typical objectives

production production efficiencyhigher profits through reduced costs

productproduct quality and features

increased sales through product improvements

sales sales techniques and advertising

sales volume – often short term

customer customers’ needsincreased long-term sales through customer loyalty, positive image

marketcustomers’ needs and competitors’ strategies

long-term profits through good customer relations and a sustainable competitive advantage

market orientation

• focus on customers and competitors• coordination of all business functions

– marketing, HR, finance, operations, R&D• taking marketing research seriously• long-term view of markets and products

focus on customers

• ‘the customer is king’• importance of customer service• employee priorities• customer or consumer?

– how influential are consumers?– depends on purchase type and occasion

advantages of a market orientation

• better understanding of customer needs• better customer relations• a better reputation in the marketplace• more new customers • more repeat purchases• improved customer loyalty• more motivated staff• competitive edge

modern marketing

transactionmarketing

relationshipmarketing

• one-off sales• short-term view• hard sell

• repeat sales• long-term view• ongoing relationship

retaining valuable customers AQ – text missing

the marketing mixthe 4Ps

ProductPromotionPricePlace

marketing today and tomorrow

• digital technologies• social change• social networking media• communications overload• marketing metrics• lifestyle branding• consumerism• eco-consumers

summary

• what marketing is, and is not– definitions and scope

• exchanges of value• importance of long-term relationships• demand and supply theory• strategic orientations

– the importance of a customer focus• the fast-changing world of marketing

references• American Marketing Association (AMA) (2008)

‘AMA releases new definition for marketing’. Available at: http://www.marketingpower.com/AboutAMA (accessed 03/08/13).

• Chartered Institute of Marketing (CIM) (n.d.) Marketing Glossary. Available at: http://www.cim.co.uk/cim/ (accessed 11/06/07).