marketing principles and society (1)

7/30/2019 Marketing Principles and Society (1)

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Chapter 1: Marketing Principles and Society


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Define the marketing concept.

Explain how marketing has developed overthe twentieth century.

Describe the three major contexts ofmarketing application, i.e. consumer goods,business to business and services marketing.

Understand the contribution marketing makes

to society. Assess critically the impact marketing has on

society.

Learning Outcomes


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Case Insight Systembolaget

Systembolaget is Swedens

exclusive distributor for the sale and

serving of alcoholic drinks.

Systembolaget was the worlds first

alcohol monopoly and remains theonly retailer of alcohol in Sweden.

But in 2002, only 48% of Swedes

supported the monopoly.

How does an alcohol monopoly like

Systembolaget increase public

support for its existence without

promoting alcohol consumption?


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The management process of anticipating, identifying andsatisfying customer requirements profitably (CIM, 2001).

Marketing is the activity, set of institutions, and processesfor creating, communicating, delivering, and exchanging

offerings that have value for customers, clients, partners,and society at large (AMA, 2007)

Marketing is the endeavour of adapting organisations totheir competitive markets in order to influence, in their

favour, the behaviour of their publics, with an offer whoseperceived value is durably superior to that of thecompetition (French trans.: Lendrevie, Lvy and Lindon,2006).

Definitions of Marketing


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The Three Components of Market

Orientation


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The Marketing Process


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Production period, 1890s-1920s characterized by a focus onphysical production and supply, where demand exceededsupply. This phase took place after the industrial revolution.

Sales period, 1920s-1950s characterized by a focus on

personal selling supported by market research andadvertising. This phase took place after the First World War.

Marketing period, 1950s 1980s characterized by a moreadvanced focus on the customers needs. This phase tookplace after the Second World War.

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

The Development of Marketing


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Marketing Sales

Tends towards long-term

satisfaction of customer needs

Tends towards short-term

satisfaction of customer needs; part

of the value delivery process asopposed 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 demand

Tends to low focus on stimulation of

demand, more focused on meeting

existing demand

Marketing and Sales Compared


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

A Functional Map for Marketing


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The Original developed by Borden

in his teaching but not written up

until 1964:

Product planning

Pricing

Branding Channels of distribution

Personal selling

Advertising

Promotions

Packaging

Display Servicing

Physical handling

Fact finding and analysis(Borden, 1964).

The Shortened simplified version

by Eugene McCarthy and now

more commonly used:

Product

Place (distribution)

Price and Promotion (McCarthy, 1960).

The Marketing Mix


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The 4Ps of the Marketing Mix


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Physical evidence to emphasize that the tangible componentsof services were strategically important since customers usedthese to infer what the quality of society might be.

Processbecause service delivery is inseparable from the

customer consumption process, we include process because ofthe need to manage customer expectations and satisfactionwhich becomes strategically important in this context. Whereprocesses are standardized, it is easier to manage customerexpectations.

People included to emphasize that services are delivered bycustomer service personnel, sometimes experts and oftenprofessionals who interact with the customer sometimes in anintimate manner.

Extension from 4-7 Ps for Services


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Simple Marketing Exchange Processes


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Marketing Exchange: European Airlines


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The Marketing Mix: the Airline Industry

Table 1.3


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The Relationship Pyramid


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Types of Products and Services


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Consumer

product

Product Attribute Consumer Need Inventors/ Pioneers* Yr. of

invention

Ketchup

(from the

Chinese

word

Ketsiap)

A food condiment, derived from the Chinese fish-

based sauce, Ketsiap, but adapted for western

taste, using tomatoes

Designed to improve the consumers

enjoyment of their food by improving

the taste, and reducing the dryness

of some foodstuffs.

F. & J. Heinz Co., USA 1876

Television Transmission of moving images Information, entertainment and

education

Baird Television

Development Company,

UK/Telefunken, Germany

1929/1932

Artificial

sweeteners

Xylitol, as the sweetener is known, is used to

sweeten food products such as sugar-free chewing

gum and toothpastes

It sweetens food products without

damaging teeth

Culter, Finland 1969

Karaoke

sing-along

system

A TV system linked to musicplayer, with words ofmusic tracks displayed on screen, allows a person

with a microphone to sing to a tracks musicalbackground

Designed to entertain small groups in

house parties and large groups of

individuals at venues who typically

enjoy singing themselves and

listening to others, or laughing at

theirfriends efforts

Roberto del

Rosario/Trebel Music

Corporation, the

Phillipines

1975

Mobile

phone

A hand held device for making telephone calls

while in motion

The ability to stay in telephone

contact with others regardless of

ones location

NTT, Japan 1979

Social

networking

A website designed for personal interaction

between friends and acquaintances

Provides easy and instantaneous

communication between two or more

people in multiple locations around

the world

Facebook, Inc, USA 2004

Some Modern Consumer Products and

Their Dates of Inventions


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The Aggregate Marketing System

The aggregate marketing system impedes products because they dont

meet consumer needs. So, it serves a number of benefits to societyincluding the following: the promotion and delivery of desired products and services; the provision of a forum for market learning (we can see what does andwhat doesnt get through the system; the stimulation of market demand; the offering of a wide scope for choice of products and services byoffering a close/ customized fi t with consumer needs; facilitates purchases (or acquisitions generally, e.g. if no payment ismade directly as in the case of public services); saves times and promotes efficiency in customer requirement matching;

brings new products and services, and improvements, to market to meetlatent and unserved needs and; seeks customer satisfaction for repeat purchases (Wilkie and Moore,1999).


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Controversies in Marketing

Consider the following questions? What is a fair price for companies and organizations in wealthier countries to pay

suppliers in poorer countries (see Market Insight 1.5)?

Where is the line between persuading customers and manipulating customers to

purchase products, services, and ideas? Is some marketing promotion really corporate

propaganda?

To what extent should the goods, services, and ideas of one country be marketed over

the goods, services, and ideas of another country? What are the cultural implications?

How much should we consume of any one particular good, service, or idea? When

should governments step in to limit consumption?

Are some groups more susceptible than others to certain types of marketing promotion?

If they are, at what point and how should they be protected?

Are some producers or buyer groups more powerful than others, and what impact, if any,

does this have upon society?

Does the aggregate marketing system itself advantage some groups over others andwhat are the implications for society?


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Defined the marketing concept.

Explained how marketing has developed overthe twentieth century.

Described the three major contexts ofmarketing application, i.e. consumer goods,business-to-business and services marketing.

Understood the contribution marketing makes

to society. Assessed critically the impact marketing has

on society.

Summary

marketing principles and society (1)

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