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Chapter 1The Nature Of Marketing

Chapter-1 The Nature of Marketing

Learning Objectives Define the term “marketing” Describe four marketing management

philosophies Discuss the differences between sales and

market orientations Macro and Micro marketing defined Describe the marketing process Describe several reasons for studying

marketing


Marketing- What’s It all About?

All Those Bicycles

More than Selling and Advertisement


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Why Marketing? Products do not sell themselves! Makes sure that the right goods and services

are produced Form utility Task utility Time utility Place utility


Definition of Marketing “Marketing is the process of planning and

executing the concept of pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals”


Concept of Exchange People give up something in order to receive

something that they would rather have. The usual medium of exchange is money.

Exchange can also be fostered through barter or trade of items or services


Five conditions for an exchange There must be two parties Each party must have something the other party

values Each party must be able to communicate with the

other party and deliver the goods or services sought by the other trading party

Each party must be free to accept or reject the other’s offer

Each party must want to deal with the other party


Marketing Management-Philosophy Production

Focus on efficiency of internal operations Sales

Focus on aggressive techniques for overcoming customer resistance

Market Focus on satisfying customer needs and wants

Societal Focus on enhancing individual and societal well-being


Production Orientation Focuses on internal capabilities of the firm

rather than on the desires and needs of the marketplace

Most likely to work for firms producing generic products

E.g. Fast food industry


Sales Orientation Assumes that more goods and services will

be purchased if aggressive sales techniques are used and that high sales result into profits

E.g. Insurance The fundamental problem with this approach

is lack of understanding of the needs and wants of the marketplace


Marketing Orientation Focuses on customer wants and needs Integrates all the organization’s activities Achieves long-term goals for the organization Assumes that sales depends on customer’s

desire to purchase a products


Societal Marketing Orientation Organization exists not only to satisfy

customer wants and needs but also to preserve individual’s and society’s long-term best interests

This orientation serves three bodies The organization itself Society customers


Marketing’s Role over the time

Era Simple trade Production Sales Marketing Dept. Marketing Company

Focus Sell surplus Increase supply Beat competition Coordinate & control Customer satisfaction


Customer Value Customer value is the ratio of benefits to the

sacrifice necessary to obtain those benefits Creating customer values is a core business

strategy of many success firms


Marketers interested in customer value Offer products that perform Give consumers more than they expect Avoid unrealistic pricing Give the buyer facts Offer organization wide commitment in

serves and after-sales support


The Marketing Concept & Customer Value

Take customer’s point of view

Customer may not dwell on value

Where does competition fit?

Customer Cost Benefits


The Marketing Concept

TheMarketingConcept

The company Effort

Profit

CustomerSatisfaction


Relationship Marketing A sense of well-being occurs when one

establishes an on-going relationship with provider

Depends on Customer orientation Effective training programme Employees Team work


Putting it all togetherSuperior

Customer Value

Profitable Relationships with

Customer

Total company effort tosatisfy

Customer

Customer Satisfaction

Customer Acquisition

CustomerRetention


Micro-Marketing Is the performance of activities that seek to

accomplish an organization's objectives, by anticipating customers that will satisfy those needs .

It is a set of activities performed by organizations


Macro-marketing It refers to the social process that directs

goods and services in an economy from produced to consumers in a way that accomplishes the objectives of society by effectively matching supply and demand

Emphasis is on how the whole marketing system works


Marketing Process Organization’s mission and vision, and the role

marketing plays Setting marketing objectives Gathering , analyzing and interpreting information Developing marketing strategy Implementing the marketing strategy Designing performance measure Periodically evaluating marketing efforts and making

changes if necessary


Who performs marketing activities ? Consumers Marketing specialists Advertising agencies Internet service providers Transporting firms


Reasons for studying Marketing Important role in society Important to businesses Offers outstanding career opportunities Affects your life everyday Increasing importance of the global

marketplace


Summary “Marketing is the process of planning and

executing the concept of pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals”

There are four main marketing philosophies, 1. Production 2.Sales 3. Marketing 4. Societal Customer value is the ratio of benefits to the

sacrifice necessary to obtain those benefits


Summary Relationship marketing provides a sense of

well-being occurs when one establishes an on-going relationship with provider

Micro-marketing is a set of activities performed by organizations

Macro-marketing emphasizes on how the whole marketing system works

Study of marketing is essential as it affects our day to day life


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