Introduction to Marketing Miss Mary Lynn Mundell
What Is Marketing? Simple definition:Marketing is the management process responsible for identifying, anticipating, and satisfying customer requirements profitably.” (CIM,2001) Goals: Attract new customers by promising superior value. Keep and grow current customers by delivering satisfaction.
Marketing Defined Marketing is the activity, set of instructions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. OLD view of marketing: Making a sale—“telling and selling” NEW view of marketing: Satisfying customer needs
Shifting Business Paradigms Buyers’ markets Sellers’ markets Why is Marketing Important?
The Marketing Process A simple model of the marketing process: Understand the marketplace and customer needs and wants. Design a customer-driven marketing strategy. Construct an integrated marketing program that delivers superior value. Build profitable relationships and create customer delight. Capture value from customers to create profits and customer quality.
Needs, Wants, and Demands Need: State of felt deprivation including physical, social, and individual needs. Physical needs: Food, clothing, shelter, safety Social needs: Belonging, affection Individual needs: Learning, knowledge, self-expression Want: Form that a human need takes, as shaped by culture and individual personality. Wants + Buying Power = Demand
Need/ Want Fulfillment Needs & wants are fulfilled through a Marketing Offering: Products: Persons, places, organizations, information, ideas. Services: Activity or benefit offered for sale that is essentially intangible and does not result in ownership. Experiences: Consumers live the offering.
Customer Value and Satisfaction Dependent on the product’s perceived performance relative to a buyer’s expectations. Care must be taken when setting expectations: If performance is lower than expectations, satisfaction is low. If performance is higherthan expectations, satisfaction is high. Customer satisfaction often leads to consumer loyalty. Some firms seek to DELIGHT customers by exceeding expectations.
Marketing Management The art and science of choosing target markets and building profitable relationships with them. Requires that consumers and the marketplace be fully understood. Aim is to find, attract, keep, and grow customers by creating, delivering, and communicating superior value.
Marketing Management Marketing managers must consider the following, to ensure a successful marketing strategy: • What customers will we serve? • — What is our target market? • How can we best serve these customers? • — What is our value proposition?
Choosing a Value Proposition The set of benefits or values a company promises to deliver to consumers to satisfy their needs. Value propositions dictate how firms will differentiate and position their brands in the marketplace.
The Marketing Concept The marketing concept: A marketing management philosophy that holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfaction better than competitors.
Customer Perceived Value Customer perceived value: “Customer’s evaluation of the difference between all of the benefits and all of the costs of a marketing offer relative to those of competing offers.” (Armstrong & Kotler) Perceptions may be subjective Consumers often do not objectively judge values and costs. Customer value = perceived benefits – perceived sacrifice.
The set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the target market. Product: Variety, features, brand name, quality, design, packaging, and services. Price: List price, discounts, allowances, payment period, and credit terms. Place: Distribution channels, coverage, logistics, locations, transportation, assortments, and inventory. Promotion: Advertising, sales promotion, public relations, and personal selling. The Marketing Mix
Introduction to Marketing Marketing Strategy
Requires careful customer analysis. To be successful, firms must engage in: Market segmentation Market targeting Differentiation Positioning Customer-Driven Marketing Strategy
Segmentation: The process of dividing a market into distinct groups of buyers with different needs, characteristics, or behavior who might require separate products of marketing programs. Targeting: Involves evaluating each market segment’s attractiveness and selecting one or more segments to enter. Market Segmentation and Targeting
Differentiation: Creating superior customer value by actually differentiating the market offering. Positioning: Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers. Differentiation and Positioning
Key segmenting variables: Geographic Demographic Psychographic Behavioral Different segments desire different benefits from products. Best to use multivariable segmentation bases in order to identify smaller, better-defined target groups. Market Segmentation
Why Segment?: Meet consumer needs more precisely Increase profits Segment leadership Retain customers Focus marketing communications Market Segmentation
Segment size and growth: Analyze current segment sales, growth rates, and expected profitability. Segment structural attractiveness: Consider competition, existence of substitute products, and the power of buyers and suppliers. Company objectives and resources: Examine company skills and resources needed to succeed in that segment. Offer superior value and gain advantages over competitors. Evaluating Market Segments
Market targeting involves: Evaluating marketing segments. Segment size, segment structural attractiveness, and company objectives and resources are considered. Selecting target market segments. Alternatives range from undifferentiated marketing to micromarketing. Being socially responsible. Market Targeting
A product’s position is: The way the product is defined by consumers on important attributes—the place the product occupies in consumers’ minds relative to competing products. Perceptual positioning maps can help define a brand’s position relative to competitors. Differentiation and Positioning
Identifying possible value differences and competitive advantages: Key to winning target customers is to understand their needs better than competitors do and to deliver more value. Competitive advantage: Extent to which a company can position itself as providing superior value. Achieved via differentiation. Differentiation and Positioning