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INTRODUCTION TOMARKETING
Chapter 1
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Introduction contd.
Marketing came into existence with the first barterexchange (e.g. the barter trade in ancient Egypt,Songhai and Ghana empires in Africa etc.) whensomeone realized that exchanges add value for both
parties. This was the first real step forward in economic
development.
Marketing has evolved (like other practices such asarchitecture, medicine, engineering) over thecenturies to where it is today (Michael Baker).
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Introduction contd.
According to Peter Drucker, the first test ofany business is not the maximization ofprofit but the achievement of sufficient profitto cover the risks of economic activity andthus avoid loss.
Customers are the foundation of a businessand their purpose of existence.
In other words, customers are the mainstayof the business.
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Introduction contd.
As Peter Drucker puts it: There is only onevalid definition of business purpose: tocreate a cus tomer.
It is the custom er who determ ines w hat
business is What the bus iness th inks i t produces is notof f i rst impo rtance, especial ly no t to thefuture of the business and to i ts success in
the market place. The customer determ ines what a businessis , what it produces and whether it wi l lprosper (Druc ker).
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What is Marketing?
It is the most interesting, dynamic, versatile
of all academic disciplines.
It is both theoretical and practical in nature.
It yields real results in the form of profits
and/or satisfaction of business
aims/objectives.
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What is Marketing? contd.
It is a multidisciplinary (economics,psychology, sociology, history, statistics)management process of identifying andsatisfying consumer and organizational
needs profitably.
The aim of marketing is to make profit and/orsatisfy business objectives.
Thus, overall, it enhances human andnational economic development/progress.
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Definition
Marketing is the process of planning andexecuting the conception, pricing,promotion, and distribution of ideas, goods,and services to create exchanges thatsatisfy individual and organizational goals.
Source: The American Marketing
Association (AMA) (see www.ama.org).
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Definition
Marketing is the management processresponsible for identifying, anticipating,and satisfying customer requirements
profitably.
Source: The Chartered Institute ofMarketing (CIM) (UK) (see www.cim.co.uk)
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Recent formal Definition of
Marketing
Marketing is an organizational function and aset of processes for creating,communicating, and delivering value tocustomers and for managing customerrelationships in ways that benefit theorganization and its stakeholders.
Source: American Marketing Association, 2004
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Role of Marketing
Organizational Resources
Effective match Specification
ofTarget Market
Customer Satisfaction
Organizational
Aims/objectives
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The Marketing Concept
The Marketing Concept states that if a
business or organization is to achieve
profitability, the entire organization must be
oriented towards satisfying consumerneeds, wants and aspirations.
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The Marketing Concept
contd.
In other words, The Marketing Concept
holds that the key to success is through
determining the needs/wants/aspirations of
target markets and delivering these moreeffectively and efficiently than competitors.
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The Marketing Concept (key issues)
Organizations must concentrate on thecustomer and not the product or thecompany.
Organizations should revolve round thecustomer and not the other way around.
The purpose of a business is to create andkeep a customer (Theodore Levitt).
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Elements of the Marketing Concept
Consumer/customer Orientation
Total Organization effort
Profitability/achievement of objectives.
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Criticisms of the Marketing Concept
Do customers really know theirneeds/wants/aspirations?
The choice of either consumer orcompetitive orientation.
Adapting to change (rigidity,inflexibility ofthe concept).
Conflict with social responsibility.
Limits in the applicability of the concept (e.g.
the arts, ideology such as political parties,environmentalistsgreenpeace, religionschurches/synagogues etc
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Some Criticisms of Marketing
Too many advertisements are annoying,
misleading, or both.
There are too many unnecessary products.
Middlemen raise prices but dont add value.
Marketing makes people materialistic.
Most of the criticisms result from
misunderstandings about marketing (Perreault &McCarthy, 1999).
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Do you know your market?
What is the product or service being offered?
What are the market trends in the industry?
What is the market?
Who are your customers? And what are they lookingfor?
Who are your competitors? And how do theyoperate/react/behave?
Why do (should) your customers buy your
product/service rather than that of yourcompetitors?
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What is a Market ?
According to Kotler (2004), a market consist
of all the potential customers sharing a
particular need or want who might be willing
and able (i.e., propensity to) to engage inexchange to satisfy that need or want.
Source: Kotler, P. (2004), Marketing Management,
Prentice-Hall, Englewood Cliff, NJ.
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Market Types
Consumer Markets.
Industrial/Business to Business Markets.
Reseller (Retailers, Distributors) Markets.
Publics (Governmentagencies/departments/institutions).
International/global Markets.
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What is Market(ing) Orientation?
The process of applying the marketingconcept in the market place.
Maintaining a customer orientation.
All departments work together guided bycustomer needs/wants/aspirations.
Focus on profits/objectives.
Source: Kohli and Jaworski (1990); Narver and Slater (1990).
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Market Orientation
Production Orientation
--1850s -> 1930s
Sales Orientation
-- 1930s -> 1950s Time Marketing Orientation
-- 1960s -> ??
Consumer Relationship Marketing (CRM)-- 1990s -> ??
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Production Orientation
Focus on the means ofproduction, and assumes
customers will want the
product/service.
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Product Orientation
Focus on the technicalperfection of the
product/service seen throughthe producers (firm) eyes.Assumes customers will
perceive product/service in thesame way and thus buy.
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Selling Orientation
Focus on persuading (usually
aggressive) customers to buy
products which do not usuallymatch their requirements. This
is unlikely to lead to repeat
buy/business.
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Customer Orientation
Focus on discoveringcustomer needs (basicsurvey/question & answer type
) andsatisfying them. This isunlikely to make best uses of
production and otherorganizational resources.
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Marketing Orientation
Focus on the identification of customers
needs, organizational resources and
objectives. Achieve effective match
through market segmentation, targeting,positioning and resource development (see
also Role of Marketing).