overview of marketing class 23 tuesday 11/15/11. nature of marketing to create value by allowing...
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Overview of Marketing
Class 23Tuesday 11/15/11
Nature of MarketingNature of Marketing
• To create value by allowing people and organizations to obtain what they need and want
The Exchange Process: Giving Up One The Exchange Process: Giving Up One Thing for AnotherThing for Another
Marketing Creates UtilityMarketing Creates Utility
• Utility—the ability of a a product or service to satisfy human needs and wants– Place– Time– Ownership– Form
Evolution of the Marketing ConceptEvolution of the Marketing Concept
• The production orientation– During the second half of the 19th
century• The sales orientation
– By the early part of the 20th century• The marketing orientation
– By the 1950s
Marketing OrientationMarketing Orientation
• Requires organizations to:– Gather information about customer
needs– Share that information throughout the
entire firm– Use that information to help build long-
term relationships with customers
Developing Marketing StrategyDeveloping Marketing Strategy
• Marketing strategy: – A plan of action for developing pricing,
distributing and promoting products that meet the needs of specific customers
• Two major components:– Selecting a target market– Developing the appropriate marketing
mix
Selecting a Target MarketSelecting a Target Market
• Market – A group of people who have a need,
purchasing power, and the desire and authority to spend money on goods, services, and ideas
• Target market – A more specific group of consumers on whose
needs and wants a company focuses its marketing effort
Target Market Strategies Total-Market Target Market Strategies Total-Market ApproachApproach
Further RefinementFurther Refinement
• Market Segment– A collection of individuals, groups, or
organizations who share one or more characteristics and have similar product needs and desires
• Niche Market– Narrow market segment focus when efforts are
on one small, well-defined segment that has a unique, specific set of needs
The Keys to Successful Market The Keys to Successful Market SegmentationSegmentation
1. Consumers’ product needs must be heterogeneous2. Segments must be identifiable and divisible3. The market must be divided so segment sales, cost, and
profit can be compared4. One segment must have enough profit potential to justify
a special marketing strategy5. The chosen segment must be reached by the firm with a
particular marketing strategy
Marketing Research & Information Marketing Research & Information SystemsSystems
• Marketing research– A systematic, objective process of
getting customer information to guide marketing decisions
• Marketing information system– A framework for assessing information
about customers from internal and external sources
Collecting DataCollecting Data
• Primary data– Marketing information that is observed,
recorded, or collected directly from respondents
• Secondary data– Information that is compiled inside or outside
an organization for some purpose other than changing the current situation
Influences OnInfluences OnBuying BehaviorBuying Behavior
PsychologicalPsychologicalMotivationMotivationPerceptionPerceptionLearningLearningAttitudesAttitudes
PersonalityPersonality
SocialSocialFamilyFamily
ReferenceReferenceGroupsGroups
Economic orEconomic orSocial StatusSocial Status
CultureCulture
The Marketing Mix and the The Marketing Mix and the Marketing EnvironmentMarketing Environment
The 4 PThe 4 P’’ss
• Product: A good, service, or idea that has tangible and intangible attributes that provide satisfaction and benefit to consumers– Products should be sold at a profit
• Price: A value placed on a product or service that is exchanged between a buyer and seller
• Place (Distribution): Making products available to consumers in the quantities and locations desired
• Promotion: A persuasive form of communication that attempts to expedite a marketing exchange by influencing individuals and organizations to accept goods, services, and ideas
Product - Life CycleProduct - Life Cycle
Introduction StageIntroduction Stage& Marketing Mix& Marketing Mix
Product Awareness
Limited Competition
Skim-Pricing Approach
Few Channels
Growth Stage & Marketing MixGrowth Stage & Marketing Mix
Building Sales
Competition = Lowering Prices
Multiple Channels
Profitable
Maturity Stage & Marketing MixMaturity Stage & Marketing Mix
Sales Grow At Decreasing Rate
Differentiate from Competition
Price Wars
Profits Up With Sales
Changing Consumer Preferences
Decline StageDecline Stage& Marketing Mix& Marketing Mix
Demand Down
Intense Price Competition
Profits Low Or Losses
Revitalize Or Pull Product
Pricing - Product PricingPricing - Product Pricing
•New$Skimming$Penetration
•Other$Cost-Based$Demand-Based$Target Costing$Prestige$Odd-Even
Place - DistributionPlace - Distribution
• Intermediary – “…a wholesaler or retailer who helps move products
from their original source to the end user…”
• Each intermediary in the channel of distribution requires a profit margin,
thus increasing the cost of the product.
Distribution ChannelsDistribution Channels
The Supply ChainThe Supply Chain
Value ChainValue Chain
• “…the entire range of activities involved in delivering value to
customers…”
Promotion MixPromotion Mix
• “…the means by which (companies) communicate
with customers…”
Considerations Considerations BeforeBeforeSelecting Promotional StrategySelecting Promotional Strategy
Purpose of Promotion? Target Market? Product Features to Emphasize? Afford? Similar to Competitors?
Promotional ToolsPromotional Tools
Advertising
Advertising
Personal
PersonalSellingSelling
Sales
Sales
Prom
otion
Prom
otion
Publicity & Public
Publicity & Public
Relations
Relations
Promotion - BrandingPromotion - Branding
• “…word, letter, sound, or symbol that… differentiate(s)… products on the
market.”
• Trademark – “…register(ed) name with the U. S. Patent and Trademark
Office.”• U.S. Patent & Trademark Website
RR
Branding StrategiesBranding Strategies
Private Branding
Generic Branding
Manufacturer Branding
Branding Equity & LoyaltyBranding Equity & Loyalty
• Equity – Value of a brand generated by a favorable consumer experience with a product or service
• Loyalty – Consumer preference for a particular product or service that develops over time based on satisfaction with the company’s products or services
Packaging/LabelingPackaging/Labeling
• Packaging - “…container that holds…(the) product.”
• Labeling – “…what… (is said) about the product on… (the) packaging.”