Welcome Back The MARKETING CONCEPT

Barbara Armstrong Programme Director, Business Programmes Birmingham Business School

Key Points

Be aware that marketing is both a philosophy which determines the strategic orientation of an organisation, and a function involving a series of techniques such as product development, advertising and research Understand the development of marketing and the reasons for that development Understand the basic role of marketing management: analysis of the marketing environment, planning, implementation and control Note the elements of the marketing mix and how they are used

Marketing

What do marketing people do?

Write down up to 3 words or phrases which immediately come to mind when you hear the word marketing .

Marketing is a way of thinking about business

The fundamental idea that the very survival of a company ultimately depends upon its ability to satisfy its customers Companies which apply the marketing concept have a market / customer orientation All employees focus on the needs of their customers The three pillars of marketing are customers, competitors and profit

What is Marketing?

Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements, profitably
The Chartered Institute of Marketing

Marketing is an exchange process

Marketing can be applied to all types of organisations i.e. Drinks Companies, Hospitals, Universities.
Individual

Cash Slake Thirst Insurance Premium Assured Medical Treatment Fees Education Provision

Patient

Student

What does a marketing department do?

The marketing function: Acts as an interface between the company and its customers Identifies customers current and future product needs Identifies implications of these for other company functions - R&D, production, finance, HRM

What does a marketing department do?

The marketing function: Plans future company activity using elements of the Marketing Mix Marketing Mix - 4Ps of marketing Product Price Promotion Place

The Marketing Mix

Price:
Costs Profitability Value for Money Competitiveness Incentives

Product:
New Product Development Product Management Features & Benefits Branding Packaging After Sales Service

Place:
Access to Target Market Channel Structure Channel Management Retailer Image Logistics

Promotion:
Promotional Mixes Promotion Management Advertising Management P R Management Direct Marketing

Services Marketing
A service is an activity which has some element of intangibility associated with it, which involves some interaction with customers or with property in their possession, and does not result in a transfer of ownership. A change in condition may occur and production of the service may or may not be closely associated with a physical product.
Payne (1993)

Five Categories of Service Offers

A pure tangible good such as soap, toothpaste or salt. No services accompany the product
A tangible good with accompanying services to enhance its consumer appeal. Computers are an example. Hybrid offer equal parts of goods and services such as restaurants. A major service with accompanying minor goods and services such as first class airline travel. A pure service like baby-sitting or psychotherapy. Kotler et al (2008)

The Intangibility and Tangibility Continuum Babysitting

Intangible elements
Education

Legal service
Air travel Fast foods

Tangible elements

Cosmetics Soft drinks Clothing Sugar

Characteristics of a Service Offering

Intangibility services are to a large extent abstract and intangible. Heterogeneity services are non-standard and highly variable. Inseparability services are typically produced and consumed at the same time, with customer participation in the process. Perishability it is not possible to store services in inventory. Lack of Ownership - ownership only for a limited period.

Unique Features
Intangibility

Cannot be seen, touched Cannot protect services through patents Cannot readily display or communicate Prices difficult to set

Heterogeneity

Standardisation and QC difficult to achieve No two services are precisely alike Performance delivered by people

Unique Features
Inseparability

Consumer involved in production Simultaneous production and consumption Other consumers involved in product

Perishability
Services cannot be saved, stored, resold or returned i.e. spare seats on a plane is capacity lost forever Lack of Ownership Ownership restricted in duration No physical possession

The Services Marketing Mix

People The selection, training and motivation of front line staff is important and makes a huge difference to customer satisfaction. Physical Environment customers look to the physical environment for cues to the likely quality of a service.
Process ie. Grocery stores offering online shopping and home delivery as a better way to shop.

Review

How did your marketing words match up with what marketing really is ?