MKT243 Fundamentals of Marketing

Chapter 1 An Overview of Marketing

What is Marketing?
Television commercials, direct mail offers, sales call and internet pitches ..etc Is this marketing? Many people think of marketing only as selling and advertising. Or is buying marketing? Or increase in production cost and sales sales? Marketing is not telling and selling but satisfying customer needs and wants.

 Marketing involves in developing product that provides superior value, and prices, distributes and promotes them effectively. Advertising and selling are only part of a larger marketing mix a set of tools that mixwork together to satisfy customer needs and build customer relationship.

What Is Marketing?
Marketing is a philosophy or a management orientation that stresses the importance of customer satisfaction, as well as the set of activities used to implement this philosophy The American Marketing Association definition of marketing:
Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals.

The Concept of Exchange

The concept of exchange means that 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 through barter or trade of items or services. Five conditions must be satisfied for an exchange to take place:
There must be at least two parties. Each party has something that might be of value to the other party. Each party is capable of communication and delivery. Each party is free to accept or reject the exchange offer. Each party believes it is appropriate or desirable to deal with the other party.

Exchange may not take place even if all of these conditions exist, but these conditions are necessary for exchange to be possible

Marketing Management Philosophies

Five competing philosophies strongly influence an organization s marketing activities. These philosophies are commonly referred to as production, product, sales, marketing, and societal orientations. Production Orientation
The production orientation focuses on internal capabilities of the firm rather than on the desires and needs of the marketplace. The firm is concerned with what it does best, based on its resources and experience, rather than with what consumers want.

 Product Orientation
Consumers favor products that offer the most quality, performance, and innovative features

 Sales Orientation
A sales orientation assumes that more goods and services will be purchased if aggressive sales techniques are used and that high sales result in high profits.

 Market Orientation
The marketing concept states that the social and economic justification for an organization's existence is the satisfaction of customer wants and needs while meeting organizational objectives.

 The marketing concept involves:

Focusing on customer wants and needs so the organization can differentiate its product(s) from competitors' offerings Integrating all the organization's activities, including production, to satisfy these wants and needs Achieving long-term goals for the organization by satisfying customer wants and needs legally and responsibly

 A market orientation involves obtaining information about customers, competitors, and markets; examining the information from a total business perspective; determining how to deliver superior customer value; and implementing actions to provide value to customers. Understanding your competitive arena and competitor's strengths and weaknesses is a critical component of market orientation. Market-oriented companies are successful in getting all business functions together to deliver customer value.

 Societal Marketing Orientation

The philosophy called a societal marketing orientation states that an organization exists not only to satisfy customer wants and needs and to meet organizational but also to preserve or enhance individuals and society's long-term best interests. This orientation extends the marketing concept to serve three bodies rather than two: customers, the organization itself, and society as a whole.

Society (Human Welfare)

Societal Marketing Concept

Consumers (Wants)

Company (Profits)

Differences between Sales and Market Orientations

Sales Orientation The Organization s Focus Market Orientation Inward-looking. Focus on satisfying External focus. Focus on their own needs. satisfying customers.

The Firm's Business Defines its business in terms of the Defines its business based goods and services it offers on the benefits customers seek. Those to Whom the Targets its products at Product Is Directed "everybody" or "the average customer." Recognizes that different customer groups have different wants. Targets specific subgroups of customers. Designs special products and marketing programs for these groups. Recognize that promotion is only one of the four basic tools that comprise the marketing mix.

Tools the Organization Uses to Achieve Its Goal

Seek to generate sales volume through intensive promotional activities, mainly personal selling and advertising.

Marketing & Sales Concepts Contrasted

Starting Point Focus Means Ends

Factory

Existing Products

Selling and Promoting

Profits through Volume

The Selling Concept

Market

Customer Needs

Integrated Marketing

Profits through Satisfaction

The Marketing Concept

Customer value
Customer value is the ratio of benefits to the sacrifice necessary to obtain those benefits. Creating customer value is a core business strategy of many successful 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 service and after-sales support Customer Satisfaction Customer satisfaction is the feeling that a product has met or exceeded the customer's expectations. The organizational culture focuses on delighting customers rather than on selling products.

Building Relationship
Relationship marketing is a strategy that entails forging long-term partnerships with customers and contributing to their success. The Internet is an effective tool for generating relationships with customers. Customers benefit from stable relationships with suppliers. A sense of well-being occurs when one establishes an ongoing relationship with provider

The Marketing Process

Marketing managers are responsible for a variety of activities in the marketing process:
Understanding the organization s mission and vision, and the role marketing plays. Setting marketing objectives Gathering, analyzing, and interpreting information about the organization s situation, including its strengths and weaknesses, as well as opportunities and threats in the environment. Developing marketing strategy by deciding exactly which wants and whose wants the organization will try to satisfy, and by developing appropriate marketing activities to satisfy the desires of selected target markets. Implementing the marketing strategy Designing performance measures Periodically evaluating marketing efforts and making changes if needed.

Why Study Marketing?

Marketing Plays an important Role in Society Marketing is important to Business Marketing Offers Outstanding career opportunities Marketing Affects Your Life Every Day