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marketing 1
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MarketingLenkova
Lecture 1: Definition of marketing
Marketing definitions vary on perspective, however, they generally refer to engaging a
target market of consumers to sell a product and hopefully to maintain a relationship
beyond the purchase.
- Dr. Philip Kotler: ‘The science and art of exploring, creating, and delivering value to
satisfy the needs of a target market at a profit. Marketing identifies unfulfilled needs
and desires. It defines, measures and quantifies the size of the identified market and
the profit potential. It pinpoints which segments the company is capable of serving
best and it designs and promotes the appropriate products and services.’
- Matt Blumberg, Chairman and Chief Executive Officer: ‘Marketing when done well is (a)
the strategy of the business – its value proposition, go to market strategy and brand
positioning and image to the world. Marketing when not done well is (b) an endless
checklist of advertising and promotional to-dos that can never be
completed. Marketing in the twenty-first century must be (c) largely, but not entirely,
measurable and accountable around driving business goals. Marketing when done
brilliantly is driven by the business strategy, includes a small, disciplined subset of
advertising and promotional to-do’s, and is steeped in a culture of driving business
goals.’
Marketing is the process of creating, distributing, promoting and pricing goods, services
and ideas to facilitate satisfying exchange relationships with customers and to develop
and maintain favorable relationships with stakeholders in a dynamic environment.
The importance of Marketing
- Helps in transfer, exchange, and movement of goods : conduction of those activities
which facilitate the transfer of ownership between seller & buyer
- A source of new ideas: identifying the consumers’ wants, understanding new demand -
patterns and inspiring the production of relevant goods
- Financial success and business growth for the organization: ensuring sufficient demand
for products and services so that the firm can make a profit
- Economic driving force : Survival in a highly competitive economic environment
- Source of employment
- A basis for making decisions : what, how, when, how much and for whom to produce?
Also, what prices to set, where to sell, and how much to spend on advertising, sales,
the Internet or mobile marketing etc.
- Coping up with competition: building a strong brand to ensure customers’ loyalty.
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,Social acceptance: demonstrating social responsibilities throughout the company’s
functioning
Marketing core concepts
1) Needs, Wants and demands/Consumer’s
motivation
Marketing identify the needs;
Needs: any basic requirement
Wants: a need for its specific satisfier -
product/services
Demands: the human want backed by the ability
and willingness to buy products or services.
Maslow’s hierarchy of needs
Ex: hungry would be a need, wants depends on the person could be an ice cream or a
hamburger and a demand would be a cheeseburger or a banana ice cream.
2) Product, Service and Experience
Product: something tangible; anything that might satisfy people’s needs, wants, and
demands. Product is identified by a physical product, service, or idea. For instance, a
product is a food, house, clothes, car, etc.
Service: Service is also a kind of product that is mostly intangible and does not specify
any particular ownership. Ex: bank, insurance, delivery
Experience: Experience is something that customers get after using the products and
services. Ex: Massage
3) Market
A place where the consumer and sellers start exchanging goods/services and thus, start
making transactions. Transactions are also influenced by the internal and external forces
of the marketing environment.
Metamarkets: place where exchange of goods and services takes place ex: stores
Marketspace: Virtual place where exchange of goods and services takes place ex: website
and eshops.
Metamarkets: Sale of complementary goods: insurance providers, service centers…
4) Exchange, transaction and relationship
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,EXCHANGE - Means giving or getting something to (from) someone by receiving or
offering something in return. The exchange does not need to be conducted in money
terms, it can be goods for goods or service for service.
TRANSACTION - The basic unit of exchange. For a transaction, there must be two parties
one is a giver and another is a receiver and it must be done in monetary terms.
RELATIONSHIP - The relationship is a long-term interaction between buyers and sellers.
The relationship aims to build mutually satisfying long-term relations with the company,
seller, customers, suppliers, and all the stakeholders.
5) Customer value and customer satisfaction
CUSTOMER VALUE - The value is a combination of quality, service, and price. Sellers sell
different types of values related to products – i.e. products may have price value, services
value, and image value. Customer value is the difference between the values consumers
get after owing & using and the cost of buying the product or service.
CUSTOMER SATISFACTION - Reflects a person’s judgment of a product’s perceived
performance in relation to expectations. Products exceeding customers’ expectations
increase customers’ satisfaction which in result strengthens their brand loyalty.
6) Segmentation, targeting and positioning
SEGMENTATION – groups customers who share similarities on certain types of variables.
The variables which define a segment need to be easy to identify, and distinctly different
from other segments.
Segmentation requires to carry out market research, to work out which customer variables
most influence the buying decision.
Most popular types of segmentation variables - demographics, occasions or behaviors, or
on needs or attitudes. These don’t have to be mutually exclusive, just the opposite – best
segmentation models combine all 3 types
- Demographic segmentation – how people are
- Occasions/Behaviors segmentation – what people do
- Needs/ Attitude segmentation - it attempts to identify needs, attitudes and
motivations as to why consumers act and choose the way they do
- Customer Profile – Personas – tailor made the message in the communication plan.
Persona is a detailed description about someone.
TARGETING - identify the segment which is most attractive for the business.
1. Segment size
2. Segment competition - strong players in the segment make segments less attractive
3. New entrants - where is easy/likely that new competitors will go after the segment,
those segments are less attractive
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, 4. Substitutes - if the segment has other products that can easily substitute in to meet
the need, the segment is less attractive.
5. Buyers - if the buyers in this segment have increasing power, it's more attractive
6. Suppliers - the suppliers in these segments have increasing power, it's less attractive.
Targeting is about the connection between the audience and the company brand identity.
The company has to decide what's the best segment - competitive strategy.
In many businesses, the attractiveness of segments can be calculated using available
data.
Variables/weight Segment 1 Segment 2 Segment 3
Size of market/40 40 25 35
Purchasing power/30 20 30 50
New entry 20 50 30
competitors/30
Segment 1 (divided for 100): 0.4x0.4=0.16 0.3x0.2=0.06 0.3x0.2=0.06. 28%
We should divided all the segments and see which one has more advantage.
POSITIONING . Designs the company’s offering and image to occupy a distinctive place
in the mind of the target group/market. Positioning requires marketers to clearly define
and communicate the differentiation of their brand compared to one of its competitors. It
is the basis for the creator of the brand identity, brand image and reputation.
To conclude segmentation divide the total market into manageable groups, targeting
identify which groups offer the best chance of success and positioning build your brand to
best meet their needs.
Company’s Orientation - concepts
1) The production:
Concept: consumers prefer products that are widely available and inexpensive
Focus: achieving high production efficiency, low costs and mass distribution - expand the
market.
2) The product concept
Concept: consumers favor products offering the most quality, performance or innovative
features.
Focus: improved product; can't fail if it isn't priced, distributed, advertised and sold
properly.
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