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Lecture notes Principles of marketing (BUS12) Foundations of Marketing
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- Nottingham Trent University (NTU)
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Lecture 1 – What is Marketing ?Lecture 1
What is Marketing?
Marketing is a process responsible for identifying, anticipating and satisfy customer
requirements as well as being profitable.
About exchanging of goods and services
Identifies and anticipates customers’ needs and wants
Fulfils customers needs profitably with performance value, emotional value and rationale
value
Needs, Wants and Demand
Needs
Þ Must have and cannot live without basic requirements
Þ Water, shelter, education, clothing, food
Wants
Þ Not a must to have and can live without
Þ Shaped by society
Demands
Þ Specific objects that’s a want and can be satisfied by the ability to pay for it.
Business Orientation
1. Production Orientation : What? – Focuses on manufacturing and production.
How? - Producing in Large volume the production costs are reduced or new technology of producing
the product.
Advantage? – economies of scale
Disadvantage? - The business priority is the product first then the customers so therefore there is
less focus on customer needs. If new technology is introduced, then employees will be laid off.
For example: - The busiest McDonald restaurant in the world was not in USA but in Russia because
Russian diners accustomed that expensive restaurants had bad service and bad food quality.
Therefore, McDonald introduced a different experience: consistently producing food and fast service
at an affordable price. McDonald was popular, Russian diners would wait hours in the cold to buy a
big mac.
- Primark
2. The Product Orientation – focuses on product development. aims at improving an existing
products’ functions and quality which makes the business competitive in the market. The product is
the first priority to the business the customers. The limitation is that, there is less focus on the
customer’s needs.
3. The Selling Orientation - Focuses on to push sales in order for customers to buy a product. the
selling company needs to be an aggressive force to increase sales. For the company to push sales it
needs to use promotional tools such as persuading to buy the product and influence because the
company should aim to sell what they make not what the market wants.
Advantage: due so much persuading and influence on selling the product, such a focused view is
likely to sell many products which will lead to high turnover.
Disadvantage: customers may not trust your judgement or sale, it has little market audience and
often despite the persuasive manner and personality of the sales person it fails to convince the
buyer to fit the mood or motive to make a sale
,4. The Marketing Orientation – Focuses on identifying the needs and wants for customers and
consumers. The business has to conduct research first and then produce goods and services to
satisfy the needs and wants for the customers. Advantage: due to consistently understanding and
delivering what the customers wants leads to long term profitability. Companies may attract new
customers which are turned to repeat customers and a goal of developing many loyal customers.
The business is more like to be successful because business responds to customers’ needs and wants
as well as design products accordingly.
Disadvantage: Challenges of quickly responding to market changes, due to markets changing it
impacts the business’ market orientation strategy and this is either new business entering or existing
and an ever changing of raw materials of which failing to take an act into consideration can put a
business at a disadvantage.
For example: coca cola is market oriented because they have different variety of drinks because they
did market research to find out what people liked. They commercials are targeting a younger
generation as well increase sales and to do so they innovated by putting names on coke cans to
attract young people to buy.
Contrasting the selling and Marketing orientation
The Marketing Approach
The MARKETING CONCEPT means that we PUT THE CUSTOMER FIRST, so we must KNOW OUR
CUSTOMERS in order to SATISFY THEIR NEEDS AND WANTS through OFFERING THE CORRECT
MARKETING MIX but at the same time CONSIDERING OUR WIDER ENVIROMENTAL RESPOSIBILITY
Marketing Mix
Þ Product- what need does it satisfy
Þ Price- what does it cost?
Þ Place- where is it available?
Þ Promotion – how is it communicated?
Lecture 2
Who are the Customers?
Þ A group of people who, are consumers or part of organizations, need and have the ability,
willingness and authority to purchase product.
Steps in Market Segmentations, Targeting and Positioning.
For a business to be successful, it needs to follow these steps:
1. Segmentation – identify and describe segments by grouping customers together with similar
needs because not all customers are the same or have the same needs.
2. Targeting- evaluate segments and decide which one to serve because businesses need to
know which segment is best to target with their product or service.
3. Positioning- design a product or service to satisfy and meet a segment’s needs and develop a
marketing mix that will create a competitive advantage in the minds of customers (selected target
market).
Have to follow these steps to be successful.
Consumer-Driven Marketing Strategy
, Þ Technique used by businesses not only for profit but also have an edge against competitors
Þ It’s all about the business’ customer preferences
Þ So, the will have to segmentation, targeting, positioning and differentiation (the market
offering to create superior customer value)
Þ Targeting the market, meeting the need and building the relationship
Þ Customer is always right
Segmentation
Þ Process of grouping customers into small group
Benefits of Segmentation:
Þ Enables marketers to develop product or service benefit to appropriate to the segment
Þ Products and Brands Designed to appeal to particular target segment
Þ Supported by appropriate promotional campaign, customer service, pricing, place (distribution
strategies)
Types of Segmentation
1. Geographic: Dividing a market into different geographical units. E.g. nations, states, regions,
countries, cities)
2. Demographic: Dividing a market into segments based on variables. E.g. age, life-cycle, stage,
gender, income, occupation, education, religion, generation
3. Geo-demographic: Combination of geographic and demographic
4. Psychographic: Social class, personality
5. Behavioural: Occasions, benefits, user status, usage rate, Loyalty status
Demographic Segmentation
Age and Life cycle segmentation
- Dividing a market into different age and life cycle groups
Gender Segmentation
- Dividing a market into different segments based on gender
Social Class
- Upper, Middle, Skilled working, unemployed
Income Segmentation
- Dividing a market in to different income segments
Psychographic Segmentation
- Marketers segment their market using variables such as :
-Consumer lifestyle
-Consumer personality
- Products people buy reflect their lifestyles
Behavioural Segmentation
- Occasion segmentation: segments divided according to occasions when the buyers:
-Get the idea to buy
-Make their purchase
-Use the purchased item
- Benefit segmentation: segments divided according to the different benefits that consumers seek
from the product
- User status: Markets can be segmented into light, medium and heavy users
- Loyalty status: consumers can be loyal to brands , stores and companies
Multiple Segmentation Bases
Þ Segmentation bases help companies to:
- Identify smaller, better defined target groups
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