Introduction to Marketing Lecture

8/11/2019 Introduction to Marketing Lecture

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Marketing is simple, yet complex.

We are all involved in marketing and: theenigma of marketing is that it is one of mans

oldest activities and yet it is regarded as themost recent of the business disciplines(Baker, 1976).


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Marketing came into existence with the first barterexchange (e.g. the barter trade in ancient Egypt,Songhai and Ghana empires in Africa etc.) whensomeone realized that exchanges add value for both

parties. This was the first real step forward in economic

development.

Marketing has evolved (like other practices such asarchitecture, medicine, engineering) over thecenturies to where it is today (Michael Baker).


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According to Peter Drucker, the first test ofany business is not the maximization of profitbut the achievement of sufficient profit tocover the risks of economic activity and thusavoid loss.

Customers are the foundation of a businessand their purpose of existence.

In other words, customers are the mainstay ofthe business.


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As Peter Drucker puts it: There is only onevalid definition of business purpose: to createa customer.

It is the customer who determines what

business is What the business thinks it produces is not of

first importance, especially not to the future ofthe business and to its success in the market

place. The customer determines what a business is,

what it produces and whether it will prosper(Drucker).


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It is the most interesting, dynamic, versatileof all academic disciplines.

It is both theoretical and practical in nature.

It yields real results in the form of profitsand/or satisfaction of businessaims/objectives.


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It is a multidisciplinary (economics, psychology,sociology, history, statistics) management processof identifying and satisfying consumer andorganizational needs profitably.

The aim of marketing is to make profit and/or satisfybusiness objectives.

Thus, overall, it enhances human and nationaleconomic development/progress.

Compare (a) Advanced countries andunderdeveloped countries? And (b) a profitablebusiness and a less profitable business?


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Marketing is the process of planning andexecuting the conception, pricing, promotion,and distribution of ideas, goods, and servicesto create exchanges that satisfy individual andorganizational goals.

Source: The American Marketing Association

(AMA) (see www.ama.org).


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Marketing is the management processresponsible for identifying, anticipating, andsatisfying customer requirements profitably.

Source: The Chartered Institute of Marketing(CIM) (UK) (see www.cim.co.uk)


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Marketing is an organizational function and aset of processes for creating, communicating,and delivering value to customers and formanaging customer relationships in ways thatbenefit the organization and its stakeholders.

Source: American Marketing Association, 2004


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Organizational Resources

Effective match Specification

ofTarget Market

Customer Satisfaction

Organizational

Aims/objectives


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The Marketing Concept states that if abusiness or organization is to achieveprofitability, the entire organization must be

oriented towards satisfying consumer needs,wants and aspirations.


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In other words, The Marketing Concept holdsthat the key to success is through determiningthe needs/wants/aspirations of target markets

and delivering these more effectively andefficiently than competitors.


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Consumer/customer Orientation

Total Organization effort

Profitability/achievement of objectives.


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Do customers really know theirneeds/wants/aspirations?

The choice of either consumer or competitiveorientation.

Adapting to change (rigidity,inflexibility ofthe concept).

Conflict with social responsibility. Limits in the applicability of the concept (e.g.

the arts, ideology such as political parties,environmentalists greenpeace, religions churches/synagogues etc


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Too many advertisements are annoying,misleading, or both.

There are too many unnecessary products.

Middlemen raise prices but dont add value. Marketing makes people materialistic.

Most of the criticisms result from misunderstandingsabout marketing (Perreault & McCarthy, 1999).


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What is the product or service being offered?

What are the market trends in the industry?

What is the market?

Who are your customers? And what are they lookingfor?

Who are your competitors? And how do theyoperate/react/behave?

Why do (should) your customers buy your

product/service rather than that of your competitors?


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According to Kotler (2004), a market consistof all the potential customers sharing aparticular need or want who might be willing

and able (i.e., propensity to) to engage inexchange to satisfy that need or want.

Source: Kotler, P. (2004), Marketing Management,

Prentice-Hall, Englewood Cliff, NJ.


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Consumer Markets.

Industrial/Business to Business Markets.

Reseller (Retailers, Distributors) Markets.

Publics (Governmentagencies/departments/institutions).

International/global Markets.


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The process of applying the marketingconcept in the market place.

Maintaining a customer orientation.

All departments work together guided bycustomer needs/wants/aspirations.

Focus on profits/objectives.

Source: Kohli and Jaworski (1990); Narver and Slater (1990).


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Focus on the means ofproduction, and assumescustomers will want the

product/service.


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Focus on the technicalperfection of the

product/service seen throughthe producers (firm) eyes.Assumes customers will

perceive product/service in thesame way and thus buy.


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Focus on the identification of customersneeds, organizational resources andobjectives. Achieve effective match through

market segmentation, targeting, positioningand resource development (see also Role ofMarketing).


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According to Narver and Slater (1990), Marketorientation comprises three components:

Customer orientation

Competitor orientation and Interfunctional co-ordination.


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Top Management

Interdepartmental Dynamics

Organizational Systems

Market (customer) Orientation Employees

Environment

Business Performance.

Source: Kohli and Jaworski (1990)


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Customer Orientation Customer commitment activities Creation of customer value Understanding customer needs Measuring customer satisfaction Offering after sales service

Competitor Orientation Salespeople share competitor information Responding rapidly to competitors actions Top managers discuss competitors strategies Targeting opportunities for competitive advantage

Interfunctional Coordination Engaging in interfunctional customer calls Sharing information among functions Integrating all functions in strategy Contribution of all functions to customer value Sharing resources with other functions. Source: Narver and Slater (1990)


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Social responsibility concerns a firmsobligation to improve its positive effects onsociety and reduce its negative effects.

Marketing ethics are the moral standards thatguide marketing decisions and actions.


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An organizations success in a dynamic businessenvironment is more dependent on adaptation tochanging and evolving customer needs/wants.

Higher degree of market orientation emanates from achanging and dynamic market environment.

Lower degree of market orientation can be evidencedin a market with a fixed set of customers whosepreferences are stable. Here, few changes areexpected in the marketing mix deliberation.

Kohli and Jaworski (1990)

Introduction to Marketing Lecture

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