Principles of Marketing - MGT301 Power Point Slides Lecture 4

8/13/2019 Principles of Marketing - MGT301 Power Point Slides Lecture 4

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MGT301Principles of Marketing

Lecture-4


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Summary

ofLecture-3


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Information Buying

Risk Taking Selling

Financing Transporting

Standardizing

and Grading

Storing

MarketingFunctions


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Demarketing Marketing to reduce demand temporarily or

permanently; the aim is not to destroy demand but only

to reduce or shift it.


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Customer RelationshipManagement


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Loyal customers provide more

and more credible referrals

But the angry gossip of

disloyal customers candevastate a firm!


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Todays Topics


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Marketing in Historical perspective andEvolution of Marketing


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How has Marketing Changed Over Time?


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How it Started


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1.The Production Concept Mass Production) prior to 1920s):Mass produce @ lowest cost -Distribute @ affordable price

No options for consumer


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2. The Product Concept 1920-1950s):Build a More Innovative Product

Build a Better Mousetrap


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3. Selling Concept 1940s-1980s)- Few product-- sell, sell, sell!

- Largest volume at any price

- Focus on one time transaction


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Until the 90sTransaction Marketing focus one time sale

Focus on product


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4. Marketing Concept 1990s and beyond)-Idea: identify most profitable customers who value your

service/product the most and build relationships with those

individuals

- Customers become more demanding/empowered

- Able to produce based on customers needs:

- Technological advances allow for customer tracking

databases


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Relationship Marketing (1990s)

Definition: Marketing is the process of establishing

and maintaining mutually beneficial exchangerelationships with customers and otherstakeholders

KEEP CUSTOMERS FORLIFE!!!


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Marketing Philosophies


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SOCIETALMARKETING

CONCEPT

PRODUCTION

CONCEPT

PRODUCTCONCEPT

MARKETING

CONCEPT

MARKETINGCONCEPT

KEY

MARKETINGPHILOSOPHIES

SELLINGCONCEPT


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The Production Concept

..Holds that consumers will favor products that are

available and affordable.

Implies work towards mass production and low cost


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The Product ConceptAssumes customers favor products that offer the most

quality, performance, and features.

Implies firm should strive to continually upgrade product

and product features.


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The idea that customers will not buy enough of the

organizations products unless the organization

undertake a large scale selling and promotion efforts.

The Selling Concept


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..Business assumption that consumers will resist purchasing

nonessential goods and services with the attitude toward

marketing that only creative advertising and personalselling can overcome consumers resistance and convince

them to buy.


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Inside-out perspective: Assumes people need to be sold on

whatever it is the firm has decided to offer. 1st: Decide whatto produce; 2nd: Figure out how to get people to buy what you

have.

Implies lots of selling/promotional activities are needed to

move product


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After WWIIShortages in goods ended.Economy changed from a sellers market to a buyers market.

Sellers market: marketplace characterized by a shortage of

goods and/or services.

Buyers market: marketplace characterized by an abundanceof goods and/or services.


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The Marketing Concept

Holds that achieving organizational goals depends upon

determining the needs and wants of target markets and

delivering the desired satisfactions more effectively andefficiently than do competitors.


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Marketing Concept Components Means of achieving goals determine needs and wants

implies research and/or appropriate assumptions Target markets

implies clear target groups: people whose needs/want you

will try to fill

Satisfaction Competitors acknowledged


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Marketing EraWith a continually increasing buyers market, marketing would

no longer be regarded as a supplemental activity performed

after completion of the production process.

The marketer would play a lead role in product planning.

Marketing and selling would no longer be synonymous terms.


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Marketing Concept Vs. SellingConceptMarketing Concept:

Begin with customer needs

Develop 4 Ps in light ofcustomer needs

Have what you can get rid

of

Selling Concept:

Begin with what firm wants to

produceGiven products, persuade

customers to buy

Get rid of what you have.


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SellingA company makes a product and then uses various selling

methods to persuade customers to buy it.

MarketingCompany finds out what the customer wants and develops a

product to satisfy those wants while yielding a profit.


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SOCIETAL MARKETING CONCEPT: .in a way thatmaintains or improves the consumers and the societyswell-being.

Typical thinking in 1990Marketer must act in a socially responsible manner.

External environments influence on firms marketing

program.


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Society

(Human Welfare)

Consumers

(Satisfaction)

Company

(Profits)

SocietalMarketing

Concept


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Relationship Era


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Relationship Marketing


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Effective relationship marketing relies heavily on information

technologies such as computer databases that recordcustomers tastes, price preferences, and lifestyles along with

the increase of electronic communications. Some examples

are frequent buyer clubs/cards.)


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Marketing Management Marketing management is the art and science of choosing

target markets and building profitable relationships with

them.

Creating, delivering and communicating superiorcustomer value is key.


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Marketing ManagementCustomer Management:

Marketers select customers that can be served well and

profitably.

Demand Management: Marketers must deal with different demand states ranging

from no demand to too much demand.


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Evolving Views of Marketings Role


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a. Marketing as anequal function b. Marketing as a moreimportant function

FinanceProduction

Marketing Humanresources

Finance

Human

resourcesMarketing

Production


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c. Marketing as themajor function d. The customer as thecontrolling factor

Marketing

Production

Customer


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e. The customer as the controllingfunction and marketing as theintegrative function

Customer

Marketing

Production


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Summary

How has Marketing Changed Over Time?


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SOCIETALMARKETING

CONCEPT

PRODUCTION

CONCEPT

PRODUCTCONCEPT

MARKETING

CONCEPT

MARKETINGCONCEPT

KEY

MARKETINGPHILOSOPHIES

SELLINGCONCEPT


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Society

(Human Welfare)

Consumers

(Satisfaction)

Company

(Profits)

SocietalMarketing

Concept


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The customer as the controllingfunction and marketing as theintegrative function

Customer

Marketing

Production


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Next.

Marketing Challenges in the 21st century


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MGT301Principles of Marketing

Lecture-4

Principles of Marketing - MGT301 Power Point Slides Lecture 4

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