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Introduction to Marketing Marketing concept and business orientation

Introduction to Marketing Marketing concept and business orientation. Geoff Leese Dec 2001 revised Sept 2002, August 2003, November 2008, January 2010 (special thanks to Geoff Leese). Content. The marketing concept Micro & Macro environments Marketing research Buying behaviour Segmentation

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Introduction to Marketing Marketing concept and business orientation

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  1. Introduction to Marketing Marketing concept and business orientation Geoff Leese Dec 2001 revised Sept 2002, August 2003, November 2008, January 2010(special thanks to Geoff Leese)

  2. Content • The marketing concept • Micro & Macro environments • Marketing research • Buying behaviour • Segmentation • Product/service, Price, Place, Promotion • Marketing planning

  3. The marketing concept • What marketing isn’t • Presentation & image - “spin” • Glossy brochures & expensive advertising • Persuasive selling methods • Excessive/wasteful packaging

  4. What is marketing? “The aim of marketing is to make selling superfluous. The aim is to know and understand the customer so well that the product/service provided fits him/her and sells itself. Drucker. “…..a social & managerial process by which individuals & organisations obtain what they need and want through creating and exchanging products and value with others Kotler “The management process responsible for identifying, anticipating and satisfying customer requirements profitably.” CIM

  5. Marketing concepts (1) • Target markets • All different • Classification using criteria • Customer needs • Real needs • Stated needs • Unstated needs (assumptions) • Delight needs • Secret needs

  6. Marketing concepts (2) • Co-ordinated marketing • all functions working together • marketing throughout the organisation • marketing management • Profitability • long term success through customer satisfaction • Employee performance • Customer satisfaction • profitability

  7. Business orientations (1) • Production orientation • Affordable available products • Prioritise production & distribution efficiency • Price sensitivity? • Until 1950s

  8. Business orientations (2) • Sales orientation • Selling lines that are produced • Customers encouraged to buy • Personal selling/persuasive advertising • 1950s and 1960s

  9. Business orientations (3) • Product orientation • Excellent, well designed products • Mass market appeal leads to production orientation • Fall in demand leads to sales orientation • Until 1960s

  10. Business orientations (4) • Marketing orientation • Customer needs are focus of firm • “Find a need and fill it” • Flexible production/distribution methods • Organisational philosophy • Profitability rather than sales volume • 1970s onwards

  11. Business orientations (5) • Relationship marketing • Building long term relationships between suppliers & customers • Ensuring that interaction is a pleasurable experience • Customer service and attention focused • Loyalty cards • 1980s onwards

  12. Business orientations (6) • Societal marketing • Ethics driven • Considers needs of society as a whole • Government pressure • Pressure groups • 1990s onwards

  13. Marketing as an interface • Need to consider • Future customer needs • Competition • Relationships • External environment

  14. Marketing management’s responsibilities • To identify customer needs • To meet them using the “marketing mix” • Product/Price/Place/Promotion • Physical evidence • Process • People

  15. Strategic vision • Look to the future • Make well informed decisions • Marketing myopia • Organisation describes itself in PRODUCT rather MARKET terms • Making slide rules? • Creating a competitive edge • Look at the “mission statement”!

  16. Market segmentation • Categorising overall market for products or services • Consumer market segments • Industrial/commercial market segments • HOW do we categorise? • WHAT are the key features of the segments?

  17. Consumer markets (1) • Demographic variables • Age • Sex • Family size • Stage in family life cycle (DINKY, SAGA) • Social class (A, B, C1, C2, D, E) • Weight and size • Income • etc!

  18. Consumer markets (2) • Geodemographic • Residential neighbourhoods • ACORN (Groups & types - see L & M) • Pan-European (Hot chocolate - see B & P!) • Moderns, go-betweens, traditionals

  19. Consumer markets (3) • Psychographic • Activities • Interests • Attitudes, beliefs & opinions • Education (Terminal Education Age?)

  20. Consumer markets (4) • Behaviour segmentation • Benefit sought (see MARVEL example in L&M) • End use (Soup?) • Loyalty status (Hard-core, soft-core, shifters, switchers) • Usage rate • Attitude • Buyer readiness (Awareness, Interest, Desire, Action)

  21. Consumer markets (5) • Geographical • Religious • Cultural

  22. McCarthy’s four P’s • Product • Price • Place • Promotion • Marketing planning needs to integrate ALL these! McCarthy E. J., “Organisation for new product development?” in: Product Strategy & Management (Libery & Stuchman eds.) 1963

  23. Marketing planning • Analyse the environment • Consider capabilities • Decide on target markets • Adapt marketing mix • Meet customer needs • Gain competitive advantage

  24. Planning stages • Where are we now? • How did we get there? • Where are we going? • Where would we like to be? • How might we get there? Choose a way? • What will it be like? Will it be worth it? • How will we know when we’re there? • Are we on course?

  25. Marketing Audit • Monitors internal & external environment • First three stages of planning

  26. External Audit checklist • Macroenvironment • Social, Technological, Economic, Political,Legal, Physical • The market • size, customers (who, when, what, why, how, where) image, market segments, distribution • Competitors • Who are they? Objectives? Strengths & weaknesses? Market share? Size? Entry barriers?

  27. Internal audit checklist • Sales, market share, profit margins, costs • Analysis of competitive position, portfolio analysis • Effectiveness of existing marketing mix • Internal structures • organisation, communications, training • Marketing information, control and planning systems

  28. SWOT analysis • Evaluates strategic position of the business • Strengths (MATCH to opportunities) • Weaknesses (turn into strengths?) • Opportunities • Threats (minimise or turn into opportunities) • RELATIVE to competitors!

  29. Setting marketing objectives • Provide direction - WHAT are we trying to achieve? • Set in terms of products • Development of new or related • Or markets • Penetration of existing, new/related markets • Or both • Diversification/divestment/realignment

  30. Marketing strategy • HOW objectives will be achieved • Which target markets to enter/develop • How will competitors be targeted? • Competitive advantage? • Better, faster, closer…. • Product development

  31. Tutorial task • Look at your own organisation. • What business orientation do you think it has? • What evidence is there of this? • Tell us about your mission statement • Tell us about your product/service • Tell us about your customer focus • Be prepared to discuss your answers next week.

  32. Further reading • Brassington F & Pettitt S (2003), Essentials of Marketing, Pearson education Chapters 1, 5, 7-19 and 21 • CIM website • http://www.cim.co.uk/home.aspx • Marketing law website • http://www.marketinglaw.co.uk/

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