POWERPOINT® SLIDES
ISBN 978 019 9041015
Accompanying the book
Marketing
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Chapter 01
An overview of
marketing
Chapter outline
• What is marketing?
• Customer satisfaction
• The concept of exchange
• Marketing management philosophies
• A word of caution
• Implementing the marketing concept in
existing firms
• The marketing process
Chapter outline (continued)
• The position and role of marketing in the
firm
• Why are there critics of marketing?
• Why study marketing?
What is marketing?
Marketing has 2 facets:
Philosophy/attitude/
perspective and
management
orientation that
stresses
customer
satisfaction
Set of activities used
to implement
philosophy
Marketing defined:
Marketing = the activity, set of
institutions, and processes for
creating, communicating, delivering
and exchanging offers that have
value for customers, clients, partners
and society at large
Customer satisfaction
Customer satisfaction = the feeling
that a product has met or exceeded
the customer’s expectations
Can be explained by
“Disconfirmation paradigm”
Disconfirmation paradigm
Performance
Expectations
Comparison
p=e
p<e
Positive
confirmation
Confirmation
Negative
confirmation
Satisfaction
Satisfaction
Dissatisfaction
p>e
Measuring customer
satisfaction (CS)
• Should be a permanent, ongoing
process
• Formal research surveys
• Analysis of customer complaint data or
interviewing staff
• Collect information about customers
needs from and intermediaries –
retailers, sales agents and wholesalers
Herzberg’s two-factor model
of customer service (CS)
Hygiene factors
Satisfiers
“prerequisites”
Contribute to
dissatisfaction
WOW!!
Contribute to
satisfaction
Benefits of CS
• Lower acquisition cost
• Base profit
• Revenue growth
• Cost savings
• Referrals
• Price premium
Concept of exchange
Seller
Buyer
Five conditions of exchange
• At least two parties (buyer and
seller)
• Have something of value
• Be able to communicate and
deliver
• Free to accept or reject
• Want to deal with other party
Marketing management
philosophies:
Production orientation
Product orientation
Sales orientation
Consumer orientation
Societal marketing orientation
Relationship marketing
orientation
Differences between
sales & marketing
Sales orientation
Marketing orientation
Firm’s
focus
Inward
Outward
What
business
are you in?
Selling goods
and services
Satisfying
consumer wants
and needs
Primary
goal?
Maximum
Sales volume
Customer satisfaction
Which tools?
Intensive advertising
and promotion
Co-ordinated marketing
activities
Direct product
at whom?
Everybody
Specific groups
A word of caution
• Comparison of sales and consumer
orientation is not meant to belittle role of
marketing communication or personal selling
• Consumers cannot buy products they are
unaware of
• Marketing communication: means by which
firms communicate with customers about
merits and characteristics of the firm and
products
Implementing the marketing
concept in existing firms
• Changing to a consumer-driven
organisational culture must occur
gradually. Includes:
– Changes in authority and responsibility
– Importance of new opportunities
– The firm’s business
– The importance of a competitive advantage
Changes in authority and
responsibility
• Requires major revisions in relationships
within the firm
• Non-marketing employees may lose
authority
• Staff in areas such as marketing research
may gain considerable authority
• Get everyone to participate in planning
• Implement slowly rather than quickly
The importance of new
opportunities:
Three important steps in evaluating new
opportunities:
1. What business are we in?
2. Does the opportunity fall in or out of the
scope of our business?
3. Will this opportunity bring a competitive
advantage?
The firm’s business:
Defining the business involves four
questions:
– What? (product type)
– To meet what? (customer need)
– For whom? (customer type)
– Where? (geographical area)
• Answering this question in terms of the
benefits customers seek instead of goods
and services has three important advantages
• It ensures that the firm keeps focusing on
customers’ needs
• It encourages innovation and creativity
• It stimulates an awareness of changes in
customer needs, wants and preferences
The importance of a competitive advantage
(or Unique Selling Position):
• Service quality
• Customer value
• Customer satisfaction
• Customer-oriented personnel
• Well-trained employees
• Employee empowerment
• Teamwork
Strategies to establish and maintain a
competitive advantage
• Cost – Shoprite Checkers
• Quality – Woolworths
• Flexibility – Taxis
• Location – Spaza shops
• Safety – Mercedes Benz
• Image – Ray Ban
• Product – Doom
• Design – Schick
• Distribution – Pick n Pay
The marketing process
• Understand firm’s business and mission; the
role of marketing
• Set marketing objectives
• Collect, analyse and interpret information
(SWOT analysis)
• Develop marketing strategy
• Implement marketing strategy
• Design performance measures
• Evaluate marketing efforts
Important marketing concepts
Marketing programme
Marketing plan
Marketing
strategy
The position and role of
marketing in the firm
• Planning
- identify opportunities
- set marketing objectives
- use marketing instruments
• Organising
• Leading
• Control
Criticism of marketing
• Discrepancy of quantity
• Discrepancy of assortment
• Spatial separation
• Separation in time
• Separation of information
• Separation in ownership
• Separation in value
Why study marketing?
• Plays an important role in society
• Important to business firms
• Career opportunities
• Influences your life every day
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