Lecture 07 [email protected] Marketing. • Working Definition of the concept > – – – • The process of determining customer wants and needs and then providing customers with goods and services that meet or exceed their expectations. Marketing can be considered to have three parts > – – – Customer orientation, Service orientation, Profit orientation. • • • In other words, market those goods and services that will earn the firm a profit and enable it to survive and expand to serve more customer needs and wants. Marketing is essential to modern organisations. Users of marketing include profit and nonprofit businesses as well as states, charities, churches, politicians and schools. • The Marketing Mix consists of the four P's. – – – – Product, Price, Place, Promote. • • • • In other words, the main idea is to design a product that people want, price it competitively, place it in a location where consumers can find it easily and promote it so that consumers know it exists. Marketing Research • • This is the analysis of markets to determine opportunities and challenges and to find the information needed to make good decisions. Consists of a number of steps – – – – 1) Define the problem and present the best situation. 2) Collect data. 3) Analyse the research data. 4) Choose the best solution. • • Environmental scanning is the process of identifying the factors that can affect marketing success. Marketers pay attention to all the environmental factors that create opportunities and threats. Environmental trends. • • The most important global and technological change is the advent and growth of the internet. A purely technological change is the growth of consumer databases. – • These enable companies to develop services that closely match the needs of consumers. Purpose of all this analysis? • • • To stay current with certain social trends. Social trends are dynamic and fluctuating. Include things like – – – population growth, population distribution, other demographics (?) • • • This is in addition to monitoring the competitive environment as well as the general economic environment. Environmental scanning then provides a means to stay connected to the latest events and occurrences in societal changes. Why is the above necessary? – (hint....what is the purpose of the latest technology and what is a side effect of its usage)? • • How does marketing meet the needs of the consumer? Through a variety of techniques. Examples include > – – – » Market segmentation, Relationship marketing and Consumer behaviour. Various approaches (orientations) to marketing. Market Segmentation. • Can consist of one or more of the following types of segmentation > – Geographic segmentation: • Dividing the market on the basis of location. – Demographic segmentation, • Segmentation by age, income and education level – Psychographic segmentation, • On the basis of values, attitudes and interests. – Benefit segmentation, • Using benefits that consumers prefer to promote a product. – Volume segmentation • Depending on the volume of use. • The most useful segmentation strategy is to use all the relevant variables to come up with a consumer profile (a target market) that is – sizeable, – reachable and – profitable. Mass Vs Relationship. • Whats the main difference between mass and relationship marketing? – – One caters to the needs of the many (the large groups of people) and the latter caters to a custom market of mostly individuals. • • • Mass marketing means developing products and promotions to please large groups of people. Relationship marketing tends to lead away from mass production and toward custom made goods and services. It goal is to keep individual customers over a certain amount of time by offering them products or services that meet their needs. Consumer decision- making process. • • Figure 13.7, page 417, Chapter 13, Book I. Influences – Psychological influences • – Perceptions, attitudes, learning & motivation etc. Marketing mix influences • Product, Price, Place, Promotion. – Sociocultural influences • – Reference groups, Family, Social class, culture, Subculture. Situational influences • Type of purchase, Social surroundings, Physical surroundings, Previous experience. • The actual process of decision making – – – – – 1) Problem recognition, 2) Information search, 3) Alternative evaluation, 4) Purchase or no purchase decision, 5) Post purchase evaluation. B2B marketing. • This market consists of – – – • • Manufacturers, Intermediaries such as retailers, institutions (eg hospitals, schools and charities) and The government. The number of consumers in the B2B market is relatively small and the size of business customers is relatively large. B2B markets tend to be geographically concentrated with direct sales and an emphasis on personal selling. Evolution of marketing • During the production era, marketing was largely a distribution function. – • The emphasis was on producing as many goods as possible and getting them to markets. By the early 1920's (the selling era). – The emphasis turned to selling & advertising to persuade customers to buy the existing goods made by mass production. • After WWII – • The demand for goods and services let to the marketing concept era, when businesses realised the need to be responsive to consumer desires. During the 1990's – – Marketing entered the customer relationship era. The main idea here was to enhance customer satisfaction and stimulate long term loyalty. • • • • In the 21st century marketers need to readjust their strategies to meet the ever changing needs of modern consumers. This effectively means that each of the elements of the marketing concept need to be updated. With the result that marketing is becoming more consumer oriented than ever before. The focus has shifted to anticipating and exceeding customer needs. • • In addition, companies are using their suppliers and dealers to provide quality service to their customers. Lastly there is an emphasis on long term loyalty of customers that is on keeping the customers that a business already has. • Stockholder marketing. – • Involves establishing and maintaining beneficial exchange relationships over time with all the stakeholders of the organisation. An organisation that carries out stockholder marketing is aware of the stockholders opinions and – is able to take the community's needs into account when designing and making products. • • Customer relationship management (CRM) is learning as much as possible about customers and doing everything you can to satisfy them with goods and services over time. Usefulness of the above process – – – Ideas? Intrusive activity? Databases of private information?