Chapter 1 Understanding Marketing
The future is not ahead of us. It has already happened.
Philip Kotler
The learning objectives:
What is Market? What is Marketing and marketing management? Marketing core Concepts Marketing management philosophies
1. Market
Market means that customers who have purchased or want to purchase a certain product or service.
Market = population+ Purchasing + Purchasing Need
Power
Examples: How to understand the market of purified water what is the market of Nike?how to understand the Nikes market?
Market
Consumer Market Business Market Global Market Nonprofit and Government Markets
Consumer Market
The aim of buying is to consume for their own or somebody who has something to do with in consumer market.
Business Market
Business buyers buy goods for their utility in enabling them to make or resell a product to others for the purpose of making profits.
Global Market
Companies selling their goods and services in the global marketplace face additional decisions and challenges.
Nonprofit and Government Markets
Companies selling their goods to nonprofit organizations such as churches, universities, charitable organizations, or government agencies.
Simple Marketing System
Communication
Industry (a collection of sellers)
Goods/services Money
Market (a collection of Buyers)
Information
[Link] Marketing
Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others. - Philip Kotler
Marketing
Is the process of planning and executing the conception,pricing,promotion,and distribution of ideas,goods,services to create exchanges that satisfy individual and organizational goals.
The Scope of Marketing
Goods Experience Persons Properties Information Services Events Places Organizations Ideas
Target Market and Segmentation
the relationship between the industry and market Marketplace & Marketspace five basic markets
Marketplace and Marketspace
Marketplace is physical, as when one goes shopping in a store, Marketspace is digital, as when someone shopping on the internet.
Five Basic Market
(figure 1.2 P9)
Manufacturer markets Resource markets Government markets Intermediary markets Consumer markets
Resources Money
Structure of Flows
Resource markets
Taxes, goods Taxes
Resources Money
Manufacturer markets
Services, money Services, money
Taxes, goods Services, money
Government markets
Services
Consumer markets
Taxes, goods
Money
Money Goods, services
Intermediary markets Goods, services
The Four Ps The Four Cs
Marketing Mix Product
Place
ConvenPromotion ience Communication
Customer Solution
Price Customer Cost
Customer Delivered Value
Starting point
Factory
Focus
Existing products
Means
Selling and promotion
Ends
Profits through sales volume
(a) The selling concept
Market
Customer needs
Integrated marketing
Profits through customer satisfaction
(b) The marketing concept
Traditional Organization Chart
Top Management
Middle Management
Front-line people Customers
Customer-Oriented Organization Chart
Customers
Front-line people Middle management
Top management
Evolving Views of Marketings Role
Finance
Production
Finance
Human resources
Production Human resources Marketing
Marketing
a. Marketing as an equal function
b. Marketing as a more important function
Evolving Views of Marketings Role
Production
Marketing
Customer
c. Marketing as the major function
d. The customer as the controlling factor
Evolving Views of Marketings Role
Production Marketing
Customer
e. The customer as the controlling function and marketing as the integrative function
Marketing management
The analysis, planning, implementation, and control of programs designed to create, build, and maintain beneficial exchanges with target buyers for the purpose of achieving organization objectives
[Link] Concepts of Marketing
Target Markets & Segmentation
Needs, Wants, and Demands
Product or Offering Value and Satisfaction Exchange and Transactions Relationships and Networks Marketing Channels Supply Chain Competition
Marketing Environment
Needs, Want, and Demands
Needs describe basic human requirements. Want are shaped by ones society. Demands are wants for specific products backed by ability to pay. examples
Demand States and Marketing Tasks
No demand Latent demand Declining demand Irregular demand full demand Overfull demand Unwholesome demand
Value and satisfaction
Benefits
functional benefits emotional benefits
Costs
Monetary costs Time costs Energy costs Psychic costs
Value and satisfaction
benefits Value = ----------------costs
Discussion
How to increase the value ? How to compare the value?
Exchange and transaction
Exchange is the act of obtaining a desired object from someone by offering something in return. transaction is a trade between two parties that involves at least two things of value, agreedupon conditions a time of agreement, and a place of agreement.
Relationship marketing
The process of creating, maintaining, and enhancing strong, value-laden relationships with customers and other stakeholders.
Product and service
Product---Anything that can be offered to a market for attention, acquisition, use or consumption that might satisfying a want or need. It includes physical objectives, services, persons, places, organizations and ideas. Service--- any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything.
Case Study
Page 41: [Link]: Changing Business in the New Millennium
How to understand the case? How to understand the questions? How to analyze the questions? The key question? Whats your idea?
[Link] philosophies
The production concept The product concept The selling concept The marketing concept The societal marketing concept
Company Orientations Towards the Marketplace
Production Concept Product Concept
Consumers prefer products that are widely available and inexpensive
Consumers favor products that offer the most quality, performance, or innovative features Consumers will buy products only if the company aggressively promotes/sells these products Focuses on needs/ wants of target markets & delivering value better than competitors
Selling Concept
Marketing Concept
Traditional Organization Chart
Top Management
Middle Management
Front-line people Customers
Customer-Oriented Organization Chart
Customers
Front-line people Middle management
Top management
Evolving Views of Marketings Role
Finance
Production
Finance
Human resources
Production Human resources Marketing
Marketing
a. Marketing as an equal function
b. Marketing as a more important function
Evolving Views of Marketings Role
Production
Marketing
Customer
c. Marketing as the major function
d. The customer as the controlling factor
Evolving Views of Marketings Role
Production Marketing
Customer
e. The customer as the controlling function and marketing as the integrative function
The production concept
the production concept holds that consumers will prefers products that are widely available and inexpensive.
The product concept
The product concept holds that consumers will favor those products that offer the most quality,performance,or innovative features.
The selling concept
The selling concept holds that consumers and businesses, if left alone, will ordinarily not buy enough of the organizations products. The organization must, therefore, undertake an aggressive selling and promotion effort
The marketing concept
The marketing concept holds that the key to achieving its organizational goals consists of the company being more effective than competitors in creating,delivering,and communicating customer value to its chosen target markets
The societal marketing concept
The societal marketing concept holds that the organizations task is to determine the needs, wants,and interests of target markets and to deliver the desired satisfaction more effectively and efficiently than competitors in a way that preserves or enhances the consumers and the societys well-being.
Discussion
Whats your opinion about the 5 five concepts? Do you think the production concept is outdate
Case Discussion
Reading Discussion