MARKETING ESSENTIALS Unit 2
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WHAT IS MARKETING?
Definitions of Marketing
"The process of planning and executing conception, pricing,
promotion, and distribution of ideas, goods, and services to
create exchanges that satisfy individual and organizational
objectives.”
- The American Marketing Association
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MARKETING DEFINED
“ Marketing is the management process that identifies,
anticipates and satisfies customers requirements profits”
- The Chartered Institutes of Marketing
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MARKETING DEFINED
“ The right product, in the right place, at the right time, and at
the right place”
- Adcock et al
“Marketing is the human activity directed at satisfying human
needs and wants through an exchange process”
- Kotler
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MARKETING DEFINED
A Social and managerial process whereby individuals and
groups obtain what they need and want through creating and
exchanging products and value with others
Marketing must be understood not in the old sense of
marketing a sale – “Telling and Selling” but in the new sense
of satisfying customer needs.
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MARKETING DEFINED
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NEEDS, WANTS, DEMANDS
Needs - state of felt deprivation for basic items
such as food and clothing and complex needs
such as for belonging. i.e. I am thirsty
Wants - form that a human need takes as shaped
by culture and individual personality. i.e. I want a
Coca-Cola.
Demands - human wants backed by buying power.
i.e. I have money to buy a Coca-Cola.
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PRODUCTS AND SERVICES
Products - anything that can be offered to a
market for attention, acquisition, use or
consumption and that might satisfy a need or
want.
Examples: persons, places, organizations, activities,
and ideas.
Services - activities or benefits offered for sale
that are essentially intangible and don’t result
in the ownership of anything.
Examples: banking, airlines, haircuts, and hotels.
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VALUE AND SATISFACTION
Consumers make choices based on their perceptions of the
value and satisfaction that various products and services
deliver.
Customer Value – the dif ference between the values the
customer gains from owning and using a product and the cost
of obtaining the product.
Customers for expectations about the value of various
marketing of fers and buy accordingly.
Customer expectations based on past experiences, friends
opinions, market and competitor information and promises.
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CUSTOMER SATISFACTION
Customer satisfaction with a purchase depends on how well
the product’s performance lives up to the customer’s
expectations.
Customer satisfaction is a key influence on future buying
behaviour.
Satisfied customers buy again and tell others about their good
experiences.
Dissatisfied customers often switch to competitors and
disparage the product to others.
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VALUE AND SATISFACTION
Set the right level of expectations!
Too low – fail to attract enough buyers.
Too high – Disappointed customers.
Customer value and customer satisfaction are key building
blocks for developing and managing customers relationships.
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HOW DO CONSUMERS OBTAIN
PRODUCTS AND SERVICES?
Exchanges - act of obtaining a desired object from someone
by of fering something in return.
Transactions - trade of values between parties. Usually
involves money and a response.
Relationships - building long-term relationships with
consumers, distributors, dealers, and suppliers.
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MARKETING EVOLUTION
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EVOLUTION OF MARKETING
Simple Trade Era
Everything was made or harvested by hand and available in limited
supply
Exploration and trade in resources was the focus of the economic
activity.
Production Era
Mass production ( ford T model example)
Production increased the availability of product options in the
marketplace
“if you build it, they will come”
Lasted approx 60 years 1860’s – 1920’s
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EVOLUTION OF MARKETING
Sales era ( 1920’s – 1940’s)
Followed the production after consumer demand became saturated.
No longer could businesses easily and readily sell everything they
produced.
Competition for market share increased
Companies had to work harder to sell their product to consumers.
Commoditization emerged: products became commodities and price
became the distinguishing competitive advantage.
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EVOLUTION OF MARKETING
Marketing department Era
Manufacturing firms realised that the sales orientation of the past
was not resonating with consumers.
New levels of affluence provided consumers with more power in the
marketplace
Businesses consolidated marketing-related activies (advertising,
sales, promotion, public relations. Etc.) into on department.
Lasted from 1940’s – 1960’s
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EVOLUTION OF MARKETING
Marketing company era
Marketing concept became widely accepted.
Businesses exist to address customer needs.
The customer is the focus of our business endeavors.
It became the goal of the business.
All employees became part of the marketing effort, either directly or
indirectly, and the customer became king.
Began in the 1960’s and is still in play.
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EVOLUTION OF MARKETING
Relationship Marketing era
Building a long-term, mutually beneficial relationship with the
customer
Focus changed to lifetime customer value and customer loyalty.
CRM ( customer relationship management) and data -mining became
the buzzwords in marketing.
The key to building relationship is trust
Exists from 1990’s to 2010
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EVOLUTION OF MARKETING
Social/ mobile marketing Era
Paradigm shift from relationship marketing
Focuses on real-time connections and social exchanges based on
relationships driven by the consumers.
24/7 connected to current / future and potential consumers in real -
time.
Communication and exchange of information is a critical success
factor
Like predecessor eras, Trust and maintaining a positive image are
just as important.
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EVOLUTION OF MARKETING
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MARKETING ORIENTATIONS
"the customer is king“
In the past this was not the case, some businesses put factors
other than the customer first.
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PRODUCTION ORIENTATION
The focus for the business is to reduce costs through mass
production. A business orientated around production
believes that the "economies of scale" generated by mass
production will reduce costs and maximise profits. A
production orientated business needs to avoid production
ef ficiency processes which af fect product design and
quality. Compromising product design and quality for the
sake of production is likely to reduce the product's appeal
to customers
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PRODUCT ORIENTATION
A product orientated company believes that its product's
high quality and functional features make it a superior
product. Such a company believes that if they have a
superior product customers will automatically like it as well.
The problem with this approach is that superiority alone
does not sell products; superior products will not sell unless
they satisfy consumer wants and needs.
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SALES ORIENTATION
A sales orientated company's focus is simple; make the
product, and then sell it to the target market. This type of
orientation involves the organization making what they
think the customer needs or likes without relevant research.
However as we know sales usually aren't this simple. An
ef fective marketing strategy requires market and marketing
research, prior to product development and finally an
ef fective promotion strategy.
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MARKETING ORIENTED
A market orientated company puts the customer at the
"heart" of the business; all activities in the organization are
based around the customer. The customer is truly king!.
A market orientated organization endeavors to understand
customer needs and wants, then implements marketing
strategy based on their market research; from product
development through to product sales. Once sales have begun
further research will be conducted to find out what consumers
think about the product and whether product improvements
are required. As markets continuously change, market
research and product development is an ongoing process for a
market orientation company.
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CONCLUSION
In today’s competitive world, it is more important than ever to
implement a market orientated strategy.
In this digital age customers are able to research the products
available on the market fairly quickly.
If an organization does not of fer customers what they are
looking for (product and customer service) they will buy from
a competitor that does
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WHO PURCHASES PRODUCTS
AND SERVICES?
Actual
Market - buyers Buyers
who share a
particular need
or want that can
be satisfied by a
company’s products Potential
or services. Buyers
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MARKETING PROCESS
companies work to understand consumers,
create customer value,
Build strong customer relationships
creating superior customer value.
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MARKETING MYOPIA
The mistake of paying more attention to the specific products
a company of fers than to the benefits and experiences
produced by these products.
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MODERN MARKETING SYSTEM
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MARKETING MANAGEMENT
Marketing Management
Implementing programs to create exchanges
with target buyers to achieve organizational
goals
Demand Management
Finding and increasing demand, also
changing or reducing demand
Profitable Customer Relationships
Attracting new customers and
retaining current customers
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MARKETING MANAGEMENT PHILOSOPHIES
• Consumers favor products that are
Production Concept available and highly affordable
•Improve production and distribution
•Consumers favor products that offer
Product Concept the most quality, performance, and
innovative features
•Consumers will buy products only if
Selling Concept the company promotes/ sells these
product
•Focuses on needs/ wants of target
Marketing Concept markets & delivering satisfaction
better than competitors
Societal Marketing Concept •Focuses on needs/ wants of target
markets & delivering superior value
•Society’s well-being
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PRODUCTION CONCEPT
Consumers will favour products that are available and highly affordable
management should therefore focus on improving production
and distribution ef ficiency
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PRODUCT CONCEPT
Consumers will favour products that offer the most in quality,
performance, and innovative features
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SELLING CONCEPT
The idea that consumers will not buy enough of the
organization’s products unless the organization undertakes a
large scale selling and promotion ef fort.
(Supply is larger than demand)
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THE MARKETING CONCEPT
Achieving organizational goals depends on knowing the needs and
wants of target markets and delivering the desired satisfactions better
than competitors do.
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SOCIETAL MARKETING CONCEPT
The marketing strategy should deliver value to customers and other
stakeholders affected by marketing decisions in a way that maintains
or improves the consumer’s and the society’s well-being.
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MARKETING & SALES CONCEPTS
CONTRASTED
Starting Focus Means Ends
Point
Selling Profits
Existing
Factory and through
Products
Promoting Volume
The Selling Concept
Profits
Customer Integrated
Market through
Needs Marketing
Satisfaction
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SOCIETAL MARKETING CONCEPTS
The idea that the organization should determine the needs,
wants and interests of target markets and deliver the desired
satisfactions more ef fectively and ef ficiently than do
competitors in a way that maintains or improves the
customer’s and society’s well -being
The first three concepts are based on the product – the last
two are more customer oriented
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SOCIETAL MARKETING CONCEPTS
Society
(Human Welfare)
Societal
Marketing
Concept
Consumers Company
(Wants) (Profits)
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MARKETING CHALLENGES
New
Marketing
Landscape & Nonprofit
Information
Technology Marketing
Emerging
Ethical Challenges
Concerns Globalization
Changing
World
Economy
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MARKETING CHALLENGES
Rapid Digitalisation
Rapid Globalisation
Sustainable Marketing / Responsible Marketing
The growth for non-profit marketing
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MARKETING CHALLENGES
Mention some Marketing
Challenges examples?
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THE CHANGING NATURE OF CUSTOMER
RELATIONSHIPS
Relating with more Carefully Selected Customers
Relating for the Long -Term
Relating Directly
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PARTNERSHIP RELATIONSHIP MANAGEMENT
Working closely with partners in other company departments
and outside the company to jointly bring greater value to
customers
Partners Inside the Company
Partners Outside the Firm
Strategic partners
Supply chain management
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CAPTURING VALUE FROM CUSTOMERS
Creating Customer Loyalty and Retention
Customer delight leads to emotional relationships and loyalty
Customer lifetime value shows true worth of a customer
Growing Share of Customer
Share of customer’s purchase in a product category
Achieved through offering greater variety, cross -sell and up-sell
strategies
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CAPTURING VALUE FROM CUSTOMERS
Building Customer Equity
The combined customer lifetime values of all current and potential
customers
Measures a firm’s performance, but in a manner that looks to the
future
Choosing the “best” customers is key
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CAPTURING VALUE FROM CUSTOMERS
The company can classify customers according to their
potential profitability and manage its relationships
accordingly.
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THE NEW MARKETING LANDSCAPE
Challenges Advances in
The Digital Age computers,
Rapid Globalization telecommunications
Ethics and Social information,
responsibility transportation
Not-for-profit Customer research and
tracking
Marketing
Product development
Distribution
New advertising tools
24/7 marketing through
the Internet
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THE NEW MARKETING LANDSCAPE
Challenges Geographical and
The Digital Age cultural distances
Rapid Globalization have shrunk
Ethics and Social Greater market
responsibility coverage
Not-for-profit More options for
Marketing purchasing and
manufacturing
Increased competition
from foreign
competitors
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THE NEW MARKETING LANDSCAPE
Challenges Marketers need to
The Digital Age take great
Rapid Globalization responsibility for the
Ethics and Social impact of their
responsibility actions
Not-for-profit Caring capitalism is a way
to differentiate your
Marketing
company
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THE NEW MARKETING LANDSCAPE
Challenges Many non-profit
The Digital Age organizations are
Rapid Globalization realizing the
Ethics and Social importance of
responsibility strategic marketing
Not-for-profit Performing arts
Marketing Government agencies
Colleges
Hospitals
Churches
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CURRENT MARKETING TRENDS
Customers as Marketers
The marketing funnel is no more, my friends. Today, the
flywheel — and a subsequent focus on service — have replaced
the one-way direction of the funnel.
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CURRENT MARKETING TRENDS
Content marketing trends
All kinds of businesses in all kinds of industries are starting
blogs, investing in content marketing resources, and paying
for content-related advertisements. Why? Because 47% of
buyers viewed three to five pieces of content before engaging
with a sales rep, and 70% of people would rather learn about
new products through content than traditional advertising.
But contributing to a blog isn’t quite enough in today’s
content dog-eat-dog world. To ensure your content is as
ef fective and accessible as possible, you must pay attention
to what type of content resonates most with your buyer
persona.
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CURRENT MARKETING TRENDS
Video content
Isnt a new idea – but its effectiveneess and popularity skyrocketed
Youtube is the second most popular social network behind Facebook.
72% of people would rather use video to learn about a new product or
service
Impact and interest in video means that the investment you put into
video will pay off –literally.
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CURRENT MARKETING TRENDS
Native advertising
The point of native advertising is to naturally, organically
advertise your brand or product within another environment,
such as a publication, video, or graphic. Unlike traditional
advertising, which is designed to interrupt and stand out,
native advertising is designed to blend in and promote your
brand to a new audience.
Buzzfeed is a popular publication and blog that routinely
partners with brands for native advertising.
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CURRENT MARKETING TRENDS
Social Media Markting Trends
social media spending will account for almost 20% of
marketing budgets in the next 5 years .
Social is an important part of every business’s marketing
strategy. It allows brands to connect authentically with their
audience and provides a fun, informal outlet to let brand
personality and character to shine through.
It’s also an ever-changing medium, and it’s important to stay
up-to-date with the ever-changing trends and best practices.
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CURRENT MARKETING TRENDS
Micro – influencers
Micro-influencers are social media promoters that have smaller
following, typically between 100,000 and 1 million. These folks might
have a smaller follower base, but their posts pack more punch due to
their engagement levels.
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CURRENT MARKETING TRENDS
Search Marketing Trends
61% of marketers say improving SEO and growing their organic
presence is their top inbound marketing priority.
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CURRENT MARKETING TRENDS
Voice search
Siri, Alexa, Cortana, or Google Assistant
Do you use this type of search?
Search content is key to marketing
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CURRENT MARKETING TRENDS
Mobile-First Indexing
48% of consumers start mobile research with a search engine,
and the first position on Google search results on mobile has
a 31 .35% click-through rate.
Businesses should ensure their website is discoverable
and readable via mobile devices — both smartphones and
tablets.
Website speed is also becoming important as Google
prioritizes better performing websites in their search engine
results pages (SERPs).
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FUTURE TRENDS
Virtual Reality
Becoming increasingly commonplace as a marketing tool
Engages customers
Although some companies are using VR it is Still emerging and
evolving
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FUTURE TRENDS
Interactive web content engages visitors
Sets interest
Informative
A dif ferent experience for the users
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z6M-REN89NKV-QtzBarNqHeC8z_Zplj
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FUTURE TRENDS
Chatbots
More than half of consumers expect a response within 10
minutes to any marketing, sales, or customer service inquiry
Bots are powered by a computer program that automates
certain tasks, typically by chatting with a user through a
conversational interface .
Bots are made possible by artificial intelligence, which helps
it to understand complex requests, personalize responses, and
improve interactions over time.
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