WHAT IS
MARKETING?
¡ An organizational function and a set
of processes for creating, communicating, and delivering value to customers and
for managing customer relationships in ways that benefit the organization and
its stakeholders (AMA)
¡ The management process responsible
for identifying, anticipating and satisfying customer requirements profitably
(CIM)
¡ Marketing is the art and science of
creating change (disequilibrium) in markets in such a way that the change
benefits the firm (or an alliance of firms) and, consequently, comparatively
"disadvantages" rivals. If a market is in equilibrium, marketers are
not doing their job.(*)
¡ Marketing exists because people have
needs and wants that they are willing to satisfy by giving up
things of value (like money for goods and services).
¡ Things of value are to be
understood as goods or services that are
ASSESSED POSITIVELY by THE CONSUMER - AS PERCEIVED BY THE CONSUMER.
¡ So value is ‘perceived value’
FIRM
orientation
ORIENTATION refers to a philosophy of doing
business, conditioning what businesses do and how. That is, what does it entail, who is
responsible for what, ...
Orientation
implies a way of thinking about marketing. This way of thinking has
changed over time
(NOTE:
Change over time does not imply evolution in orientation. One firm may have
more than one orientation (e.g. May depend on product and/or market).
Major
eras in the evolution of marketing thought
- Production (management philosophy)
- Emphasizes the most efficient
ways to produce and distribute products. Marketing had little importance.
- Sales (management philosophy)
- Aggressive selling to move
goods to consumers.
- Some people still think marketing = advertising + sales.
- Relationship / Consumer
orientation (management
philosophy, focus on satisfying consumers’ needs & wants)
- Quality management is
important to retain customers long-term (e.g. TQM). Marketing means
dialogue and collaboration with customers.
- Triple Bottom Line (management philosophy)
- Seeks to maximize financial, social,
and environmental bottom lines
(i.e. make $$ and
contribute to society).
- Social marketing concept -
marketers must satisfy customers’ needs in ways that benefits society, as
well as delivering value to the company.
¡ Sustainability - Creating products
that meet present needs while ensuring that future generations can have their
needs met
Greater
focus on accountability - ROI (Return on Investment) is the direct
financial impact of a company’s expenditure of resources (e.g. time or money
A
DIFFERENT LOOK AT THE Development in marketing thought
MARKETING:
A PROCESS TO DEAL WITH MARKETS
‘Consumer
markets’ involve the end users of products (goods and/or services)
‘Business
markets’ involve firms who produce to serve other firm’s products
MARKET
ORIENTATION
Market
orientation is generally understood as the implementation of the ‘marketing
concept’ - a philosophy of doing
business, which puts the customer’s needs at the centre of the organisation,
while accounting for the environment where a business operates (including all
other market participants, such competitors and government).
main
ideas underlying Value
- Value to the customer
- The most common meaning of
value is the ratio of costs (price) to benefits. Costs may be more than
price, (e.g convenience, quality, location); Benefits may be more than
quality (e.g. brand name, features).
- Value Proposition (by a supplier)
- Refers the whole bundle of
benefits to the customer.
- Emphasis is on the question:
“What makes this product different?”
- Suppliers identify and
communicate their value propositions.
- Value is in the eye of the
beholder
¡ Because it’s not just about price,
and its not just about quality. Value is really a combination of factors, such
as price, quality, convenience, delivery/credit, before and after the sale
service, etc.
¡ Different buyers weight the
importance of each element differently, so while some consumers find price more
important the before or after the sale service for certain items, other
consumers may feel just the opposite.
¡ Marketers need to understand which
factors are important to the majority of their customers, so that they can
present a strong value proposition.
¡ Relationship marketing regards
customers as partners, i.e.,, the emphasis moves from a transaction to a
connection that may involve co-production;
¡ Why? It is more expensive to attract
new customers than to retain current ones
¡ Calculating customer lifetime
value (CLV) allows a company to decide which customers are “worth keeping”
versus those which should be “fired”.
¡ CLV is about value to the
firm
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