Course: Global Marketing

Lecturer: Mahreen Mamoon

Academic Year Fall 10/11

Lecture 1
Fundamentals of Marketing
What is Marketing?
 Marketing is not concerned simply with selling and
advertising. This common misconception of
marketing only reflects one part of something known
as the Marketing Process

 Chartered Institute of Marketing: Marketing is

the management process responsible for
identifying, anticipating and satisfying customer
requirements profitably.
 Philip Kotler (2005:12): Marketing means
managing markets to bring about exchanges
and relationships for the purpose of creating
value and satisfying needs and wants.
 American Marketing Academy: Is the process of
planning and executing the conception, pricing,
promotion, and distribution of ideas, goods,
services to create exchange that satisfies
individual and organisational goals
Customer Needs, Relationships and
Exchange… not just selling and adverts!
• At the heart of modern marketing is the concept of
customer need

•Theodore Levitt (‘Marketing Myopia’, HBR 1960): products

and services are problem solvers that satisfy the needs of
individual consumers
• A consumer who enters a hardware store looking to buy a
¼ inch drill actually needs a ¼ inch hole. Therefore the
company who is best able to fulfil this need will obtain
overriding competitive advantage
• As a consequence of this marketing philosophy modern
organisations put customers and their needs at the centre of
their operations
Two opposing marketing philosophies

Product  Consumer (Production & Selling Concept)

• “Build a better mouse trap and the world will beat a
path to your door” (R W Emerson)
• Focus is on developing product and on selling it, not
on consumer needs

Consumer  Product (Marketing Concept)

• Find out about customer needs and competition
(Market research, Market Segmentation, Positioning)
• Product innovation follows changing customer needs
– not the other way around
The Production & Selling Concept in Marketing

• Customers will prefer products that are widely

available and inexpensive

• Strategy: cost reduction, product development, mass

production
• Focus: selling what company makes rather than what
market demands
• Features: aggressive selling and promotion, uninspired
communication

Example:
Henry Ford ‘any colour
providing its black’
 The Marketing Concept
• Vantage point: Customer Needs/Wants/Satisfaction
• Adaptation of product according to changing
demands and delivering desired satisfactions more
effectively than competitors
• Creating demands/desires/markets
• Delivering Better Value than the competition
(Competitive Advantage)
• Societal Marketing Concept: corporations also need
to take wider societal welfare of
communities into account
(environmental problems, global poverty,
shortage of raw materials…)
 Core Marketing Concepts: Needs, Wants and
Demand
• Needs can be defined as
human states of deprivation –
physical needs such as food
Markets
Needs, wants and warmth, individual needs
and demands
such as security or happiness
and social needs such as
status or acceptance.

• Wants can be seen as the

Exchange, transactions
And relationships
Marketing offers form that human needs take
when they are shaped by
culture and individual
Values and personality (Desires).
satisfaction

• Demands are wants that are

reinforced by the financial
power to realise them.
 Market Offerings
• Market offerings are what companies or individuals
offer to satisfy human needs or demands. They are
often described as value propositions – bundles of
benefits which promise to satisfy needs and wants.
Products - BMW, Mobile Telephone, Sony PSP
Services - insurance policy, Barclay’s bank
account, operation on the NHS
Experiences - Club Med holiday, Tom Cruise Film,
Arsenal football match
Ideas - socialism, capitalist “freedom”, protest,
environmental concerns
• Marketers increasingly try to combine all three to
create powerful brands which offer meaning and
uniqueness
 Customer Value and Satisfaction

 Customer Value can be seen as the difference the benefits

the customer derives from owning or using a product or
service and the costs in purchasing it (money, time, effort).
Benefits can be functional (rational) or representational
(emotional).
 Rational and emotional needs!

 Customer Satisfaction is the perceived performance of a

product relative to a customer’s expectation. Quality, service,
image are key factors here.

 In a competitive market environment the value, satisfaction

and quality derived or promised from one product – e.g. a
Mercedes - is relative to that of another – e,g. a BMW or
Lexus.
The Marketing Process

Situation Analysis

Marketing Strategy

Marketing Mix Decisions

Implementation & Control

 The Marketing Process

 Situation Analysis – Examine the environment

which the company operates in – both internal and
external – to find whether there is a current gap in
the market and whether the company is capable of
filling this. Involves environmental scanning.

 Marketing Strategy – Once an opportunity to satisfy

unfulfilled customer needs (a potential market) is
discovered, market research will be required so as
to target consumers, segment them into smaller
groups, position product in relation to price, quality
and competitors and create viable value
propositions for the targeted markets.
 The Marketing Process
 Marketing Mix Decisions – formulation of detailed plans for
the active marketing of the product. This will include
product specifications, pricing levels, distribution (or
place) channels and promotion campaigns. Each of these
four elements must interrelate and complement each other.

 Implementation and Control – Once the marketing plan has

been completed the product is launched and offered to the
market. Constant feedback on the market performance of
the product should be established so as to facilitate change
and adjustment in the marketing mix over time to ensure
long-term market success and dialogue with consumers.
 The Marketing Environment
 The marketing environment is comprised of the actors
and forces outside marketing that affect marketing
management’s ability to develop and maintain
successful relationships with its target customers
 The constantly changing environment that surrounds the
market means that the customer – product –
organisation relationship is never stable (Example: I-
Pod)
 The constantly changing nature of the marketing
environment can be seen as a threat or an opportunity
 The ever changing marketing environment regularly
environmental scanning
 The Marketing Environment
 The Internal Environment consists of the
employees, groups, departments, divisions and overall
structure of the organisation. It also encompasses
other intangibles such as organisational culture and
ethos.
 The Micro-Environment incorporates the forces
close to the company that affect its ability to serve its
customers - the company, market channel firms,
customer markets, competitors and publics (financial,
media, governmental public, citizen groups), the overall
value delivery system.
 The Macro-Environment includes the larger societal
forces demographic, economic, natural, technological,
political and cultural forces. While the organisation is
less able to influence these it should be able to adapt
to them – especially in the medium to long-term.
 Environmental analysis
 Shortages of raw materials such as oil and coal
 Increased cost of energy
 Increased pollution
 Government intervention in natural resource
management
 Technological Environment: Fast pace of
technological change; introduction of the internet
 Political and Legal Environment: protecting
companies, consumers, protecting the interests of
society; growth of public interest groups
 Cultural and Social Environment: shifts in cultural
values (body, marriage, sexuality,…)
 Environmental Scanning
 As an organisation’s environment is in constant flux
it should be constantly scanned for changes will can
impact on its market operations.
 There are two standard ways of doing this:
– SWOT analysis: Strengths, Weaknesses,
Opportunities, Threats. This is often used to
examine the Microenvironment but does include
the Macro-.
– PEST(LE) analysis: Politics, Economics, Social,
Technological, Legal, Environmental