Marketing theory

Prepared by: Abrinela L. Maralit

BSPHARM 4A
 Scenario
• Persons involved: Jim Smyth and Sue Davidson
• Position: Pharmacists/ owners/ managers of
West Side Pharmacy
• Problem: struggling in meeting financial
objectives
• Solution: To brainstorm ideas for improving
their performance by having impromptu
meeting
 Scenario
• Marketing questions asked:
– What other SERVICES can we PROVIDE that PEOPLE in
our community NEED or WANT?
– Are there any health-related goods that we should
add to the line of products we sell?
– What types of services can we develop given our
resources?
– Should we provide the services in our pharmacy or at
some other location?
– How will our services be different from the Corner
Pharmacy on the other side of the town?
– What should we charge for our services?
 Scenario
– How do we let people know that we are offering
these services?
– How will we know if our patients value the goods
and services we provide?
– What kinds of relationships do we need to
establish with our patients to be successful?
WHY MARKETING?
 Introduction: Why marketing?
• Marketing has received a ‘bad rap’.

• Marketing has many critics.

Introduction: Why marketing?

Many
marketers
are
unethical. Some
marketers fail
to act
according to
ethical
principles.
 Introduction: Why marketing?
• Marketing is not just a function for large corporations.
• Its principles are just as applicable to small,
independent owned pharmacies.
• Marketing is a CRITICAL PROFESSION of pharmacy.
• Its tools help pharmacists address many issues in a
variety of practice settings:
– WHAT to charge for a prescription drug;
– WHETHER ADD a pharmacokinetic monitoring service;
– WHICH OTC products to carry;
– WHETHER to USE a wholesaler or order directly from
manufacturer.
 Introduction: Why marketing?
• Concerns regarding:

Prescriber Patient Payer demands

Significant barriers to the provision of patient-

centered pharmacy services
 Introduction: Why marketing?
• Understanding customers’ needs and using
that understanding to

deliver Communicate

Key
components
of marketing
 Introduction: Why marketing?
• In delivering innovative pharmacy services like
MTM, “pharmacists must build the demand
and supply for pharmaceutical care services
simultaneously”.

- Rovers and colleagues (1998)

MARKETING: DEFINITIONS AND
CONCEPTS
 Concepts
“ MARKETING is an organizational function and a
set of processes for Creating
value
Communicating

Delivering

to customers and for managing customer

relationships in ways that benefit the
organization and its stakeholders.”

- AMA (American Marketing Association)

 Concepts
• Relationship
• Value
• The 4 P’s of marketing mix
• Concept of Exchange
 Definitions
• Marketing is the process of planning and executing the
CONCEPTION, PRICING, PROMOTION, and
DISTRIBUTION of ideas, goods, and services to CREATE
EXCHANGES that SATISFY the individual and
organizational objectives. (1985)

• Marketing does not specifically mention what

“product” is involved in the EXCHANGE but rather
focuses on CREATION, COMMUNICATION, AND
DELIVERY of value by organizations. (2004)

• The 2004 definition of marketing focuses on benefits as

its social role to the organization and its stakeholders.
 Kotler and Keller’s definition of
Marketing
• Is divided into 2:
– Business aspect
– Social aspect
 Kotler and Keller’s definition of
Marketing
Business
• Aka “managerial marketing”
• The art and science of
choosing target markets and
getting, keeping, and growing
customers through creating,
communicating, and delivering
superior customer value.
• Plays a demand function
• Focuses on methods on how
to control and stimulate
demand to meet the
organization’s objectives.
Social
• A societal process by which
individuals and groups
obtain what they NEED and
WANT through creating,
offering, and freely
exchanging products/
services of value with
others.
• Marketing exists because it
creates a higher standard of
living.
MARKETING SCIENCE
 Marketing science
• Some authors argued that marketing is a
science, while some argued that it is an art.
• Hunt proposed that all marketing can be
classified into one of 8 cells/ classes.
• One criterion used to define these cells is
whether the marketing content is POSITIVE or
NORMATIVE.
 Marketing science
Positive Marketing
: the focus of the analysis is DESCRIPTIVE; “what is”

Describe Predict Explain Understand

Marketing phenomena
Marketing science

Normative
Marketing
: the focus of the
analysis is
PRESCRIPTIVE;
“what ought to be
done”
THE COMPANY TOWARDS
MARKETPLACE
 Marketplace : concepts
• Kotler described 6 competing concepts used
as guides in the conduct of marketing
activities.
– Production concept
– Product concept
– Selling concept
– Marketing concept
– Customer concept
– Societal marketing concept
Production concepts:

• The efficiency in the production and

distribution of good and services.
• Key assumption:
– Product availability
– Low prices
Product concepts

• Focuses on making good products, often as

defined in the eyes of the producer, and
improving them over time.
• Key assumptions:
– Buyers appreciate well-made products
– They evaluate product QUALITY.
Selling concepts

• Emphasizes actions directed at stimulating

consumers’ interest through aggressive sales
and promotion efforts.
Customer concept
• Suggests that companies direct separate offers,
services, and messages to individual customer
needs.
Societal marketing concept
• The organization’s task is to determine the
NEEDS, WANTS, and INTERESTS of target markets
and deliver the desired satisfactions effectively
and efficiently in a way that enhances the
consumers’ and the society’s well-being.
NEEDS, WANTS, DEMANDS
 Need
• What is a need?
– the basic human requirements: PHYSICAL and
SOCIAL needs.

Affection
 Want
• Desire for a specific satisfier of a need.
• Need becomes wants, and these wants are
shaped by culture and individual personality.
 Demand
• a want that is backed by an ability to pay.
• NEGATIVE DEMAND- a situation wherein
people do not want their goods and services
like pharmaceutical services. Examples are,
automobile repair services, legal services and
dental work.
 What are the jobs of a marketer?

To people’s expressed needs and help customers

learn more about what they need and want.
They do not needs, but they do
understand their needs and translate them
into wants.
THE CORE CONCEPT OF MARKETING
• Central to marketing is the concept of
EXCHANGE.
• Exchange is the core concept of marketing.
• It is the process of obtaining a desired product
from someone by offering something in
return.
• It is a process; when 2 parties reach an
agreement, a transaction takes place.
• Transaction- a trade of values between 2 or
more parties.
• Refers to an organization’s offering.
• Not limited to tangible goods but, can
be an item of value or combination
thereof.
• In pharmaceutical care, the product
most often provided is service.
• MARKETING MYOPIA- often a result of
the application of the product
concept as a philosophical guide to
marketing activities.
• Kotler and Ketler described 5 categories of
offerings that are distinguished based on how
much the service component is part of the
offering:
1. Pure tangible good
2. Tangible good with accompanying services
3. Hybrid
4. Major service with accompanying minor goods
and services.
5. Pure service.
• Christensen, Fassett, and Andrews
differentiated among 3 types of services
associated with pharmaceutical care:
1. Dispensing services
2. Dispensing-related value-added pharmaceutical
services (VAPS)
3. Nondispensing-related value-added
pharmaceutical services (VAPS)
 9 basic differences that can help
distinguish services from physical goods
1. Customers do not obtain ownership of services.
2. Service products are intangible performances.
3. There is a greater involvement of customers in
the production process.
4. There is greater variability in operational inputs
and outputs, making it more difficult to
standardize and control.
5. There is typically an absence of inventories.
 9 basic differences that can help
distinguish services from physical goods
6. People may form part of the product,
including other patrons.
7. Many services are difficult for customers to
evaluate.
8. Time factor is relatively more important.
9. Delivery systems may involve both
ELECTRONIC and PHYSICAL CHANNELS.
 Lovelock and Wright’s “8 P’s of
integrated service management”
• Product elements
• Place, cyberspace, and time
• Promotion and education
• Price and other user outlays
• process
• Productivity and quality
• People
• Physical evidence
 Process Productivity and People Physical evidence
quality
The method and Productivity- the The ones who - the appearance of
sequence in which efficiency in the provide most the physical
a service is created, transformation of services. environment where
produced, and services inputs into the service is
delivered. output s delivered signs,
printed materials,
Quality- refers to and other visible
the DEGREE to and tangible cues .
which a service
meets the needs,
wants, and
expectations of
customers.
 Price
• It is what is given up to obtain a product.
• “objective price” – the actual price of a
product
• “perceived price” – what is encoded by the
consumer (e.g. “expensive”, “cheap”)
 Place
• A.k.a “distribution”
• Any activity designed to create utility by
having the product available WHEN and
WHERE targeted customers want to buy it.
• These are the activities seek to inform,
remind, and persuade the target market
about an organization and its offerings.
WHAT IS POSITIONING?
 Positioning
• The act of designing the
company’s offering and IMAGE
to occupy a distinctive place in the
mind of the market.
• It talks about WHAT A MARKETER CAN DO TO
MIND OF THE TARGET OF THE CONSUMER.
• Example:
– Pharmacies can position themselves as innovators,
medication experts, or partners in health-related
needs.