Principles

Principles of
of Marketing
Marketing
Lecture
Lecture 1
1 onwards
onwards
• What is Marketing ?

Old sense: making a sale – “telling and selling”

New sense: satisfying customer needs

2
• Marketing Defined (broadly 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.

3
• Marketing Defined

• The process by which companies create value for

customers and build strong customer relationships
in order to capture value from customers in return.

4
Understanding the marketplace and
consumer needs
• Five core concepts
Needs,Wants,
Needs,Wants,
and
and Demands
Demands

Core Marketing
Markets
Markets Marketing
Marketing Offers
Offers
Concepts

Exchange
Exchangeandand Customer
CustomerValue
Value
Relationships
Relationships &
&Satisfaction
Satisfaction
5
• Needs, Wants and Demands

• Needs
Needs States of felt deprivation.

• Wants
Wants The form human needs take as shaped by
culture and individual personality.

• Demands
Demands Human wants that are backed by buying
power .

6
• Marketing offer

• Some combination of products, service, information ,

or experiences offered to a market to satisfy a need or
want.

7
• Customer Value and Satisfaction

• Customer
Customervalue
value The difference between the
values the customer gains from owning and using
a product and the cost of obtaining the product.

•Customer
Customersatisfaction
satisfaction The extent to which a
product’s perceived performance matches a
buyer’s expectations.

8
• Exchange and Relationships

Exchange
Exchange the act of obtaining a
desired object from someone by offering
something in return.

9
Market

The set of all actual and potential buyers of

a product or service.

10
Elements of a modern marketing system

Company
Company
(marketer)
(marketer)
Marketing
Marketing End
Enduser
user
Suppliers
Suppliers intermediaries
intermediaries market
market
Competitors
Competitors

Environment

11
 The Marketing Process

Understand
Understand Construct
Constructaa Build
Build Capture
Capturevalue
value
Design
Designaa
the
the marketing
marketing profitable
profitable from
from
customer
customer
marketplace
marketplace program
program relationships
relationships customers
customerstoto
-driven
-driven
and
andcustomer
customer that
thatdelivers
delivers and
andcreat
creat create
createprofits
profits
marketing
marketing
needs
needsand
and superior
superior customer
customer and
andcustomer
customer
strategy
strategy
wants
wants value
value delight
delight quality
quality

12
 An expanded model of the marketing process
Understand
Understand Construct
Constructaa Build
Build Capture
Capturevalue
value
Design
Designaa
the
the marketing
marketing profitable
profitable from
from
customer
customer
marketplace
marketplace program
program relationships
relationships customers
customerstoto
-driven
-driven
and
andcustomer
customer that
thatdelivers
delivers and
andcreat
creat create
createprofits
profits
marketing
marketing
needs
needsand
and superior
superior customer
customer and
andcustomer
customer
strategy
strategy
wants
wants value
value delight
delight quality
quality

Select
Selectcustomers
customers Product
Productandand
Research
Research Customer Create
Createsatisfied,
satisfied,
totoserve:
serve:market
market service design:
service design: Customer
consumers
consumersand
and Relationship loyal customer
loyal customer
segmentation
segmentationand and Build
Buildstrong
strong Relationship
the marketplace
the marketplace Management
targeting
targeting brands
brands Management
Capture
Capturecustomer
customer
Decide
Decideon
onaavalue Pricing
Manage
Managemarketing
marketing
value
proposition: Pricing: : lifetime
lifetimevalue
value
information proposition: create
createreal
realvalue Partner
informationand
and differentiation value Partner
customer data differentiationand
and Relationship Increase
customer data positioning
positioning Distribution:
Relationship
Management Increaseshare
shareofof
Distribution: market
manage
Management marketand
and
managedemand
demand share of customer
and share of customer
and supplychains
supply chains
Promotion:
Promotion:
communicate
communicatethethe
value proposition
value proposition

Harness
Harnessmarketing
marketing Manage
Manageglobal
global Ensure
Ensureethical
ethical&& 13
technology
technology markets
markets Social
Socialresponaibility
responaibility
Marketing management
The art and science of choosing target markets
and building profitable relationships with them.

Selecting
Selecting Choosing
Choosingaa
customers
customers value
value
to
to proposition
proposition
serve
serve

14
• Demarketing

Marketing to reduce demand temporarily or

permanently; the aim is not to destroy demand but only
to reduce or shift it.

15
• Biochemists’ Industry

Biochemists can be found working in numerous

areas of industry.

These are the eight areas:

Drug discovery Consumer goods

Diagnostics industry Clinical biochemistry
Service providers Biomaterials
Agrochemicals Food formulation
16
• Marketing management orientation
(or philosophies )

Production
Productionconcept
concept
Product
Productconcept
concept
Selling
Sellingconcept
concept
Marketing
Marketingconcept
concept
Social
Socialmarketing
marketingconcept
concept

17
• Production concept
The management should only focus on
improving production and distribution efficiency.

• Product concept
The organization should devote its energy to
making continuous product improvements.

18
• Selling Concept
The consumers will not buy enough of the
organization’s products unless the organization
undertakes a large-scale selling and promotion
effort.
• Marketing Concept
To achieving organization’s goals depends on
determining the needs and wants of target markets
and delivering the desired satisfactions more
effectively and efficiently than competitors do.

19
• The selling and marketing concepts contrasted
Starting
Focus Means Ends
point

Existing Selling and Profit through

Factory
Factory products promoting sales volume

The selling concept

Profit through
Customer Integrated
Market Customer
needs Marketing satisfaction

The marketing concept

20
• Societal marketing concept

The organization should deliver the desired

satisfactions to their target market effectively and
efficiently in a way that maintains or improves the
consumer’s and society’s well being.

21
• Societal Marketing concept

Society
(Human welfare)

Social
Social
marketing
marketing
Customers concept
concept Company
(Wants satisfaction) (Profits)

Three considerations underlying the Societal marketing concept

22
• Bionomics marketing concept

To find the market demands that firm’s

resources can be match to.

“6R”:
Right time , Right place, Right product,
Right price, Right way, to Right customer

23
• The company’s strategic planning

Business unit
Corporate level Product and
market

Setting
Setting
Defining
Defining Designing
Designing Planning,marketing
Planning,marketing
company
company
the
thecompany
company the
thebusiness
business And
Andother
other
objectives
objectives Functional
mission
mission portfolio
portfolio Functionalstrategies
strategies
and
andgoals
goals

24
• The BCG matrix
Marketing growth rate

Star Question mark

high
Low

Cash cow Dog

High low
Relative market share

25
• Product-market expansion grit
Existing New
products products

Existing Market product

markets penetration development

New Market
Diversification
markets development

26
Managing marketing strategy
Marketing Competitors
intermediaries
M
pl ark

ys g
al tin
Product an eti
an rke
is
ni ng
a ng
M

n
me ket
tio

T a ke ti
m
ar
nta

r g ng
seg Mar
Profitable

et

Price
Place

Customer
relationships

Market

n
positioning

en g
tio
m tin
M on t

ta
ar r o

ple rke
c
ke l

im Ma
Promotion
tin
g

Suppliers Publcs 27
Marketing environment

The actors and forces outside marketing

that affect marketing management’s ability to
develop and maintain successful transactions
with its target customers.

28
• Marketing environment

Macro-environment

Micro-environment

Marketing
department

29
The microenvironment

The actors close to the company that affect

its ability to serve its customer- the company,
suppliers, marketing intermediaries, customer
market, competitors, and publics.

30
• The microenvironment

Company’s
Internal
environment
Publics Suppliers
Company’s
marketing
Marketing
Competitors intermediaries
Customers

31
• The company’s internal environment

Top
management
Accounting Finance
Marketing
Manufacturing R&D

Purchasing

32
The macro-environment

The larger societal force that affect the

microenvironment – demographic, economic,
natural, technological, political, and cultural
forces

33
• The macro-environment

Demographic
forces
Cultural Economic
forces forces
Microenvironment

Company
Company
Political Natural
forces forces

Technological
forces
34