Transcript Introduction to Marketing

Introduction to Marketing
Presentation and
Discussion
Charles Blankson, Ph.D., Department of
Marketing & Logistics
Introduction
Marketing is simple, yet complex.
We are all involved in marketing
and: “the enigma of marketing is
that it is one of man’s oldest
activities and yet it is regarded
as the most recent of the
business disciplines (Baker,
1976).
Charles Blankson, Ph.D., Department of
Marketing & Logistics
Introduction contd.
Marketing came into existence with the first
barter exchange (e.g. the barter trade in
ancient Egypt, Songhai and Ghana empires
in Africa etc.) when someone realized that
exchanges add value for both parties.
This was the first real step forward in
economic development.
Marketing has evolved (like other practices
such as architecture, medicine, engineering)
over the centuries to where it is today
(Michael Baker).
Charles Blankson, Ph.D., Department of
Marketing & Logistics
Introduction contd.
According to Peter Drucker, the first
test of any business is not the
maximization of profit but the
achievement of sufficient profit to
cover the risks of economic activity
and thus avoid loss.
Customers are the foundation of a
business and their purpose of
existence.
In other words, customers are the
mainstay of the business.
Charles Blankson, Ph.D., Department of
Marketing & Logistics
Introduction contd.
As Peter Drucker puts it: There is only
one valid definition of business
purpose: to create a customer.
It is the customer who determines
what business is…
What the business thinks it produces
is not of first importance, especially
not to the future of the business and
to its success in the market place.
The customer determines what a
business is, what it produces and
whether it will prosper (Drucker).
Charles Blankson, Ph.D., Department of
Marketing & Logistics
What is Marketing?
It is the most interesting,
dynamic, versatile of all
academic disciplines.
It is both theoretical and
practical in nature.
It yields real results in the form
of profits and/or satisfaction of
business aims/objectives.
Charles Blankson, Ph.D., Department of
Marketing & Logistics
What is Marketing? contd.
It is a multidisciplinary (economics,
psychology, sociology, history, statistics…)
management process of identifying and
satisfying consumer and organizational
needs profitably.
The aim of marketing is to make profit
and/or satisfy business objectives.
Thus, overall, it enhances human and
national economic development/progress.
Compare (a) Advanced countries and
underdeveloped countries? And (b) a
profitable business and a less profitable
business?
Charles Blankson, Ph.D., Department of
Marketing & Logistics
Definition
Marketing is the process of planning
and executing the conception, pricing,
promotion, and distribution of ideas,
goods, and services to create
exchanges that satisfy individual and
organizational goals.
Source: The American Marketing
Association (AMA) (see
www.ama.org).
Charles Blankson, Ph.D., Department of
Marketing & Logistics
Definition
Marketing is the management
process responsible for
identifying, anticipating, and
satisfying customer
requirements profitably.
Source: The Chartered Institute
of Marketing (CIM) (UK) (see
www.cim.co.uk)
Charles Blankson, Ph.D., Department of
Marketing & Logistics
Recent formal Definition of
Marketing
Marketing is 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.
Source: American Marketing Association,
2004
Charles Blankson, Ph.D., Department of
Marketing & Logistics
Role of Marketing
Organizational Resources
Effective match
Specification
of
Target Market
Customer Satisfaction
Organizational
Aims/objectives
Charles Blankson, Ph.D., Department of
Marketing & Logistics
The Marketing Concept
The Marketing Concept states
that if a business or organization
is to achieve profitability, the
entire organization must be
oriented towards satisfying
consumer needs, wants and
aspirations.
Charles Blankson, Ph.D., Department of
Marketing & Logistics
The Marketing Concept contd.
In other words, The Marketing
Concept holds that the key to
success is through determining
the needs/wants/aspirations of
target markets and delivering
these more effectively and
efficiently than competitors.
Charles Blankson, Ph.D., Department of
Marketing & Logistics
The Marketing Concept (key issues)
Organizations must concentrate
on the customer and not the
product or the company.
Organizations should revolve
round the customer and not the
other way around.
The purpose of a business is to
create and keep a customer
(Theodore Levitt).
Charles Blankson, Ph.D., Department of
Marketing & Logistics
Elements of the Marketing Concept
Consumer/customer Orientation
Total Organization effort
Profitability/achievement of
objectives.
Charles Blankson, Ph.D., Department of
Marketing & Logistics
Criticisms of the Marketing Concept
Do customers really know their
needs/wants/aspirations?
The choice of either consumer or
competitive orientation.
Adapting to change
(rigidity,inflexibility of the concept).
Conflict with social responsibility.
Limits in the applicability of the
concept (e.g. the arts, ideology such
as political parties, environmentalists
– greenpeace, religions –
churches/synagogues etc……
Charles Blankson, Ph.D., Department of
Marketing & Logistics
Some Criticisms of Marketing
Too many advertisements are
annoying, misleading, or both.
There are too many unnecessary
products.
Middlemen raise prices but don’t add
value.
Marketing makes people materialistic.
Most of the criticisms result from
misunderstandings about marketing
(Perreault & McCarthy, 1999).
Charles Blankson, Ph.D., Department of
Marketing & Logistics
Do you know your market?
What is the product or service being
offered?
What are the market trends in the industry?
What is the market?
Who are your customers? And what are they
looking for?
Who are your competitors? And how do they
operate/react/behave?
Why do (should) your customers buy your
product/service rather than that of your
competitors?
Charles Blankson, Ph.D., Department of
Marketing & Logistics
What is a Market ?
According to Kotler (2004), “a market
consist of all the potential customers
sharing a particular need or want who
might be willing and able (i.e.,
propensity to) to engage in exchange
to satisfy that need or want”.
Source: Kotler, P. (2004), Marketing
Management, Prentice-Hall, Englewood Cliff,
NJ.
Charles Blankson, Ph.D., Department of
Marketing & Logistics
Market Types
Consumer Markets.
Industrial/Business to Business
Markets.
Reseller (Retailers, Distributors)
Markets.
Publics (Government
agencies/departments/institutio
ns).
International/global Markets.
Charles Blankson, Ph.D., Department of
Marketing & Logistics
What is Market(ing) Orientation?
The process of applying the marketing
concept in the market place.
Maintaining a customer orientation.
All departments work together guided
by customer
needs/wants/aspirations.
Focus on profits/objectives.
Source: Kohli and Jaworski (1990); Narver and Slater (1990).
Charles Blankson, Ph.D., Department of
Marketing & Logistics
Market Orientation
Production Orientation
--1850s -> 1930s
Sales Orientation
-- 1930s -> 1950s
Time
Marketing Orientation
-- 1960s -> ??
Consumer Relationship Marketing
(CRM)
-- 1990s -> ??
Charles Blankson, Ph.D., Department of
Marketing & Logistics
Production Orientation
Focus on the means of
production, and assumes
customers will want the
product/service.
Charles Blankson, Ph.D., Department of
Marketing & Logistics
Product Orientation
Focus on the technical
perfection of the
product/service seen
through the producer’s
(firm) eyes. Assumes
customers will perceive
product/service in the
same way and thus buy.
Charles Blankson, Ph.D., Department of
Marketing & Logistics
Selling Orientation
Focus on persuading
(usually aggressive) customers
to buy products which do
not usually match their
requirements. This is
unlikely to lead to repeat
buy/business.
Charles Blankson, Ph.D., Department of
Marketing & Logistics
Customer Orientation
Focus on discovering
customer needs (basic
survey/question & answer type)
and satisfying them. This
is unlikely to make best
uses of production and
other organizational
resources.
Charles Blankson, Ph.D., Department of
Marketing & Logistics
Marketing Orientation
Focus on the identification of
customers needs, organizational
resources and objectives.
Achieve effective match through
market segmentation, targeting,
positioning and resource
development (see also Role of
Marketing).
Charles Blankson, Ph.D., Department of
Marketing & Logistics
So how do you define Market(ing) Orientation?
Market orientation is the
organization-wide generation of
market intelligence pertaining to
current and future customer
needs, dissemination of the
intelligence across departments,
and organization-wide
responsiveness to it (Kohli and
Jaworski, 1990).
Charles Blankson, Ph.D., Department of
Marketing & Logistics
Definition of Market Orientation
contd.
According to Narver and Slater
(1990), Market orientation
comprises three components:
Customer orientation
Competitor orientation and
Interfunctional co-ordination.
Charles Blankson, Ph.D., Department of
Marketing & Logistics
Measuring Market Orientation construct
Top Management
Interdepartmental Dynamics
Organizational Systems
Market (customer) Orientation
Employees
Environment
Business Performance.
Source: Kohli and Jaworski (1990)
Charles Blankson, Ph.D., Department of
Marketing & Logistics
Measuring Market Orientation construct contd.
Customer Orientation
Customer commitment activities
Creation of customer value
Understanding customer needs
Measuring customer satisfaction
Offering after sales service
Competitor Orientation
Salespeople share competitor information
Responding rapidly to competitors’ actions
Top managers discuss competitors’ strategies
Targeting opportunities for competitive advantage
Interfunctional Coordination
Engaging in interfunctional customer calls
Sharing information among functions
Integrating all functions in strategy
Contribution of all functions to customer value
Sharing resources with other functions.
Source: Narver and Slater (1990)
Charles Blankson, Ph.D., Department of
Marketing & Logistics
Social Responsibility and
Marketing Ethics
Social responsibility concerns a
firm’s obligation to improve its
positive effects on society and
reduce its negative effects.
Marketing ethics are the moral
standards that guide marketing
decisions and actions.
Charles Blankson, Ph.D., Department of
Marketing & Logistics
Final comments on Market
Orientation
An organization’s success in a dynamic
business environment is more dependent on
adaptation to changing and evolving
customer needs/wants.
Higher degree of market orientation
emanates from a changing and dynamic
market environment.
Lower degree of market orientation can be
evidenced in a market with a fixed set of
customers whose preferences are stable.
Here, few changes are expected in the
marketing mix deliberation.
Kohli and Jaworski (1990)
Charles Blankson, Ph.D., Department of
Marketing & Logistics