Transcript 4.1 The Role of Marketing

4.1 The Role of Marketing
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What is Marketing?
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The management task that links the
business to the customer by
identifying and meeting the needs
of customers profitably.
Get the right product at the right
price to the right place at the
right time.
Marketing involves the
management of:
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Market research
Product design
Pricing
Advertising
Distribution
Customer Service
Packaging
Marketing and other Business
Functions:
CMS announces opening 4 new schools.
Why would this decision need to be
coordinated with other business functions?
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Finance
Human Resources
Operations
Marketing
Market Characteristics
 Market Size
 Market Growth
 Competitors and ease of entry
 Differentiated or homogeneous products
 Segmentation
Let's examine each one....
Market Characteristics - Size
 Market Size
The size of the market is important for 3
reasons:
1. Can assess whether a market is worth
entering
2. Can calculate your market share
3. Growth or decline can be identified
What is Market Size?
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Total level of sales of all producers
within a market.
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Can be measured by volume of sales
(units sold)
Can be measured by value of sales
(total revenue generated)
Either calculation can give you a
perception of the market.
Market Characteristics - Growth
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The percentage change in the total size of
a market (in volume-units or valuerevenue) over a period of time.
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Growing markets may have many competitors
so profits may not be as high as expected.
The pace of growth
 may depend upon external factors
 may be affected by technology innovations
 may be slow because of a saturated market
Market Characteristics –
Competitors and Ease of Entry
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Businesses need to be aware of how
many competitors in the market and how
easy it is for others to join.
The more businesses in the marketplace,
the more likely there will price
competition.
Market Characteristics –
Differentiated or homogeneous
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Homogeneous products are goods that
are physically identical or viewed by
customers to be identical.
Bottled water, gas, and milk
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It is difficult to charge premium prices for
these goods.
Market Characteristics –
Segmentation
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Segmentation refers to breaking up the
market into smaller groups that have
similar needs.
Target Marketing – is specific marketing
strategies used to meet the needs of the
segment. It tries to meet the needs of
this segment only.
Mass Marketing attempts to reach as many
people as possible whether they are likely
buyers of our product or not.
Marketing GOODS vs SERVICES
Services differ from goods:
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Services are consumed immediately
Services cannot be returned, repaired, or
replaced
It is difficult to compare service quality
Trained staff (people) are important to successful
service
Because of these differences marketing of
services is different, too!
Marketing GOODS vs SERVICES
Marketing Services is about relationships!
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Building Trust
Time for delivery of service
Deliverability
Relationships
Perceived Value
Market Oriented
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Requires market research to
determine what customer want to
buy
-New products less likely to fail
-Product life span is likely to be longer
-Continuing feedback from consumers
to keep product fresh
Product Oriented
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Businesses invent products they
believe will be useful and
consumers will want.
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Pharmaceutical and electronics
Produce high-quality goods that
consumers will value
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Safety equipment or gourmet foods
Social Marketing
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Social marketing includes multiple
stakeholders usually acts in socially
responsible way.
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Balances 3 concerns: profits, consumer
wants, society's interest
Difference between short-term wants
(prices) and long-term welfare
(protecting the environment)
Business aims to meet consumer wants
in a socially responsible way.
Market Leadership
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The percentage of sales in the total
market sold by one business can
compute your market share.
X 100
Market share% =
firm’s sales for time period
total market sales for time period
Market Leadership: A business has the highest market share
of all the firms that operate in a market.
Market Leadership
Benefits:
 Sales are higher than competitors
 Prominent shelf space in stores
 Not necessary to discount
 Advertising advantages
 Recruitment of the best employees
Issues:
 Must continue to do better – the pressure is “on”
 Attention to market share could erode profitability
Market Objectives
Goals set by for the marketing function and should be
aligned with corporate aims of the business.
For-Profits:
 Increase market share
 Increase total sales
 Increase customer satisfaction
 Create a brand identity
Non-Profits:
 Maximize revenue
 Increase recognition of the organization
 Promote work or the organization to wider audience
Market Strategies
Changes in customer preferences over time make it
necessary for marketing to always be researching and
watching.
Some current trends in consumer preferences:
- Fuel efficient cars
- Healthy food choices
- Surface computing
- Informal business clothing
Market Strategies
Innovation:
Rise of Social Networking
Ethical Consideration:
Target advertising to children
Cultural Differences:
Could lead to bad publicity and
misunderstandings