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My Friends Project..
UNDERSTANDING MARKETINGEvolution, Orientations and Concepts
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What is Marketing?
Marketing is the process of planning andexecuting the conception, pricing, promotion,and distribution of ideas, goods, and servicesto create exchanges that satisfy individual and
organizational objectives.
More simply: Marketing is all aboutsatisfying needs (...profitably andfairly)!!!
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Marketing is an Exchange of Value
An exchange is the process by which sometransfer of value occurs between a buyer and aseller. At least two people or organizations must be willing to
make a trade, and
Each must have something the other values.
Most exchanges occur in the form of a monetarytransaction.
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Why is Marketing
Important? Marketing Creates Utility Form Utility
Place Utility
Time Utility
Possession Utility
Marketings Role in the Firm
A firms marketing-related decisions must affect andbe affected by its other operations such as accounting
and manufacturing.
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Why is Marketing Important?
Marketings Role in Our Daily Lives Marketings Role in Society
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Production Concept
Production Concept
Product Concept
Product Concept
Selling Concept
Selling Concept
Marketing Concept
Marketing Concept
Consumers prefer products that arewidely available and inexpensive
Consumers favor products thatoffer the most quality, performance,
or innovative features
Consumers will buy products only if
the company aggressivelypromotes/sells these products
Focuses on needs/ wants of targetmarkets & delivering value
better than competitors
Company Orientations Towards
the Marketplace
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When Did Marketing Begin?
Product OrientationProduct Orientation
Selling OrientationSelling Orientation
Customer OrientationCustomer Orientation
Most Efficient Production &DistributionSellers Market
Satisfies Customers Needsand Wants
Total Quality
New Era OrientationNew Era OrientationBenefits to Customers, PlusFirms Employees,Shareholders, and Communities.
Marketing as a Sales FunctionBuyers Market
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The PILLSBURY
First Era in 1869 - 1930s.The idea for the formation of the company
came from the availability of high quality
wheat and the proximity of water power NOT from the availability and proximity of
growing major market areas or the demand
for better less expensive, more convenientflour products.
The principal concern here was with
PRODUCTION
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The PILLSBURY
In this Era The companys Philosophymight have been stated as: We are
professional flour millers. Blessed with a
supply of the finest North American wheat,plenty of water power, and excellent milling
machinery, we produce flour of high
quality. Our basic function is to mill highquality flour, and of course we must hire
salesman to sell it just as we hire
accountants to keep our books.
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The PILLSBURY
Second Era in 1930s 60s (Sales
Orientation).
This was the era of sales when for the first
time the co began to be highly conscious of
the consumer, her wants and her prejudices
as a key factor in business equation. The first
step along the road to become a marketingcompany has been taken.
The principal concern here was with SALES.
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The PILLSBURY
In this Era The companys Philosophy might have
been stated as: We are a flour milling company,
manufacturing a number of products for the
consumer market. WE must have a first ratesales organization which can dispose of all the
products we can make at a favorable price. We
must back up this sales force with consumer
advertising and market intelligence. We want oursalesman and our dealers to have all the tools
they need for moving the output of our plants to
the consumer.
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The PILLSBURY
Second Era in 60s and beyond (Marketing
Orientation).
This was the era of product research and for the
first time co felt the need to select the best newproducts. The first step the co took to set up a
marketing department which developed criteria for
determining which products to market. The criteria
were nothing more or less than those of theconsumer itself.
The principal concern here was with Consumer
Markets
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The PILLSBURY
In this Era The companys Philosophy might havebeen stated as: We make and sell products for
consumers.
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MarketIntegratedmarketing
Profits throughcustomer
satisfaction
Customerneeds
(b) The marketing concept
Factory
Existing
products
Selling and
promotion
Profits through
sales volume
Startingpoint Focus Means Ends
(a) The selling concept
Customer Delivered Value
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How is Marketing Done?
Marketers Develop and Implement a Marketing
Plan Based on the Following Information:
Organizations Strengthsand Weaknesses
Organizations Strengthsand Weaknesses
Organizations Overall ObjectivesOrganizations Overall Objectives
Opportunities and Threats to the
Organization in the Marketplace
Opportunities and Threats to the
Organization in the Marketplace
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The Substance of Marketing
Want To Enter the Watch Business!!!
You Must Make A Set Of Important(Marketing Related) Decisions!!!
WHAT ARE THESE DECISIONS???
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The Probable Decisions are!!!
To which consumer should I sell my
watches?
How should I define the consumer I hope to
serve?Should I think in terms of geography,
perhaps the country in which my consumer
lives?Or may be the consumers income or sex
or fashion orientation is more important?
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The Probable Decisions are!!!
What Product or Products should I offer?
For example should I offer digital or
analog, ornate or simple, multifunction orsingle function?
How much should I charge for each watch?
Should I offer discounts to people who pay
cash or who buy in large amounts?
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The Probable Decisions are!!!
Should I sell direct to consumers or throughstores, and if through stores, what type of
stores?
Do I want to offer my product in severaltypes of outlet or only in one type?
How do I select and service the particular
outlets I Chose?
Finally, How do I convince the store to carry
my brand?
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The Probable Decisions are!!!
How should I communicate to the
consumers to whom I wish to sell?
Do I use advertising, and if so in whatmedia?
How do I reach the stores? Do I use sales
people?
Should the salespeople visit the stores orshould they just telephone them?
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Needs, Wants and Benefits
NeedsNeeds
WantsDesire to Satisfy Needs in
Ways That are Culturally andSocially Influenced. Lets go
eat a cheeseburger.
BenefitsOutcome Sought by a
Consumer That MotivatesBuying Behavior. Now Im
full; I feel better.
Difference Between aConsumers Actual State andSome Ideal or Desired State.
Im Hungry!
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Markets, Consumers and Demand
Market
Customers
who share a commonneed that can besatisfied by a
specific productAND
who are willing, ableand have the authorityto make the exchange.
Customers
PotentialCustomers
DEMAND
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The Four Ps: The ToolsThe Four Ps: The Tools
Marketing
Mix
Product
Price Promotion
Place
The Four Cs: The EndsThe Four Cs: The Ends
Customer
Solution
Customer
Cost
Communication
Conven-ience
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The Other 4Cs: The Participants
Company
Consumer Channel
Competitors
The
Participants
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Marketings Tools: The Marketing Mix
ProductGood, Service, Idea, Place, Person
ProductGood, Service, Idea, Place, Person
PriceAssignment of Value
PriceAssignment of Value
PlaceAvailability of Product
PlaceAvailability of Product
PromotionActivities to Inform Consumers
PromotionActivities to Inform Consumers
Tools that Are Used Together to Create a Desired
Response Among a Set of Defined Customers
Tools that Are Used Together to Create a Desired
Response Among a Set of Defined Customers
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Customers
Front-line people
Middle Management
Top
Management
Traditional Organization Chart
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Customer-Oriented
Organization Chart
Customers
Front-line people
Middle management
Top
manage-
ment
Cus
tomers
Custom
ers
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Evolving Views of Marketings Role
a. Marketing as an
equal function
FinanceProduction
Marketing Humanresources
b. Marketing as a more
important function
Finance
Humanresources
Marketing
Production
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Evolving Views of Marketings Role
c. Marketing as the
major function
Marketing
Fina
nce
Hum
an
resou
rces
Production
d. The customer as the
controlling factor
Customer
Hu
man
resou
rces
Finan
cePro
duction
Ma
rketing
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Evolving Views of Marketings Role
e. The customer as the controllingfunction and marketing as the
integrative function
Customer
Marketing
Production
Hum
an
resources
Fin
ance
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Changing Marketing Architecture
INDUSTRIAL AGE
(Past)
Customer Driven
One-way
Finite Reach
Time Delay
InformationConstraints
INFORMATION AGE
(Current and Future)
Customer Driving
Infinite Reach
Time Saving
Information
Abundance
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How Marketing is Changing?
From Exchange / Transaction to Customer Value
From Suppliers Making Marketing Decisions to
Customers Driving Those Decisions
From Physical Channels to Seamless Channels
From Market Segments to Segments of Size One
From Personal Based Communication Campaign
to Permission Based Communication Campaign
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Views on the Marketing Processes
5-C Analysis
Customer
Competitor
Company
Context
Collaborators
S-T-P Marketing
SegmentationTargeting
Positioning
4 Ps Marketing Plan
ProductPricing
Promotion
Place
The Functional View
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Views on the Marketing Processes
Understanding
CustomerValue
Creating
CustomerValue
The Process View
Capturing
CustomerValue
Delivering
CustomerValue
Sustaining
CustomerValue
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Understanding Customer Value
Value is defined as the perceived worth inmonetary units of the of the set ofeconomic functional / technical and
psychological benefits received by thecustomer in exchange for the price paidfor for a product offering, taking intoconsideration the available offerings andprices.
- Anderson, Jain and Chintagunta(1993)
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Understanding Customer Value
Psychological
Functional Economic
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MARKETINGS CONTRIBUTION
WITHIN THE FIRM
Corporate / Business Unit Level
The Policy Question: How to develop a
Customer Focus?
Marketings Answer: Bring the Voice of the
customer in the organization
Tools: Mkt Research, Customer Visits, Market
Orientation Audits
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MARKETINGS CONTRIBUTION
WITHIN THE FIRM
Product Level
The Policy Question: How to best adapt to the
market?
Marketings Answer: Develop a value
proposition and competitive positioning based
on customer needs
Tools: Customer and Competitor analysis
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MARKETINGS CONTRIBUTION
WITHIN THE FIRM
Executional Level
The Policy Question: How to best take the
product to market?
Marketings Answer: Integrate the product,
pricing, placement and promotion policies to
deliver what the target market wants.
Tools: Consumer Research, Product Testing,Communication Research, Channel Audits etc.
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Plea From an Anonymous
Customer
Dont Sell me Clothes, Sell me a sharp appearance,style and attractiveness.
Dont Sell me a House, Sell me comfort, contentment,a good investment and a pride of ownership.
Dont Sell me Toys, Sell my children happy moments.
Dont Sell me Insurance, Sell me peace of mind, and agreat future for my family and me.
Dont Sell me Books, Sell me pleasant hours and the
profits of knowledge. Dont Sell me Computers, Sell me the pleasure and
profits of the miracles of modern technology.
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The Moral is..
Dont Sell me THINGS, Sell me Ideas,
Feelings, Self-respect, Home, Life and
Happiness.
PLEASE DONT SELL ME
THINGS
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Scanning the MarketingScanning the Marketing
EnvironmentEnvironment
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Objectives
Tracking & Identifying Opportunities in the
Macroenvironment
Demographic, Economic, Natural,
Technological, Political, & Cultural
Developments
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Macroenvironmental Influences on
the Marketing Mix
MarketingMarketing
MixMix
PhysicalPhysical
environ.environ.
Socio-Socio-
culturalcultural
Demo-Demo-
graphicgraphic
PoliticalPolitical
&&
LegalLegal
EconomicEconomic
&&
CompetitionCompetition
ScienceScience
&&
Tech.Tech.
M i t
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Macroenvironment:
Physical Environment
Ecological systems
Natural resources
Climate
Geography
Pollution levels
Water & Air
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Demographic Environment
Worldwide Population GrowthWorldwide Population Growth
Population Age MixPopulation Age Mix
Ethnic MarketsEthnic Markets
Household PatternsHousehold Patterns
Educational GroupsEducational Groups
Geographical Shifts in PopulationGeographical Shifts in Population
Shift from Mass Market to Micro marketsShift from Mass Market to Micro markets
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Economic Environment
Income DistributionIncome Distribution
Subsistence economiesSubsistence economiesRaw-material-exporting economiesRaw-material-exporting economies
Industrializing economiesIndustrializing economies
Industrial economiesIndustrial economies
Savings, Debt, &
Credit AvailabilitySavings, Debt, &
Credit Availability
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NaturalEnvironment
Higher PollutionLevels
Higher PollutionLevels
Increased Costsof Energy
Increased Costsof Energy
Shortage ofRaw Materials
Shortage ofRaw Materials
Changing Roleof Government
Changing Role
of Government
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Political-LegalEnvironment
Political-Legal
Environment
Increased
Legislation
Increased
Legislation
Special-Interest
Groups
Special-Interest
Groups
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Social/Cultural Environment
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THE FOUR Cs
Company
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The Four Cs: Company
Total organization
Interactive
Flexibility Entrepreneurial approach
Intrapreneurial approach
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The Four Cs: Customers -
Economic Utility
Form Utility
Place Utility Time Utility
Possession Utility
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The Four Cs: Competitors
Levels Product class
Product category
Brands
Type
Price
Form
Time
Location
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Four Types of CompetitionFour Types of Competition
Price-basedPrice-based
Quality-basedQuality-based
Time-basedTime-based
Location-basedLocation-based
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The Four Cs:Collaborators
Alliances
Networks
Informal partnerships Suppliers
Virtual corporations