Marketing basics

1
Introduction to Marketing Marketing concept and
business orientation

• Geoff Leese Dec 2001 revised Sept 2002, August
  2003, November 2008, January 2010(special thanks
  to Geoff Leese)

2
Content

• The marketing concept
• Micro Macro environments
• Marketing research
• Buying behaviour
• Segmentation
• Product/service, Price, Place, Promotion
• Marketing planning

3
The marketing concept

• What marketing isnt
• Presentation image - spin
• Glossy brochures expensive advertising
• Persuasive selling methods
• Excessive/wasteful packaging

4
What is marketing?
The aim of marketing is to make selling
superfluous. The aim is to know and understand
the customer so well that the product/service
provided fits him/her and sells
itself. Drucker.
..a social managerial process by which
individuals organisations obtain what they need
and want through creating and exchanging products
and value with others Kotler
The management process responsible for
identifying, anticipating and satisfying customer
requirements profitably. CIM
5
Marketing concepts (1)

• Target markets
• All different
• Classification using criteria
• Customer needs
• Real needs
• Stated needs
• Unstated needs (assumptions)
• Delight needs
• Secret needs

6
Marketing concepts (2)

• Co-ordinated marketing
• all functions working together
• marketing throughout the organisation
• marketing management
• Profitability
• long term success through customer satisfaction
• Employee performance
• Customer satisfaction
• profitability

7
Business orientations (1)

• Production orientation
• Affordable available products
• Prioritise production distribution efficiency
• Price sensitivity?
• Until 1950s

8
Business orientations (2)

• Sales orientation
• Selling lines that are produced
• Customers encouraged to buy
• Personal selling/persuasive advertising
• 1950s and 1960s

9
Business orientations (3)

• Product orientation
• Excellent, well designed products
• Mass market appeal leads to production
  orientation
• Fall in demand leads to sales orientation
• Until 1960s

10
Business orientations (4)

• Marketing orientation
• Customer needs are focus of firm
• Find a need and fill it
• Flexible production/distribution methods
• Organisational philosophy
• Profitability rather than sales volume
• 1970s onwards

11
Business orientations (5)

• Relationship marketing
• Building long term relationships between
  suppliers customers
• Ensuring that interaction is a pleasurable
  experience
• Customer service and attention focused
• Loyalty cards
• 1980s onwards

12
Business orientations (6)

• Societal marketing
• Ethics driven
• Considers needs of society as a whole
• Government pressure
• Pressure groups
• 1990s onwards

13
Marketing as an interface

• Need to consider
• Future customer needs
• Competition
• Relationships
• External environment

14
Marketing managements responsibilities

• To identify customer needs
• To meet them using the marketing mix
• Product/Price/Place/Promotion
• Physical evidence
• Process
• People

15
Strategic vision

• Look to the future
• Make well informed decisions
• Marketing myopia
• Organisation describes itself in PRODUCT rather
  MARKET terms
• Making slide rules?
• Creating a competitive edge
• Look at the mission statement!

16
Market segmentation

• Categorising overall market for products or
  services
• Consumer market segments
• Industrial/commercial market segments
• HOW do we categorise?
• WHAT are the key features of the segments?

17
Consumer markets (1)

• Demographic variables
• Age
• Sex
• Family size
• Stage in family life cycle (DINKY, SAGA)
• Social class (A, B, C1, C2, D, E)
• Weight and size
• Income
• etc!

18
Consumer markets (2)

• Geodemographic
• Residential neighbourhoods
• ACORN (Groups types - see L M)
• Pan-European (Hot chocolate - see B P!)
• Moderns, go-betweens, traditionals

19
Consumer markets (3)

• Psychographic
• Activities
• Interests
• Attitudes, beliefs opinions
• Education (Terminal Education Age?)

20
Consumer markets (4)

• Behaviour segmentation
• Benefit sought (see MARVEL example in LM)
• End use (Soup?)
• Loyalty status (Hard-core, soft-core, shifters,
  switchers)
• Usage rate
• Attitude
• Buyer readiness (Awareness, Interest, Desire,
  Action)

21
Consumer markets (5)

• Geographical
• Religious
• Cultural

22
McCarthys four Ps

• Product
• Price
• Place
• Promotion
• Marketing planning needs to integrate ALL these!

McCarthy E. J., Organisation for new product
development? in Product Strategy Management
(Libery Stuchman eds.) 1963
23
Marketing planning

• Analyse the environment
• Consider capabilities
• Decide on target markets
• Adapt marketing mix
• Meet customer needs
• Gain competitive advantage

24
Planning stages

• Where are we now?
• How did we get there?
• Where are we going?
• Where would we like to be?
• How might we get there? Choose a way?
• What will it be like? Will it be worth it?
• How will we know when were there?
• Are we on course?

25
Marketing Audit

• Monitors internal external environment
• First three stages of planning

26
External Audit checklist

• Macroenvironment
• Social, Technological, Economic, Political,Legal,
  Physical
• The market
• size, customers (who, when, what, why, how,
  where) image, market segments, distribution
• Competitors
• Who are they? Objectives? Strengths weaknesses?
  Market share? Size? Entry barriers?

27
Internal audit checklist

• Sales, market share, profit margins, costs
• Analysis of competitive position, portfolio
  analysis
• Effectiveness of existing marketing mix
• Internal structures
• organisation, communications, training
• Marketing information, control and planning
  systems

28
SWOT analysis

• Evaluates strategic position of the business
• Strengths (MATCH to opportunities)
• Weaknesses (turn into strengths?)
• Opportunities
• Threats (minimise or turn into opportunities)
• RELATIVE to competitors!

29
Setting marketing objectives

• Provide direction - WHAT are we trying to
  achieve?
• Set in terms of products
• Development of new or related
• Or markets
• Penetration of existing, new/related markets
• Or both
• Diversification/divestment/realignment

30
Marketing strategy

• HOW objectives will be achieved
• Which target markets to enter/develop
• How will competitors be targeted?
• Competitive advantage?
• Better, faster, closer.
• Product development

31
Tutorial task

• Look at your own organisation.
• What business orientation do you think it has?
• What evidence is there of this?
• Tell us about your mission statement
• Tell us about your product/service
• Tell us about your customer focus
• Be prepared to discuss your answers next week.

32
Further reading

• Brassington F Pettitt S (2003), Essentials of
  Marketing, Pearson education Chapters 1, 5, 7-19
  and 21
• CIM website
• http//www.cim.co.uk/home.aspx
• Marketing law website
• http//www.marketinglaw.co.uk/