What is Marketing?

Marketing is the art and science of choosing a target market, attracting, keeping and
growing customers through creating, delivering and communicating superior value to
customers.
Marketing is the right product, in the right place, at the right time, at the right price
Marketing is a social and managerial process by which individuals and organizations
obtain what they need and want thought creating and exchanging value with others.
Marketing is managing profitable customer relationships. Its aims is to create value for
customers and capture value from customers.
Marketing consists of actions taken to build and maintain desirable exchange
relationships with target audiences involving a product, service, idea, or other object.
The process by which companies create value for customers and build strong customer
relationships in order to capture value from customers in return
The Marketing Process
Five steps in the marketing process:
1. Understand the market place and customer needs and wants
2. Design a costumer driven marketing strategy
3. Construct an integrated marketing program that delivers superior value
4. Build profitable relationships to create customer delight
-> Capture value from customers to create profits and customer equity (reap the rewards
of creating superior customer value)
By creating value for customers, they in turn capture value from consumers, in the form
of sales, profits, and long-term customer equity.
customer obsessed costumers reward with brand loyalty and buying dollars
build strong customer relationships based on real and enduring value
The twofold goal of marketing is to attract new costumers by promising superior value
and keep and grow current customers by delivering satisfaction.
In recent years, marketers have assembled a host of new approaches that do more than
just blast out messages to the masses. They reach you directly and personally. Todays
marketers want to become a part of your life, enrich your experiences with their brands.
The aim of marketing is to make selling unnecessary

Needs= states of felt deprivation

Wants=the form human needs take as they are shaped by culture and individual
personality
Demands=when backed by buying power, wants become demands. Given their wants and
resources, people demand products with benefits that add up to the most value and
satisfaction.
Consumers needs and wants are fulfilled through marketing offerings - some
combination of products, services, information, or experiences offered to a market to
satisfy a need or a want.
Marketing Myopia
Many sellers make the mistake of paying more attention to the specific products they
offer than to to the benefits and experiences produced by these products. They focus only
on existing wants and lose sight of underlying customer needs. They forget that a product
is only a tool to solve a consumer problem. Smart marketers look beyond the attributes of
the products and services they sell, creating brand experiences for consumers.
Consumers usually face a broad array of products and services that might satisfy a given
need. They form expectations about the value and satisfaction that various market
offering will deliver and buy accordingly. Marketers must be careful to set the right level
of expectations.
Marketers want to build strong relationships by consistently delivering superior customer
value. Beyond simply attracting new customers and creating transactions, companies
want to retain customers and grow their businesses.
A market is a set of actual and potential buyers of a product or service. The buyers share a
particular need or want that can be satisfied through exchange relationships.
What is it for?
Profit Maximization
It can serve to modify wants, demand or attitudes of individuals, groups or organisations
Consumer sovereignty school of thought - generally consumer and costumer needs are a
given and cannot be directly influenced.
Marketing Myopia
The only way to guarantee survival, competitive advantage and superior business
performance is to concentrate on customer needs and defining the company business in
terms of customer needs and not on product form or technology.

Customer perceived value - the customers evaluation of the difference between all the
benefits and all the costs of a market offering relative to those of competing offers. To
some consumers, value might mean sensible products at affordable prices. To others, it
might mean pay more to get more.
Customer lifetime value - entire future relationship with a customer. losing a customer
means losing more than a single sale, it means losing the entire stream of purchases that
the customer would make over a lifetime of patronage.
Customer equity is the total combined customer lifetime values of all of the companys
current and potential customers. The ultimate aim of customer relationship management
is to produce high customer equity. As such, its a measure of the future value of the
companys customer base. The more loyal the firms profitable customers, the higher its
customer equity. It may be a better measure of a firms perfomance than current sales or
market share. Whereas sales and market shares reflect the past, customer equity suggests
the future.
PEST Analysis
Analyzing the business environment in which a company operates in is of major
importance in order to better predict or prepare for changes in it. These changes can
either create great opportunities or cause significant threats for an organization. As such,
by a analyzing the macroeconomic factors that affect an organization, we are also
analyzing whether the company will succeed of fail, for reasons beyond its control.
Porter 5 Forces
Analysis of five competitive forces that make up for determining an industry
attractiveness and profitability.
SWOT Analysis
It helps to uncover opportunities that a company is well placed to exploit and to manage
and eliminate threats after understanding the weaknesses of the organization. Moreover, it
helps organisations craft a strategy aiming at distinguishing them from potential
competitors so that they can successfully compete in the market.
The mission of a company is a statement of the organizations purpose - what it wants to
accomplish in the larger environment. A mission statement should be market-oriented;
centered on satisfying a customer need or solving a customer problem; realistic; specific;
based on distinctive competences; and motivating for management and staff.
Business portfolio = the collection of businesses and products that make up the company.
Business portfolio planning involves analysing the current business portfolio and
determine which businesses should receive more, less or no investment. Second, it must
shape the future portfolio by developing strategies for growth and downsizing.

Managements first step is to identify the key businesses that make up the company,
called the strategic business units SBUs. An SBU can be a company division, a product
line within a division, or sometimes, a single product or brand. The company next
assesses the attractiveness of its various SBUs and decides how much support each
deserves. The purpose of strategic planning is to find ways in which the company can
best use its strengths to take advantage of attractive opportunities in the environment. So
most standard portfolio analysis methods evaluate SBUs on two important dimensions:
the attractiveness of the SBUs market of industry and the strength of the SBUs position
in that market or industry. Best-known-portfolio-planning method -> BCG matrix.
There are too many different kinds of consumers, with too many different kinds of needs.
Most companies are in a position to serve some segments better than others. Thus, each
company must divide up the total market, choose the best segments, and design strategies
for profitably serving chosen segments. This process involves market segmentation,
market targeting, differentiation, and positioning.
A companys marketing environments consists of the actors and forces outside marketing
that affect marketing managements ability to build and maintain successful relationships
with target customers. The marketing environment consists of a microenvironment and a
macroenvironment.
Microenvironment= actors close to the company that affect its ability to serve its
customers such as the company, suppliers, marketing intermediaries (resellers, physical
distribution firms, financial intermediaries and marketing services agencies), customer
markets, competitors and publics (media publics, government publics, local publics). The
macroenvironment consists the largest societal forces that affect the microenvironment demographic, economic, natural, technological, political and cultural forces.
Managing Marketing Information to Gain Customer Insights
To create value for customers and build meaningful relationships with them, marketers
must first gain fresh, deep insights into what customers need and want. Companies use
such customer insights to develop competitive advantage. Such insights come from good
marketing information. The real value of marketing research and marketing information
lies in how its used - in the customer insights that it provides.
A marketing information system consists of people and procedures for assessing
information needs, developing the needed information, and helping decision makers use
the information to generate and validate actionable customer and market insights.
Marketers start by assessing user information needs. Then they develop the needed
information using internal data, marketing intelligence, and marketing research process.
Finally they make the information available to users in the right form at the right time.

How does a marketing information system works?

First, it interacts with these information users to assess information needs. Next,it
interacts with the marketing environment to develop needed information through internal
company databases, marketing intelligence activities, and marketing research. Finally, the
MIS helps users to analyse and use the information to develop customer insights, make
marketing decisions, and manage customer relationships.
Marketers can obtain the needed information from internal databases, marketing
intelligence, and marketing research.
Internal databases= electronic collections of consumer and market information obtained
from data sources within the company network.
Competitive marketing intelligence= the systematic collection and analysis of publicly
available information about consumers, competitors, and developments in the marketing
environment.
Marketing research= the systematic design, collection, analysis, and reporting of data
relevant to a specific marketing situation facing an organization.
The marketing research process has four steps: defining the problem and research
objectives, developing the research plan, implementing the research plan and interpreting
and reporting the findings.
1st step: After the problem has been defined carefully, the manager and researcher must
set the research objectives. A marketing research project might have one of three types of
objectives. The objective of exploratory research is to gather preliminary information that
will help define the problem and suggest hypotheses. The objective of descriptive
research is to describe things, such as the market potential for a product or the
demographics and attitudes of consumers who buy the product. The objective of causal
research is to test hypotheses about cause-and-effect relationships.
2nd step: developing the research plan. To meet the managers information needs, the
research plan can call for gathering secondary data, primary data, or both. Secondary data
is data that already exists somewhere, having been collected for another purpose. Primary
data is information collected for the specific purpose at hand.
Research approaches:
Observational research - involves gathering primary data by observing relevant people,
actions, and situations.
Ethnographic research - involves sending trained observers to watch and interact with
consumers in their natural environment.
Survey research - the most widely used method and is best for descriptive information knowledge, attitudes, preferences, and buying behavior.

Experimental research - best for gathering causal information, cause-and-effect

relationships.
Online Contact Methods - internet surveys, online panels, online experiments, online
focus groups.
Research Instruments - questionnaires (closed-end, open-end)
Marketing Research Implementation:
1.Collecting the information
2.Processing the information
3.Analyzing the information
4.Interpret findings
5.Draw conclusions
6.Report to management
Distributing and Using Marketing Information: information distribution involves entering
information into databases and making it available in a time-useable manner. Intranet
provides information to employees and other stokeholders and extranet provides
information to key customers and suppliers.

Types of Segmentation:
Demographic
Geographic
Psychographic
Behavioral
Recent study by Signode Corporation revealed the following four types of buyers:
Programmed buyers - pay full price and accept little service.
Relationship buyers - small discounts and good profitability
Transaction buyers - large discounts for volume. well informed on products and
competitors products.
Bargain hunter - demand highest service and biggest discounts.
Differentiation - marketers strive for competitive advantage defined as a comparative
advantage over the competitor gained by offering greater value, either by lower prices or
by offering higher quality or benefits.

The New BCG Matrix: Four Industry Types

Volume industries:
Stalemate industries
Fragmented industries
Specialized industries
Differentiating Markets
Companies and their market offerings can be differentiated along the lines of product
characteristics, service design, personnel and image.
Product Positioning
According to Ries and Trout, there are three positioning alternatives:
Strengthen a brands current position in the mind of the consumers.
Search for a new unoccupied position that is valued by enough consumers and occupy
that.
De-position or re-position the competition.
Ad man Rosser Reeves states that every company should have a unique selling
proposition (USP). The USP is the unique product benefit that a firm aggressively
promotes in a consistent manner to its target market. The benefit usually reflects
functional superiority: best quality, best services, lowest price, most advanced
technology.
Difficult of maintaining functional superiority forces leads firms to attempt a more
emotional influence by developing an Emotional selling proposition (ESP).
Under-positioning (failure to position a company, its product or brand)
Over-positioning (too narrow a picture of the company, products or brand being
communicated to target costumers)
Confused positioning

Implausible positioning (too good to be true)

A good positioning statement should include:
target customers
product name
product category
key of benefit
differentiation
competitive advantage
Factors Influencing Consumer Behavior: Cultural, Social, Personal, Psychological
Types of Buying Decision Behavior
Complex buying behavior: consumer buying behaviour in situations characterised by
high consumer involvement in a purchase and significant perceived differences among
brands.

Dissonance-reducing behaviour: consumer buying behaviour in situations characterised

by high involvement but few perceive differences among brands.
Habitual Buying Behaviour: consumer buying behaviour in situations characterised by
low-consumer involvement and few significantly perceived brand differences.
Variety-Seeking Buying Behaviour: consumer buying behaviour in situations
characterised by low consumer involvement but significant perceived brand differences.
The Buyer Decision Process:
Need Recognition
Information Search
Evaluation of Alternatives
Purchase Decision
Postpurchase Behaviour
The Buyer Decision Process for New Products
Stages in the adoption process
Awareness

Interest
Evaluation
Trial
Adoption

Levels of Products and Services

Product planners need to think about products and services on three levels. Each level
adds more customer value. The most basic level is the core customer value, which
addresses the question What is buyer really buying? (freedom,hope and all that
bullshit). At the second level, product planners must turn the core benefit into an actual
product. Develop product and service features, design, a quality level, a brand name, and
packaging. Finally, product planners must build an augmented product around the core
benefit and actual product by offering additional consumer services and benefits.
Product Life-Cycle Strategies
1.
2.
3.
4.
5.

product development
introduction
growth
maturity
decline

Generic Strategies - Porter

Product Differentiation: offer and design products and services that are perceived as
unique, protect the business from competitors creating customer loyalty and reducing
price sensitivity. Broad Target (competitive scope) and Customers perceive singularity
(competitive advantage)
Cost Leadership: achieve the position of the lowest cost producer to generate either high
margins, or lower price. Invest the profits obtained in new factories and equipment to
keep the cost leadership position. Broad Target (competitive scope) and Lower Cost
(Competitive Advantage)
Focus: achieve the ownership of the market niche. Narrow Target (competitive scope)
and Customers Perceive Singularity and Lower Cost (competitive advantage)