PRINCIPLES OF MARKETING Module 1: What Is Marketing?

WHAT IS MARKETING? Marketing is a set of activities related to

creating, communicating, delivering, and exchanging offerings
that have value for others WHAT IS THE FUNCTION OF
MARKETING? Marketing brings value to customers, whom the
business seeks to identify, satisfy, and retain. THE EXCHANGE
PROCESS The act of obtaining a desired object from someone by
offering something of value in return ▪ Customer (or buyer) ▪
Product ▪ Provider (or seller) ▪ Transaction THE ROLE OF
MARKETING MARKETING VS. ADVERTISING ▪ Advertising uses
paid notices in different forms of media to draw public attention
to a company, product, or message, usually for the purpose of selling products or services [1] ▪ Advertising is one
of many tools marketers use MARKETING VS. BRANDING ▪ Branding is the process of “creating a unique name and
image for a product in the consumer’s mind” [1] ▪ Marketing builds brands, and branding is an important strategic
consideration in marketing, but marketing is broader than branding MARKETING VS. SALES ▪ Sales is the process of
actually selling products or services ▪ Effective marketing aligns well with the sales process and leads to increased
sales, but there is more to marketing than just supporting sales COMPANY ORIENTATIONS ▪ The Marketing Concept
▪ Success depends on doing better than competitors at understanding, creating, delivering, and communicating
value to their target customers ▪ The Product Concept ▪ Success depends on creating the best, most innovative
product for the lowest price ▪ The Sales Concept ▪ Success depends on a good sales team with the right tools and
incentives. ▪ The Production Concept ▪ Success depends on low production costs, highly efficient processes, and
mass distribution. RELATIONSHIP STAGES ▪ Meeting and Getting Acquainted ▪ Providing a Satisfying Experience ▪
Sustaining a Committed Relationship STAGE 1: MEETING AND GETTING ACQUAINTED • Find desirable target
customers, including those likely to deliver a high customer lifetime value • Understand what these customers
want • Build awareness and demand for what you offer • Capture new business STAGE 2: PROVIDING A
SATISFYING EXPERIENCE • Measure and improve customer satisfaction • Track how customers’ needs and wants
evolve • Develop customer confidence, trust, and goodwill • Demonstrate and communicate competitive
advantage • Monitor and counter competitive forces STAGE 3: SUSTAINING A COMMITTED RELATIONSHIP •
Convert contacts into loyal repeat customers, rather than one-time customers • Anticipate and respond to
evolving needs • Deepen relationships, expand reach of and reliance on what you offer WHAT IS CUSTOMER
LIFETIME VALUE? Customer lifetime value predicts how much profit the company will make from the customer
during his or her lifetime relationship with the company [1] HOW DO STRONG CUSTOMER RELATIONSHIPS HELP A
BUSINESS? Happy customers . . . ▪ Return to buy more goods and services ▪ Help market the business with positive
reviews or word of mouth ▪ Engage with the brand GOALS OF MARKETING For profit companies ▪ Not for profit
organizations Increase profits by selling products or services to customers Promote the mission by attracting
donors or participants or by raising awareness of an issue or cause DIFFERENCE BETWEEN CUSTOMERS AND ▪
Customers CONSUMERS are the individuals who buy the product ▪ Consumers are the individuals who actually use
the product The customer and the consumer are not always the same ▪ Example: A food distributor’s customer is
the restaurant, not the diner who is the consumer B2B VS. B2C ▪ B2B or Business to Business companies sell
products or services to other businesses ▪ B2C or Business to Consumer companies sell directly to consumers
PRACTICE QUESTION 1 A B2B business would benefit most from a) Television advertisement b) Trade show c)
Presentation at the rotary club PRACTICE QUESTION 2 A B2C business would benefit most from a) Television
advertisement b) Trade show c) Presentation at the rotary club PRACTICE QUESTION 3 A Dual focus business would
benefit most from a) Television advertisement b) Trade show c) Presentation at the rotary club HOW DOES
MARKETING SERVE CUSTOMERS? Marketing can help customers find goods and services that are valuable to them
HOW DOES MARKETING SERVE SOCIETY? ▪ Marketing helps customers and businesses find each other to make
exchanges that benefit them both ▪ Marketing can spread ideas and innovation QUICK REVIEW ▪ What is
marketing? ▪ Where do you experience marketing in everyday life? ▪ What are the differences between marketing,
branding, advertising, and sales? ▪ What is the marketing concept? How does it differ from the production
concept, the product concept, or the selling concept? MORE QUICK REVIEW ▪ What is the role of marketing in
building and managing customer relationships? ▪ How do different types of organizations, such as non-profits,
consumer product (B2C) firms and business-to-business (B2B) organizations, use marketing? ▪ How does marketing
create value for the consumer, the company, and society?
PRINCIPLES OF MARKETING Module 2: Marketing Function MARKETING ORIENTATION Companies with a marketing
orientation focus on identifying and understanding the
customer’s needs and wants and addressing them more
effectively or efficiently than one’s competitors WHY DO
CUSTOMERS MATTER IN MARKETING? ▪ Marketing exists to
help organizations understand, reach, and deliver value
to their customers ▪ The customer is considered the
cornerstone of marketing SEGMENTATION AND
TARGETING ▪ Segmentation is the process of dividing
potential customers into groups to better understand
them ▪ Targeting is determining which segments are
most likely to become customers and directing marketing efforts to best to satisfy them
DEFINING A TARGET MARKET 1. Identify the business need you address 2. Segment your
total market 3. Profile your target customer segment(s)
4. Research and validate your market opportunity
VALUE FOR THE CUSTOMER ▪ Value = benefit – cost ▪
Price is only part of cost ▪ Customers will consider competitors and substitutes ▪
Differentiation is how marketers optimize the elements of a product that provide
unique value to customers ▪ When a company can create greater value for
customers than its competitors, it has a competitive advantage VALUE
PROPOSITION ▪ A value proposition provides a very simple answer to the
question: Why should someone buy what you are offering? ▪ The value
proposition should be clear, compelling, and differentiating EVOLVING DEFINITIONS OF THE MARKETING MIX 4 Ps ▪4
Cs Product Price Promotion Place ▪ Consumer solution ▪ Cost ▪ Communication ▪ Convenience PRODUCT VS
CUSTOMER SOLUTION A company will only sell what the consumer specifically wants to buy. So, marketers should
study consumer wants and needs to attract them. PRICE VS COST Price is only a part of the total cost to satisfy a want
or a need. For example, the total cost might be the cost of time in acquiring a good or a service, along with the cost
of conscience in consuming it. It reflects the total cost of ownership. Many
factors affect cost, including but not limited to the customer’s cost to change
or implement the new product or service and the customer’s cost for not
selecting a competitor’s product or service. PROMOTION VS
COMMUNICATION Communications can include advertising, public relations,
personal selling, viral advertising, and any form of communication between
the organization and the consumer. PLACE VS CONVENIENCE Marketers
should know how the target market prefers to buy, how to be there and be
ubiquitous, in order to provide convenience of buying. With the rise of
Internet and hybrid models of purchasing, “place” is becoming less relevant.
Convenience takes into account the ease of buying the product, finding the
product, and finding information about the product. PRODUCT PROMOTION
PLACE PRICE MARKETING PLAN The marketing plan describes how the
company will use the marketing mix—product, promotion, place, and price
—to achieve its marketing objectives effectively within the competitive
market environment THE MARKETING PLANNING PROCESS CLASS ACTIVITY:
MATCH THE MARKETING MIX BELOW TO A MARKET SEGMENT Marketing
Mix ▪ Market Segment Exceptionally Soft Cashmere blankets $89.99 Buy in
store or order online for two day free delivery. Free returns. Excellent
customer service. Samples sent to lifestyle bloggers, ads in home magazines
▪ Parents of newborns ▪ Women aged 40-55 ▪ Boys 14-17 QUICK REVIEW ▪
Why is the customer the cornerstone of marketing? ▪ What are segmentation
and targeting? ▪ What is the marketing mix? ▪ How do organizations use the
marketing mix (often called the four Ps) to market to their target customers? ▪ What is the role of a marketing plan in
guiding marketing activities?
Principles of Marketing Module 3: Segmentation and
Targeting Segmentation and Targeting • Segmentation is
the process of dividing potential customers into groups
to better understand them • Targeting is determining
which segments are most likely to become customers
and directing marketing efforts to best satisfy them
Professional tennis players are a specific segment of the
market. Five Criteria for a Market 1. There must be a
true need and/or want for the product, service, or idea;
this need may be recognized, unrecognized, or latent 2.
The person/organization must have the ability to pay for the product via means acceptable to the marketer 3. The
person/organization must be willing to buy the product 4. The person/organization must have the authority to buy
the product 5. The total number of people/organizations meeting the previous criteria must be large enough to be
profitable for the marketer Objectives of Segmentation • To improve an organization’s understanding of who their
prospective customers are and how to serve them • To reduce risk in deciding where, when, how, and to whom a
product, service, or brand will be marketed • To increase marketing efficiency by directing effort toward designated
segment(s) in ways that are consistent with that segment’s characteristics Practice Question What products or
companies would find this market segmentation by family life stage useful? Choosing a Target Market The target
market should include only those segments of a market that are both: • Profitable to serve • Likely to be receptive to
the products a company provides Common Market Segmentation Approaches Type of Approach Segmentation
Criteria Geographic Nations, states, regions, cities, neighborhoods, zip codes, etc. Demographic Age, gender, family
size, income, occupation, education, religion, ethnicity, and nationality Psychographic Lifestyle, personality, attitudes,
and social class Behavioral User status, purchase occasion, loyalty, readiness to buy Decision maker Decision-making
role (purchaser, influencer, etc.) Common Business Segmentation Approaches • Organization size: by revenue,
number of employees, geographic reach, etc. • Geography • Industry • User status: usage frequency, volume used,
loyalty, longevity, products already in use, readiness to buy, etc. • Benefits sought • End use • Purchasing approaches
Combining Bases for Segmentation • Geo-cluster approach demographic + geographic data • Geographic +
behavioral data • Can point companies toward locations where customers are clustered • Demographic + lifestyle or
behavioral segments Sample Market Segment Profiles Ideal Market Segment 1. Can be measured 2. Is profitable 3. Is
stable 4. Is reachable 5. Is internally homogeneous 6. Is externally heterogeneous 7. Is responsive 8. Is cost-effective
9. Helps determine the marketing mix Questions to Consider in Selecting a Target Segment • Whose needs can you
best satisfy? • Who will be the most profitable customers? • Can you reach and serve each target segment
effectively? • Are the segments large and profitable enough to support your business? • Do you have the resources
available to effectively reach and serve each target segment? Targeting Strategy Concentration Only one marketing
mix is developed • Advantage: focus • Disadvantage if demand in segment declines, company will suffer Multi-
segment Marketing mix for each segment • Advantage: may reach more customers • Disadvantage: Costs of multiple
campaigns and distribution channels Targeting Strategies Strategy Target Market Example Mass marketing Everybody
everywhere Target Differentiated marketing Large groups within the total market Costco, Sam’s Club Niche marketing
High penetration within smaller, specialized segments Trader Joe’s, Whole Foods Micromarketing Individual
customers or localized microsegments Groupon Shaping Marketing Mix for Target Markets Marketing Element
Targeting Criteria Product What would make the ideal product for your target segment? What special features or
capabilities are critical for this segment? What unique problems does your product help them solve? Promotion
What are the best ways to get your target segment’s attention? What do you want this segment to remember about
your product? Place / Distribution Where does this segment look or shop for your product? What is the best way to
get your product to your target customers? Price What price(s) are your target customers willing to pay? How much
is too expensive? How much is too cheap? Quick Review • What is the purpose of segmentation and targeting in
marketing? • What are some common segmentation approaches? • How do businesses select an appropriate
segmentation approach and decide which customer segments to target for marketing activities? • How does
targeting influence each element of the marketing mix?