1 Marketing: Advertising and Sales Promotion Food Communication II Section A Introduction to Marketing All of the information has been adapted from Kotler P. Armstrong, G.,2004. Principles of Marketing. 10 th International Edition. New Jersey: Pearson Education.
2 Administrative info
3 Marketing Advertising, Promoting, selling, public relations, direct marketing and selling, online media, market= group of people, target group, sales, product, price, place, promotion,
4 Introduction to Marketing Join the blog Sign up with your address on the right. Watch the video - Post a comment about the video one sentence about what marketing is or is not. (must be different to others that have commented.)
6 Introduction Marketing? Part of everyday life. (toothpaste, clothes, cars) Products designed to satisfy needs of consumers Marketing is NOT Advertising It is only the tip of the marketing iceberg. A universal function, performed by most organizations Companies attempt to meet the demand of consumers by developing a product that will satisfy the demand.
7 What is Marketing? Simply: Marketing is managing profitable customer relationships. Goal: Attract new customers by promising superior value and keep and grow current customers by delivering satisfaction Defined: A social and managerial process by which individuals and groups obtain what they need and want through creating, offering and exchanging products and value with others. (Kotler, Armstrong, 2004)
8 What is Marketing? Marketing is an activity, a process. One that facilitates the exchange of one thing of value for another. Identify needs of consumer and try to satisfy needs by developing an offer. The consumer will then exchange something (money&time) for the offer (value coming from a product/service) to satisfy his/her needs. Marketing manages this process.
9 Examples of this is South Africa?
10 Core Marketing Concepts Needs, Wants, and Demands Human Needs: state of felt deprivation. Food, clothing, belonging, affection, knowledge See maslows hierarchy of needs. Wants: Form taken by human wants as shaped by culture and individual personality. Big mac instead of rice and beans Demands: Human wants backed by buying power. Want a big mac and go out to buy it.
11 Maslow's hieracrhy of needs
12 Relate this to your industry.
13 Core Marketing Concepts Marketing Offers Products, services, Experiences. Address needs by putting forth a value proposition = A set of benefits that they promise to consumers will satisfy their needs. Do not focus too much on the product or service, but rather on the benefits and experiences produced by them. Example: A manufacturer of a blender may think that the cook is looking for a blender, but actually she is looking for chopped onions, or a smooth soup.
14 Other examples of differences between product and benefits in your industry?
15 Core Marketing Concepts Value, Expectations, and Satisfaction Customer Value: the difference between the values the customer gains from owning and using the product versus the cost of obtaining it. Customer Expectations: based on past buying experiences, opinions of friends, and marketing and competitor information and promises. Customer Satisfaction: How well the product's performance lives up to the customer's expectations. Influences future buying behaviour. Marketers must be careful to set the right level of expectations.
16 Look at a restaurant and determine the differences as related to value (benefits vs cost), expectation, and satisfaction?
17 Core Marketing Concepts Exchange, Transactions, and Relationships Exchange: Act of obtaining a desired object from someone by offering something in return. Transaction: A trade of values between two parties. Example: R28 for a Woolies Club sandwich Marketing consits of actions taken to build and maintain desireable exchange relationships with target audiences involving a product, service, idea, or other concept. Marketers want to build strong, long term, financially beneficial exchange relationships with customers.
19 Explain how you a Fruit and Veg City builds such exchange relationships.
20 Core Marketing Concepts Markets Market: The set of all actual and potential buyers of a product or service. The buyers share a particular need or want that can be satisfied through exchange relationships. The size of the market depends on the number of people who exhibit the need, have resources to engage in exchange, and are willing to exchange these resources for what they want. Marketers are keenly interested in markets.
21 Define the core market of...
22 Needs, wants, and demands Markets Core Marketing Concepts Marketing offers (products, services, and experiences) Exchange, transactions, and relationships Value, Expectation, and Satisfaction
24 Core Marketing Concepts Marketing And so, we come full circle to the concept of marketing in that marketing means: Managing markets to bring about profitable exchange relationships by creating value and satisfying needs and wants. Creating exchange relationships involved work. Sellers must search for buyers, indentify their needs, design good marketing offers, set prices for them, promote them, and store and deliver them.
26 Marketing Management Marketing Management: The art and science of choosing target markets and building profitable relationships with them. It involves getting, keeping, and growing customers through creating, delivering, and communicating superior customer value.
28 Marketing Management Customer and Demand Management Mkt Mngt. Is not concerned with serving all customer in every way. Instead, marketers want to serve selected customers that they can serve well and profitably. The organisation has a desired level of demand for its products. At any point in time, there may be no demand, adequate demand, irregular demand, or too much demand. Mkt Mngt. Must find ways to deal with these different demands states. Demarketing: Marketing to reduce demand temporarily or permanently; the aim is not to destroy demand but only to reduce or shift it.
29 Could you give an example of demarketing in the food and beverage industry...
30 Marketing Management Marketing Management Orientations The Production Concept: The idea that consumers will favour products that are available and highly affordable. (Like bread) Focus on improving production and distribution. (used when demans exceeds supply) The Product Concept: The idea that consumers will favour products that offer the most quality, performance, and features and that the organisation should therefore devote its energy to making continuous product improvements. (Building a better mousetrap) Both can lead to marketing myopia: When a firm is too narrowly focused on their own operations, loosing sight of the real objective satisfying the customer's needs.
31 Could you give an example of marketing myopia in the food production industry...
32 Marketing Management Marketing Management Orientations The Selling Concept: The idea that consumers will not buy enough of the organisation's products unless the org undertakes a large-scale selling and promotion effort. This concept is typically practiced with unsought goods those that the buyers do not normally think of buying, such as insurance. Most firms practice the selling concept when they face overcapacity. Their aim is to sell what they make rather than make what the market wants. Such marketing carries high risk. It focuses on creating sales transactions rather than on building long-term, profitable customer relationships.
33 Could you give an example of the selling concept in the food production industry...
34 Marketing Management Marketing Management Orientations The Marketing Concept: Achieving organisational goals depends on determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors do. Instead of a product-centered make and sell philosophy, the marketing concept is a customer centered sense and respond philosophy. It views marekting not as hunting, but as gardening. Customer-driven companies research current customers deeply to learn about their desires, gather new product and service ideas, and test proposed product improvements. They even try and determine what customers would want in the future and then make it for them. That is really being customer-centered.
35 How could the food production industry be more marektingoriented/ customer-driven?
36 Starting point Focus Means Ends Factory Existing Products Selling and Promoting Profit through sales volumes The Selling Concept Market Customer needs Integrated marketing Profits through customer satisfaction The Marketing Concept
37 Can you give a contrasting example of the selling and marketing concepts in the food production industry?
38 Marketing Management Marketing Management Orientations The Social Marketing Concept: The idea that organisations should determine the needs, wants, and interests of the target markets and deliver the desired satisfaction more effectively and efficiently than do competitors in a way that maintains and improves the consumer's and society's well being. Originally, most companies based their marketing decisions largely on short-term company profits. Eventually, they recognised the long-run importance of satisfying consumers wants, and the marketing concept emerged. Now many companies are beginning to think of society's interests when making marketing decisions. J&J quote: If we keep trying to do what is right, at the end of the day we believe that the marketplace will reward us.
39 Can you think of examples in the food production industry of companies that apply social marketing concepts?
40 Customer Relationship Management Customer Relationship Management: The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. Companies are going beyond designing strategies to attract new customers and create transactions with them. They are using CRM to retain current customers and build profiable, long-term relationships with them. Changing demographics, more-sophisticated competitors, and overcapacity in many industries all contribute to the fact that there are fewer customers to go around. It costs 5-10 times as much to attract a new customer as it does to keep a current customer satisfied.
42 Customer Relationship Management Customer Lifetime Value: The value of the entire stream of purchases that the customer would make over a lifetime of patronage. A customer is worth much more than one sale. If they become a loyal customer, they will buy often and that makes good business sense. A company may loose money on one transaction (maybe where the customer is dissatisfied and you have to give them a product for free to apologise), but if handled well, that customer will feel respected and will probably become even more loyal. CRM and CLV looks at long-term relationships as a businesses most prized and profitable assets.
43 Can you think of examples in the food production industry of how CRM is implemented?
44 Customer Relationship Management Customer perceived value: The difference between total customer value and total customer cost. A customer buys from the firm that has the highest customer perceived value the customer's evaluation of the difference between all the benefits and all the costs of a marketing offer relative to those of competing offers. Customer satisfaction: The extent to which a product's perceived performance matches a buyer's expectaions. Smart companies aim to delight customers by promising only what they can deliver, then delivering more than promised. A company can increase customer satisfaction by lowering its prices or increasing its services. And do so without deminishing profits.