INTRODUCTION TO MARKETING MANAGEMENT
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1 INTRODUCTION TO MARKETING MANAGEMENT Timeframe: 16 hours Learning Outcome: Critically explain marketing terminology, concepts and principles. Recommended Reading: Multimedia: Section Overview: Mitchell, R., Hutchinson, K., and Bishop, S. 2012, Interpretation of the retail brand: an SME perspective, International Journal of Retail & Distribution Management, 40 (2), Continuum Learning 2012, 7 Ps of Service Marketing, (accessed 21 Gmx.xmu n.d., Chapter 3: The Marketing Environment, (accessed 20 September 2012). Marketing in MTD Training 2010, Effective Marketing [e-book], (accessed 20 Joshi, M. 2012, Essentials of Marketing [e-book], Strain, M. 2012, How do Elements of a Marketing Environment Affect Marketing Decision- Making?, MarketingTeacher.com 2012b, Marketing Environment, Marketing91.com 2011b, Needs, Wants and Demands, SooperTutorials 2009, Needs, Wants and Demands, (accessed 12 Whalley, A. 2010, Strategic Marketing [e-book], (accessed 20 Gellynck, X., Banterle, A., Kuḧne, B., Carraresi, L., and Stranieri, S. 2012, Market orientation and marketing management of traditional food producers in the EU, British Food Journal, 114 (4), B2Bwhiteboard 2011, What are Customer Needs, Wants and Demands? [video clip], Mathur, S. 2010, What is Marketing? [slides], (accessed 20 The focus of this first section is on introducing you to the terminology, concepts and principles of marketing. Definitions will be given of marketing and various levels of marketing will be explored as well as the value, need and demand for marketing. The Ps of marketing will also receive attention.
2 Introduction All organisations have products and services to sell and this is the main reason for marketing activities. Goods and services are developed to meet customer needs and so these needs must be identified and understood. Customers, in turn, must be made aware of the availability of a variety of products and needs to meet their needs. This requires strategies to be put in place to inform customers of possible products/services. Marketing programmes aim to achieve alignment between customer needs and product/service availability. Marketing has arguably become the most important idea in business mass media are used to communicate various possibilities of products and services to meet every possible human need. According to Peter Drucker, a leading management theorist, there will always be a need for some selling. However, the aim of marketing is to know and understand the customer so well that the product or service fits him/her perfectly and therefore sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed is to make the product or service available. Within this first section, we will investigate the terminologies, concepts and principles related to marketing. Defining Marketing and Related Concepts There are many definitions of marketing, most of which focus on customer orientation and the satisfaction of customer needs. Some examples: Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. (Kotler and Keller, 2012:27) Marketing is a combination of management tasks and decisions aimed at meeting opportunities and threats in a dynamic environment in such a way that its market offerings lead to the satisfaction of consumer s needs and wants in order to achieve the objectives of the enterprise, the consumer and society. (North American Marketing Association, 2012) Marketing is the all-embracing function that links business with customer needs and wants in order to get the right product to the right place at the right time. It is a management process that identifies, anticipates and supplies customer requirements efficiently and profitably. Tutor2u (2012c) The recommend reading for this section offers more definitions of marketing: Joshi, M. 2012, Essentials of Marketing [e-book], Whalley, A. 2010, Strategic Marketing [e-book], (accessed 20
3 Key components of the marketing to consider: Marketing is about meeting the needs and wants of customers. It is a business-wide function. It is based on a thorough understanding of customers and their needs. It aims to create alignment between organisational product/service delivery and market needs. In essence, marketing is the process whereby a company decides what it will sell, to whom, when and how and then does it (Whalley, 2010). According to Kotler and Keller (2012:37), the term marketing planning process refers to the analysis of marketing opportunities, researching and selecting target markets, designing marketing strategies, planning marketing programmes and organising, implementing and controlling marketing efforts. Related to the above, marketing is also a strategy and entails an understanding of the environment the organisation is operating in; its customers, competitors, laws, regulations, etc. Marketing as a strategy requires segmenting the marketing to decide which customers to target and what message to send to the target market to associate with the organisation called positioning. Tutor2u (2012c) provides the illustration depicted in Figure 1 in order to put the relationship between marketing and other organisational functions and linked to customer needs and wants into perspective:
4 FIGURE 1: MARKETING RELATION TO BUSINESS Marketing What is the businesses' attitude to marketing? Marketing Orientation? Analyse current position and opportunties: Marketing audit Gain information on the Market: Market reseach Persuade customers to buy: Marketing mix Marketing Analysis Quantitive Analysis Product Marketing Segmentation Qualitative Analysis Price Marketing Strategy Customer Tests Place Promotion (Tutor2u, 2012c) If you look at Figure 1, you will notice that there are a number of other terms related to marketing that you may be unfamiliar with. Within the context of this course, the term marketing process and strategy therefore refers to all activities related to establishing and implementing a marketing campaign within an organisation, with the aim of ensuring that products and services are introduced to customers for the benefit of ensuring the financial sustainability of the organisation.
5 The key to ensuring the successful implementation of the marketing process is management of various components. According to Kotler and Keller (2012:27), marketing management is the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value. Access the following slide show to find out more about marketing and the marketing process: Mathur, S. 2010, What is Marketing? [slides], (accessed 20 Components of Marketing If we refer back to the definitions of marketing, we can identify a number of core components that relates to marketing. These are illustrated in Figure 2. FIGURE 2: CORE COMPONENTS OF MARKETING Needs Wants Demands Products Value Cost Satisfaction Exchange Transaction Relations Markets Marketing Marketers A brief explanation of each of these components is given in Table 1 below (Kotler and Keller, 2012:31):
6 TABLE 1: CORE COMPONENTS OF MARKETING Needs, Wants and Demands Products Value, Cost and Satisfaction Exchange, Transaction and Relationships Markets Marketer A human need is a state of felt deprivation of some basic satisfaction. Wants are desires for specific satisfiers of these deeper needs. Demands are wants for specific products that are backed up by an ability and willingness to buy them. A product is anything that can be offered to someone to satisfy a need or want. We use the term product for tangible or physical objects (e.g. a can of Coke), whereas the term service is used for intangible products (e.g. a lawyer s services). Value is the customer s estimate (cost) of the product s overall capacity to satisfy his or her needs. People can obtain products through self-production; coercion; begging or exchange. Marketers use the concept of exchange. A transaction consists of a trade of values between two parties. Relationships develop as a result of marketer trying to build up long-term, win-win relationships with customers, distributors, dealers and suppliers. A market consists of all the potential customers sharing a particular need or want who might be willing and able to engage in exchange to satisfy that need or want. This is someone seeking a resource from someone else and willing to offer something of value in exchange for that which is marketed.
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