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Chapter: Business Science - Marketing Management - Marketing - Introduction

Marketing

It is a social process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others.

MARKETING  - INTRODUCTION

 

MARKETING

 

It is a social process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others.

 

1 Definition:

 

Management process through which goods and services move from concept to the customer. As a philosophy, it is based on thinking about the business in terms of customer needs and their satisfaction.

 

As a practice, it consists in coordination of four elements called 4P's: (1) identification, selection, and development of a product, (2) determination of its price, (3) selection of a distribution channel to reach the customer's place, and (4) development and implementation of a promotional strategy.

 

The American Marketing Association defines, Marketing management is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, services to create exchanges that satisfy individual and organisational goals.

 

2.Conceptual Framework

 


1Target Market:

 

Companies do best when they choose their target market(s) carefully and prepare tailored marketing programs.

 

2.Customer Needs:

We can distinguish among five types of needs:

 

1.                 Stated needs (the customer wants an inexpensive car).

2.                 Real needs (the customer wants a car who operating cost, not its initial price, is low).

3.                 Unstated needs (the customer expects good service from the dealer).

 

4.                 Delight needs (the customer would like the dealer to include an onboard navigation system).

 

5.                 Secret needs (the customer wants to be seen by friends as a savvy consumer).

 

3Integrated Marketing:

 

When all the company‗s departments work together to serve the customer‗s interests, the result is integrated marketing. It takes place on two levels, 1.Various marketing function, 2. By other department.

4.Profitability :

A company makes money by satisfying customer needs than its competitors.

 

5.The Marketing Process

 

Under the marketing concept, the firm must find a way to discover unfulfilled customer needs and bring to market products that satisfy those needs. The process of doing so can be modelled in a sequence of steps: the situation is analyzed to identify opportunities, the strategy is formulated for a value proposition, tactical decisions are made, the plan is implemented and the results are monitored.

The Marketing Process


5.1Situation Analysis

 

A thorough analysis of the situation in which the firm finds itself serves as the basis for identifying opportunities to satisfy unfulfilled customer needs. In addition to identifying the customer needs, the firm must understand its own capabilities and the environment in which it is operating.

 

The situation analysis thus can be viewed in terms an analysis of the external environment and an internal analysis of the firm itself. The external environment can be described in terms of macro-environmental factors that broadly affect many firms, and micro-environmental factors closely related to the specific situation of the firm.

 

The situation analysis should include past, present, and future aspects. It should include a history outlining how the situation evolved to its present state, and an analysis of trends in order to forecast where it is going. Good forecasting can reduce the chance of spending a year bringing a product to market only to find that the need no longer exists.

 

If the situation analysis reveals gaps between what consumers want and what currently is offered to them, then there may be opportunities to introduce products to better satisfy those consumers. Hence, the situation analysis should yield a summary of problems and opportunities. From this summary, the firm can match its own capabilities with the opportunities in order to satisfy customer needs better than the competition.

There are several frameworks that can be used to add structure to the situation analysis:

 

        5 C Analysis - company, customers, competitors, collaborators, climate. Company represents the internal situation; the other four cover aspects of the external situation

        PEST analysis - for macro-environmental political, economic, societal, and technological factors. A PEST analysis can be used as the "climate" portion of the 5 C framework.

 

        SWOT analysis - strengths, weaknesses, opportunities, and threats - for the internal and external situation. A SWOT analysis can be used to condense the situation analysis into a listing of the most relevant problems and opportunities and to assess how well the firm is equipped to deal with them.

 

 

6.Marketing Strategy

 

Once the best opportunity to satisfy unfulfilled customer needs is identified, a strategic plan for pursuing the opportunity can be developed. Market research will provide specific market information that will permit the firm to select the target market segment and optimally position the offering within that segment. The result is a value proposition to the target market. The marketing strategy then involves:

 

Segmentation

 

Targeting (target market selection)

 

Positioning the product within the target market Value proposition to the target market

 

6.1.Marketing Mix Decisions

 

Detailed tactical decisions then are made for the controllable parameters of the marketing mix. The action items include:

 

 

        Product development - specifying, designing, and producing the first units of the product.

        Pricing decisions

 

        Distribution contracts

 

        Promotional campaign development

 

7Implementation and Control

 

At this point in the process, the marketing plan has been developed and the product has been launched. Given that few environments are static, the results of the marketing effort should be monitored closely. As the market changes, the marketing mix can be adjusted to accomodate the changes. Often, small changes in consumer wants can addressed by changing the advertising message. As the changes become more significant, a product redesign or an entirely new product may be needed. The marketing process does not end with implementation - continual monitoring and adaptation is needed to fulfill customer needs consistently over the long-term.

 


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