University of Hargeisa

Faculty of Business Administration Junior Class: 3C Group: 1

Chapter 1

Defining Marketing for the 21st Century

P.S. This Handout is not completely 100% from our book, but it is a collection of notes not
only from different books but also different references as well!

INTRODUCTION
Many of todays customers have the income to buy a vast range of goods and services, and in turn are faced a huge choice between different companys products. Businesses therefore must market their products. Marketing allows businesses to: Create new customers Find out what customers want. Produce products that meet the customers needs. Inform customers about their products. Persuade customers to buy their products.

The twofold goal of marketing is to attract new customers by promising superior value and to keep current customers by delivering satisfaction. Marketers are motivated to turn a private or social need into a professional business opportunity. They are responsible for demand management. What is marketing? There are many definitions of marketing. The better definitions are focused upon customer orientation and satisfaction of customer needs: Marketing at its very core is: The process through which Value is exchanged. Marketing is the delivery of customer satisfaction at a profit. Marketing deals with identifying and meeting human and social needs. Marketing is meeting customers needs profitably Marketing is the process in the business of identifying customer needs and satisfying those needs at a profit, in such a way that the customer will buy the product again and again.

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Marketing is the social process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others. KOTLER Marketing is the science of meeting the needs of a customer by providing valuable products to customers by utilizing the expertise of the company. WIKIBOOKS. Marketing is the management process that identifies, anticipates and satisfies customer requirements profitably. THE CHARTERED INSTITUTE OF MARKETING (CIM). The CIM definition looks not only at identifying customer needs, but also satisfying them (short-term) and anticipating them in the future (long-term retention). The right product, in the right place, at the right time, at the right price. ADCOCK 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. THE AMERICAN MARKETING ASSOCIATION With this definition, it is important to realize that the customer can be an individual user, a company, or several people who contribute to the purchasing decision. Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders. OUR BOOK

MARKETING DEPARTMENT
The role of the marketing department is to carry out marketing. This means it must link production to consumption. To do this, the department makes sure that the demands of its customers are met by what is being made. If the marketing department achieves this, it will meet customer wishes and help the business make a profit. To do this, marketing staff must manage the marketing mix efficiently by: Researching into the demand for the firms products e.g. through market research. Ensuring these products are competitive through pricing policies. Making sure they are available through efficient distribution. Keeping the products in the minds of its customers by promoting them.

MARKETING MANAGEMENT
Marketing Management is a business discipline which is focused on the practical application of marketing techniques and the management of a firm's marketing resources and activities. Rapidly emerging forces of globalization have compelled firms to market beyond the borders of their home country making International marketing highly significant and an integral part of a firm's marketing strategy.

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Marketing managers are often responsible for influencing the level, timing, and composition of customer demand. In part, this is because the role of a marketing manager can vary significantly based on a business' size, corporate culture, and industry context. Marketing management is the application and review of a business marketing resources and activities. The scope of a business marketing management depends on the size of the business and the industry in which it operates. Effective marketing management will use a companys resources to increase its customer base, improve customer opinions of the companys products and services, and increase the companys perceived performance -- (Customers opinion of a products value to him. It depends on the products ability to satisfy the customer needs or requirements). 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. Structure Traditionally, marketing analysis was structured into three areas: 1. Customer analysis 2. Company analysis, and 3. Competitor analysis (so-called "3Cs" analysis). Customer analysis is to develop a schematic diagram for market segmentation, breaking down the market into various constituent groups of customers, which are called customer segments or market segmentation's. In company analysis, marketers focus on understanding the company's cost structure and cost position relative to competitors, as well as working to identify a firm's core competencies and other competitively distinct company resources. In Competitor analysis, marketers build detailed profiles of each competitor in the market, focusing especially on their relative competitive strengths and weaknesses using SWOT analysis. Marketing managers will examine each competitor's competencies, competitive positioning and product differentiation, and other factors. Selling is only the tip of the iceberg There will always be need for some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and 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. Peter Drucker.

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The Scope of Marketing What is marketed? Marketing people are involved in marketing 10 types of entities: 1. Goods Physical goods constitute the bulk of most countries production and marketing effort. In developing nations, goodsparticularly food, commodities, clothing, and housingare the mainstay of the economy. 2. Services as economies advance, a growing proportion of their activities are focused on the production of services. The U.S. economy today consists of a 7030 services-togoods mix. Services include airlines, hotels, and maintenance and repair people, as well as professionals such as accountants, lawyers, engineers, and doctors. 3. Experiences by orchestrating several services and goods, one can create, stage, and market experiences. Walt Disney Worlds Magic Kingdom is an experience; so is the Hard Rock Cafe. 4. Events Marketers promote time-based events, such as the Olympics, trade shows, sports events, and artistic performances. 5. Persons Celebrity marketing has become a major business. Artists, CEOs, physicians, high-profile lawyers, and other professionals draw help from celebrity marketers. 6. Places Cities, states, regions, and nations compete to attract tourists, factories, company headquarters, and new residents. 7. Properties Properties are intangible rights of ownership of either real property or financial property stocks and bonds. Properties are bought and sold, and this occasions a marketing effort. 8. Organizations Organizations actively work to build a strong, favorable image in the mind of their publics. Philips, the Dutch electronics company, advertises with the tag line, Lets Make Things Better.. Universities, museums, and performing arts organizations boost their public images to compete more successfully for audiences and funds. 9. Information the production, packaging, and distribution of information is one of societys major industries.6 among the marketers of information are schools and universities; publishers of encyclopedias, nonfiction books, and specialized magazines; makers of CDs; and Internet Web sites. 10. Ideas every market offering has a basic idea at its core. In essence, products and services are platforms for delivering some idea or benefit to satisfy a core need. Marketers and prospects Marketer is someone who seeks a response (attention, a purchase, a vote, a donation) from another party, called the Prospect. For an exchange to occur. There are at least two parties. Each party has something that might be of value to the other party. Each party is capable of communication and delivery. Each party is free to reject the exchange offer. Each party believes it is appropriate or desirable to deal with the other party.

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Two parties are engaged in exchange if they are negotiating trying to arrive at mutually agreeable terms. When an agreement is reached, we say that a transaction takes place. A transaction is a trade of values between two or more parties. A transaction involves several dimensions: at least two things of value agreed-upon conditions a time of agreement and a place of agreement Core Marketing Concepts Needs states of felt deprivation including physical needs for food, social needs for belonging and individual needs for self-expression. I.e. I am thirsty. Wants form that a human need takes as shaped by culture and individual personality. I.e. I want a Coca-Cola. Demands human wants backed by buying power. I.e. I have money to buy a CocaCola. Segmentation identify distinct groups of buyers examining behavioral differences. Target Markets segments presenting the greatest opportunity. Positioning what the offering means in the minds of the target buyers as delivering some central benefits. Value the sum of perceived tangible and intangible benefits and costs to customers. Customer value = quality, service & price Customer value difference between the values that the customer gains from owning and using a product and the costs of obtaining the product. Customers judge this values on perceived value not accurately or objectively. Satisfaction a persons comparative judgment of a products perceived performance (or outcome) in relation to expectation. Customer satisfaction the extent to which a products perceived performance matches a buyer expectations. New Consumer Capabilities Information age (Digital revolution) A substantial increase in buying power A greater variety of available goods and services A great amount of information about practically anything Greater ease in interacting and placing and receiving orders An ability to compare notes on products and services.

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Company Orientations Production Product 4 Ps Vs 4 Cs

Selling Marketing

Relationship Marketing A strategy that focuses on keeping and improving relationships with current customers. Internal & External Marketing Internal marketing is the task of hiring, training, and motivating able employees who want to serve customers well. Every one in the organization must think customer External Marketing is marketing directed at people outside the company. In fact, internal marketing must precede the external marketing. The Marketing Triangle

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Marketing Management Tasks Develop market strategies and plans Capture marketing insights Connect with customers Build strong brands Shape market offerings Deliver value Communicate value Create long-term growth

LO4

Review Learning Outcome

Reasons for Studying Marketing Why Study Marketing? Why Study Marketing?

Important Important to to Society Society

Important Important to to Business Business

Good Good Career Career Opportunities Opportunities

+ Marketing affects you every day!

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