Topic 1: What is Marketing?
LO1: Define marketing and outline the steps in the marketing process
Marketing refers to 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.
◦ Involves managing profitable customer relationships ◦ Goal is to attract new customers by promising superior value and to keep and grow current customers by delivering satisfaction
The marketing process
1. Understand the marketplace and customer needs, wants and demands. 2. Design a customer-driven marketing strategy. 3. Construct an integrated marketing program that delivers superior value. 4. Build profitable relationships and create customer delight. 5. Capture value from customers to create profits and customer equity.
LO2: Explain the importance of understanding customers and the marketplace
Understanding the marketplace and customer needs
To begin, marketers need to understand customer needs, wants and demands, and the marketplace within which they operate.
Human needs – states of felt deprivation - Includes physical needs for food, clothing, warmth and safety; - Social needs for belonging and affection; and - Individual needs for knowledge and self-expression
While marketers may stimulate these needs, they do not create them for they are a basic part of human make-up. When a need is not satisfied, a person will try to either reduce the need or look for something that will satisfy it. This depends on the society/culture that people belong to. E.g. people from developing countries may try to reduce their desires and satisfy them with what is available whereas those in developed countries might try to find objects that will satisfy their needs.
Wants – the form human needs take as shaped by culture and individual personality - Wants are the objects that will satisfy one’s needs - As people are exposed to more objects that arouse their interest and desire, producers try to provide more want-satisfying goods and services - When wants are backed by buying power they become demands
Demands – Humans wants that are backed by buying power
Market offerings
A market offering that is some combination of goods, services and experiences that can be offered to a market to satisfy a need or want. ◦ ‘Product’ is not limited to physical objects; anything capable of satisfying a need can be called a product.
Marketing myopia – the mistake of paying more attention to the specific products a company offers than to the benefits and experiences produced by these products
Exchange, transactions and relationships
Marketing occurs when people decide to satisfy their needs and wants through exchange relationships. ◦ Exchange is the act of obtaining a desired object from someone by offering something in return. ◦ Whereas exchange is the core concept of marketing, a transaction is marketing’s unit of measurement ◦ A transaction consists of a trade of values between two parties. ◦ Marketing involves taking actions to build and maintain desirable exchange relationships with target audiences
Markets A market is a set of actual and potential buyers of a product.
LO3: Identify the key elements of a customer-driven marketing strategy
Designing a customer-driven marketing strategy
Once marketing management fully understands consumers and the marketplace, it can design a customer-driven marketing strategy.
Marketing management is ‘the art and science of choosing target markets and building profitable relationships with them.’ Two key questions the marketing manager must ask: 1. What customers will we serve? (Who is our target market?) 2. How can we serve these customers best?
Selecting customers to serve This is done by examining the various segments into which the market naturally falls and choosing the specific customers the company can serve well and profitably ◦ May not always mean seeking to increase market demand; at times, it may be necessary to seek fewer customers and reduce demand ◦ Demarketing means trying to temporarily or permanently reduce demand ◦ Marketing is concerned with not only attracting new customers but also, retaining current customers and building long-term profitable relationships with them; the key to customer retention is superior customer value and satisfaction
Choosing a value proposition A marketing organisation’s value proposition is the set of benefits or values it promises to deliver to consumers to satisfy their needs. Value propositions answer the customer’s question, ‘why should I buy your brand rather than a competitor’s?’
Topic 2: Planning, Strategy and the Marketing Environment
LO1: Explain company-wide strategic planning and its four steps.
Company-wide strategic planning: Defining marketing’s role
Strategic planning (SP) is the process of developing and maintaining a strategic fit between the organisation’s goals and capabilities and it’s changing marketing opportunities.
The process… 1. The organisation starts the SP process by defining its overall purpose and mission. 2. The mission is then turned into detailed supporting objectives that guide the whole organisation. 3. Next, headquarters decides what portfolio of businesses and products is best for the company and how much support to give to each one. 4. In turn, each business and product develops detailed marketing and other departmental plans that support the company-wide plan.
Defining a market-oriented mission
A mission statement is a statement of the organisation’s purpose – what it wishes to accomplish in the larger environment. A clear mission statement should guide those in the organisation as to what to focus on when carrying out their roles.
Mission statements… Ø Should be market-oriented (rather then product oriented) and defined in terms of satisfying customer needs. Ø Should be meaningful and specific, yet motivating. Ø Should emphasise the organisation’s strengths in the marketplace. Too often mission statements are written for public relations purposes and lack specific, workable guidelines. Ø Should not be stated as making more sales or profits – profits are only a reward for creating value for customers. Instead, the mission should focus on customers and the customer experience that organisation seeks to create.
E.g. McDonald’s mission not ‘to be the world’s best and most profitable quick-service restaurant’ but rather, ‘to be our customers’ favourite place and way to eat.’ - If McDonald’s accomplishes this customer-focussed mission, profits will follow.
Setting company objectives and goals
The marketing organisation needs to turn its mission into detailed supporting objectives for each level of management. Each manager should have objectives and be responsible for reaching them. Marketing strategies and programs must then be developed to support these objectives.