Principle Of Marketing- Lec 4

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					        MGT301
Principles of Marketing
        Lecture-4
Summary
   of
Lecture-3
        Information       Buying


Risk Taking                         Selling

                   Marketing
                   Functions
Financing                       Transporting


        Standardizing
         and Grading
                          Storing
                     Demarketing

   …Marketing to reduce demand temporarily or
    permanently; the aim is not to destroy demand but only
    to reduce or shift it.
Customer Relationship
    Management
   Loyal customers provide more But the angry gossip of
    and more credible referrals   disloyal customers can
                                  devastate a firm!
Today’s Topics
Marketing in Historical perspective and
        Evolution of Marketing
How has Marketing Changed Over Time?
How it Started
1.The Production Concept (Mass Production) (prior to 1920’s):
   Mass produce @ lowest cost -Distribute @ affordable price
   No options for consumer
2. The Product Concept (1920-1950’s):
    Build a More Innovative Product
    Build a Better Mousetrap
3. Selling Concept (1940’s-1980’s)
    - Few product-- sell, sell, sell!
     - Largest volume at any price
     - Focus on one time transaction
Until the ‘90’s
    “Transaction Marketing” – focus one time sale
    Focus on product
4. Marketing Concept (1990’s and beyond)
 -Idea: identify most profitable customers who value your
   service/product the most and build relationships with those
   individuals
 - Customers become more demanding/empowered
 - Able to produce based on customers needs:
    - Technological advances allow for customer tracking
       databases
   Relationship Marketing (1990’s)

   Definition: Marketing is the process of establishing
    and maintaining mutually beneficial exchange
    relationships with customers and other
    stakeholders

   KEEP CUSTOMERS FOR LIFE!!!
Marketing Philosophies
     PRODUCT           SOCIETAL
     CONCEPT           MARKETING
                       CONCEPT


                  KEY
              MARKETING
             PHILOSOPHIES
                            MARKETING
                             MARKETING
PRODUCTION                   CONCEPT
                              CONCEPT
  CONCEPT

               SELLING
               CONCEPT
         The Production Concept


..Holds that consumers will favor products that are
   available and affordable.
    Implies work towards mass production and low cost
               The Product Concept
…Assumes customers favor products that offer the most
 quality, performance, and features.
  Implies firm should strive to continually upgrade product
    and product features.
             The Selling Concept

…The idea that customers will not buy enough of the
 organization’s products unless the organization
 undertake a large scale selling and promotion efforts.
..Business assumption that consumers will resist purchasing
   nonessential goods and services with the attitude toward
   marketing that only creative advertising and personal
   selling can overcome consumers’ resistance and convince
   them to buy.
Inside-out perspective: Assumes people need to be sold on
   whatever it is the firm has decided to offer. 1st: Decide what
   to produce; 2nd: Figure out how to get people to buy what you
   have.
    Implies lots of selling/promotional activities are needed to
      move product
                        After WWII

Shortages in goods ended.
Economy changed from a seller’s market to a buyer’s market.
   Seller’s market: marketplace characterized by a shortage of
     goods and/or services.
   Buyer’s market: marketplace characterized by an abundance
     of goods and/or services.
             The Marketing Concept


…Holds that achieving organizational goals depends upon
 determining the needs and wants of target markets and
 delivering the desired satisfactions more effectively and
 efficiently than do competitors.
        Marketing Concept Components

   Means of achieving goals
   determine needs and wants
     – implies research and/or appropriate assumptions
   Target markets
     – implies clear target groups: people whose needs/want you
       will try to fill
   Satisfaction
   Competitors acknowledged
                     Marketing Era

With a continually increasing buyer’s market, marketing would
  no longer be regarded as a supplemental activity performed
  after completion of the production process.
The marketer would play a lead role in product planning.
Marketing and selling would no longer be synonymous terms.
         Marketing Concept Vs. Selling
                   Concept

Marketing Concept:           Selling Concept:
  Begin with customer needs     Begin with what firm wants to
  Develop 4 Ps in light of         produce
    customer needs              Given products, persuade
  “Have what you can get rid       customers to buy
    of”                         “Get rid of what you have.”
Selling
   A company makes a product and then uses various selling
      methods to persuade customers to buy it.
Marketing
   Company finds out what the customer wants and develops a
      product to satisfy those wants while yielding a profit.
SOCIETAL MARKETING CONCEPT: ….in a way that
  maintains or improves the consumer’s and the society’s
  well-being.


Typical thinking in 1990
   Marketer must act in a socially responsible manner.
   External environment’s influence on firm’s marketing
     program.
                     Society
                 (Human Welfare)




                    Societal
                   Marketing
                   Concept

 Consumers                         Company
(Satisfaction)                     (Profits)
Relationship Era
   Relationship marketing: development and maintenance of
    long-term, cost-effective exchange relationships with individual
    customers, suppliers, employees, and other partners for
    mutual benefit.
   Strategic alliances: partnerships with vendors and retailers
    play major roles in relationship marketing.4
Relationship Marketing
Effective relationship marketing relies heavily on information
   technologies such as computer databases that record
   customers’ tastes, price preferences, and lifestyles along with
   the increase of electronic communications. Some examples
   are frequent buyer clubs/cards.)
               Marketing Management

 Marketing management is “the art and science of choosing
  target markets and building profitable relationships with
  them.”
    Creating, delivering and communicating superior
     customer value is key.
              Marketing Management

Customer Management:
  – Marketers select customers that can be served well and
     profitably.
Demand Management:
  – Marketers must deal with different demand states ranging
     from no demand to too much demand.
Evolving Views of Marketing’s Role
                                      Finance
                         Production
Production    Finance
                                          Human
                                        resources
Marketing      Human
             resources      Marketing




   a. Marketing as an     b. Marketing as a more
      equal function         important function
   Production


    Marketing             Customer




c. Marketing as the   d. The customer as the
   major function         controlling factor
          Production

          Marketing

           Customer




e. The customer as the controlling
   function and marketing as the
         integrative function
              Summary



How has Marketing Changed Over Time?
     PRODUCT           SOCIETAL
     CONCEPT           MARKETING
                       CONCEPT


                  KEY
              MARKETING
             PHILOSOPHIES
                            MARKETING
                             MARKETING
PRODUCTION                   CONCEPT
                              CONCEPT
  CONCEPT

               SELLING
               CONCEPT
                     Society
                 (Human Welfare)




                    Societal
                   Marketing
                   Concept

 Consumers                         Company
(Satisfaction)                     (Profits)
          Production

         Marketing

          Customer




The customer as the controlling
 function and marketing as the
       integrative function
                           Next….

   Marketing Challenges in the 21st century
        MGT301
Principles of Marketing
        Lecture-4

				
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