Principles of Marketing (week I)

What is Marketing?


Marketing seeks to satisfy the needs of people (customers or the market) 

(creating a sense of usefulness or utility through the exchange process).

The Marketing Mix or the "4 P's" are: 

•

• Product  
• Price  
• Promotion  
• Place (or distribution) 

These are employed to satisfy a target market' or target demographic (the pool of potential customers).

The Exchange Process


The exchange process is the process by which two or more parties give something of value to each other to satisfy the perceived needs. The marketer (a company like P&G) offers goods and services desired by the market (the pool of potential customers). In return, the market (the customer) gives back something of value to the marketer, generally money. Both ends receive something of value in the exchange process. The marketer makes money and the customer receives goods, services, or ideas that satisfy their needs. The exchange process is the origin of marketing. 

The exchange process creates utility. There are four basic types of utility: 

•

• Form utility: production of the good or service, driven by the marketing function. Ex: P&G turns raw ingredients and chemicals into toothpaste.
• Place utility: making the product available where customers will buy the product. Ex: Shelf displays at supermarkets and drugstores.
• Time utility: making the product available when customers want to buy the product. Ex: Seven Eleven available 24/24. 
• Possession utility: once you have purchased the product, you have rights to use the product as intended, or (in theory) for any use you would like. 
• Image utility: the satisfaction acquired from the emotional or psychological meaning attached to products. Ex:Some people pay more for a toothpaste perceived to be more effective at fighting cavities and whitening teeth. 

The exchange process occurs only if

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• Both parties must have something of value to exchange
• Both parties need to be able to communicate
• Both parties must be able to exchange
• Both parties must want to exchange
• At least 2 people are needed for an exchange to occur

Marketing Management Process

1.

• 
  

  Analyzing Market Opportunities
• Define the market
• Assess Consumer
• Assess Environment
• Assess Company Resources
• Analyse Demand and Forecast Sales

• Identifying Market Segments & Selecting Target Markets 
• Marketers set priorities for business opportunities, concentrating on market segments within which they expect to achieve the best overall economic return from their product or services.
• Market segmentation and target marketing are the processes used to isolate these opportunities.
• Market segmentation is the process of grouping customers based on their similarities.

  Market segmentation allows a company to:

  •Understand the different behavioral patterns and decision-making processes of different group of consumers

  •Select the most attractive segments or customers the company should target

  •Develop a strategy to target the selected segments based on their behavior

  
  
• Developing Marketing Strategies  
• Positioning
• Develop new product, test and launch
• Modification in the stages of product life cycle
• Strategy choice depends on the strategy pursued by the firm
• Consider changing global opportunities and challenges

• 
  

  Planning Marketing Programs 
• Transforming Strategy into programs
• Managing Product Lines, Brands and Packaging
• Managing Service Businesses and Ancillary Services
• Designing Pricing Strategies and Programs
• Selecting and Managing Marketing Channels
• Managing Retailing, Wholesaling, and Physical Distribution Systems
• Designing Communication and Promotion Mix Strategies
• Designing Effective Advertising Programs
• Designing Direct Marketing, Sales Promotion, and Public Relations Programs
• Managing the Sales Force

• Organizing, Implementing & Controlling The Marketing Effort. 
• Organising resources
• Implementation
• Control (annual control, profitability control, strategic control)