MARKETING - Chapter I

1900 - 1910 Period of Discovery

Marketing theory was borrowed from economics, which thus resulted to distribution, worldwide trade, and commodity markets. The concept of marketing came into being and the business activity was thus named.

1910 - 1920 Period of Conceptualization

Many marketing concepts were being developed. These concepts were classified and terms were defined.

1920 - 1930 Period of Integration

Principles of marketing were postulated. The general body of thought was integrated for the first time.

Paul W. Ivey

First to use “Principles of Marketing” as a book to title

1930 - 1940 Period of Specialization

Specialized areas of marketing continued to be developed, hypothetical assumptions were verified and quantified, and some new approaches were developed to explain marketing knowledge. The scientific aspects of the subject were considered.

1940 - 1950 Period if Reappraisal

The concept and traditional explanation of marketing was reappraised in terms of current needs for marketing knowledge.

1950 - 1960 Period of Reconception

Traditional approaches to the study of marketing were supplemented by increasing emphasis on managerial decision making, the societal aspects of marketing, and quantitative marketing analysis. Many new concepts, some borrowed from the field of management and from other social sciences, were introduced into marketing.

1960 - 1970 Period of Differentiaton

As marketing expanded, new concepts took on substantial identity as significant components of the total structure of thought. Among them were such elements as managerialism, holism, environmentalism, systems, and internationalism.

1970 Period of Socialization

Social issues and marketing became much more important. It is the influence not of society upon marketing, but of marketing upon society that became a focus of interest.

“Marketing is managing profitable customer relationships. It is the process by which companies create value for customers and build strong relationships[s in order to capture value from customers in return.”

Marketing defined by Kotler and Armstrong

“Marketing is the process of continuous and profitably satisfying the target customer’s needs, wants, and expectations superior to competition.”

Marketing defined by Ac-Ac

attract new customers by promising superior value and keep and grow current customers by delivering satisfaction

goal of marketing

unnecessary

Peter Drucker said that the aim of marketing is to make selling __________

A. Create Value for Customers and Build Customer Relationships

1. UNDERSTAND the marketplace and customer needs and wants.

2. DESIGN a customer - driven marketing strategy.

3. CONSTRUCT an integrated marketing program that delivers superior value.

4. BUILD profitable relations and create customer delight.

B. Capture Value from Customers in Return

1. CAPTURE value from customers to create profit and customer equity.

the marketing process

Marketing & Production

Products manufactured or suppled to customers must be consistent with customer specifications. This means that production should only produce products that will satisfy customer’s needs and wants.

Marketing & Human Resources

The marketing strategy by itself cannot produce good results, say, meeting target sales, profit, and market share. A company needs good people to implement these strategies. A marketing plan is useless if the people who execute the plan are not committed to the idea. Organization is a source of competitive advantage.

Marketing & Finance

One of the common conflicts in a company involves sales and finance. Marketers and finance people should coordinate their functions to successfully achieve company objectives. Go (2001) mentioned that the wealth conversion principle results to irreconcilable differences between marketing and finance.

Wealth Conversion Principle

Business firms need cash to operate. For a company to create wealth or profit , it must have a good and cheap source of funds. These funds must be used to buy inventories at a lower price. The inventories are often then sold at a higher price and cash is collected from each sales transaction. Buying creates inventory while selling most often creates receivables since not all sales can be transacted on a pure cash money basis.

1. needs

2. wants (a. expectations)

3. demands

4. exchange

5. market

five core customer and marketplace concepts

needs

states of felt deprivation, basic reason or the minimum requirements consumers look for in a product or services

wants

the form of human needs take as they are shaped by culture and individual personality; the determining dimensions among many choices

expectations

• values/intangibles associated with a product or service

• a part of wants but become extremely important when products or services are not differentiated

demands

human wants that are backed by buying power

exchange

act of obtaining a desired object from someone by offering something in return

market

the set of all actual and potential buyers of a product or service

market offering

• consumers needs and wants are fulfilled through

• not limited to physical products, also include services

• combination of products, services, information, or experiences offered to a market to satisfy a need or want

• include persons, places, organizations, and ideas

product

goods-and-services combination the company offers to the target market

services

the activities or benefits offered for sale that are essentially intangible and do not result in the ownership of anything

marketing myopia

the mistake of paying more attention to the specific products a company offers to the benefits and experiences produces by these products.

smart marketers

they look beyond the attributes of the products and services they sell, by orchestrating several services and products, they create brand experiences for consumers1

company —→ 1) Customer —→ 2) Competitors

strategic 3CS of marketing

to satisfy needs wants & expectations of targeted customers

objective with customers

to outperform them

objective with competition

to ensure corporate health and profit

objective with company

1. strategic marketing management

2. marketing strategy

3. marketing tactics

three levels of marketing activities

strategic marketing management

focus is vision & mission, industry & competition analysis, key factors for success, strengths & weaknesses analysis, opportunity & threats analysis

marketing strategy

market segmentation, target market positioning

marketing tactics

product, placement, promotions, pricing

1) Customers

2) Company 3) Competitors

marketing triangle

• market - emerging opportunities

• industry - impending threats

factors to consider in formulating marketing strategies and tactics with customers:

• competitor’s strategies and tactics

• competitor’s strength and weaknesses

• competitor’s strategic focus

factors to consider in formulating marketing strategies and tactics with competitors

• company’s strengths and weaknesses

• industry structure and the firm’s competitive position

• personal values and preferences of key owners and excecutives

• societal expectations

factors to consider in formulating marketing strategies and tactics with company

1. marketing mix

2. conceptual approach

3. systems/holistic approach

4. marketing management

5. macro - marketing

6. social marketing

7. comparative marketing

enumerate the contemporary marketing approaches

E. Jerome McCarthy

who developed the marketing mix

marketing mix

consists of four Ps — product, price, placed and promotion — all of which influence buyer’s decision and resources

marketing success

desirable product + effective promotion or demand stimulation + acceptable price + availability in right places = _________ _______

product

anything marketed to satisfy a want or a need, may be a person, a place, an organizational, an idea or a good offered to a target market

target market

consist of buyers who share common needs or characteristics that the company decides to serve

place

considers all the functions, problems, and institutions involved in getting the right product to the market, also refers to the channel of distribution that marketers work in and through to move goods from manufacturers to the consumers.

promotion

• includes advertising, sales promotions, public relations, personal selling, and direct marketing.

• concerned with any communication tool used to persuade and influence the target market

setting the PRICE

wherein factors like competition, existing practices on mark ups, discounts and terms of sale, product appeal, and legal restrictions must be considered,

independent

elements of the marketing mix are ___________

conceptual approach

an approach that studies the ideas of marketing rather than the activities of marketing

1. as a marketing concept

2. as a concept in marketing

the conceptual approach is viewed in two ways

“Consumer is King” approach

counterpart of the conceptual approach

system/holistic approach

an approach that is based on the understanding that activities or processes are interdependent to other activities or processes. it is a holistic/unified view of marketing

modern marketing system

marketing management

emphasizes marketing management as a decision-making process and how decision makers, specifically rhetorical marketing managers, handle specific marketing problems and situations