Topic 1 Introduction to Marketing 2025

Introduction to Marketing

• Source: OXFORD UNIVERSITY PRESS, MAN231, 7th Edition, 2024

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Definition of Marketing

• Definition: The activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offers that have value for customers, clients, business partners, and society at large.

• Meeting Customer Needs:

  • More than just selling or advertising; it focuses on understanding and satisfying unmet needs.

• Creating Value for Customers:

  • Essential for understanding marketing; without customer satisfaction, firms can't sustain.

• Profitability in Value Creation:

  • The need to create value profitably depends on the organisational strategy and objectives.

Marketing Strategy and Organisational Strategy

• Levels of Strategy:

  • Corporate Level: Overall strategic perspective of the organization, including range, scope, and diversity of business activities.

  • Business Level: Search for distinctive competitive advantage for individual business units.

  • Functional Level: Specific functions within organizations (like marketing) must support company-wide competitive strategies.

• Alignment: Marketing strategy should align with and support business-level competitive advantage strategies.

Marketing Planning Framework

1. Objectives

2. Situational Analysis (SWOT)

3. Competitive Advantage

4. Target Market

5. Desired Positioning

6. Marketing Mix

• Integration: Ensure marketing strategies and objectives are aligned with organisational strategies.

Customer Satisfaction

• Definition: The feeling that a product/service meets or exceeds expectations of value.

• Judgment: Customer satisfaction is a response based on pre-purchase expectations.

• Disconfirmation Paradigm: Helps in understanding the gap between expectations and actual performance.

Hertzberg's Two-Factor Model of Customer Satisfaction

• Hygiene Factors: "Minimum requirements" that contribute to dissatisfaction if absent.

• Satisfiers (Motivators): Things that lead to customer satisfaction; e.g., additional services or features.

• Frederick Herzberg: Renowned psychologist known for the Motivator-Hygiene Theory.

Measuring Customer Satisfaction

• Importance: Should be a continuous process, utilizing various methods.

• Data Collection Methods:

  • Formal Research Surveys

  • Customer Complaint Analysis (including social media)

  • Internal Staff Interviews

  • Intermediaries: Feedback from retailers, sales agents, and wholesalers.

• Goal: Understand customer satisfaction levels and changing needs.

Benefits of Customer Satisfaction

• Lower Acquisition Costs: Retaining existing customers is cheaper than acquiring new ones (5x more).

• Economies of Scale: Satisfied customers contribute to larger sales volumes, facilitating cost-effectiveness.

• Revenue Growth: Opportunities for additional sales through promotions and customer relationship management (CRM).

• Cost Savings: Repeat clients require fewer resources.

• Referrals: Satisfied customers provide valuable word-of-mouth recommendations.

• Price Premium: Loyal customers are often less sensitive to price changes.

Conditions for Exchange Concept

1. Two parties (buyer and seller)

2. Both have something of value

3. Ability to communicate and deliver

4. Freedom to accept/reject the offer

5. Desire to engage with the other party

• Note: Even if conditions are met, an exchange may not occur (e.g., when selling a car).

Marketing Management Philosophies

1. Production Orientation: Focused on the capacity to produce.

2. Product Orientation: Belief that a good product ensures success.

3. Sales Orientation: Emphasis on aggressive sales techniques.

4. Consumer Orientation: Understanding and satisfying consumer needs.

5. Societal Marketing Orientation: Balancing consumer and societal goals.

6. Relationship Marketing Orientation: Building long-term partnerships with consumers (CRM).

Differences Between Sales and Marketing Orientations

• Sales Orientation:

  • Inward focus on selling goods and services; aim for maximum sales volume.

  • Tools: Intensive advertising and promotion.

  • Target: Broad public.

• Marketing Orientation:

  • Outward focus; emphasis on satisfying consumer wants/needs.

  • Primary goal: Customer satisfaction.

  • Tools: Coordinated marketing activities.

  • Target: Specific groups.

Sustainable Competitive Advantage

• Competition: Critical in marketing, particularly in competitive industries.

• Types of Competitive Advantage:

  • Cost-based Advantage: Lower production costs than competitors.

  • Differentiation Advantage: Unique products/services that offer value to customers.

  • Reason to Buy: Identifying unique selling propositions (USPs) that attract customers (e.g., Checkers Sixty60).

Dimensions of Differentiation Advantage

• Quality: Affiliated with trusted brands (e.g., Woolworths, Mercedes-Benz).

• Location: Considerations for convenience (e.g., Waterfront, Shell Ultra City).

• Safety: Reputable brands focused on safety (e.g., Mercedes-Benz; Volvo).

• Brand Image: Recognition through brand quality (e.g., Ray-Ban, Gucci).

• Design: Appeal through aesthetics (e.g., Apple products).

• Flexibility: Adaptability in production (e.g., Dell Computers).

• Distribution: Accessibility of products (e.g., Coca-Cola).

• Product Features: Specific attributes like "no artificial ingredients."

Why Study Marketing?

• Societal Role: Marketing significantly affects society.

• Importance to Businesses: Critical for business success.

• Career Opportunities: Broad and diverse opportunities in the field.

• Everyday Influence: Marketing impacts daily life events and decisions.

Quotes on Marketing

• David Packard: "Marketing is too important to be left to the Marketing Department."

• Pierre van Tonder: "The importance of marketing to a company should never be underestimated."