Marketing 1

• Business is the activity of making one’s living or making money by producing or buying and selling products (such as goods and services), Simply put, it is “any activity or enterprise entered into for profit.

• Administration is the range of activities connected with organizing and supervising the way that an organization or institution functions.

• Key? Holder of the Key?

RATIONALE OF PRODUCT EXISTENCE

▪️NEED

• of the customer to be satisfied (problem) + PP = DEMAND

▪️MARKETING

• the key to answer the need.

▪️ENTREPRENEUR

• the holder of the key and will organize the factors of production to produce the good or service that will answer the need
• Business Enterprise is the end result

• Yes, because the business world exists because of PRODUCTS - goods and services. All products are the result of a marketing process.

• Without marketing there will be no product to speak of, hence no business to create.

• Marketing is the “key” to any business.

• The entrepreneur is the holder of the “key”

• All other fields follow: Human Resource, Operations, Finance, etc.

SIMPLY PUT

• No Marketing ➔ No Product ➔ No Business ➔ No Business Administration

MAJOR FUNCTIONAL AREAS OF A BUSINESS

1. Marketing
2. Human Resource
3. Operations
4. Finance

FUNCTIONS OF MANAGEMENT

• PLANNING
• ORGANZING
• DIRECTING
• EVALUATING

MARKET: A MARKETING PERSPECTIVE

EASY MEMORY - USING THE KEYWORDS:

• Understand, Provide, and Communicate (UPC/ process of UPC)

Marketing is the process of UNDERSTANDING the needs and wants of the customers, PROVIDING these needs and want through goods and services and COMMUNICATING to them that these products are available in the market.

• “Marketing is the process by which (1) companies create value for customers ajd (2) build strong customer relationships (3) yo capture value from customers in return.”

• Philip Kotler

• “The aim of marketing is to make selling unnecessary.”

• Peter Drucker

❗To defend Peter Drucker’s Definition of Marketing:

• Marketing makes selling unnecessary, IF and WHEN, (1) we have created value for customers, and (2) built strong customer relationships which have captured value from customers in return.

• CUSTOMER LOYALTY

WHAT IS NOW MARKETING MANAGEMENT?

1. Functions of Management

2. Marketing

• Marketing Management is the process of planning, organizing, implementing, and controlling MARKETING ACTIVITIES to facilitate exchange EFFECTIVELY and EFFICIENTLY, to manage and maintain customers and demand

• “Marketing management is ‘the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value’ (KOTLER and KELLER, 2008:5).”

• What and who customers will we serve?

• How can we best serve these customers?

• Marketing Management is:

• Customer Management
• Demand Management

➤ UNDERSTANDING THE MARKET

1. Market Analysis

• A market analysis is the process of gathering information about a market within an industry. Your analysis studies the dynamics of a market and what makes potential customers tick. A market analysis may seem complex, but it’s necessary if you want to lead your business in the direction of success.

TYPES OF ECONOMIC SYSTEMS OF DECISION MAKING:

A. Tradition Economy

B. Command Economy

C. Market Economy

D. Mixed Economy

MARKET STRUCTURES

PEST ANALYSIS

• Political Factors
• Economic Factors
• Socio-cultural Factors
• Technological Factors

• The operation of supply and demand is the answer to the four economic problems

• In a market economy, prices of goods and services are determined by the interaction of demand and supply

🔻WANTS/ DESIRE TO BUY + BUYING POWER/CAPACITY TO BUY = DEMAND

FACTORS AFFECTING DEMAND

1. Price of the good itself

2. Consumer’s income

3. Consumers’ expectation of future prices

4. Price of related commodities/goods

5. Consumers’ taste and preferences

6. Population

FACTORS AFFECTING SUPPLY

1. Change of technology

2. Cost of input used

3. Expectation of Future Prices

4. Change of Price of Related Goods

5. Government Regulations and Taxes

6. Government Subsidies

7. Number of firms in the market

SUPPLY CHAIN

• Supply chain is a group of functions and processes focused on optimizing the flow of products, services and related information from sources of supply to customers or points of demand.

• It includes the handling of the entire flow of goods and services, starting from procuring the raw components from vendors to delivering the final product to customers. An example of a supply chain in the food industry includes farming, manufacturing, packaging, and transporting food products.

➤ UNDERSTANDING CUSTOMER NEEDS AND WANTS

2. Customer Analysis

• A customer analysis (or customer profile) is a critical section of a company’s business plan or marketing plan. It identifies target customers, ascertains the needs of these customers, and then specifies how the product satisfies these needs.

W’s of CUSTOMER ANALYSIS

• WHAT - product is needed/wanted
• WHO - needs the product
• WHEN - they need to buy the product
• WHERE - they want to buy the product

➤ UNDERSTANDING COMPETITOR/S

3. Competitor Analysis

• Competitor analysis in marketing and strategic management is an assessment of the strengths and weaknesses of current and potential competitors. This analysis provides both an offensive and defensive strategic context to identify opportunities and threats.

COMPETITOR’S ANALYSIS

1. Identify competitors (who)
2. Do the SWOT ANALYSIS. Identify their STRENGTHS, WEAKNESSES, OPPORTUNITIES, AND THREATS in terms of the marketing mix (what) - end result is the TOWS MATRIX.
3. Competitive Edge (Market Positioning)

DIRECT VS INDIRECT COMPETITOR

• Direct competitors are the businesses that sell a similar product or service in the same category as you.

• Indirect competitors are the businesses that sell a product that is in a different category all together but which is seen as an alternative purchase choice; for example, coffee and mineral water.

CATEGORY VS BRAND

• Brand competitors (categories) are generic classifications of products or services. Similar and competing products (or services) all fall into the same brand category. It helps the customers understand to which product or service category the particular brand belongs and what products and services are sold under the brand name.

COMPETITOR’S ANALYSIS

• Porter’s Five Forces is a framework for analyzing a company’s competitive environment. The number and power of a company’s competitive rivals, potential new market entrants, suppliers, customers, and substitute products influence a company’s profitability.

VIDEOS:

Philip Kotler - Marketing is the science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit.

• The hidden word is COMPETITOR.

• REPHRASED DEFINITION - Marketing is the science and art of exploring, creating, and delivering value different from COMPETITORS to satisfy the needs aof a target market at a profit.

• Customer Analysis - asking questions such as “Who are your customers?”, “What, where, and what do they buy?”, “How do they choose and use?”, “Why they prefer a brand over another?”

• Competitor Analysis - asking questions such as “Who are or key competitors?”, “What are their strengths and weaknesses?”, “What are their strategies?”, “What are their objectives?”

- The problem is not the customers, but the competitors.

- Most brands do not fail in the marketplace because they could not satisfy their customer, but they fail because they could not understand and beat their competitors.

➤ THE FATHERS OF POSITIONING

• Al Ries and Jack Trout wrote in the book Marketing Warfare “Today every company is customer oriented. Knowing what the customer wants isn’t too helpful if a dozen other companies are already serving the same customer’s want”. “To be successful today, a company must become competitor-oriented. It must look for the weak points in the positions of its competitors and then launch marketing attacks against those weak points”.

According to Al Ries, “marketing people believe in positioning, they just don’t believe in the principles of marketing. Principles that we have been writing about for decades.”

1. The positioning concept is widely misunderstood. People have learned the definition of it and forget the steps required to achieve and sustain positioning.

2. How to do positioning is difficult to comprehend. It’s when more difficult to apply on the brand.

3. If you’ll use your common sense, you’ll be lost. On the other hand, if you’ll use your marketing sense, you’ll be on the right track.

• Positioning creates a specific perception of the brand in that specific category. EX: safest car (Category) = Volvo (Brand).

• Positioning is built through PERCEPTION and competitor is engaged through “differentiation”.

• Positioning is to “differentiate” the brand in the mind of the customer.

• The perception of competitor’s brand has to be “differentiated” from the perception of our brand.

• You have to get into the mind of consumers before the competitors to do POSITIONING.

RULE OF THUMB : When we talk about competitors, “differentiation” comes in.

➤ BY BEING FIRST!

2 DIFFERENT WAYS:

• Launching a brand in the marketplace
• Launching a brand in the consumers' mind by being first

• If you want to get into the consumer's mind, you have to launch the brand in the mind of consumers by being first and not by being first in the marketplace.

THE IMPORTANCE OF BEING FIRST IN THE MIND

• The first event, person, or thing in your life to occupy your mind is hard to forget.

• When a consumer is not deeply in love with some other brand, that is the right time to get into it.

• In any category, when there is no brand in the mind of the consumer, that is the right time to get into the mind and make your brand a leader.

🔻IMPORTANT 🔻

• To get into the mind of the consumer, create a new category.

• To become a market leader, get into the mind of the consumer by being first. Then, getting into the marketplace is easier.

• The first brand in the category is unforgettable and dominates in the long run.

• Develop a category and then dominate the category with a new brand.