"Marketing consists of all the activities
of individuals and organizations designed to identify, anticipate, and mutually
satisfy the needs of all parties involved in the exchange."
Four(4) marketing
utilities, which are the
capacities of the product offering to satisfy the needs of a customer, are
enhanced when exchange occurs.
These include:
1.
Form Utility - The product is produced, or modified for the customer. An
example of this might be a car manufacturer designing their car so that a
driver will be able to plug in his I-pod or other devices.
2.
Time Utility - The consumers ability
to buy the product when he or she wants to buy the product. A grocer may store
certain amounts of certain foods until the prime season they are bought. It is
ensuring customers will have access to the food when they most desire them.
3.
Place Utility - This describes when a
consumer is able to buy the product at a location that is convenient to him or
her. The best example of this is online sales. Home is the most convenient
location for a consumer.
4.
Possession Utility - Ownership of the product is transferred from the marketer to the
buyer. An example is a getting a loan and then buying a car. This is concerned
with the ease of transfer-ability for the consumer.
There are four marketing management concepts that companies will
utilize in their marketing objectives. All of these aim to achieve profits and
objectives, but the focus and means by which they do so will differ. They will
typically follow one of these four major concepts:
1.
Product Concept - This management orientation says that if you build a quality
product and set a reasonable price, very little marketing effort is needed to
sell it. The product generates the demand "build it, and they will
come"
2.
Selling Concept - This management orientation says that consumers will not
normally buy enough of a product unless it is aggressively promoted to them.
3.
Marketing Concept - This management orientation says the major purpose of an
organization is to identify consumer needs and then adapt the organization in a
way that will satisfy the customers needs more effectively and efficiently than
competition. (i.e. Chain restaurants may alter their menu in different
countries)
4.
Societal Concept - This management orientation focuses on satisfying consumers
needs and demonstrating long run concern for societal welfare in order to
achieve company objectives and attend to its responsibilities for society. The
idea is to find a balance between social welfare, consumer needs, and company
profits.
|
Concept
|
Focus
|
Means
|
Ends
|
|
1. Product
|
Products
|
Quality product, reasonable price, little marketing effort
|
Achieve profits or objectives by products generating consumer
demand
|
|
2. Selling
|
Products
|
Aggressive advertising and selling efforts
|
Achieve profits or objectives by generating sales volume
|
|
3. Marketing
|
Customer needs
|
Integrated marketing
|
Achieve profits or objectives through customer satisfaction
|
|
4. Societal-Marketing
|
Customer satisfaction and long run public welfare
|
Constant search for better products in terms of appeal and
benefit
|
Satisfy organizational goals and responsibilities for society
|
Traditional vs. Integrated Marketing
To understand the fundamentals of marketing, it
is important to understand two different approaches used when a company chooses
to introduce a new product. Here we see traditional and integrated marketing.
There are typically 5 different departments
directly involved with the product during creation and launch: Development,
Engineering, Production, Marketing, and Distribution.
If a company opts to use a traditional
approach, all of these
departments work as separate entities. For example, development will draw up a
product and then pass it along to engineering to create it. Engineering will
then pass it along to production mass produce it. They will afterwards pass it
to marketing, who will eventually move the product to distribution for a
product launch.
If a firm opts to utilize an integratedmarketing approach, all of the departments
work together as a single unit. Engineering will not begin a product without
ensuring that production has the capabilities to produce it. Development will
check with marketing to ensure the product is line with the company image and
approach. Basically, every department will at some point integrate their work
with all other departments in the process.
Clearly, integrated marketing is the better approach. While it may
take longer to launch a product, the likelihood of success is greater. The
traditional approach leaves much room for interdepartmental conflicting
interest and is therefore regarded as an outdated approach in marketing. It all
too often ignores the consumers needs. The integrated marketing approach helps
a business work collectively as one unit.
Perceived Value and Satisfaction
A customers perceived value is equal to the
benefits derived divided by the costs.
Value = Benefits/Costs
Further, benefits can include functional and
emotional benefits. Costs may include monetary costs, time costs, energy costs,
and psychic costs.
So,
Value =
Functional benefits +
emotional benefits / monetary cost + time cost + energy cost + psychic costs
Satisfaction is a person's feelings of pleasure or disappointment resulting from comparing a products performance in relation to the person's expectations of performance.
Most expectations are derived from past buying
experiences, friends, the marketer, peers, competitors, and promises of
performance.
It is also important to keep in mind that a person is twice as
likely to tell others about a negative product or experience than they are
about a good product or positive experience. Dissatisfied customers can also
have a negative impact on employee morale.
The Marketing Mix - The Four P's
There are four marketing mix variables that are
associated with a product. These must be taken into consideration when making
any decisions regarding marketing activities. These are often known as the
"Four P's" in marketing. Note that these should only be identified
after a target market is selected. All marketing mix variables are controllable,
internal factors. These include:
1.
Product -
This variable described all factors relating to the actual product visible to
the consumer. These may include things such as quality, features, options,
style, packaging, brand, sizes, labels, variety, and warranties.
2.
Price -
The price variable includes not only the list price, but all other pricing
factors associated with a product. These may include discounts, allowances,
payment options and periods, and credit terms. All of these are related to the
final, whole price of the product.
3.
Place - Place deals with all
distribution and location aspects of a product. How and what are the products
available to consumers? These may include assortments, channels, coverage
areas, locations, and inventories.
4.
Promotion - Promotion is any and
all efforts by a company to make publicize a product and make the consumer
aware of it. Efforts might include advertising, personal selling, sales, public
relations, or internet activities.
The marketing mix should only be determined after
a target
market is determined.
Target market = The group or groups of customers for which the marketer will
direct attention. This group is determined after thorough segmentation and
analysis of the market. (more to come)
While the marketing mix consists of factors that
are controllable by a company, there are numerous external factors that must be
taken into consideration when scanning the environment the product or service
is marketed in. The company can do nothing about these in the long run, but can
react to them in the short run. They will certainly impact what the marketer
can do.
External Factors (Uncontrollable)
·
Demographic environment - The features of a country that can be
statistically described
·
Economic environment - The financial and economic conditions in a
country will determine demand for any and all products.
·
Competitive environment - The intensity of competition in the market the
business is in cannot be controlled.
·
Physical environment - Availability, use, and disposal of natural
resources
·
Technological environment - Determines how the
marketing should be done. What medium should be used?
·
Political and legal environment - Laws and restrictions may be set by various
government agencies in regard to competition, consumer protection, or societal
welfare.
·
Social/Cultural environment - What is acceptable in what culture may not be
acceptable in another.
·
Company related environment - Goals and objectives of top Gethsemane and
company as a whole.
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