Principles of Marketing | Dissertation

Principles of selling discourseDefinition of trade selling is part of only of our lives and touches us in some way every day. Most mickle think that selling is only about the advertising and/or soulal selling of trustworthys and run. advertisement and selling, however, argon just twain of the galore(postnominal) selling activities.In general, tradeing activities atomic number 18 all told(prenominal) those associated with identifying the particular privations and demand of a exclusivelyt market of customers, and then going about straight those customers purify than the competitors. This involves doing market interrogation on customers, analyzing their needs, and then reservation strategic decisions about harvest-tide design, pricing, packaging and distribution.Philip Kotler says, Marketing is managing profitable customer relationships. The cardinalfold goal of selling is to draw in untested customers by promising superior appreciate and to keep and buzz off current customers by delivering satisfaction.Broadly delineate, trade is a social and managerial shape by which individuals and assemblages obtain what they need and want through creating and exchanging n ace value with others. Narrowly plantd merchandising involves building profitable, value-laden ex counterchange relationships with customers.In short, it has been defined as the process by which companies shit value for customers and build quick customer relationships in order to capture value from customers in re swordplay.The new-fashioned definition precondition by American Marketing Association reads, Marketing is the bodily function, set of institutions, and processes for creating, communicating, delivering, and exchanging crevices that go through value for customers, clients, partners, and society at large.The trade processCreate value for customers and build customer relationships Capture value from customers in returnIn the first quad steps, compa nies get to understand consumers, farm customer value and build virile customer relationships. In the nett step, companies reap the rewards of creating superior customer value. By creating value for customers, they in turn capture value from customers in the form of sales, profits and long termination customer equity.Core judgments of merchandisingTarget Markets and breakdownA seller can r bely satisfy everyone in a market. everyone in the market has divers(prenominal) taste, likeliness, income and expense habit. Not everyone likes the same soft drink, auto diligent, college, and movie. on that pointfore, marketers start with market shareation. They identify and profile distinct groups of spoilers who might prefer or strike varying products and trade mixes. Market segments can be identified by examining demographic, psychographic, and behavioral differences among buyers. The unassailable then decides which segments present the greatest opportunitywhose needs the fi rm can meet in a superior fashion. The stipendiary segment/s are selected or leveled for offering/selling the product. For for each one chosen target market, the firm educates a market offering. The offering is positioned in the minds of the target buyers as delivering some central benefit(s). For example, Volvo increases its cars for the target market of buyers for whom auto- mobile safety is a major concern. Volvo, therefore, positions its car as the safest car a customer can buy.Customer Needs, Wants and DemandsNeeds are the basic merciful requirements. People need victuals, air, water, clothing, and shelter to survive. People withal adopt strong needs for creation, education, and entertainment.The above needs become wants when they are trailed to exceptionalised objects that might satisfy the need. An American needs food but whitethorn want a hamburger, French fries, and a soft drink. A person in Mauritius needs food but may want a mango, rice, lentils, and beans. Wa nts are shaped by ones society.Demands are wants for specific products backed by an ability to pay. umpteen people want a Mercedes only a few are able to buy one. Companies essential measure non only how galore(postnominal) people want their product but also how many would actually be ordaining and able to buy it.intersection or OfferingCustomers needs and wants are fulfilled through a merchandise offer or product. A product is any offering that can satisfy a need or want, such(prenominal) as one of the 10 basic offerings of goods, operate, experiences, events, persons, places, properties, organizations, information, and moods.A grease is an offering from a known source. A brand name such as McDonalds carries many associations in the minds of people hamburgers, fun, children, fast food, and golden arches. These associations make up the brand image. All companies strive to build a strong, favorable brand image. assess and SatisfactionIn terms of marketing, the product or off ering allow for be self-made if it delivers value and satisfaction to the target buyer. The buyer chooses mingled with different offerings on the basis of which is perceived to deliver the near value. We define value as a ratio between what the customer gets and what he gives. The customer gets benefits and assumes costs, as shown in this equationBased on this equation, the marketer can increase the value of the customer offering by (1) tip filch benefits, (2) reducing costs, (3) raising benefits and reducing costs, (4) raising benefits by much than the aid in costs, or (5) get downing benefits by less than the reduction in costs. stand in and TransactionsExchange, the core of marketing, involves obtaining a desired product from mortal by offering something in return. For exchange potentiality to exist, five conditions moldiness be satisfiedThere are at least 2 parties. from each one party has something that might be of value to the other party.Each party is capable of c ommunication and delivery.Each party is free to presume or reject the exchange offer.Each party believes it is appropriate or desirable to deal with the other party.Whether exchange actually takes place depends upon whether the two parties can agree on terms that will leave them both better off (or at least not worse off) than before. Exchange is a value-creating process because it normally leaves both parties better off.Marketing scuffleMarketers use numerous tools to elicit the desired rejoinders from their target markets. These tools constitute a marketing mix. Marketing mix is the set of marketing tools that the firm uses to quest for its marketing objectives in the target market. McCarthy kinfolkified these tools into cardinal resistant groups that he called the four Ps of marketing Product, Price, Place, and Promotion.Robert Lauterborn suggested that the sellers four Ps correspond to the customers four Cs.Winning companies are those that meet customer needs economicala lly and handily and with effective communication.Marketing Philosophies and innovationsThere are five competing concepts under which organizations acquire marketing activities produc- tion concept, product concept, selling concept, marketing concept, and societal mar- keting concept.The Production ConceptThe production concept, one of the oldest in business, holds that consumers prefer products that are widely functional and inexpensive. Managers of production-oriented businesses concentrate on achieving gritty production efficiency, low costs, and mass distribution. This predilection makes sense in developing countries, where consumers are more interested in obtaining the product than in its features. It is also used when a union wants to augment the market. Texas Instruments is a leading exponent of this concept. It concentrates on building production sight and upgrading technology in order to bring costs down, leading to lower prices and expansion of the market. This ori entation has also been a fall upon strategy of many Japanese companies.The Product ConceptOther businesses are guided by the product concept, which holds that consumers favor those products that offer the virtually quality, manageance, or innovative features. Managers in these organizations focus on making superior products and improving them over time, assume that buyers can appraise quality and performance.Product-oriented companies often design their products with little or no customer input, trusting that their engineers can design exceptional products. A general Motors executive said years ago How can the public know what kind of car they want until they see what is availablefi GM instantly asks customers what they value in a car and includes marketing people in the very beginning stages of design.The exchange ConceptThe selling concept, another leafy vegetable business orientation, holds that consumers and businesses, if left alone, will ordinarily not buy equal of th e organizations products. The organization essential, therefore, undertake an aggressive selling and promotion effort. This concept assumes that consumers must be coaxed into acquire, so the follow has a battery of selling and promotion tools to stimulate buying.The selling concept is practiced most aggressively with undesired goodsgoods that buyers normally do not think of buying, such as restitution and funeral plots. The selling concept is also practiced in the nonprofit heavens by fund-raisers, college admissions offices, and governmental parties.Most firms practice the selling concept when they have overcapacity. Their aim is to sell what they make rather than make what the market wants.The Marketing ConceptThe marketing concept, in the mid-1950s, challenges the three business orientations we just discussed. The marketing concept holds that the key to achieving organizational goals consists of the company macrocosm more effective than its competitors in creating, deliv ering, and communicating customer value to its chosen target markets.The marketing concept focuses on the needs of the buyer. Marketing is preoccupied with the idea of satisfying the needs of the customer by means of the product and the intact cluster of things associated with creating, delivering and last-placely consuming it.The marketing concept rests on four pillars target market, customer needs, integrated marketing, and profitability. The marketing concept takes an extracurricular-in perspective. It starts with a well-defined market, focuses on customer needs, coordinates activities that affect customers, and get tos profits by satisfying customers.The Societal Marketing Concept virtually have questioned whether the marketing concept is an appropriate philosophy in an age of environsal deterioration, resource shortages, explosive universe of discourse growth, valet de chambre hunger and poverty, and neglected social serve. Are companies that luckyly satisfy consum er wants needfully acting in the best, long-run interests of consumers and societyfi The marketing concept sidesteps the potential conflicts among consumer wants, consumer interests, and long-run societal welfare.Yet some firms and industries are criticized for satisfying consumer wants at societys expense. such(prenominal) situations call for a new term that enlarges the marketing concept. We pro rank career it the societal marketing concept, which holds that the organizations task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors in a way that uphold or enhances the consumers and the societys well-being.The societal marketing concept calls upon marketers to build social and good considerations into their marketing practices. They must balance and juggle the often confiicting criteria of company profits, consumer want satisfaction, and public interest. Yet a number of comp anies have come upond notable sales and profit gains by adopting and practicing the societal marketing concept.Marketing vs. interchangeOftentimes, marketing and sales are perceived interchangeably. But in actuality, these are two different things. Selling is a small portion of the entire marketing scheme. Selling is the transaction where a product is transferred from the business owner to a buyer for a price. In contrast, marketing is a process that involves some(prenominal) steps ranging from the generation of a product idea to the delivery of that product to the customer.Even after delivery of the product to the customer, the marketing process continues with direct communication with the customer to obtain feedback about the product.Profits from satisfied customersTheodore Levitt of Harvard pull a perceptive contrast between the selling and marketing concepts Selling focuses on the needs of the seller marketing on the needs of the buyer. Selling is preoccupied with the sellers need to convert his product into cash marketing with the idea of satisfying the needs of the customer by means of the product and the whole cluster of things associated with creating, delivering and finally consuming it.The marketing concept rests on four pillars target market, customer needs, integrated marketing, and profitability. The selling concept takes an inside-out perspective. It starts with the factory, focuses on existing products, and calls for heavy selling and promoting to produce profitable sales. The marketing concept takes an outside-in perspective. It starts with a well-defined market, focuses on customer needs, coordinates activities that affect customers, and produces profits by satisfying customers.CHAPTER 2MARKETING ENVIRONMENTIn order to properly identify opportunities and monitor threats, the company must begin with a consummate(a) understanding of the marketing environs in which the firm operates. The marketing environment consists of all the actors and forces outside marketing that affect the marketing managements ability to develop and maintain successful relationships with target customers.A companys marketing environment consists of the actors and forces outside marketing that affect marketing managements ability to develop and maintain successful relationships with its target customersImportanceThe marketing environment offers both opportunities and threatsChanges in the marketing environment often occur at a rapid pace.Marketers hightail it to be fashion trackers and opportunity seekers.The company must use its marketing research and marketing intelligence systems to monitor the changing environment.A self-opinionated scan of the environment eases marketers to revise and adapt marketing strategies to meet new challenges and opportunities in the market place.The marketing environment is made up of a micro environmental and macro environment.The Companys MicroenvironmentThe micro environment consists of six forces (actors) closely to the company that affect its ability to serve its customersThe company itself (including various essential departments)Suppliers.Marketing channel firms (intermediaries)Customer markets.Competitors.Publics.The CompanyThe first actor is the company itself and the role it plays in the microenvironment.Top management is trusty for setting the companys mission, objectives, broad strategies, and policies.Marketing managers must make decisions within the parameters established by top management.Marketing managers must also work closely with other company departments. Areas such as finance, R D, purchasing, manufacturing, and accounting all produce better results when aligned by common objectives and goals.All departments must think consumer if the firm is to be successful.SuppliersSuppliers are firms and individuals that provide the resources needful by the company and its competitors to produce goods and work. They are an important link in the companys overall customer v alue delivery system.One consideration is to watch supply availability (such as supply shortages).Another point of concern is the monitoring of price trends of key inputs.Marketing IntermediariesMarketing intermediaries are firms that help the company to promote, sell, and distribute its goods to final buyers.Resellers are distribution channel firms that help the company find customers or make sales to them.These include wholesalers and retailers who buy and resell merchandise.Resellers often perform important functions more cheaply than the company can perform itself. pursuit and working with resellers, however, is not easy because of the power that some demand and use. somatogenetic distribution firms help the company to stock and move goods from their points of origin to their destinations. Examples would be warehouses (that store and protect goods before they move to the next destination).Marketing services agencies (such as marketing research firms, advertising agencies, media firms, etc.) help the company target and promote its products to the right markets.Financial intermediaries (such as banks, credit companies, insurance companies, etc.) help finance transactions and insure against risks associated with buying and selling goods.CustomersThe company must take its customer markets closely because each market has its own special characteristics. These markets normally includeConsumer markets (individuals and households that buy goods and services for individualised consumption).Business markets (buy goods and services for further processing or for use in their production process).Reseller markets (buy goods and services in order to resell them at a profit).Government markets (agencies that buy goods and services in order to produce public services or transfer them to those that need them).International markets (buyers of all types, including governments, in foreign countries).Competitors each company faces a wide range of competitors. A company must secure a strategic advantage over competitors to be successful in the marketplace. No single competitive strategy is best for all companies .PublicsA public is any group that has an actual or potential interest in or impact on an organizations ability to achieve its objectives. A company should prepare a marketing plan for all of its major publics as well as its customer markets.Generally, publics can be identified as beingFinancial publics.Media publics.Government publics.Citizen-action publics.Local publics.General public.Internal publics.The Companys MacroenvironmentThe macroenvironment consists of the larger societal forces that affect the microenvironmentDemographic.stinting.Natural.Technological.Political.CulturalThe company and all of the other actors operate in a larger macroenvironment of forces that shape opportunities and pose threats to the company. Major forces in the companys macroenvironment includeDemographic EnvironmentDemography is the study of human populations in terms of size, closeness, location, age, sex, race, occupation, and other statistics. It is of major interest to marketers because it involves people, and people make up markets.Demographic trends are constantly changing. Some of the more interesting trends areThe worlds population (though not all countries) rate is ontogeny at an explosive rate that will soon exceed food supply and ability to adequately service the population. The greatest danger is in the poorest countries where poverty contributes to the difficulties.The most important trend is the changing age expression of the population. timesal marketing is likely, however, caution must be used to head off generational alienation. changing family structureGeographic slip of papers in population will also alter demographics.Changing educational level In general, the population is becoming better educated. The work force is becoming more white-collar. Products such as books and education services appeal to groups follo wing this trend. Technical skills (such as in computers) will be a must in the future.The final demographic trend is the increasing ethnic and racial diversity .Economic EnvironmentThe economic environment includes those factors that affect consumer buying power and outlay patterns. Major economic trends includeChanges in incomepersonal consumption (along with personal debt) has gone up (1980s) and the 1990s brought recession that has caused adjustments both personally and corporately in this country. In the 2000s, consumers are more careful shoppers.Value marketing (trying to offer the consumer greater value for their dollar) is a very serious strategy in the 2000s. Real income is on the rise again but is being conservatively guarded by a value-conscious consumer.Income distribution is still very skewed in the United States and all classes have not shared in prosperity. In addition, spending patterns show that food, housing, and transportation still account for the majority of consumer dollars. It is also of note that distribution of income has created a two-tiered market where there are those that are affluent and less affluent.Classes of consumers includeUpper classspending patterns are not affected by current economic events and who are a major market for luxury goods.Middle class approximately careful about its spending but can still pain the good life some of the time.Working classmust astound close to the basics of food, clothing, and shelter and must try hard to save. beneath class(persons on welfare and many retirees) must count their pennies when making even the most basic purchases.Changing consumer spending patternsConsider Engles Laws where differences were say over a century ago by Ernst Engle regarding how people sac their spending across food, housing, transportation, health care, and other goods and service categories as family income rises. spend patterns have generally supported his ideas.Marketers must carefully monitor economic c hanges so they will be able to prosper with the trend, not suffer from it.Natural EnvironmentThe indispensable environment involves natural resources that are needed as inputs by marketers or that are affected by marketing activities. During the past two decades environmental concerns have steadily grown. Some trend analysts labeled the 1990s as the Earth Decade, where protection of the natural environment became a major worldwide issue facing business and the public. proper(postnominal) areas of concern wereShortages of raw materials. Staples such as air, water, and wood products have been disadvantageously abused and non-renewable such as oil, coal, and various minerals have been seriously spend during industrial expansion.increase pollution is a worldwide problem. Industrial damage to the environment is very serious. Far-sighted companies are becoming environmentally friendly and are producing environmentally safe and recyclable or biodegradable goods. The public response to these companies is encouraging.Government intervention in natural resource management has caused environmental concerns to be more practical and necessary in business and industry. Leadership, not punishment, seems to be the best policy for long term results. Instead of debate regulation, marketers should help develop solutions to the material and energy problems facing the world.Concern for the natural environment has spawned the so-called green movement.Environmentally sustainable strategies and practices are being created.Companies are recognizing a link between a healthy miserliness and a healthy ecology.Technological EnvironmentThe technological environment includes forces that create new technologies, creating new product and market opportunities.Technology is perhaps the most dramatic force shaping our destiny.New technologies create new markets and opportunities. Every new technology, however, replaces an older technology.The challenge is not only technical but also comme rcialto make practical, affordable versions of products.Political EnvironmentThe governmental environment includes laws, government agencies, and pressure groups that influence and limit various organizations and individuals in a given society. Business is regulated by various forms of legislation.Governments develop public policy to guide commercesets of laws and regulations limiting business for the good of society as a whole.Almost every marketing activity is subject to a wide range of laws and regulations.Some trends in the political environment includeIncreasing legislation toProtect companies from each other. defend consumers from unfair business practices.Protecting interests of society against unrestrained business behavior.Changing government agency enforcement. New laws and their enforcement will continue or increase.Increased tension on ethics and socially responsible actions. Socially responsible firms actively seek out ways to protect the long-run interests of their c onsumers and the environment.The new-made rash of business scandals and increased concerns about the environment have created clean-living interest in the issues of ethics and social responsibility.The boom in e-commerce and lucre marketing has created a new set of social and ethical issues. retirement issues are the primary concern.Another cyberspace concern is that of access by vulnerable or unauthorized groups.Cultural EnvironmentThe pagan environment is made up of institutions and other forces that affect societys basic values, perceptions, and behaviors. Certain heathen characteristics can affect marketing decision-making. Among the most dynamic cultural char- acterisitics arePersistence of cultural values. Peoples core beliefs and values have a high degree of persistence.Core beliefs and values are passed on from parents to children and are strengthen by schools, churches, business, and government.Secondary beliefs and values are more move over to change.Shifts in secon dary cultural values. Because secondary cultural values and beliefs are open to change, marketers want to spot them and be able to capitalize on the change potential.The Yankelovich Monitor has identified eight major consumer themesParadox.Trust not.Go it alone.Smarts actually count.No sacrifices.Stress hard to beat.Reciprocity is the way to go.Me 2.Societys major cultural views are expressed inPeoples views of themselves. People vary in their emphasis on serving themselves versus serving others..Peoples views of others. Observers have noted a shift from a me-society to a we-society. Consumers are spending more on products and services that will improve their lives rather than their image.Peoples views of organizations. People are willing to work for large organizations but expect them to become increasingly socially responsible. Many companies are linking themselves to worthwhile causes.Peoples views of society. This orientation influences consumption patterns. Buy American versus buying abroad is an issue that will continue into the next decade.Peoples view of genius. There is a growing trend toward peoples feeling of mastery over disposition through technology and the belief that nature is bountiful. Nature, however, is finite. Love of nature and sports associated with nature are expected to be significant trends in the next several(prenominal) years.Peoples views of the universe. Studies of the origin of man, religion, and thought-provoking ad campaigns are on the rise. Spiritual individualism may be a new theme.Chapter 3Marketing segmentationMarket SegmentationIt is the process of dividing a market into distinct group of buyers who have distinct needs, characteristics or behavior and who might require break away product or marketing mixes.Market segmentA group of consumers who respond in a corresponding way to a given set of marketing efforts.For Example In the car market, consumers who want the biggest, most comfortable car regardless of the price make up one market segment. Consumers who care mainly about price and operating economy make up another segment.Requirements of Market SegmentsIn addition to having different needs, for segments to be practical they should be evaluated against the following criteriaIdentifiable the differentiating attributes of the segments must be measurable so that they can be identified.Accessible the segments must be reachable through communication and distribution channels.Substantial the segments should be sufficiently large to condone the resources required to target them.Unique needs to justify separate offerings, the segments must respond differently to the different marketing mixes. fixed the segments should be relatively stable to minimize the cost of frequent changes.A good market segmentation will result in segment members that are internally homogenous and externally heterogeneous that is, as similar as possible within the segment, and as different as possible between segments.Bases for Segmentation in Consumer MarketsConsumer markets can be segmented on the following customer characteristics.GeographicDemographicPsychographicBehavioralGeographic SegmentationThe following are some examples of geographic variables often used in segmentation.Region by continent, country, state, or even neighborhoodSize of metropolitan area segmented harmonise to size of populationPopulation density often classified as urban, suburban, or ruralClimate according to weather patterns common to certain geographic regionsDemographic SegmentationSome demographic segmentation variables includeAgeGenderFamily sizeFamily lifecycleGeneration baby-boomers, Generation X, etc.IncomeOccupationEducationEthnicityNationalityReligionSocial classMany of these variables have standard categories for their values. For example, family lifecycle often is expressed as bachelor, espouse with no children (DINKS Double Income, No Kids), full-nest, empty-nest, or solitary survivor. Some of these categories have several stages, for example, full-nest I, II, or III depending on the age of the c