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ADVERTISING PRACTICE 2
Understanding Marketing
Management
ADVERTISING PRACTICE 2
What Marketing is Not• One of the most common misconceptions is
associating “marketing as selling”.While selling is an important activity of marketing and is a central function in daily business, marketing is not selling.
• Another common misconception – “marketing equals advertising”It is often reinforced when some of the companies spend their huge advertising budget.Selling and advertising are merely a part of many functions of marketing. Thus, selling and advertising are only the tip of the marketing iceberg.
ADVERTISING PRACTICE 2
The Marketing Overview
Advertising
Creative Evaluation Response Evaluation
Revision
EvaluationStage
Creative Decisions
Media DecisionsTiming/Size
ImplementationStage
Direct Marketing
Point of Sale/ Packaging
Sales Promotion
Marketing Public
Relations
Personal Selling
Price DistributionCommunication ProductTacticalStage
Determine Objectives
Strategic Decisions Marketing Mix
StrategicStage
Environmental Assessment
Consumer Assessment
ResearchStage
ADVERTISING PRACTICE 2
Definition of Marketing• The simplest definition is: Marketing is the
delivery of customer satisfaction at a profit.• In a general sense, marketing is any
exchange activity intended to satisfy human wants. It is practiced by individuals, businesses and non-profit organization.
• Marketing is the process of continuously and profitably satisfying the target customer’s needs, wants and expectations superior to competition.
- Josiah Go -
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ADVERTISING PRACTICE 2
Definition of Marketing• Marketing is an organizational function and a set
of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakes holders.
- American Marketing Association -
• Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others.
- Philip Kotler -
ADVERTISING PRACTICE 2
Twofold Goal of Marketing• To attract new customers by promising
superior values• To keep and grow current customers by
delivering satisfaction.
ADVERTISING PRACTICE 2 ADVERTISING PRACTICE 2
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What is Marketed?
– Goods– Services– Experiences– Events– Persons
– Places– Properties– Organizations– Information– Ideas
• Marketing is typically seen as the task of creating, promoting and delivering products to consumers and businesses.
• Marketing people are involved in marketing the following entities:
ADVERTISING PRACTICE 2
Goods
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Services
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Events
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ADVERTISING PRACTICE 2
Experiences
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Persons
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Places
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Properties
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ADVERTISING PRACTICE 2
Organizations
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Information
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Ideas
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CoreMarketingConcepts
Core Marketing Concept
Exchange, transactions and
relationships Value and satisfaction
Markets
Needs, wants& demands
Marketing offers (products, services &
experiences)
Marketing offers (products, services &
experiences)
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ADVERTISING PRACTICE 2
Markets• The set of all actual and potential buyers of
a product or service.• The size of the market depends on the
number of people who exhibit the need, have resources to engage in exchange and are willing to exchange these resources for what they want.
ADVERTISING PRACTICE 2
Types Of Markets• Consumer Markets • Business Markets (Industrial Markets)• Reseller Markets• Government Markets • International Markets
ADVERTISING PRACTICE 2
Types Of Markets• Consumer Markets
– It consist of individuals and households that buy goods and services for personal consumption.
• Business Markets (Industrial Markets)– Companies that buy goods and services for further
processing or for use in their production process.• Reseller Markets
– Wholesalers, retailers and distributors who buy finished or semifinished products to resell at a profit.
ADVERTISING PRACTICE 2
Types Of Markets• Government Markets
– Made up of government agencies that buy goods and services to produce public services or transfer the goods and services to others who need them.
• International Markets – Consist of buyers in other countries,
including consumers, producers, resellers and governments.
BACK
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Needs• These are states of felt deprivation. They are
a basic part of the human makeup.• They include basic physical needs for food,
clothing, warmth and safety; social needs for belonging and affection and individual needs for knowledge and self-expression.
ADVERTISING PRACTICE 2
Wants• These are the form taken by human needs
take as they are shaped by culture and individual personality.
• Needs become wants when they are directed to specific objects that might satisfy the need.
ADVERTISING PRACTICE 2
Demands• These are human wants supported by the
willingness and ability to pay for them.• Demand = Want + willingness to buy +
ability to buy• Demand is brand specific.
ADVERTISING PRACTICE 2
Needs, Wants & Demands• Marketing companies must learn about and
understand their customers’ needs, wants and demands.
• Companies must measure not only how many people want their product but also how many would actually be willing and able to buy it.
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ADVERTISING PRACTICE 2
Needs, Wants & Demands• Simply giving customer what they want isn’t
enough anymore – to gain an edge companies must help customers learn what they want.
BACKADVERTISING PRACTICE 2
Marketing Offers/Products• Product is any offering that can satisfy a
need or want.• Major types of basic offerings: goods,
services, experiences, events, persons, places, properties, organizations, information and ideas.
• A Brand is an offering from a known source.
ADVERTISING PRACTICE 2
Marketing Offers/Products• Goods
– It is a physical entity you can touch, objects, devices or things.
– Physical goods constitute the bulk of most countries’ production and marketing effort.
• Services– It is any activity or benefit that one party can offer
to another that is essentially intangible and does not result in the ownership of anything.
• Ideas– It is a concept, philosophy, image or issue
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Is it a Goods, Service or Idea?• Overnight stay in a
hotel • DVD player• This marketing
subject• Dry cleaning• Political party platform• Pair of jeans• Toothpaste• Lawyers• Save the environment
• Advice from a marriage counselor
• Utilities, such as electricity
• Meal at Red Crab• A movie at a theater• Candy bar• Airplane flight• Beauticians• Shampoo• Insurance
(S)
(G)
(S)
(S)
(I)(G)
(I/S)
(S)
(S)(G/S)
(G)(S)
(G)(S)(I)
(S)(G)(S)
BACK
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ADVERTISING PRACTICE 2
Customer Value • Customer value is the difference between
the values the customer gains from owning and using a product and the costs of obtaining the product.
• A ratio between what the customer getsand what he gives.
• The buyer chooses between different offerings on the basis of which is perceived to deliver the most value.
ADVERTISING PRACTICE 2
Customer Value • Value = Benefits/Costs
– Benefits = Emotional benefits + Functional benefits
– Costs = Monetary + Time + Energy + psychic• Value can be increased through
– Lowering costs– Increasing benefits– Combination of both– Raise benefits by more than the raise in costs– Lower benefits by less than the reduction of
costs
ADVERTISING PRACTICE 2
Customer Satisfaction • Customer satisfaction is the extent to
which a product’s perceived performance matches a buyer’s expectations.
• It is meeting or exceeding customer expectations.
BACKADVERTISING PRACTICE 2
Exchange• Exchange is the act of obtaining a desired
object from someone by offering something in return.
• A person can obtain product in four ways:– Self-produce– Use force to get a product– Beg– Offer a product, service or money for
something he or she desires.
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ADVERTISING PRACTICE 2
Exchange
INDUSTRY (a collection of sellers)
MARKET (a collection of buyers)
Product/services
Money
Information
Communication
For exchange potential to exist, it must satisfy the following conditions:1. There are at least two parties.2. Each party has something that may be valuable to the other party.3. Each party must have the ability to communicate with and make
available what is being offered to the other.4. Each party is free to accept or reject the exchange offer.5. Each party believes it is appropriate or desirable to deal with the
other party.ADVERTISING PRACTICE 2
Transactions • Transactions is a trade of values between
two or more parties. – Monetary transaction– Barter transaction
• It involves several dimensions:– at least two things of value– agreed-upon conditions– a time of agreement – a place of agreement.
ADVERTISING PRACTICE 2
Relationship Marketing • It is the process of creating, maintaining
and enhancing strong, value-laden relationships with customers and other stakeholders (employees, suppliers, distributors, retailers, etc.)
• Beyond attracting customers and creating transactions, the goal is to retain customers and grow their business with the company.
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Exchange, Transactions and Relationships
Learning Environment
Tuition
Votes
Promised Action
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Exchange, Transactions and Relationships
Fee
Consulting
Products/services
MoneyADVERTISING PRACTICE 2
You Can Be A Marketing Expert!
Marketing is a simple concept. We all see lots of advertising,
and we know what works.
Marketing is just common sense!
ADVERTISING PRACTICE 2
You Can Be A Marketing Expert!
Would you sell more Sony Discmans at P500 or P5,000?
Your experience helped you pick the right answer.
ADVERTISING PRACTICE 2
You Can Be A Marketing Expert!
In a magazine article, a well-known actress said she often play badminton for fun and
exercise.
What was the reaction of the badminton apparel company? (a) delighted, (b) upset, or (c) somewhere in between?
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ADVERTISING PRACTICE 2
Marketing Management• The art and science of choosing target
markets and building profitable relationships with them.
• Involves getting, keeping and growing customers through creating, delivering and communicating superior customer value.
• It is customer management and demand management.
ADVERTISING PRACTICE 2
Marketing Management Orientations• The Production Concept• The Product Concept• The Selling Concept• The Marketing Concept• The Societal Marketing Concept
ADVERTISING PRACTICE 2
The Production Concept• The idea that consumers will favor products
that are available and highly affordable.
Management should concentrate on achieving high production efficiency, low
costs and mass distribution.
ADVERTISING PRACTICE 2
The Product Concept• The idea that consumers will favor products
that offer the most quality, performance and innovative features.
The organization should therefore devote its energy to making continuous product
improvements.
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ADVERTISING PRACTICE 2
Marketing Myopia• Sellers pay more attention to the specific
products they offer than to the benefits and experiences produced by the products.
• They focus on the “wants” and lose sight of the “needs.”
ADVERTISING PRACTICE 2
The Selling Concept• The idea that the consumers will not buy
enough of the organization’s products unless the organization undertakes a large-scale selling and promotion effort.
This concept assumes that consumers typically show buying resistance and must
be coaxed into buying.It is typically practiced with unsought goods –
those that buyers do not normally think of buying.
ADVERTISING PRACTICE 2
The Selling Concept
ADVERTISING PRACTICE 2
The Marketing Concept• The marketing concept holds that the key
to achieving organizational goals consists of the company being more effective than competitors in creating, delivering and communicating customer value to its chosen target markets.
The job is not to find the right customers for your product, but the right products for your
customers.
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ADVERTISING PRACTICE 2
The Marketing Concept
Profit
CustomerSatisfaction
Total CompanyEffort
TheMarketingConcept
ADVERTISING PRACTICE 2
The Marketing Concept• The marketing concept rests on four pillars:
– Target market– Customer needs– Integrated marketing– Profitability
ADVERTISING PRACTICE 2
Customer Delivered Value
Market Integratedmarketing
Profits throughcustomer
satisfactionCustomer
needs
(b) The marketing concept
Factory Existingproducts
Selling andpromotion
Profits throughsales volume
Startingpoint Focus Means Ends
(a) The selling concept
ADVERTISING PRACTICE 2
The Societal Marketing Concept• The idea that organization should
determine the needs, wants and interests of target markets and deliver the desired satisfactions more effectively and efficiently than do competitors in a way that maintains or improves the consumer’s and society’s well-being.
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ADVERTISING PRACTICE 2
The Societal Marketing Concept• Three considerations underlying the
societal marketing concept:
Societal Marketing Concept
Society (Human Welfare)
Consumers (Want Satisfactions)
Company(Profits)
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The Societal Marketing Concept
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How Marketing Are Changing?• Changing technology• Globalization• Deregulation• Privatization• Customer Empowerment• Customization• Heightened Competition• Industry Convergence• Retail Transformation• Disintermediation