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Chapter 1

The nature and scope of Marketing

By

Dr. Raafat Youssef Shehata

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Marketing

Marketing is defined to be the process responsible for anticipation, identification ,

and satisfaction of customer needs through a profit

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Marketing manager

• He is the bridge between the company and the customers

• His functions are (APIC)

Analysis

Planning

Implementation

Control

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What are Consumers’ Needs, Wants, and Demands?

Needs Needs - state of felt deprivation including physical, social, and individual needs i.e hunger

WantsWants - form that a human need takes as shaped by culture and individual personality i.e. bread

DemandsDemands - human wants backed by buying power i.e. money

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American Association of Advertising Agencies

• This ad demonstrates that advertising can’t make consumers buy things that they don’t need despite high-pressure selling.

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Marketing and Sales Concepts Contrasted

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Push versus pull strategies

• A push strategy involves the manufacturer using its sales

force and trade promotion money to induce intermediaries to

carry, promote, and sell the product to end user.

• A pull strategy involves the manufacturer using advertising

and promotion to induce consumers to ask intermediaries for

the product, thus inducing the intermediaries to order it

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Production ConceptProduction Concept

Product ConceptProduct Concept

Selling ConceptSelling Concept

Marketing ConceptMarketing Concept

Societal Marketing ConceptSocietal Marketing Concept

Marketing Management Philosophies

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Production concept

The production concept holds that consumers will prefer

products that are widely available and inexpensive.

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Product concept

-The product concept holds that consumers will favor those products that

offer the most quality, performance, or innovative features

-In order to compete effectively, the product needs to have features that

appeal to individual consumers. In a product-oriented firm, the products

are designed to incorporate a large number of features in order to meet

the needs of a large number of consumers. Unfortunately, the cost

becomes too high for most people, and of course people do not want to

pay for features that they are unlikely ever to use.

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Selling concept

The selling concept holds that consumers and

businesses, will ordinarily not buy enough of the

organization’s products, therefore, the organization

must undertake aggressive selling and promotion

effort.

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Marketing conceptThe marketing concept holds that the key to achieving organizational

goals consists of the company being more effective than competitors in

creating, delivering, and communicating superior customer value to its

chosen target markets.

Reactive marketing orientation: understanding and meeting consumers’ expressed needs.

Proactive marketing orientation: researching or imagining latent consumers’ needs

through a “probe-and-learn” process

e.g. Wal Mart

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Company Orientations towards business

.

Marketing Concept

ReactiveReactive market

Understanding and

meeting consumers’

expressed needs

ProactiveProactive marketing

Finding latent consumers’

needs through a “probe-

and-learn” process.

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Marketing Concept Evolution

Production Concept Consumers prefer products that are widely available and inexpensive

Product Concept Consumers favor products that offer the most quality, performance, and innovative

features

Selling Concept Consumers will buy products only if the company aggressively promotes/sells these

products

Marketing Concept Focuses on needs/wants of target markets & delivering value better than competitors

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Marketing orientation and increasing customer value

British airways and American airlines may use the same kind of aircraft to fly executives first class between New York and London but British airways (BA) beats American airlines by meeting customers’ needs for convenience and rest at every step of the journey

BA value delivery system includes a separate first class express check in and security clearance plus a pre-flight express meal service in the first class lounge so that time pressed executives can maximize sleep time on the plane without the distraction of in flight meals . BA was the first to put seats that recline into perfectly flat beds into first class section

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Selling focuses on the needs of the seller ,

Marketing on the needs of the buyers

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Marketing orientation

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Marketing orientation

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Internal marketing

-It is the creation of customer focus concept within the organization

-Marketing mix of internal marketing

-Training and education

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The 4 P’s & 4 C’s of the Marketing Mix

• 4 P’s– Product– Price– Place– Promotion

• 4 C’s– Customer Solution– Customer Cost– Convenience– Communication

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Social Responsibility and Marketing Ethics

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Ethics

• It is the science which determines what is right and what is wrong

• Products may be:1. Ethical and legal

2. Ethical and illegal

3. Unethical and legal

4. Unethical and illegal

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Ethics and marketing mix

1. Product

2. Price

3. Place

4. Promotion

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Sex sells ,but did Calvin Klein cross the line? 1995

-The print ads show some models revealing their underwear

-These ads are shot by the same Steven Meisel who photographed Madonna’s controversial book sex)

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Social responsibility

• It is the obligation of any organization to increase its positive effects and decrease its negative effects on the society

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The Avon walk for breast cancer

Avon is the largest corporate supporter of the breast cancer cause with more than $ 250 million generated since the

first program in 1992

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Relationship Marketing

• Relationship marketing has the aim of building mutually

satisfying long-term relationships with key parties—

customers, suppliers, distributors, and other marketing

partners.

• The ultimate outcome of relationship marketing is the building

of a unique company asset called a marketing network.

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5 levels of customer relationship

1.Basic relation .

2.Reactive relation.

3.Accountable relation .

4.Proactive relation .

5.Partnership relation.

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Many customers/

distributors

Accountable Reactive Basic or reactive

Medium No. customers/

distributors

Proactive Accountable Reactive

Few customers/

distributors

Partnership Proactive Accountable

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Morgan and Hunt model

commitment

Trust

Co-operation