Ch.

1 Overview of Marketing

This chapter will have three parts.

Video01
(1) What is marketing
(2) Need and want

What is Marketing
Marketing is satisfying consumer needs and wants profitably.
The delivery of Customer Satisfaction in a way that benefits the organization and its
stakeholders!
 Personal Selling
 Advertising
 Making products available in stores
 Managing relationships with customers
 Designing new products
All of the above, plus much more!

What is marketing?
Marketing is a set of business practices designed to plan for and present an organization’s
products or services in ways that build effective customer relationships.
(Definition from our textbook).

What is Marketing?
Marketing is the activity, set of institutions, and processes from creating, communicating,
delivering, and exchanging offerings that have value for customers, clients, partners, and
society at large.
(Definition from American marketing association (2013))

Breakdown:
Creating is related to the production of the production of the products (developing product)
Communicating is promotion
Delivering is a place
Exchanging and offerings are related to the pricing

What is a Market?
Where do I buy “Baby strollers”?
 Traditional view
o A Market is a physical place where buyers and sellers gathered to buy and sell
good.
o Examples: Walmart, Kiddy town, Babies R us, Kijiji, boomerang kids, etc.

What is a Market?
Market: set of actual and potential buyers of a product (or/and service).

What is Marketed?
 Everything that can be exchanged!
o Examples: Products, Services, Ideas, Experiences

What is Marketing?
 Why do I buy a baby stroller?
 Can I afford them?
= Marketer’s Task
= What marketers are doing in the market!

Marketer’s First Task | Discover consumer’s needs

Marketers Second Task | Satisfying consumer needs

 Satisfying consumer needs by finding the right combination of Product, Price, Promotion
and Place.
Requirements for Marketing to Occur
 Two or more parties (individuals or organizations) with unsatisfied needs
 A desire and ability on their part to be satisfied
 A way for the parties to communicate
 Something to exchange

Marketing entails an exchange

Satisfying customer needs & wants
 Need: basic necessities
 Want: how to fulfill that need

Needs vs. Wants vs. Demands

Exercise:
 Needs occur when a person feels physiologically deprived of necessities.
 Wants are needs shaped by culture and individual personality.
 Demands are needs/wants combined with buying power.

Should marketing try to satisfy consumer needs or consumer wants?

The answer is both!

How Marketing Discover and Satisfies Consumer’s Needs and Wants?

 With Controllable Factors | Four Ps

 The Four Ps: Controllable Marketing Decisions

Price/promotion/place/product

“Marketing Mis”: 4Ps are the marketing mix.

With 4Ps => Marketers create, communicate, transacting and deliver value.

Video02
(1) 4Ps
 (2) Value and 4Ps

Example of 4Ps:

Marketing requires marketing mix decisions

Product
Product: Anything that can be offered to a market for attention, acquisition, use or
consumption, that might satisfy a need or a want.

Price

Price: Price is everything that the buyer gives up in exchange for the product

Place
Place: A means of getting the product into the consumer’s hands

Promotion
Promotion: A means of communication to inform, persuade and remind potential buyers about
product or service to influence their opinions or elicit a response
Activity:
4Ps
Product?
Price?
Promotion?
Place?

Uncontrollable Factors: The Marketing Environment

The Marketing Environment: uncontrollable events involving social, economic, technological,

competitive, and regulatory forces.
Details will be covered in Ch.3.

Value Creation
 The fundamental purpose of marketing is to create value for both the firm and
customer.
  Value is in essence what you get for what you give up.

Product: Creating value

Price: transacting value

Place: delivering value

 All activities necessary to get the product to the right customer when that customer
wants it.
 Supply chain management is the field that examines these activities.
 Where would you find this product in the store?

Promotion: communicating value

 The communication activities of marketing
 Used to inform, persuade and remind potential buyers
 Used to influence their opinions or elicit a response

Video03
The four orientations of marketing

The four orientations of marketing

 Product Orientation
 Sales Orientation
 Market Orientation
 Value-based Orientation

Product Orientation
 Consumers prefer the best product that offer the most quality, performance, or
innovative features.
 Focus on making superior products and improving them over time

The Product Orientationuntil the 1920s

 Focus on production and economics of scale
 Profit id from Production methods
o :Focus on the producing the best product.”
 Products from Quality of the Product
o “if we build it, they will come”
Products will sell themselves

“You can have any color… as long as it’s black.” Henry Ford and Model T

Sales Orientation
 The Sakes Orientation up to the 1960s
 Consumers, of let alone, will not buy enough for our products.
 Focus on selling
o Selling techniques
o “Sell, sell, sell”
“Hire more salespeople to find more consumers”

Market Orientation
The Market Orientation
 Focus on customer wants and needs
  “We’re not satisfied until you are”
 Customer is King!
 Focus on 4Ps
 This is NOT easy.

 Value-based Orientation (Social orientation or Societal marketing from other textbooks)

 Focus on customer satisfaction

 Provide the right 4Ps collectively

 Deliver more effectively and efficiently than competitors
 Build long-term profitable relations with customers

Value-based orientation
To compete successfully, firms focus on the triple bottom line:
 People (consumer needs & wants)
 Profits (long-term profitable relationships)
 Planet (social and environmental responsibility)

Value & Satisfaction

Value:
 Safety
 Dependability
 Courtesy service
 In-flight entertainment
 Online check-in
Customer value = the unique combination of benefits received by the customer that include
quality, price, convenience, on-time delivery, and both before sale and after-sale service.

The value Tim Hortons provides customers?

 New product and services:
 Remain high reputation:
 Community involvement:
 Promotions:
 Social media activities:
How do firms become more value driven?
Firms focus on four activities:
 Sharing information
 Balance customer’s benefits & costs
 Build relationships with customers
 Use technology to connect with customers

Sharing information
Why is sharing and coordination information such a critical success factor for any firm?

Balancing benefits with costs

 Understand key benefits.

 Focus on key benefits.
 Eliminate cost of less strategic benefits.

Building customer relationships

 Take a long term view of customer relationships
 Use data to assist in maintaining the relationship
“We are not satisfied until you are.” McDonald’s
Value-based Concept
One burger became so many burgers called Customer Life-Time Value.

Connect with customers using social media

 Embrace social media to connect better with customers
 ¾ of North American companies now use social media for marketing purposes
 Users are driving the way brands & stores are interacting with social media

Why Social Media Has Become So Important!

Through social media marketers can connect with consumers 24/7 before social media they
have to wait until consumers entered to their retail outlet or visiting their website or on their
phone that consumers are connecting to them by visiting them but now they don’t need to do
that they just distribute it and some consumers do not even read it but their exposed when
they’re going to the next page or scroll down.

Why is marketing important?

Core aspects of marketing

Marketing expands firms’ global presence

 Good are available to consumers from many countries from the far reaches of the globe
 Must understand customers needs & wants
 Segment-by-segment, region-by-region

Ch. 2 Developing Marketing Strategies and a Marketing Plan

Part 01
(1) Marketing strategy
(2) Marketing plan Step 1&2
 (3) Mission statement example
(4) SWOT analysis

Chapter 2: Developing Marketing Strategies and a Marketing Plan

Learning Objectives
 LO1 Define a marketing strategy
 LO2 Describe the elements of a marketing plan
 LO3 Analyze a marketing situation using SWOT analysis
 LO4 Outline the implementation of the marketing mix as a mean to increase customer
value
 LO5 Describe how firms grow their business (BCG and Growth strategy/Market-Product
Analysis)

What is Marketing strategy?

Marketing strategy identifies:
 A firm’s target market (s)
 A related marketing mix – the four P’s and
 the bases upon which the firm plans to build a sustainable competitive advantage
 Leads to sustainable competitive advantage!

Sustainable Competitive Advantage

 Strong brand Just do it!
 Technology
 Strong customer base
 Loyal customers

Developing Customer Value

Customer Excellence
  Retain loyal customers
 Provide excellent customer service

Operational Excellence

Product Excellence
High perceived value + Effective branding and positioning

Locational Excellence
The three most important things in retailing are location, location, location.

Multiple Sources of Advantage

Multiple approaches:
Customer value
Customer service
Customer relations
Great prices!

Good service = Good value

What is a Marketing plan?

A marketing plan is a written document to give marketers a “road-map” for the company to
market its product.

Developing a Marketing Plan

Planning Phase – Step 1: Business mission & objectives
Defining the Mission
Tim Hortons states: Our guiding mission is to deliver superior quality products and services for
our customers and communities through leadership, innovation and partnerships. Our vision is
to be the quality leader in everything we do.

Examples: Mission statement

The Heat and Stroke Foundation mission: is to improve the health of Canadians by preventing
and reducing disability and death from heart disease and stoke through research, health
promotion, and advocacy.

“Always earning the right to be our clients’ first choice.” (RBC)

“______’s mission is to organize the world’s information and make it universally accessible and
useful.” (Google)

“______’s mission is to be Canada’s best food, health and home retailer by exceeding customer
expectations through innovative products at great prices.” (Loblaw)

“______’s mission: Our vision is to be Earth’s most customer centric company; to build a place
where people can come to find and discover anything they might want to buy online (Amazon)

Business mission & Mission Statement

 Business mission
o Provides reason for existence (“Why it exist?”) of the organization.
 o Foundation of marketing plan -> The marketing plan focuses on accomplishing
the mission.

 Business Mission Statement

o A statement of the organization’s scope that often identifies its customers,
markets, products, technology, and values

Marketing Objectives
 A statement of what is to be accomplished through marketing activities.
 Basis of measuring success
 Marketing objective must be
o Specific
o Measurable
o Actionable
o Relevant
o Time specific (Time-based)
Example: “Our objective is to increase market share by 40% and to obtain customer satisfaction
ratings of at least 90% in 2020 Q3.”

Planning Phase – Step 2: Situation Analysis

Step 2: Conduct a Situation Analysis (suing SWOT)

SWOT Analysis
SWOT Analysis – Ben & Jerry’s Example
 Growing demand for quality ice cream. (O)
 Consumer’s concern about fatty desserts; B&J customers are the type to read new
nutritional labels. (T)
 Flat sales and profits in recent years (W)
 Can complement Unilever’s existing ice cream brands. (S)
 Increasing demand for frozen yogurts and other low-fat desserts. (O)
 Prestigious brand name. (S)
 Need for experienced managers to help them grow. (W)
 Success of many firms in extending successful brand in one product category to others.
(O)
 Competes with Haagen-Dasz. (T)
 Danger that B&J’s social responsibility actions may add costs, reduce focus on core
business. (W)
 Major share of super-premium ice cream market. (S)
Summary in table:
SWOT Analysis

Part 2
BCG analysis & discussion question
Growth strategies

Business Portfolio Analysis (BCG)

Analyzing current portfolio.
Where do we want to go?

Portfolio analysis: BCG Analysis

BCG – Business Portfolio Analysis
 Stars
o Large profits but need a lot of cash
 Question Marks
o Need a lot of cash
o Have potential to become stars
 Cash Cows
o Generate strong cash flow
 Dogs
o Low growth potential and small market share

Growth Strategies (Market Product Analysis)

Developing your portfolio.

Growth Strategies

Market Penetration
 Existing product service offerings
 Existing customers

Market Development Strategy

 Existing marketing offering
 New market segments (domestic, international) not currently being served
Product Development
 New product/service
 Current target market

Diversification
 New product/service
 New market segment not currently being served

Growth Strategies: Market Product Analysis

Marketing plan II Steps 3-5
Implementation Phase – Step 3: Identify Opportunities
Which products will be directed toward which customers?
(The What and Who of the strategic marketing process)

 S. Segment the market: Who

 T. Select target market(s): Who
 P. Position Product: What

Implementation Phase – Step 4: Implement Marketing Mix

 Development of the marketing mix
(The How of the strategic marketing).
 Product strategy
 Price strategy
 Promotion strategy
 Place (distribution) strategy
(4Ps)

Product
Value creation product is the first of the 4Ps because the key to success of any marketing
program is the creation of value firms attempt to develop product services that customers
perceive valuable enough to purchase.

Price
 Exchange: product = money
 Customer perception of value
Price is only a part of value!

Place
Product must be readily accessible when and where the customer wants it a firm must be able
to make the product or service readily accessible its related to the place strategy.

Promotion
  Television
 Radio
 Magazines
 Sales force
 New media

Control Phase – Step 5: Evaluation

 Control Phase
o Compare results with marketing plan
o Exploit deviations
o Act on negative deviations

Planning Phase: allocating resources to get where we want to go.

Implementation Phase: how to convert plans to action.
Control Phase: how do our result compare with our plan.

Chapter 3: Analyzing the Marketing Environment