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UNIT 2 BUSINESS ESSENTIALS

Kotler et al., Principles of Marketing, 6^th edition © Pearson Education Limited 2013

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Unit 2 Business Essentials

Introduction to the unit – unit specification

Kotler et al., Principles of Marketing, 6^th edition © Pearson Education Limited 2013

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UNIT 2 MARKETING ESSENTIALS

Recommended Textbook by Pearson:

BRASSINGTON, F. and PETTITT, S. (2012) Essentials of Marketing. 3rd Ed. Harlow: Pearson.

GROUCUTT, J. and HOPKINS, C. (2015) Marketing (Business Briefings). London: Palgrave Macmillan.

JOBBER, D. and CHADWICK, F. (2012) Principles and Practice of Marketing. 7th Ed. Maidenhead: McGraw-Hill.

KOTLER, P. et al. (2013) Principles of Marketing, 6th edition, London: Prentice Hall.

MCDONALD, M. and WILSON, H. (2011) Marketing Plans: How to Prepare Them, How to Use Them. 7th Ed. Chichester: John Riley and Sons.

Kotler et al., Principles of Marketing, 6^th edition © Pearson Education Limited 2013

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Chapter 1��Marketing: creating and capturing customer value�

it’s good and

good for you

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Our learning outcome

By the end of this unit a student will be able to:

Explain the role of marketing and how it interrelates with other functional units of an organisation.

Kotler et al., Principles of Marketing, 6^th edition © Pearson Education Limited 2013

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Our Learning objective

P1 Definitions and the marketing concept:

Definitions of marketing and the nature of marketing
The development of the marketing concept, including current and future trends. How the external environment influences and impacts upon marketing activity

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Creating and capturing �customer value

What is marketing?
Understand the marketplace and customer needs
Designing a customer-driven marketing strategy
Preparing an integrated marketing plan and program
Building customer relationships
Capturing value from customers
The changing marketing landscape

Topic outline

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What is marketing?

Marketing is a process by which companies create value for customers and build strong customer relationships to capture value from customers in return.

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What is marketing?

The marketing process

Figure 1.1 A simple model of the marketing process

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Understanding the marketplace�and customer needs

Customer needs, wants and demands

States of deprivation

Physical—food, clothing, warmth and safety
Social—belonging and affection
Individual—knowledge and self-expression

Needs

Form that needs take as they are shaped by culture and individual personality

Wants

Wants backed by buying power

Demands

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Understanding the marketplace�and customer needs

Market offerings are some combination of products, services, information, or experiences offered to a market to satisfy a need or want.
Marketing myopia is focusing only on existing wants and losing sight of underlying consumer needs.

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Understanding the marketplace�and customer needs

Customer value and satisfaction expectations

Customers

Value and satisfaction

Marketers

Set the right level of expectations
Not too high or low

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Understanding the marketplace�and customer needs

Exchange is the act of obtaining a desired object from someone by offering something in return.

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Understanding the marketplace�and customer needs

Market is the set of actual and potential �buyers of a product.

Figure 1.2 A modern marketing system

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Designing a customer-driven marketing strategy

Marketing management is the art and science of choosing target markets and building profitable relationships with them.

What customers will we serve?
How can we best serve these customers?

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Designing a customer-driven marketing strategy (Continued)

Market segmentation refers to dividing the markets into segments of customers.

Target marketing refers to which segments to go after.

Selecting customers to serve

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Designing a customer-driven marketing strategy (Continued)

Choosing a value proposition

Value proposition is the set of benefits or values a company promises to deliver to customers to satisfy their needs.

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Designing a customer-driven marketing strategy (Continued)

Marketing management orientations

Production concept

Product concept

Selling concept

Marketing concept

Societal concept

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�Designing a customer-driven marketing strategy (Continued)�

Production concept is the idea that consumers will favour products that are available or highly affordable.

Marketing management orientations

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Designing a customer-driven marketing strategy (Continued)

Product concept is the idea that consumers will favour products that offer the most quality, performance and features and that the organisation should therefore devote its energy to making continuous product improvements.

Marketing management orientations

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Designing a customer-driven marketing strategy (Continued)

Selling concept is the idea that consumers will not buy enough of the firm’s products unless it undertakes a large-scale selling and promotion effort.

Marketing management orientations

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Designing a customer-driven marketing strategy (Continued)

Marketing management orientations

Marketing concept is the idea that achieving organisational goals depends on knowing the needs and wants of the target markets and delivering the desired satisfactions better than competitors do.

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Designing a customer-driven marketing strategy (Continued)

Marketing management orientations

Societal marketing concept is the idea that a company’s marketing decisions should consider consumers’ wants, the company’s requirements, consumers’ long-term interests and society’s long-run interests.

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Designing a customer-driven marketing strategy (Continued)

Figure 1.4 Three considerations underlying the societal marketing concept

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Notes to Instructor:

This slide shows companies should balance three considerations in setting their marketing strategies.

Johnson & Johnson does this well. Johnson & Johnson would rather take a big loss than ship a bad batch of one of its products. Consider the tragic tampering case in which eight people died in 1982 from swallowing cyanide-laced capsules of Tylenol, a Johnson & Johnson brand. Although Johnson & Johnson believed that the pills had been altered in only a few stores, they recalled all of their product and launched an information campaign to instruct and reassure consumers. The recall cost the company $100 million in earnings.

In the long run, however, the company’s swift recall of Tylenol strengthened consumer confidence and loyalty, and today Tylenol remains one of the nation’s leading brands of pain reliever.

Discussion Question

Ask students about other companies that have had serious problems with their products? How have these companies bounced back?

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Preparing an integrated marketing plan and program

The marketing mix: set of tools (four Ps) the firm uses to implement its marketing strategy. It includes product, price, promotion and place.

Integrated marketing program: comprehensive plan that communicates and delivers the intended value to chosen customers.

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The changing marketing landscape

Uncertain economic environment

New consumer frugality
Marketers focus on value for the customer.

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The changing marketing landscape (Continued)

Digital age

People are connected continuously to people and information worldwide.
Marketers have great new tools to communicate with customers.
Internet + mobile communication devices create environment for online marketing.

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The changing marketing landscape (Continued)

Rapid globalisation
Sustainable marketing
Not-for-profit marketing

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So, what is marketing?� Pulling it all together

Figure 1.6 An expanded model of the marketing process

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