Principles of marketing: Chapter 1 - Introduction to Marketing

Principles of marketing: Chapter 1 - Introduction to Marketing is Marketing, more than any other business function, deals with customers; understanding, creating, communicating, and delivering customer value and satisfaction are at the very heart of modern marketing thinking and practice.

TS Nguyễn Minh Đức PRINCIPLES OF MARKETING Dr NGUYEN MINH DUC NONG LAM UNIVERSITY HCM CITY Nguyen Minh Duc 2010 Marketing v v v v v v v v Introduction to Marketing The Marketing Environment Strategic and Marketing Planning Market Segmentation, Targeting and Positioning Product Concept Pricing Products Place (Distribution Channel) Promotion Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyen Minh Duc 2010 TS Nguyễn Minh Đức Chapter Introduction to Marketing Strategic Marketing & Customer Service Nguyen Minh Duc 2010 Introduction v Marketing, more than any other business function, deals with customers v Understanding, creating, communicating, and delivering customer value and satisfaction are at the very heart of modern marketing thinking and practice v The twofold goal of marketing is: v To attract new customers by promising superior value and v To keep current customers by delivering satisfaction Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyen Minh Duc 2010 TS Nguyễn Minh Đức Introduction v The highly successful companies know that if they take care of their customers, market share and profits will follow v This course will give you a more complete and formal introduction to the basic concepts and practices of today’s marketing Nguyen Minh Duc 2010 Introduction v What does the term “Marketing” mean? v Many people think of “Marketing” only as selling and advertising v However, selling and advertising are only two of many marketing functions and are often not the most important ones Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyen Minh Duc 2010 TS Nguyễn Minh Đức Introduction v Marketing starts long before a company has a product v Marketing is the homework that managers undertake to assess needs, measure their extent and intensity, and determine whether a profitable opportunity exists v Marketing continues throughout the product’s life, trying to find new customers and keep current customers by improving product appeal and performance, learning from product sales results, and managing repeat performance Nguyen Minh Duc 2010 Introduction v v v v v v v If the marketer does a good job of: -understanding consumer needs, -develops products that provide superior value, and -prices, -distributes, and -promotes them effectively, these products will sell very easily Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyen Minh Duc 2010 TS Nguyễn Minh Đức Definition of Marketing v “Marketing is the process of planning, and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.” -The American Marketing Association (www.ama.org) v “Marketing is the delivery of customer satisfaction at a profit.” -Kotler & Armstrong Nguyen Minh Duc 2010 Definition of Marketing v “Marketing is the process of determining customer wants and needs and then providing the goods and services that meet or exceed expectations.” i.e Marketing is a process of exchanging ideas, goods, and services to maximize customer satisfaction 10 Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyen Minh Duc 2010 TS Nguyễn Minh Đức What is Marketing? v “Marketing is the management process which identifies, anticipates and satisfies customer needs profitably.” - Chartered Institute of Marketing (CIM) v Perhaps the simplest definition is this one: “Marketing is the delivery of customer satisfaction at a profit.” v The Marketing function manages an organization’s relationships with its customers 11 Nguyen Minh Duc 2010 What is Marketing? v Marketing covers not only selling activities, advertising and sales promotions, but also other activities and functions such as product design, production, production control quality control, after-sales service and credit for customers i.e Marketing can be seen as creating the environment in which selling will take place 12 Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyen Minh Duc 2010 TS Nguyễn Minh Đức The Marketing Functions v Market Research: =>Finding markets, identifying consumers, determining consumer needs and wants, and forecasting demand v Product Planning: =>Designing and developing products, packaging, branding, labeling, modeling v Pricing: =>Set a price structure, maintaining and modifying, monitoring competitors’ pricing and cost structure, pricing strategies 13 Nguyen Minh Duc 2010 The Marketing Functions v Promotion: =>Advertising, sales promotion, personal selling, publicity, public relation v Physical Distribution: =>Transportation, warehousing, storage, channel, coverage v Follow-up: =>After sales service, feedback information v Facilitating: =>Financing, insurance, sponsorship 14 Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyen Minh Duc 2010 TS Nguyễn Minh Đức The Marketing Concept and Philosophies v There are some basic approaches to marketing, i.e Organizations have different orientations towards the customers v The most notable options are as follows: Production Concept (Production Orientation) Product Concept (Product Orientation) Selling Concept (Sales Orientation) Marketing Concept (Marketing Orientation) Societal Marketing Concept 15 Nguyen Minh Duc 2010 The Marketing Concept and Philosophies Production Concept (Production Orientation) “The philosophy that consumers will favor products that are available and highly affordable and that management should therefore focus on improving production and distribution.” – (Kotler & Armstrong) i.e Management selects products that are economical to produce relative to production costs and resource availabilities, and then sets up a Marketing Department to distribute the goods It is assumed that customers will want to purchase wellconstructed mass-produced items that are made available to them at low costs 16 Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyen Minh Duc 2010 TS Nguyễn Minh Đức The Marketing Concept and Philosophies Production Concept (Production Orientation) Is the oldest concept/philosophy started in Great Britain during the industrial revolution (16th century) In this concept, manufacturers and marketers regard that consumers prefer goods and services that are widely available They tend to mass produce and target them to the whole market The price set is often low as the manufacturers are able to enjoy economies of scale 17 Nguyen Minh Duc 2010 The Marketing Concept and Philosophies Production Concept (Production Orientation) =>The Production Concept holds that consumers will prefer products that are widely available and inexpensive This orientation makes sense in developing countries, where consumers are more interested in obtaining the product than in its features Example: Tissue paper, Rice, Newspaper, Daily needs products 18 Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyen Minh Duc 2010 TS Nguyễn Minh Đức The Marketing Concept and Philosophy Product Concept (Product Orientation) v “The idea that consumers will favor products that offer the most quality, performance, and innovative features and that the organization should therefore devote its energy to making continuous product improvements.” – (Kotler & Armstrong) v The Product features Orientation presupposes that all a firm needs to is offer for sale high-quality sound-value products with many attractive features, provide effective after-sales service, and then the goods will ‘sell themselves’ 19 Nguyen Minh Duc 2010 The Marketing Concept and Philosophy Product Concept (Product Orientation) v The Product Concept believes that if it can make a good quality product, then customers will inevitably buy it with a minimum of marketing effort by the firm v The firm will probably concentrate on product developments and improvements v -Manufacturer and marketer regards that they are certain customers that prefer branded/prestige goods and services v -Prices are normally set high as to reflect the quality of the goods and services v -Tendency to focus on high income segments/people/buyers v Examples: BMW, Mercedes cars, Rolex watch 20 Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyen Minh Duc 2010 10 TS Nguyễn Minh Đức The Marketing Concept and Philosophies Selling Concept (Sales Orientation) v “The idea that consumers will not buy enough of the organization’s products unless the organization undertakes a large-scale selling and promotion effort.” -(Kotler & Armstrong) v Is to regard marketing as the function of finding customers for goods which the firm has already decided to supply v Here, there is much emphasis on face-to-face customer contact, price cutting, heavy advertising and sales promotions 21 Nguyen Minh Duc 2010 The Marketing Concept and Philosophies Selling Concept (Sales Orientation) v The dominant of this concept is that people will not buy until they are persuaded to buy by positive selling v Thus, the focus of attention is more on the skills of selling, than on the needs of the buyer v For example, several life-insurance companies have adopted this approach over the years v This attitude implies a belief that potential customers are by nature sales-resistant and have to be persuaded to buy (or buy more), so that the task of the firm is to develop a strong sales department, with well-trained salesmen 22 Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyen Minh Duc 2010 11 TS Nguyễn Minh Đức The Marketing Concept and Philosophies Selling Concept (Sales Orientation) v Manufacturers and marketers act aggressively to promote and sell their goods and services v If they not act aggressively, customers would not be interested to know and even buy their goods and services v Examples: Insurance, cosmetics, etc 23 Nguyen Minh Duc 2010 The Marketing Concept and Philosophies Marketing Concept (Marketing Orientation) Alternatively, the firm might seek to: v evaluate market opportunities before production, v assess potential demand for the good, v determine the product characteristics desired by consumers, v predict the prices consumers are willing to pay, and then v supply goods corresponding to the needs and wants of target markets more effectively than competitors Businesses adopting this approach are said to apply the “Marketing Concept” Adherence to the marketing concept means the firm conceives and develops products that satisfy consumer wants 24 Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyen Minh Duc 2010 12 TS Nguyễn Minh Đức The Marketing Concept and Philosophies Marketing Concept (Marketing Orientation) “The marketing management philosophy which holds that achieving organizational goals depends on determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors do.” – (Kotler & Armstrong) i.e the key task of the organization is to determine the needs, wants and values of a target market and to adapt the organization to delivering the desired satisfactions more effectively and efficiently than its competitors 25 Nguyen Minh Duc 2010 The Marketing Concept and Philosophies v Marketing Concept (Marketing Orientation) In other words, customer needs are considered of paramount importance Since technology, markets, the economy, social attitudes, fashions, the law are all constantly changing, customer needs are likely to change too 26 Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyen Minh Duc 2010 13 TS Nguyễn Minh Đức The Marketing Concept and Philosophies Marketing Concept (Marketing Orientation) v The marketing concept believes that changing needs must be identified, and products adapted and developed to satisfy them v Only in this way can a supplier hope to operate successfully and profitably v A market orientated organization is one which focuses on the needs of its customers v Its primary concern is to find out what its customers needs and wants are so as to meet them with the highest level of customer satisfaction v In this situation, production responds to the demands of marketing rather than the other way round 27 Nguyen Minh Duc 2010 The Marketing Concept and Philosophies Marketing Concept (Marketing Orientation) v Marketers and manufacturers regard customers as ‘king or VIP v Tendency to focus on customers’ needs and wants and satisfaction v Normally conducts research as to identify the market needs and wants and finally offer the right goods and services to the right target market at the right price Example of market-oriented attitudes can be found in motorcar manufacturing I.e Everything we is driven by you 28 Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyen Minh Duc 2010 14 TS Nguyễn Minh Đức The Marketing Concept and Philosophies Societal Marketing Concept v “The idea that the organization should determine the needs, wants, and interests of target markets and deliver the desired satisfactions more effectively and efficiently than competitors in a way that maintains or improves the consumer’s and society’s well being.” –(Kotler & Armstrong) 29 Nguyen Minh Duc 2010 The Marketing Concept and Philosophies Societal Marketing Concept v The latest concept v Goes beyond customer satisfaction v Tendency to focus on societies’ well-being beside customer’s satisfaction and profit v Firms normally fulfill their social obligations to society through charities and sponsorship of education, financial assistance, recycling campaign, etc 30 Lưu ý: Chỉ sử dụng nội cho sinh viên KTS, ðH Nông Lâm TPHCM, nghiêm cấm chép, upload, phổ biến tất hình thức Nguyen Minh Duc 2010 15 ... objectives.” -The American Marketing Association (www.ama.org) v Marketing is the delivery of customer satisfaction at a profit.” -Kotler & Armstrong Nguyen Minh Duc 2 010 Definition of Marketing v Marketing. .. Minh Đức Chapter Introduction to Marketing Strategic Marketing & Customer Service Nguyen Minh Duc 2 010 Introduction v Marketing, more than any other business function, deals with customers v... one: Marketing is the delivery of customer satisfaction at a profit.” v The Marketing function manages an organization’s relationships with its customers 11 Nguyen Minh Duc 2 010 What is Marketing?