1、Introduction to Buisiness1Marketing:Background&ConceptsIntroduction to Buisiness2What is MarketingSocial definition A societal process by which individuals and groups obtain what they need and want through creating,offering and freely exchanging products and services of value with others.Introductio
2、n to Buisiness3What is Marketing?Management DefinitionIt 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 goals.Introduction to Buisiness6The Marketing ConceptA custom
3、er orientationBacked by integrated marketingAimed at generating customer satisfaction&repurchase as the key to satisfying the organizational goalsMeeting the needs and wants of customersIntroduction to Buisiness7The Marketing Concept(Contd)Focus Means End Sales ConceptProducts Selling&promotionProfi
4、ts through sales volumeMarketing conceptCustomer needsIntegrated marketingProfits through customer satisfactionSales Concept vs.Marketing ConceptIntroduction to Buisiness8Marketing Focus vs.Sales FocusThe focus of marketing concept is on customers needs and wants,not the product itself.SalesMarketin
5、gScott“We sell grass seeds and fertilizer.”“We offer you a green,healthy yard.”Disney“We run theme parks.”“We offer you a dreamy,fantastic experience.”Introduction to Buisiness9Customer Satisfaction&Dow JonesIntroduction to Buisiness10Customer Satisfaction&ProfitsvProfits through customer satisfacti
6、on(one customer)Normal profitsNormal profitsIncreased usageIncreased usageReduced selling effortsReduced selling effortsPrice premiumPrice premiumReferralsReferralsAcquisition costsIntroduction to Buisiness11Cost of Losing/Attracting CustomersCost of Lost Customers#Accounts=64000Loss=5%for poor serv
7、ice=3200 accountsLoss in Revenue/Account=$40000Total Revenue Loss=$128 MMMargin=10%Loss in Profits=$12.8 MMHow to Increase Retention Rate?Cost of Average Sales Call=$300Average#Calls to Convert Customer=4Cost of New Customer=$1200Annual Revenue from Customer=$5000#Loyal Years=2Profit Margin=10%Lifet
8、ime Value=$1000Firm is spending more on attracting new customers than they are worth!Introduction to Buisiness12 Cost of attracting a new customer can be up to 5 times the cost of keeping a current one happy.Cost of Offensive Marketing Cost of Defensive Marketing Some companies have increased profit
9、s from 25%to 85%by reducing defections by 5%.Cost of Losing/Attracting CustomersIntroduction to Buisiness13Developing an Effective Marketing PlanIntroduction to Buisiness14Conduct a Marketing Reviewv3-C AnalysisOpportunity IdentificationAnalysis of CUSTOMER needs,trends,perceptions&behaviorAssessmen
10、t of COMPANY capabilities¤t marketing positionAnalysis of COMPETITORS current position,capabilities&actionsIntroduction to Buisiness15SegmentationWhat it is The process of partitioning markets into groups of potential customers with similar needs and/or characteristics who are likely to exhibi
11、t similar purchase behavior.Demographic(age,gender,occupation,income,education,ethnicity,etc.)Geographic Psychographics(social class,life style,personality)Behavioral(purchase occasions,benefits sought,usage rate,loyalty status,etc.)Introduction to Buisiness16The Competitive EnvironmentDegree of cap
12、tivityExpanding,static,stagnant or decliningEthical&non-ethicalEntry barriersExit barriersLegal constraintsDifferentiationLuxury goodsGood valuesRivalryBuyer groupsSupplier groupsOrganizational standpointInternal marketingIntroduction to Buisiness17Build a Marketing StrategyGeneric Strategies ForDIF
13、FERENTIAL ADVANTAGE*Product Differentiation*Cost Leadership*Special Market FocusSelection of TARGET MARKETand Development of aPOSITIONING STATEMENT Introduction to Buisiness18Marketing Strategies7 Categories of Strategies(p.247)Pioneering or“first in the field”“Follow the leader”“Me too”or“all-comer
14、s”Supply led Technology led Staff ledMarket ledIntroduction to Buisiness19Implementation:The Marketing Mix4 Ps:-Tools an organization uses to pursue its marketing objectives.ProductPricePlace PromotionIntroduction to Buisiness20ProductA product is any offering catered to satisfy customer needs and w
15、ants.Needs:basic human requirements.Wants:needs directed to specific objects/services that might satisfy the need.Demand:the wants for specific products backed by an ability to pay.Introduction to Buisiness21ProductVariety-Product ranges&portfolios:total range of products offered by an organization.
16、Market ShareMarket GrowthHighHighLowLowCash CowDogStarQuestion MarkIntroduction to Buisiness22ProductBranding&Quality-Branding:known resource,gives credence&confidence.-Quality&durabilityPackaging-Used to present the product to its best advantage and to protect it up to the point of consumption.Appe
17、arance&Design Introduction to Buisiness23Product LevelsIntroduction to Buisiness24Product Life CycleDevelopmentTimeWithdrawalSalesSalesIntroductionGrowthMaturitySaturationDeclineProfit CurveIntroduction to Buisiness25Ansoffs Product-Market GridCurrent productsNew productsCurrent MarketsMarket penetr
18、ationstrategy(turn customers into regular/loyal customers)Product developmentstrategy(sell new products to regular customers)New MarketsMarket developmentstrategy(lure customers from competitors)Diversificationstrategy(most risky)Useful in business unit strategy process to determine business growth
19、opportunities.Introduction to Buisiness26Price+=PriceProfitCostList prices,discounts,financing,allowances,etc.Introduction to Buisiness27PriceFactors affecting the pricing policy Costs-Price Total Average Cost-In short-term,okay to price below TAC,but greater than marginal cost.CompetitorsMonopolist
20、 Perfect CompetitionIntroduction to Buisiness28PriceFactors affecting the pricing policy Customers-Expectations about price and capability to pay.Business objectives-To maximize profits-To achieve a target return on investment-To achieve a target sales figure-To achieve a target market share-To matc
21、h the competition,rather than to lead the marketIntroduction to Buisiness29PromotionWhat it is Combination of methods used to generate public awareness,identity,confidence,desire and conviction in a product and ultimately its adoption and usage by the general public.-Advertising,public relations,mes
22、sage,direct sales,sales,media,budget,etc.-Image&Identity-Internal promotionMeans by which confidence and awareness of the organizations products&services is generated among its staff.Introduction to Buisiness30Public RelationsWhat it is Management of relationship b/e the organization and the public
23、at large(the community,its customers and clients,and the media,etc.)in order to maintain,preserve,and improve positive and effective images and relationships;to build confidence and credibility;and to resolve problems when they arise.-Issuing of brochures&information on different media about organiz
24、ation-Placement of stories favorable to themselves-Engagement in more general customer and market liaison activities-Engagement in positive PR in relation to their staffIntroduction to Buisiness31PlacePlace includes company activities involved in making the product available to target consumers.Chan
25、nels of distributionExtent of market coverageManaging discrepancies of quantity and assortment Retail locationsManagement of inventory,transportation,and logistics.Introduction to Buisiness32Distribution ChannelsIntermediariesIntroduction to Buisiness333C/4P FrameworkCustomerCompanyCompetitor Produc
26、t Price Place Promotion Introduction to Buisiness34Marketing SystemShort Term Controllable FactorsProductPlace PricePromotionLong Term FactorsTechnologicalEconomicSocio/CulturalLegalIntroduction to Buisiness35Marketing Research&DevelopmentFind out as much as possible about the market before being co
27、mmitted to an irretrievable step.What does the customer need?Who is the target audience and how much can you find out about them?What is the competition?Are there any gaps in the market?Would the product be acceptable in the market?What are the organization capabilities and capacities?Introduction to Buisiness36Question&Answer
