Employment skills Week 5 Introduction to marketing

This session will cover What’s in it for you? What is marketing? Some definitions Developing a business marketing plan Digital media as a marketing tool

What’s in it for you? Good, successful marketing is important to any business You may be interested in related work after graduation or for your placement This lecture will help you with at least part of your required course work

What is marketing? Goods and services do not move automatically from the makers to the users. There is a definite mechanism that brings about exchange of goods and services against money or money’s worth for the mutual benefit-namely, satisfaction to the consumers and surplus to the producers and manufacturers. Marketing is the belt that connects the two major wheels of any economy namely, Producers and consumers

Definition of marketing According to Harry L. Hansen: "Marketing is the process of discovering and translating consumer needs and wants into product and service specifications, creating demand for these products and services and then, in turn, expanding the demand". Professor Philip Kotler has defined marketing: “ Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating exchanging of products and value with others”.

Cont.. “Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitably” (Chartered Institute of Marketing) “The process of determining the customer demand for a product or service, motivating its sale, and distributing it into ultimate consumption at a profit” (Breck) “ The creative management function which promotes trade and employment by assessing customer needs and initiates research and development to meet them. It co-ordinates the resource of production and distribution of goods and services, determines and directs the nature and scale of the total effort required to sell profitably to the ultimate user” (McDonald & Morris)

Nature of Marketing The characteristics speak of the very nature of marketing. These are It is operational It is customer oriented It is mutuality of benefits It is value driven It is proactive to the environment It covers both profit and non-profit making organisations

Contd… Its is operational: that is, managers must think and act to achieve results. Benefits of marketing will not emerge from a passive attitude to the exchange process emphasizing the statement “no gains without pains”. It is customer oriented: that is, marketing firm is to be the keen observer focusing its attention on needs of customers. Its effectiveness lies in finding solutions to the challenges posed by these demands. It is Mutuality of benefits: Exchange of goods and services work and persist because it is the mutual interest of both parties to continue. Both the marketer and customer benefit through supply of quality goods and services in return for profit. Here, customer’s benefits exceed costs.

Contd… It is value driven: the culture of the marketing firm are based on a desire to build the business through meeting the needs and responding to the market where the values adapted by firm’s leaders are communicated to all those involved in the firm. It is proactive to the environment: marketing firm is a sub-system of super- system, the environment. The environment is something which is external to the firm. The environmental forces are ecology, technology, competition, physical resources, legal-frame work, socio-economic factors, which are to be accepted by the marketing unit where it is to be proactive and not reactive.

It covers both profit and non-profit making organisations: Marketing is not confined to only profit making organisations but covers non-profit making organisations or charitable institutions that sell services such as educational institutions, churches, temples, mosques, gurudwaras, hospitals, sports clubs and so on.

Difference between “marketing” and “selling” Many people who use the words ‘marketing’ and ‘selling’ interchangeably. In fact, there is difference between the two terms so much so that their real meaning and content make them altogether quite distinct words. The basic difference can be outlined as under: Scope Emphasis Occurrence Philosophy

Scope ‘Marketing’ involves the design of product acceptable to consumers and transfer of ownership between the sellers and buyers. ‘selling’ simply involves obtaining orders from customers and supplying them the products. It is more concerned with the sale of goods already produced. Emphasis ‘marketing’, the focus is on satisfying the wants of customers ‘selling’ emphasizes the need of the seller to convert products into cash. Marketing is customer-oriented and seeks to earn profits through customer satisfaction Selling is product-oriented and seeks to increase the sales volume

Occurrence ‘Marketing’ begins much before the production of goods and services. It continues even after the sale because, ‘after sale services may be necessary for satisfying the wants of customer. ‘selling’ comes after the production has been completed and it comes around with the delivery of the product to the customer. In other words, marketing begins before the manufacturing cycle, whereas selling comes at the end of this cycle. Philosophy ‘marketing’ has philosophical and strategic implications. It is directed towards the long term objectives of growth and stability ‘selling’ is mere tactical routine activity with a short term perspective, under which customers are taken for granted as one homogeneous unit.

S.NoMARKETINGSELLING 1Focuses on customer needsFocuses on sellers needs 2Begins before productionBegins after production 3Continues after saleComes to an end with sale 4A comprehensive term in terms of meaningA narrow term in terms of meaning 5Philosophy of businessRoutine day to day physical process 6Profits through customerProfits through sales volume satisfaction 7Let the seller be awareLet the buyer be aware 8Integrated approachFragmented approach 9Long term perspectiveShort term perspective 10Customer first then productProduct first then customer

Understand the following elements of marketing: The external business environment Your own business (its capabilities) The market (including segmentation) The marketing mix

The external business environment What competition is out there and how good are they? What are the relevant technologies out there and where are they going? What is the general availability of the right people and appropriate ‘materials’? What are the relevant legislative issues or constraints? What is the prevailing financial climate like?

Your own business What strong points do you have? What are your skills and limitations? Do you need to adapt?

The market People with needs to satisfy (there will always be needs-it’s the means to satisfy that change); People with money to spend; People with the willingness to spend BUT remember to distinguish between the customer or client and the consumer!

The Diffusion Process Innovators (2.5%) Early Adopters (13.5%) Early Majority (34%) Late Majority (34%) Laggards (16%)

Market Segmentation Market segmentation is sub-dividing a market into distinct and homogeneous subgroups of customers, where any group can conceivably be selected as a target market to be met with distinct marketing mix.

Identify a target market Market segmentation can be done through different criteria DemographicPsychographicGeographicBehaviouristic AgePersonalityRegionVolume usage GenderMotivesUrban, ruralEnd use RaceLifestylesMarket densityBrand loyalty EthnicityClimatePrice sensitivity IncomeTerrain EducationCity size OccupationCountry size Family sizeState size Religion Social class

Create a marketing mix A marketing mix is the blending of four marketing elements – product, place, price and promotion; also known as 4Ps. A successful marketing mix satisfies the wants and needs of the target market.

Introduction 23

The Marketing Mix The tools available to a business to gain the reaction it is seeking from its target market in relation to its marketing objectives 7Ps – Price, Product, Promotion, Place, People, Process, Physical Environment Traditional 4Ps extended to encompass growth of service industry 24

Price 25

Price Pricing Strategy Importance of: knowing the market keeping an eye on rivals 26

Product 27

Product Methods used to improve/differentiate the product and increase sales or target sales more effectively to gain a competitive advantage e.g. Extension strategies Specialised versions New editions Improvements Changed packaging Technology, etc. 28

Promotion 29

Promotion Strategies to make the consumer aware of the existence of a product or service NOT just advertising 30

Place 31

Place The means by which products and services get from producer to consumer and where they can be accessed by the consumer The more places to buy the product and the easier it is made to buy it, the better for the business (and the consumer?) 32

People 33

People People represent the business The image they present can be important First contact often human – what is the lasting image they provide to the customer? Extent of training and knowledge of the product/service concerned Do staff represent the desired culture of the business? 34

Process 35

Process How do people consume services? What processes do they have to go through to acquire the services? 36

Physical Environment 37

Physical Environment The ambience, mood or physical presentation of the environment Smart/shabby(untidy)? Trendy/retro/modern/old fashioned? Light/dark/bright/? Romantic/loud/quiet? Clean/dirty/messy/neat? Music? Smell? 38

The Marketing Mix Blend of the mix depends upon: Marketing objectives Type of product Target market Market structure Rivals’ behaviour Global issues – culture/religion, etc. Product portfolio Product lifecycle Boston Matrix 39

PLC Stages and Characteristics

Digital media as a marketing tool (product) Example: DVD-ROM (promotional video/ images/ animation, setting up the product, product information, access to help/support etc.) Website (Product information, product catalogue, help/support, downloads, promotional video/images etc.)

Digital media as a marketing tool (Price) Example: DVD-ROM (Promotional deals, special offers, prices- links to website to get latest prices etc.) Website (promotional deals, special offers using discount codes, prices, intelligent price calculation via e-commerce, payment terms and methods etc.)

Digital media as a marketing tool (Place) Example: DVD-ROM (geographic availability of products/services, lists of dealers/sales outlets, channels available for purchasing etc.) Website (online selling- e-commerce, geographic availability of products/services, lists of dealers or sales outlets etc.)

Digital media as a marketing tool (Promotion) Example: DVD-ROM (General product information, the electronic brochure, promotional video, show reel etc.) Website (general product information, downloadable ‘electronic brochure’, streaming video, sign up for more offers, etc.)

The End!!! Thank you Future IT Innovators!!!