Business Chapter 13 Flashcards
Marketing management
Business organization
Can be described as an institution of the free-market system that attempts to satisfy the needs and wants of the community while making a profit
Marketing function
Is that aspect of the business involved in the marketing process, which is the transfer of products(or services) to the market
The marketing process consists of:
Environmental scanning
The development of a market offering
Environmental scanning
Environmental scanning (by means of market research) in order to collect information on which marketing management can base sound decisions
The development of a market offering
Consists of tangible products
and intangible services, offered at a specific price and convenient place, and about
which the consumer has received adequate information
The evolution of marketing thought
Operation-oriented management
Sales-oriented management
Marketing-oriented management
Consumer-oriented management
The strategic approach to marketing
Relationship marketing
Operation-oriented management
Initially, instead of focusing on the needs of the market, management focused on the
capabilities of the organisation. Operation-oriented organizations tried to increase the
number and variety of products they produced
A major disadvantage of operation-oriented
management was that management concentrated mainly on encouraging production in order to solve operation problems.
Sales-oriented management
Misleading advertisements and unethical sales methods were employed. The
objective was to sell the products at any cost. This gave rise to the idea that products needed to be marketed instead of merely sold.
Marketing-oriented management
Market-oriented management means that not only the sales message and price of the
product need to be considered, but also the quality of the product, the packaging, the
choice of distribution channels and the methods of informing potential consumers
about the market offering
Consumer-oriented management
As increasingly competitive consumer products became available and the financial position of consumers improved, consumer demands also started changing.
It became clear that consumers’ needs, demands and preferences needed to be considered when product-related decisions were made
The strategic approach to marketing
Continual changes in the
marketing environment, and the need to ensure the survival and growth of the
organization, meant that management had to concentrate on scanning the environment and on long-term issues
Relationship marketing
In order to survive in the changing environment, marketing management needed to establish long-term relationships with people and institutions in the environment in which the marketing task was to be performed. A long-term relationship with customers leads to loyalty and the repeated purchase of need-satisfying products. A long-term relationship with a supplier ensures the availability of the raw materials and
the inventory
The marketing concept
The marketing concept is a well-known concept and can be described as the philosophy by which the marketing task is performed. Four principles are contained in the marketing concept
The marketing concept directs all
marketing decisions about products, distribution methods, marketing communication and price determination.
Four principles of the marketing concept:
1.Profitability
2.Consumer orientation
3.Social responsibility
4.Organisational integration.
Profitability
The first principle of the marketing concept in a profit-seeking business is the long-term
maximisation of profitability. This is the primary objective of the business in a free market system. It is therefore also the main objective of marketing management. The principle of profitability is fundamental to the marketing concept. It emphasises
profitability instead of sales, which do not necessarily maximise profits.
Consumer orientation
The satisfaction of consumer needs, demands and preferences constitutes a consumer-oriented approach to marketing where emphasis is placed on what the consumer needs.
Consumer orientation also means that the consumer has to be supplied with adequate and correct information about the business’s market offering
Social responsibility
Besides its responsibility towards the consumers of its products, marketing
management also has a responsibility towards the community in which the marketing task is performed
The objective of these projects is to create a stable economic, social and political environment in which future profits can be optimised
If a business were to disregard the norms of society, consumer resistance could
result, thereby harming the primary objective of the business
Organisational integration
This principle expresses the need for close co-operation between all the functions of the business. All the functional decision-making activities should be co-ordinated in a way that will eventually lead to the successful marketing of the products of the business. Organisational integration entails close co-operation between the marketing,
operations, purchasing and all other functions of the business in pursuit of the
business’s mission and objectives
Merits of the marketing concept
The true marketer is proud of his or her product and of the way it satisfies the needs of consumers. The marketer jealously guards the product’s name, paying meticulous attention to complaints and criticism, even though his or her main purpose is continually to improve the profit position. The business is entitled to this profit to offset the risks involved in
developing products for the market
The four principles of the marketing concept, the philosophy according to which all marketing tasks are performed.
1)Organizational management, top management, marketing management, operations management, Financial management, human resource management, purchasing management, public relations management
2)Social responsibility
3)Consumer orientation
4)The primary objective: profit maximization in the long term
Defining marketing
Marketing consists of management tasks and decisions directed at successfully meeting opportunities and threats in a dynamic environment, by effectively developing and transferring a need-satisfying market offering to consumers in such a way that the objectives of the business, the consumer and society will be achieved
Decisions
Product distribution, marketing communication methods and price
Opportunities
Favorable circumstances in the marketing environment that must be utilized by marketing management
Threats
Unfavourable conditions that marketing management must endeavour to change into opportunities