Nature of Marketing Flashcards
The Marketing Mix
Defined by Borden (1964)
Borden (1964) composed a twelve-item list of elements the manufacturer should consider when developing its marketing mix policies and procedures:
- Product planning
- Pricing
- Branding
- Channels of distribution
- Personal selling
- Advertising
- Promotions
- Packaging
- Display
- Servicing
- Physical handling
- Fact finding and analysis
Marketing Mix (Simplified) Defined by Eugene McCarthy (1960)
- Product: the offering and how it meets customer’s needs, its packaging and labelling
- Place: the way in which the product meets’ customers needs
- Price: the cost to customer/profit to seller
- Promotion - how the product’s benefits and features are conveyed tot he potential buyer
Changes in marketing
- Should not only be thought of as ‘telling-and-selling’
- Marketing is satisfying a customers needs
- ‘The aim of marketing is to make selling unnecessary’’
Marketing Mix
A set of marketing tools that work together to engage customers, satisfy customer needs, and build customer relationships.
Broad definition of marketing
Social and managerial process by which individuals and obtain what they want by obtaining and sharing value with others
Business definition of marketing
Market involves building profitable and valuable relations with customers
Balanced definition of marketing
A process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return.
What is the goal of marketing?
Long-term customer satisfaction
Drucker, P.F. (1999) The Practice of Management. London: Heinemann
“Because the purpose of business is to create and keep customers, it has only two central functions- marketing and innovation. the basic function of marketing is to attract and retain customers at a profit”
What does Drucker (1999) tell us?
- it places marketing in the central role for business success
- it is a reality of commercial life that it is much more expensive to attract new customers than to retain existing ones.
The Modern Marketing Concept can be expressed as…
the achievement of corporate goals through meeting and exceeding customer needs better than the competition
Example: Netflix has added to its successful movie rental and streaming services by providing original TV show content. In addition, all of the content is available on mobile devices to watch on the move- significant advantage over cable operators
What should company activities be focused on providing?
Customer satisfaction
How does a company achieve customer satisfaction through integrated effort?
By implementing the concept within the marketing department, but also through production, finance, research and dev elopement, engineering and other departments.
For integrated effort to come about, management must believe..
that corporate goals can be achieved through satisfied customers
Example: Nike was a late entrant into the running shoes company and established itself as the world’s leading sportswear company through delivering powerful brand values
What are the key components of the marketing concept?
- Customer orientation
- Integrated effort
- Goal achievement
Define Customer Orientation
Corporate activities are focused upon providing customer satisfaction
Define Integrated effort
All staff accept the responsibility for creating customer satisfaction
Define Goal achievement
The belief that corporate goals can be achieved through customer satisfaction
What is an important task in marketing?
- To create and communicate value to customers
- To drive their satisfaction, loyalty and profitability
Define Customer Value
CUSTOMER VALUE = PERCEIVED BENEFITS - PERCEIVED SACRIFICE
Perceived benefits
Derived from…
- Product
Example: Hotel room and restaurant - Service
Example: How responsive the hotel is to the specific needs of the customer - Image
Example: is the image of the company/product favourable?
Define Perceived Sacrifice
The total cost associated with buying the product
This could be monetary costs, but also time and energy involved with a purchase
Why is it important to ensure value offered exceeds that of competitors?
Once a product has been purchased, customer satisfaction depends on its perceived performance compared with the buyers expectations
- will be achieved if expectations are met or exceeded
The Kano Model
Joiner, B.L. (1994) Fourth Generation Management. New York: McGraw-Hill.
The Kano Model helps to separate characteristics that cause dissatisfaction, satisfaction and delight.
Underlined as: Must be, more is better and delights
