Marketing: Advertising and
Sales Promotion
Food Communication II
Section A – Introduction to Marketing
All of the information has been adapted from Kotler P. Armstrong, G.,2004.
Marketing
Advertising, Promoting, selling, public relations,
direct marketing and selling, online media,
market= group of people, target group, sales,
product, price, place, promotion,
Introduction to Marketing
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Join the blog –
www.marketmanage.wordpress.com
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Sign up with your email address on the right.
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Watch the video - Post a comment about the
video – one sentence about what marketing is
or is not. (must be different to others that have
commented.)
Introduction Marketing?
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Part of everyday life. (toothpaste, clothes, cars)
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Products designed to satisfy needs of consumers
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Marketing is NOT Advertising – It is only the tip of the
marketing iceberg.
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A universal function, performed by most
organizations
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Companies attempt to meet the demand of
consumers by developing a product that will satisfy
the demand.
What is Marketing?
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Simply: Marketing is managing profitable customer
relationships.
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Goal: Attract new customers by promising superior
value and keep and grow current customers by
delivering satisfaction
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Defined: A social and managerial process by which
individuals and groups obtain what they need and
want through creating, offering and exchanging
products and value with others. (Kotler, Armstrong,
2004)
What is Marketing?
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Marketing is an activity, a process.
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One that facilitates the exchange of one thing
of value for another.
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Identify needs of consumer and try to satisfy
needs by developing an offer.
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The consumer will then exchange something
(money&time) for the offer (value – coming
from a product/service) to satisfy his/her
needs.
Core Marketing Concepts
Needs, Wants, and Demands
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Human Needs: state of felt deprivation.
– Food, clothing, belonging, affection, knowledge – See maslows hierarchy of needs.
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Wants: Form taken by human wants as shaped by
culture and individual personality.
– Big mac instead of rice and beans
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Demands: Human wants backed by buying power.
Core Marketing Concepts
Marketing Offers – Products, services,
Experiences.
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Address needs by putting forth a value proposition =
A set of benefits that they promise to consumers will
satisfy their needs.
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Do not focus too much on the product or service, but
rather on the benefits and experiences produced by
them.
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Example: A manufacturer of a blender may think that
the cook is looking for a blender, but actually she is
looking for chopped onions, or a smooth soup.
Other examples of differences between product and
benefits in your industry?
Core Marketing Concepts
Value, Expectations, and Satisfaction
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Customer Value: the difference between the values
the customer gains from owning and using the
product versus the cost of obtaining it.
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Customer Expectations: based on past buying
experiences, opinions of friends, and marketing and
competitor information and promises.
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Customer Satisfaction: How well the product's
performance lives up to the customer's expectations.
– Influences future buying behaviour.
– Marketers must be careful to set the right level
of expectations.
Look at a restaurant and determine the differences as
related to value (benefits vs cost), expectation, and
satisfaction?
Core Marketing Concepts
Exchange, Transactions, and Relationships
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Exchange: Act of obtaining a desired object from
someone by offering something in return.
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Transaction: A trade of values between two parties.
– Example: R28 for a Woolies Club sandwich
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Marketing consits of actions taken to build and
maintain desireable exchange relationships with
target audiences involving a product, service, idea,
or other concept.
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Marketers want to build strong, long term, financially
beneficial exchange relationships with customers.
Explain how you a Fruit and Veg City builds such
exchange relationships.
Core Marketing Concepts
Markets
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Market: The set of all actual and potential buyers of a
product or service.
– The buyers share a particular need or want that
can be satisfied through exchange
relationships.
– The size of the market depends on the number
of people who exhibit the need, have resources
to engage in exchange, and are willing to
exchange these resources for what they want.
– Marketers are keenly interested in markets.
Needs, wants, and demands Marketing offers (products, services, and experiences) Value, Expectation, and Satisfaction Exchange, transactions, and relationships Markets
Core
Marketing
Concepts
Core Marketing Concepts
Marketing
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And so, we come full circle to the concept of
marketing in that marketing means: Managing
markets to bring about profitable exchange
relationships by creating value and satisfying needs
and wants.
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Creating exchange relationships involved work.
Sellers must search for buyers, indentify their needs,
design good marketing offers, set prices for them,
Marketing Management
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Marketing Management: The art and science
of choosing target markets and building
profitable relationships with them.
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It involves getting, keeping, and growing
customers through creating, delivering, and
communicating superior customer value.
Marketing Management
Customer and Demand Management
• Mkt Mngt. Is not concerned with serving all customer in every way. Instead, marketers want to serve selected customers that they can serve well and profitably.
• The organisation has a desired level of demand for its products. At any point in time, there may be no demand, adequate demand, irregular demand, or too much
demand. Mkt Mngt. Must find ways to deal with these different demands states.
• Demarketing: Marketing to reduce demand temporarily or permanently; the aim is not to destroy demand but only to reduce or shift it.
Could you give an example of demarketing in the food and beverage industry...
Marketing Management
Marketing Management Orientations
• The Production Concept: The idea that consumers will
favour products that are available and highly affordable. (Like bread) – Focus on improving production and
distribution. (used when demans exceeds supply)
• The Product Concept: The idea that consumers will
favour products that offer the most quality, performance, and features and that the organisation should therefore devote its energy to making continuous product
improvements. (Building a better mousetrap)
• Both can lead to marketing myopia: When a firm is too narrowly focused on their own operations, loosing sight of the real objective – satisfying the customer's needs.
Could you give an example of marketing myopia in the food production industry...
Marketing Management
Marketing Management Orientations
• The Selling Concept: The idea that consumers will not
buy enough of the organisation's products unless the org undertakes a large-scale selling and promotion effort.
• This concept is typically practiced with unsought goods – those that the buyers do not normally think of buying,
such as insurance.
• Most firms practice the selling concept when they face overcapacity. Their aim is to sell what they make rather than make what the market wants. Such marketing
carries high risk. It focuses on creating sales
transactions rather than on building long-term, profitable customer relationships.
Could you give an example of the selling concept in the food production industry...
Marketing Management
Marketing Management Orientations
• The Marketing Concept: Achieving organisational goals
depends on determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors do.
• Instead of a product-centered “make and sell” philosophy, the marketing concept is a customer centered “sense and
respond” philosophy. It views marekting not as “hunting”, but as “gardening”.
• Customer-driven companies research current customers deeply to learn about their desires, gather new product and service ideas, and test proposed product improvements. They even try and determine what customers would want in the future and then make it for them. That is really being customer-centered.
How could the food production industry be more marekting-oriented/ customer-driven?
Factory Existing Products Selling and Promoting Profit through sales volumes Starting
point Focus Means Ends
The Selling Concept
Market Customer needs Integrated marketing Profits through customer satisfaction
Can you give a contrasting example of the selling and marketing concepts in the food production industry?
Marketing Management
Marketing Management Orientations
• The Social Marketing Concept: The idea that organisations
should determine the needs, wants, and interests of the target markets and deliver the desired satisfaction more effectively and efficiently than do competitors in a way that maintains and improves the consumer's and society's well being.
• Originally, most companies based their marketing decisions largely on short-term company profits. Eventually, they
recognised the long-run importance of satisfying consumers wants, and the marketing concept emerged. Now many
companies are beginning to think of society's interests when making marketing decisions.
• J&J quote: If we keep trying to do what is right, at the end of the day we believe that the marketplace will reward us.”
Can you think of examples in the food production industry of companies that apply social marketing concepts?
Customer Relationship Management
• Customer Relationship Management: The overall
process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.
• Companies are going beyond designing strategies to
attract new customers and create transactions with them.
They are using CRM to retain current customers and build profiable, long-term relationships with them.
• Changing demographics, more-sophisticated competitors, and overcapacity in many industries all contribute to the fact that there are fewer customers to go around.
• It costs 5-10 times as much to attract a new customer as it does to keep a current customer satisfied.
Customer Relationship Management
• Customer Lifetime Value: The value of the entire stream of purchases that the customer would make over a lifetime of patronage.
• A customer is worth much more than one sale. If they become a loyal customer, they will buy often and that makes good business sense.
• A company may loose money on one transaction (maybe where the customer is dissatisfied and you have to give them a product for free to apologise), but if handled well, that customer will feel respected and will probably become even more loyal.
• CRM and CLV looks at long-term relationships as a businesses most prized and profitable assets.
Can you think of examples in the food production industry of how CRM is implemented?
Customer Relationship Management
• Customer perceived value: The difference between total customer value and total customer cost.
• A customer buys from the firm that has the highest
customer perceived value – the customer's evaluation of
the difference between all the benefits and all the costs of a marketing offer relative to those of competing offers.
• Customer satisfaction: The extent to which a product's perceived performance matches a buyer's expectaions. • Smart companies aim to delight customers by promising
only what they can deliver, then delivering more than
promised. A company can increase customer satisfaction by lowering its prices or increasing its services. And do so without deminishing profits.
