Principles of Marketing LT1 PDF

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PRINCIPLES OF MARKETING LTMARKETINGᴥ Managing profitable customer relationships to attract new customers by promising superior value and grow current customers by delivering satisfaction (Pearson Technology Centre, 2010) ᴥ A social and managerial process by which individuals and groups obtain what t...

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PRINCIPLES OF MARKETING LT1 MARKETING ᴥ Managing profitable customer relationships to attract new customers by promising superior value and grow current customers by delivering satisfaction (Pearson Technology Centre, 2010) ᴥ A social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others (Maria Victoria Ac-ac, 2014) ᴥ Process of continuously and profitably satisfying target market customer’s need, wants and expectations to superior competition (Josiah Go, 2018) ᴥ A human activity responsible for managing the demand structure of need-satisfying goods and services in order to facilitate satisfactorily exchange process at a reasonable profit, for present and potential customers (Kotler, 2010) ᴥ Motion of changing form called “production”, or motion of changing place and ownership called “distribution” STAGES OF MARKETING THOUGHT The developmental stages of marketing thought in its fifty years may be classified as follows: (Bartels, 1976) PERIOD OF DISCOVERY (1900 - 1910) ᴥ In the early years, teachers of Marketing sought facts about the distributive trades. ᴥ Marketing thoughts borrowed from Economics resulting to distribution, world trade commodity and world markets. ᴥ The concepts of “marketing” came about, thus the terminology was given to it. PERIOD OF CONCEPTUALIZATION (1910 1920) ᴥ Many marketing concepts were initially developed. Concepts were classified and terms were defined. PERIOD OF INTEGRATION (1920 - 1930) ᴥ Principles of marketing were postulated and the general body of thought was integrated for the first time.

ᴥ “Principles of marketing” by Paul W. Ivey was used in connection with advertising, retailing, and credit granting. PERIOD OF DEVELOPMENT (1930 - 1940) ᴥ As specialized areas of marketing continued to be developed, hypothetical assumptions were verified and quantified and some new approaches to the explanation of marketing knowledge. PERIOD OF REAPPRAISAL (1940 - 1950) ᴥ The concept and traditional explanation of marketing was reappraised in terms of new needs for marketing knowledge. ᴥ The scientific aspects of the subject were considered. PERIOD OF RECONCEPTION (1950 - 1960) ᴥ Traditional approaches to the study of marketing were supplemented by increasing emphasis upon managerial decision making, the societal aspects of marketing and quantitative marketing analysis. PERIOD OF DIFFERENTIATION (1960 - 1970) ᴥ As marketing expanded, new concepts took on substantial identity as significant components of the total structure thought. PERIOD OF SOCIALIZATION (1970) ᴥ Social issues and marketing became much more important. ᴥ It is the influence not of society upon marketing but upon marketing to society that became a focus interest. INTERACTING MARKETING

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COMPANY & MARKET ᴥ A market is composed of people or organizations that have the need, have the ability, the willingness, and the authority to pay for their purchases. ᴥ Both the company and its market are equally important. Satisfying one without satisfying the other is not marketing. ᴥ A marketer should have a balance between the company’s requirements for profit and desired market share.

CUSTOMER & COMPETITION ᴥ The market is composed of 2 other interacting components: CUSTOMERS AND COMPETITION. ᴥ Customers, which may either be trade intermediaries (wholesalers or retailers) or end users, are people or organizations buying from you. ᴥ Competitors are those with products and services that can offer similar benefits to your customers. THE STRATEGIC MARKETING

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COMPANY, CUSTOMERS & COMPETITION ᴥ The overriding objective of the company is to first have a bond with the customer to develop relationship, then think of a competitive advantage that addresses gaps in customer’s world. ᴥ Companies must know the problems of the customers then provide a solution while being profitable superior to their competition. KEY OBJECTIVES OF THE 3 C’s 1. To ensure corporate health and profit (COMPANY) 2. To outperform competition (COMPETITION) 3. To satisfy the needs, wants, and expectation of target customers (CUSTOMERS) KEY RESULT AREAS OF 3 C’s The output of Customers, Competition, and Company is collectively called Key Result Areas. 1. Sales → Customers 2. Company → Profit 3. Competition → Market Share ᴥ The key objectives of each of the 3 C’s of marketing are marketing-oriented rather than being market-oriented (simply satisfying needs better than their competitors). A. SALES ᴥ Result of satisfying the customer’s needs and wants ᴥ Gaining market share is an effect of outperforming competition.

ᴥ Profit comes from having an excess of sales over cost and expenses in gaining market share. ᴥ To increase sales revenues, a firm can increase either the price of the sales volume. ᴥ Sales volume can be increase through the 4 U’s of growing your volume. 1. NEW USERS (Who uses the product or services?) 2. EXTENDED USERS (Who can still use the product or services?) 3. NEW USAGE (For what purpose is the product or service used?) 4. MORE USAGE (When and in what occasions is the product or service used?) B. MARKET SHARE ᴥ Ratio of your brand sales versus the total sales in your market. ᴥ While companies would naturally define its target competitors, it is actually the consumers who ultimately decide the competitive frame, or list of related products or services that they consider when exercising their purchasing power. For example: ᴥ McDonalds may define other fast food chains as key competitors but consumers may go to Pancake house or Yellow Cab when the lines in McDonalds are long. ᴥ Cebu Pacific grabbed market shares not just from Philippine Airlines but also from land and sea transport. ᴥ National Bookstore may consider online bookstores as competition but consumers may decide to watch TV series in Netflix instead of spending discretionary time reading. C. PROFIT ᴥ An indispensable component for a firm to continuously satisfy its customers. ᴥ Profit, however, must always go hand in hand with honor. ᴥ In October 1991, a flash flood killed around 8,000 people in Ormoc City. The tragedy was caused by years of illegal logging in the province. ᴥ One cannot justify any profit from business if the consequences are the destruction of lives.

Examples: ᴥ Wyden King of Anito Motels ᴥ Jerry Chua of Eng Bee Tin ᴥ Nanette Medved-Po & Christopher Po of Century Tuna 4 U ’s ᴥ ᴥ ᴥ ᴥ ᴥ ᴥ ᴥ ᴥ

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