Chap1-Principles of Marketing Introduction

Principles of Marketing : 

Principles of Marketing Instructor: Ngoc Ai, Pham Fall 2010 MBA Program

Today’s Agenda : 

Today’s Agenda Review Syllabus Other Administrative Details Overview of the Marketing Concept & Marketing Mix

Course Description : 

Course Description “An introduction to the basic concepts of market definition, consumer behavior, and the principal marketing functions: product line development, pricing, distribution, promotion, sales force management, advertising, research, and planning.” Review Syllabus

Course Objectives : 

Course Objectives Review Syllabus Understand basic concepts in Marketing Your ability to analyze Marketing problems. Learn how to develop a marketing plan.

Classes and Communication : 

Classes and Communication Class: L8013 Mon-Wed-Fri 6-9pm WO22-25* Email: To e-mail me, please type “Marketing Class” into the subject line. E-mail: ngocaidba@gmail.com Address: Business Administration Dept, DUE 71 Ngu Hanh Son St, Da Nang City Phone: (511) 3836934 Review Syllabus

Class Structure : 

Class Structure Lectures: 3 sessions/week (*note that class schedule might be changed!) Determination of Grades: * Class Participation (incl. home exercise) 10% * Group Case Presentations (x2) 40% * Group Marketing Plan Report 20% * Midterm Exam 20% * Final Exam 10% Textbook:There is no required textbook for this subject. For a basic textbook on marketing, including marketing terms, examples, and a general taxonomy of issues, I recommend: Kotler, Philip. Marketing Management. 11th ed. London, UK: Prentice Hall, 2003. Kotler, Philip. Principles of Marketing. 2nd European ed. UK: Prentice Hall, 1999 Review Syllabus

Case Analysis and Class Discussion(Team based) : 

Case Analysis and Class Discussion(Team based) Each class we have 2 theme-based discussion relevant to the subject of the lecture. Based on a case analysis or a debate. For each class 2 teams are assigned for preparing for the case analysis or debate before class. During the discussion I will call for names or volunteers. So it is important that you come prepared. Questions related to discussed topics would be in mid-term and possibly finals.

More on Team Project : 

More on Team Project Develop a marketing plan for a new product or service. Work in groups of 5 students. No more than 15 pages, double spaced, 12 point font, (including tables, figures, and references). Keep in mind that both creativity and the actual marketability of your product matter. Your group should make appointments with the instructor to discuss your idea of the project or via email no later than Aug 17. Final write-up due by 10am August 23. You must submit a hardcopy of your assignments before the deadlines. No fax or email copy will be accepted. Group presentation at the last lecture: Aug 21.

Class Participation : 

Class Participation There are 10% for class participation in the course score. Including attendance, in-class discussion, take-home exercise, and project presentation at the end of the course. Remember to give a sign plus (+) if you feel you deserve it after each discussion session (See: Individual assessment checklist)

Tracking your contribution… : 

Tracking your contribution…

Midterm & Final: 20% and 10% : 

Midterm & Final: 20% and 10% Midterm (WO23-Aug 14): 40-60% multiple choice. The rest of it will be short answer and short essay questions. Some are relevant to our theme-based class discussion and case analysis. No make-up midterm test. Final: (WO25) Similar format (need coordination with other sections). Everything in the text book is fair game. Review Syllabus

Missed Exams : 

Missed Exams If you miss the Final due to illness or domestic tragedy: 1) Contact the Program Office Assistant immediately. 2) Submit a medical certificate or other relevant documentation within 48 hours of the test date if possible. Requesting remarking of midterms Make request to me no more than 2 weeks after return date. Include a written explanation with request. Note that I will photocopy many of the tests, so don’t make changes and think I won’t catch it. Any exam submitted for remarking will be remarked in its entirety. Grades may rise, fall, or stay the same. Review Syllabus

Class Etiquette : 

Class Etiquette Come to class on time and don’t walk out early. Turn off your cell phone, pager and palm pilot etc. Don’t talk amongst yourselves, read the newspaper, or eat during lecture. Do ask questions and ask me to slow down if I am going too fast or the material is not clear. Do help out the class by initiating and participating in class discussion. Read textbook before class, review after.

Communication in Class : 

Communication in Class Name card Information form Administration

Question：Is marketing good or evil? : 

Question：Is marketing good or evil?

Slide 16: 

If you think marketers have an image problem

Slide 17: 

What People Think of Marketers Don’t shoot the messenger  FUTURELAB

Slide 18: 

Marketers are faddish, irresponsible, … don’t think like business people … more akin to a recalcitrant child … McKinsey & Company, CEO/CMO Survey, 2005

Slide 19: 

Too many marketers have become so specialised that they don’t think in terms of the company’s big picture. Philip Kotler

Slide 20: 

Marketers are frivolous and difficult to approach Australian Society of Certified Public Accountants

Slide 21: 

Buy Stormhoek Wine 

What is Marketing, anyway? : 

What is Marketing, anyway? Advertising Sales Promotions Public relations Sponsorships Pricing Retailing Direct mail Catalogues Billboards E-commerce Shopping channels Packaging Delivery Service Research Partly…. Coupons

Marketing Everywhere! : 

Marketing Everywhere! Understanding marketing helps you when: You buy a new pair of shoes, or go to the grocery store. You open a new bank account. You apply for a job. You watch television. ….. What is Marketing?

What is Marketing? : 

What is Marketing? Marketing is the total system of business activities designed to plan, price, promote, and distribute want-satisfying products, services, and ideas to target markets in order to achieve organizational objectives. Marketing is the sum total of activities that keep a company focused on its customers and, with good management and a little luck, ensure that the company’s offerings are valued by its customers – Alexander Hiam

This is your 1st homework :) : 

This is your 1st homework :) In your own word… What’s marketing ?

Key Words in the Definition : 

Key Words in the Definition total system: not an ad hoc approach business activities: but not just for businesses plan, price, promote, distribute: the application of the marketing mix need-satisfying: meeting customers’ needs products, services, ideas: not just products target markets: not a broad-brush approach objectives: the customer’s as well as the firm’s

Slide 27: 

Why Study Marketing? Contributions to Individual Organizations Critical to the success of the firm. Costs About 50% of total Product/service costs are marketing costs. Careers About 25 to 33% of the nation’s work force hold marketing positions. Contributions to Society Marketing decisions affect the lives of individual consumers and society as a whole.

Who is the Focus? : 

Who is the Focus? CustomersThe purchasers of organizations’ products; the focal point of all marketing activities. The Target Market Hard Rock focuses on its target market to meet their needs © Used By Permission.

Customer as a focal point of the firm : 

Customer as a focal point of the firm In 1912 catalog of L.L.Bean contained following message: I do not consider a sale complete until goods are worn out and customer still satisfied We will thank anyone to return goods that are not perfectly satisfactory… Was this guy nuts? We won’t be happy until we have 100% customer satisfaction and on-time delivery – John West, Fedex manager

It’s All About Satisfaction : 

It’s All About Satisfaction The ultimate goal is customer satisfaction, which leads to long-term profitability and success. Whenever things of value are being exchanged, marketing principles apply: consider exactly what is being exchanged (it’s “give” and “get”) Marketing today is applied to virtually all aspects of a company’s operation that has the potential to influence satisfaction Marketing principles apply in all organizations

Figure 1-1: The Give and Get of Marketing : 

Figure 1-1: The Give and Get of Marketing

…and Creating Value : 

…and Creating Value Successful marketing involves meeting or exceeding customer expectations When expectations are exceeded, customer satisfaction or delight results Marketing is very much about adding value through a broadly-defined value proposition The value proposition comprises everything the company offers its customers – must be defined very broadly Value may be created by marketers in many different ways: value is not only about price

Creating Customer Value : 

8 Creating Customer Value Product benefits Service benefits Relational benefits Image benefits Monetary costs Time costs Energy costs Psychological costs Positive Negative

A value proposition : 

A value proposition

Drivers of Customer Satisfaction : 

Drivers of Customer Satisfaction Many aspects of the firm’s value proposition contribute to customer satisfaction: The emotional connection with customers Interaction with the firm and it employees The technical performance of the firm Support services and systems The core product or service offered Ability to add value and to differentiate as a firm focuses more on the top levels

Discussion Questions : 

Discussion Questions Is customer satisfaction enough? Is customer delight necessary?

The Marketing Mix : 

The Marketing Mix The conventional view of the marketing mix consisted of four components: product, price, distribution and promotion. Generally acknowledged that this is too narrow today; now includes service, people, technology. Marketers today are focused on virtually all aspects of the firm’s operations that have the potential to affect the relationship with customers.

Product Variable : 

Product Variable A good, a service, or an idea.

Product Example : 

© Used By Permission. Product Example Is this advertisement for a good, service, or idea?

Price Variable : 

Price Variable Decisions and actions associated with establishing pricing objectives and policies and determining product prices All the cost that the buyer must give up to receive the product

Distribution Variable : 

Distribution Variable Make products available in quantities desired Minimize costs: Inventory Transportation Storage Select/Motivate intermediaries Establish/Maintain inventory control Develop/Manage transportation &storage systems

Coca Cola machines outside gas stations : 

Coca Cola machines outside gas stations Grocery store inside a bank

Slide 43: 

1–43

Promotion Variable : 

Promotion Variable Activities to inform individuals or groups about the organization and its products Increase awareness of the organization and new or existing products. Knowledge about product’s unique and desirable features © Used By Permission.

Evolution of the Marketing Concept : 

Evolution of the Marketing Concept © Used By Permission. Figure 1.3

Production Concept : 

Production Concept Consumers will favour those products that are widely available and low in cost. Therefore increase production and cut down costs. And build profit through volume.

Product Concept : 

Product Concept Consumers will favour those products that offer the most quality, performance, or innovative features. Therefore, improve quality, performance and features. This would lead to increased sales and profits.

The Selling Concept : 

The Selling Concept Consumers , if left alone , will not buy enough of company’s products. Therefore, promote sales aggressively. And,build profit through quick turnover.

The Marketing Concept : 

The Marketing Concept The key to achieving organizational goals consist in determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors. And build profit through customer satisfaction and loyalty.

Marketing and Sales Concepts Contrasted : 

Marketing and Sales Concepts Contrasted

The Societal Marketing Concept : 

The Societal Marketing Concept The societal marketing concept holds that the organization’s task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors in a way that preserves or enhances the consumer’s and the society’s well being. It addresses conflicts between consumer’s and firm’s short run wants and long term welfare.

Societal Marketing Concept : 

Societal Marketing Concept

Marketing Myopia – Fit or Future? : 

Marketing Myopia – Fit or Future? Management’s failure to recognize a company’s scope of business. Sellers pay more attention to the specific products they offer than to the benefits and experiences produced by the products. They focus on the “wants” and lose sight of the “needs.” Need a drill? Need a cloth?

Slide 54: 

People buy holes, not drills! Fashion, status, reference groups approval, and warmth, but not coats! The Marketing Myopia

The New View of Marketing : 

The New View of Marketing The marketing emphasis today is on keeping existing customers as well as getting new ones Four principles guide marketing- 4R: retention: keeping them coming back referrals: encourage them to recommend us relationships: build an emotional connection recovery: solve problems as they arise

Next Class : 

Next Class Marketing Environment Discussion Session: first 2 cases Next Class Debate: Which environmental factor is the most important for marketing: demographic change or technology change?

Slide 57: 

THANK YOU & GOOD NIGHT!