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Hi there. Welcome to the first Vodcast for Marketing Principles. Before we start, please
note that the vodcasts are to assist you in structuring your revision notes for the concepts
covered in the lectures and textbook, they are not to replace the lectures. You should
have read the textbook chapters and attended the lectures before watching the vodcasts.
In this vodcast, we will review the key concepts
Chapter 1 & 2, which provide introductions to “What is Marketing?” and “What is
So, what is marketing? The textbook defined marketing as “the process by which companies
create value for customers and build strong customer relationships in order to capture
value from customers in return.
Before we explore this process, let's firstly review five of the core concepts in marketing.
First, customer needs, wants and demand: wants
are objects that satisfy the needs. When wants are backed by buying power (ie., money $), they
become demands. In other words, a potential customer for your product is someone who is
"willing" and "able" to buy your product.
and a variety of other offerings that satisfy customers’ needs and wants.
Third, value, satisfaction and quality. When
a product's perceived performance or quality matches or exceeds a buyer's expectation,
he or she becomes a satisfied customer and will buy again and tell others about their
good experiences.
Four, marketing is an exchange between the customer and the marketer and successful transactions
pave the way for long-term relationships.
Five, a market is the set of all actual and potential buyers of a product. In the subsequent
lectures, we will introduce the concepts of market segmentation and target marketing whereas
companies concentrate their marketing efforts in selected segments of the total market.
In a nutshell, marketing starts with the customer
and ends with the customer.
Now, let's have a closer look at the marketing process.
(Figure 1.2 in your textbook presents a five-step
model of the marketing process.)
In the first four steps, marketing organisations uncover knowledge about customers, create
value for customers and build strong customer relationships. In the final step, companies
reap the rewards of creating superior customer values. I.e., capturing value from customers
in return.
Please refer to the textbook for detailed discussions on each of the steps in the marketing
process which are summaries in the expanded model of the marketing process in Figure 1.8.
Now, let's move on to the hard task of strategic
planning, namely selecting an overall company strategy for long-run survival and growth.
Strategic planning is the process of developing
and maintaining a strategic fit between the organisation's goals and capabilities and
its changing marketing opportunities. The strategic planning process begins with
the company defining its overall purpose and mission. This mission is turned into objectives
that guide the whole company. Marketing planning occurs at the business-unit, product, and
market levels.
The Boston Consulting Group's now-classic BCG growth-share matrix is one of the popular
approaches to business portfolio analysis whereas a company classifies all its Strategic
Business Units (SBUs) according to the "market growth rate" (the vertical axis in the matrix)
which is a measure of market attractiveness and the "relative market share" (the horizontal
axis in the matrix) which is a measure of company strength in the market.
As time passes, SBUs change their position
in the growth-share matrix. Each SBU has a life cycle.
The product/market expansion grid is a portfolio-planning tool for identifying company growth opportunities
through market penetration, market development, product development or diversification.
The strategic plan defines the company's overall mission and objectives. Marketing's
role and activities are summaries in Figure 2.4
* Customers are in the centre.
* Profitable long-term customer relationships are the goal.
* Companies cannot possibly serve all customers. They must divide up the total market and choose
the best segment(s) to target. * Marketing strategy is next. Guided by the
strategy, the company develops its marketing mix -- Product, Price, Placement logistics,
Promotion (the classic 4Ps for consumer marketing), plus People, Process and Physical evidence
(the extended marketing mix 7Ps taking into consideration the marketing of services and
business-to-business marketing).
After all, managing the marketing process requires analysis, planning, implementation,
and control. A company's strategic marketing planning
process is documented in their "Marketing Plan". Table 2.2 outlines the main sections
of a typical product or brand marketing plan (see also Appendix 2 for a sample marketing
In the meantime, read the “Tribes for the Sydney” article and start discussion among
your group members what new product you want to develop for your group project. Discuss
In the meantime, read the “Tribes for the Sydney” article and start discussion among
with your tutor the feasibility of your proposal and your choice of tribe.