Chapter 2 Marketing

01 MARKETING
MARKETING
Kotler defines marketing as “the science and art of

exploring, creating, and delivering value to satisfy the needs
of a target market at a profit. Marketing identifies
unfulfilled needs and desires. It defines, measures and
quantifies the size of the identified market and the profit
potential.” To understand the marketing concept or the
marketing approach it’s useful to contrast this with certain
other approaches that might be available.
APPROACHES TO SELLING A PRODUCT
The product-led approach. For this, imagine a company which

was started by a couple of engineers, clever and successful
people, who are very interested in the technical qualities and the
cleverness of the products they produce. They get enormous
satisfaction in well-engineered, clever innovative products.
Unfortunately, just because the product is well-engineered,
innovative and clever doesn’t mean that product will sell. No
matter how much those engineers appreciate the fine details of
that product it may be a product that no one wants, or a product
which is too expensive. Eg: Windows Smart Phones
The sales-led approach may sound okay, but what it means is

great emphasis on selling what you have, even if customers
don’t really want it. The sales-led company will have a very high
powered sales team, skilled in the arts of persuasion and getting
people to sign contracts which they may later regret.
The marketing-led concept is quite different. What’s important about that is that it is very outward looking. It
looks to see:
๏ What will potential customers want?
๏ What do they appreciate?
๏ What amount of money do they think it’s worth paying for the product or service we are providing?
Through market research we will establish the needs of potential customers and then develop an appropriate
product to match those needs. It will stress to those customers the ability of the product or service to satisfy
their needs and it will profit through customer satisfaction because it fulfils the needs of the customers.
In many ways it’s a very humble approach. It’s saying that the customer knows best: the marketing concept
means finding out what do customers want and developing products or services to fulfil customer’s needs.
MARKET SEGMENTATION
Market segmentation looks in how a market can be split

up.
Commonly it can be split up according to age, sex, lifestyle,
wealth, and geography. For example in the fashion market, there
are quite different fashions which are bought by younger and
older people. Obviously there are different fashions depending
whether you are selling to male or female. Lifestyle is important:
are we addressing the leisure market or are we addressing a
more formal market?
MARKETING MIX
After investigating market segmentation, the next stage is
market targeting, that is deciding which segments of the market
to attack. Most companies have a range of products each of
which targets a particular segment. Targeting each segment,
known as product positioning, is carried out by adjusting the
marketing mix.
Originally there were four variables or levers that could be used.
Product ๏ Process
These were known as๏ McCarthy’s marketing mix or the Four Ps:
๏ Price ๏ Physical
evidence
๏ Promotion
๏ Place
THE 4 P’s
Product
The first of the Four Ps is product, and this includes: The features of the
product (what it does)
๏ Quality
๏ Design,
๏ Brand,
๏ Packaging.
THE 4 P’s
Pricing
The second of the Four Ps is price. This includes not only
the price itself (the price level or price point), but also
discounts for bulk buying which is particularly important in
business-to-business sales. Price also includes the terms,
that is how long a customer has to pay. There are also
various types of strategic pricing, described below. Pricing
often has to take into account the price of competing
products.
THE 4 P’s
Promotion
There are four main types of promotion:
๏ Advertising
๏ Sales promotion
๏ Personal selling
๏ Public relations.
We are all familiar with advertising: TV, magazines and,
increasingly, the Internet. Marketing can be very expensive,
so setting a marketing budget is very important
THE 4 P’s
Promotion
There are four main types of promotion:
๏ Advertising
๏ Sales promotion
๏ Personal selling
๏ Public relations.
We are all familiar with advertising: TV, magazines and,
increasingly, the Internet. Marketing can be very expensive,
so setting a marketing budget is very important
THE 4 P’s
Promotion
๏ Push promotion
๏ Pull promotion
Imagine a new product is about to be launched. Push
promotion is concerned with getting the
product into the shops and would use, for example,
personal selling. Pull promotion is getting the public to
demand that product, to go into shops and ask to buy it.
That promotion could be done by advertising. For the whole
promotional campaign to be successful, you need both
push promotion and pull promotion to match up.
THE 4 P’s
Place
The last of the four Ps is ‘Place’, meaning the place you go
to buy or acquire the product. It really means distribution.
Considerations to bear in mind there are:
๏ The length of the distribution chain. For example direct
marketing where products go directly from manufacturer to
consumer compared to manufacturer, wholesaler, retailer
chains.
๏ Suitability of the outlet. For example, high fashion goods
are better sold through exclusive shops, not supermarkets.
PRICING ISSUES: THE 4 C’s
 Cost- Can profit be made

 Customers- How much will they pay
 Competition- Price comparison with competitors
 Corporate objectives- How to capture market share
PRICING ISSUES: THE 4 C’s
 Cost- Can profit be made

 Customers- How much will they pay
 Competition- Price comparison with competitors
 Corporate objectives- How to capture market share
PRICING STRATEGIES

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01 MARKETING

Kotler defines marketing as “the science and art of

The product-led approach. For this, imagine a company which

The sales-led approach may sound okay, but what it means is

๏ What will potential customers want?

๏ What do they appreciate?

Market segmentation looks in how a market can be split

 Cost- Can profit be made

 Cost- Can profit be made

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