AKMONLINK COLLEGE

Strategic Marketing Management

By: TEGEGNE A.
 Chapter One
The concept of Marketing
• Most of the people define marketing as selling or advertising.
• In fact marketing comprises of a number of activities which
are interlinked and the decision in one area affects the
decision in other areas.
• The term market originates from the Latin word “Marcatus”
which means a place where business is conducted.
• Comprehensively, market is defined as a group of potential
customers with similar needs or wants who are willing to
exchange something of value with sellers offering various
goods and/or services to satisfy those needs or wants of
customer.
 Cont’d
• Marketing is the process of discovering and
translating consumer needs and wants into
products and services, creating demand for these
products and services and then in turn expanding
this demand.
• The concept of marketing encompasses
Applies to profit and non-profit organizations
More than just persuading customers
Begins with customer needs
Does not do it alone
 Cont’d
• Exchange, which is the core concept of marketing,
involves obtaining a desired product from someone
by offering something in return.
• So, for marketing conditions to be satisfied :
 There are at least two parties.
 Each party has something that might be of value to the
other party.
 Each party is capable of communication and delivery.
 Each party is free to accept or reject the exchange offer.
 Each party believes it is appropriate or desirable to deal
with the other party.
 Types of market
• Depending upon what is involved, there are different types of
markets which deals with products and/or services such as:-
• Consumer Market: In which the consumers obtain what they
need or want for their personal or family consumption. This
market can be subdivided into fast moving consumer goods
market and durables market.
• Industrial/Business Market: In which the industrial or
business buyers purchase products like raw materials,
components, finished products, office supplies and
maintenance and repair items.
• Global Market: The world is rapidly moving towards
borderless society and thanks to information revolution as well
the efforts of WTO to lower the tariff and nontariff barriers.
 Scope of marketing
• The scope of market entails that things to be marketable
• Goods. Good is defined as something tangible that can be offered
to market to satisfy a need or want.
• Service. is any performance that one party can offer to another.
• Experiences. By mixing several services and goods, one can
create, stage and market experiences.
• Events. Marketers promote time based, theme-based or special
events such as Olympics, company anniversaries, sports events.
 Cont’d
• Persons. Celebrity marketing has become a major business.
• Places. Places, cities, states, regions and whole nations, compete
actively to attract tourists, factories, company headquarters and new
residents.
• Properties. Properties are intangible/tangible rights of ownership of
either real property or financial property that are bought and sold
which requires marketing effort.
• Information. Information can be produced and marketed as a product.
• Ideas. Film makers, marketing executives and advertising continuously
look for a creative spark or an idea that can immortalize them and their
work.
 Nature of Marketing
• Marketing is both consumer oriented and
competitor oriented.
• Marketing is a dynamic activity because a number
of variables keep changing.
• Long term objective of marketing is profit
maximization through customer satisfaction.
• Marketing is an integrated function and all the
marketing decisions are linked with each other.
• Marketing is the core functional area of modern
day organizations and is the driving force behind
every organization.
 Importance of Marketing
• To the Society
 It is instrumental in improving the living standards.
 Marketing generates gainful employment opportunities both directly
and indirectly.
 Marketing helps in stabilizing economic condition
• To the firms/companies
 Marketing sustains the company by bringing in profits.
 Marketing is the source of new ideas.
 Marketing provides direction for the future course.
• To the Consumers
 Meeting the unmet needs or wants.
 Reducing the price of products or services.
 Create Value and Satisfaction
 societal marketing concept
• The concept in which 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 calls upon marketers to build social and ethical
considerations into their marketing practices.
 Relationships and Networks Marketing
• Traditionally, a “market” was a physical place
where buyers and sellers gathered to exchange
goods.
• Economists now describe a market as a collection
of buyers and sellers who transact over a
particular product or product class.
• But marketers view the sellers as constituting the
industry and the buyers as the market.
 Goods/services
Industry (a
Market
collection of
sellers) (a collection of
buyers)

Money
 Five basic markets and their connecting flows
Resources
Markets

Services, money

Taxes

Manufacture Government markets Consumer

markets markets
Services

Services, money Taxes, goods

Taxes,
Money goods

Goods and services Money

Intermediary Goods and services

markets
 cont’d
• Today we can distinguish between a market place
and market space.
• The market place is physical, as when one goes
shopping in a store;
• Market space is digital, as when one goes shopping
on the Internet.
• Metamarket describes a cluster of complementary
products and services that are closely related in the
minds of consumers but are spread across a diverse
set of industries.
 cont’d
• Relationship marketing has the aim of building long-term mutually
satisfying relations with key parties, customers, suppliers and
distributors in order to earn and retain their long-term preference
and business.
• Marketers accomplish this by promising and delivering high
quality products and services at fair prices to the other parties over
time.
• The ultimate outcome of relationship marketing is the building of a
unique company asset called a marketing network.
• A marketing network consists of the company and its supporting
stakeholders (customers, employees, suppliers, distributors,
retailers, ad agencies, university scientists, and others) with whom
it has built mutually profitable business relationships.
 cont’d
• Marketing Channels: is the process and mechanisms through which
marketers reach their potential marketing network.
• Marketing channels may be conducted through:
• communication channels to deliver and receive messages from target
marketing network which includes newspapers, magazines, radio,
television, mail, telephone, billboards, posters, fliers, CDs, audiotapes.
• distribution channels to display or deliver the physical product or
service(s) to the marketing network or user which includes
warehouses, transportation vehicles, and various trade channels such
as distributors, wholesalers, and retailers.
• selling channels to effect transactions with potential buyers which
may includes banks and insurance companies that facilitate
transactions.
 cont’d
• Competition is the actual and potential rival offerings and substitutes
that a buyer might consider.
• Competitions may be
• Brand competitions: competition between companies offering the
similar line of products or services in the same target market with the
goal of having higher market share, revenue, profit and growth.
• Industry competition: A company sees its competitors as all
companies making the same product or class of products.
• Form competition: A company sees its competitors as all companies
manufacturing products that supply the same product or service.
• Generic competition: A company sees its competitors as all
companies that compete for the same consumer of different products.
 The Production Concept
• The production concept holds that consumers will
prefer products that are widely available and
inexpensive.
• Managers of production-oriented businesses
concentrate on achieving high production
efficiency, low costs, and mass distribution.
• They assume that consumers are primarily
interested in product availability and low prices
primary in developing countries.
 The Product Concept
• The product concept holds that consumers will
favor those products that offer the most quality,
performance, or innovative features.
• Managers in these organizations focus on making
superior products and improving them over time.
• They assume that buyers admire well-made
products and can appraise quality and performance.
• Management of these companies in consultation of
their product engineers design a new way and
design of products with little to no customers input.
 The Selling Concept
• The selling concept holds that consumers and
businesses, if left alone, will ordinarily not buy enough
of the organization’s products.
• The organization must, therefore, undertake an
aggressive selling and promotion effort.
• It also assumes that the company has a whole battery of
effective selling and promotion tools to stimulate more
buying.
• The selling concept is practiced most aggressively with
unsought goods, goods that buyers normally do not
think of buying, such as insurance etc.
 The Marketing Concept
• The marketing concept holds that the key to
achieving its organizational goals consists of the
company being more effective than competitors
in creating, delivering, and communicating
customer value to its chosen target markets.
• The marketing concept rests on four pillars :
target market, customer needs, integrated
marketing, and profitability.
 The difference between selling and
marketing Concept
Selling concept Marketing concept

Selling starts with the seller, and is preoccupied Marketing starts with the buyer and focuses
all the time with the needs of the seller. constantly on the needs of the buyer.

Seeks to quickly convert ‘products’ into ‘cash’. Seeks to convert customer ‘needs’ into
‘products’.

Views business as a ‘goods producing process’. View business as a ‘customer satisfying

process’.

Emphasis on staying with the existing The firm makes a ‘total product offering’ that
technology and reducing costs. will match and satisfy the identified needs of
the customer.
 The Marketing Mix
• Marketing is a process of creating and delivering
value.
• The marketer delivers value to the customer
basically through his market offer.
• Marketing mix is the set of marketing tools that
the firm uses to pursue its marketing objectives in
the target market.
• There are four marketing mix which are so called
4p’s of marketing
 Product mix
• The term product refers to what the business or non-profit
organization offers to its prospective customers or clients.
• The offering may be a tangible good, such as a car; a
service, such as an insurance plan; or an intangible idea,
such as the importance of donating eyes after the death.
• Customers habitually expect more than a simple tangible
product rather the complete offering of a total product that
includes not only the basic good or service but also the
‘extras’ that go with it.
• Selecting a brand name, designing a package, developing
appropriate warranties and service plans, and other product
decisions are also part of developing the “right” product.
 Place (distribution) mix
• The element of the marketing mix that encompasses
all aspects of getting products to the consumer in
the right location at the right time.
• Place, or distribution, activities involve bridging the
physical separation between buyers and sellers to
assure that products are available at the right place.
• Determining how goods get to the customer, how
quickly, and in what condition are decisions that are
made to place products where and when buyers
want them.
 Promotion mix
• The element of the marketing mix that includes
all forms of marketing communication.
• Advertising, personal selling, publicity and sales
promotion are all forms of promotion.
• Each offers unique benefits, but all are forms of
communication that inform, remind, or persuade
customers to buy a product.
 Price mix
• Price is the money or something else of value
given in exchange for something.
• The customer typically buys a product with cash
or credit, but the price may be the value of good
or service that is traded.
• To determine the price, marketers must ascertain
a product’s value, or what it is worth to
consumers.
THANKS!