CHAPTER 1
Overview of marketing
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Overview of marketing
LO
1.1
Define the role of marketing in
organisations.
LO
1.2 Explain the concept of value in
marketing.
LO
1.3
Understand why marketing is
important, both within and outside the
firm.
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Concept map
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What is marketing?
Marketing is the activity, set of
institutions and processes involved
in creating, capturing,
communicating, delivering and
exchanging offerings (goods,
services and ideas) that have value
for customers, clients, partners and
society in general.
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What is value?
Value represents the relationship of benefits to
costs. Firms can improve their value by increasing
benefits, reducing costs or both.
Improving/balancing the value is not necessarily
all about discounting your product all the time.
We must never assume why a customer is
Benefit
buying from us. Cost
We need to carry out market research; finding
out what customers' needs and wants
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Marketing is strategic
• Marketing is not a random
activity—it requires thoughtful
planning.
• Firms assess their market
position and then decide on
their marketing strategy.
• Based on this, they then devise
a marketing plan.
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Marketing plan
A marketing plan is a written
document composed of any analysis
of the current marketing situation,
opportunities and threats for the firm,
marketing objectives and strategy
specified in terms of the four Ps,
action programs and project or pro
forma income and other financial
statements.
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Apple
How does a brand like Apple create
value for the end user?
© aiyoshi597/Shutterstock
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Core aspects of marketing
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Customer needs and wants
• Good marketers seek out potential
customers who have both:
1. an interest in the offering
2. the ability to buy it.
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Marketing entails an
exchange
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Marketing requires decisions about
product, price, place and promotion
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Product: creating value
The fundamental
purpose of marketing Goods
is to create value by
developing a variety
of offerings, Services
including goods,
services and ideas,
to satisfy customer Ideas
needs.
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Goods, services, ideas
• A Matilda’s soccer
game is a service.
• A Matilda’s soccer
shirt purchased at
the game is a good.
• The possibility of
getting the T-shirt
signed by Matilda’s
© Matt King/Getty Images
captain Sam Kerr is
an idea.
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How are ideas marketed?
The Australian Government’s National
Tobacco Campaign, using graphic
imagery and a Quitline, successfully
encouraged people to stop smoking,
benefiting society at large.
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Price: capturing value
• Everything has a price but it’s not
always monetary—as well as
money, buyers give time and
energy.
• How much are customers willing to
pay so that they are satisfied with
their purchase and the seller
makes a reasonable profit?
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Place: delivering the value
proposition
• Place—or supply chain
management—describes all activities
necessary to get the product to the
customer when the customer wants it.
• Without an efficient marketing channel
system, the product isn’t available
when customers want it, which can
result in poor sales and low profits.
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Promotion: communicating
value
• Promotion is communication by a
marketer that informs,
persuades and reminds
potential buyers about a product,
service or idea to influence their
opinions or elicit a response.
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Marketing can be performed
by individuals and
organisations
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Marketing impacts various
stakeholders
Society Customers
Employees Supply
chain
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Marketing helps create value
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CHECK YOURSELF
What is the definition of marketing?
Marketing is about satisfying ______
and ______.
What are the four components of the
marketing mix?
Who can perform marketing?
What are the various eras of
marketing?
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How do marketing firms become
more value driven?
By sharing information
By balancing benefits with costs
By building relationships with
customers
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Sharing information
• In value-based marketing-orientated firms
marketers share information about
customers and competitors across the firm’s
various departments.
• Zara’s designers collect purchase
information and research customer trends to
determine what their customers want to
wear in the next few weeks, simultaneously,
the logisticians are getting the product to
stores by using the purchase history of
individual stores.
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Connecting with customers
using social and mobile
media
• Businesses and marketers take
social and mobile media seriously.
• In Australia, social media is used
as a marketing tool by:
– 79% of large businesses
– 34% of mid-sized businesses
– 27% of small businesses.
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CHECK YOURSELF
Does providing ‘good value’
simply mean selling at a low
price?
What are the benefits of long-term
relationships with customers?
How are marketers connecting
with customers using social and
mobile media?
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Why is marketing
important?
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Marketing is pervasive
across channel members
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Supply chain/marketing channel
• Supply chain refers to the group of firms
that make and deliver a given set of
goods and services.
• Effective management of supply chain
relationships often has marked impact on
a firm’s ability to satisfy the consumer,
which results in profitability for all parties.
• Levi Strauss & Co. uses an automatic
inventory replenishment system to
ensure adequate stock is in stores.
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Marketing expands a firm’s
global presence
© Redfx/Alamy Stock Photo/DAL
Levi Strauss & Co. helps retailers manage their inventory
so they don’t run out of stock.
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Marketing enriches society
• All the top companies focus on a
broader range of considerations than
just financial profitability.
• Good corporate citizenship could
include:
– greener products
– healthier food options
– safer products
– reduced carbon footprint.
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Marketing can be
entrepreneurial
• Entrepreneurs organise, operate
and assume the risk of a business
venture that aims to satisfy unfilled
needs.
• Examples include:
– OzHarvest
– Magic Millions
– TPG
– Orange Sky.
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CHECK YOURSELF
List five functions of marketing that
illustrate its importance.
A firm ‘doing the right thing’
emphasises the importance of
marketing to _________.
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Summing up
• Marketing strives to create value in
many ways.
• Value represents the relationship of
benefits to costs.
• The best firms integrate a value
orientation into everything they do.
continued
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Summing up (cont.)
• Successful firms integrate marketing
throughout their organisation.
• Marketing helps facilitate the
smooth flow of goods through the
supply chain.
• Firms ‘do the right thing’ by
considering environmental and
societal impacts.
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