MARKETING Tatiana Y. Grishchenko, Ph. D, associate professor,

MARKETING Tatiana Y. Grishchenko, PhD, associate professor, Dean of Higher School of Economics and Management [email protected]

GRADING From 1 to 2 points - for the result of assignments and class work 30 points – final test ---------------------------------- 100 points ----------------------------------- Plus additional 20 points – participation in the Annual Scientific Congress of Students and Graduate Students / Debates / participation in the school graduate campaign ------------------------------------- 120 points The final grading: 3 (satisfactory) – 70 points and more 4 (good) – 85 points and more 5 (excellent) – 100 points and more

Marketing: Definitions Marketing consists of those activities involved in the flow of goods and services from the point of production to the point of consumption (1938, American Marketing Association). Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchange and satisfy individual and organisational objectives (1985, American Marketing Association). Marketing is the management process which identifies, anticipates and supplies customer requirements efficiently and profitably. (UK Chartered Institute of Marketing, 1999).

Looking at the two most recent definitions one sees that they agree on the following points: Marketing is a management process. Marketing is about giving customers what they want. In the AMA version, marketing is about exchanges (i.e., of ideas, goods, and services). The AMA definition also describes the ways in which marketing can stimulate exchanges (i.e., through conception, pricing, promotion, and distribution).

History of Marketing First Era Classical School (1900–50): These theories focused on aggregate market behaviour and focused on the use of economics and sociology. Second Era Managerial Marketing (1950-75): This era began in marketing departments within managerial or business schools, and they focused their attention on individual behaviour, but continued their reliance on borrowing techniques from social sciences. Third Era Behavioural Marketing School (1965-present): These schools have borrowed from different branches, mostly psychology, in an effort to gain even greater insight into individual consumer behaviour. Fourth Era Adaptive/Strategic Marketing School (1980 —present): once again, a return to a more macro-or aggregate focus. Influence of M. Porter and the competitive advantage paradigm.

Marketing is not a theoretical discipline. It is a framework composed of different disciplines. Though its roots are in industrial economics, actually it is a composite of three academic disciplines: Economics; Psychology and Management. Each theoretical approach has its specific contribution to areas of marketing relevance

Guinness is a popular Irish dry stout that originated in the brewery of Arthur Guinness (1725–1803) at St. James's Gate, Dublin.

Pears transparent soap is a brand of soap first produced and sold in 1789 by Andrew Pears at a factory just off Oxford Street in London, England. It was the world's first transparent soap and one of the oldest brands.

Bubbles by John Everett Millais Pears was one of the first products in History to put together the essential ingredients for modern brands: identity (customers could recognize it), differentiation (customers could remember it), affinity (product became part of customer’s culture and networks).

In 2009, Unilever created a furor among long time customers by changing the formula of Pears. This offended brand sensibilities in two ways: The listed ingredients of the new soap are: Sorbitol, Aqua, Sodium Palmate/stearate, Sodium Palmkernelate, Sodium Rosinate, Propylene Glycol, Sodium Lauryl Sulfate, PEG-4, Alcohol, Glycerin, Perfume, Sodium Chloride, Sodium Meta Bisulfite, Etidronic acid, Tetra Sodium EDTA, BHT, Cl 12490, Cl 47005, Benzyl Benzoate, Benzyl Salicylate, Cinnamal, Eugenol, Limonene, Linalool. The original listed ingredients are: Sodium Palmitate, Natural Rosin, Glycerine, Water, Sodium Cocoate, Rosemary Extract, Thyme Extract, Pears Fragrance Essence.

The world and marketing are changing. They will continue to change. Today's winners may be tomorrow's losers. Marketers are surrounded by change. We all are. Back in 500 AD, Heraclitus the Greek philosopher, spotted it and commented: 'You cannot step twice into the same river for fresh waters are ever flowing in upon you.' Change is constant.

Can you market these products easily ?

What about marketing them? How about their films ? How about the products they endorse ?

Services Can you name the following offerings?

Experiences

Events

Organizations

Information

Places

Ideas

Four Main Business Orientations • Production: focus on producing more, selling high volumes; controlling costs and production efficiency. (Ford 1920s — Model T) • Product: focus on improving quality; assumes that customers want a better quality version of the same product. ( GM 1930s — Diversified product line) • Selling: focus on aggressive sales and promotion to sell whatever the organisation wants to make; sellers needs come first • Marketing: focus on defining customer needs and then developing offerings that deliver what the customer wants; customer needs come first .

1. Production Concept Concentrate on achieving high production efficiency, low cost & mass distribution Consumers prefers inexpensive items in developing countries This concept is the oldest of the concepts in business. It holds that consumers will prefer products that are widely available and inexpensive. Managers focusing on this concept concentrate on achieving high production efficiency, low costs, and mass distribution. They assume that consumers are primarily interested in product availability and low prices. This orientation makes sense in developing countries, where consumers are more interested in obtaining the product than in its features. Five Marketing Concepts

2. Product Concept Consumers favors quality, performance or innovative features This orientation holds that consumers will favor those products that offer the most quality, performance, or innovative features. Managers focusing on this concept concentrate on making superior products and improving them over time. They assume that buyers admire well-made products and can Appraise quality and performance. However, these managers are sometimes caught up in a love affair with their product and do not realize what the market needs.

3. Selling Concept Consumers & businesses if left alone will not buy enough Undertake aggressive Selling & Promotion Consumers shows buying inertia until coaxed Many use it at the time of over capacity or competition This is another common business orientation. It holds that consumers and businesses, if left alone, will ordinarily not buy enough of the selling company’s products. The organization must, therefore, undertake an aggressive selling аnd promotion effort. This concept assumes that consumers typically show buying resistance and must be coaxed into buying. It also assumes that the company has a whole battery of effective selling and romotional tools to stimulate more buying. Most firms practice the selling concept when they have overcapacity. Their aim is to sell what they make rather than make what the market wants.

4. Marketing Concept More effective than competitors in creating, delivering, and communicating superior customer value Putting people first Fulfilling buyers needs This is a business philosophy that challenges the above three business orientations. Its central tenets crystallized in the 1950s. It holds that the key to achieving its organizational goals (goals of the selling company) consists of the company being more effective than competitors in creating, delivering, and communicating customer value to its selected target customers. The marketing concept rests on four pillars: target market, customer needs, Integrated marketing and profitability.

Factors leading to Marketing Concept: Sales Decline Slow Growth Changing buying Patterns Increasing competition Increasing marketing expenditure

Distinctions between the Sales Concept and the Marketing Concept: 1. The Sales Concept focuses on the needs of the seller. The Marketing Concept focuses on the needs of the buyer. 2. The Sales Concept is preoccupied with the seller’s need to convert his/her product into cash. The Marketing Concept is preoccupied with the idea of satisfying the needs of the customer by means of the product as a solution to the customer’s problem (needs). The Marketing Concept represents the major change in today’s company orientation that provides the foundation to achieve competitive advantage.

Societal marketing concept holds that organization should not develop marketing strategy by only keeping customer needs and wants in mind but also consider the well being and betterment of society. Now days this marketing concept is followed by majority of organizations including MacDonald’s, Unilever and Procter & gamble. This marketing strategy passes out positive message to the stakeholder, partners, Government, customer and public. Those organizations working on this marketing strategy communicating the message to the world those they are not only working for the profits but also for the well being of the society. Source: Kotler, Philip. (2000) Marketing Management. Upper Saddle River, New Jersey: Prentice Hall.

5. Societal Concept To determine the needs, wants and interest of the Target Market and deliver the desired satisfaction that preserves the society's well being Environment deterioration Resource Shortages Population Growth Unhealthy Food This 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 (this is the original Marketing Concept). Additionally, it holds that this all must be done in a way that preserves or enhances the consumer’s and the society’s well being.

Home task for the next seminar: 1) In group of 2-5 write 5 examples for each of 5 concepts. 2) Prepare presentation in Microsoft PowerPoint about your examples of the world oldest brands