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University of Eastern Africa, Baraton
School of Business Department of Management & Marketing
MKTG 115 (Chapter 1: Marketing in Today’s Economy) By Sang Monica, PhD 2023/24.1 CHAPTER ONE Marketing in Today’s Economy Contents • Introduction • Challenges & Opportunities of marketing in Today’s Economy • Basic Marketing Concepts • Major Marketing Activities & Decisions • Taking on the challenges of marketing strategy Introduction • Today’s economy is concerned about understanding customer needs better than the competitor. • Profit and non-profit organizations require effective planning and sound marketing strategy • Main aim is to satisfy customer • Concern about developing quality products, cost effective, understand environment,(SWOT) analysis • Planning, develop, implement strategies Challenges and opportunities of marketing in today’s economy
Advancement in technology (computer,
communication, information technology) has influenced business practices, and personal buying behavior. Challenges: • Power shift to customers • Massive increase in product selection • Audience and media fragmentation • Changing value propositions • Shifting demand patterns • New sources of competitive advantage • Privacy, security and ethical concerns • Unclear legal jurisdiction Basic Marketing Concepts • Marketing is a business function just like production, R & D, management, HR, and accounting. • Its goal is to connect the organization to its customers. • Marketing is also a process of managing the flow of products from manufacturer, wholesaler, retailer, consumer. • From 1985-2005, The American Marketing Association (AMA) defined marketing as; ‘process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objective.’ • In 2005, the AMA changed the definition of marketing to better reflect the realities of competing in today’s marketplace: ‘marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholder.’ Marketing concepts: market, exchange, product. Market- a collection of buyers and sellers. Market place – a physical location where buyers and sellers meet to conduct transactions. Market space – an electronic market place not bound by time or space. Meta-market – a cluster of closely related goods and services that centers around consumption activity. Metamediary – a single access point where buyers can locate and contact many different sellers in the market. Exchange – the process of obtaining something of value from someone by offering something in return, this usually involves obtaining products for money. There are 5 conditions for exchange: 1. There must be at least two parties to the exchange. 2. Each party has something of value to the other party 3. Each party must be capable of communication and delivery. 4. Each party must be free to accept or reject the exchange. 5. Each party believes that it is desirable to exchange with the other party. Product – something that can be acquired via exchange to satisfy a need or a want. Utility- the ability of a product to satisfy a customers’ needs and wants. A broad number of things can be classified as products. - Goods -people - Services - places - Ideas - experiences & events - Information - real or financial property - Digital products - organizations The 5 types of utility provides through marketing exchanges are: 1. Form utility 2. Time utility 3. Place utility 4. Possession utility, and 5. Psychological utility. Major marketing activities and decisions
Aim is to give customers a reason to buy
organization’s products. Include: • Strategic and tactical planning • Social responsibility and ethics • Research and analysis • Developing competitive advantages and a strategic focus for the marketing program. • Marketing strategy decisions, including decisions related to market segmentation and target marketing, the product, distribution, and promotion which will create competitive advantages over rival firms. • Implementing and controlling marketing activities. • Developing and maintaining long-term customer relationships, including a shift from transactional marketing to relational marketing. Challenges involved in developing marketing strategy • Unending change – customers change, competitors change, marketing organizations change. • The fact that marketing is inherently people driven. • Lack of rules for choosing appropriate marketing activities. • The basic evolution of marketing and business practice in our society. • The increasing demands of customers. • An overall decline in brand loyalty and an increase in price sensitivity among customers. • Competing in mature markets with increasing commoditization and little real differentiation among product offerings. • Increasing expansion into foreign markets by U.S. and foreign firms. • Aggressive cost-cutting measures in order to increase competitiveness. • Increasing cooperation with supply chain partners and competitors. Reference
• O. C. Ferrell & Michael D. Hartline, (2011)
Marketing Strategy. Mexico City, Southwestern publications
