OVERVIEW OF MARKETING

Topic 1
OVERVIEW OF MARKETING



Introduction

• Marketing is all around you
• Marketing comes to you in the good traditional forms:

• you see it in the abundance of products at your nearby shopping mall
• in the advertisements that fill your TV screen
• spice up your magazines
• But in recent years, marketer have assembled a host of new marketing
approaches. Everything from websites, internet chat rooms, social networks
& cell phone.
• Most people think that marketing is only about the advertising and selling of
goods and services.
• However, advertising and selling are just two of the many marketing
activities.
• Today, marketing must be understood not in the old sense of making sale
(telling and selling) but in the new sense of satisfying customer needs.

1.1 DEFINITION OF MARKETING

Philip Kotler says, ‘Marketing is the
process by which companies create value
for customers and build strong customer
relationships in order to capture value
from customers in return’.

Marketing is the process of

planning and executing the conception,
pricing, promotion, and distribution of
ideas, goods, and services to create
exchanges that satisfy individual and
organizational goals

1.2 MARKETING MANAGEMENT PHILOSOPHIES

5 MARKETING MANAGEMENT PHILOSOPHIES

(1) Production The Production Concept hold that:-
Concept
Consumers will prefer products that are available and
highly affordable.

Therefore….

Company should focus on improving production, low cost
and distribution efficiency.

It is useful when;

1. The demand for a product exceeds the supply

2. The product’s cost is too high & improved
productivity is needed to bring it down

Eg : Texas Instruments increased production and lower
costs in order to bring down prices

5 MARKETING MANAGEMENT PHILOSOPHIES

(3) Selling The Selling Concept holds that :-
Concept Consumers will not buy the organization's product unless the
organization undertakes a large-scale and strong promotions

Therefore….
Company will focus on aggressive sales techniques and must be
good at tracking down prospects and selling them on product
benefits

This concept is normally practiced for unsought products
(unplanned products or purchases) E.g. : encyclopedia,
insurance, credit card.

Most firms practice this concept when they have overcapacity.
Their aim is to sell what they make rather than make what the
market wants

5 MARKETING MANAGEMENT PHILOSOPHIES

(4) Marketing The Marketing Concept believes that the success of the
concept company depends on determining the needs and wants of
target markets and delivering the desired satisfactions more
effectively and efficiently than competitors do.

Therefore…..

Company should focus on consumer needs and wants, value and
customer satisfaction

Consumers Company
(satisfaction) (profits)

5 MARKETING MANAGEMENT PHILOSOPHIES

(5) Societal The Societal Marketing Concept holds that :-
Marketing The company should determine the needs, wants and
Concept interests of target markets.

It should then deliver the desired satisfactions more
effectively and efficiently than competitors in a way that
maintains or improves the consumer’s and society’s well-
being.

This concept is the newest of the five marketing
management philosophies.

Selling vs Marketing Concepts

Selling Concept Marketing Concept

• It takes an Inside-out perspective • It takes an Out-inside perspective

• It starts with the factory, focuses on • It starts with a well-defined market,

the company’s existing products, and focuses on customer needs, and

calls for heavy selling and promotion integrates all the marketing activities

to obtain profitable sales that affecting customers.

• It focuses primarily on customer • Makes profits by creating long term

conquest - getting short term sales customer relationship based on

with little concern about who buys or customer value and satisfaction

why

1.3 CORE MARKETING CONCEPTS

5 core marketing concepts :

1 Customer Needs, Wants & Demands
2 Market Offerings – Products, Services & Experiences
3 Customer Value & Satisfaction
4 Exchange, Transaction & Relationships
5 Markets & Marketers

(1) Customer Needs, Wants & Demands

The most basic concept of fundamental marketing is that of human
needs, wants and demands.
Needs
• Human needs are states of felt deprivation.
• They include

• basic physical needs for food, clothing, warmth, and safety;
• social needs for belonging and affection; and
• individual needs for knowledge and self-expression.

• These needs were NOT invented by marketers; they are a basic
part of the human makeup.

Customer Needs, Wants & Demands

Wants
• Wants are the form human needs take as they are shaped by

culture and individual personality.

• E.g: An American needs food but wants a hamburger, French fries,
and a soft drink. A person in Malaysia needs food but wants a rice
and tea.

• Wants are described in terms of objects that will satisfy needs.

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satisfaction for their money.

Customer Needs, Wants & Demands

Demands
• When backed by buying power, wants become demands.
• Consumers view products as bundles of benefits and choose

products that give them the best bundle for their money.
• A Honda Civic means basic transportation, affordable price, and

fuel economy; a Mercedes means comfort, luxury, and status.
• Given their wants and resources, people demand products with

the benefits that add up to the most satisfaction.

(2) MARKET OFFERINGS – PRODUCTS & SERVICES

People satisfy their needs and wants with products and services.

Product
• A product is anything that can be offered to a market to satisfy a need or

want.
• The concept of product is not limited to physical objects—anything capable

of satisfying a need can be called a product.
• Products also include other entities such as service, experiences, properties,

persons, places, organizations, information, and ideas.

Sevices
• Services are activities or benefits offered for sale that are essentially

intangible and do not result in the ownership of anything.
• Examples; banking, airline, hotel, tax preparation, and home repair services.

(3) CUSTOMER VALUE & SATISFACTION

Consumers make buying choices based on their perceptions of the
value that various products and services deliver.

Customer value is the difference between the benefits the customer
gains from owning and using a product and the costs of obtaining the
product.

For example:
FedEx customers gain a number of benefits. The most obvious are fast and
reliable package delivery. However, when using FedEx, customers also may
receive some status and image values. Using FedEx usually makes both the
package sender and the receiver feel more important. When deciding whether
to send a package via FedEx, customers will weigh these and other values
against the money, effort, and psychic costs of using the service.

CUSTOMER VALUE & SATISFACTION

• Customer satisfaction depends on a product's
perceived performance in delivering value relative to
a buyer's expectations.

• If the product's performance falls short of the customer's
expectations, the buyer is dissatisfied.

• If performance matches expectations, the buyer is satisfied.
• If performance exceeds expectations, the buyer is delighted.

(4) EXCHANGES, TRANSACTION & RELATIONSHIPS

Marketing occurs when people decide to satisfy their needs and wants through
exchange relationships.

Exchange
• Exchange is the act of obtaining a desired object from someone by offering

something in return.

• Exchange is only one of many ways that people can obtain a desired
object.

• For example, hungry people could find food by hunting, fishing, or gathering
fruit. They could beg for food or take food from someone else. Or they could
offer money, another good, or a service in return for food.

EXCHANGES, TRANSACTION & RELATIONSHIPS

Transaction
• Transaction is a trade of values between two parties that involves at

least two things of value, agreed-upon conditions, a time of
agreement and a place of agreement.

• In a transaction, one party gives A to another party and gets B in
return.

• E.g:
• A buyer pays LG RM2,500 for a 4k television
• In a barter transaction, one might trade an old sewing machine in
return for secondhand furniture.

EXCHANGES, TRANSACTION & RELATIONSHIPS

Relationship
• Relationship marketing is the process of creating,

maintaining, and enhancing strong, value-laden relationships
with customers and other stakeholders.
• Marketers need to build long-term relationships with
customers, distributors, dealers, and suppliers.
• This is done by promising and consistently delivering high-
quality products, good service, and fair prices.

(5) MARKETS & MARKETER

The concept of exchange leads to the concept of a market.

Markets
• A markets is the set of actual and potential buyers of a particular product.
• Market also is a place where buyers and sellers are come in touch with

detailed information about what sellers are offer and what buyers are ready
to buy.

Marketer
• Marketer is one who seeks one or more prospects (buyers) to engage in an

exchange.
• Marketer helps boost the sale of products and services which in turn boosts

the revenue for the organization by creating effective marketing strategies.

1.4 ETHICS IN MARKETING

• Ethics are a collection of principles of right conduct that
shape the decisions people or organizations make.

• Practicing ethics in marketing means deliberately applying
standards of fairness, or moral rights and wrongs, to
marketing decision making, behavior, and practice in the
organization.

• There are several ethical values that marketers are
expected to uphold, and these are: Honesty,
Responsibility, Fairness, Respect and Transparency

1.5 SOCIAL RESPONSIBILITY

• To be socially responsible is when the organization is concerned
about people, society and environment with whom and where
it conducts business.

• In it’s most basic form, socially responsible marketing is taking
moral actions that encourage a positive impact on all the
company’s stakeholders, including employees, community,
consumers, and shareholders.

• The main responsibility of marketers in this aspect is to
package and communicate the organization’s decisions that will
impact the various communities with which they interact.