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PRINCIPLES OF MARKETING
Eighth Edition
Philip Kotler and Gary Armstrong

Chapter 1
Marketing in a Changing World:
Creating Customer Value and
Satisfaction
 Copyright 1999 Prentice Hall
What is Marketing? 1-2

• Process by which individuals and

groups obtain what they need and
want through creating and
exchanging products and value with
others.

• More simply: Marketing is the

delivery of customer satisfaction at a
profit.

 Copyright 1999 Prentice Hall

 1-3
Core Marketing Concepts

Products
Needs, wants, and
and demands Services

Core
Marketing
Concepts
Markets
Value, satisfaction,
and quality

Exchange, transactions,
and relationships

 Copyright 1999 Prentice Hall

What Motivates a Consumer 1-4

to Take Action?
• Needs - state of felt deprivation for basic
items such as food and clothing and complex
needs such as for belonging. i.e. I am thirsty

• Wants - form that a human need takes as

shaped by culture and individual personality.
i.e. I want a Coca-Cola.

• Demands - human wants backed by buying

power. i.e. I have money to buy a Coca-Cola.

 Copyright 1999 Prentice Hall

What Will Satisfy Consumer’s
Needs and Wants?
• Products - anything
that can be offered to a
market for attention,
acquisition, use or
consumption and that
might satisfy a need or
want.
• Examples: persons,
places, organizations,
activities, and ideas.
 Copyright 1999 Prentice Hall
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• Services - activities or
benefits offered for
sale that are
essentially intangible
and don’t result in the
ownership of anything.
• Examples: banking,
airlines, haircuts, and
hotels.
How Do Consumers Choose 1-6

Choose Among Products and

Services?
• Customer Value - benefit that the customer
gains from owning and using a product
compared to the cost of obtaining the
product.

• Customer Satisfaction - depends on the

product’s perceived performance in
delivering value relative to a buyer’s
expectations. Linked to Quality and Total
Quality Management (TQM).
 Copyright 1999 Prentice Hall
How do Consumers Obtain 1-7

Products and Services?

• Exchanges - act of obtaining a desired object from
someone by offering something in return.

• Transactions - trade of values between parties.

Usually involves money and a response.

• Relationships - building long-term relationships

with consumers, distributors, dealers, and
suppliers.

 Copyright 1999 Prentice Hall

Who Purchases Products 1-8

and Services?

Actual
Market - buyers Buyers
who share a
particular need
or want that can
be satisfied by a
company’s products Potential
or services. Buyers

 Copyright 1999 Prentice Hall

Modern Marketing System 1-9

Suppliers

Company
Competitors
(Marketer)
Environment

Environment
Marketing
Intermediaries

End User
Market

 Copyright 1999 Prentice Hall

Marketing Management 1-10

Marketing Management
Implementing programs to create exchanges
with target buyers to achieve organizational
goals

Demand Management
Finding and increasing demand, also
changing or reducing demand

Profitable Customer Relationships

Attracting new customers and
retaining current customers
 Copyright 1999 Prentice Hall
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Marketing Management
Philosophies
• Consumers favor products that are
Production Concept available and highly affordable
•Improve production and distribution

•Consumers favor products that offer

Product Concept the most quality, performance, and
innovative features

•Consumers will buy products only if

Selling Concept the company promotes/ sells these
product

•Focuses on needs/ wants of target

Marketing Concept markets & delivering satisfaction
better than competitors

•Focuses on needs/ wants of target

Societal Marketing Concept markets & delivering superior value
•Society’s well-being

 Copyright 1999 Prentice Hall

Marketing & Sales 1-12

Concepts Contrasted
Starting Focus Means Ends
Point

Selling Profits
Existing
Factory and through
Products
Promoting Volume

The Selling Concept

Profits
Customer Integrated
Market through
Needs Marketing
Satisfaction

The Marketing Concept

 Copyright 1999 Prentice Hall

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Societal Marketing Concept
Society
(Human Welfare)

Societal
Marketing
Concept
Consumers Company
(Wants) (Profits)
 Copyright 1999 Prentice Hall
New Marketing Challenges 1-14

New
Marketing
Landscape &
Information Nonprofit
Technology Marketing

Emerging
Ethical
Concerns
Challenges Globalization

Changing
World
Economy

 Copyright 1999 Prentice Hall