Basic Marketing

Principles of Marketing

Session 1
Feb 01, 2010
Course Goals

• To outline the marketing function and its role within a

corporation’s business strategies, also hopefully
generating a passion for the Marketing discipline
and empowering you to evaluate Marketing as a
possible career choice
• To introduce you to marketing strategy and to the
elements of marketing analysis: customer analysis,
company analysis, and competitor analysis
• To familiarize you with the elements of the marketing
mix (product, pricing, promotion, and distribution
strategies) and enhance your problem solving and
decision making abilities in these operational areas
of marketing tactics
• HAVE LOTS OF FUN!
Text Book

Fundamentals of Marketing

10th International Edition

William J. Stanton, Michael J. Etzel, Bruce J. Walker

What Is
Marketing?
•Chapter 1
 Chapter Objectives
When you have completed your study of this chapter, you should
be able to:
The relationship between exchange and
marketing
How marketing applies to business and
nonbusiness situations.
The difference between selling and marketing
Describe the evolution of the marketing concept.
The impact of ethics and quality management in
marketing.
Explain marketing’s role within an organization.
 Nature & Scope of Marketing
The variety of Marketing Experiences

Why Study Marketing?

• How many of you bought something today?
• How many have seen or heard an ad today?
• How many of you consumed something today?
• How many of you engaged in word of mouth about a
product/service today?
 Reason #1

• Marketing is a fundamental human

activity
• it’s ubiquitous in daily life
• it happens around the world
• we can learn to make better consumer
decisions
 Reason #2

• Marketing impacts the economy

• Marketing (broadly conceptualized) is
• about 50% of retail sales expenses
• Healthy marketing systems support economic
advance
Reason #3

• Marketing management is essential to

organizational success
Reason #4

• Marketing can contribute to societal well-

being
 Reason #5

• It’s about people (consumers) and it’s fun.

• (Well, it’s more fun than accounting and

calculus anyway…)
Broad Dimensions of Marketing

• Marketing is a Great Variety of

business activity.  Marketers
• By Other type of  What are they
organizations Marketing.
• By Individual  Their Potential
Market
The Scope of Marketing

• Places • Goods
• Properties • Services
• Organizations • Experiences
• Information • Events
• Ideas • Persons
EXCHANGE

• Three ways to satisfy needs

 Produce
 Steal
 exchange

• 4 Conditions of Exchange
 Conceptualizing Marketing
•What is marketing anyway?
What is Marketing?
• Many definitions, but for the purposes of
this class we’ll follow Kotler et al:
• Marketing is a social and managerial
process by which individuals and groups
obtain what they need and want through
creating and exchanging products and
value with others
• Marketing is a total system of business activities
designed to plan, price, promote and distribute
want satisfying products to target markets to
achieve organizational objective.
Definition of Marketing
(until last year)
• “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.”
• American Marketing Association Definition of
Marketing, www.marketingpower.com
 Marketing starts with needs/wants of
Customer

Product Customer
Consumer
Types of Marketing “Offerings

• Product
• A generic term to describe
what is being marketed –
whether it is a good,
service, person or place.
Requirements for Market Exchange

• A “marketplace”
• A medium of exchange
• Specialization of labor
• Marketing management/coordination
Types of Marketing “Offerings”

• Goods
• are tangible
 Types of Marketing “Offerings”

• Services
• an experience provided by the application of
human or mechanical skill

• Examples – haircut, dry cleaning, consulting,

movies…
 How services differ
• Can’t inventory
• Intangible
• Quality control difficult
• Often a real time performance
• Consumer participation
A third marketing “offering”

• Ideas -- the most intangible of all

• at worst, “spin”
• at best, worthy social causes are promoted
• Is marketing persuasion?
 Marketing as Selling Ideas

• “Social marketing has been with us for a long

time. The Greeks and Romans launched
campaigns to free slaves. During the
Industrial Revolution, campaigns were
mounted to abolish debtor prisons and child
labor and grant voting rights to women. In the
past century social reform campaigns in
 Nonprofits Need Marketing, Too

Non-
Non- Non-
Non-
Customer
Customer Economic
Economic
Support
Support Measures
Measures

Characteristics
of Nonprofit
Organizations

Poorly
Poorly
Organized
Organized
for
forMarketing
Marketing

1-8
 Selling ideas/Social Marketing

• America have spoken for abolition,

temperance and prohibition, and women’s
suffrage movements.”
• --James Mintz, Marketing News
Common Social Marketing Concerns

• Health
• Environment
• Education
• Safety
 The Marketing of Ideas/ Causes

• “Charitable causes and social services

campaigns for funds and donations are
everywhere: on TV and radio, in newspapers
and magazines, in point of purchase material,
in public service announcements between the
coming attractions and the main feature at the
local movie theater…”
Goods, Services, Ideas and...

• You can market yourself!

 Marketing Yourself!

• “Starting today you are a brand. You’re

every bit as much a brand as Nike, Coke,
Pepsi, or the Body Shop…start thinking like
your favorite brand manager and ask
yourself…What is it that my product or
service does that makes it different?…Start
by identifying the qualities or characteristics
that make you distinctive from your
competitors or your colleagues…What would
your colleagues…say is your greatest and
clearest strength? Your most noteworthy
personal trait?”
-- Tom Peters “The Brand Called You,’ In Fast Company, Sept. 1997
Difference B/W Marketing & Selling
In Marketing
In Selling • Emphasis is on
costumer’s wants.
• Emphasis on the • Company first
product determines customers’
• Company first make wants and then figures
out how to make and
the product and then deliver a product to
figures out how to satisfy those wants.
sell it • Management is profit
oriented.
• Management is sales • Planning is long run
volume oriented oriented, in terms of
new products,
• Planning is short tomorrows markets,
run, in terms of and future growth
today’s products and • Wants of buyers is
markets stressed.
 Evolution of Marketing

• Simple Trade Era

• Production Concept
• Product Concept
• Selling Concept
• Societal or Social Marketing Concept
Marketing’s
Marketing’s Changing
Changing Role
Role

Focus: Sell what it’s easy

Production-oriented
Production-oriented to produce

Focus: Push products to

Sales-oriented
Sales-oriented beat competition

Marketing
MarketingDepartment
Department Focus : Coordinate all
Era
Era customer contacts

Marketing-oriented
Marketing-oriented Focus :Long-Run
Company
Company Customer Satisfaction
 Five stage of marketing evolution

     Simple trade era

• A time when families
trade or sold their
surplus out to local
intermediaries, who
then resold these good
to other consumers or
distant intermediaries.
Five stage of marketing evolution

•     Production era (from

industrial revolution
until the 1920’s)

• A time when a company

focuses production of a
few specific products—
perhaps because few of
these products are
available in the market
 Five stage of marketing evolution

Sale era(1929—
1950)
• A time when a
company emphasizes
selling because of
increased
competition.
Five stage of marketing evolution

 Marketing department era (1950-

1960)

• A time when all marketing activities are

brought under the control of one
department to improve short-run policy
planning and to try to integrate the
firm’s activities.
 Five stage of marketing evolution

     Marketing company era(1960—)

• A time when, in addition to short-run

marketing planning, marketing people
develop long-range plans—sometimes
ten or more years ahead—and the
whole company effort is guided by the
marketing concept.
The Evolution of a Concept

• Product orientation: • Selling orientation:

- Emphasizes the most efficient - Views marketing solely as a
way to produce and distribute selling function,
products - Way to reduce inventory

• New era orientation:

• Customer orientation:
- Excellence in designing and
- Proactive and responsive in
producing products
identifying and satisfying
- Benefit customers, employees,
consumer needs and wants
stake-holders
 Marketing’s Changing Role
Focus:
Simple
Simple Trade
Trade Era
Era Sell
Sell Surplus
Surplus

Focus:
Production
Production Era
Era Increase
Increase Supply
Supply

Focus:
Sales
Sales Era
Era Beat
Beat Competition
Competition

Marketing Focus :
Marketing Department
Department
Era
Era Coordinate
Coordinate and
and Control
Control

Marketing Focus :
Marketing Company
Company Long-Run
Long-Run
Era
Era Customer
Customer Satisfaction
Satisfaction
1-5
The
TheMarketing
Marketing Concept
Concept

Customer
Customer Total
TotalCompany
Company
Satisfaction
Satisfaction Effort
Effort

The
Marketing
Concept

Profit
Profit
Marketing
MarketingFunctions
Functions

Information
Information Buying
Buying

Risk
RiskTaking
Taking Selling
Selling
Universal
Marketing
Marketing
Functions
Functions
Financing
Financing Transporting
Transporting

Standardizing
Standardizing Storing
Storing
and
andGrading
Grading
A Business Function

Providing the business with long-term

competitive advantage.
Understanding needs.
Creating value for customers.
A Business Philosophy

The marketing concept:

Achieve objectives by understanding
customer needs and the costs of
satisfying them, and providing products
that best satisfy those needs.
A Process

Planning and executing the

conception, pricing, promotion, and
distribution of ideas, goods, and
services to create exchanges that
satisfy individual and organizational
objectives.
Marketing’s Role in Society

Ethical behaviour is good business.

Dark side of marketing:
Marketers create artificial needs.
Marketing teaches us to value people for what
they own rather than who they are.
Marketers promise miracles.
 The Marketing Mix (cont.)
Product Place
• Tangible good, service, or idea • Availability of product to the customer, at
• Satisfies consumer or business the desired time and location
needs • Channels of distribution
• Features, functions, benefits, and
uses

Price Promotion
• Seller’s assignment of value to a • Communication efforts by a marketer to
product influence consumers or organiza-tions
about goods, services, or ideas
 Utility and Marketing
From Production
Time
Time
Form
Form

Utility
Utility
Value
Value that
that comes
comes Place
Place
from
from satisfying
satisfying
human
human needs
needs

Task
Task
Possession
Possession

Exhibit 1-1
From Marketing
1-3
Utility The power to satisfy human need

• 1.    Form utility provided when

someone produces something tangible.

• 2.     Task utility Provided when

someone performs a task for someone
else--- for instance, when a bank
handle financial transactions.
• 3.    Possession utility obtaining a
good or service and having the right to
use or consume it.

• 4. Time utility Having the product

available when the customer wants it.
   5. Place utility Having the
product available where the
customer wants it.
Careers in Marketing

Marketing management
Marketing research
Marketing consulting
Product and brand management
Sales
Advertising
How does Marketing fit
into our lives today?

• Technological advances have allowed us to

connect even more strongly with:
• Customers
• Marketing Partners
• World in general
• Discussion: how has the Internet impacted
the role of marketing in your own lives?
Recap

• Today we’ve covered Chapter 1 of the text

• We’ve reviewed definitions of some basic
concepts…remember we have not yet
reached the marketing terminology we will
be dealing with for the majority of the
course
• There’s lots to come and lots to learn…the
fun has just begun!
 Marketing’s Changing Role
Focus:
Simple
Simple Trade
Trade Era
Era Sell
Sell Surplus
Surplus

Focus:
Production
Production Era
Era Increase
Increase Supply
Supply

Focus:
Sales
Sales Era
Era Beat
Beat Competition
Competition

Marketing Focus :
Marketing Department
Department
Era
Era Coordinate
Coordinate and
and Control
Control

Marketing Focus :
Marketing Company
Company Long-Run
Long-Run
Era
Era Customer
Customer Satisfaction
Satisfaction
1-5
---- See exhibit 1-5
CODE OF ETHICS BY AMERICAN
MARKEYING ASSOCIATION
 Responsibility of the marketer
Honesty and Fairness
Rights and duties of parties in the
marketing exchange process
In the area of the 4P’s
QUIZ FOR CHAPTER 1

• 1. What are the five kinds of

economic utility ?
• 2.What’s marketing concept mean?
And what are the three basic idea
included in the definition of the
“marketing concept?
• 3.What are five stages of marketing
evolution?