An Overview of Marketing

An Overview of Marketing

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. (Kotler & Armstrong,
2008)
5 Groups which comprise the core marketing
concepts:
1. Needs, Wants, and Demands
2. Products
3. Value, Satisfaction, and Quality
4. Exchange, Transactions, and
Relationships
5. Markets
I. Needs, Wants and Demands
The most basic concept underlying
marketing is that of human needs.
Marketing, like quality starts with customer
needs and ends with customer
satisfaction.
NEEDS
Needs are states of felt deprivation, personal
requirements that motivate behavior, and things that
people cannot live without like food, clothing and
shelter.
Not invented by marketers; they are basic part of the
human makeup.
When a certain need is not satisfied, a person may
either find a way to reduce the need or look for
an object that will satisfy it.
WANTS
are the form taken by human needs as they are
shaped by culture and individual personality.
These are needs translated into specific satisfiers
that may differ from person to person.
In this example: food is a NEED while the specific
kinds of food are the WANTS.
WANTS
The satisfaction of the need is basic and
mandatory; the satisfaction of the want is
secondary but also important.
However, satisfaction is greater if BOTH his NEED
and WANT are met SIMULTANEOUSLY.
WANTS
However, we also know that with limited resources
we cannot buy everything we want. Thus, we are
constrained to choose products that will give us the
MOST-VALUE and SATISFACTION for our money.
The concept of demands comes into the picture.
When backed by purchasing power, or the ability to
buy, wants become demands.
II. PRODUCTS
PRODUCTS
People satisfy their need and wants with
PRODUCTS.
A PRODUCT is anything offered for sale to
satisfy a need or a want.
Tangible products is called GOODS.
Also a product may pertain to intangibles like
haircut, massage, car repair, entertainment or
a tour. Intangible products are known as
SERVICES.
PRODUCTS
Products should be offered not only as physical
acquisitions but also as solutions to a need.
Sellers often make the mistake of concentrating
too much on the physical characteristics of the
products they sell instead of considering the
benefits derived from the products.
Too much focus on product to the point of losing
sight of underlying customer needs is called
MARKETING MYOPIA.
III. VALUE, SATISFACTION AND QUALITY
Since we recognized our limited resources, one
question we need to answer is:
HOW DO WE CHOOSE FROM AMONG
THE WIDE ARRAYS OF PRODUCTS
OFFERS TO US TO SATISFY OUR NEEDS
AND WANTS?
ANSWER: The third set of core marketing concepts:
VALUE, SATISFACTION AND QUALITY
CUSTOMER VALUE
One of the deciding factor in
which product to buy and where
to buy it.
Customer value is the difference
between the value of buying,
owning, and using the product
and the cost of the product.
The customer compares the cost
of the product with the benefits
he gains from using the product.
CUSTOMER VALUE
If the BENEFIT exceeds THE COST, there is
POSITIVE customer value and the customer
usually decides to buy the product.
If the COST exceeds THE BENEFIT, there is
NEGATIVE customer value and the customer
would most likely avoid the product and look
for something else.
CUSTOMER SATISFACTION
Refers to the difference between the buyers
expectation and the perceived performance of
the product.
If the product performs LESS THAN expected,
the customer is DISSATISFIED.
If the product performs AS expected, the
customer is SATISFIED.
If the product performs BETTER THAN
expected, the customer is DELIGHTED.

CUSTOMER SATISFACTION
Customer satisfaction is closely linked to
quality.
In recent years, many companies have
adopted TOTAL QUALITY MANAGEMENT
(TQM) Programs pertaining to the continuous
improvement of the company products,
services and marketing processes.
QUALITY is what customer says it is.
IV. EXCHANGE, TRANSACTIONS AND
RELATIONSHIPS
Marketing exists when people are willing to satisfy
their need and wants through beneficial exchanges.
EXCHANGE is the act of obtaining a desired object
by offering something in return.
In order to have a marketing exchange, 5
conditions have to be met:
There must be at least TWO parties to the
exchange.
Each party must have something that the
other party needs or wants.
Each party must want to deal with the other
party.
Each party must have the freedom to accept
or reject the other partys offer.
Each party must be able to communicate
with the other party.

TRANSACTION
If exchange is the core concept of marketing,
TRANSACTION is the marketings unit of
measurement.
A transaction, an exchange or trade of values
between TWO parties, measures the number of
exchanges that take place.
Marketing must not be seen merely as a series of
exchanges and transactions.
To succeed, exchanges and transactions ,must be
continuous to sustain a firms operations.
RELATIONSHIP
Relationship marketing treats each
transaction with much value and
appreciation.
Instead of building short-term transactions,
marketers build long-term relationships with
valued customers, distributors, suppliers,
and dealers.
The operating assumption of relationship
marketing is thus, build good relationships
and profitable transactions will follow.
V. MARKETS
A MARKET refers to a set of actual and potential
buyers of a product who have a common need or
want that can be satisfied through exchange.
Market in marketing does not refer to a place but
to a group of people bound by a common need or
want.
The size of a market is measured by a number of
people who exhibit the need, have the resources to
engage in an exchange, and who are willing to offer
these resources in exchange for what they want.

DEMOGRAPHIC MARKET- refers to customer
bound by similar demographic characteristics. (e.g.,
market based on age-adult market/ teens market; on
gender-male or female market)
GEOGRAPHIC MARKET- are defined by territory
(like the Metro Manila market, the Mindanao
market, the Visayas market).
DIFFERENT GROUPINGS
OF CUSTOMER:
are classified according to the product sought
(such as the computer market, the clothes
market).
It also extend to non-customer groupings as
well like the labor markets, and financial
markets.


PRODUCT MARKETS
A collection of buyers is called MARKET while
a collection of sellers is called an INDUSTRY.
The process of breaking down a large market
into smaller manageable units is called market
segmentation.

TWO STEPS IN MARKET
SEGMENTATION:
The first step in market segmentation is the
identification of the different segmentation
variables to be used.
A segmentation variable is a way by which we
can segment or break down a market into
smaller units.
THERE ARE 3 WAYS OF
SEGMENTING THE MARKET:
I. DEMOGRAPHIC SEGMENTATION VARIABLES
are population characteristics that include
age, gender, income, occupation, geographical
location, family size and education.
II. PSYCHOGRAPHIC VARIABLES (or lifestyle
segmentation according to Joseph T. Plummer
1974) are identifiable personal traits like
personality, lifestyle and activities, interests
and opinions( or AIO).
III. BENEFIT SEGMENTATION, as proposed by
Russell I. Haley(1995), is based on the underlying
belief that the benefits that people seek in a
given product are the basic reasons for the
existence of true market segments.
Variables under this segmentation technique
include specific product benefits like durability,
fabric, fashion-sense, design(for clothes) or scent
(for perfumes), low price, and image.
The second step is the selection of market
characteristics(based on the different
segmentation variables used) that we can
serve most effectively and efficiently.
The chosen market segment is called the
TARGET MARKET.

Success in the marketing is determined by four
equally important factors that are collectively known
as the MARKETING MIX. These are:
Product
Price
Place
Promotion

If we put marketing success into an equation, it
would be:
Marketing success = high quality, top performing
PRODUCT + reasonable PRICE + convenient and
accessible PLACE + intensive PROMOTION
MARKETING MANAGEMENT
DEFINED
MARKETING MANAGEMENT is the analysis,
planning, implementation and control of
programs designed to create, build and
maintain beneficial exchanges with target
buyers for the purpose of achieving
organizational objectives ( Kotler and
Armstrong, 2008).
Marketing management is also called demand
management.
MARKETING MANAGEMENT PHILOSOPHIES:
THE PRODUCTION CONCEPT
- This concept holds that a given a wide array of
products in the market, consumers will prefer to buy
products that are widely available and highly
affordable.
- One of the oldest philosophies guiding sellers.
- In this concept, the primary factors affecting the
decision to buy are place of distribution
(availability) and price (affordability).
THE PRODUCT CONCEPT
- This concept holds that consumers favor products
that offer the best quality, performance and
innovative features. From the name itself, the
primary focus is the product.
- Thus, an organization must devote energy to making
continuous product improvement, research,
development and innovations.
THE SELLING CONCEPT
- This concept holds that consumers will not buy
enough of the companys product unless the
company undertakes an extensive and large-scale
selling and promotional effort.
- Consumers need a lot of coaxing, persuasion and
motivation to buy the companys products.
THE MARKETING CONCEPT
- This concepts holds that achieving the goals of an
organization depends on knowing the needs and
wants of the target market and delivering that
desired satisfaction more effectively and efficiently
than others.
- The focus would be the consumer needs, wants and
the competition.
THE SOCIAL MARKETING CONCEPT
- This concept holds that organizations must not only
study and satisfy the customers needs and wants but
also deliver superior value in a way that maintains or
improves the customers well as the societys well-
being.
SOCIAL RESPONSIBILITY
IN MARKETING
They must not only focus on enriching
themselves but also on finding ways to promote
goodwill and build a lasting positive impression to
gain sympathy and loyalty.
The IEBM Dictionary of Business and
Management defines SOCIAL RESPONSIBILITY as
the responsibility that companies have towards
society at large, in particular, to conduct their
activities and use their profits in ways that are of
benefit to society.
Some Applications Of Social Responsibility To
The Marketing Mix Are Enumerated Below:
PRODUCT/SERVICE
offering products/services of superior quality
and value
Preferring the use of locally sources materials
to imports
Ensuring environmental protection and
preservation in waste disposal
Considering the effects of product/service to
public health, safety and morals
PRICE
Offering products at reasonable and
affordable prices
Providing a reasonable return on investments
Setting costs at reasonable levels without
sacrificing quality
Setting reasonable markups
PLACE
Ensuring wide availability of the
product/service
Treating and paying the sales force fairly and
competitively
Considering accessibility
Ensuring prompt deliveries at reasonable cost
PROMOTION
Making promises that you can keep
Adhering to truth in advertising
Sponsoring activities beneficial to the society
and the community
Ensuring fair and healthy competition