Principles of Marketing

PRINCIPLES OF MARKETING
Marketing Principles
and Strategies
Marketing Defined
Marketing
(Merriam Webster)
 the activities that are involved in making
people aware of a company’s products;
making sure that the products are available to
be bought.
 the act or process of selling or purchasing in a
market
Marketing Defined
Marketing
(Merriam Webster)
 the process or technique of promoting,
selling, and distributing a product or service.
 an aggregate of functions involved in moving
goods from producers to consumers.
Marketing Defined
Marketing
(The American Marketing Association)
is the activity, set of institutions, and
processes for creating, communicating,
delivering, and exchanging offerings that have
value for customers, clients, partners, and
society at large.
Marketing Defined
Marketing (Kotler)
is managing profitable customer relationships.
Marketing is:
 A Management Process
 It is about the exchange of goods and

services
 It anticipates and meets customer needs
 It creates profits
“Because the purpose of business is to create
and keep customers, it has only two central
functions—marketing and innovation.
The basic function of marketing is to attract
and retain customers at a profit.”
- Peter Drucker
1. Marketing is concerned with the
creation and retention of customers.
2. It is a reality of commercial life that it is
much more expensive to attract new
customers than to retain existing ones.
3. Markets are characterized by strong
competition.
Importance of Marketing
 Businesses cannot survive in the face of an
unforgiving economic environment.
 Marketing has helped introduce and gain

acceptance of new products that have
eased or enriched people’s lives.
 It can inspire enhancements in existing

products as marketers innovate to improve
their position in the marketplace.
 Successful marketing builds demand for
products and services, which, in turn,
creates jobs.
 Successful marketing also allows firms to

more fully engage in socially responsible
activities.
 Building strong brands and a loyal

customer base, intangible assets that
contribute heavily to the value of a firm.
Your Role as Marketer
 Marketers must decide
 what features to design into a new
product or service,
 what prices to set,
 where to sell products or offer services,
and
 how much to spend on advertising, sales,
the Internet, or mobile marketing.
Your Role as Marketer
 You must make those decisions in an
Internet-fueled environment where
consumers, competition, technology, and
economic forces change rapidly, and the
consequences of the marketer’s words and
actions can quickly multiply
What is Marketed?
• Goods • Places
• Services • Properties
• Events • Organizations
• Experiences • Information
• Persons • Ideas
THE MARKETING PROCESS
THE MARKETING PROCESS
 In the first four steps, companies work to understand

consumers, create customer value, and build strong
customer relationships. In the final step, companies
reap the rewards of creating superior customer value.
 By creating value for consumers, they in turn capture
value from consumers in the form of sales, profits,
and long-term customer equity.
UNDERSTANDING THE MARKETPLACE
AND CUSTOMER NEEDS
 Five core customer and marketplace concepts:
1. Needs, wants, and demands;

2. Market offerings (products, services, and
experiences);
3. Value and satisfaction;
4. Exchanges and relationships;
5. Markets.
Needs, Wants, and Demands
 Needs
 States of felt deprivation.
 Wants
 The form human needs take as they are shaped by
culture and individual personality.
 Demands
 Human wants that are backed by buying power.
Maslow’s Hierarchy of Needs
UNDERSTANDING THE MARKETPLACE
AND CUSTOMER NEEDS
 Five core customer and marketplace concepts:
1. Needs, wants, and demands;

2. Market offerings (products, services, and experiences,
etc.);
3. Value and satisfaction;
4. Exchanges and relationships;
5. Markets.
MARKET OFFERINGS
 Products, Services, and Experiences
 Some combination of products, services,
information, or experiences offered to a market to
satisfy a need or want
CUSTOMER VALUE AND SATISFACTION
 Customers form expectations about the value and
satisfaction that various market offerings will deliver
and buy accordingly.
 Satisfied customers buy again and tell others about their

good experiences.
 Dissatisfied customers often switch to competitors and

disparage the product to others.
EXCHANGE AND RELATIONSHIP
 Exchange is the act of obtaining a desired object from
someone by offering something in return. In the
broadest sense, the marketer tries to bring about a
response to some market offering.
MARKET
 The concepts of exchange and relationships lead to the
concept of a market.
 A market is the set of actual and potential buyers of a

product or service.
 These buyers share a particular need or want that can

be satisfied through exchange relationships.
A Simple Marketing System
Communication
Goods/Services
INDUSTRY MARKET
(a collection of sellers) (a collection of buyers)
Money
Information
Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

MODERN MARKETING SYSTEM
Structure of Flows in
Modern Exchange Economy
FOUR BASIC KINDS OF UTILITY
CREATED BY MARKETING
UTILITY
 Utility satisfies man’s wants for goods and services.
 Utility is created in the exchange process.
 Through the exchange process, marketing creates
four basic kinds of utility:
 FORM UTILITY
 OWNERSHIP or POSSESSION UTILITY
 PLACE UTILITY
 TIME UTILITY
FORM UTILITY
 This utility is created when labor and other
business expenses are spent to convert raw
materials into finished goods and services to be
sold to customers.
OWNERSHIP or POSSESSION UTILITY
 This is the capability to transfer ownership, title,
or possession of the product being marketed from
the seller to the buyer.
PLACE UTILITY
 This refers to the presence of goods and services at
locations that are convenient to the customers.
GROCERY???
TIME UTILITY
 it is the availability of goods and services when it is
convenient to the customer.
GROCERY???
EVOLUTION OF MARKETING
APPROACHES
HISTORY OF MARKETING
The history of marketing is divided into different eras:
 Trade Era
 Characterized by a very simple exchange of goods and
services among townspeople.
 Production Era (prior to 1920s)
 Product was the focus of marketing activities.
 Sales Era (1920s to 1950s)
 Advocated innovative advertising and selling
techniques.
HISTORY OF MARKETING
 Marketing Era
 Identifying consumer needs, designing a marketing
system, and producing goods and services to satisfy the
consumer needs.
 Relationship Era
 Involves lasting, value-added relationships over long
periods of time with customers and suppliers, and even
among businesses.
DIFFERENT MARKETING APPROACHES
PRODUCTION SALES MARKET
ORIENTATION ORIENTATION ORIENTATION
ERA Mid 19th century First half of the 1950’s onward
to the turn of the 20th century
20th century
FOCUS Offer a superior Sell, sell, sell. Use Develop a product
innovative product of aggressive that caters to the
selling, advertising, needs and wants of
and distribution consumers.
tactics.
TRADITIONAL APPROACHES TO MARKETING
 Production Concept
 The idea that consumers will favor products that are
available and highly affordable and that the
organization should therefore focus on improving
production and distribution efficiency.
 Product Concept
 The idea that consumers will favor products that offer
the most quality, performance, and features and that
the organization should therefore devote its energy to
making continuous product improvements.
TRADITIONAL APPROACHES TO MARKETING
 Selling Concept
 The idea that consumers will not buy enough of
the firm’s products unless it undertakes a large-
scale selling and promotion effort.
CONTEMPORARY APPROACHES TO MARKETING
 Marketing Concept
A philosophy that holds that achieving
organizational goals depends on knowing the needs
and wants of target markets and delivering the
desired satisfactions better than competitors do.
 Relationship Marketing Concept
 believes that all marketing activities are for the
purpose of establishing, maintaining, and
strengthening meaningful long-term relationships
with customers.
 Societal Marketing Concept
 The concept is similar to the marketing concept.
However, beyond providing solutions to
customers, the societal marketing concept goes
further to include considerations that protect the
customer’s well-being and interests, as well as the
interests of the environment and society.
THE SOCIETAL MARKETING CONCEPT
 The idea that a company’s marketing decisions
should consider consumers’ wants, the company’s
requirements, consumers’ long-run interests, and
society’s long-run interests.
SELLING CONCEPT
VS.
MARKETING CONCEPT
TRADITIONAL VS. CONTEMPORARY
Purpose Traditional Contemporary

Making a sale and expand To establish a profitable,
Aim customer base; increase long-term, one-to-one
market share by marketing relationship with customers
View Product oriented Customer oriented
Mass marketing/mass Mass customization, one-to-
Reach Out
production one marketing
Standardization of customer Close customer-supplier
Value
needs relationship
Approach Transactional Relational
MARKETING MIX ELEMENTS
4 P’s of Marketing
Creating Value Capturing Value
PRODUCT PRICE
PLACE PROMOTION
Delivering Value Communicating Value

PRODUCT
 can be goods or services that are offered in
the market. To be able to sell a product in
the market, consumers must understand its
value and must perceive it as something that
is worth buying.
 The value offered to the market pertains to
the benefits that consumers look for in a
product.
PRICE
 captures the value of a product’s offering
when you put a price tag that equates to the
benefits the product offers to consumers.
 In return, a company captures value or profit
from the payment made by a customer in
exchange for the
PLACE
 includes the necessary activities to make the
products available to consumers.
 Companies are concerned on where they sell
their products.
PROMOTION
 is the component that informs, persuades
and reminds potential buyers of the value
they can get from a product.
 A powerful message can influence
consumers to buy, and buy some more.
MARKETING MIX ELEMENTS
(Consumer’s Perspective)
4 C’s of Marketing
Consumer Cost to the
Solution Customer
PRODUCT PRICE
PLACE PROMOTION
Convenience Communication

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PRINCIPLES OF MARKETING

 It is about the exchange of goods and

 It anticipates and meets customer needs

 Marketing has helped introduce and gain

 It can inspire enhancements in existing

 Successful marketing also allows firms to

 Building strong brands and a loyal

 In the first four steps, companies work to understand

1. Needs, wants, and demands;

1. Needs, wants, and demands;

 Satisfied customers buy again and tell others about their

 Dissatisfied customers often switch to competitors and

 A market is the set of actual and potential buyers of a

 These buyers share a particular need or want that can

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

Purpose Traditional Contemporary

Delivering Value Communicating Value

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