MKTG CH - 1 PPT (1)

Principle of Marketing
CHAPTER ONE
OVER VIEW OF MARKETING
Learning Outcomes
• After completing this chapter; students will able to:

1. Define the term marketing and understand the concept of
marketing.
2. Differentiate the philosophy of marketing management.
3. Discuss the difference between sales and marketing
orientation.
4. Understanding the main reasons why we studying
marketing.
What is
Marketing…??
Selling?
Advertising?
Promotions?
Making products available in stores?
Maintaining inventories?
 All of the above, plus much more!
3
Marketing = ?
 Marketing is the process of planning and executing the conception, pricing,
promotion, and distribution of ideas, goods, services to create exchanges that
satisfy individual and organizational goals.
(American Marketing Association)
 Marketing is the process by which companies create values (benefit)
for customers and build strong customer relationships with customer.
 Marketing is concerned with identifying consumers wants and
demands for the company goods and services, meeting those
demands and wants by making available products (goods, services,
ideas etc.) in the most efficient manner and satisfying customers and
in exchange.
 Marketing is a social and managerial process by which individuals and
organizations obtain what they need and want through creating and
exchanging values with others.
 Goal of Marketing is To attract new customer by promising superior
value, and to keep current customers by delivering satisfaction.
4
Marketing = ?
 create exchanges that satisfy individual and organizational
goals
 Marketing is the sum of all activities that take you to a sales
outlet.
 Marketing is all about managing the four P’s –
 product
 price
 place
 promotion
5
What is Marketing
Management???
Marketing management is the art and science of
choosing target markets and, keeping, and growing
customers through creating, delivering, and
communicating superior customer value.
6
Why we Study Marketing?
The main reasons why study
marketing:
7
Core concepts of marketing
 Need, want and demand
 Product (physical good and service)
 Value, satisfaction, and quality
 Exchange, transaction and relationship
 Market, marketer and prospect
1. Need, Want and Demand
A. Needs
 Needs are basis for motivation of people
and they constitute (form) basic human
requirements.
A human need is a state of deprivation
(deficit) of basic satisfaction.
cont.
 Needs can be :
 Physiological
 Social
needs
(belongingness)
 Individual
(knowledge)
Cont.…
b) Wants
 are desires for specific satisfiers of
needs.
 Need changed to want when it directed
to specific objects that might satisfy
the required need.
Eg. Ethiopian need food but want Enjera
are shaped by ones
 Are many and subjected to cultural
shifts and technological dynamism,
whereas needs are few and are innate
or inborn.
 Marketers strive not to create needs
but identify them and develop products
(services) that would satisfy the needs.
d. Demands
 are wants for specific products that are backed by an
ability and willingness to buy them.
 Wants become demand when they are supported by
purchasing power.
2. Product
– A product is any thing that can be offered to the
market for satisfying a human needs and wants
– a wise firm sells product benefits rather than just
products.
Cont.…
3. Value, Satisfaction, and Quality

 Customer value is the difference between the
benefit the customer gains from owning and using a
product and the costs of obtain the product.
 Customer satisfaction is the extent to which a
products perceived performance matches buyer’s
expectations.
There are three levels of satisfaction
A. Dissatisfaction
B. Satisfaction
Cont….
 Quality is the totality of features and characteristics of a
product or service that bear on its ability to satisfy customer
needs.
 It begins with customer needs and ends with customer
satisfaction.
4. Exchange and Transaction

 Exchange is one of the ways in which a person can obtain a
product.
 is the process of obtaining a desired product from someone by
offering something in return.
 Marketing emerges when people decide to satisfy needs and
-------
• Mm
 A transaction is a trade of values between two or
more parties that involves at least two things of
value, agreed-upon conditions a time of
agreement, and a place of agreement.
 Transactions are the basic unit of

exchange.
A transaction can be of a classic
monetary mode or barter one.
Cont.…
5. Market, Marketer and Prospect
A market consists of all the set of actual

and potential customers sharing a
particular need or want who might be
willing and able to engage in exchange
to satisfy that need or want.
 Markets, from the definition above, comprise actual
and potential customers who:
 Exhibit needs or wants to a specific product or
service a marketer is offering.
 Have resources or capacity that interests others,

and
 Are willing and have the authority to offer the

resources in exchange.
Cont..
A marketer is someone seeking a response

(attention, a purchase, a vote, a donation)
from one or more prospects that might engage
in exchange of values.
A prospect is someone whom the marketer

identifies as potentially willing and able to
engage in an exchange.
CONCEPT/PHILOSOPHY OF MARKETING
MANAGEMENT
There are five competing concepts under
which organizations conduct marketing
activities:
Production Concept,
Product Concept
Selling Concept
Marketing Concept
Societal Marketing Concept. 21
1. The Production Concept,
Customers prefer products that are widely
available and inexpensive.
Managers of production-oriented
businesses concentrate on achieving high
production efficiency, low costs, and mass
distribution.
This orientation makes sense in developing

countries. It is also used when a company
wants to expand the market.
22
2. The Product Concept
Favor products that offer the most
quality, performance, or innovative
features.
Managers in these organizations

focus on making superior products
and improving them over time,
assuming that buyers can appraise
quality and performance.
23
3. The selling Concept
The organization must, therefore, undertake an

aggressive selling and promotion effort.
Practiced most aggressively with the types of

unsought goods.
The selling concept is also practiced in the

nonprofit area by fund-raisers, college admissions
offices, and political parties.
24
Cont…
“Selling focuses on the needs of the seller.
Most firms practice the selling concept when they

have overcapacity. Their aim is to sell what they
make rather than make what the market wants.
The selling concept takes an inside-out perspective.

It starts from the factory, focuses on existing
products, and calls for heavy selling and promoting
to produce profitable sales.
25
4. The Marketing Concept
Holds the concept of being more effective
than its competitors in creating, delivering,
and communicating customer value to its
chosen target markets.
The marketing concept focused on the needs

of the buyer. The marketing concept takes an
outside-in perspective.
It starts with a well-defined market, focuses
on customer needs, coordinates activities that
affect customers, and produces profits by
26
Cont’d
The marketing concept rests on four pillars: target
market, customer needs, integrated marketing, and
profitability.
1. Target Market: Companies choose their target

market and prepare customized marketing
programs.
2. Customer Needs: Understand customer needs and

wants. 27
3. Integrated Marketing: Foster teamwork among
all departments
4. Profitability: The ultimate purpose of the

marketing concept is to help organizations achieve
their objectives.
28
Selling and Marketing Concept
Contrasted
29
5. The Societal Marketing Concept
It holds that the organization’s task is
to determine the needs, wants, and
interests of target markets and to
deliver the desired satisfactions more
effectively and efficiently than
competitors in a way that preserves or
enhances the consumer’s and the
society’s well-being.
Calls upon marketers to build social
and ethical considerations into their
marketing practices. 30
Demand Management
Deal with the changing demand
Marketing management seeks to affect the

level, timing and nature of demand in a way
that helps the organization to achieve its
objectives.
Different states of demand
1. Negative Demand: Is when the major part
of the market dislikes the product.
Market Strategy ( Task)- Conversional
Marketing
- Identify (analyze) why the market- dislike
the product
- Use different strategies to convince the
market (buyers) and change their beliefs
and attitudes.
2. No Demand: This happens when the market is
unaware of or un interested in the product of the
company.
Market Strategy (Task) Stimulation
3. Latent Demand ( Hidden Demand):
Happens when there is a demand
/unsatisfied by existing product.
Market Strategy: (Task) Developmental
Marketing
- Measure the size of the potential market
- Develop new and commercialize the products
that satisfy these needs
4. Decline Demand: The demand for product
declines after some time
Market strategy- Remarketing /Re
stimulating
-Analyze why demand declines
-Find new target market, price reduction,
applying more effective promotional packages
5. Irregular demand: Here demand for

company’s product varies on certain time
frame. This causes idle or overworked
capacity
Market strategy synchronic marketing
- is to find ways to alter the pattern of demand
6. Full Demand: Happens when demand level is the
level that company wants to handle.
- The actual demand is the level desired by the
business firm.
Marketing Strategy (Task) Maintain Marketing
 Maintain the level of demand by measuring
the satisfaction level of consumers along with
quality controlling
7. Over full Demand: When demand is greater
than what can be supplied or handled by
company
- Marketing Strategy (Task) De marketing
- It is the techniques of reducing demand
temporarily or permanently
- Selective de marketing
- General de marketing
Cont’d
8. Un whole some Demand: A products is unwholesome
when it involves/attracts some organizations organized
parties/ to discourage its demand or consumption
Marketing Strategy (Task)

Get people who like that product given it up by
using fear message, price raise, reduce
availability
This is b/c the company has to work as per
the regulation of the organized parties & at
the same time does, its business


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Principle of Marketing

• After completing this chapter; students will able to:

 All of the above, plus much more!

3. Value, Satisfaction, and Quality

There are three levels of satisfaction

4. Exchange and Transaction

 Transactions are the basic unit of

5. Market, Marketer and Prospect

A market consists of all the set of actual

 Have resources or capacity that interests others,

 Are willing and have the authority to offer the

A marketer is someone seeking a response

A prospect is someone whom the marketer

This orientation makes sense in developing

Managers in these organizations

The organization must, therefore, undertake an

Practiced most aggressively with the types of

The selling concept is also practiced in the

Most firms practice the selling concept when they

The selling concept takes an inside-out perspective.

The marketing concept focused on the needs

1. Target Market: Companies choose their target

2. Customer Needs: Understand customer needs and

4. Profitability: The ultimate purpose of the

Deal with the changing demand

Marketing management seeks to affect the

5. Irregular demand: Here demand for

Marketing Strategy (Task)

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