What is MARKETING?

Marketing is about identifying and meeting human and social needs. One of the shortest good
definitions of marketing is “meeting needs profitably.” The American Marketing Association offers the
following formal definition: Marketing 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 is a process by which companies create value for customers and build strong
customer relationships to capture value from customers in return.

Marketing is a business activity which directs the flow of goods and services from
manufacturers, producers, or service providers to customers for a profit.

Marketing is an organizational function and a set of processes for creating, communicating, and
delivering value to customers and for managing customer relationships in ways that benefit the
organization and its stakeholders.

The Marketing Process

1. Understanding the Marketplace and Customer Needs

Needs - States of deprivation

Self
Actualization
Esteem Needs
(Self-development )
(self-esteem,
Social Needs
status)
(sense of belonging, love)

Safety Needs
(security, protection)
Physiological Needs
(hunger, thirst)

Maslow’s Hierarchy of Needs

Five types of needs:
1. Stated needs (The customer wants an inexpensive car.)
2. Real needs (The customer wants a car whose operating cost, not initial price, is low.)
3. Unstated needs (The customer expects good service from the dealer.)
4. Delight needs (The customer would like the dealer to include an onboard GPS navigation system.)
5. Secret needs (The customer wants friends to see him or her as a savvy consumer.)
The needs become wants when they are directed to specific objects that might satisfy the need.

Wants- needs that are directed to specific objects

Human wants continually shaped and reshaped by social forces and institutions. Wants become
demands when supported by purchasing power.

Demands- Wants backed by buying power

Marketers are responsible for demand management. They seek to influence the level, timing,
and composition of demand to meet the organization’s objectives. Eight demand states are possible:
1. Negative demand— Consumers dislike the product and may even pay to avoid it.
2. Nonexistent demand— Consumers may be unaware of or uninterested in the product.
3. Latent demand— Consumers may share a strong need that cannot be satisfied by an existing
product.
4. Declining demand— Consumers begin to buy the product less frequently or not at all.
5. Irregular demand— Consumer purchases vary on a seasonal, monthly, weekly, daily, or even
hourly basis.
6. Full demand— Consumers are adequately buying all products put into the marketplace.
7. Overfull demand— More consumers would like to buy the product than can be satisfied.
8. Unwholesome demand— Consumers may be attracted to products that have undesirable social
consequences.

Market offerings are some combination of products, services, information, or experiences offered to a
market to satisfy a need or want.

Goods Places
Services Properties
Events Organizations
Experiences Information
Persons Ideas

Marketing myopia is focusing only on existing wants and losing sight of underlying consumer needs.

Customer value is the difference between the values the customer gains from owning and using the
product and the cost of obtaining the product.

Customers often do not judge product value and cost accurately or objectively. They act on perceived
value.

Customer Satisfaction– the extent to which the product’s perceived performance matches a buyer’s
expectations. If the product’s performance falls short of expectation, the buyer is dissatisfied. If
performance matches or exceeds expectations, the buyer is satisfied or delighted.
 Four Eras of Marketing History

E Produ Sales Mark Relation

r Prior
ction to to
Prior Since
eting Since
ship
a 1920’s 1950’s 1950’s 1990’s

“A good “Creative “The “Long term

product advertising and consumer relationships
will sell selling will rules! Find a with
itself.” overcome need and fill customers
consumers’
Marketing Management Orientations it.” under which organizations
(alternative concepts and other conduct their
activities): resistance and partners lead
convince
Production Concept – holds that consumersthem to products that are available
will favor to success.”
and highly affordable.
buy.”
Product Concept – holds that consumers will favor products that offer the most in quality, performance
and innovative features. Thus, organization should devote energy to making continuous product
improvement.

Selling Concept – is the idea that consumers will not buy enough of the organization’s products unless
the organization undertakes a large scale selling and promotion efforts. This is typically practiced with
unsought goods.

Marketing Concept – holds that achieving organizational goals depends on knowing the needs and
wants of target markets and delivering the desired satisfaction better than competitors do. Under this
concept customer focus and value are the paths to sales and profit.

Societal Marketing Concept – holds that the organization should determine the needs, wants and
interest of target markets and deliver the desired satisfactions more effectively and efficiently than
competitors do in a way that maintains or improves the customer’s and society’s well-being.
2. Designing a Customer-Driven Marketing Strategy

Marketing management is the art and science of *choosing target markets and *building profitable
relationships with them.

What customers will we serve?

How can we best serve these customers?

A. Selecting Customers to Serve

Market segmentation refers to dividing the markets into segments of customers

Target marketing refers to which segments to go after

Demarketing is marketing to reduce demand temporarily or permanently; the aim is not to destroy
demand but to reduce or shift it

B. Choosing a Value Proposition

The value proposition is the set of benefits or values a company promises to deliver to customers to
satisfy their needs

3. Preparing an Integrated Marketing Plan and Program

The marketing mix is the set of tools (four Ps) the firm uses to implement its marketing strategy.
It includes *product, *price, *promotion, and *place.
Updated 4P’s

4. Building Customer Relationships

Customer Relationship Management (CRM) - The overall process of *building and *maintaining
profitable customer relationships by *delivering *superior customer value and *satisfaction

Partner relationship management involves *working closely with partners in *other company
departments and *outside the company to jointly bring greater value to customers.

5. Capturing Value from Customers

Creating Customer Loyalty and Retention

Customer lifetime value is the value of the entire stream of purchases that the
customer would make over a lifetime of patronage.

Customer equity is the *total combined customer lifetime values of all of the company’s
customers.