Pmk101chap12014 150619060902-lva1-app6891

OVERVIEW OF MARKETING:AN
INTRODUCTION
Principles of Marketing
1

Chapter Objectives
At the end of the chapter, the student is expected to:
Explain the meaning of Marketing;
Describe the stages of Marketing thought;
Understand the behavioral concepts relevant to Marketing;
Discuss the goals of Marketing;
Describe the traditional approaches to marketing; and
Identify and explain contemporary marketing approaches.
2

Introduction
Marketing started in the early part of the twentieth century
(between 1900 and 1910) out of questions and issues
neglected by its mother science, economics.
In the early years of study and teaching of trade practices,
the word “marketing” was not used. Instead, “trade,”
“commerce,” and “distribution” were the common
operations of the area to which the term “marketing” is
identified today.
3

1 - 4
Stages of Marketing Thought
 1900-1910 Period of Discovery. In the early years,
teachers of marketing sought facts about the distributive
trades. The concept of “marketing” occurred, thus, the
terminology was given to it.
 1910-1920 Period of Conceptualization. Many
marketing concepts were initially developed. Its concepts
were classified, and terms were defined.
 1920-1930 Period of Integration. Principles of
marketing were postulated, and the general body of
thought was integrated for the first time.
 Paul W. Ivey was the first to use as a book title Principle
of Marketing, although others and previously used
“principles” in connection with advertising, retailing and
credit granting.4

1930-1940 Period of Development. Specialized
areas of marketing continued to be developed, hypothetical
assumptions were verified and quantified, and some new
approaches to the explanation of marketing knowledge.
1940-1950 Period of Reappraisal. The concept and
traditional explanation of marketing was reappraised in
terms of new needs for marketing knowledge.
1950-1960 Period of Reconception. Traditional
approaches to the study of marketing were supplemented
by increasing emphasis upon managerial decision making,
the societal aspects of marketing, and quantitative
marketing analysis.
5

1960-1970 Period of Differentiation. As
marketing expanded, new concepts took on substantial
identity as significant components of the total structure of
thought.
1970 Period of Socialization. Social issues
and marketing became much more important. It is the
influence not of society upon marketing, but of marketing
upon society that became a focus of interest.
6

What Is Marketing?
Simple Definition:
Marketing is managing profitable
customer relationships.
Goals:
1. Attract new customers by promising
superior value.
2. Keep and grow current customers by
delivering satisfaction.
7

Marketing Defined
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.
OLD View
of Marketing:
Making a Sale –
“Telling & Selling”
New View
of Marketing:
Satisfying
customer needs
NEW View
of Marketing:
Satisfying
Customer Needs
8

Marketing as One of the Functions in
Business Organization
A simple business organization consists of the
following functions:
1) finance and accounting,
2) human resource management,
3) production and materials management, and
4) marketing
9

Functions in Management
The different functions of managers in a business
organization are as follows:
planning,
organizing,
staffing,
directing/supervising, and
evaluating of personnel, plans and programs in the
different departments of the company.
10

Marketing as a Management Function
Marketing is a part of four key management
functions –
Marketing,
Production,
Finance, and
Human Resource
11

Behavioral Concepts Marketing Thought
From anthropology (Community
in entirety)
Culture
Subculture
Comparative approach
Climate for business
Market Research
Culture restraints
Word association
Communication
Retailing structures
From Sociology (individuals in
relation to other individuals)
Social class
Social differentiation
Status crystallization
Reference groups
Informal groups
Social role
The family
Individuals
Institutions
Market segments
Social class awareness
New product acceptance
Shopping behavior
Communication
Leisure
Groups, product, brands
Aspirations
References
Status conflict
Personal influence
Decision making
Life cycle
Behavioral Concepts Relevant to
Marketing
12

From Psychology (Centers on the
individual)
 Motivation
 Drives
 Cognitive dissonance
 Achievement
 Affiliations
 Hierarchy of motives
 Perception
 Orientation
 Scope
 Thresholds
 Perceptual function
 Mechanics of vision
 Time
 Selective perception
 Classical and operant
learning
 Serial learning
 “Insight”
 Learning of concepts
 Attitudes
 Motivation
 Risk reduction
 Ego
 Self-image
 Concept generalization
 Brand choice
From Political Science Power groups
Values
Trade associations
Public policy
Behavioral Concepts Relevant to Marketing
13

Goals of Marketing
The four goals of a marketing system:
maximize consumption,
maximize consumer satisfaction,
maximize choice, and
maximize life quality (Kotler 2000)
14

3Cs Key Objectives
1. Customers To satisfy the needs, wants and
expectations of target customers.
2. Competition To outperform competition.
3. Company To ensure corporate health and profit.
Marketing: The Strategic 3Cs Concept
15

Contemporary Marketing
Approaches
With the maturation of marketing thought, approaches to the
analysis of marketing were advanced.
The following are some of the approaches and concepts in
marketing:
1) marketing mix;
2) conceptual approach;
3) systems or holistic approach;
4) marketing management;
5) macro-marketing;
6) social marketing; and
7) comparative marketing. (Llanes and Jurado: 1980)16

The Marketing Mix
The marketing mix developed by E. Jerome McCarthy
(McCarthy 1975:44) consists of 4Ps – product, price,
place, and promotion – all of which influence buyer’s
decision and responses.
Each Ps relates to and is dependent on every other Ps.
The Ps are controllable variables that a company may use in
mapping a successful marketing strategy. Below is the
formula for marketing success (Schwartz 1977:67):
17

Product
(desirable)
Promotion
(Effective)
Price
(affordable)
Place
(Availability)
Consumer
Consumer
Below is the formula for marketing
success
(Schwartz 1977:67)
18

Conceptual Approach
This approach studies ideas of marketing rather than the
activities of marketing.
Its emphasis is on theoretical analysis and development of
new concepts whether of consumer, products, marketing
institution, functions, processes, or policies.
The concept of marketing is more important than the
definition of marketing.
The conceptual approach is recognized when marketing is
defined to bring out various ideas for which “marketing
stands.”
19

Systems (Holistic) Approach
A system is a set of interacting or interdependent
groups coordinated to form a unified whole and
organized to accomplish a set of goals (Markin
1979:28).
Thus, marketing is perceived as whole,
interdependent units, the marketing process
conceptualized as “flows” and the marketing
structure as “systems” (Bartels 1976:202).
20

Marketing Management
This concept is a managerial approach to marketing.
It emphasizes marketing management as a decision making
process and how decision makers, specifically the marketing
manager, handles specific marketing problems and
situations.
Marketing activities and strategies are evaluated and
developed to achieve specific management objectives.
The approach establishes the position of the “marketing
manager” as a top- level position in a company’s
organization.
21

1 - 22
Macro Marketing Approach
Macro Marketing is the study of marketing
activities, institutions, and processes from the
national (societal) perspective.
It looks at the aggregate flow of goods and
services in an economy to determine if it
benefits the society in terms of its resource
consumption and environmental effects.
22

Social Marketing
Kotler and Andreason – Social Marketing as
“differing from other areas of marketing only
with respect to the objectives of the marketer
and his or her organization.
Seeks to influence social behaviors not the
benefit the marketer, but to benefit the target
audience and the general society.
23

Comparative Marketing
Focus on the systematic study of similarities
and differences between national marketing
systems across time, space and sectors for the
purpose of theory-building and theory.
24

Pmk101chap12014 150619060902-lva1-app6891

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