Today
• The Nature of Marketing
Principles of Marketing
Topic Two: The Nature of Marketing
Associated Reading
Chapter 1: Rogan, Donal, (2007)
Marketing, An Introduction for Students
in Ireland, 3rd edition. Gill and
Macmillian.
OR
Chapter 1: Blythe, Jim, Essentials of
Marketing 4th Edition, Prentice Hall
(2008)
Needs, Wants and Demands
• Marketing begins with an understanding of
human needs
• Humans are constantly needy
• At a basic level we need food, drink etc. to
survive
• Wants are influenced by our culture
• Few people have enough money to satisfy all of
their wants
• People will buy products & services that can
offer the most amount of satisfaction they
can get for their money
• Needs & Wants
• Products and services (tangible & intangible)
• The Market
• The Evolution of Marketing
• The production, product, marketing and selling
concepts
• Marketing Orientated Business
• Competitive advantage
• Tayto Crisps Case-study
The Nature of Marketing
• Marketing should permeate the whole
operation
• It is a process that commences before the
product or service begins & continues
after it has been sold
• Should not be restricted to ‘one department’
within an organisation
• Demand exists when people have the purchasing power
to satisfy their needs
• The terms needs and wants are not the same: some
needs are innate
• Wants are for specific products or services that will
satisfy a need – i.e. I’m thirsty why do I buy Ballygowan
water?
Criticism of marketing: ‘it creates needs to make money’
• Marketing can’t create needs but it does influence wants
through advertising, sales promotions etc.
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 Products • Kotler & Levy (1969) suggested that
marketing is a social activity that goes
Product: what is being exchanged by the beyond selling tangible goods
marketer with the consumer
• A product is anything that can be offered to satisfy a
• They suggested that the term ‘product’ could
need or a want
describe physical products, services, people,
• It can include physical things i.e. tangible items organisations and ideas
• Something is tangible if we can see, touch, hear,
smell or taste it
• Products can also be intangible
• Intangibility describes experiences, feelings
or emotions

Value and Satisfaction

• Physical products:
• Whatever the nature of the product
• Services:
• People:
• It must be valued and give satisfaction if it
• Organisations: is to be demanded
• Ideas:
• A product or service offering particular
features & priced in a specific way may
represent value and satisfaction

• To another consumer it may not

Exchange, Transactions & Relationships

• Customer Value reflects a wide variety of factors,
depending on the nature of the product:
• The availability of information on the product
• The convenience of the retail outlets
• How the consumer was treated by sales
personnel
• Ease of payment
• Delivery
• Operating instructions
• The performance and durability of the product
• The functions of the product
• Maintenance cost
• Marketing is an exchange process
• We exchange money for products / services
• Not all exchange services involves money i.e.
Samaritans
• Transactions are:
a trading of values between two parties
• A customer could trade in an older product in
part-exchange for a new one – i.e. car market
• The notion of exchange has been developed
into the concept of relationship marketing

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• RM implies that the organisation aims to:
build relationships between itself its customers,
suppliers & distributors
• The concept of relationship marketing has
become very important in recent years
• Relationship marketing results in:
• customer satisfaction,
• customer loyalty,
• product quality &
• profitability
The Market
• Market profiling is an important aspect of
marketing:
• understanding the characteristics & trends,
• Comprehending and monitoring these is key
to successful marketing
• Understanding the customer is guided by
universal principals
• The customer must also be understood in the
context of their environment
The Production Concept
• Companies decided what to produce –
customers were not consulted
• Focus on production and distribution efficiency
• Where demand exceeds supply
• Mass produced
• Acceptable once they are producing what the
customer wants
The Market
• The market describes the actual and
potential buyers for the product
• Markets can be divided into:
consumer markets
business-to-business markets
international markets
The Evolution of Marketing
• Contemporary marketing has come to the fore
after the industrial revolution
• The factory system & new forms of transport
made selling products to a wider audience
possible
• Large-scale, efficient production
• Mass production of products at attractive prices
• Advertising was also stimulated by the industrial
revolution – manufacturers needed to inform new
& growing markets
The Production Concept
• Ryanair follow this approach – they
concentrate on a low-cost service with no
added benefits
• The production concepts works for them
• May not work in markets where buyers
require a high degree of customisation or
additional benefits
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 The Product Concept The Product Concept
• Consumers favour products that offer the highest
quality • Should not lose sight of customers
needs
• The greatest number of performance and innovative
features • Following the product concept too closely –
can lead to ‘marketing myopia’
• Manufactures spend a lot of time and effort in improving
products: adding features & benefits
• What is produced is ultimately determined by
• But improvements must be valued by the market customers needs – if those needs
change, businesses have to adapt
• High performance products may cost more – can
customers afford them or want them?

The Selling Concept / Sales Orientation The Marketing Concept

•Selling & marketing •Danger if they
often seen as the same concentrate on • Based on:
thing selling rather than ‘understanding customers needs’
matching products with
•Selling is a function needs
of marketing • Providing competitive products/services to
•Dangerous to focus on meet those needs at a profit
•Firms seek to sell getting the sale without
products and services to worrying about the
make a profit – what customers needs or • The role of marketing in the firm and in society:
they sell should be post-sales
what the customer satisfaction
wants • Marketing plays a number of roles: internal and
external

The Marketing Concept The Social Marketing Concept

• Marketing plays a role in initial research, creation
of a product, it also sustains the product over its
life-time and helps develop it
• Marketing has helped to create many of the products
and services we take for granted
• It has created consumer icons
• Marketers should take some responsibility for the
needs of society
• Looks at the long-term effects of marketing on
society
• Does not have to conflict with business objectives i.e.
Body shop
• Some companies take on responsibility for good
citizenship (CSR)

• Can create competitive advantage (i.e. Dove,

Body Shop, Ben & Jerry’s)

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 Top Ten Brands UK & USA What makes up a marketing-orientated
organisation?
1. Sony 1. Sony
2. Heinz 2. Kraft 1. Customer driven
3. Marks and Spencer 3. Dell 2. Centred on satisfying customers needs
4. Kellogg’s 4. General Motors
5. Tesco 5. Microsoft
3. Has a competitive advantage
6. Flora 6. Ford
7. Coca-Cola 7. Coca-Cola
4. Capable of change
8. Boots 8. Procter and Gamble
9. Nestle 9. Kellogg’s 5. Responsive to the customers needs
10. Cadbury 10. GE and Pepsi before, during and after the sale of the
product
6. Is profit driven

Centered on Customers’ Needs Competitive Advantage

• The business has something to differentiate its product
• Businesses know what the needs are & or services from that of competitors
attempting to serve them better than the
• Products / services must have a (USP)
competitors
• Otherwise customers may not be able to tell them apart
• Marketing research finds out what customers
• Competitive advantage is a prerequisite of successful
needs are & monitor how they change marketing

• Businesses that have remained close to their
customers & focused on customers needs will
tend to be successful in the long term
• If a product or service is no better than its competitors on
quality, price, availability, choice or image – what is there to
market?
• Competitive advantage needs to be sustained, successful
products and brands need to be kept up-to-date

Tayto Case-study: Ireland’s Favourite Crisp

• Tayto was founded in 1954 off Moore Street
• By 1964 majority share was bought by
Beatrice Food
• Through the 70s & 80s Tayto became a
hugely successful company
• Walkers entered the market - Taytos’ share
dropped
• Tayto increased its advertising & promotion in
response
• They introduced the ‘Honest’ range in 2004:
low salt - low-fat positioning & recovered
market share
• Company was sold in 2006
• Demonstrates how competitive advantage
needs to be sustained and new market
potential needs to be examined

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 Capable of Change
• Marketers need to be able to adapt to changes in
their environment
• Technology is also a source of competitive
advantage – (improved products and services & its
role in marketing practice)
• IT very influential
• Gather info:
• DM, DbM & tele-marketing have all grown
• Late 1990s website development:
Responsive before, during and after
• Marketing is concerned with developing a
relationship with the customer
• The relationship begins before the product or
service is sold & continues after the sale
• Post-purchase satisfaction just as important as
creating awareness & a sales technique
• Firms must manage a number of relationships:
I.e. marketer-customer, marketer-supplier,
marketer-distributor