LECTURE 1

1. What is marketing?
 Gather accurate data market knowledge
 Understand customers needs and wants
 Analyse the market place
 Segmentation analysis
 Set marketing objective (realistic) ( increase market share
 Right strategy to achieve objective ( reposition strategy mass
market to by cutting price launching of new up market products
carry out market research

One of the difficulties many students have when studying

marketing for the first time is the fact that the term marketing
can be understood and used in a number of different ways.
Such perspectives include an understanding of marketing as:

· a philosophy of business,

· a management function,

· a management process,

· a social process, and

· a social science.

1. Philosophy of business.
This philosophy holds that organisations which recognise the
importance of their respective customers or clients, and carry out
good marketing programmes which try to satisfy, perhaps even
delight, their customers, are more likely to be successful than
those that do not. The philosophy recognizes that organisational
survival is dependent upon placing the customer at the centre of
all organisational activities.

2. Management Function

In order to realize this philosophy some organisations

incorporate marketing within their structure as a management
function. Just like finance, production, research and design,
personnel and administration, marketing is treated as a function
of management and specialists are employed to undertake the
activities.

3. Management process

Management process involves about developing the idea that a

customer focus is necessary across the whole organisation not just
within a marketing department. The development of this customer
focus involves viewing marketing as a team effort across all
functions within an organisation.

4. Managerial Process

Marketing is also a managerial process that involves the

conception (that is, thinking about what idea, good or service
to market) and the pricing, promotion and distribution of the
idea, good or service

5. Social Process

We can also view marketing in a broader sense as a social process. This

approach treats marketing as one aspect of the organisation of
society. Here we are considering all of the activities, transactions
and exchanges in a society, and the complete range of businesses
and organisations involved in the social system. This approach
examines the behaviour of institutions and markets in the economy
as a whole and analyses how society satisfies its consumption needs.

6. Social Sciences

The study of marketing borrows heavily from other disciplines, e.g.

sociology, psychology, economics and mathematics, to assist in
understanding the behaviour of customers and markets, the aim
of this study is usually to ensure organisational resources are
used efficiently and effectively.

2. Marketing Definitions

1. The Chartered Institute of Marketing

‘Marketing is the management process that identifies, anticipates and
satisfies customer requirements profitably’

2. Adcock et al

The right product, in the right place, at the right time, and at the right
price’

3. Kotler 1980

‘Marketing is the human activity directed at satisfying human needs and

wants through an exchange process’

4. Kotler 1991

‘Marketing is a social and managerial process by which individuals and

groups obtain what they want and need through creating, offering and
exchanging products of value with others.

Marketing is a human activity directed at satisfying needs and wants

The marketing concept holds that the main task of the company is to
determine what a given set of customers’ needs, wants, and values are
and to dedicate the organization to delivering the solution

5. Peter Druker : “marketing is a social and managerial process by

which individuals and organisations obtain what they need and
want through creating and exchanging value with others.

6. Marketing is the management of relationships. This relates to the

external environment of the organisation .all relationships which
 cross the boundary between the organisation and the outside
world especially when they relate to customers, need to be
managed. The outside world is composed of customers suppliers,
competitors and others. It is these elements of the outside world
that will judge the organisation’s performance and image.

3. Marketing development

1. 1900-1930
1. Demand exceeding supply. Shortage in terms of goods and
services
2. How to overcome the problem of shortage
3. Adopted research and development to find out new
production techniques and ultimately greater volume of
goods were manufactured and made available with efficient
method of production
4. Most firms tended to be production oriented

2. 1930-1950

1. Supply exceeded demand and created a surplus for

which there were no immediate buyers
2. Management problem: what to do with the surplus
3. Try to stimulate a higher rate of consumption
4. Sales volume also became the objective of
management at the expense of profits and most
organisation tended to be sales oriented
3. 1950-Today

1. Sales volume is not the ultimate solution as it will not

lead to long term survival
2. Lead to develop the modern marketing concept :
customers will only be interested in buying those
goods that will best satisfy their needs and wants and
therefore only those suppliers who focus on the needs
satisfaction of customers will prosper and survive
3. Lead to make most firms to become market orientation
which is simply a customer oriented strategy

 20th century- improvement in technology

 Transition from production to consumption

 Competition- local/regional/international

 No longer problem of supply but in terms of anticipating demand

 Businesses struggling to establish customer preferences for their

products in relation Use of modern marketing practices

 Use of advertisement,

 Branding

 Packaging

 Marketing research
  Product improvement and new product development – invest in
research

 Marketing must not be understood in the old sense of making a

sale- “telling and selling”

 Should be viewed in the new sense: satisfying customer needs

Understand customer needs; develops products and services that

provide superior customer value; and prices, distributes, and promotes
them effectively; these products will sell easily.

3. Marketing, Exchange, Needs & Wants.

It is marketing, then, that facilitates satisfying exchanges and

exchange relationships. However marketers are not involved
with all exchanges, few people would argue that marketing is
involved with all exchanges, most teachers and practitioners
would agree that marketing has little to offer in terms of the
exchanges involved in personal relations. Most people restrict
marketing to exchanges that occur within a market.

Essential to any consideration of marketing is the principle that

marketers do not want to facilitate exchanges with all customers.
For example if a firm is going to achieve its profit objective it needs
to have customers who place sufficient value on their product and
who are willing to pay a price that is higher than the costs
incurred by the organisation.
The identification of what a customer is offering in the exchange
is thus important. For example, customers do not just offer to
pay for the product, each customer may have a different way of
paying, each of which has a different degree of attraction to the
seller. The role of the marketer is to encourage exchanges which
satisfy customer needs but which are also favourable to the
supplier’s interests. To this end a marketer will accept that some
customers are more preferable to others and even that some
customers are not wanted at all.

For exchanges to be successful, marketers need to try to

understand the needs and wants of their customers. In principle
there is an essential difference between a want and a need.

What is a need?

A need is often described as a generic condition; this may

include nutrition, shelter and clothing. You drink because you
are thirsty.

What is a want?

However a want is a specific form of satisfaction that an

individual is seeking, thus I am thirsty and I want lemonade to
quench the thirst.
 Most individuals enter into market exchanges to acquire
products that meet not just their generic condition but also their
desires. As people are able to consume a wider variety of products
and acquire a greater quantity of goods the distinction between
needs and wants gets blurred. Thus, a need becomes more
complicated; people will complain that they are desperately
thirsty and that they need for example a fresh beer

People can satisfy their needs and wants in four ways:

1. Self solution (coming up to the answer of the problems

themselves.

2. Force threatening/ stealing

3. Begging looking for sympathy

4. Exchange (offering something of value to the owner): this

last method is mutually beneficial to both parties. This
value exchange summarises marketing and applies in
every type of product exchange

5. How
For this to be possible it is important that the two parties
must have

 Have something of value to exchange

 Be capable of communicating

 Be free to accept or reject the exchange situation

 Successful exchange will only occur when there is some

individual or organisation with enough interest (and
available resources) who is prepared to enter to enter into
an agreement with the owner or producer of a particular
item (s)

 Combination of products ,services ,information and

experiences offered to a market to satisfy a need or a want

 Exchange: act of obtaining a desired object from someone

by offering something in return

 Market: the set of all actual and potential buyers of a

product or service.

 How the company presents itself and its activities to the

world will depend very much on a combination of factors:

1. The nature of product being sold

2. The beliefs of the decision makers

3. The extent of influencers from the environment

 4. Customer expectations

Marketing Management

Marketing management is the process of planning and

executing the conception, pricing, promotion and distribution
of ideas, goods and services to create exchanges that satisfy
individual and organisational objectives

The potential for exchange exists when there are at least two
parties and each has something of potential to the other.

When two parties can communicate and deliver the desired

goods and services exchange can take place. They follow the
right principle

They attempt to get the right goods or service to the right

people at the right place at the right time at the right price using
the right promotion techniques

The principle hold that marketing managers control many

factors that ultimately determine marketing success

Analysis

 A marketing orientation begins and ends with the

customer
 Marketing management involves identifying for example
who are the customers why do they buy and are they
satisfied with it, having bought it
  Carry out market research (quantitative analysis) how
many customers ? what is the market share ? how many
competitors? (and qualitative analysis) why do people
buy? What are their motivations?, attitudes and
personality

Planning

Marketing management also involves using the information

gained from marketing analysis to plan the organisation’s
marketing response. The strategic plan which consist of :

 Identification of selected target markets

 Forecasting future demands in each market
 Setting levels of each element of the marketing mix for
each target market

Control

The third component of marketing management is to control

the implementation of the marketing plan. Control involves
setting measurable targets for the plan and then checking
performances against these targets. If necessary remedial
action must be taken to ensure that planned and actual
performance are brought into line.

Organising the marketing dept

Four keys areas:

 1. Functions ( promotion , pricing etc)

Headed by a marketing manager who is responsible for the

overall coordination of the marketing effort. A number of
functional specialist such as market research manager , sales
manager are found in the second tiers of management and they
take responsibility of all activities in their function across all
products and markets ( specialisation)

2. Geographical areas

Responsibility for some or all functional activites being

developed to a regional level through a national functional
manager

3. Products based management

 Product managers take responsibility for specific products
or groups of products
 Suitable for large organisation with either diverse
products or with a large range of products
 Individual product manager is responsible for developing
plans for specific products and ensuring that products
remain competitive drawing on experience and guidance
of functional managers
 Product manager is effectively responsible for all the
marketing activities relating to a particular product group
and must therefore draw on and develop skills in relation
to promotion, pricing and distribution
Market Management

 Instead of taking responsibility for particular products

they responsibility for particular matkets
 The advantage of this approach arises when an
organisation sells a variety of different products into
particular markets and the understanding of the product is
perceived to be slightly less important than the
understanding of the market

4. Marketing management philosophies

Five alternatives concepts under which organisations conduct

marketing activities:

1. Production concept:

May be defined as the management view that success is achieved

through producing goods of optimum quality and cost and that
therefore the task of management is to pursue improved production
and distribution efficiency

1. Production concept: produces more than demand: concentrate

only on production not on marketing = low price

Production concept good for

  High demand

 Market is low cost and high turnover

 Buyers are sensitive to prices

 Organisation has capacity for mass production

The production concept is a useful philosophy in two types of situations

namely:

1. Where demand exceeds supply

2. Where cost of production becomes too high and improved
productivity is needed to bring it down.

2. Product Concept

The product concept holds the ideas that consumers will favour product
that offer the most quality features and performance and that
organisation should devote their energy to making continuous product
improvement and development.

Product concept:

 Managers believe that customers would recognise a good product

and buy it when it is made available.

 Focus on quality
  Carry market research before production

 Companies following a product orientation can be successful only

when:

 There is a current demand for the product

 There is a potential demand for the product

 Products are given full marketing support

 Products meet customer requirements

3. The selling concept

The selling concept is the management view that effective selling and
promotion are keys to success. The concept is typically practiced with
unsought goods- those goods which buyers do not think of buying
(impulse buying – selling them on product benefits). The focus is only
on selling

 Selling only what the company makes- it does not make what it
can sell.

 Involve heavy activity on the selling and promotional aspects with

provision of incentives- discounts/
  Company interested in moving stock rather in stocking the right
goods

 Sales concept implies the existence of an aggressive work force

 Sales concept works only when there is:

 Need for little after sales service

 Companies not interested in building relationship with customers

 Buyers have low expectations of the product

4. The Marketing Concept

The marketing concept is a customer-oriented philosophy that is

implemented and integrated throughout an organisation to serve
customers better than competitors and achieve specific goals.

Marketing concept

 Firmly believe that the customer is key to successful business

 Begins with the customer and the company try to give what the
customer wants rather than making the customer want what the
company has
The marketing concept has been stated as “identify a need and fill it”. To
efficiently adopt their goals firms today have adopted the marketing
concept which requires:

 A consumer orientation: Firms strive to identify the group of

people (firms) most likely to buy their product (target market) and
to produce a good or offer a service that will meet the needs of the
target customers effectively.

 A goal orientation: The firm must be consumer oriented only to the

extent that it also accomplished corporate goals. ( financial criteria;
example a return on investment of 15 % is needed)

 A system orientation: A system is an organised whole –or a group

of diverse units that form an integrated whole-functioning unit.

5. The Societal Concept: it holds that the organisation should

determine the needs and wants and interest of target markets
and deliver the desired satisfaction more effectively and
efficiently than competitors in a way that improves and
maintains the consumers and society’s well being. This would
require management “to include the consideration of social
implication in their decision processes and their management
control procedures. Also social responsibility is implied in the
marketing concept. Increasingly firms now have a strong
commitment to social responsibility in their corporate
objectives and recognise that customer satisfaction must take
into account the societal impact of a product’s use.