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Study Guide in Mgt 101: Management and Marketing in the 21 st Century Module No. 6

STUDY GUIDE FOR MODULE NO. 6

OVERVIEW OF MARKETING
MODULE OVERVIEW

Hello, how are you? I hope you are doing fine wherever you are, dear! So today is a very exciting day
because we are going to discuss about marketing! Management is interesting but marketing is a lot more
interesting, right?

This first chapter introduces you to the basic concepts of marketing. We start with the question: What is
marketing?

Simply put, marketing is engaging customers and managing profitable customer relationships. The aim of
marketing is to create value for customers in order to capture value from customers in return. We proceed
with a closer look at the most important element of the marketplace—customers. The aim of marketing is to
engage customers and affect how they think and act. To affect the whats, whens, and hows of buyer behavior,
marketers must first understand the whys. In this chapter, we look at final consumer buying influences and
processes.

Ready? Arat na! 

Go to www.menti.com and enter the code that the teacher will give you. Write down three words you
associate with management.

All contents are heavily drawn from our main reference book, Principles of Marketing (17th ed.) by Kotler and
Armstrong (2018).

MODULE LEARNING OBJECTIVES

At the end of this module, you should be able to:

1. Define Marketing and outline the steps in the marketing process.
2. Explain the importance of understanding the marketplace and customers and identify the
five core marketplace concepts.
3. Define the consumer market and construct a simple model of consumer buyer behavior.
4. Name the four major factors that influence consumer buyer behavior.
5. List and define the major types of buying decision behavior and the stages in the buyer
decision process.

A. WHAT IS MARKETING

Kotler & Keller (2016) states that 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

Managers sometimes think of marketing as “the art of selling products,” but many people are surprised when
they hear that selling is not the most important part of marketing! Selling is only the tip of the marketing
iceberg. Peter Drucker, famed management theorist, put it this way:

There will always, one can assume, be need for some selling aim of marketing is to make
selling superfluous. The aim of marketing is to know and understand the customer so well that
the product or service fits him and sells itself. Ideally, marketing should result in a customer
who is ready to buy. All that should be needed then is to make the product or service available.
(Source: Kotler & Keller, 2016 pp 27)

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Marketing, more than any other business function, deals with customers. Although we will soon explore more-
detailed definitions of marketing, perhaps the simplest definition is this one: Marketing is engaging customers
and managing profitable customer relationships. The twofold goal of marketing is to attract new customers by
promising superior value and to keep and grow current customers by delivering value and satisfaction.

Marketing Process

The figure below presents a simple, five-step model of the marketing process for creating and capturing
customer value. In the first four steps, companies work to understand consumers, create customer value, and
build strong customer relationships. In the final step, companies reap the rewards of creating superior
customer value. By creating value for consumers, they in turn capture value from consumers in the form of
sales, profits, and long-term customer equity.

LEARNING ACTIVITY 1

 Continue reading the topic on the ebook, Principles of Marketing by Kotler, P. & Armstrong, G. (2018)
on pages 28-30. Also read this topic on https://marketing-insider.eu/marketing-process/ entitled “The
Marketing Process – All Aspects of Marketing At One Glance”. Don’t forget to write short notes on
your notebook (virtual or physical)!

 Go to www.menti.com and enter the code that the teacher will give you. Write down three words you
associate with marketing.

Reflection Question/s: (Code: T6_RQ1)

The simplest definition of marketing is said to “meeting needs profitably”. Why do you think so?

B. UNDERSTANDING THE MARKETPLACE AND CUSTOMER NEEDS

As a first step, marketers need to understand customer needs and wants and the marketplace in which they
operate. We examine five core customer and marketplace concepts: (1) needs, wants, and demands; (2)
market offerings (products, services, and experiences); (3) value and satisfaction; (4) exchanges and
relationships; and (5) markets.

Customer Needs, Wants, and Demands

 The most basic concept underlying marketing is that of human needs. Human needs are states of felt
deprivation. They include basic physical needs for food, clothing, warmth, and safety; social needs for
belonging and affection; and individual needs for knowledge and self-expression. Marketers did not
create these needs; they are a basic part of the human makeup.
 Wants are the form human needs take as they are shaped by culture and individual personality.
Wants are shaped by one’s society and are described in terms of objects that will satisfy those needs.
 When backed by buying power, wants become demands. Given their wants and resources, people
demand products and services with benefits that add up to the most value and satisfaction.

Market Offerings—Products, Services, and Experiences

 Consumers’ needs and wants are fulfilled through market offerings—some combination of products,
services, information, or experiences offered to a market to satisfy a need or a want. Market offerings
are not limited to physical products. They also include services— activities or benefits offered for sale

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that are essentially intangible and do not result in the ownership of anything. Examples include
banking, airline, hotel, retailing, and home repair services. More broadly, market offerings also include
other entities, such as persons, places, organizations, information, and ideas.

Customer Value and Satisfaction

 Consumers usually face a broad array of products and services that might satisfy a given need. How
do they choose among these many market offerings? Customers form expectations about the value
and satisfaction that various market offerings will deliver and buy accordingly. Satisfied customers buy
again and tell others about their good experiences. Dissatisfied customers often switch to competitors
and disparage the product to others.

Exchanges and Relationships

 Marketing occurs when people decide to satisfy their needs and wants through exchange
relationships.
 Exchange is the act of obtaining a desired object from someone by offering something in return. In the
broadest sense, the marketer tries to bring about a response to some market offering. The response
may be more than simply buying or trading products and services.
Markets

The concepts of exchange and relationships lead to the concept of a market.

 A market is the set of actual and potential buyers of a product or service. These buyers share a
particular need or want that can be satisfied through exchange relationships.
 Marketing means managing markets to bring about profitable customer relationships. However,
creating these relationships takes work. Sellers must search for and engage buyers, identify their
needs, design good market offerings, set prices for them, promote them, and store and deliver them.

Other Core Marketing Concepts:

Positioning, and Segmentation

• Businesses know that not EVERYONE will buy their products or services
• They look for ways to offer their products or services to the people who are most likely to be
interested
• This involves segmenting, or breaking the market into smaller groups that have similar wants and
needs
• Market segmentation seeks to find the group of people most likely to become customers
• The group that is identified for a specific marketing program is the target market
• Positioning is how you put the product in the minds of your customers.

LEARNING ACTIVITY 2

Continue reading Continue reading the topic on the ebook, Principles of Marketing by Kotler, P. & Armstrong,
G. (2018) on pages 30-34. Don’t forget to write short notes on your notebook (virtual or physical)!

Reflection / Guide Question/s: (Code: T6_RQ1)

 What is the relationship between satisfaction and expectation?

 Contrast need, wants and demand. Provide examples.
 What is marketing myopia? What are the short- and longterm implications for business in this situation?
 What is the difference between customer and consumer?

C. MODEL OF CONSUMER BEHAVIOR

Buying behavior is never simple, yet understanding it is an essential task of marketing management.
Consumer buyer behavior refers to the buying behavior of final consumers—individuals and households that

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buy goods and services for personal consumption. All of these final consumers combine to make up the
consumer market.

According to this model, marketing stimuli (the four Ps) and other major forces (economic, technological,
political, cultural) enter the consumer’s “black box” and produce certain responses. Once in the black box,
these inputs produce observable buyer responses, such as brand choice, purchase location and timing, and
brand engagement and relationship behavior.

LEARNING ACTIVITY 3

Continue reading Continue reading the topic on the ebook, Principles of Marketing by Kotler, P. & Armstrong,
G. (2018) on pages 30-34. Don’t forget to write short notes on your notebook (virtual or physical)!

Reflection / Guide Question/s: (Code: T6_RQ3)

How do consumers respond to various marketing efforts the company might use?

D. CHARACTERISTICS AFFECTING CONSUMER BEHAVIOR

Consumer purchases are influenced strongly by cultural, social, personal, and psychological characteristics,
For the most part, marketers cannot control such factors, but they must take them into account.

Cultural Factors

Cultural factors exert a broad and deep influence on consumer behavior. Marketers need to
understand the role played by the buyer’s culture, subculture, and social class.

 Culture: The set of basic values, perceptions, wants, and behaviors learned by a member of society
from family and other important institutions.
 Subculture: A group of people with shared value systems based on common life experiences and
situations.
 Social class: Relatively permanent and ordered divisions in a society whose members share similar
values, interests, and behaviors.

Social Factors

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A consumer’s behavior also is influenced by social factors, such as the consumer’s small groups, social
networks, family, and social roles and status.

 Many small groups influence a person’s behavior. Groups that have a direct influence and to which a
person belongs are called membership groups. In contrast, reference groups serve as direct (face-to-
face interactions) or indirect points of comparison or reference in forming a person’s attitudes or
behavior. People often are influenced by reference groups to which they do not belong. For example,
an aspirational group is one to which the individual wishes to belong.

 Word-of-mouth influence can have a powerful impact on consumer buying behavior. The personal
words and recommendations of trusted friends, family, associates, and other consumers tend to be
more credible than those coming from commercial sources, such as advertisements or salespeople.

 Marketers of brands subjected to strong group influence must figure out how to reach opinion leaders
—people within a reference group who, because of special skills, knowledge, personality, or other
characteristics, exert social influence on others.

 Buzz marketing involves enlisting or even creating opinion leaders to serve as “brand ambassadors”
who spread the word about a company’s products. Over the past several years, a new type of social
interaction has exploded onto the scene—online social networking. Online social networks are online
communities where people socialize or exchange information and opinions.

 Family members can strongly influence buyer behavior. The family is the most important consumer
buying organization in society, and it has been researched extensively.

 Roles and Status: A person belongs to many groups—family, clubs, organizations, online
communities. The person’s position in each group can be defined in terms of both role and status. A
role consists of the activities people are expected to perform according to the people around them.
Each role carries a status reflecting the general esteem given to it by society.

Personal Factors

A buyer’s decisions also are influenced by personal characteristics such as the buyer’s occupation, age and
stage, economic situation, lifestyle, and personality and self-concept.

 Occupation: A person’s occupation affects the goods and services bought. Blue-collar workers tend to
buy more rugged work clothes, whereas executives buy more business suits. Marketers try to identify
the occupational groups that have an above-average interest in their products and services.

 Age and Life Stage: People change the goods and services they buy over their lifetimes. Tastes in
food, clothes, furniture, and recreation are often age related. Buying is also shaped by the stage of
the family life cycle—the stages through which families might pass as they mature over time. Life-
stage changes usually result from demographics and life-changing events—marriage, having children,
purchasing a home, divorce, children going to college, changes in personal income, moving out of the
house, and retirement.

 Economic Situation: A person’s economic situation will affect his or her store and product choices.
Marketers watch trends in spending, personal income, savings, and interest rates.

 Lifestyle: People coming from the same subculture, social class, and occupation may have quite
different lifestyles. Lifestyle is a person’s pattern of living as expressed in his or her psychographics. It
involves measuring consumers’ major AIO dimensions—activities (work, hobbies, shopping, sports,
social events), interests (food, fashion, family, recreation), and opinions (about themselves, social
issues, business, products).

 Personality and Self-Concept: Each person’s distinct personality influences his or her buying
behavior. Personality refers to the unique psychological characteristics that distinguish a person or
group. Personality is usually described in terms of traits such as self-confidence, dominance,

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sociability, autonomy, defensiveness, adaptability, and aggressiveness. Personality can be useful in

analyzing consumer behavior for certain product or brand choices.
o The idea is that brands also have personalities, and consumers are likely to choose brands
with personalities that match their own. A brand personality is the specific mix of human traits
that may be attributed to a particular brand.
o Many marketers use a concept related to personality—a person’s self-concept (also called
self-image). The idea is that people’s possessions contribute to and reflect their identities—
that is, “we are what we consume.” Thus, to understand consumer behavior, marketers must
first understand the relationship between consumer self-concept and possessions. Hence,
brands will attract people who are high on the same personality traits.

Psychological Factors

A person’s buying choices are further influenced by four major psychological factors: motivation, perception,
learning, and beliefs and attitudes.

Motivation
A person has many needs at any given time. Some are biological, arising from states of tension such as
hunger, thirst, or discomfort. Others are psychological, arising from the need for recognition, esteem, or
belonging. A need becomes a motive when it is aroused to a sufficient level of intensity. A motive (or drive) is
a need that is sufficiently pressing to direct the person to seek satisfaction. Psychologists have developed
theories of human motivation. Two of the most popular—the theories of Sigmund Freud and Abraham Maslow
— carry quite different meanings for consumer analysis and marketing.

 Sigmund Freud assumed that people are largely unconscious about the real psychological forces
shaping their behavior. His theory suggests that a person’s buying decisions are affected by
subconscious motives that even the buyer may not fully understand.
 Abraham Maslow sought to explain why people are driven by particular needs at particular times. Why
does one person spend a lot of time and energy on personal safety and another on gaining the
esteem of others? Maslow’s answer is that human needs are arranged in a hierarchy, from the most
pressing at the bottom to the least pressing at the top.25 They include physiological needs, safety
needs, social needs, esteem needs, and self-actualization needs.

Perception

A motivated person is ready to act. How the person acts is influenced by his or her own perception of the
situation. All of us learn by the flow of information through our five senses: sight, hearing, smell, touch, and
taste. However, each of us receives, organizes, and interprets this sensory information in an individual way.
Perception is the process by which people select, organize, and interpret information to form a meaningful
picture of the world.

Learning

When people act, they learn. Learning describes changes in an individual’s behavior arising from experience.
Learning theorists say that most human behavior is learned. Learning occurs through the interplay of drives,
stimuli, cues, responses, and reinforcement.

Beliefs and Attitudes

Through doing and learning, people acquire beliefs and attitudes. These, in turn, influence their buying
behavior. A belief is a descriptive thought that a person holds about something. Beliefs may be based on real
knowledge, opinion, or faith and may or may not carry an emotional charge. People have attitudes regarding
religion, politics, clothes, music, food, and almost everything else. Attitude describes a person’s relatively
consistent evaluations, feelings, and tendencies toward an object or idea.

LEARNING ACTIVITY 4

Continue reading Continue reading the topic on the ebook, Principles of Marketing by Kotler, P. & Armstrong,

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G. (2018) on pages 159-173. Also read the following journals below. Don’t forget to write short notes on your
notebook (virtual or physical)!

 N., Ramya & Ali, Dr. (2016). Factors affecting consumer buying behavior. Retrieved from
https://www.researchgate.net/publication/316429866_Factors_affecting_consumer_buying_behavior

 Rani, P. (2014). Factors influencing consumer behavior. Retrieved from http://www.ijcrar.com/vol-2-

9/Pinki%20Rani.pdf

Reflection (Guide) Question/s: (Code: T4_RQ4)

 Given all the factors mentioned, what are the top three factors that have greatest influence on what
you buy? Cite some of these situations.
 Find a friend (a classmate) and identify the similarities and differences of what you have answered.

BUYING DECISION BEHAVIOR AND THE BUYER DECISION PROCESS

Buying behavior may vary greatly across different types of products and buying decisions.
 Consumers undertake complex buying behavior when they are highly involved in a purchase and
perceive significant differences among brands.
 Dissonance reducing behavior occurs when consumers are highly involved but see little difference
among brands.
 Habitual buying behavior occurs under conditions of low involvement and little significant brand
difference.
 In situations characterized by low involvement but significant perceived brand differences, consumers
engage in variety-seeking buying behavior.

The Buyer Decision Process

When making a purchase, the buyer goes through a decision process consisting of need recognition,
information search, evaluation of alternatives, purchase decision, and postpurchase behavior.

LEARNING ACTIVITY 5

Continue reading the topic on the ebook, Principles of Marketing by Kotler, P. & Armstrong, G. (2018) on
pages 174-178. Also read the following journals below. You may also watch the video presentation “MBA 101:
Marketing: Consumer Buying Process” on https://www.youtube.com/watch?v=Afl1vmcFVD8.

Don’t forget to write short notes on your notebook (virtual or physical)!

 Qazzafi, S. (2019). CONSUMER BUYING DECISION PROCESS TOWARD PRODUCTS. Retrieved
from
https://www.researchgate.net/publication/336047692_CONSUMER_BUYING_DECISION_PROCESS
_TOWARD_PRODUCTS
 Stankevich, A. (2017). Explaining the Consumer Decision-Making Process: Critical Literature Review.
Retrieved from https://researchleap.com/wp-content/uploads/2017/10/01_Explaining-the-Consumer-
Decision-Making-Process.pdf

Reflection (Guide) Question/s: (Code: T4_RQ5)

 Describe each of the steps in the buyer-decision process.

 Do all consumers pass through each and every steps in the buying decision process? Why or why
not? Cite some examples from your experiences.

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Watch the following videos and write short notes. These videos will give you an idea of the upcoming lessons
about marketing mix.

 The Marketing Mix - The 4 P's of Marketing: https://www.youtube.com/watch?v=hHtJwTU9kg8

 The 4 Ps of The Marketing Mix Simplified: https://www.youtube.com/watch?v=Mco8vBAwOmA
 4P's of Marketing: https://www.youtube.com/watch?v=mrwOajVXnHo

Collage:

They say that marketing is around you. With this, make a collage of your idea of marketing. You may cut
pictures or figures from old magazines and newspapers, paste in a bond paper and take a photo of your
collage. Or, if you have internet, you may use photos from the internet and use any app you like to make a
collage. Make it as creative as possible. Explain your collage in 100 words.

Quiz #7
 Review all the lessons in this module and prepare short quiz. I will be sending the link of the quiz. You
can only answer once and make sure you answer them when you’re ready. Answer the questions as
honest as possible. You know the drill: Do not ask your classmates for the questions and learn on
your own 

SUMMARY

 Marketing is the process by which companies create value for customers and build strong customer
relationships in order to capture value from customers in return. The marketing process involves five
steps. The first four steps create value for customers. First, marketers need to understand the
marketplace and customer needs and wants. Next, marketers design a customer driven marketing
strategy with the goal of getting, engaging, and growing target customers. In the third step, marketers
construct a marketing program that actually delivers superior value. All of these steps form the basis
for the fourth step: engaging customers, building profitable customer relationships, and creating
customer delight. In the final step, the company reaps the rewards of strong customer relationships by
capturing value from customers.
 The core marketplace concepts are needs, wants, and demands; market offerings (products,
services, and experiences); value and satisfaction; exchange and relationships; and markets.
 The consumer market consists of all the individuals and households that buy or acquire goods and
services for personal consumption. The simplest model of consumer buyer behavior is the stimulus
response model. According to this model, marketing and other stimuli enter the consumer’s “black
box” and produce certain responses.
 Consumer buyer behavior is influenced by four key sets of buyer characteristics: cultural, social,
personal, and psychological.
 Buying behavior may vary greatly across different types of products and buying decisions. Consumers
undertake complex buying behavior, dissonance reducing behavior, habitual buying behavior and
variety-seeking buying behavior.
 When making a purchase, the buyer goes through a decision process consisting of need recognition,
information search, evaluation of alternatives, purchase decision, and postpurchase behavior.

REFERENCES

 Kotler, P. & Armstrong, G. (2018). Principles of Marketing. (17th Ed.) Pearson Education Limited
 Kotler, P. & Keller, K. G. (2016). Marketing Management. (15th Ed.) Pearson Education Limited
 https://marketing-insider.eu/marketing-process/
 N., Ramya & Ali, Dr. (2016). Factors affecting consumer buying behavior. Retrieved from
https://www.researchgate.net/publication/316429866_Factors_affecting_consumer_buying_behavior
 Rani, P. (2014). Factors influencing consumer behavior. Retrieved from http://www.ijcrar.com/vol-2-
9/Pinki%20Rani.pdf
 Qazzafi, S. (2019). CONSUMER BUYING DECISION PROCESS TOWARD PRODUCTS. Retrieved

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from
https://www.researchgate.net/publication/336047692_CONSUMER_BUYING_DECISION_PROCESS
_TOWARD_PRODUCTS
 Stankevich, A. (2017). Explaining the Consumer Decision-Making Process: Critical Literature Review.
Retrieved from https://researchleap.com/wp-content/uploads/2017/10/01_Explaining-the-Consumer-
Decision-Making-Process.pdf

Videos:

MBA 101: Marketing: Consumer Buying Process: https://www.youtube.com/watch?v=Afl1vmcFVD8

The Marketing Mix - The 4 P's of Marketing: https://www.youtube.com/watch?v=hHtJwTU9kg8
The 4 Ps of The Marketing Mix Simplified: https://www.youtube.com/watch?v=Mco8vBAwOmA
4P's of Marketing: https://www.youtube.com/watch?v=mrwOajVXnHo

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