Chapter 1

The Nature Of Marketing

Chapter-1 The Nature of Marketing

Learning Objectives
Define

the term marketing

Describe
four marketing management
philosophies
Discuss the differences between sales and
market orientations
Macro and Micro marketing defined
Describe the marketing process
Describe
several reasons for studying
marketing
Chapter-1 The Nature of Marketing

Marketing- Whats It all About?

More than Selling and Advertisement

All Those Bicycles

Chapter-1 The Nature of Marketing

Why Marketing?
Products

do not sell themselves!

Makes sure that the right goods and services
are produced
Form utility
Task utility
Time utility
Place utility

Chapter-1 The Nature of Marketing

Definition of Marketing
Marketing

is the process of planning and

executing the concept of pricing, promotion,
and distribution of ideas, goods, and services
to create exchanges that satisfy individual
and organizational goals

Chapter-1 The Nature of Marketing

Concept of Exchange
People

give up something in order to receive

something that they would rather have. The
usual medium of exchange is money.
Exchange can also be fostered through
barter or trade of items or services

Chapter-1 The Nature of Marketing

Five conditions for an

exchange

There must be two parties

Each party must have something the other party
values
Each party must be able to communicate with the
other party and deliver the goods or services sought
by the other trading party
Each party must be free to accept or reject the
others offer
Each party must want to deal with the other party

Chapter-1 The Nature of Marketing

Marketing ManagementPhilosophy

Production

Sales

Focus on aggressive techniques for overcoming customer

resistance

Market

Focus on efficiency of internal operations

Focus on satisfying customer needs and wants

Societal

Focus on enhancing individual and societal well-being

Chapter-1 The Nature of Marketing

Production Orientation
Focuses

on internal capabilities of the firm

rather than on the desires and needs of the
marketplace
Most likely to work for firms producing
generic products
E.g. Fast food industry

Chapter-1 The Nature of Marketing

Sales Orientation
Assumes

that more goods and services will

be purchased if aggressive sales techniques
are used and that high sales result into profits
E.g. Insurance
The fundamental problem with this approach
is lack of understanding of the needs and
wants of the marketplace

Chapter-1 The Nature of Marketing

Marketing Orientation
Focuses

on customer wants and needs

Integrates all the organizations activities
Achieves long-term goals for the organization
Assumes that sales depends on customers
desire to purchase a products

Chapter-1 The Nature of Marketing

Societal Marketing Orientation

Organization

exists not only to satisfy

customer wants and needs but also to
preserve individuals and societys long-term
best interests
This orientation serves three bodies

The organization itself

Society
customers

Chapter-1 The Nature of Marketing

Marketings Role over the time

Era

Simple trade
Production
Sales
Marketing Dept.
Marketing Company

Chapter-1 The Nature of Marketing

Focus

Sell surplus
Increase supply
Beat competition
Coordinate & control
Customer satisfaction

Customer Value
Customer

value is the ratio of benefits to the

sacrifice necessary to obtain those benefits
Creating customer values is a core business
strategy of many success firms

Chapter-1 The Nature of Marketing

Marketers interested in
customer value
Offer

products that perform

Give consumers more than they expect
Avoid unrealistic pricing
Give the buyer facts
Offer
organization wide commitment
serves and after-sales support

Chapter-1 The Nature of Marketing

in

The Marketing Concept &

Customer Value

Cost

Chapter-1 The Nature of Marketing

Benefits

Take customers point

of view
Customer
may not
dwell on value
Where
does
competition fit?
Customer

The Marketing Concept

Customer
Satisfaction

The company Effort

The
Marketing
Concept

Profit

Chapter-1 The Nature of Marketing

Relationship Marketing
A

sense of well-being occurs when one

establishes an on-going relationship with
provider
Depends on

Customer orientation
Effective training programme
Employees
Team work

Chapter-1 The Nature of Marketing

Putting it all together

Superior
Customer Value
Total company effort to
satisfy
Customer

Customer
Acquisition

Profitable
Relationships with
Customer

Customer
Satisfaction

Customer
Retention

Chapter-1 The Nature of Marketing

Micro-Marketing
Is

the performance of activities that seek to

accomplish an organization's objectives, by
anticipating customers that will satisfy those
needs .
It is a set of activities performed by
organizations

Chapter-1 The Nature of Marketing

Macro-marketing
It

refers to the social process that directs

goods and services in an economy from
produced to consumers in a way that
accomplishes the objectives of society by
effectively matching supply and demand
Emphasis is on how the whole marketing
system works

Chapter-1 The Nature of Marketing

Marketing Process

Organizations mission and vision, and the role

marketing plays
Setting marketing objectives
Gathering , analyzing and interpreting information
Developing marketing strategy
Implementing the marketing strategy
Designing performance measure
Periodically evaluating marketing efforts and making
changes if necessary

Chapter-1 The Nature of Marketing

Who performs marketing

activities ?
Consumers
Marketing

specialists
Advertising agencies
Internet service providers
Transporting firms

Chapter-1 The Nature of Marketing

Reasons for studying

Marketing
Important

role in society
Important to businesses
Offers outstanding career opportunities
Affects your life everyday
Increasing
importance of the global
marketplace

Chapter-1 The Nature of Marketing

Summary

1.

Marketing is the process of planning and

executing the concept of pricing, promotion,
and distribution of ideas, goods, and
services to create exchanges that satisfy
individual and organizational goals
There are four main marketing philosophies,
Production 2.Sales 3. Marketing 4. Societal
Customer value is the ratio of benefits to the
sacrifice necessary to obtain those benefits

Chapter-1 The Nature of Marketing

Summary

Relationship marketing provides a sense of

well-being occurs when one establishes an
on-going relationship with provider
Micro-marketing is a set of activities
performed by organizations
Macro-marketing emphasizes on how the
whole marketing system works
Study of marketing is essential as it affects
our day to day life

Chapter-1 The Nature of Marketing