C H A P T E R

1
Introduction to
Marketing

Cambodian Mekong University

Basic Marketing

Instructor: Neang Putheara, MBA, AIT

Learning Objectives
After studying this chapter, you should be able to:

Discuss what marketing is and why it is important to

organizations and individuals.

Distinguish between marketing as an organizational
philosophy and a societal process.
Understand the components of a marketing strategy and
the different activities involved in marketing products and
services.
Be aware of the various types of marketing institutions
and the different marketing positions available in these
institutions.
Understand the basic elements and relationships in the
contemporary marketing framework.
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Amazon: An Entrepreneurial Story

Amazon.com represents an
interesting entrepreneurial story. Jeff
Bezos started Amazon.com as a
book retailer in 1995.
The companys mission was to use
the Internet to transform book
buying into the fastest, easiest, and
most enjoyable shopping
experience available.
Sales have increased from about
$150 million in 1997 to over $7
billion today.
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Amazon and Marketing

The Amazon.com story
illustrates a basic principle of
successful marketing:

Identify market opportunities

and respond by developing and
executing marketing strategies
to take advantage of the
opportunities better than
competitors do.

1-4

Marketing - Definition
What is marketing?
Marketing is an organizational function and a
set of processes for creating, communicating,
and delivering value to customers and for
managing customer relationships in ways that
benefit the organization and its stakeholders.
- American Marketing Association
www.marketingpower.com
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Why is marketing important?

Marketing is important to
many organizations.
For example, the Humane
Society uses advertising to
promote animal protection.

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The Importance of Marketing

Social
Entrepreneurs

Individuals

Different Types
of Organizations

Small Firms

Farmers

Nonprofit

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Views of Marketing

Production
Philosophy

Marketing as
an Organizational
Philosophy
Selling
Philosophy

Marketing
Philosophy
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Marketing as an Organizational Philosophy

Production
Philosophy

A production philosophy exists

when an organization emphasizes
the production function.

Selling
Philosophy

A selling philosophy
predominates where the selling
function is most valued.

Marketing
Philosophy

A marketing philosophy
suggests that the organization
focuses on satisfying the needs
of customers.

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Practicing the Marketing Concept

Marketing as an organizational philosophy has
been based on the marketing concept. This
concept consists of three interrelated principles:

An organizations basic purpose is to satisfy customer

needs.
needs
Satisfying customer needs requires integrated,
coordinated efforts throughout the organization.
Organizations should focus on long-term success.
success

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Developing a Market Orientation

A market orientation consists of creating norms
and values that encourage customer-oriented
behavior throughout the organization, including:

Generating
Market
Intelligence

Disseminating
Market
Intelligence

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Responding to
Market
Intelligence

Customer Equity
Customer equity is the financial value of a firms
customer relationships. It consists of profits from firsttime customers plus expected profits from future sales to
these and other customers. Customer equity can be
increased in several ways:

Acquire more profitable customers at a lower cost.

Retain profitable customers longer.
Win back profitable customers.
Eliminate unprofitable customers.
Sell more to profitable customers.
Reduce service and operational costs.
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Customer Equity Relationships

Marketing
Concept,
market
Orientation,
CRM

Providing
exceptional
customer
value

Achieving
completely
satisfied
customers

Earning
high
customer
loyalty

Increasing
sales growth
and
profits

Building
customer
equity

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Marketing as a Societal Process

Defined as a process that facilitates the flow of goods
and services from producers to consumers in a society.
Producers of
Goods & Services

Consumers of
Goods & Services
Emphasis on:

Institution involved
Activities performed
Effectiveness of system
Efficiency of system
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Thinking Critically

Identify the most important benefits of the

societal marketing system in Cambodia.

What changes would you recommend for this

system to be more beneficial to Cambodia
society?

Identify the most negative effects of the societal

marketing system in the Countries (Cambodia).

What changes would you recommend to reduce

these negative effects?

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Marketing as a Set of Processes

Marketing
Exchanges
Marketing
Institutions

Marketing
Processes

Marketing
Positions

Marketing
Strategies

Marketing
Activities

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Marketing Exchanges
Exchange is defined as the transfer of something tangible or
intangible, actual or symbolic, between two or more social actors.

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Marketing Strategies
Marketing strategies consist of selecting a target
market and developing a marketing mix to
satisfy that markets needs.

A target market is a defined group of consumers or

organizations with which a firm wants to create marketing

exchanges and relationships.
A marketing mix is the overall marketing offer to appeal to
the target market.

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Marketing Mix Decisions

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Marketing Strategies
The cosmetics industry is a good place to look
for examples of different marketing strategies.

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Marketing Activities

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Marketing Positions
Marketing
manager

Directs all companys marketing

activities, including planning, organizing,
staffing, directing, controlling, evaluating
performance

Product
manager

Develops goals, objectives, plans,

strategies, marketing mixes for product
line or brand

more
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Marketing Positions (cont)

Advertising
manager

Devises advertising policy and strategy,

selects advertising agencies, develops
promotional campaigns, selects media,
allocates advertising expenditures

Supply chain
manager

Manages distribution system, including

storage and transportation for all
products and services

more
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Marketing Positions (cont)

Purchasing
manager

Manages all purchasing activities,

including buying product ingredients or
components, supplies, equipment,
needed materials

Marketing
research
manager

Develops research designs for specific

problems; collects, analyzes, interprets
data; presents results to top
management

more
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Marketing Positions (cont)

Public
relations
manager

Manages all communications with media

and company stakeholders
to present favorable public image

Customer
service
manager

Provides customer service, handles

customer complaints

Sales
manager

Organizes, develops, directs, controls,

evaluates sales force

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Marketing Institutions

Retailers

Wholesalers
Marketing
research firms
Advertising
agencies
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Marketing Environment
Exhibit 1-9

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Summary
After studying this chapter, you should be able to:
Discuss what marketing is and why it is important to
organizations and individuals.
Distinguish between marketing as an organizational
philosophy and a societal process.
Understand the components of a marketing strategy
and the different activities involved in marketing
products and services.
Be aware of the various types of marketing
institutions and the different marketing positions
available in these institutions.
Understand the basic elements and relationships in
the contemporary marketing framework.
1-28