The Marketing Process: Basic

Concepts

Chapter 1

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 The Nature and Definitions of
Marketing
Misconceptions about the definition of marketing
and what is it not:
1.Marketing is definitely not the business of inducing
people to buy what they don’t really needs.
2. Marketing activities does not help people to
influence buying decisions, especially in the choice
between competing brands. Even heavy
advertising cannot persuade people to buy
something once. Marketing is the delivery of
customer satisfaction at a profit.
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 Definitions of Marketing
1. True marketing starts out with the customers,
their demographics related needs and values.
This is the concept of how the enterprise as a
whole operates. (Peter Drucker)
2. Marketing concept is a philosophy, not a system
of marketing or an organizational structure.
Profitable sales and satisfactory returns on
investment can only be achieved by identifying,
anticipating and satisfying customer needs and
desires. (Barwell)
3
 Continuations
3. Marketing is a social and managerial process by
which individuals and groups obtain what they
want and need through creating and exchanging
products and value with others. (P. Kotler)
4. Marketing is a process which directs and
economizes flow of goods and services from
producers to consumers in a way which effectively
matches supply and demands and accomplishes
the objective of society. (McCarthy and Perreault)

4
 Continuations
5. Marketing is a total system of interacting business
activities designed to plan, price, promote and
distribute want- satisfying products and service to
present and potential customers. (Stanton)
6. Marketing is the process in a society by which the
demand structure for products and services in
anticipated or enlarged and satisfied through the
conception, promotion, exchange and physical
distribution of such goods and services. (Carman
and Ulil)
5
 Continuations
7. Marketing is a complex business process directed
towards satisfaction of customers present and
future wants through supply of goods and services
and in the end would reward those engaged in such
activities. (Gomez)
8. Marketing is an organized system of business
activities that makes possible the determination of
customer needs, the feasibility of producing at a
profit that would satisfy those needs and finally
getting the finished goods into the hands of the
consumers it was intended for. (Carrion) 6
 Continuation
9. Marketing is the performance of all activities
necessary for ascertaining the needs and wants of
markets, planning products availability affecting
transfers in ownership, of products producing for
their physical distribution, and facilitating the
entire marketing process. (Beckman and
Davidson)

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 Continuation
10. Marketing is a business process by which
products are matched with markets, and
through which transfers of ownership are
affected. (Cundiff and Still)
11. Marketing includes all the activities
necessary to place tangible goods in the
hands of household customers and industrial
users. (Phillipps and Duncan)
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 Conclusion:
All the definitions have in common and that
is directed on needs, demands and interest
of the customer and consumer and that is
what exactly meant by a marketing
orientation.

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 Basic Marketing Functions
1. Exchange functions – buying and selling
2. Physical distribution functions – storage and
transportation of products
3. Facilitating functions – building satisfactory
exchange
 Grading – sorted into different quality and

quantity for efficient storage and display

 Financing – process to pay suppliers and the

customer to pay enterprise for procured

products and services. 10
 Continuations
 Risk taking – risks associated with buying,
selling and financing products.
 Developing marketing information – providing
the management with adequate marketing
information needed for better decision.
1. Identifying buyers needs that would create
effective company objectives and satisfying
customer needs
2. Monitor the progress and results of marketing
plans towards objectives.
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 Importance of Marketing
as a Field of Study
1. Importance to people – offers career
opportunities that are less affected by cyclical and
economic fluctuations, and offers better
opportunities than many other career paths for
growth and advancement based on personal
merit. Giving convenient time and place attests to
the effectiveness of the marketing system.
2. Importance to companies – the company’s sole
revenue producing system which generate income
that is manage by financial people to generate
profits. 12
 Continuations
3. Importance to the society – create high levels of
business activity, increased investment opportunity
and high employment.

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 Benefits of Marketing
1. It creates employment – provides job
opportunities to many individuals in various fields
like sales, advertising, research and development,
merchandising and logistics.
2. It helps develop more and better products –
provides companies’ innovation and enhancement
of product offerings, and allowing the market to
have more product choices.
3. It provides better profits – translated into better
sales performance and ultimately more profit.
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4. It improves the quality of life – with better
product offerings, marketing provides convenience,
easy living and better lifestyle.
5. It produces more entrepreneurs – an
opportunity for entrepreneurs to put up businesses
to be part of the distribution channel.
6. It contribute to economic development – by
giving revenues to the government agencies
through collection of taxes paid by business
people.
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 The Goal of Marketing is:
To attract new customer by promising
superior value, and to keep current
customers by delivering satisfaction.

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 Marketing, more than any other business
function, deals with customers.
 Creating customer value and satisfaction are at
the very heart of modern marketing thinking and
practice.
 Some people believe that only large business
organizations operating in highly developed
economies use marketing, but sound marketing
is critical to the success of every organization –
whether large or small, for profit or non – profit,
domestic or global.
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To explain marketing definition, we
examine the following important terms :
 Needs, wants, and demands
 Products and services
 Value, satisfaction and quality
 Exchange, transactions, and relationships
 Markets

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 Needs, Wants, and Demands
Needs:
 The most basic concept underlying marketing is that of human needs.
 Human needs are states of felt deprivation.
 Human have many complex needs:
 Physical needs for food, clothing, warmth, and safety
 Social needs or belonging and affection
 Individual needs for knowledge and self – expression
Wants:
 Want are the form taken by human needs as they are shaped by culture and
individual personality.
 People have almost unlimited wants but limited resources.
 They want to choose products that provide the most value and satisfaction for
their money.
Demands:
 When backed by buying power, wants become demands.
 Consumers view products as bundles of benefits and choose products that
give them the best bundle for their money. 19
 Products and Services
Product:
 Anything that can be offered to a market to satisfy a
need or want.
 The concept of product is not limited to physical objects –
anything capable of satisfying a need can be called a
product.
Services:
 In addition to tangible goods, products also include
services, which are activities or benefits offered for sale
that are essentially intangible and do not result in the
ownership of anything.

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 Values, Satisfaction, and Quality
Values:
 Customer value is the difference between the values the customer gains from
owning and using a product and the costs of obtaining the products.
 Customers often do not judge product value and costs accurately or
objectively. They act on perceived value.
Satisfaction:
 Customer satisfaction depends on a product’s perceived performance in
delivering value relative to a buyer’s expectation.
 If the product’s performance falls short of the customer’s expectations, the
buyer is dissatisfied.
Quality:
 Customer satisfaction is closely linked to quality.
 Quality has a direct impact on product performance.
 Quality can be defined as “freedom from defects”.
 TQM programs designed to constantly improve the quality of products,
services, and marketing processes.
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 Exchange, Transactions,
and Relationships
Exchange :
 The act of obtaining a desired object from someone by
offering something in return
Transaction :
 A trade between two parties that involves at least two
things of value, agreed – upon conditions a time of
agreement, and a place of agreement.
Relationship marketing :
 The process of creating, maintaining, and enhancing
strong, value – laden relationships with customers and
other stakeholders

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 Markets
The set of all actual and potential buyers of a
product or service
Communication

Products / Services
Industry Market (a
(a collection collection of
of sellers) buyers)
Money

Information

A simple marketing system

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 Main actors and forces in a modern
marketing system

Competitors

Marketing
intermediaries End user market
Suppliers
Company
(marketer)

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 Marketing Management

The analysis, planning, implementation, and

control of programs designed to create,
build, and maintain beneficial exchanges with
target buyers for the purpose of achieving
organizational objectives.

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Marketing Management Involves:
 Demand Management : The organization has a
desired level of demand for its products. At any point
in time, There may be no demand, adequate
demand, irregular demand, or too much demand,
and marketing management must find ways to deal
with these different demand states.
 Building Profitable Customer Relationships :
Beyond designing strategies to attract new customers
and create transactions with them, companies now
are striving to retain current customers and build
lasting customer relationships.

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 MARKETING MANAGEMENT PHILOSOPHIES

 The role that marketing plays within a company varies

according to the overall strategy and philosophy of each
firm.
 There are five alternative concepts under which
organizations conduct their marketing activities:
 Production concept

 Product concept

 Selling concept

 Marketing concept

 Societal marketing concepts

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 Production Concept
The philosophy that consumers will favour
products that are available and highly
affordable and that management should
therefore focus on improving production and
distribution efficiency.

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 Product Concept
The philosophy that consumers will favour
products that offer the most quality,
performance, and innovative features.

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 Selling Concept
The idea that consumers will not buy enough
of the organization’s products unless the
organization undertakes a large – scale
selling and promotion effort.

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 Marketing Concept
The marketing management philosophy that
holds that achieving organizational goals
depends on determining the needs and
wants of target markets and delivering the
desired satisfactions more effectively and
efficiently than competitors do.

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 Societal Marketing Concept
The idea that the organization should
determine the needs, wants, and interests of
target markets and deliver the desired
satisfactions more effectively and efficiently
than competitors in a way that maintains or
improves the consumer’s and society’s well –
being.

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The selling and Marketing Concepts Contrasted

Starting
Focus Means Ends
point
Selling
Factory Existing and
Profits through
products sales volume
promoting

The selling concept

Profits through
Market Customer Integrated customer
needs marketing
satisfaction

The marketing concept

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Three Considerations Underlying The Societal
Marketing

Society
(Human welfare)

Societal
marketing
concept

Consumers Company
(Want satisfaction) (Profits)

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MARKETING CHALLENGES
INTO THE NEW CENTURY
 GROWTH OF NON-PROFIT MARKETING
 THE INFORMANTION TECHNOLOGY BOOM
 RAPID GLOBALIZATION
 THE CHANGING WORLD ECONOMY
 THE CALL FOR MORE ETHICS AND SOCIAL
RESPONSIBILITY

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THE NEW MARKETING LANDSCAPE
The past decade taught business firms
everywhere a humbling lesson. Domestic
companies learned that they can no longer
ignore global markets and competitors.
Successful firms in mature industries learned
that they cannot overlook emerging markets,
technologies, and management approaches.
Companies of every sort learned that they
cannot remain inwardly focused, ignoring the
needs of customers and their environment.

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Thank You

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 Discussion Questions:
1. Why is important for a company to have a
written plan?
2. What important roles does marketing play
in our present economy?
3. Think of two (2) convenience stores where
you normally purchase your needs or your
frequently visit. Describe how you were
satisfied and not satisfied by the two stores
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