Download What is marketing?

DOCT 708:
Advanced Marketing Management Seminar
What is Marketing?
Diego BONAVENTURA - # 4535
Professor: Boris PORKOVICH
November 2008
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What is marketing?
“Let’s start with the beginning – the customer” (Levitt, 1960).
Several definitions have been proposed for the term marketing. Each tends to
emphasize different issues, however most of them converge to a single truth that business
success is based on the ability to build a growing body of satisfied customers.
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“Marketing must be regarded not merely as a business practice, but as a social
institution. Marketing is essentially a means of meeting and satisfying certain needs
of people” (Bartles, 1976).
“Marketing deals with identifying and meeting human and social needs. One of the
shortest definitions of marketing is meeting needs profitability”. (Kotler, 2005).
Marketing involves satisfying consumers’ needs and wants. The task of many
business is to deliver customer value and at a profit”. (Kotler and Keller, 2006).
“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” (American Marketing Association Board of
Directors, October 2007).
To sum up, putting the customer first is probably the most popular approach of marketing. As
a matter of fact, modern marketing programs are built around the "marketing concept," which
directs managers to focus their efforts on identifying and satisfying customer needs - at a
profit. But what seems obvious today was not at the stuttering of marketing. In the first
chapter of this essay, we will see how marketing theories changed from the historic “marketer
in control” at the beginning of the 1900s when new production facilities were leading the
industrial revolution, to retailer in control in the 1950s (how can we sales more?), to the today
“customer in control” model. But in an over saturated market, where clients are transferring in
informed customers who have the choices, the idea that marketing is identified in terms of
satisfying customer’s needs and wants may appear as a basic but deficient concept. As a
matter of fact, in a modern economy leaded by global competition, customers’ expectations
have changed. Today the winning equation is represented by the function: product = f (value +
profit). In marketing, the term “product” is often used as a catch-all word to identify solutions
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a marketer provides to satisfy a want or a need. Value because for a product or service to be
successful it must in some way be of value to the customer. The creation of value requires an
understanding of customer needs in the form of benefits. What will the product or service do
for them and why will it be better, faster or easier to use than that which is currently available
(differentiation concept)? If the product is valuable for the customer it will generate economic
benefit for the company. So to succeed in the age of constant change; where the
democratization of fulfilling all kinds of needs have impact customers’ expectations, a
company must be able to offer a product that differentiate to other products. But what
differentiates one company from another is how well they manage marketing, not just what is
visibly marketed. Marketing has so to focus on the customer but also has to integrate the
customer at each level of the company and reflect in term of process not only in term of
concept.
As a matter of fact, once the customers’ needs have been identified and a tailored in
the form of a differentiated product, the need has to be converted into wants. For wants to
become purchases, the purchasers had to be “educated and guided to the product’s uses”
(Levitt 1986, p13). This why in the second chapter of this essay, I will focus on a more
operational approach, and I will introduce the idea that marketing is not only a concept, but
it’s also a process that change over time. “The world of competitive enterprises openly facing
each other in open markets is clearly a world of constant change” (Levitt, 1986. P12). The
marketing concept alerts us to this fact with the perspective restriction that to keep up
requires studying and responding to what people want and value, and promptly adjusting to
choices provided by competitors. There is not, and cannot be, any rigid and lasting
interpretation of what the marketing notion means in the definite ways a company should
operate at any given time (Levitt, 1960).
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Modern Marketing has to face shifts that lead to new approaches in order to fit market
conditions under which they operate. Influenced by external (macro) and internal
(controllable) parameters companies need to have a more complete and integrated approach
that goes beyond traditional applications of the marketing concept. I will in a third chapter
explain why modern marketing now a day is moving to a more holistic and cohesive
approach leading to new marketing strategic theories, and some how to many criticisms. As a
matter of fact, in his book “Marketing Imagination” (1986), Levitt has argued that the
marketing concept has stimulated the professionalized study of people enabling business
strategists to become what critics have called “hidden persuaders” and “captain of
consciousness”. In this view, the definition of marketing as a science of satisfying needs can
be viewed as the art of creating needs and wants that did not exist before. In the third chapter
of this essay, I will so focus on the idea that marketing shapes consumer needs and wants
versus merely reflects the needs of consumers. This criticism tends to be recently objectified
by the fact that the technological revolution has saturated our needs and enabled us to
stimulate our imagination, amplifying our expectations. Then, to succeed in the age of
constant change, in which everything is possible, companies have to arouse customers’
emotion, by anticipating future trends and needs, one way or another by influencing desires.
As stated by Carpenter, “Simply giving customers what they want isn’t enough any more – to
gain an edge companies must help customers learn what they want”. By doing so modern
marketing goes beyond the concept of selling a product or service to satisfy customers
‘needs. Therefore, to better understand the criticisms that stressed marketing, it is essential to
define what needs are and how they are fulfilled. Although, it is helpful to understand that we
live in very materialistic times where needs and desires are natural and pre-exist.
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Table of Content:
INTRODUCTION
PART 1: The Marketing Concept
p.2
1.a: From product to customer oriented
The product concept
The sales concept
The marketing concept
p.6
p.6
p.8
p.8
1.b: The customer Value and Product Differentiation Concepts
p.10
PART 2: From the Marketing Concept to the Marketing Process
2.a: The Marketing process:
Situation Analysis
Marketing Strategy and Marketing Planning
Marketing Mix Decisions
Implementation and Control
p.13
p.14
p.15
P.16
p.19
PART 3: The New Marketing Paradigm and its Criticisms.
3.a: The Holistic Concept an Obvious Mutation
Relationship Marketing
Integrated Marketing
Internal Marketing
Social responsibility marketing
3.b: Marketing criticisms
The eternal marketing debate: satisfying or creating needs
The concept of influencing desires vs. the concept of creating needs
The concept of leveraging desires vs. the concept of obsessing desires
p.22
p.23
p.24
p.25
p.25
p.26
p.27
p.29
CONCLUSION
ANNEX 1: Strategic Marketing framework
ANNEX 2: The 4P’s
ANNEX 3: The Theory of Human Motivation
p.32
p.34
p.35
p.36
REFRENCES
p.38
TABLES:
Table 1. Company orientations toward the market place: marketing evolution.
Table 2: From product centric to delivering value to customers
Table 3: The four P’s – Marketing Mix
Table 4: The Modern Marketing Mix Model
p.9
p.10
p.17
p.20
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1- The marketing concept:
It is hard for many to believe, but when compared to economics, production and
operations, accounting and other business areas, marketing is a relatively young discipline.
The development of marketing thought has emerged in the United States at the beginning of
the XXth century with the development of the consumption of mass. In Europe, the
techniques of the marketing spread were applied after the Second World War, at first in the
big companies then gradually, from the 70s, in all the categories of products and
organizations. However, historical accounts of trade lead one to conclude that marketing has
always existed. Was the original use of the term marketing merely an application of a new
name to an old practice (Bartels, 1976)?
1-a: From product to customer oriented.
The production concept:
In the eighteenth century, business environment was led by economic theories which
emphasized that the market had the capacity to adjust itself automatically to a harmonious
equilibrium. Adam Smith conceived man as ‘the economic man’ turned upon a constant
effort to better his condition1. Thus there was a natural basis for competition, and according
to natural motivations they would effect perfect competition. Actually, early students of
marketing were actually educated as economists. This is why, at that time, everything was
oriented toward production, and productivity was held by the economists to be the production
of a surplus over costs. The “production concept” was the idea that a firm should focus in
those products that it could manufacture most efficiently and that the creation of a supply of
low-cost products would in and of itself creates the demand for the products. Concepts of
production included: diminishing returns, marginal productivity, opportunity costs, and the
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representative firm.2 There was no clear concept of the rationalization of marketing as a
productive activity or as a contribution to economic production. On the contrary, the popular
impression was that the middleman added cost instead of value.
The sale concept:
At the time, the production concept was rational as the goods that were produced
were largely those of basic necessity and there was a relatively high level of unfulfilled
demand. But with the Industrial Revolution, the rapid transition from an agricultural
economy to an industrial economy leaded to expanded market giving opportunities for
production on a scale larger than had ever before been undertaken. The new industrial
technologies poured into the market such quantities of products as to warrant the conclusion
that a buyers market was replacing a sellers market. The development of marketing was
suddenly motivated by the need to analyze in greater detail relationships and behaviors that
existed between sellers and buyers. In particular, the study of marketing led sellers to
identify that adopting certain strategies and tactics could significantly benefit the seller/buyer
relationship versus natural competition. New importance was attached to information,
promotion, and the quest for satisfactory products (Bartles, 1976)2. But before the 1950s this
often meant identifying strategies and tactics for simply selling more products and services
with little regard for what customers really wanted (see table 1: Company orientations toward
the market place: marketing evolution). At the time marketing was built around the product:
“make-and-sell” (i.e. production efficiency and optimization: Ford & Taylor). Often this
meant companies embraced a “sell-as-much-as-we-can” philosophy with little concern for
building relationships for the long term (see table 2: From product centric to delivering value
to customers). During the age of sales concept, marketing was a function that was performed
after the product was developed and produced, and many people came to associate marketing
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with selling (Lanning and Edward, 1998)5. However, led by marketing scholars from several
major universities, marketing theorists realized that the selling concept was not concerned
with the values that the exchange is all about. “And it does not, as marketing in-variably
does, view the entire business process as consisting of a tightly integrated effort to discover,
create, arouse, and satisfy customer needs” (Levitt, 1960). At the time, one common error
was that organizations tend to view themselves as making things that have to be sold rather
than satisfying customer needs: "Come buy this exceptional product we have developed or
this fantastic service we are offering." The giveaway, of course, is the word we. When
transposing this notion to defining marketing, Levitt suggested that the difference between
marketing and selling is more than semantic. Selling Focuses on the needs of the seller,
marketing on the needs of the buyer. Selling is preoccupied with the seller's need to convert
his product into cash; marketing with the idea of satisfying the needs of the customer by
means of the product and the whole cluster of things associated with creating, delivering, and
finally consuming it.3
The Marketing Concept:
After World War II, the variety of products increase and the theory moved from a
commercial perspective: sell what was produced by developing the commercial structures
(sales force and distribution network) to a marketing focusing on the market as customer,
more complete in its initiative and pre-eminent in the company organization. As competition
grew stiffer across most industries, organizations looked to the buyer side of the transaction
for ways to improve. What was found is an emerging philosophy suggesting that the key
factor in successful marketing is understanding the needs of customers. This now famous
“Marketing Concept” suggests that marketing decisions should flow from FIRST knowing
the customer and what they want.
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Table 1. Company orientations toward the market place: marketing evolution.
Production & Sales Conception
Modern Marketing Process
> 1900s
Production
concept:
Can we produce
the product?
The marketing is
secondary with regard
to the production.
VS.
Superiority of the
marketing function in the
organization of the
company (a strategic
function which leads the
company activity).
VS.
It becomes a constructed
initiative:
- Analysis and study of the
market,
- Segmentation,
- Elaboration of the
marketing mix (unique
selling proposition),
- Elaboration of the action
plans which aim at
promoting the offer
(operational marketing).
Can we produce
enough of it?
> 1930s
It amounts essentially
to the sales force, the
distribution and the
advertising.
Sales concept:
Can we sell the
product?
Can we sell
enough of it?
Radius of action
limited to some big
companies and
essentially to
convenience goods.
VS.
Radiuses of action
widened to all products
and services, concepts,
organizations.
Marketing
concept:
How can we
keep our client
satisfied? =
Realizing a
profit by
successfully
satisfying
customer needs
over the longterm
Can we develop
if while they
still want it? =
Aligning all
functions of the
company to
focus those
needs.
What do
consumers
want? =
focusing on
customers
needs.
>1950s
TIME FRAME
The new idea was not to find the right customers for your products, but the right products for
your customers (Kotler and Lane, 2006)4 (see Table 2: From product centric to delivering
value to customers). In response to these discerning customers, firms began to adopt the
“marketing concept”, which involves:
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Focusing on customers needs before developing the products;
Aligning all functions of the company to focus those needs;
Realizing profits by successfully satisfying customer needs over the long-term.
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Table 2. From product centric to delivering value to customers5
a) Traditional Physical Process Sequence
Make the Product
Design
Product
Procure
Sell the Product
Make
Price
Sell
Advertise
Promote
Distribute
Service
Sell
b) Value Creation and Delivery Sequence
The marketing concept
•
•
•
•
•
choosing and targeting appropriate customers
positioning your offering
interacting with those customers
controlling the marketing effort
continuity of performance
Source: Lanning and Michaels, 1998.
1-b: The Customer Value and Product Differentiation Concepts: satisfying
customers’ needs in a saturated competitive market place.
Under the “Marketing Concept”, the mission of any business is to satisfy consumers’
needs and wants by delivering value at profit 6. It is important to understand that the term
value of a product within the context of marketing means the relationship between the
consumer's expectations of product benefit to the actual amount paid for it. The value the
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customer attributes to this benefit is in proportion to the perceived ability of the offer to solve
whatever customer problem prompted the purchase (Payne 2005)6. This why in a market
driven by more demanding customers and global competition, marketers have to emphasize
the value of their offering by proposing something more than a generic product. This
involves differentiating from competitors ‘products.
The concept of product differentiation is the process of distinguishing the differences
of a product or offering from others, to make it more attractive to a particular target market
(Sharpe, 2001)7. This is done in order to demonstrate the unique aspects of product and create
a sense of value, which is a pivotal concept in a market where products are much more
accessible to many more people than ever before. To fully succeed at this, marketers need to
distinguish their offering - focusing on offering unique (USP - unique selling point) or
differentiated benefits and value – in order to influence customers’ choices. In this ways,
differentiation follows customer’s expectation and allows companies to impact their
performances by reducing directness of competition: as the product becomes more different,
categorization becomes more difficult and hence draws fewer comparisons with its
competition7. On the other hand, as pointed out by Harvard Business School's Theodore
Levitt (1986), competition exists not between what companies produce in their factories but
between "what they add to their factory output in the form of packaging, services,
advertising, customer advice, financing, delivery arrangements, warehousing, and other
things that people value"8. A successful product differentiation strategy will so move one
product from competing based primarily on price (generic product) to competing on nonprice factors such as product characteristics, distribution strategy, or promotional variables…
in its value chain model, Porter (1985) argues that in a hypercompetitive economy with
increasingly rational buyers faced with abundant choices, a company can win only by finetuning the value delivery process and choosing, providing, and communicating superior
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value9. Customer value from this perspective is the result of providing and delivering greater
value to the purchaser; deploying enhanced acquisition and retention strategies; and utilizing
successful channel management1. So what differentiates one organization from others is how
well they manage marketing, not just what is visibly marketed. It is the process, not just the
product that is uniquely differentiated (Levitt, 1986). Although in competing over a saturated
marketplace, to be successful, a firm needs to look for competitive advantage beyond its own
product, but into its operation and into the value chain of suppliers, distributors, and
customers9. In this process strategic marketing and marketing planning play a central role.
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A value chain is a chain of activities. Products pass through all activities of the chain in order (R&D, marketing, logistics, operations, etc)
and at each activity the product gains some value. The chain of activities gives the products more added value than the sum of added values
of all activities. Michael Porter has proposed the value chain as a tool for identifying ways to create more customer value and increase its
competitive advantage. Competitive advantage is a position a firm occupies against its competitors. The two forms of competitive advantage
are cost advantage and differentiation advantage. Cost advantage occurs when a firm delivers the same services as its competitors but at a
lower cost. Differentiation advantage occurs when a firm delivers greater services for the same price of its competitors. They are collectively
known as positional advantages because they denote the firm's position in its industry as a leader in either superior services or cost. Many
forms of competitive advantage cannot be sustained indefinitely because the promise of economic rents invites competitors to duplicate the
competitive advantage held by any one firm. A firm possesses a sustainable competitive advantage when its value-creating processes and
position have not been able to be duplicated or imitated by other firms. Sustainable competitive advantage results, according to the Resourcebased View theory, in the creation of above-normal (or supranormal) rents in the long run. Analysis of competitive advantage is the subject of
numerous theories of strategy, including the five forces model pioneered by Michael Porter of the Harvard Business School. The primary
factors of competitive advantage are innovation, reputation and relationships. Source: Competitive Advantage: Creating and Sustaining
Superior Performance.
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2: From the Marketing Concept to the Marketing Process:
"Marketing is the process of planning and executing the conception, pricing, promotion, and
distribution of ideas, goods, services, organizations, and events to create and maintain
relationships that will satisfy individual and organizational objectives" (Boone and Kurtz,
1998)10.
2-a. The marketing Process:
Under the marketing concept, firms must find a way to differentiate their offers in order to
increase customer values. The process of doing so leans on four constituents:
1.
A constituent “research of information” (to know): it is the study and the market
analysis that is the descriptive and explanatory research for market mechanisms.
2.
A constituent “reflection” (to decide – to plan): it is the strategic marketing which
tries hard to think in the long term of the development of the company and to orient its
activities to attractive opportunities (choice of products-market and segments), that is adapted
to its resources and core competencies, and focuses on growth and profitability.
3.
A constituent “action” (to act): it is the operational marketing which by the
elaboration of the market plan fixed and coordinates product, price, distribution and
communication = marketing mix.
4.
A constituent “implementation and monitoring” (to control): marketing evaluation
and control processes are essential to value the efficiency and effectiveness of marketing
activities and how both could be enhanced.
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In this frame, we can define marketing as a process which in the company attempts to
identify and to measure the needs of the clientele, to choose those (the segments) which the
company will serve first and foremost, to decide on concepts of products which will answer
its expectations and to elaborate the action plans which aim at promoting them – at profit.
Step 1 - Situation Analysis:
Before determining customers’ needs, the first step is to analyze, define and interpret the
state of the environment of an organization. According to the American Marketing
Association (2008), a situation analysis is “the systematic collection and study of past and
present data to identify trends, forces, and conditions with the potential to influence the
performance of the business and the choice of appropriate strategies. The situation analysis is
the foundation of the strategic planning process. The situation analysis includes an
examination of both the internal factors (to identify strengths and weaknesses) and external
factors (to identify opportunities and threats)”. As matter of fact, to fulfill customer needs in
a lucrative manner, a firm must understand its internal and external limitation/situation,
including the customer (target market), the market environment (micro: business and macro:
industry), and firm’s own capabilities. Hence, the situation analysis should yield a summary
of problems and opportunities. From this summary, the firm can match its own capabilities
with the opportunities in order to satisfy customer needs better than the competition.
Different approaches are possible2: the inside out (Porter model) vs. the outside-in (Post
Modern Concept, i.e. RVB model)11. The main notion is that a firm needs to assess the
environment to recognize, measure, and target opportunities. This step so describes an
2
If the situation analysis reveals gaps between what consumers want and what currently is offered to them, then there may be opportunities
to introduce products to better satisfy those consumers. There are several frameworks that can be used to add structure to the situation
analysis: 5 C Analysis - company, customers, competitors, collaborators, climate. Company represents the internal situation; the other four
cover aspects of the external situation / PEST analysis - for macro-environmental political, economic, societal, and technological factors. A
PEST analysis can be used as the "climate" portion of the 5 C framework. Or PESTE analysis: Political, Economic, Social, Technological,
Legal and Environmental / SWOT analysis - strengths, weaknesses, opportunities, and threats - for the internal and external situation. A
SWOT analysis can be used to condense the situation analysis into a listing of the most relevant problems and opportunities and to assess
how well the firm is equipped to deal with them.
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organization’s competitive position, operating and financial condition and general state of
internal and external affairs. By doing so organizations will be able to gather specific market
information (market research) that will permit the firm to select the target market segment
and optimally position the offering within that segment (marketing strategy). The result is a
value proposition to the target market.
Step 2 - Marketing Strategy and Strategic Planning:
“Marketing management is seen as the art and science of choosing target markets and getting,
keeping, and growing customers through creating, delivering, and communicating superior
customer value.” (American Marketing Association Board of Directors, October 2007). To
make sure that the products and services meet customer needs while developing long-term
and profitable relationships with customers a strategy has to be implemented. Such a strategy
should also aim the firm to identify whole new markets that it can successfully target. To do
this it’s vital to create a flexible strategy that can respond to changes in customers’
perceptions and demand (Baker, 2008)12. The marketing strategy subsequently “involves
defining what’s to be done, the allocation of resources for their maximization” 3 (Levitt, 1986.
p137). In developing a marketing strategy, the mission and marketing and financial
objectives must be defined. Marketing Strategy then involves:
Segmentation;
Targeting (target market selection);
Positioning the product within the target market;
Value proposition to the target market.
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3
It is essential to understand the slight but important difference between “Marketing strategy” and “Strategic Marketing”. Strategic
marketing is more than a matter of resources allocation among possible issues. It’s about choices of preferences, not about appropriateness
(Levitt, 1986). Marketing strategy is setting the right objectives at the right times, executed with right means for the right situation in order to
catch new customer and keep them. But this approach is viable only if the concept is implemented at each level of the organization. It’s a
global concept at corporate level that focuses on attracting customers; create a long-term ship with them in order to hold them (see Annex 1:
Strategic Marketing Framework) - while Marketing Strategy is related to the product at the Business Unit level where marketers focus on the
product (i.e. price, promotion, distribution, etc.)
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Discovering what customers want and making sure firms meet their needs takes a lot of
work. But once the marketing strategy has been set then specific actions have to be taken to
achieve the goals of the marketing strategy.
Once the best opportunity to satisfy unfulfilled customer needs is identified (marketing
strategy), a strategic plan for pursuing the opportunity can be developed. The marketing plan
is the central tool for directing and coordinating the marketing strategy in order to satisfy
customer needs in an efficient manner. The marketing plan, then, can be thought of as the
practical application of the marketing strategy, including product features, promotion,
merchandising, pricing, sales, channels and services. All this is done with the inputs from
other managerial areas, such as purchasing, manufacturing, sales, finance, and human
resources, to guarantee that the company can make available appropriate support for
successful execution.
Step 3 - Marketing Mix Decisions: Determine how to satisfy customers’ needs.
“The right product, in the right place, at the right time, and at the right price” (Adcock et al).
Once the customers’ needs have been identified and tailored in the form of a plan, the need
has to be converted into wants. For wants to become purchases, the purchasers had to be
“educated and guided to the product’s uses” (Levitt 1986, p13). In this process operational
marketing plays a fundamental role.
To put the marketing strategy in action, marketing as a science makes decisions about
controllable parameters (see table 3: The four P’s – Marketing mix) of the marketing mix
(Borden, 1964).13

Product: The term "product" refers to tangible, physical products as well as services.

Price: Setting the value – how much the customer is ready to pay/scarify.

Place (distribution): Distribution is about getting the products to the customer.
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Promotion: In the context of the marketing mix, promotion represents the various aspects

of marketing communication, that is, the communication of information about the product
with the goal of generating a positive customer response.
Table 3: The four P’s – Marketing Mix















Brand name
Functionality
Styling
Quality
Safety
Packaging
Repairs and Support
Warranty
Accessories and services
Promotional strategy (push, pull, etc.)
Advertising
Personal selling & sales force
Sales promotions
Public relations & publicity
Marketing communications budget



Pricing strategy (skim, penetration, etc.)
 Suggested retail price
Volume discounts and wholesale pricing
 Cash and early payment discounts
 Seasonal pricing
 Bundling
 Price flexibility
 Price discrimination
 Distribution channels
Market coverage/ inclusive, selective, or
exclusive distribution;
 Specific channel members
 Inventory management
 Warehousing
 Distribution centers
 Order processing
 Transportation
Reverse
Limitations of the Marketing Mix Framework: from managing the supply side to
focusing on the demand side.
The traditional four P’s marketing has been developed to improve the way of supplying
products and services to customers by: manipulating prices, products, places, and promotion
to make better use of the tools and resources available to the marketing manager. This
framework was particularly useful in the early days of the marketing concept when physical
products represented a larger portion of the economy. More modern criticisms of the model
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tend to highlight the fact that at that time, the model has been designed ignoring the
dominance of customers (Checkitan and Schultz, 2002).14 This is why the four P’s model has
been at the center of many critics. Some authors have so attempted to extend its usefulness
by orienting the model on customer and there have been many attempts to increase the
number of P's from 4 to 5P's. The most frequently mentioned one being: people or personnel.
In 1981, Booms and Bitner have suggested a 7 P’s approach for services-oriented companies
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(people, process, physical evidence - see annex 1 for detailed information about the four P’s
and seven P’s model). The new idea is to make decisions that center the four P’s on the
customer in a specific target market (vs. a global population) in order to create value and
benefit that can be perceived and generate a positive response (McCarthy, 1960) 15. This new
approach has been objectified by many other theorists. According to Gordon (1999), the
marketing mix approach is too limited to provide a usable framework for assessing and
developing customer relationships in many industries and should be replaced by the
relationship marketing alternative model where the focus is on customers, relationships and
interaction over time, rather than markets and products (Kotler et al, 1999). Another formal
approach to the 4P’s marketing mix is known as SIVA14 (Solution, Information, Value,
Access). The SIVA Model provides a demand/customer centric version alternative to the
well-known 4Ps supply side model (product, price, place, promotion) of marketing
management .
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Product
→
Solution
Promotion
→
Information
Price
→
Value
Place
→
Access
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The four elements of the SIVA model are:


Solution: How appropriate is the solution to the customer's problem/need?
Information: Does the customer know about the solution? If so, how and from whom
do they know enough to let them make a buying decision?

Value: Does the customer know the value of the transaction, what it will cost, what
are the benefits, what might they have to sacrifice, what will be their reward?

Access: Where can the customer find the solution? How easily/locally/remotely can
they buy it and take delivery?
This model was proposed by Chekitan Dev and Don Schultz in the Marketing Management
Journal of the American Marketing Association, and presented by them in Market Leader the journal of the Marketing Society in the UK 14. This framework focuses heavily on the
customer and how they view the transaction. But it remains limited to controllable
parameters and so by default subject to the internal constraints. However, modern marketing
suggest that in an ever changing environment, the 4P’s model should also take in
consideration uncontrollable parameters of the marketing environment such as external
forces: competition, economic, political and legal situations, etc (see Table 4: The Modern
Marketing Mix model). Given that few environments are static, all parameters having an
impact on the environment should be monitored closely. As the market changes, the
marketing mix must be adjusted to accommodate the changes based on internal and external
limitations. That will allow organizations to take appropriate tactical decisions based on the
marketing strategy.15 The function of the marketing mix should be to help develop a package
that will not only satisfy the needs of the customers within the target markets, but
simultaneously to maximize the performance of the organization. Marketing is so the
capacity to take advantage, twist or change these limitations vs. passively
suffering/respecting them. As a matter of fact, marketing is not the ability to react to the
environment, but the capacity to create opportunities (pro-activity) by controlling and
monitoring the environment: internal (controllable parameters) and external forces
19
(competition, economic, socio-cultural, technology, political). Marketing must be able to
anticipate future needs, but also future trends, rules and other obtuse laws and regulations
that slow down competitiveness and clamp imagination. Today however, the marketing mix
most commonly remains based on the 4 P's. Despite its limitations and perhaps because of its
simplicity, the use of this framework remains strong and many marketing textbooks have
been organized around it.
Table 4: The Modern Marketing Mix Model
Determinants of competitive rivalry, e.g.
• Brand identity
• Switching costs
• Concentration and balance
• Exit barriers
Regulations:
• Government regulated
industries (e.g. telecoms)
• Young industries
beginning to attract
government attention
(e.g. Internet, software)
• Significant public
good/cost
(e.g. pharmaceuticals,
petroleum)
• Minor development or evolution within
the current state of the business system
• True technological discontinuity that
fundamentally changes the game for all
players
• Changes in
– GDP
– Employment
– Exchange rate
• Government policy
• International relations
• cHanges in social preferences:
• Existing demand (can be
analyzed by demand curve
analysis)
• Latent demand (demand for
services previously
unavailable, e.g. Sony
walkman unleashed demand
for personal music systems)
• Future demand (forecasting
existing demand in the future)
Step 4: Implementation and Control.
20
One more factors that make the difference is the ability to correctly implement the
marketing strategy and the importance of being able to measure the return of the marketing
actions/decisions. However, the marketing process does not end with implementation.
Continual monitoring and adaptation is needed to fulfill customer needs consistently over the
long-term. Marketing evaluation and control processes are necessary to understand the
efficiency and effectiveness of marketing activities and how both could be improved (Kotler
and Keller, 2006).
21
3. The New Marketing Paradigm and its Criticisms.
Marketing can so be defined as a process in perpetual progression that evolves with in an
ever changing environment where customers’ behaviors (i.e. Internet) and desires evolve. As
a matter of fact, the democratization of fulfilling customers’ needs and the amplification of
customer expectation are making radical changes in how companies do business and
implement their strategies. This revolution is fueled by millions of customers who are
imposing their will, tastes, and desires to force transformation in the way companies produce
and sell. In order to win this revolution, companies have to constantly refresh their thinking
about marketing in order to surprise and challenge them. In consequence, marketers have to
connect with their customers’ imaginations, they have to anticipate future needs, and for that
they need to have a more complete and integrated approach that goes beyond traditional
applications of the marketing concept.
3-a. The Holistic Marketing an Obvious Mutation
Back to the concept that marketing should focus on customer needs, based on Levitt
approach “to attract and hold customers”, and referring to the idea that differentiation relies
on the ability of managing its value chain, it appears obvious that marketing is most effective
when it is an integral component of corporate strategy (Baker, 2008)11. This why marketers in
the twenty-first century are increasingly recognizing the need to have a more complete and
22
cohesive approach that will help them to design a strategic marketing plan able to rapidly
adjust to changes and that addresses three key management questions:
1. Value exploration – how can a company identify new value opportunities?
2. Value creation – how can a company efficiently create more promising new value
offerings?
3. Value delivery – how can a company use its capabilities and infrastructure to deliver the
new value offerings more efficiently?
This belief derives from the old fragmented model of marketing. As a matter of fact, when
firms first began to adopt the marketing concept, they typically set up separate marketing
departments whose objectives were to satisfy customer needs. Often these departments were
separated sales departments with expanded responsibilities. But it quickly appears that
marketers used to focus on and communicate with clients, customers, consumers, and often
neglect if not ignore other stakeholders - arguably the organization’s most important
stakeholder – employees. By contrast, the new marketing concept is a holistic discipline
using the fractal concept of wholeness, where the whole is present in each part, as in DNA, to
develop congruent, sustainable and high-value brand experience for all stakeholders
(customers, employees, suppliers…). The main concept is to focus on the necessity of
integrating a strategic marketing plan with the purpose off building long-term, mutually
satisfying relationships with key stakeholders. This new approach, namely “Holistic
Marketing”, is concerned with wholes rather than analysis or separation into parts. According
to Kotler (2005)17, four components of holistic marketing are relationship marketing,
integrated marketing, internal marketing, and social responsibility marketing.
Relationship Marketing:
23
As “attracting a new customer may cost five times much as doing a good job to retain
existing customers” (Kotler, 2006)4, modern marketing is now placing much more emphasis on
customer retention. But this fresh philosophy implies many changes at corporate level and
gives new direction to strategic marketing issues. In order to improve the process of capturing
customer value, it appears obvious that the next step of marketing is to build deep, durable
relationship with all stakeholders that could indirectly (employees & suppliers) or directly
(customers) affect the success of the firm’s marketing activities. This why new strategic
marketer focus on building a mutual interest between company and customer in order to build
strong and long lasting exchanges with customers rather than focusing upon one-off exchanges
with customers (transactional marketing)4. The ultimate outcome of relationship marketing is
the building of a unique company asset called a marketing network in order to emphasize
customer retention and long term customer relationships (Kotler, 2005) 17. This new,
increasingly efficient ways that companies have of understanding and responding to customers'
needs and preferences seemingly allow them to build more meaningful connections with
customers than ever before. These connections promise to benefit the bottom line by reducing
costs and increasing revenues.
Integrated Marketing:
By definition, Integrated Marketing is a management concept that is designed to make
all aspects of marketing communication such as advertising, sales promotion, public relations,
and direct marketing work together as a unified force, rather than permitting each to work in
isolation. The concept of integrated marketing is fully related to the relationship and internal
marketing theories and it is a natural progression of the effects of developing concepts of
4
The transactional marketing approach places the emphasis on quantity vs. quality; on the product rather than the customer. This type of
marketing still exists mostly in low-priced, low-profit margin businesses. In this case, sales people sell and do not go back to the customer
and does not care whether the buyer is happy after the purchase; the on-shot model. The sales person does not have a strong relationship with
the buyer. Therefore the buyer has no trust and confidence in sales person / people. Sales people to achieve their objective put pressure on the
buyer to make purchase. This kind of sales can be described as hard selling.
24
marketing planning. In the case of Integrated Marketing, the starting point is core identity, and
this is then articulated as strategy through the business model, products, brand, vision, cultural
values and business evaluation (amongst others) (Kotler, 2005).17
Internal Marketing:
Holistic Marketing Strategy is an organic and inter-related process that builds on team
oriented approaches to achieving organizational goals. In short, everyone needs to be part of
the plan. Such an approach involves all players; a system based on partnerships where
everyone has something to gain or lose by a campaign's success or failure. In other words,
holistic marketing recognizes that “everything matters”. The concept so focuses on the
necessity of overlapping marketing at each level of the company: “the holistic marketing
concept is based on the development, design, and implementation of marketing programs,
processes, and activities that recognizes their breadth and interdependencies” (Kotler, 2006). 4
The principal role of internal marketing is to ensure everyone within the organization not only
understands why the organization exists but also its key outputs and metrics, and most
importantly, how every person and department contributes to the delivery of the proposition.
Since the entire organization exists to satisfy customer needs, nobody can neglect a customer
issue by declaring it a "marketing problem" - everybody must be concerned with customer
satisfaction.
Social Responsibility Marketing:
The holistic marketing concept advocates the philosophy that businesses must develop
products and marketing strategies that not only address the needs of the consumers but also
safeguard the long-term interests of those consumers as well as those of society at large (Kotler
and Keller 2005)18. In this view, holistic marketing incorporate social responsibility in its
25
broader context: ethical, environmental, legal and social. One reason modern marketing is
involved in this ethical path is the public growing perception that marketing organizations are
not just sellers of product but also have an inherent responsibility to be more socially
responsible, including being more responsible for its actions and more responsive in addressing
social and environmental concerns. And as marketing deals with the public, companies see this
new context as an opportunity Kaliski (2001).18 Marketers who are pursuing a socially
responsible agenda should bear in mind that such efforts do not automatically translate into
increased revenue or even an improved public image. However, organizations that consistently
exhibit socially responsible tendencies may eventually gain a strong reputation that could pay
dividends in the form of increased customer loyalty.
In summary, holistic marketing recognizes that the organization’s sales and revenues are
inextricably tied to the quality of each of its products, services, and modes of delivery and to
its image and reputation among its constituencies (Mack, 1999). According to this view,
holistic marketers succeed in managing a superior value chain that deliver a higher product
quality improving the process of capturing customer value. Holistic marketing also recognizes
the need of a more ethical approach that focuses on the needs of the consumers but also
safeguard the long-term interests of those consumers as well as those of society at large.
Nevertheless this new philanthropic trend is not strong enough to upset public critics which
accuse marketing to satisfy their financial needs even before satisfying the real consumers’
needs.
3-b. Criticisms of marketing:
“It seems impossible in these days for people in marketing to gather anywhere in
the world without the subject’s finally turning to their troubles with the public.
26
Everywhere marketing is maligned for its pushy, noisy, manipulative intrusions
into our lives; its corruptive teachings of greed hedonisms; its relentless pursuit of
the customer’s cash, regardless of consequence, save the profit of the seller”
(Levitt 1986, p.215).8
While marketing is viewed as offering main profit to organizations and to society, the
fact that marketing is a business function operating in close relation with the public opens this
functional area to wide criticism. Among the issues cited by those who criticize marketing,
the criticism most frequently made about marketing is that marketers are only concerned with
getting customers to buy whether they want the product or not. The source of this argument
stems from the conviction that marketers are only out to gratify their own needs and really do
not care about the needs of their customers. But while many marketers are guilty of
manipulating customers into making unwanted purchases, the majority realizes that
undertaking such tactics will not lead to loyal customers and, subsequently, is improbable to
lead to longer term success.
The eternal marketing debate: satisfying or creating needs.
Under the marketing concept, marketers have to ensure that companies’ core activities
are yielded by stakeholder needs and wants. But still one common error is that most
companies continue to operate under the classic approach of supply is in control (sell what is
produced by developing the commercial structures) vs. demand is in control (find the right
products for your customers). They focus on the solutions that they make – the products that
they are already selling. In other words, most business activities, including advertising, are
still today dedicated to solving the firm's problems. This phenomenon leads organizations to
the temptation of manipulating customers into making unwanted purchases. However, by
doing so they miss the possibility to create customer value by trying to find matches for the
27
products to which they are already committed or to adapt a product to a need. Success,
conversely, is more likely if you dedicate your activities exclusively to solving your
customer's problems. People buy products in order to solve problems: “products are problemsolving tools” (Levitt, 1986. p76)8. Modern marketing consequently recognizes that the
problem defines the market, not the solution. In this view, a market starts where the product
can satisfy a need. When you combine need and product you can create products that are
valuable for your customers (Meyer, 2002)19. Under this concept, the firm must find a way to
discover unfulfilled customer problems (needs) and bring to market solutions (products) that
satisfy those problems (needs). This will help ensure that the provided products offer tangible
benefits - and therefore genuine value - to the target audience and by default to the company.
But solving problems which are relative: different and several, is not risk free so the
main question in a how to identify the right problem? To choose the right problem, there are
three fundamental options (Smith, 1998)20:
1. Anticipate future problems.
2. Create problems that you can resolve with your products.
3. Go ask customers directly about their existing problems.
The most common decision is to anticipate problems: to look into the future and identify the
most likely issues that will block the success of competitors (Salter & Rosenbaum, 1997)21.
This strategy is attractive if firms know their customers with whom they deal. This strategy
has worked well for several markets. More often however, the strategy fails. Why? Because
anticipating the problem is easy, while anticipating the problem that eventually becomes real
enough to build a market is much riskier. One example is the third cellular phone generation
“3G”. At the time the technology had obtain the approval from influencers: media,
consultants, technical analysts and investors who massively invest in the project. However,
influences and suppliers were not enough. Customers, as a whole, remained unimpressed.
The 3G technology became known as technology that “I still don’t need”, and 3G services
28
never became popular (except for the Japanese market).Too much in advance vs. customer
acceptance.
Another option is to create problems. Where you know that you can create a serious problem,
and then solve it, you have the opportunity to stimulate the value of your product. This is
risky, but when you control the problem, controlling the market is easier. Inkjet printer
cartridges and razor blades are example of success in creating the problem. They apply the
“consumables theory”. Getting the initial service and function is cheap and easy. Everybody
can get razor for a few dollars, and inkjet printers are now available for $50. The idea? Hook
customers on the service; then, to continue to get the value customers want from it, they have
to buy products from the manufacturer that will cost much more than the razor or printer. The
risk is to create a competitor and substitutes products that can have a strong impact on the
business (Meyer, 2002).18
The real solution to avoid risk is to: CONSIDER FINDING A PROBLEM INSTEAD
OF CREATING IT. Creating problem is risky, expensive and not always successful. The
issue is creating the right problem. If marketers create a wonderfully important problem, they
can name the price. If firms want to know where their best chances of creating valuable
products are, the key may be in simply asking about the problem. By definition a market
starts where the product can satisfy a need and modern marketing recognizes that the
problem defines the market, not the solution. When you combine need and product you can
start a new market (Meyer, 2002). This is why, the key success in creating and maximizing
customer value proposition is to INDENTIFY THE RIGHT PROBLEMS TO SOLVE.
The concept of influencing desires vs. the concept of creating needs:
To understand fully the resulting dilemmas, it is useful to examine the concept of
needs in terms of man’s material aspiration and in terms of how human fulfill their needs.
29
Human have different levels of needs - both physical and psychological - that they have to
fulfill (Maslow, 1943)22 (See ANNEX 3: A Theory of Human Motivation) . By definition,
need arises from the presence of a gap between the fulfillment of this need and the situation
experienced by a person (customer). This gap is called the situation of need. Thus, the
recognition of a situation of need gives rise to the need - to fulfill this gap (Leagans, 1964) 23.
But when needs cannot be fulfilled they are then considerate as desires. But needs are
limited. On the other hand, the culturally differentiated desires are infinite: “because desire is
defined not by that which one has, but by that which one is tempted” (Longinotti-Buitoni,
1999)24. However, the marketing does not create needs, these pre-exist, but it influences the
desires. For example, marketing suggests to the consumer that a MERCEDES can serve for
satisfying a need of respect. It does not create the need of esteem, but proposes a means to
satisfy it.
The Maslow’s hierarchy of needs (see annex 3: The theory of human motivation) tends to
highlight that individuals have several means to satisfy their demand: the auto production, the
strength, the plea and the exchange. Marketing focuses on exchange. And this leads us to the
second concept: marketing sees “exchange principles” as an economic reality, which
regulated the market:
- There are two parties (the most active being the storekeeper, the other one the prospect)
- Every party possesses something that can have some value for the other one.
- Every party may communicate and deliver what he exchanges.
- Every party is free to accept or to reject the offer of the other one.
- Every party considers the exchange as a solution adapted to its problem.
What makes the marketing in all this system? We already know that it influences the desires
and concentrates on the exchange. If we rationalize the concept, with the risk of oversimplifying, we can consider that the marketing is nothing else than an economic and social
mechanism by which individuals and groups satisfy their needs and desires by means of the
exchange of products and other valuable entities for others. “Marketing is a social and
30
managerial process by which individuals and groups obtain what they want and need through
creating, offering and exchanging products of value with others” (Kotler 1991).
On the other hand we can highlight that marketing has the power to leverage or increase
needs by facilitating economical exchanges and by selling tricks such as credit facilities and
discount. Most important, companies can also promote their products through incisive
advertising and public relations campaigns that help educate and possibly influence their
customers’ perceptions. The business logic behind marketing in satisfying needs is designed
to arouse customers’ emotion by influencing their perception of reality. By doing so
marketing is able to manipulate customers in purchasing unwanted products. As a matter of
fact, the excess of marketing leads to an obsessive desire and here lays the custom between
satisfying and creating a need. However, human have needs – such as food and shelter – but
once they have fulfill these needs can we objectively say that all their needs have been
fulfilled. Is everything else unnecessary or self-indulgent? (Levitt, 1986) 18. As a matter of
fact, customers have become so contaminated by advertising campaign and organizations
trying to bring differentiation to catch market shares that they now perceive themselves and
define their lives with the product they buy. In 1986, Levitt argues that delivering products of
extreme quality is no more a sufficient differentiation strategy: “the generic product is the
minimal expectation” (Levitt, 1986 p. 79). Today, satisfying psychological necessities is now
considered the minimum; this is where “marketing concept”, in the sense of satisfying
customers’ needs at value, has reached its limits. But the current obsession to identify oneself
according to the thing one buys, drinks, drives, wears, and smokes is an extension of the kind
of need to identify which we have always innately felt (loninotti-Buitoni, 1999)24.
31
Conclusion:
Marketing focuses on two associated key words: “customer and needs”. In marketing the
term customers is synonym of market. The term market refers to the group of customers
(individual, companies, associations, governments…) that is interesting in the
product/service, has the resources to purchase the good, and is allowed by law and regulations
to buy the good. While, the concept of need in marketing is closely related to the concept of a
situation of need in its primary psychological definition: people have different needs that they
have to fulfill (Maslow, 1943). Thus, the recognition of a situation of need gives rise to the
need to fulfill this gap (Leagans,1964). Marketing as a discipline recognizes that this situation
of needs exist. Its main objective is to identify these needs and focus on providing
(exchanging) solutions (products/services) to satisfy (fulfill) them. In brief, the marketing
consists in putting a product in adequacy with the customer’s expectations, and to let him
(her) to know it…. It supposes to observe the consumer, to encircle his (her) motivations and
his (her) behaviors. Know to act: could not the marketing look like an applied “social
science"? But marketing is even more than that. Today marketing is a holistic concept that
focuses on the whole – it’s an organic methodology that helps organizations in developing a
package that will not only satisfy the needs of the customers within the target markets, but
simultaneously will maximize the performance of the organization. Is this not considerate as a
technique of management? But let’s go further and let’s focus on the twenty first century
marketer’s new challenges. In an ever changing environment, where markets are saturated,
where competition is global and fragmented, marketers have to collect, perceive and interpret
in a fine way the evolutions of such or such market segment. They must know how to cross
the information - figures, observations, analyses - to become familiar with the atmosphere of
an environment (Badot et al.,1998) in order to be able to anticipate future needs. The post
modern marketer would not be any more riveted to a methodology and a unique theory; he
32
would be, on the whole, an informed observer of a changeable world. Is this not the purpose
of the human sciences?
However, it’s important to recognize that marketing is a structured process (marketing
strategy, marketing plan, segmentation strategy, pricing, etc.) but is also build on creativity.
Marketing is both a science and an art. It’s the science of satisfying needs at profit and the art
of transforming desires in wants. This is even truer in a society where the democratization of
fulfilling customers’ needs and the amplification of customer expectation are making radical
changes in how companies do business. In an era where technology makes everything
possible customers are much more difficult to please. Today, marketing has to cope with the
idea that modern customers prefer spend their money on products and services that improve
their emotional well-being, products that are an extension of their own personality. To attract
them, companies must sell products and services that can excite their personality. In other
words, companies are more likely to attract more customers by arousing customers’ emotion,
by anticipating future trends and needs, some how by influencing their perception of reality.
Today marketing is about influencing desires; it’s about selling dreams… and some how
influencing the concept of need. By doing so modern marketing goes beyond the concept of
selling a product or service to satisfy customers ‘needs. As stated by Carpenter, “Simply
giving customers what they want isn’t enough any more – to gain an edge companies must
help customers learn what they want”. However, let’s reverse the concept. Marketing gives
the opportunity to customers to fulfill dreams, and doing so, marketing as an art can be seen,
to a certain extend, as an equalizer of social differences. By rending desires affordable, can we
consider that marketing covers social differences?
33
ANNEX 1/ Strategic Marketing Framework.
34
Source: The Key to Marketing: The Marketing Plan - Part 1: Marketing Plan Versus Marketing Strategy - By
Susan Ward (2007).
ANNEX 2: 4 P’s
Product: A product can be either a good or service that is sold either to a commercial
customer or an end consumer. The product or service must address the needs of customers as
identified through market research. A customer buys a product, and a consumer uses it.
Price: No matter how good the product is, it is unlikely to succeed unless the price is right.
This does not just mean being cheaper than competitors. Even if you decide not to charge for
a service, it is useful to realise that this is still a pricing strategy. Identifying the total cost to
the user (which is likely to be higher than the charge you make) is a part of the price element.
Promotion: is the business of communicating with customers, and providing them with
information that will assist them in making a decision to purchase a product or service. The
main aims of promotion are to persuade, inform and make people more aware of a brand, as
well as improving sales figures. This includes advertising, personal selling (eg attending
exhibitions), sales promotions (eg special offers), and public relations. Advertising is the
most widely used form of promotion, and can be through the media of TV, radio, journals,
cinema or outdoors (billboards, posters). The specific sections of society (market segments)
being targeted will affect the types of media chosen, as will the cost. Companies use
sponsorship and public relations to improve their image, notably through financing sports,
the arts and public information services. Sales promotion is designed to encourage new and
repeat sales. Loyalty cards, free gifts, competitions and voucher schemes are the most
Place or distribution: Looking at location (eg of a library) and where a service is delivered
(eg are search results delivered to the user's desktop, office, pigeonhole - or do they have to
collect them). 'Place' is concerned with various methods of transporting and storing goods,
and then making them available for the customer. Getting the right product to the right place
at the right time involves the distribution system. The choice of distribution method will
depend on a variety of circumstances. It will be more convenient for some manufacturers to
sell to wholesalers who then sell to retailers, while others will prefer to sell directly to
retailers or customers.
Booms and Bitner's expanded the marketing mix by adding the following 3 additional
P's:
The first two additional Ps are explicit (People, Process) and the third one (Physical
Evidence) is an implicit factor.
Booms and Bitner also suggest that Place in a service-oriented company includes the accessibility
of the service, and that Promotion in a service-oriented company includes the input of front-line
service personnel.
5. People: All people directly or indirectly involved in the consumption of a service are an
important part of the extended marketing mix. Knowledge Workers, Employees,
Management and other Consumers often add significant value to the total product or service
offering.
6. Process: Procedure, mechanisms and flow of activities by which services are consumed
35
(customer management processes) are an essential element of the marketing strategy.
7. Physical Evidence: The ability and environment in which the service is delivered, both
tangible goods that help to communicate and perform the service and intangible experience
of existing customers and the ability of the business to relay that customer satisfaction to
potential customers.
ANNEX 3: A Theory of Human Motivation
Maslow's hierarchy of needs is often depicted as a pyramid consisting of five levels:
the first lower level is being associated with Physiological needs, while the top levels are
termed growth needs associated with psychological needs. Deficiency needs must be met
first. Once these are met, seeking to satisfy growth needs drives personal growth. The higher
needs in this hierarchy only come into focus when the lower needs in the pyramid are met.
Once an individual has moved upwards to the next level, needs in the lower level will no
longer be prioritized. If a lower set of needs is no longer being met, the individual will
temporarily re-prioritize those needs by focusing attention on the unfulfilled needs, but will
not permanently regress to the lower level.
Deficiency needs: The lower four layers of the pyramid are what Maslow called "deficiency
needs" or "D-needs". With the exception of the lowest needs, physiological ones, if the
deficiency needs are not met, the body gives no indication of it physically, but the individual
feels anxious and tense. These deficiency needs are: physiological, safety and security, love
and belonging, and esteem.
Safety needs: With their physical needs relatively satisfied, the individual's safety needs take
over and dominate their behavior. These needs have to do with people's yearning for a
predictable, orderly world in which injustice and inconsistency are under control, the familiar
frequent and the unfamiliar rare. In the world of work, these safety needs manifest
themselves in such things as a preference for job security, grievance procedures for
protecting the individual from unilateral authority, savings accounts, insurance policies, and
the like.
For the most part, physiological and safety needs are reasonably well satisfied in the "First
World". The obvious exceptions, of course, are people outside the mainstream — the poor
36
and the disadvantaged. If frustration has not led to apathy and weakness, such people still
struggle to satisfy the basic physiological and safety needs. They are primarily concerned
with survival: obtaining adequate food, clothing, shelter, and seeking justice from the
dominant societal groups.
 Safety and Security needs include:
 Personal security from crime
 Financial security
 Health and well-being
 Safety net against accidents/illness and the adverse impacts
Social needs: After physiological and safety needs are fulfilled, the third layer of human
needs is social. This psychological aspect of Maslow's hierarchy involves emotionally-based
relationships in general, such as:
 friendship
 intimacy
 having a supportive and communicative family
Humans need to feel a sense of belonging and acceptance, whether it comes from a large
social group, such as clubs, office culture, religious groups, professional organizations, sports
teams, gangs ("Safety in numbers"), or small social connections (family members, intimate
partners, mentors, close colleagues, confidants). They need to love and be loved (sexually
and non-sexually) by others. In the absence of these elements, many people become
susceptible to loneliness, social anxiety, and Clinical depression. This need for belonging can
often overcome the physiological and security needs, depending on the strength of the peer
pressure; an anorexic, for example, ignores the need to eat and the security of health for a
feeling of control and belonging.
Esteem: All humans have a need to be respected, to have self-esteem, self-respect, and to
respect others. People need to engage themselves to gain recognition and have an activity or
activities that give the person a sense of contribution, to feel accepted and self-valued, be it in
a profession or hobby. Imbalances at this level can result in low self-esteem or an inferiority
complex. People with low self-esteem need respect from others. They may seek fame or
glory, which again depends on others. It may be noted, however, that many people with low
self-esteem will not be able to improve their view of themselves simply by receiving fame,
respect, and glory externally, but must first accept themselves internally. Psychological
imbalances such as depression can also prevent one from obtaining self-esteem on both
levels.
Growth needs: Though the deficiency needs may be seen as "basic", and can be met and
neutralized (i.e. they stop being motivators in one's life), self-actualization and transcendence
are "being" or "growth" needs (also termed "B-needs"); i.e. they are enduring motivations or
drivers of behavior.
Aesthetic needs: The motivation to realize own maximum potential and possibilities is
considered to be the master motive or the only real motive, all other motives being its various
forms. In Maslow's hierarchy of needs, the need for self-actualization is the final need that
manifests when lower level needs have been satisfied.
Self-transcendence: Near the end of his life Maslow revealed that there was a level on the
hierarchy that was above self-actualization: self-transcendence. He stated that the
37
achievements and success of his offspring were more satisfying than the personal fulfillment
and growth characterized in self-actualization.
Source: A.H. Maslow, A Theory of Human Motivation, Psychological Review 50 (1943):370-96.
References:
38
Smith (1976), The Wealth of Nation.
1
2
Bartels (June 1976), The History of Marketing Thought, Grid Pub; 2nd edition,.
3
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