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Business / Marketing Minor
Marketing Fundamentals
M21439
Session 1:
Marketing Planning & The Broader
Environment
Key Concepts
• Definition of marketing
• Difference between needs, wants and
demands
• Marketing management philosophies
• Role of marketing planning
• Marketing environment
• Marketing in international markets
Definition of Marketing
“A social and managerial process whereby
individuals and groups obtain what they need
and want through creating and exchanging
products and value with others.”
Source: Kotler,P & Armstrong,G (2001) Principles of Marketing 9th ed, Prentice Hall, p6
Definitions of Marketing
“Marketing is the management process which identifies,
anticipates and supplies customer requirements
efficiently and profitably.”
Chartered Institute of Marketing
“Marketing is the process of planning and executing the
conception, pricing, promotion and distribution of ideas,
goods and services to create, exchange and satisfy
individual and organisational objectives.”
American Marketing Association,1985
Source: Brassington,F.& Pettit,S.(2000) Principles of Marketing 2nd ed, UK:FT/Prentice Hall
Definition of Marketing
“Marketing is a pervasive societal activity that goes
considerably beyond the selling of toothpaste, soap
and steel. Political contests remind us that
candidates are marketed as well soap; student
recruitment in colleges reminds us that higher
education is marketed; and fundraising reminds us
that “causes” are marketed…[Yet no] attempt is made
to examine whether the principles of “good”
marketing in traditional product areas are transferable
to the marketing of services, persons and ideas.”
Source: Andreasen,A.R. & Belk,R.W. (1980) Predictors of Attendance at the Performing Arts Journal of Consumer Research Sept,
pp.112-120
Core Marketing Concepts
Needs, wants and
demands
Markets
Exchange, transaction
and relationships
Products and
services
Value, satisfaction
and quality
Source: Kotler,P & Armstrong,G (2000) Principles of Marketing 9th ed, USA:Prentice Hall
Need, Want, Demand
• Need
=
A state of felt deprivation
• Want
=
The form taken by a human
need as shaped by culture
and individual personality
• Demands =
Human wants that are backed
by buying power
Source: Kotler,P & Armstrong,G (2001) Principles of Marketing 9th ed, Prentice Hall, p7
Question:
When does a want become a
need?
For example, why do people say “I need to have the latest
DVD/clothing/gossip” ?
Values
“All customers have values made up of attitudes
and beliefs that affect their perceptions and
buying behaviour. Beliefs can also be
thought of as knowledge, opinion or faith
depending whether they can be verified by
personal experience or research.”
Source: Bickerton,P, Bickerton,M & Pardesi,U (2000) Cybermarketing 2nd ed, Butterworth Heinemann, p7
Supply & Demand
Supply:
The amount of a product producers are
willing to provide at a particular price.
Demand:
The amount of a product customers are
willing to purchase at a particular price.
Source: Keegan,W.J., Moriarty,S.E. & Duncan,T.R. (1995) Marketing 2nd ed, Prentice Hall, p11
Product
“Anything that can be offered to a market for
attention, acquisition, use, or consumption
that might satisfy a want or need. It includes
physical objects, services, persons, places,
organisations and ideas.”
Source: Kotler,P & Armstrong,G (2001) Principles of Marketing 9th ed, Prentice Hall, p7
Definition of Service
“Time and expertise provided or activities
performed in the customer’s behalf by an
individual or firm.”
Source: Keegan,W.J., Moriarty,S.E. & Duncan,T.R. (1995) Marketing 2nd ed, Prentice Hall, p10
E.g. of Goods/Services Spectrum
PURCHASE
A
CAR
GOODS
TELEVISION
RENTAL
FAST
FOOD
OUTLET
GOURMET
RESTAU –
RANT
HAIRCUT
LEGAL
ADVICE
SERVICES
Question:
Why don’t people consider going
to McDonalds for a romantic
meal?
Definition of Profit
“The return that a company receives on a
transaction after costs have been subtracted.”
Source: Keegan,W.J., Moriarty,S.E. & Duncan,T.R. (1995) Marketing 2nd ed, Prentice Hall, p10
Definition of Publics
“Publics are any organisations or individuals
that have actual or potential influence on the
marketing organisation…(these can) include
government departments, competitors,
outside pressure groups, employees, the
local community and so forth.”
Source: Blythe,J (2001) Essentials of Marketing 2nd ed, Prentice Hall, p9
Definition of Markets
“Markets are all the actual and potential buyers
of the firm’s products.”
Source: Blythe,J (2001) Essentials of Marketing 2nd ed, Prentice Hall, p9
Marketing Management Philosophies
There are 5 alternative concepts under which
organisations conduct their marketing
activities:
1. Production
2. Product
3. Selling
4. Marketing
5. Societal Marketing
Source: Kotler,P. & Armstrong,G.(2001) Principles of Marketing 9th ed,USA:Prentice Hall
Management Philosophies
Orientation Focus
Characteristics
& aims
Eavesdropping
Production
Manu
-Increase production
-Cost reduction &
control
-Make profit through
volume
Product
Goods
-Quality is all that
matters
-Improve quality levels
-Make profit though
volume
Main Era (generalised)
USA
West
Europe
East
Europe
“Any colour you
want – as long as
it’s black”
Up to
1940’s
Up to
1950’s
Late
1980’s
“Just look at the
quality of the
paintwork”
Up to
1940’s
Up to
1960’s
Largely
omitted
Source: Brassington,F.& Pettit,S.(2000) Principles of Marketing 2nd ed, UK:FT/Prentice Hall
Management Philosophies
Orientation Focus
Characteristics
& aims
Eavesdropping
Main Era (generalised)
USA
West
Europe
East
Europe
Selling
Selling
what’s
produced –
seller’s
need
-Aggressive sales &
promotion
-Profit through quick
turnover of high
volume
“You’re not keen
about black?
What if I throw in
a free sun roof”
1940 –
1950’s
1950 –
1960’s
Early
1990’s
Marketing
Defining
what
customers
want –
buyer’s
need
-Integrated marketing
-Defining needs in
advance of
production
-Profit through
customer satisfaction
& loyalty
“Let’s find out if
they want it in
black, and if they
would pay a bit
more for it”
1960’s
onward
1970’s
onward
Mid
1990’s
onward
Source: Brassington,F.& Pettit,S.(2000) Principles of Marketing 2nd ed, UK:FT/Prentice Hall
Question:
Now you understand the basic
marketing concepts do you think
that organisations need to plan
their marketing activities?
Marketing’s Role in Strategic Planning
Marketing plays a key role in an
organisation’s strategic planning process:
1. Provides a guiding philosophy – the
marketing concept – that suggests that
organisation strategy should resolve
around serving the needs of important
consumer groups
Source: Kotler,P. & Armstrong,G.(2001) Principles of Marketing 9th ed,USA:Prentice Hall
Marketing’s Role in Strategic Planning
2. Marketing provides inputs to strategic
planners by helping to identify attractive
market opportunities and by assessing the
firm’s potential to take advantage of them.
3. Within business units, marketing designs
strategies for reaching the unit’s
objectives. Once the objectives are set,
marketing’s task is to carry them out
profitably.
Source: Kotler,P. & Armstrong,G.(2001) Principles of Marketing 9th ed,USA:Prentice Hall
UK consumer expenditure
Source: Marketing Pocket Book, 1999 Reprinted by
permission of NTC Publications, Ltd.
Source: Dibb,S, Simkin, Pride, Ferrell (2001) Marketing: Concepts & Strategies 4th ed, USA:Houghton Mifflin
The forces of the
marketing
environment:
macro and
micro
Source: Dibb,S, Simkin, Pride, Ferrell (2001) Marketing: Concepts & Strategies 4th ed, USA:Houghton Mifflin
Levels of involvement in international
marketing
Source: Dibb,S, Simkin, Pride, Ferrell (2001) Marketing: Concepts & Strategies 4th ed, USA:Houghton Mifflin