PRINCIPLES OF MARKETING (MRK-152)
CHAPTER 1
INTRODUCTION, BASIC CONCEPTS & DEFINITIONS
Definition: Marketing is a social and managerial process by which individual and groups
obtain what they need and want through creating, offering and exchanging products of
value with others.
NEED : A human need is a state of deprivation of some basic satisfaction.
WANTS: Wants are desires for specific satisfiers of need.
DEMANDS: Demands are wants for specific products that are backed by an ability and
willingness to buy them. Wants become demands when supported by a purchasing
power.
PRODUCT: A product is anything that can be offered to satisfy a need or want.
Products are a bundle of solutions
Products may be physical goods, services or ideas.
VALUE: Value is the consumer's estimate of the product's overall capacity to satisfy
his or her needs.
Value is the satisfaction of customer requirements at the lowest possible cost of
acquisition, ownership and use.
EXCHANGE AND TRANSACTIONS
Exchange is the act of obtaining a desired product from someone by offering something
in return.
There are five conditions for exchange
1. There are at least two parties.
2. Each party has something that might be of value to the other party.
3. Each party is capable of communication and delivery.
4. Each party is free to accept or reject the exchange offer.
5. Each party believes it is appropriate or desirable to deal with the other party.
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A transaction is a trade of values between two or more parties
A transaction involves several dimensions:
-at least two things of value.
-agreed upon conditions.
-a time of agreement.
-a place of agreement.
Transaction differs from a transfer. In a transfer
anything in return.
A gives X to B but does not receive
Exchange (process) + Agreement=Transaction
MARKETS, MARKETERS & PROSPECTS
A market consists of all the potential customers sharing a particular need or want who
might be willing and able to engage in exchange to satisfy that need or want.
A marketer is someone seeking one or more prospects who might engage in an exchange
of values.
A prospect is someone whom the marketer identifies as potentially willing and able to
engage in an exchange of values.
When both parties actively seek an exchange and both are marketers, then the situation is
called reciprocal marketing.
MARKETING MANAGEMENT
Marketing management is the process of planning and executing the conception,
pricing, promotion and distribution of ideas, goods and services to create exchanges that
satisfy individual and organizational goals.
Marketing management has the task of influencing the level, timing and composition of
demand in a way that will help the organization achieve its objectives. Marketing
management is essentially demand management. Marketing managers manage demand
by carrying out marketing research, planning, implementation and control.
COMPETING CONCEPTS OF MARKETING
1. PRODUCTION CONCEPT
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The production concept holds that consumer will favour those products that are widely
available and low in cost. Managers of production oriented organizations concentrate on
achieving high production efficiency and wide distribution.
2. PRODUCT CONCEPT
The product concept holds that consumers will favour those products that offer the most
quality, performance or innovative features. Managers in product oriented organization
favour their energy on making superior products and improving them overtime.
3. SELLING /SALES CONCEPT
The selling concept holds that consumers, if left alone will ordinarily not buy enough of
the organization’s product. The organization must therefore undertake an aggressive
selling and promotion effort.
4. MARKETING CONCEPT
The marketing concept holds that the key to achieving organizational goals consist of
being more effective than competitors in integrating marketing activities towards
determining and satisfying the needs and wants of target markets.
The marketing concept rests on four pillars: target market, customer needs, integrated
marketing and profitability.
INTEGRATED MARKETING
When all the company's departments work together to serve the customer's interest, the
result is integrated marketing.
Integrated marketing takes place on two levels. First the various marketing functionssales force, advertising, product management, marketing research and so on must work
together. Second marketing must be well coordinated with other company departments.
REASONS FOR TAKING MARKETING CONCEPTS
-Sales Decline
-Slow Growth
-Changing buying pattern
-Increasing Competition
5. SOCIETAL MARKETING CONCEPT
The societal marketing concept holds that the organization’s task is to determine the
needs, wants and interests of target markets and to deliver the desired satisfactions more
effectively and efficiently than competitors in a way that preserves or enhances the
consumer's and society's well being.
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