U N D E R S TA N D I N G T H E C O N C E P T
AND PROCESS OF MARKETING
WEEK 1
LECTURE 1
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WHAT IS MARKETING?
• Process by which individuals and groups obtain
what they need and want through creating and
exchanging products and value with others.
• More simply: Marketing is the delivery of
customer satisfaction at a profit.
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CORE MARKETING CONCEPTS
Needs, wants,
and demands
Products
and
Services
Core
Marketing
Concepts
Markets
Value, satisfaction,
and quality
Exchange, transactions,
and relationships
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WHAT MOTIVATES A CONSUMER
TO TAKE ACTION?
• Needs - state of felt deprivation for basic items
such as food and clothing and complex needs
such as for belonging. i.e. I am thirsty
• Wants - form that a human need takes as shaped
by culture and individual personality. i.e. I want
a Coca-Cola.
• Demands - human wants backed by buying
power. i.e. I have money to buy a Coca-Cola.
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WHAT WILL SATISFY CONSUMER’S
NEEDS AND WANTS?
• Products - anything that can be
offered to a market for attention,
acquisition, use or consumption
and that might satisfy a need or
want.
• Examples: persons, places,
organizations, activities, and ideas.
• Services - activities or benefits
offered for sale that are
essentially intangible and don’t
result in the ownership of
anything.
• Examples: banking, airlines,
haircuts, and hotels.
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HOW DO CONSUMERS CHOOSE
AMONG PRODUCTS AND
SERVICES?
• Customer Value - benefit that the customer
gains from owning and using a product
compared to the cost of obtaining the product.
• Customer Satisfaction - depends on the
product’s perceived performance in delivering
value relative to a buyer’s expectations.
Linked to Quality and Total Quality
Management (TQM).
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HOW DO CONSUMERS OBTAIN
PRODUCTS AND SERVICES?
• Exchanges - act of obtaining a desired object from
someone by offering something in return.
• Transactions - trade of values between parties.
Usually involves money and a response.
• Relationships - building long-term relationships with
consumers, distributors, dealers, and suppliers.
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WHO PURCHASES PRODUCTS
AND SERVICES?
Actual
Buyers
Market - buyers
who share a
particular need
or want that can
be satisfied by a
company’s products
or services.
Potential
Buyers
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MODERN MARKETING SYSTEM
Suppliers
Company
(Marketer)
Marketing
Intermediaries
Environment
Environment
Competitors
End User
Market
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MARKETING CONCEPT
A philosophy that an organization should try to provide products that satisfy
customers’ needs through a coordinated set of activities that also allows the
organization to achieve its goals.
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MARKETING MANAGEMENT
PHILOSOPHIES ( CONCEPTS OF MARKETING)
• Consumers favor products that are
Production Concept
available and highly affordable
•Improve production and distribution
Product Concept
•Consumers favor products that offer
the most quality, performance, and
innovative features
Selling Concept
•Consumers will buy products only if
the company promotes/ sells these
product
•Focuses on needs/ wants of target
markets & delivering satisfaction
better than competitors
Marketing Concept
Societal Marketing Concept
•Focuses on needs/ wants of target
markets & delivering superior value
•Society’s well-being
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NEW MARKETING CHALLENGES
New
Marketing
Landscape &
Information
Technology
Ethical
Concerns
Nonprofit
Marketing
Emerging
Challenges
Globalization
Changing
World
Economy
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MARKETING PROCESS
This important figure shows marketing in a nutshell. By
creating value for customers, marketers capture value from
customers in return. This five-step process forms the
marketing frame work for the rest of the chapter and the
remainder of the text.
Understand the
marketplace
and customer
needs and
wants
Design
customerdriven
marketing
strategy
Construct an
integrated
marketing
program that
delivers
superior value
Create value for customers and
build customer relationships
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Build profitable
relationships
and create
customer
delight
Capture value
from
customers to
create profits
and customer
equity
Capture value from
customers in return
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THE MARKETING PROCESS IN NUTSHELL
DemographicEconomic
Environment
Marketing
Intermediaries
TechnologicalNatural
Environment
Product
Suppliers
Place
Target
Price
Consumers
Publics
Promotion
PoliticalLegal
Environment
Competitors
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SocialCultural
Environment
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