Core Concepts of Marketing
Definition:
Marketing is a social and managerial process by which
individuals and groups obtain what they need and want
through creating, offering and exchanging products of
value with others.
Alternative Definition:
Producing and distributing the right goods:
• to the right people
• at the right place
• at the right time
• at the right price
• with the right communication and promotion.
Concepts:
•
•
•
•
•
Needs, Wants, Demand
Products, Services, Ideas
Exchange, Transactions, Relationships
Markets, Marketer
Consumers, Customers
4
Satisfaction = Σ (utilities)
L=1
1.
2.
3.
4.
Form
Place
Time
Possession
Exchange:
The Process by which needs and wants are satisfied.
Fife Necessary Conditions:
1. Two or more parties
2. Each has something of value to other
3. Each can communicate and deliver
4. Each is free to accept or reject offers
5. Each finds it desirable or appropriate to deal with the
other.
Transactions: Measurable Entities:
1. At least two things of value
2. Agreeable Conditions
3. Time of Agreement
4. Place of Agreement
“Law of Contracts”
Countertrading:
1. Barter
2. Compensation Deal
3. Product Buyback
4. Counterpurchase
T1-A Summary of factors that affect an organization’s
marketing program
Environmental forces
Competitive
forces
Economic
forces
Marketing program
Information
Regulatory
forces
Consumer
Product
Price
Promotion
Social
forces
Place
Technological
forces
© 1994 Richard D. Irwin, Inc. To accompany MARKETING, 4/E by Berkowitz, Kerin, Hartley, and Rudelius.
T1-5 Marketing’s second task: Satisfying consumer needs
Organization’s marketing department
Concept for
products
Discover consumer needs
Satisfy consumer needs by
finding right:
Product
Price
Promotion
Place
Ideas about needs
Actual products
Potential consumers: The market
© 1994 Richard D. Irwin, Inc. To accompany MARKETING, 4/E by Berkowitz, Kerin, Hartley, and Rudelius.
Company orientation toward the
market place
1. Production approach:
•
•
•
Large Scale Production
Wide Distribution
Homogeneous Product
Problem: Consumer insensitive
2. Product approach:
•
•
•
Quality
Performance
Features
Problem: Emphasis on product rather than consumer needs
Examples:
ELGIN WATCH CO.
KEVIAR
ISDN
DIOLIGHT
3. Sales approach:
•
•
Unsought goods
Methods to sell whatever products are produced
4. Marketing approach:
•
•
•
Know customer needs and satisfy them more
efficiently than your competitors
Optimal combination of the four “P”
Marketing research
T1-6 Four different orientation in the history of
American business
Product area
Sales area
Marketing
concept area
Market
orientation area
1860
1880
1900
1920
1940
1960
1980
© 1994 Richard D. Irwin, Inc. To accompany MARKETING, 4/E by Berkowitz, Kerin, Hartley, and Rudelius.
2000
T3-1 Environmental forces affecting the organization,
as well as its suppliers and customers
Organization
• Marketing department
Suppliers
Customers
 Other departments
 Employees
Environmental forces
Social
Economic
Technological
Competitive
Regulatory
• Demographic
shifts
• Macroeconomic
conditions
• Changing
technology
• Alternative forms
of competition
• Laws protecting
competition
• Cultural
changes
• Consumer
income
• Economical
impact of
technology
• Components of
competition
 Laws affecting
marketing mix
actions
• Increasing
foreign
competition
© 1994 Richard D. Irwin, Inc. To accompany MARKETING, 4/E by Berkowitz, Kerin, Hartley, and Rudelius.
 Self-regulation
 Consumerism