Chapter 1

BAA 120
1. Overview of Marketing
Why study Marketing?
Costs: About 50% of the total cost of a
product are marketing costs.
Careers: About 25 % to 33% of a nation’s
work force holds marketing positions.
Contributions (‫ )إسهام‬to individual
organizations: Important for their success.
Contributions to society (‫)مجتمع‬: Marketing
decisions affect the lives of individual
consumers and society as a whole.
The marketing concept means that an organization aims all its efforts at
satisfying its customers at a profit1.
o Definition of ‘Marketing’
Marketing is the activity (‫)نشاط‬, set of institutions, and processes (‫)العمليات‬
for creating (‫)خلق‬, communicating, delivering, and exchanging offerings
that have value for customers, clients, partners, and society at large2.
Most people believe that Marketing is the same as Advertising or Personal
Selling. But this definition shows that marketing is much bigger.
Core Marketing Concepts:
Needs: are states of physical or mental deprivation. For example,
people require (‫ )تطلب‬food, clothing, and shelter. These are not created
by society or marketers: they exist in humans.
Wants: are desires for specific satisfiers of deeper needs. Shaped by
culture and personal development. For example, a person needs food,
but he wants to eat a burger.
Demands: are wants for specific products that are backed up by an
ability and willingness (‫ )القدرة واالستعداد‬to buy them. Person’s ability and
willingness to buy changes over time. Example: many people want to
buy BMW or Mercedes but only few are able and willing to buy one.
Types of demands:
Negative demand: There is a demand for the product of service
but most people dislike it. For example: dental work, Vaccinations,
medical operation. Then, Marketers’ task is to try change consumer
attitude towards their products.
No demand: Customers are uninterested or have no information about
the product. For example students do not know or have no interest in
the Chinese language courses available in UOB. Marketers’ task is to
try and create a demand by promoting their product.
Latent demand: (Hidden demand) many consumers may have strong
needs that cannot be satisfied by an existing product or service. It’s a
gap between desirables (‫ )مرغوب فيه‬and the available. For example: the
youth like to hear music using a portable music system, Sony
successfully identified that hidden demand and introduced the Sony
walkman. Marketer’s task is to try develop or find this demand.
sooner or later faces falling demand for its
analyze the cause of decline (‫ )هبوط‬and
introduce another product.
Irregular demand: Demand that changes on
seasons, daily, or even hourly basis.
Full demand: happens when the organization is pleased
with their volume of business. The marketer task is to
maintain this level of demand.
Overfull demand: while no demand is bad for an organization, having
too much demand is equally damaging especially if you cannot meet
this demand. Marketers use “De-marketing” to try reduce this demand
temporarily or even permanently.
demand) unwholesome products will attract
efforts to discourage their consumption. For
Marketers task is to destroy this demand, by
price hikes (or TAX), or reduced availability.
Marketing Mix (4Ps)
These are the four controllable factors or the tools that managers organize
to satisfy consumer needs and company objectives.
Marketing Mix: the set of controllable tactical marketing
tools - product, price, place, and promotion - that the firm blends
to produce the response it wants from the target market3.
Product: a good, service or idea to satisfy the consumer’s needs. It is
anything tangible or intangible (‫)ملموسة أو غير ملموسة‬, offered for the attention,
purchase, use, or consumption, which is capable to satisfy a need.
Price: What is exchanged for a product. The
price that a customer pays for a product
influences (‫ )يؤثر على‬the product’s image and
likelihood of buying it. It is based on the
analysis of product cost, customer need,
competitive prices, and other governmental
Promotion: a mean of communication between the seller and the buyer. It
is a program designed to influence customers to buy the product. This
program includes personal selling, advertising, publicity and public
Placement: a mean of getting the product into the consumer’s hands. This
might include choosing channel of distributions, logistics, or even finding
the right location.
Figure : Elements of the Marketing-Mix that comprise a cohesive Marketing Program
Perrault Jr., W D, Cannon, J. P, McCarthy, E J, Essentials of Marketing , 12th edition,
(International), McGraw Hill, New York, 2010.
2 See AMA website : (retrieved on
27 Sep 2011)
3 Grewal, D., Levy, M., Marketing, second edition,. McGraw Hill- Irwin, New York ( 2007)