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Chapter 1 . . . What is Marketing?
Section 1.1 Marketing Goods and Services
Marketing is the sum of all the activities involved in the
 planning
 pricing
 promotion
 distribution and
 selling
of goods and services to satisfy consumer’s needs and want.
Marketing is the process that connects suppliers with the end users. Distributing goods &
services.
No business can survive without marketing:
1. Manufacturers market their products to potential consumers.
2. Politicians market their ideas to potential voters.
3. Service businesses market their expertise to potential customers.
4. Not-for-profit organizations market their cause to potential donors and their benefits to
potential clients.
5. Individuals market themselves every day.
Goods and Services (Two types: industrial and consumer)
Goods -items in a useable form . . . Services - activities performed for others
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Industrial Goods (business goods) – products used in business to make other products or to
assist in business operations.
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Consumer Goods – products intended for personal use. Sold in retail stores
Industrial Services / Consumer Services – the major difference is in who pays for the
service.
 Hotel – selling to corporations (Industrial) and
you or I (Consumer Services)
 Haircut (service)
1.2 EVOLUTION OF THE MARKETING CONCEPT
THE MARKETING CONCEPT
 The idea that a business or organization must consider both its potential customers and its
competitors in every important business decision.

The focus of production, accounting, research, shipping, warehousing, distribution, sales
and even office management should be on satisfying the customer and overcoming the
competition.
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The marketing concept requires a business and/or organization to take 3 major steps:
1.
2.
3.
Identify an opportunity in a specific consumer or individual market.
Ensure that the opportunity has not already been met in the competitive market.
Use the appropriate marketing strategies to organize marketing plans and to sell its
product or service successfully.
Supply and Demand
 When the supply of a product that consumers want or need is low, marketing is not as
important a business activity as when supply of such a product is high.
 Low supply of a desired item usually means high consumer demand.
 When the supply or the capacity to supply products is high, consumer demand for a specific
product is lowered, and marketing becomes a major factor in an organization’s success.
During the late 1900’s, production in North America outstripped demand.
Consumers stopped buying whatever was made and became more selective (comparing price,
quality and service). Those companies that adapted to the new marketing concept became very
successful.
Today’s marketers continue to alter their products, services, distribution, production facilities,
and marketing mix to meet the needs of the consumer. - E-commerce and market research.
CONSUMERS KNOW THEIR POWER IN THE MARKET . . . “Whatever you want,
we’ll make.”
Most businesses compete not only domestically but also internationally.
1.3 Marketing & the Organization
Depending on their product(s) and the market they are trying to reach, companies may organize
their marketing divisions by:




region
county
brand
method of distribution, or a combination of these.
1.4 Marketing Activities
 Research – gathering information about consumers and the marketplace
 Product development – creating the product with the information that is gathered
 Packaging – providing protection and getting attention
 Pricing – setting a price that the consumer will pay and you still make a profit
 Branding – establishing a trademark, logo etc.
 Sales
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 Distribution – getting goods from point A to point B
 Inventory management – a system that controls what a business has in stock and what it
needs
 Storage – ex. Warehouse
 Promotion – how you will make your product known
1.5 Consumer and Competitive Markets . . . The consumer market – refers to all those
customers who:
1. Are or may become interested in a particular product or service and
2. Who have the means by which to purchase the particular product or service.
This group is called the target market. If the target market is everybody, the market is called an
aggregate market.
However, most consumer markets are differentiated markets, based on:
 income,
 geographical location,
 personal values,
 gender or age.
. Brand strategies:
Competitive Markets – comprise all the products and services that compete with one another
for consumer’s money within a specific category.
Marketing Concept – the idea that a business or organization must consider both its potential
customers and its competitors in every important business decision.
Businesses need to:
1. Identify an opportunity in a specific consumer or industrial market.
2. Ensure that the opportunity has not already been met in the competitive market.
3. Use appropriate marketing strategies to organize marketing plans and to sell its product or
service successfully.
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1.6 THE MARKETING MIX (4 P’s vs 4 C’s) It is the effectiveness of the mixing of
marketing activities that defines the success or failure of any marketing campaign.
The 4 P’s (Market Oriented)


Product – (research, development, packaging & branding)
Price – Firstly should reflect what customers are willing & able to pay.
Secondly, must consider what will be charged to industrial consumers as well as resellers.
(sales, discounts, credit terms)
Lastly, take into account competition prices for comparable products.

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Place – (physical distribution, storage, inventory mgt & channel selection)
Promotion – (advertising, sales promotion & publicity)
The 4 C’s (Customer Oriented)
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Customer Value – product benefits from the customers’ point of view.
Cost to the Customer – price plus the customers’ costs.
Convenience for the Buyer – how best to deliver a product/service to the target market.
Communication – a dialogue with the consumer, not just promotion.
1.7 Marketing Strategies. Brand Strategies vs Distribution Strategies.
A strategy is the method selected to carry out a carefully devised plan of action in order to
achieve a specific goal. A marketing strategy outlines how the company will carry out the
marketing plan. The marketing plan consists of the company’s:
1. Marketing Goals
2. Marketing Mix Formula for achieving them
BRAND STRATEGIES - The primary goal of any brand strategy is to communicate the value of
a product or service to the consumer
 develop & communicate the benefits of the brand
 minimize the costs, and
 encourage the consumer to set up a positive value equation
What is value? Value is the differences between the perceived cost of the product and the
perceived satisfaction derived from the product.
The value equation – adds together all the benefits of a product, both real and imagined, and
subtracts the costs involved in obtaining the product.
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The consumer will only purchase a product if it has a positive value; benefits outweigh
the costs.
The brand strategy attempts to position the product or service – meaning that marketers try to
create a value equation for the product in the consumer’s mind. (packaging, brand names,
slogans, trademarks)
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DISTRIBUTION STRATEGIES Ads using a ‘push strategy’ are directed to retailers and other members of trade. They tend to
be:
 more technical in nature,
 more formal in tone, and
 often use an informative technique. NOTE: These ads are not usually as eye catching.
Ads using a ‘pull strategy’ are directed to end-users. They are often entertaining and usually
more expensive to produce than push strategy ads. In a print medium, these ads are:
 eye catching
 colourful and
 often provide exciting promotional offers.