OLC EUROPE
PRINCIPLES OF MARKETING
Eric Agyemang BSc., MA, PGCE, A1, V1
UNIT AIMS
First, the unit looks at the definitions of marketing, and what is meant by a
marketing orientation and the marketing process.
Next, we consider the use of environmental analysis in marketing at both
macro and micro levels.
We then investigate the importance of market segmentation and how this
leads to the identification and full specification of target groups.
We then consider buyer behaviour and positioning.
The unit looks at the main elements of both the original and the extended
marketing mix.
Finally you will try to develop your own marketing mixes to meet the
needs of different target groups within a range of contexts.
LEARNING OUTCOMES
On successful completion of this unit you will:

Understand the concept and process of marketing (LO1)

Be able to use the concepts of segmentation, targeting
and positioning (LO2)

Understand the individual elements of the extended
marketing mix (LO3)

Be able to use the marketing mix in different contexts.
(LO4)
UNDERSTAND THE CONCEPT AND
PROCESS OF MARKETING
On successful completion of Learning Outcome, you can:
1. explain the various elements of the marketing process
2. evaluate the benefits and costs of a marketing orientation
for a elected organisation
BE ABLE TO USE THE CONCEPTS OF
SEGMENTATION TARGETING AND POSITIONING
On successful completion of Learning Outcome, you can:
1. show macro and micro environmental factors which influence
marketing decisions
2. propose segmentation criteria to be used for products in different
markets
3. choose a targeting strategy for a selected product/service
4. demonstrate how buyer behaviour affects marketing activities in
different buying situations
5. propose new positioning for a selected product/service
UNDERSTAND THE INDIVIDUAL ELEMENTS
OF THE EXTENDED MARKETING MIX
On successful completion of Learning Outcome, you can:
1. Explain how products are developed to sustain competitive advantage
2. Explain how distribution is arranged to provide customer convenience
3. Explain how prices are set to reflect an organisation's objectives and
market conditions
4. Illustrate how promotional activity is integrated to achieve marketing
objectives
5. Analyse the additional elements of the extended marketing mix
BE ABLE TO USE THE MARKETING
MIX IN DIFFERENT CONTEXT
On successful completion of Learning Outcome, you can:
1. Plan marketing mixes for two different segments in
consumer market
2. illustrate differences in marketing products and services to
businesses rather than consumers
3. Show how and why international marketing differs from
domestic marketing
WHAT IS MARKETING ANYWAY?

“Merchants are to be accounted vulgar; for they
can make no profit except by a certain amount of
falsehood.”
Cicero

“Advertising . . . is a meretricious endeavor in
which psychological appeals to “fear” and
“shame” are developed to bamboozle the public
into purchasing essentially worthless packaged
goods at bloated prices.”
Thorstein Veblen
Other Perspectives . . .

Corporate leaders nationwide are discovering
that their most powerful competitive weapon
is marketing--the development, pricing,
distribution, and promotion of products.
--Newsweek

More than half of the polled executives at 250
corporations ranked marketing as the most
important element of strategy for the 1990’s.
--Yankelovitch, Skelly, and White
MARKETING DEFINED
“Marketing is the management function which organises
and directs all those business activities involved in
assessing customer needs, and converting customer
purchasing power into effective demand for a specific
product or service, and in moving that product or service to
the final consumer or user so as to achieve the profit target
or other business objective set by the company or other
organisation”
(Michael Fardon et al 1993)
“Marketing is human activity directed at satisfying needs
and wants through exchange processes”
(Philip Kotler)
MARKETING DEFINED
Two most popular definitions of marketing are offered by,
the UK's Chartered Institute of Marketing (CIM), and the
American Marketing Association (AMA):
“Marketing is the management process responsible for
identifying, anticipating and satisfying consumers
requirements profitably”. (CIM)
“Marketing 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 organisational goals”
(AMA)
CIM AND AMA DEFINITIONS COMPARED
Both the CIM and AMA definitions make a good attempt at capturing
concisely what is actually a wide and complex subject. Although they
have a lot in common, each says something important that the other
does not emphasise. Both agree on the following points.

Marketing is a management process

Marketing is about giving customers what they want

Marketing identifies and anticipates customer requirements

Marketing fulfils customer requirements profitably

Marketing offers and exchanges ideas goods and services

Pricing promotion and distribution of ideas, goods and services
RELATIONSHIP MARKETING
The traditional definitions of marketing tend to reflect a view that the
transaction between buyer and seller is primarily:
 seller-oriented,
 that each exchange is totally discrete, and
 That it lacks any of the personal and emotional overtones that emerge
in a long-term relationship.
In B2B markets in particular, each of these exchanges could involve a
complex web of interactions between the staff of both organisations, each
seeking to work together for their mutual benefit against a history of
previous exchanges.
Contemporary writers particularly highlight the importance of enduring
buyer-seller relationships as a major influence on decision-making in
international B2B markets. Companies such as Volvo have supplier
relationships that go back fifty years,
RELATIONSHIP MARKETING CONT,
Relationship marketing is not just a B2B phenomenon, however.
Internet and direct marketing are creating new opportunities for
organisations in mass markets to become much closer to their customers.
Consumers often stay loyal to familiar brands, retailers and suppliers for
many years and with the enormous power of new technology, individual
consumers can be identified and profiles developed, whether through
loyalty schemes, monitoring Internet shopping behaviour or other ways of
capturing detailed information.
It is now possible to track the purchase behaviour of individual shoppers
and to create a database for directly targeted communication, and with
such power it would be a foolish marketer who did not try to maintain
customer loyalty to improve sales
WIDER DEFINITIONS OF MARKETING
The definitions of marketing are moving away from the single exchange, seller
focused perspective adopted by the CIM and AMA definitions towards more
socially relevant and relationship-oriented definitions that are considered to reflect
the reality of modern marketing far better.
Although relationship marketing over time focuses on customers' needs and
attitudes as important points of concern, it can also embrace social and ethical
concerns as well as issues more directly related to the series of transactions.
A definition that includes the important elements of both the AMA and CIM
definitions, but still embraces the evolving relationship orientation, is offered by
Gronroos (1997):
“Marketing is to establish, maintain and enhance relationships with customers and
other partners, at a profit, so that the objectives of the parties involved are met.
This is achieved by mutual exchange and fulfillment of promises”.
Such relationships are usually, but not necessarily always, long-term.
Marketing Defined
Another definition that embraces the relationship
orientation, is offered by Boone and Kurtz (1998):
Marketing is…
“The process of planning and executing the conception,
pricing, promotion, and distribution of ideas, goods,
services, organizations, and events to create and
maintain relationships that will satisfy individual and
organizational objectives.“
-Contemporary Marketing Wired (1998) by Boone and Kurtz
MARKETING PRINCIPLES IN ACTION
NEEDS OF THE CUSTOMER
Anticipating
Future needs
Creating good
perception of
Organisation
Satisfying
customer
needs
NEEDS OF THE
ORGANISATION
Income and
Profits
Satisfactory
Growth
Planning &
Coordination
MARKETING
PRINCIPLES
Analysing
Competition
Using new
Technology
MANAGING CHANGE IN THE MARKETPLACE
Analysing
Change
MARKETING OBJECTIVES
a.
To maximise sales, increase market share and be
the market leader.
b.
To saturate the market
c.
To maximise profits
d.
To dominate one region country or
geographical area.
e.
To be the technical leader in the product field
f.
To be the recognised innovator, always first with the
new ideas.
g.
To enhance product image with best quality products
(ISO 9000).
h.
To become the leader in ‘social marketing’
MARKETING OBJECTIVES
In groups of two, come up with six objectives that an
organisation may want to achieve with its corporate
strategy:
a.
b.
c.
d.
e.
f.
MARKETING OBJECTIVES
a.
To maximise sales, increase market share and be
the market leader.
b.
To saturate the market
c.
To maximise profits
d.
To dominate one region country or
geographical area.
e.
To be the technical leader in the product field
f.
To be the recognised innovator, always first with the
new ideas.
g.
To enhance product image with best quality products
(ISO 9000).
h.
To become the leader in ‘social marketing’
EVOLUTIONARY ORIENTATION TORWARD
THE MARKET PLACE

The Production Concept

The Product Concept

The Selling Concept

The Marketing Concept

Societal Marketing Concept.

Relationship Market Concept
The Production Concept

'Holds that consumers will favour those products that
are widely available and low in cost. Managers of
production-oriented organisations concentrate on
achieving high production efficiency and wide
distribution coverage‘

The main assumption is that the market is completely
price sensitive, which means that customers are only
interested in price as the differentiating factor
between competing products and will buy the
cheapest.
The Production Era

Mass production following industrialisation

Customers have what is available from a range
of products rather than having a ‘choice’

MacDonald’s approach to the catering industry
– specified range of products, process driven,
limited deviation from prescribed menu possible
The Product Concept

Holds that consumers will favour those products that
offer the most quality, performance or innovative
features.

Managers in these product-oriented organisations
must therefore focus their energy on making superior
products and improving them over time.

Since consumers want the highest level of quality for
their money, the organisation must work to increase
and improve quality levels.
The Product Concept
At first glance, the Product concept may seem like a
reasonable proposition, but the problem is the
assumption that “consumers want this product”.
In groups of two, discuss the problem with this
assumption
The Selling (Sales) Concept

Holds that consumers, if left alone will ordinarily not buy
enough of the organisation's product. The organisation
must therefore undertake an aggressive selling and
promotion effort.

This leads to a heavy emphasis on personal selling and
other sales stimulating devices because products “are
sold, not bought”.

Thus the organisation puts its effort into building strong
sales departments, with the focus very much on the needs
of the seller, rather than on those of the buyer.
The Sales Era

Mid 1920s to 1950s, when competitive forces and the
desire for high sales volume led businesses to emphasise
selling and the salesperson in its business strategy

Organisations ‘push’ product/service onto the buyer

Companies employ a sales force to encourage corporate
clients to book their facilities, looking for a one-off
bookings rather than an on going relationship.

Sales orientation usually emerged from commissionbased reward and remuneration packages for sales
people
The Marketing Concept

Holds that the key to achieving organisational goals consists
in determining the needs and wants of target markets and
delivering the desired satisfactions more effectively and
efficiently than competitors.

The motivation is to 'find wants and fill them' rather than
'create products and sell them'.

The assumption is that customers are not necessarily price
driven, but are looking for the total offering that best fits their
needs and therefore the organisation has to define those
needs and develop appropriate offerings.
Marketing Era

Period in which product and aggressive selling were no
longer seen to suffice, if customers either did not desire a
product or preferred a rival brand, and in which customer
needs were identified and satisfied

Managers learn about their clients’ preferences and cater to
their needs and requirements

This is not just about the core product itself, but also about
pricing, access to information, availability and peripheral
benefits and services that add value to the product.
Societal Marketing Concept.

Also referred to as Ethical and Sustainable marketing.

Holds that the organisations 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.

It involves serving the needs of the buyer with due
respect for the welfare of society and the environment
Societal Marketing Concept Era.

Integrated ethical marketing

Defining needs and designing and producing products
to minimise harm or damage

Profit through customer satisfaction and loyalty and
through societal acceptance
Relationship Marketing Era

Current period in which the focus is not
on a single transaction but on
developing ongoing relationships with
customers.

New technologies assist this type of
marketing by allowing better targeting
and faster processing of information
Relationship Marketing Era

Companies use new technology to develop business with
clients’

Websites and virtual business environments are established to
promote facility

Emails and newsletters are sent to customers to thank them for
their business and update them with news about products and
services

The business adopts a holistic approach to cater for the
individual needs of their customers
Implementing The Marketing Concept

It needs to be adopted by top management of the
organisation

High level executives must incorporate the marketing
concept into their philosophies

It should become the basis for all goals and decisions
within the organisation
Implementing The Marketing Concept

Establishment of information system to discover
customer needs.

Organisational restructuring and coordination of
activities across entire organisation.

Active management support, explaining reasons for
any changes
FUNCTIONS OF MARKETING
MARKET AND PRODUCT
RESEARCH
Marketing Research &
new Product Research
PRODUCT AND SALES
MONITORING & ANALYSIS
Regular Product
and Market Review
Product
Life Cycle
Statistical
Analysis
PRODUCT LAUNCH
AND SALES
Test
Marketing
Decision to
Proceed
Pricing Policy
Promotional
Policy
Merchandising
After Sales
Service
Selling
Distribution
Ice – breaker Activity

In February 2012 the Pepsi Next product was
launched into the US market.

The new product is described as a mid-calorie cola
beverage, having a mix of sugar and artificial
sweeteners, designed to deliver a full cola taste with
reduced calories. While filling the market gap between
full sugar and diet soft drinks, PepsiCo has indicated
that its prime target market is lapsed cola drinkers
(giving them a reason to return to the product category
Ice – breaker Activity 1

1.
2.
Question for you
PepsiCo has been quite persistent with pursing midcalories beverage products – why do you think this is
the case? Do you agree with their decision to
introduce Pepsi Next? Why/why not?
How is the performance and market acceptance of
Pepsi Next likely to impact the overall brand equity of
Pepsi? Should PepsiCo have launched this product
under a new brand instead?