What is
Marketing?
Chapter 1
Definition of
Marketing

Sum of all activities involved
in the planning, pricing,
promoting, distributing, and
selling of goods and services
to satisfy consumers’ needs
and wants
Marketing Goods and
Services
GOODS
SERVICES
(1) Industrial
Goods:
-Raw
materials
-Processed
goods
-Finished
goods
(2) Consumer
Goods:
-intended
for personal
use by
general
public
•Services can
be marketed to
both industrial
and consumers
markets
What is the Marketing
Concept?

The marketing concept is
the idea that a business or
organization must consider
both its potential customers
and its competitors in every
important business decision.
Three Steps of the
Marketing Concept
The marketing concept requires a
business to take three major
steps:
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
products or service
successfully.
Supply and Demand
Marketing is not as important
when the supply of a product
is low because…
 Low supply means higher
demand, therefore the
product sells itself and
marketing is not necessary.

Supply and Demand
“let the buyer beware”)
(caveat emptor =
The Industrial
Revolution
Before
Concentrated on
distribution and
sales, rather than
advertising,
packaging etc.
After
Steam, electricity, gas
and oil provided
power to factories,
railroads and homes
Demand for
Factories produced
products was
huge quantities of
greater than supply inexpensive goods
Farmers and
craftspeople
worked with their
hands and
produced limited
output
Railroads moved the
goods across the
country
The Industrial
Revolution
After the two World Wars
(1945), most businesses
marketing philosophy was
“whatever we make, you’ll
buy”
 Growth from department
stores (Simpson’s, Eaton’s,
Hudson Bay company)
 Supermarket (Loblaws,
Dominion, Sobeys)
 Mass Media (magazines,
radio, billboards, television)

The Marketing
Concept Today

In the late 1900’s, production in North
America exceeded demand and
customers stopped buying whatever
the manufacturer made and became
more selective.

Marketers alter their products, their
distribution, their production facilities
and marketing mix to meet the needs
of the customer.
Domestic & Global
Marketing
Free trade and the World
Trade Organization have
helped to reduce import
taxes (called tariffs);
 Most marketing can no
longer be domestic;
 Canadian companies sell
aboard or buy from other
nations.

Marketing and the
Organization
Companies organize their
marketing divisions by:
– Region
– Country
– Brand
– Method of Distribution
– Combination
Regional Organizations
Can be within a city, a region,
or a group of provinces
(Atlantic, Western).
 Strength is that it allows a
company to respond quickly
to regional differences;

International
Organizations
Sets up marketing and
distribution centers in foreign
markets;
 Foreign office analyzes
buying habits and customs of
local consumers and designs
marketing campaigns that
respond to those variables.

Brand Management

This organizational structure
assigns one or more of the
company’s major brands to a
marketing manager who then
develops a marketing plan
specifically for that brand.
– Kellogg’s (Corn Flakes,Rice
Krispies)
– Procter and Gamble (Cheer,Crest,
Pringles)
Distribution
Management

Organizes marketing activities
around the way that the product
or service will be delivered to the
customer.
– E.g. soft-drink companies divide
marketing into supermarket,
vending machines, and hotels, with
each creating separate marketing
plans.
Non-Profit
Organizations
A nonprofit organization is
one that does not seek profit
as its primary motive, but
instead raises funds for a
specific goal.
 E.g. Canadian Breast Cancer
Foundation

The Goal of a Not-forProfit Organization
Not-for-profit organizations
do not seek profit. They
operate for the good of the
community.
 The funds are used to
improve the services offered
to its members.

– Canadian Breast Cancer
Foundation exists to advance
cancer research, education
diagnosis and treatment.
Marketing Concept for
Nonprofit
Organizations

Marketing is important for the
existence of nonprofit
organizations.
 When economic times are tough,
the public is less likely to donate
funds to nonprofit organizations,
therefore they need effective
marketing to increase awareness
and support.
Consumer and Competitive
Markets

Markets are composed of two
parts:
1. Consumer market: refers to all
those consumers who are or may
become interested in a product or
service and have the means to
purchase it.
2. Competitive market: all products
or services that compete with one
another for the consumers’ money
within a specific category (Eg.
Cd’s, athletic shoes, hair salons)
Target Market

A target market is the group
of consumers that marketers
want to attract.
– Aggregate market: the target
market is everybody
– Differentiated markets:
markets are categorized in a
specific way, e.g. consumers’
income, geographical location,
age or gender.
The Marketing Mix

The marketing mix is
divided into four categories:
Marketing Strategies


A strategy is the method
selected to carry out a
carefully devised plan of
action in order to achieve a
specific goal
The strategies can be
categorized as
1. Brand strategies
2. Distribution strategies
1.Brand Strategies
This goal is to communicate
the value of a product or
service to the consumer
 Brand strategies develop and
communicate the benefits of
the brand, minimize costs,
and encourage the consumer
to set up a positive value
equation

Value Equation

Value equation adds together
all of the benefits of a
product, both real and
imagined, and subtracts the
costs involved in obtaining
the product.
Value Equation = Total BenefitsTotal Costs
– See example on page 26 in textbook
2. Distribution Strategies


Distribution Strategies focus on
best way to deliver the product
or service to target market
The 3 types of distribution
strategies are:
1. Push Strategy: sells product to
retailers, importers, or
wholesalers, and not to end-use
consumers
2. Pull Strategy: attempts to
communicate
to consumers directly rather
than relying on retailers
3. Combination: a use of both push
and pull strategies