Introduction to Marketing

Definition of Marketing

• It involves creating, distributing, promoting, and pricing goods, services, and ideas.
• The goal is to facilitate satisfying exchange relationships with customers in a dynamic environment.
• Marketing serves as communication between a business and its customers, with the purpose of selling products or services.
• Communicating the value of a product or service is a key marketing concept.

Marketing Concept

• It is a business philosophy where firms analyze customer needs to make decisions that satisfy those needs better than competitors.
• Most firms today have adopted some form of the marketing concept.
• In 1776, Adam Smith stated that producer needs should only be considered in relation to meeting consumer needs.
• The production concept involves whether businesses can produce the product and enough of it.
• The sales concept involves if the business can sell the product while charging enough for it.

Nature and Scope of Marketing

• Marketing is an economic function.
• It functions as a system of interacting business activities.
• It is a managerial function that organizes and directs business activities in order to move goods from producers to consumers.
• Marketing identifies customer needs through market research.
• It is a business philosophy centered on customer orientation and satisfaction.
• Marketing has dual objectives including profit-making and ensuring customer satisfaction.

Importance of Marketing

• It aids in the transfer, exchange, and movement of goods through intermediaries like wholesalers and retailers, benefiting both producers and consumers.
• It raises and maintains the standard of living by making goods and services widely available, due to large-scale production and lower prices made possible by marketing techniques.
• It creates employment through various marketing functions, such as buying, selling, financing, transport, warehousing, risk bearing, and standardization.
• It provides income and revenue by creating time, place and possession utilities, leading to reinvestment and future profits.
• It acts as a basis for making decisions by helping businesses understand what, how, when, how much, and for whom to produce.
• It acts as a source of new ideas, adapting to changing consumer tastes and preferences to produce goods that meet current demands.
• Adam Smith remarked that it is key to development of an economy because it is the "kingpin" that sets the economy revolving.

Essential Features of Marketing

• Need and Want, addresses fulfilling consumer desires, where needs are basic requirements and wants are specific satisfiers.
• Creating a marketing offer involves providing complete product and service information, including name, type, price, size, and availability.
• Customer Value is the analysis a buyer makes the satisfaction a product provides relative to its cost, influencing their purchase decision.
• Exchange Mechanism is fundamental, with two sides: buyer and seller, facilitating transactions of goods/services for money or equivalents.

Core and Marketing Objectives

• Corporate objectives are core goals affecting the entire organization, encompassing missions, visions, and overall aims.
• Marketing objectives are the sub-parts of the corporate objectives.
• As a practical instance, if a company aims to produce vegan food products and capture 30% of the Bhutanese food market, marketing objectives could include raising awareness via campaigns, enhanced branding, developing marketing strategies as well as research to know the demand.

Objectives of Marketing

• Some major objectives of marketing include creation of demand, customer satisfaction, market share, generation of profits, and creation of goodwill and public image.
• The basic purpose is to achieve the objectives of the business.
• The goal of a business is to gain reasonable profits by satisfying the needs of customers.
• The goal is to create demand by discovering consumers' preferences and informing them of the utility of goods and services.
• Customer satisfaction requires studying customer demands prior to offering anything.
• Modern marketing is customer-oriented as it should begin and end with them.

Market Share

• Every business seeks to increase its market share.
• This is the ratio of its sales to the total sales in the economy.
• Pepsi and Coke compete with each other, using innovative advertising, packaging, and sales promotions to grow their market presence.

Profit

• Marketing is the sole department that raises all revenue for the business.
• Sufficient profits must be earned as a result of sale of want-satisfying products.
• Companies must earn profits to survive, grow, and diversify.

Goodwill and Public Image

• Building a positive public image is a key marketing objective.
• This can be done by offering quality products at reasonable prices.
• Creating a positive impact includes initiatives like promotions, publicity, advertisements, high quality, reasonable prices, and convenient distribution outlets.

Needs

• Needs include states of deprivation; physical needs for food, clothing, shelter, safety, and water; social needs for belonging and affection; and individual needs for knowledge and self-expression.

Wants

• Wants are products desired by a customer but not required for survival, serving as the complete opposite of needs.

Demands

• Demands includes when a customer shows the ability and willingness to buy a need or a want, showing a demand.

Marketing Environment

• Includes internal factors, such as employees, customers, shareholders, retailers, and distributors.
• Includes external factors such as political, legal, social, technological, and economic aspects that affect a business.
• Some factors can be controlled, while others require business operations to adapt.
• In order to mitigate negative impacts from environmental factors, companies must understand their marketing environment.

Internal Marketing Environment

• Affects the overall business operations and includes labor, inventory, company policy, logistics, budget and capital assets.
• These factors influence marketing decisions and customer relationship
• Internal factors and can be controlled by the firm.

Micro Environment

• It has a close relationship with all business operations and their influence.
• The elements include customers, employees, suppliers, retailers, distributors, shareholders, competitors, government, and the general public.
• To some extent the business operation can control them.

Customers

• It is oriented around fulfilling customers needs and wants.
• Every business revolves around offering the best product that fulfills their customer’s needs.

Employees

• They are a main component of a business who contributes to its success.
• To ensure quality, training and motivation sessions are essential.

Suppliers

• They are the source of materials for finished goods.
• To effectively manage the process of turning raw materials through finished product, identifying and choosing the best suppliers is crucial.

Retailers & Distributors

• The channel partners have an imperative role.
• They can offer the company advice that gives insight on customer desires about a product and its services because they are in direct contact with the customer.

Competitors

• Constant observation of competitors is essential.
• Observing them will allow a company to strategically adjust marketing according to trends.

Shareholders

• Marketing activities should be strategic.
• The strategy should generate optimum returns to shareholders, since they are the owners of the company, and ensure a return on their investments.

The Government

• Policies such as pricing, credit, education and housing can influence marketing strategies.
• A company has to accommodate for marketing strategies by keeping track of these policies.

The General Public

• A business should be responsible for all its marketing and activities towards society.
• The marketing activities should be designed to increase the welfare of society.

Macro-Environment

• Includes factors that are outside the organization's control, such as social, economic, technological forces, political and legal influences.
• These elements are described as the PESTLE framework.

Component: Political & Legal Factors

• Changes in political parties can change the market in ways that include trade, taxes, and duties, codes and practices, market regulations, etc.
• A firm must be compliant in all these changes or business operations maybe penalized.

Component: Economic Factors

• Economic phases are affected differently for every business.
• Recession-influenced marketing should differ from inflation-influenced marketing.

Component: Social Factors

• A responsible business should do no harm or harm to the sentiments of people.
• Companies should also invest back into communities through parks, construction, and educational program sponsoring.

Component: Technological Factors

• Companies should provide customers with new products.
• Meeting customer needs requires the firm to be up to date on technological advancements.

The Marketing Process

• It is defined by the American Marketing Association as the activity, set of institutions, and processes of creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.
• The four core activities/components in this process are creating, communicating, delivering, and exchanging.
• The process is about collaborating with suppliers and customers to create offerings that have value.
• It is about Broadly describing offerings, as well as learning from customers. .
• It is about getting offerings to customers in a way that optimizes value.
• It is also about trading value for those offering.

Introduction of Marketing Mix

• It is often referred to as the "Four P's".
• It covers the most important elements of marketing.
• Product is what the customer obtains from purchase, while price is what the cost the customer pays for the product.
• Place is how the product is distributed to customers.
• Promotion is how the customer is found and persuaded to buy the product.

Marketing Ethics

• It is about the line between appropriate and inappropriate actions.
• It is the standard by which marketing actions will b judged as right or wrong.
• Customers develop more positive outlooks on practices.
• The organization should treat its products well.

Principles of Ethical Marketing

• Fairness is establishing fairness as a decision-making principle means companies commit to fair prices, better wages, and sustainable development.
• Honesty ensures that companies provide factual and unexaggerated information.
• Honesty also includes not misleading when they advertise functionality and the result of their product and services.
• Businesses should emphasize their responsibility in several ways, including their obligation to provide a reliable product or service, support social causes, give back to communities, treat their employees with respect, or protect the environment through sustainable practices. Transparency means being open to the public about your company's operations, particularly the ethical way you treat employees and the sustainability and environmental impact of your products or services.

Ethics in Marketing

• Behaving ethically shows customers positive aspects.
• Ethics is needed to create values or trust with key stakeholders.
• When building an image is about creating the minds of customers, employees, shareholders and the society this is referred to as good faith.