Marketing: Definitions and Core Concepts

• Business firms and non-profit organizations partake in marketing, which includes goods, services, ideas, people, and places.
• Marketing activities target markets consisting of product purchasers and individuals/groups influencing organizational success.
• The foundation of marketing is exchange, where value is traded between parties.
• Broadly, marketing involves facilitating exchanges to satisfy human needs.

Meaning and Definitions

• Marketing is when a social unit exchanges value with another.
• Marketing involves activities that generate and facilitate exchanges to satisfy human needs or wants.
• Marketing is defined as a social and managerial process where individuals or groups obtain their needs/wants by creating, offering, and exchanging products of value (Philip Kotler).
• Marketing is the business activity designed to plan, price, promote, and distribute products to a target market, achieving organizational goals (William J. Stanton).
• Marketing involves creating and delivering a standard of living to society (Paul Mazor).
• Marketing management the planning and execution of conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges satisfying individual or group objectives (American Marketing Association).
• Core marketing concepts include needs, wants, and demands; products (goods, services, ideas); value, cost, satisfaction; exchange and transaction; relationships and networks; markets; marketers and prospects.

Nature of Marketing

• Marketing includes business activities involved in getting goods and services from producers to final consumers.
• Marketing is a legal process by which ownership transfers from seller to purchaser, or from producer to end user.
• Marketing is a system of interacting business activities that aims to satisfy customers, earn profit, and manage relationships.
• Managing the individual organization processes marketing and developing its strategic dimensions is a managerial function.
• Marketing is the delivery of a standard of living to society.
• Knowing/understanding consumer needs/wants, managing product/service supply/demand efficiently, and providing distribution/payment systems effectively are essential functions in societal marketing
• Consumer orientation and satisfaction define marketing which has dual profit and consumer satisfaction objectives.

Scope of Marketing

• A marketer should understand how it works, what is marketed, and who does the marketing.
• Marketing involves identifying consumer needs/wants, which motivate purchasing.
• Studying consumer behavior aids in market segmentation and targeting
• Product planning starts with idea generation and ends with commercialization
• Product planning includes branding and packaging.
• Marketers determine pricing policies depending on competition, product life cycle, and goals/objectives.
• A distribution channel to is important for maximizing sales/profit by delivering goods to the most consumers at minimum cost.
• Promotion includes personal selling, sales promotion, and advertising, and the right promotion mix is crucial.
• Consumer satisfaction is the major objective and is required of products or services offered.
• Marketing audit to is done to control marketing activities.

Core Concepts of Marketing: Needs, Wants, and Demand

• Marketing begins with understanding needs and wants which arise from physical or psychological imbalances.
• A human need is a state of deprivation of basic satisfaction, such as food, clothing, shelter, safety, belonging, and esteem.
• Biogenic needs arise from physiological tension, while psychogenic needs arise from psychological tension like recognition or belonging.
• Abraham Maslow suggested human needs form a hierarchy where secondary needs are pursued after basic needs are met.
• Physiological needs arise from physical imbalances like needing food, water, and shelter.
• After primary needs are satisfied, individuals seek to fulfill secondary needs arising from psychological imbalances.
• Needs include Safety and security (workplace security and protection), Comfort and peace (threat-free orderly surroundings and Assuming long term economic well being.)
• Social Needs (acceptance, belonging, love, affection, and group participation).
• Esteem or ego needs are recognition, prestige, confidence, leadership, competence, success, strength, and intelligence.
• Self-actualization needs include fulfilling potential, doing things for accomplishment, intellectual curiosity, creative appreciation, and accepting reality.
• Marketer's duty is to identify unfilled needs and tailor activities to fulfill them.
• Wants are desires for specific satisfiers of needs, shaped by social forces and institutions.
• Demands are wants for specific products, backed by the ability and willingness to buy.

What is Marketed?

• Marketing involves 10 types of entities: goods, services, events, experiences, persons, places, properties, organizations, information, and ideas.
• Goods: Physical goods constitute bulk of most countries' production and marketing .
• Services: A growing proportion of activities focus on service production.
• Events: Marketers promote time-based events like trade shows, performances, and anniversaries.
• Experiences: Firms orchestrate services/goods to create and market experiences.
• Persons: Celebrity marketing is a major business.
• Places: Cities, states, regions, and nations compete to attract tourists, factories, and residents.
• Properties: These intangible ownership rights need marketing for exchanges.
• Organizations: Actively build a strong, favorable image.
• Information: Marketers produce, market, and distribute books, information, and schooling.
• Ideas: Market offerings include basic ideas delivered via platforms.

Products (Goods, Services, Ideas)

• People satisfy needs/wants with products and product is defined as anything offered to do so.
• Products are classified based on tangibility and durability.
• Tangible products (goods) can be seen, touched, and felt etc., where Intangible products (services) cannot.
• Durable products last longer and need longer purchase decisions. They are compared on suitability, durability, after-sales service, cost, and features.
• Non-durable products are consumed daily and require quick purchase decisions.
• Products are also classified as consumer or industrial goods being used for consumption or used to produce other goods.
• A product can consist of goods, services, and ideas.

Value, Cost, and Satisfaction

• Consumers choose among products based on value and satisfaction.
• Value is the consumer's overall estimate of the product's capacity to satisfy needs.
• Cost describes the amount of money that are going to be expended or already incurred to acquire a product.
• Satisfaction occurs with performance exceeding expectation
• Role of marketer is to offer affordable products meeting requirements and exceeding expectations, enhancing performance.

Exchange and Transactions

• People obtain product in self produce, coercion, begging, or exchange.
• Marketing emerged when people decided to satisfy needs and wants through exchange.
• Exchangeis obtaining a desired product by offering something in return.
• Transaction includes the trade of values between parties which may not even require money (barter)
• A transaction involves at least 2 things of value, as well as agreed conditions, time, and place.

Relationship and Networks

• Relationship marketing involves building long-term relations with key parties to retain long-term preferences and business.
• Smart marketers build trusting, win-win relationships with customers, distributors, dealers, and suppliers promising high quality, good service, and fair prices.
• Relationship marketing creates strong economic, technical, and social ties.
• The ultimate result of this type of marketing is establishing a marketing network

Market

• Concept of exchange leads to the concept of a market and the concept of a market is all the potential customers sharing a need or want who might be willing/able to engage in exchange to satisfy it.
• The market size depends on number of willing/able people, the place where they are willing to exchange their resources in goods for exchange for what they want.
• Seller sends goods/services and communications; in return, they receive money and information.
• All modern economies abound in markets.
• Consumer markets focus on marketing to people and consumers
• Business markets focus on marketing to well-trained professionals

Marketers and Prospect

• Marketing means working units markets to actualize potential exchange for the purpose of satisfying human needs and wants.
• The first party is a marketer and the second party is a prospect, when one party is searching for an exchange than the other.
• A prospect is someone who is willingly and able to engage in an exchange of value, and a marketer is someone who is seeking one or more prospects
• The customer is trying to market himself to the seller

Importance of Marketing

• About 50 cents of each dollar consumers spend covers marketing costs.
• Activities add want-satisfying ability (utility) to products: form, place, time, information, and possession.
• The purchase is a result of utility
• Form utility relates to the physical or chemical changes that make a product more valuable.
• Place utility is when it is accessible to potential customers.
• Time utility means availability when wanted.
• Information utility arises from informing prospective buyers.
• Possession utility happens when ownership transfers to the buyer.

Marketing Philosophies

• Efficient, effective, and socially responsible marketing requires a well-thought-out philosophy and there are five competing concepts:
  • Production
  • Product
  • Selling/sales
  • Marketing
  • Societal marketing

The Production Concept

• Consumers favor widely available, low-cost products, so managers focus on efficient production and distribution.

The Product Concept

• Consumers favor products with the most quality, performance, or innovative features.

The Selling Concept/Sales Concept

• Consumers won't buy enough without aggressive selling and promotion effort.

The Marketing Concept

• Achieving organizational goals depends on being more effective than competitors in integrating marketing activities towards satisfying target markets' needs and wants.
• Profitability, is achieved through a well-defined market that focuses on customer's needs, integrates all activities that affects it, and produces profit by satisfying consumers
• Integrated marketing to serve the consumer's interest, resulting in management, advertising, and product functions working in harmony for maximum effectiveness
• Customer needs in the market is tested by 5 areas of need
  • Stated (an inexpensive car)
  • Real Needs (low operating costs)
  • Unstated (expects service from dealer)
  • Delight Needs (receives a complimentary)
  • Secret Needs (be seen as a value-oriented consumer)

The Societal Marketing Concept

• The organization should determine target markets' needs, wants, and interests, delivering desired satisfactions better than competitors in a way that maintains or improves consumers/society's well-being.

Contrasted Selling and Marketing Concept

• Selling is existing products from a factory where profits are made through sales volume
• Marketing is a market of customer needs that integrates marketing and profits through customer satisfaction