Marketing Fundamentals

• Introduction to marketing

Marketing Fundamentals

• 16.261 is marketing fundamentals
• 16.367 is marketing management
• 16.368 is marketing research
• 16.365 is consumer behaviors
• 16.372 is digital marketing
• 16.374 is B2B marketing
• 16.433 is marketing Analytics (2025/26)
• 16.302 is service marketing (2026/27)

What is Marketing?

• Marketing is advertising and sales
• Marketers make people buy stuff they do not need and cannot afford
• Advertisers should spend the same amount of money improving their product, instead of advertising

Production vs. Marketing

• Marketing ensures the right goods and services are produced
• Production involves making goods and performing services
• Creates customer satisfaction

Marketing - Bike Example

• Things a firm should do in producing and selling a bike: Analyze needs, predict wants, estimate demand, determine where, estimate price, decide on promotion, estimate competition, and provide service.

Defining Marketing

• Marketing is the systematic planning, implementation, and control of a mix of business activities.
• It intends to bring together buyers and sellers for mutually advantageous exchange or transfer of products.

Marketing as Exchange

• Marketing facilitates an exchange between a firm and its customers.
• Customers seek benefits from the company and expect to pay for them.
• The company offers benefits to its customers and seeks profits.
• Old marketing view: making a sale, "telling and selling".
• New marketing view: satisfying customer needs.

Core Marketing Concepts

• Core marketing concepts include: needs, wants, and demands; marketing offers; value, satisfaction, and quality; markets; and exchange, transactions, and relationships.

Fulfilling Needs and Wants

• Marketers create marketing offers in response to consumer needs and wants.
• A marketing offer is a combination of goods, services, information, or experiences offered to a market to satisfy a need or want.
• Marketing needs to consider the legal, ethical, and moral implications of satisfying wants and needs.

Ethical Norms for Marketers

• Do no harm.
• Foster trust in the marketing system.
• Embrace ethical values.

Ethical Values in Marketing

• Honesty: be forthright in dealings with customers and stakeholders.
• Responsibility: accept the consequences of marketing decisions and strategies.
• Fairness: balance justly the needs of the buyer with the interests of the seller.
• Respect: acknowledge the basic human dignity of all stakeholders.
• Transparency: create a spirit of openness in marketing operations.
• Citizenship: fulfill the economic, legal, philanthropic, and societal responsibilities that serve stakeholders.

Marketing Facilitates Production and Consumption

• Marketing needed to overcome discrepancies and separations: discrepancies of quantity, discrepancies of assortment, spatial separation, separation in time, separation of information, separation in values, and separation of ownership.

Separation Between Producers and Consumers

• Economies of Scale - Lower Unit Cost, Marketing bridges the Gap

Can Marketers Create Needs? - Rollerblade Example

• Rollerblade Inc. invented the sport in 1980, developing it into a nearly US$1 billion international industry, with more than 30 million participants worldwide.
• Rollerblade Inc. successfully turned an off-season hockey training tool into an internationally recognized, legitimate sport for all ages.
• Though has over 25 significant competitors, Rollerblade has remained the overwhelming market leader.
• A Rollerblade Ad to Show In-Line Skating - giving both exercise and fun from the early 1990's
• Active Brake Technology lets you stop with all eight wheels on the ground for increased control and stability. "Exercise Your Soul". Rollerblade Ad From the late 1990s

What can we market?

• The "What Can We Market?" section shows various brands and products, including Vancouver 2010, google

Exercise on Customer Value

• Customer value in marketing is based on benefits
• Customer value is the difference between (a) the benefits a consumer perceives in a market offering and (b) the cost of obtaining those benefits

Value and Satisfaction:

• The core marketplace concepts covered a model where expectations are compared with performance
• High satisfaction results when performance is higher than expectations
• Low satisfaction results when performance is lower than expectations

Building Customer Relationships

• It is about building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.
• Frequency marketing programs, i.e. get a free coffee after purchasing 10
• Club marketing programs
• Frequent flyer programs

Loyalty and Brand Equity

• Customer lifetime value is the value of the entire stream of purchases a customer would make over a lifetime of patronage.
• CLV = Average Purchase Value * Purchase Frequency * Customer Lifespan
• Brand equity is the perceived strength of the brand in the market
• High CLV contributes to strong brand equity, because loyal customers are likely to have a positive view of the brand and continue purchasing

Core Marketplace Concepts

• Overview of the Core Marketplace
• Needs, wants, and demand: how markets can determine demand
• Marketing offers are also discussed in this model

Segmentation and Targeting

• Segmentation divides the market into groups of customers with varying needs and wants.
• Targeting involves selecting the right segment to nurture.

Marketing Management - Art and Science

• The art and science of choosing target markets to grow relationships that are profitable

The Role of Marketing Over Time

• Simple Trade Era = Sell Surplus
• Production Era = Increase Supply
• Product Era = Improve the product
• Sales Era = Beat Competition
• Marketing Department Era = Coordinate & Control
• Marketing Company Era = Long-Run Customer Satisfaction

Production Concept

• Consumers favor products that are available and highly affordable.
• Mass produce at lowest cost, few or no options for consumer

Product concept

• Consumers favor products that offer the most in quality, performance, and innovative features.

Key Marketing Questions

• What triggers the decision to buy a mousetrap?
• How is the mousetrap used (e.g. different segments/usages)?
• What features do users want in a mousetrap?

Marketing Lessons

• A "better" product is in the eye of the customer, not the seller.
• Key features or “points of difference" in the product provide customer value to users.
• Different market segments of buyers exist with different needs, but sometimes it is not possible to reach small market segments profitably.

Marketing/Marketing Company Concept

• Marketing/Marketing Company Concept = more efficient than competitors.
• Customer driven.
• Marketing department takes control, helping guide a company's direction. All employees are also involved in marketing, making it important for the success of the company

Concept vs Practice In Marketing

• Sales concept in practice - there are customers who do not buy goods or services
• Sales focuses on selling while marketing company concept wants satisfaction.

Social Marketing Concept

• In practice, this concept balances company profits, social welfare, and consumer wants to serve longrun human welfare.

Marketing Overall

• Marketing has impacts such as
• Important to every consumer!
• Important to your job!
• Affects innovation and standard of living

Summary for Marketing

• Define marketing.
• Discuss a simple model of the marketing process and its core concepts.
• Explain the importance of understanding customers
• Identify key elements of a customer-driven strategy.
• Discuss marketing management and compare different marketing management orientations.