Chapter 1 - Introduction to Marketing PDF

: This unit is designed to introduce students to the principles of marketing, enabling them to develop a basic marketing plan and to employ elements of the Synopsis marketing mix to achieve results. While they will learn the underpinning theories and framework...

: This unit is designed to introduce students to the principles of marketing, enabling them to develop a basic marketing plan and to employ elements of the Synopsis marketing mix to achieve results. While they will learn the underpinning theories and frameworks, they will also be able to relate these to real‐world examples, including products/services that they encounter in their own daily lives CLO1 -Explain the role of marketing and how it interrelates with other functional units of an organisation. (C2, PLO1) CLO2 -Compare ways in which organisations use elements of the marketing mix (7Ps) to achieve overall business objectives.(C2, PLO2) CLO3 -Prepare and evaluate a basic marketing plan. (C3, PLO3) Topic 1: Introduction to Marketing 1.1 Understand the marketing concepts and role of marketing in organizations. 1.2 Explain the marketing mix of 7P’s (Product, After reading this chapter, you should be able to : Price, Place, Promotion, Process, Physical Evidence, and People). 1. Describe the basic marketing terms and concepts 1.3 Explain the values based marketing. 2. Describe the relationship between marketing 1.4 Understanding the importance of marketing and society. within and outside the firm.  Definition of Marketing Chartered Institute of Marketing (CIM) Marketing as the management process responsible for identifying, anticipating & satisfying customer requirement profitably. American Marketing Association (AMA)  Marketing as activity, set of institutions & process for creating communication, delivering & exchanging offerings that have value for customers, clients, partners & society at large. Kotler & Armstrong  Marketing as the process by which companies create value for customers & build strong customer relationship in order to capture value from customers in return. Learning objective 1  Needs, Wants & Demand Product Basic Concepts of marketing Exchange, Transaction & Relationship Value & Satisfaction Market  a) Needs, Wants & Demand 1. Needs -Is a state of lacking something necessary in a person. –Can be in the form of: Physiological needs Safety needs from external threats Self-esteem needs for opportunities & achievements Self – actualization needs for development of one’s own self –Maslow Hierarchy Needs 4 Learning objective 2  a) Needs, Wants & Demand 2. Wants 3. Demand (DD) Wants are people’s needs that are moulded DD created when buying power backs a person’s by culture & individual personality. want. Example: For example: a hungry person in UK may want Many young adults would love to own a car but it to a plate of fish & chips & a glass of apple juice remains a want if the person could not afford to have for lunch, but hungry person in Malaysia may feel satisfied if they can have a plate of one. Only those who have the money to purchase the chicken rice & a glass of ‘teh tarik’. product would considered as part of the demand. b) Product A need – satisfying offering of a firm to the market for attention, acquisition, use or consumption. physical form or non – physical form. The marketers should focus more at the benefits of the product offering to the consumer rather than just the product itself. c) Value & Satisfaction Value – Value is the difference between the benefits a person gained from a product & the costs incurred in obtaining the product. – Example: – In order to go to work, you may have several modes of transportation like travelling by cars, motorcycle, bus or LRT. – Besides just reaching your workplace, you may have others needs like getting to your office on time, economically, safely & comfortably that you need to weigh against the costs that you have incurred.  c) Value & Satisfaction Satisfaction – difference between a product’s perceived performance in delivering value relative to a buyer’s expectation before a product is purchased. i. If perceived performance < buyer expectations  dissatisfied buyer ii. If perceived performance = buyer expectations satisfied buyer iii. If perceived performance > buyer expectations  delighted buyer – A satisfied customer tends to buy more of one’s product, remains loyal for a long time & pay little interest to competitive brands. d) Exchange, Transaction & Relationship 1. Exchange – The act of returning something of value to someone who has given a desired object. – Example of exchange process: Flour Retailer Consumer Money For an exchange to occur, 5 condition must be satisfied: 1. There is a minimum of two parties. 2. Each party have something valuable to offer to the other. 3. Each party must be able to communicate & deliver the needed goods or services to the other party. 4. Each party must have the freedom to accept or reject the other’s offer. 5. Each party is interested to deal with the other party. 2. Transaction -Whenever an agreement is reached during an exchange, a transaction occurs. –A transaction is the basic unit of measurement for an exchange. In a transaction, when person A gives X to person B, person A should get Y in return. –Example : For one kilogram of flour, a buyer is willing to give away RM 1.00. A transaction may involve money (monetary transaction) or goods (barter transaction). 3. Relationship Usually transaction is a one-time exchange between two parties, but if the parties are involved in repeated transactions, relationship may be built up as a result of frequent transactions. Relationship marketing builds on the idea of long term relationships between marketers & its customers, suppliers & distributors based on mutual benefits. Through relationship building, marketers would gain from :- Increase in customer loyalty: Loyal; continuously purchasing the product communicate good things about the product to others. Increase in customer lifetime value: not satisfied & the customer switches to a competitor’s products, Increase in share of customer delighted with a product, easier to convince the customer e) Market Market is a set of actual & possible buyers of a product. It can be built around a product, service or anything with value. Example : An economy will have a labour market, which consists of people willing to offer their labour in exchange for salary. A market includes the following customers: Customers Explaination Consumer market  Customers who buy products for their own consumption. They are the end users of the product.  Business market Customers who buy products for further processing,  reselling, renting & not for their own personal consumption. Government Government bodies & related agencies who buy products market  in order to provide services to the public. Reseller market  Customers who buy goods to resell the goods to get profits. International Customers in other countries including consumers, market producers, resellers & governments.  Creating Utility marketing activities play major role in creating utility, which refers to the sum of the benefits we receive when we use a good or service. Consists of several kinds of utility to provide value to consumers: Utility Explaination Form The benefit marketing provides by transforming raw materials into finished products. Place The benefits marketing provides by making products available where customers want them. Time The benefit marketing provides by storing products until they are needed. Possession The benefits marketing provides by allowing the consumer to own, use & enjoy the product.  Production Concept Holds that people will buy a product that was well made & reasonably priced. As a result, the focus of a firm is on its internal capabilities rather than the customers’ needs. Producers concentrate on producing & distributing more efficiently, i.e. at a lower cost by mass- producing products. The product concepts holds that consumers will buy products that offer the most quality performance & features. The underlying assumption is that ‘good products sell themselves Selling Concept & Marketing Concept Societal Marketing Concept  What can be marketed? Any goods, service or idea that can be marketed is called a product. Its consists of : 1. Consumer goods and services. 2. Business-to-business goods and services. E-commerce is the buying & selling of products on the internet. 3. Not-for-profit marketing 4. Idea, place & people marketing Marketing’s Tools : Marketing Mix (7P’s) https://in.pinterest.com/pin/marketing  Contribution of Marketing to Individuals & Society a)Maximizing consumption. c)Maximizing choice. Marketers seek to stimulate When a marketing system maximum satisfaction as the more maximizes the product variety, it customer spend, buy & consume, will also maximize consumer the happier the customer & the satisfaction. marketers are. But, maximizing the choices Maximizing consumption also comes with higher production & means that production, inventory cost. employment & wealth are maximized. d)Maximizing quality of life. b)Maximizing customer A marketing system could satisfaction. improve life quality not only by increasing quality, The goal of marketing is to fulfill the needs & wants of a customer. quantity & availability of product but also by increasing the quality of physical & cultural environment.  Importance of marketing within and outside the firm. Internally, marketing helps to create a strong brand identity and communicate the value of the business to its employees. It also helps to align the organization's goals and objectives with its marketing strategies, ensuring that everyone is working towards the same goal. Externally, marketing is essential for attracting and retaining customers. It helps to build brand awareness, establish credibility, and differentiate the business from its competitors. Effective marketing can also help to increase sales, boost customer loyalty, and drive business growth. Moreover, marketing plays a critical role in shaping the overall reputation of a business. By building a positive image and reputation through marketing efforts, a business can enhance its credibility and trustworthiness in the eyes of its customers, partners, and stakeholders. This can lead to increased brand loyalty, customer advocacy, and a stronger market position. References 1. Kotler, P., Armstrong, G. (2020). Principles of Marketing, Global Edition. United Kingdom: Pearson Education. 2. Marc Oliver Opresnik and Svend Hollensen (2018) Marketing: Principles and Practice: A management-oriented approach.Independently published  KEY TERMS Marketing Production concept Needs Selling concept Wants Customer satisfaction Demands Exchange Market offerings Market Marketing Mix DISCUSSION QUESTIONS 1. Define marketing and outline the basic concepts in the marketing process. 2. Compare and contrast needs, wants, and demands. 3. Discuss on marketing mix.  MODEL ANSWER FOR DISCUSSION QUESTIONS 1. Define marketing and outline the basic concepts in the marketing process. According to Kotler & Armstrong, Marketing is the process by which companies create value for customers & build strong customer relationship in order to capture value from customers in return. Basic concepts in marketing process:- a) Needs, Wants & Demand b)Product c)Value & Satisfaction d)Exchange, Transaction & Relationship e)Market 2. Compare and contrast needs, wants, and 3.Discuss on marketing mix. demands.