Marketing Concepts and Definitions PDF

# Marketing For a layman, “market” is a place where buyers and sellers meet personally to finalize the deal after personal inspection of goods. However , for a student of marketing , it represents that place where buyers and sellers come in contact with one another due to which the prices of goods...

# Marketing For a layman, “market” is a place where buyers and sellers meet personally to finalize the deal after personal inspection of goods. However , for a student of marketing , it represents that place where buyers and sellers come in contact with one another due to which the prices of goods and services tend to be equalized easily and quickly. Thus , market does not mean a place of exchange. It is an arrangement that provides opportunity of exchanging goods and services for money or money's worth. A market is asset of actual and potential buyers who might transact with a seller. ## Types of Market There are different types of market as stated by Kotler, such as consumer, business, global and nonprofit. ### 1. Consumer Market - This refers to those who buy goods for their personal use or purpose, such as buying a personal computer to accomplish one's academic requirements. #### a. Consumer Durables These have low volume but high unit value. Consumer durables are often divided into: - **White Goods** (e.g., fridge-freezers; cookers; dishwashers; microwave) - **Brown Goods** - (e.g., DVD players, games consoles, personal computer) #### b. Soft Goods Soft goods are similar to consumer durables, except that they wear out more quickly and therefore, have a shorter replacement cycle. Examples include clothes and shoes. #### c. Services This refers to a transaction in which no physical goods are transferred from the seller to the buyer. The benefits of such a service are held to be demonstrated by the buyer's willingness to make the exchange. Using resources, skill, ingenuity, and experience, service providers benefit service consumers. Examples include hairdressing, dentists, and hospitality services. ### 2. Business Markets These institutions or people buy industrial goods either for the purpose of using in business operations. Also known as business-to-business marketing or B2B Marketing. ### 3. Global Markets - Markets which have historically been tried in international trade are most readily identified as being global. - A marketing strategy used mainly by multinational companies to sell goods or services internationally. - Global marketing is sometimes used to refer to overseas expansion efforts through licensing, franchises, and joint ventures. ### 4. Non-Profit and Government Markets A type of organization that does not earn profits for its owner. - All of the money earned by or donated to a not-for-profit organization is used in pursuing the organization's objectives. - A not-for-profit organization is an organization that exists to attain some goals apart from the usual goals of profit, market share and return of investment. - It operates in **both public and private sectors** like churches, public schools, public charities, hospitals etc. **Examples:** - **Tuloy Foundation Inc**. – helps in the upliftment of abandoned and street children - **ABS CBN Foundation Inc. Sagip Kapamilya** – Outreach program for children, their families, the environment and community. - **Jollibee Food Corporation Seeds Program** (Skills Enhancement and Education Development for Students – to support the working students to continue their studies while working at Jollibee - **KFC Addd Hope** – campaigns collects donations in store to fund meals for less fortunate children. ## Definition of Marketing - **CUSTOMER** - **ANALYSIS** - **ADVERTISING** - **MARKET** - **SALES** - **PROMOTION** - **PRICE** - **INTERNET** - **TARGET** - **MARKETING** Marketing is the organization's task to determine the needs, wants, and interest of target markets and to deliver the desired product/service more effectively and efficiently than competitors in a way that preserves or enhances the consumer's and the society's well-being. **According to Harry L. Hanson**, marketing is "the process of discovering and translating consumer needs and wants into product and service specification, creating demand. It is the performance of those business activities that direct flow of goods and services from the producers to the consumers." **According to Philip Kotler**, the Father of Modern Marketing, marketing is working with markets attempting to actualize potential exchanges, a human activity directed at satisfying needs and wants through the exchange processes. There are several basic components underlying marketing, namely: ### 1. Needs Things we must have in order to stay alive. ### 2. Wants Things we don't really need but would like to have. | Particulars | Needs | Wants | | ------------------------ | ---------- | ---------------------------------------- | | Hunger | Food | Chinese: noodles, siomai, tikoy, buchi | | Fashion Wear | Clothing | Uniqlo, Bench, Levi's | | Shelter | Housing | condominium, dorm, townhouse | | Recreation | Sports | basketball, volleyball | | Transportation | Vehicle | cars, vans, bus, jeepney | ### 3. Potential Exchange Where the buyers and sellers physically meet and exchange goods and services ### 4. Human Activity Concerned with people and the activities involved in the flow of goods and services from producers and consumers ### 5. Demands - **Demands** are human wants that are backed by buying power. - Consumers view products as bundles of benefits and choose products that give them the best bundle for their money. ## Different Aspects of Marketing ### Nature of Marketing 1. **Consumer-Oriented Process** - The basic objective of marketing is to fulfil the needs of human beings. Hence, identifying the customer needs is the most significant aspect of marketing organizations. 2. **Starts and Ends with the Customer** – Marketing is about satisfying the customer needs; it is very essential for the marketer to collect relevant information about customer choices and preferences about the product or services. Marketer should adopt proper research techniques to find out the tastes and interests of the buyers. 3. **Guiding Element of Business** – Marketing is considered as an essential element in the development of every economy. An economy which is market driven will definitely raise the standard living of the people. Hence, the responsibility of marketing is to integrate all activities involved in the marketing and reach customer at a maximum speed with minimum cost. 4. **System-Oriented Process** – Marketing is an input-output process. This means that there is a whole lot of interaction between the marketer and the customer in the process of marketing. It is a process of receiving inputs of marketing from the environment. i.e., the customers – such tastes, preferences, etc. and translating them into output such as desired products and services for the fulfilment of the customer needs. 5. **Goal-Oriented Process** – No business can be successful unless it has a goal to achieve. Since marketing is one of the most important activities that any organization performs, setting proper goals is very essential. There can be goals such as increase in the volume of sales increase in profit etc. 6. **Exchange Process** – Marketing is a dynamic process of exchange of goods and services between the sellers and the buyers. Not only goods and services are exchanged, but a whole lot of information about the goods and services is also exchanged between the sellers and buyers. ### Importance of Marketing 1. Marketing helps the organization to reach the objectives into realization in order for them to become more effective in marketing aspects that will guide them to survive in the stiff competition of business. 2. It helps people to satisfy their economic and social needs and to have opportunity to raise the standards of their living. It secures better services for their consumers and it helps and guides the company to fulfill and maximize its corporate and social responsibilities. 3. It helps in making and offering the products and services that are needed by the consumers and community. The right and proper production and consumption can help the organization to become more effective to have a competitive edge. ## Definition of Service “A service is any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product." - Philip Kotler "Services are those separately identifiable, essentially intangible activities which provide want satisfaction, and not necessarily tied to the sale of a product or another service. To provide a service may or may not require use of tangible goods. However, when such use is required, there is no transfer of title (permanent ownership) of these tangible goods." - William J. Stanton ### The Concept of Service Service is an act of courtesy not only providing what the customers want but giving them beyond their expectations. Although most of the time service providers are only limited with the provision of basic services and products, they must be mindful of what everything the customer needs. Service providers must be attentive to address everything that the customer needs including their less obvious needs such as showing empathy when talking and listening to them because if the service provider does not meet the customer's expectations and satisfaction level, they will look for other competitive products or services. #### 1. Friendliness It is the most basic of all customer needs. It is usually associated with being greeted politely and with courtesy. #### 2. Understanding and Empathy Empathy is one of the basic needs which customers are looking for. The service provider should put oneself in the customers' shoes and act to fulfil their need. #### 3. Fairness The need to be treated fairly is high up on most customer's list of needs. There should not be bias in the provision of service given to a customer. #### 4. Control Control represents the customers' need to feel as if they have an impact on the way things turn out. This brings confidence in the customer's mind. #### 5. Options and Alternatives Customers need to feel that other avenues to getting what they want are available. #### 6. Information Customers need to be educated and informed about the products, policies, and procedures they encounter when dealing with your company. ### Growth of Service Sector The following can be noted as some of the implications of such changes in the service operations: 1. Growing demand for many services; 2. Greater competition; 3. The service provider must identify the critical components of each of the encounter. ### The Six S's of Service Encounter The hospitality provider must ask question on: 1. **Specification**- Describing what, when, where, and how service is provided. 2. **Staff** Who the service staff are, what skills the staff have, what training they have undergone, how committed the service personnel, etc. 3. **Space** Where the service happens, appropriateness of the space for service, adequacy of the space etc. 4. **Systems** Information adequacy, coordination between various departments 5. **Support** What kind of financial, human, and other support-reward systems, technology, employee training, supervision, etc. 6. **Style** - Attitude, emphasis on quality by the service provider. ### Determinants of Service Quality #### 1. Reliability A hospitality customer looks for consistency in performance and dependability. The service provider should try to keep the promises made from the very beginning. #### 2. Responsiveness This is another factor which influences the customer expectation. The service provider should have willing and ready employees to provide service. Promptness in service is a crucial factor which influences the customer perception. #### 3. Competence The employees should possess the required skills and knowledge to perform the service. #### 4. Access Easy accessibility and approachability of the contact personnel is another significant factor which influences the customer expectation. It means the service is easily accessible by telephone, lines are not busy and the customer is not put on hold. #### 5. Courtesy The service contact personnel should be polite, respectful , considerate and friendly. #### 6. Communication An open system of communication is very important in hospitality services. The service provider should inform the customer using the language they understand and listen to customers actively. #### 7. Credibility Trustworthiness, credibility, and honesty of the service personnel are other factors which the hospitality customer looks from hospitality encounter. The service provider should keep in mind the interests of the customer and the company reputation while delivering the service. #### 8. Security Every hospitality customer is concerned about physical safety, financial security, and confidentiality. The service provider should make sure that the customer is made comfortable during their stay. #### 9. Understanding - Knowing the Customer The hospitality service provider should be a shrewd salesman making all the efforts to understand the customer's needs so that he can deliver personalized services as per the specific requirements of the guests. #### 10. Tangibles Since most of the hospitality products and services are intangible in nature, service provider should include necessary physical evidence of the service to make it more tangible in nature.