Ch 1,2,4,5,6,8,10
1. Marketing Principles and Society
The Principles Of Marketing
Marketing involves a series of highly complex interactions between individuals, organizations, society and
government. It is difficult to develop general principles. Therefore, the next generalization were made.
➢ Generalization 1: Advertising has a direct and positive influence on total industry sales.
➢ Generalization 2: Selective advertising has direct and positive influence on individual company
sales.
➢ Generalization 3: The elasticity for selective advertising is low (inelastic).
➢ Generalization 4: Increasing store shelf space (display) has a positive impact on sales of non-
staple grocery items, which are products that are not a main or important food.
➢ Generalization 5: Distribution has a positive influence on company sales.
OBJECTIVE ONE: Define The Marketing Concept
: Marketing is the process by which organizations anticipate and satisfy their customers’ needs to both
parties’ benefit. It involves mutual exchange.
The Three Marketing Definitions
*Disclaimer: All definitions recognize the widened concept of the wider societal applicability of marketing.
Chartered Institute of Marketing (CIM) recognizes marketing as a management process that is
responsible for identifying, anticipating and satisfying customer requirements profitably.
American Marketing Association (AMA) recognizes marketing as an activity; set of institutions; and
processes for creating communicating, delivering and exchanging offerings.
A French Perspective recognizes marketing as the adaptation strategy of organizations to competitive
markets so that they can influence the behaviour of the publics on which they depend. In the commercial
sector, the role of marketing is to create economic value for the company by creating value as perceived by
customers.
Customer versus consumer
The difference between the two is very subtle. Since a customer is the person who purchases and pays for
the product or service. While the consumer is the person who uses the product or service.
Market orientation
Marketing orientation is the recognitions of the importance of marketing within the organization.
➔ Appointing a marketing person as CEO or to chair its board of directors.
Market orientation refers to ‘the organization-wide generation of market intelligence pertaining to
current and future customer needs; disseminations of the intelligence across the departments; and
organization-wide responsiveness to it’. Therefore, requires a focus on:
➢ Customer orientation: is concerned with creating superior value by (re)developing offerings to
meet customers needs.
➢ Competitor orientation: requires an organization to develop an understanding of its competitors’
short-term strength and weaknesses; and its own long-term capabilities and strategies.
➢ Interfuncational coordination: requires all functions of an organization to work together for long-
term profit growth.
,OBJECTIVE TWO: Explain How Marketing Has Developed Over The Twentieth And Into
The Twenty-First Century
: There have been four main phases in the history of marketing. These are the production era; the sales
era; the marketing era; and the societal marketing era.
History of Marketing
Marketing developed in a four-stage sequence:
1890s-1920s) Production period: focuses on physical production and supply, has little competition
and a limited range of products.
1920s-1950s) Sales period: focuses on personal selling supported by market research and
advertising.
1950s-1980s) Marketing period: has a more advanced focus on the customer’s needs.
1980s-present) Societal marketing period: has a stronger focus on social and ethical concerns and
recognition that not-for-profits could also undertake marketing.
Marketing has developed as a result of the influence of its practitioners and developments in related
disciplines.
➢ Industrial economics influences > The knowledge about matching of supply and demand within
industries.
➢ Psychological influences > The knowledge of consumers behaviour in relation to their attitudes,
perceptions, motivations and information processing.
Additionally the understanding of persuasion, consumer personality and customers satisfaction.
➢ Sociological influences > How groups of people behave with insights into research such as;
→ Demographics: How people from similar gender and age groups behave
→ Class: How people in different social positions within society behave.
→ Motivation: Why we do thing in the way that we do.
→ Customs: General ways that groups behave.
→ Public opinion: What society thinks as a whole.
→ /: How communications pass through opinion leaders.
→ /: How we influence the way in which people think and to adapt our perspective.
➢ Anthropological* influences: our debt to social anthropology increases as we use qualitive
approaches such as ethnography*, netnography* and observation in researching consumer
behaviour. Particularly the behaviour of subgroups and cultures.
***
Social anthropology is the discipline of observing and recording the way in which humans behave in
different social groups.
Ethnography is the approach to research in which subcultural groups are observed.
Netnography is the brand of ethnography that seeks to analyse Internet users’ behaviour.
Procurement is the buying process in a firm or organization. Marketing is distributed throughout the
organization and all employees can be considered to be part-time marketers.
***
,OBJECTIVE THREE: Understand The Exchange And Marketing Mix Concepts In
Marketing
: The concept of exchange is important: empathizing with customers to understand what they want and
determining how sellers seek to provide what buyers want. The marketing mix comprises product,
place, price and promotion. Marketers consider an extra 3PS for services marketing. Including
physical evidence, process and people.
Marketing As Exchange
Marketing is a two-way exchange process (Dyadic) since it provides an income for marketers and helps t
create awareness for the second party. For instance, customers specify how marketers might satisfy their
needs, and then customers must pay for the offering.
The (Extended) Marketing Mix
Includes:
➢ Product: refers to the offering and how it meets the customers’ needs, its packaging and its
labelling.
➢ Place: refers to the way in which the offering meets customers’ needs.
➢ Price: refers to the cost to the customer and the cost plus profit to the seller.
➢ Promotion: refers to how the offering’s benefits and features are conveyed to the potential buyer.
For services, there is an extended marketing mix which adds the following.
➢ Physical evidence: to emphasize the tangible components of services.
➢ People: to emphasize the importance of customer service personnel.
➢ Process: to emphasize the importance of service delivery, which is designed to meet customers’
needs.
Relationship Marketing
The principal idea behind this was that if marketing is about exchange, it should also be concerned with
relationships between the exchanging parties. There was a shift from the need to engage in transactions
towards the need to develop long-term customer relationships. Including relationships with stakeholders;
suppliers; potential employees; recruiters; referral markets etc.
Service-Dominant Logic
This new marketing paradigm sees service as the fundamental basis of exchange. Since offerings are
inherently service-based, customer because co-creators of the service experience.
Co-Creation
Organizations should use co-creation to differentiate their offerings, given that value is tied up inside the
customers’ experience with the organization. The co-creation experience is about joint creation of value, in
which customers take part in active dialogue and co-construct personalized experiences.
➔ Enhancing customer input to co-creation should map supplier and customer processes to identify
how to design their services accordingly.
, OBJECTIVE FOUR: Understand The Positive Contribution That Marketing Makes To
Society
: The aggregate marketing system delivers to us a wide array of offerings to serve our wants and needs.
There is much that is positive about the aggregate marketing system and it has served to improve the
standard of living for many people around the world.
Marketing’s Positive Impact On Society
Marketing plays an important role in developing and transforming society. The following benefits within
society were provided by inventions through the aggregate marketing system.
➢ Promotion and delivery of desired offerings
➢ Provision of a forum for market learning
➢ Stimulation of market demand
➢ Provision of a wide scope of choices of offerings
➢ Facilitation of purchases
➢ Time saving and promotion of efficiency in customer requirement matching
➢ New offerings and improvements
➢ Pursuit of customer satisfaction for repeat purchases
