Module in Marketing Management | 0

PREFACE

Marketing Management is an organizational discipline, which deals with the

practical application of marketing orientation, techniques and methods in enterprises and
organizations and with the management of a company's marketing resources and activities.
This is a brief introductory that explains the methodologies applied in the rapidly growing
area of marketing management. This will be useful for students from management streams
who aspire to learn the basics of Marketing Management. Professionals, especially
managers, aspirants of entrepreneurship, regardless of which sector or industry they
belong to, can use this to learn how to apply the methods of Marketing Management in their
respective enterprise. Activities are provided at the end of every unit in order to evaluate
the students’ comprehension and to enhance their knowledge regarding the subject.

MEPM
NCN
NCV

Module in Marketing Management | 1

UNIT I. INTRODUCTION TO MARKETING CORE CONCEPTS

Overview

This unit discusses about the core concepts of marketing. It has been said that
marketing is everywhere and all around us. The essential ingredient in our daily lives, either
at home, in the workplace or in our journey to experience the wonders of nature. It tells that
it is the lifeblood of every successful organization, groups or individuals are it in the
domestic or international markets for goods and services.

Learning Objectives

At the end of the unit, I am able to:

1. Define marketing and discuss its core concepts;
2. Differentiate selling and marketing;
3. Define marketing management; and
4. Compare the different marketing management concepts.

Setting Up

Name: ________________________________________ Date:________________

Course/Year/Section: _____________________

Direction: TRUE or FALSE. Write Marketing if the statement is correct and Management if
wrong on the space provided before each numbers.

____________________1. Marketing must be understood not in the old sense of

making a sale but rather in the new sense of satisfying
customer needs.
____________________2. The marketing concept is management philosophy stating
that an organization should strive to satisfy the needs of
consumers.
____________________3. Marketing is viewed as the performance of office personnel
that affects the flow of goods and services.
____________________4. The key objectives of each 3C’s of marketing must be
attained to be called the key results areas.
____________________5. In marketing, management is sales-volume oriented.
____________________6. Decision making are also needed regarding product quality,
design, features, branding and packaging.
____________________7. In pricing, management must determine the right profit for
its products.
____________________8. Wants become demands when supported by purchasing
power.
____________________9. People satisfy their needs and wants with quality and
design of the products.
____________________10. The marketer can be a seller or a buyer.

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Multiple Choices. Write the letter of the correct answer on the space provided before the
number.

_____ 1. This refers to what the business offers for sale.

a. Product
b. Price
c. Place
d. Promotion
_____ 2. These are the desires that satisfies the needs.

a. Needs
b. Wants
c. Demands
d. Satisfactions
_____ 3. This are goods that are meant for final consumption by the ultimate consumers.

a. Consumer goods
b. Tangible goods
c. Intangible goods
d. Industrial goods
_____ 4. It refers to the group of consumers or organizations that is interested, has the
resources to purchase, and is permitted by law to acquire the product.

a. Networks
b. Prospects
c. Market
d. Stockholders
_____ 5. This usually happens because of changing preferences and taste of consumers.

a. Full demand
b. Declining demand
c. Irregular demand
d. Negative demand
_____ 6. In a strategic marketing concept which of the following variables is not included to
develop an effective marketing strategy.

a. Customer
b. Competitors
c. Company
d. Costs

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_____ 7. It refers to the contract or agreement between two parties where a good or service is
exchange in return for a monetary value.

a. Exchange
b. Transaction
c. Communication
d. Promissory
_____ 8. A type of market who legally are permitted to buy the product.

a. Potential market
b. Available market
c. Qualified available market
d. Target market
_____ 9. It holds the belief that customers primarily want products that are affordable and
accessible.

a. Production concept
b. Product concept
c. Selling concept
d. Marketing concept
_____ 10. This concept holds the companies belief that the consumer should be place at the
center of the organization.

a. Production concept
b. Product concept
c. Selling concept
d. Marketing concept

Lesson Proper

What is Marketing

Marketing has been defined in various ways by different authors of marketing

textbooks, marketing educators, as well as marketers, and marketing practitioners. These
definitions may be attributed to their close association with marketing and business
professionals or perhaps their experiences in their respective businesses as readings of
related literature and studies, whether foreign or local.

The American Marketing Association, the official organization for academic and
professional marketers, defines marketing as: Marketing is the process of planning and
executing the conception, pricing, promotion, and distribution of ideas, goods, and services to
create exchanges that satisfy individual and organizational objectives.

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 For Philip Kotler, (an American marketing author, consultant and professor),
Marketing is a social and managerial process by which individuals and groups obtain what
they need and want through creating, offering, and exchanging products of value with others.

This definitions of marketing rests on the following core concepts:

need/want/demand; product (goods/services/ideas); value/cost/satisfaction;
exchange/transaction; relationship/network; markets; and marketers/prospects.

Josiah Go, (chairman of 12 corporations and author of record-breaking best-selling

marketing books), define marketing based on the strategic 3C ’s of Marketing: Customers,
Competitors, and Company.

The 3 C’s of marketing, a strategic marketing concept takes into consideration 3

variables to develop an effective marketing strategy. These variables are dynamic and
interdependent on each other, thus if one changes, the other has to change.

According to Go, the key objectives of each 3C ’s of marketing must be attained to be

called marketing-oriented. The output of customers, competitors and company is
collectively called the “key result areas” namely: sales, market shares, and profit.

The Strategic 3C’s of Marketing

3 C’s Key Objectives
Customer To satisfy the needs, wants, and expectations of
target customers

Competitors To outperform competition

Company To ensure corporate health and profit

Figure 1

Ways to Differentiate Selling and Marketing

In general, we use marketing and selling as synonyms but there is a considerable

difference between both concepts. For a successful marketing manager, it is necessary to
understand the difference between Marketing and Selling.

According to Theodore Levitt, an American economist and a professor at the

Harvard Business School, the difference between selling and marketing is more than
semantic. A truly marketing-minded firm tries to create value satisfying goods and services
which the consumers will want to buy. What is offers for sale is determined not by the seller
but by the buyers. The seller takes his cues from the buyer and the product becomes the
consequence of the marketing effort, not vice versa. Selling merely concerns itself with the
tricks and techniques of getting the customers to exchange their cash for the company ’s
products, it does not bother about the value satisfaction that the exchange is all about. On
the contrary, marketing views the entire business as consisting of a tightly integrated effort
to discover, create, arouse and satisfy customer needs.

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 Selling vs Marketing
Selling Marketing
1. Emphasis is on the Emphasis is on consumer needs and wants
product
2. Company manufactures Company first determines customers need and
the product first wants and then decides out how to deliver a product
to satisfy these wants

3. Management is sales Management is profit-oriented

volume- oriented

4. Planning is short-run Planning is long-run-oriented in terms of today’s

oriented in terms of new products, tomorrow’s markets and future
today’s products and growth
markets
5. Stresses needs of sellers Stresses needs and wants of buyers

6. Views business as a good Views business as producing consumer satisfying

producing process process

7. Emphasis on staying Emphasis on innovation on every existing

with existing technology technology and reducing every sphere, on providing
and reducing costs better costs value to the customer by adopting a
superior technology

8. Different departments All departments of the business work in integrated

work as in a highly manner, the sole purpose being of consumer
separate water- tight satisfaction
compartments
9. Cost determines price Consumer determine price, price determines cost

10. Selling views customer Marketing views the customer as the very purpose of
as a last link in business business
Figure 2

The Marketing Mix

The term marketing mix is a foundation model for businesses, historically centered
on product, price, place, and promotion (also known as the 4 Ps). The marketing mix has
been defined as the “set of marketing tools that the firm uses to pursue its marketing
objectives in the target market.”

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 Product refers to what the business offers for sale and may include products or
services. Product decisions include the "quality, features, benefits, style, design, branding,
packaging, services, warranties, guarantees, life cycles, investments and returns".

Price refers to decisions surrounding "list pricing, discount pricing, special offer

pricing, credit payment or credit terms". Price refers to the total cost to customer to acquire
the product, and may involve both monetary and psychological costs such as the time and
effort spent in acquisition.

Place is defined as the "direct or indirect channels to market, geographical

distribution, territorial coverage, retail outlet, market location, catalogues, inventory,
logistics and order fulfillment". Place refers either to the physical location where a business
carries out business or the distribution channels used to reach markets. Place may refer to a
retail outlet, but increasingly refers to virtual stores such as "a mail order catalogue, a
telephone call center or a website".

Promotion refers to "the marketing communication used to make the offer known

to potential customers and persuade them to investigate it further". Promotion elements
include "advertising, public relations, direct selling and sales promotions."

The original marketing mix or 4 Ps, as originally proposed by marketer and

Professor Edmund Jerome McCarthy, provides a framework for marketing decision-making.

Core Concepts of Marketing

Philip Kotler defines Marketing Management as a social and managerial process by

which individuals or firms obtain what they need or want through creating, offering,
exchanging products of value with each other. The following are the key and core concepts
of marketing:

Needs, Wants, and Demands

Needs are the feelings of deprivation of some satisfaction. People need food, air,
water, clothes and shelter for their survival. Marketers identify what type of products are
needed by society and their customers. By determining those needs, the marketers then
brings the products in the market that will fulfill the customers and the society ’s needs at
large.

Wants are those desires that satisfy the needs. Wants are shaped by the persons
themselves and continuously changes according to time. There are only a few needs of
human but the wants are too many.

Demands are the wants of people for some specific products or services that are
backed by an ability and willingness to buy them. Wants become demands when supported
by purchasing power. Marketers focus on the increasing demand of those products in the
market by making it designable, attractive, and unique and also by keeping it in mind that
the product would be easily available in the market at an affordable price.

Products (Goods, Services, and Ideas)

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 A product, as defined by Kotler is anything that can be offered to satisfy a need or
want. He also uses other terms for products such as offerings, satisfiers or resources that
are capable of delivering satisfaction of a want or need.

Types of Products

Products are basically of two types, tangible product and intangible product.

1. Tangible Product is a physical object that can be perceived by touch such as a

building, vehicle, gadget, or clothing.
2. Intangible Product is a product that can only be perceived indirectly such as an
insurance policy. Intangible data products can further be classified into Virtual
Digital Goods that are virtually located on a computer and are accessible to
users as conventional types, such as jpeg and mp3 files, without requiring
application process or transformational work by programmers.

Products or goods can be classified into broad categories depending upon the
use for which they are meant.

1. Consumer Goods – are meant for final consumption by the ultimate consumers.
Bread, butter, TV sets, cosmetics and garments are all consumer goods.
2. Industrial Goods – are those meant for use in making other products or for
rendering a service in the operation of a business organization.

Value, Cost and Satisfaction

Value, cost, satisfaction: These three intertwined concepts constitute consumers’

product choice set. Generally speaking, value is the difference between the perceived
benefits gained from having or using the product and the cost of obtaining it. Customers
tend to maximize the value of any market offering within the bounds of search costs and
limited mobility, knowledge and income. A consumer’s satisfaction i.e., the level of his/her
felt state resulting from comparing a product’s perceived performance or outcome in
relation to his/her expectation, is linked to his perceived value of the offering. Marketers,
are however, more interested in the ‘customer perceived value ’ defined as ‘the customer’s
evaluation of the difference between all the benefits and all the costs of a market offering
relative to those of competing offers’. This relates to the notion of exchange that underlies
the precepts within this course.

Customer satisfaction implies that forcus to mer value to occur the customer’s
expectations must be exceeded. Satisfied customers are likely to be repeat buyers and who
are likely to use favorable ‘word‐of‐mouth’ (WoM) about their good experiences with the
offering. Dissatisfied customers tend to switch to competitors and spread bad words about
the product to others.

Exchange and Transaction

Transaction and exchange are two terminologies that are often used
interchangeably due to the similarities between them. Furthermore, both these terms are
used in various contexts and subject matter where their meanings are different depending
on the circumstances in which they are used.

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 The key difference between transaction and exchange is that a transaction is a
contract or agreement between two parties where a good or service is exchanged in return
for a monetary value whereas an exchange is a swap of a good or a service between two
parties. Transactions and exchanges happen in both personal and commercial contexts.
For exchange potential to exist, five conditions must be satisfied:
1. There are at least two parties involved
2. Each party has something that might be of value to the other party
3. Each party is capable of communication and delivery
4. Each party is free to accept or reject the exchange
5. Each party believes it is appropriate or desirable to deal with the other party

Relationships and Networks

Relationship marketing is a facet of customer relationship management (CRM) that

focuses on customer loyalty and long-term customer engagement rather than shorter-term
goals like customer acquisition and individual sales. The goal of relationship marketing (or
customer relationship marketing) is to create strong, even emotional, customer connections
to a brand that can lead to ongoing business, free word-of-mouth promotion and
information from customers that can generate leads.
Marketing network consists of the company and all of its supporting stakeholders:
customers, employees, suppliers, distributors, retailers, and advertising agencies, among
other with whom it has built mutually profitable business relationships.

Market

In marketing, the term market refers to the group of consumers or organizations

that is interested in the product, has the resources to purchase the product, and is
permitted by law and other regulations to acquire the product.
Beginning with the total population, various terms are used to describe the market
based on the level of narrowing:
 Total Population
 Potential market – those in the total population who have interest in acquiring the
product
 Available market – those in the potential market who have enough money to buy the
product
 Qualified available market – those in the available market who legally are permitted
to buy the product
 Target market – the segment of the qualified available market that the firm has
decided to serve (served market)
 Penetrated market – those in target market who have purchase the product
The size of the market is not necessarily fixed. For example, the size of the available
market for a product can be increased by decreasing the product ’s price, and the size of the
qualified available market can be increased through changes in legislation that result in
fewer restrictions on who can buy the product.

Marketers and Prospects

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 When one party is more actively seeking an exchange than the other party, we call
the first party a marketer and the second party a prospect. A marketer is someone seeking
one or more prospects who might engage in an exchange of values. A prospect is someone
whom the marketer identifies as potentially willing and able to engage in an exchange of
values.

Marketing Management

The American Association of Marketing define marketing management as the

process of planning and executing the conception, pricing, promotion, and distribution of
ideas, goods and services in order to create, exchange and satisfy individual and
organizational objectives.

The definition above recognizes that marketing management is a process involving

analysis, planning, implementation, and control; that it covers goods and services, and
ideas; that it rests on the motion of exchange; and that the goal is to produce satisfaction for
the parties involved.

The following are the 8 types of demand which are necessary for fulfilling the
customer value.

Demand State Definition Marketing Tasks

Negative demand This is created when  Try to create awareness
customers have disliked the rather than promotion
product but the product is  Inform the customers
actually useful to them. The about the importance of
customers try to avoid the the product
product and merely do not
want it.
Non-existent demand Target consumers are  Marketers should first
unaware of the product or create awareness
they know about the product  Find ways to connect the
but they are not interested benefits of the product
to buy. This may be with the person’s
happening because of natural needs and
culture or the customers interest
think that buying the  Aggressive promotion is
product is merely a wastage needed
of money.
Latent demand Many consumers may share  Producers need to
a strong need that cannot be understand the latent
satisfied by any existing demand of the customer
product.  Try to collect feedback
from the customer to
know what they want or
if they have any
complaints
Declining demand Declining demand happens  Reverse the declining
because of changing demand through

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 preference and taste of  Re-marketing
consumers, and the radical  Re-branding
technological development  Re-positioning
Irregular demand This is created because of  Synchromarketing – which
usage rate based on intends to shift the pattern
seasonal, monthly, weekly, of demand to dampen
daily, hourly basis, seasonal, irregular, or
inconsistent demand
levels in order to
synchronize the demand
better to the ideal pattern
of supply.
Full demand The products have the same  Maintain the current level
demand all over the year. of demand in the face of
changing consumer
preferences and
increasing competition
 The organization must
maintain or improve the
its quality and continually
measure consumer
satisfaction to make sure it
is doing a good job
Overfull demand Suddenly people are likely  Demarketing – (unselling
buying more products that or marketing in reverse)
creates the shortage of an attempt by the firm to
supply and an increase in discourage all or some of
prices. its customers from making
purchases either
temporarily or
permanently.
Unwholesome demand People are aware of the bad  To get people who like
effect of the product but they something to give it up,
are still attracted to this. using tools such as fear
messages, price hikes and
reduced availability

The Evolution towards the Marketing Concept

There are five distinctive marketing concept types or approaches to achieving

effective marketing. Not all these type of marketing concept work for all industries, because
differ in function. Every marketing concept was created depending on the need of the
market. As markets changed, so did the concepts.

The Production Concept

Companies that use the production concept have the belief that customers primarily
want products that are affordable and accessible. The production concept is based on the

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approach that a company can increase supply as it decreases its costs. Moreover, the
production concept highlights that a business can lower costs via mass production. A
company oriented towards production believes in economies of scale (decreased
production cost per unit), wherein mass production can decrease cost and maximize profits.
As a whole, the production concept is oriented towards operations.

A working example of the production concept is a company that produces their

goods overseas. Producing retail goods abroad lowers costs and the resulting savings can be
passed on to the consumer. These lower prices could be a good incentive to attract new
consumers.

The use of the production concept is only effective when demand is greater than
supply. The biggest disadvantage of this concept is that it is not always the case that your
customer chooses to buy the most affordable and easily accessible product.

The Product Concept

Companies that focus on the product concept believe that the most significant
priorities for a customer are quality and functional characteristics of a product. What this
indicates is that a customer looks for innovative alternatives and always searches for the
best of what is currently available in the market. In addition, within this concept, it is
assumed that consumers stay loyal if they receive more product options and benefits.

Companies who keep this philosophy intact direct their marketing efforts in raising
their product quality. With this in mind, it is not surprising that many companies in
technology use the product concept. These companies always update and release their new
products. It is then important for these technology companies to create strong decisions on
how often they should release their new products.

The disadvantage of the product concept is that companies must recognize

that superior quality of a product does not make it sell automatically. Superior products will
sell only if they satisfy a consumer’s needs and wants. Moreover, consumers are not
attracted to goods simply because of its quality. They also factor in other variables, such as
a product’s price, availability, and the like. A quality product yet with a high price can dent
the budget of a consumer.

The Selling Concept

The selling concept involves companies that are sales oriented. What this means is
that they can make a product and then sell it to their target market without consideration of
their consumers’ needs or wants. The selling concept highlights that customers would buy a
company’s products only if the company were to sell these products aggressively.

The selling concept pays little attention to whether or not a product was truly
needed by consumers. The objective was to beat the competition merely in sales, with few
regarding the satisfaction of a consumer. Nowadays, this is called “hard selling, ” wherein
goods are not bought – they are sold. This concept is based on the belief that consumers
may be attracted; hence, companies can focus their efforts in attracting and educating
consumers.

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 Although it may be effective for some time – that repeated efforts can sell anything –
this cannot be sustained for a long period of time. If a company is able to entice a consumer
once, he or she cannot be won each and every time. Actually, this may even damage the
reputation of a business. Thus, this concept offers only short-term gains but not long-term
benefits.

The Marketing Concept

A company that believes in the marketing concept places the consumer at the center
of the organization. All activities are geared towards the consumer. A business, oriented
towards the market, aims to understand the needs and wants of a customer and executes
the marketing strategy according to market research beginning from product conception to
sales. As sales begin, further research can be implemented to figure out what customers
think about a product and whether improvements are needed. While markets change
continuously, product development and market research is always ongoing for a company
that concentrates on the market.

By focusing on the needs and wants of a target market, a company can deliver value,
more than its competitors. The marketing concept highlights the pull strategy, wherein a
brand is so strong that customers would always prefer your brand to others ’. The main
concerns of a company that was focused on the marketing concept were the wants of
consumers, if they could develop the product while the consumers still wanted it, and how
they could keep customer satisfaction.

Companies who believe in the marketing concept opine that they can be successful
only through the satisfaction of their customers. This thinking is based on the belief
that goods and services are only made available only if consumers need or want them. A
small problem with the marketing concept is that there is no focus given towards societal
welfare.

The Societal Marketing Concept

The societal marketing concept is a relatively new marketing concept. While the
societal marketing concept highlights the needs and wants of a target market and the
delivery of better value than its competitors, it also underscores the importance of the  well-
being of customers and society as a whole (consumer welfare or societal welfare).

The societal marketing concept goes one step further than the marketing concept.
Case in point, if a company creates a car that uses less fuel but has more pollution, this
would merely increase customer satisfaction, but not societal welfare. Companies who
believe in the societal marketing philosophy direct their marketing towards giving
customer satisfaction and social welfare.

With this last concept of marketing, companies receive long-term profit, not only
from the viewpoint of the consumer, but also of society.

References

Module in Marketing Management | 13

Alminar-Mutya, Ruby F. Elements of Marketing: 3rd Edition. National Book Store,
Mandaluyong City, 2000

Go, Josiah. Grow and Sustain your Network Marketing Distributor Business. Design Plus,
Quezon City, 2000

Go, Josiah. Fundamentals of Marketing in the Philippine Setting. Design Plus, Quezon City,
2001
Lao, Felix M. Jr. Principles of Marketing: 1st Edition, Anvil Publishing, Inc. Pasig City, 2001

Medina, Roberto G. Principles of Marketing: Revised Edition. Rex Book Store, Manila, 2008

https://mu-bit.com/blog/selling-and-marketing/#:~:text=Selling%20is%20an%20action
%20which,distributing%20the%20product%20or%20service
https://creately.com/blog/diagrams/elements-of-marketing-mix/

Assessing Learning

Name: ________________________________________ Date:________________

Course/Year/Section: _____________________ Score: ______________

Activity 1-1

Directions: Identify which word or words that do not belong to the group. Write the letter of
the correct answer.

__________1. a. Full Demand c. Wholesome Demand

b. Overfull Demand d. Unwholesome Demand
__________2. a. Marketing concepts c. Product Concept
b. Basic Concepts d. Production Concept
__________3. a. Means c. Materials
b. Money d. Methods
__________4. a. Raw Materials c. Manufacturing Process
b. Machines and Equipment d. Finished Products
__________5. a. Brand Broadening c. New products
b. Product Growth d. Product innovation
__________6. a. Factory c. Target Market
b. Products d. Sales Volume
__________7 a. Felt Needs c. Real Needs
b. Delight Needs d. Secret Needs
__________8. a. Economy c. Flavor
b. Color d. Scent
__________9. a. Target Market c. Integrated marketing
b. Customer Needs d. Selling and Promotion
__________10. a. Profitability c. Customer Needs
b. Sales Volume d. Integrated Marketing

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 Activity 1-2

Direction: TRUE or FALSE. Write Marketing if the statement is correct and Management if
wrong on the space provided before each numbers.

____________________1. Marketing must be understood not in the old sense of

making a sale but rather in the new sense of satisfying
customer needs.
____________________2. The marketing concept is management philosophy stating
that an organization should strive to satisfy the needs of
consumers.
____________________3. Marketing is viewed as the performance of office personnel
that affects the flow of goods and services.
____________________4. The key objectives of each 3C’s of marketing must be
attained to be called the key results areas.
____________________5. In marketing, management is sales-volume oriented.
____________________6. Decision making are also needed regarding product quality,
design, features, branding and packaging.
____________________7. In pricing, management must determine the right profit for
its products.
____________________8. Wants become demands when supported by purchasing
power.
____________________9. People satisfy their needs and wants with quality and
design of the products.
____________________10. The marketer can be a seller or a buyer.

Activity 1-3

Directions: Answers the following.

1. Differentiate marketing and marketing management. Give and explain their importance
to the following: a) individual persons (consumers), b) business organizations and c)
economy
__________________________________________________________________________________________________________
__________________________________________________________________________________________________________
__________________________________________________________________________________________________________
__________________________________________________________________________________________________________
____________________________________________________________________________________________

2. How can the organization attain its long-term objectives and gain competitive advantage
through the marketing mix strategy/
__________________________________________________________________________________________________________
__________________________________________________________________________________________________________
__________________________________________________________________________________________________________
__________________________________________________________________________________________________________
______________________________________________________________________________________________

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3. Explain the five competing concepts under which the organization can choose to conduct
their marketing entities.
__________________________________________________________________________________________________________
__________________________________________________________________________________________________________
__________________________________________________________________________________________________________
__________________________________________________________________________________________________________
____________________________________________________________________________________________

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