UNDERSTANDING PRINCIPLES OF

MARKETING
 What Is Marketing?

Hosting a party
 As a Philosophy

• “Marketing…..It encompasses the entire

business. It is the whole business seen
from the point of view of its final result, that
is from the customer’s point of view.”
 Be Customer Centric

“There is only one valid definition of

business purpose: to create a customer.”
Peter. F. Drucker

“…the purpose of marketing: to create a

valuable customer experience…your
customers will thank you for it, stay loyal…,
and pay a premium.”
B Schmitt
 What Is Marketing?
• 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
Building Customer Value, Satisfaction, and
Loyalty
The Changing Marketing Landscape
Engaging Customers

Customer-Engagement and Today’s Digital and Social Media

•Companies today are using online, mobile, and social media to
refine their targeting and to engage customers more deeply and
interactively. The new marketing is customer-engagement marketing

• Customer-Engagement Marketing makes the brand a

meaningful part of consumers’ conversations and lives by
fostering direct and continuous customer involvement in
shaping brand conversations, experiences, and community.
 What Is a Marketing Plan?
• Detailed strategy for focusing marketing
efforts on consumer needs and wants
 Who Are Marketing Managers?
• Manager who plans and implements the
marketing activities that result in the transfer
of products or services from producer to
consumer
Marketing: Providing Value and Satisfaction

• Value and Benefits

– Value
- is the relative comparison of a products benefits
versus its costs
– Benefits
- include the functions of the product and the
emotional satisfactions associated with owning,
experiencing or possessing it
Marketing: Providing Value and Satisfaction
• Utility
– Utility is the ability of a product to satisfy a human want or need. Four
kinds:
• Time Utility
Make Product available when customers want it
• Place Utility
Makes Product available where they are convenient to customers
• Ownership Utility or Possession Utility
Makes product available to customers which they enjoy by
Possessing it
• Form Utility
By making product available with features they enjoy
 Marketing: Goods, Services and Ideas

• Consumer goods are products purchased by

consumers for personal use
• Industrial goods are products used by
companies to produce other products
• Services are intangible products that can be
purchased
 The Marketing Environment
External environment
is the outside factors that influence marketing
programs by posing opportunities and threats. Five
environmental factors:
– Political–Legal Environment
– Social–Cultural Environment
– Technological Environment
– Economic Environment
– Competitive Environments
The Marketing Environment
 Competitive Environment
• Substitute products
differ from those of competitors but can fill
the same need
 Competitive Environment
• Brand competition occurs between similar
products
 Competitive Environment
• International competition
• matches domestic products against foreign
products
 What Is the Marketing Mix (or the “Four
P’s”)?
• Combination of product, pricing, promotion
and distribution (place) strategies used to
market products
 What Is a Product?
• A product is a good, service or idea designed
to fill a consumer need or want.
 What Is a Product?
• Product differentiation
• is the creation of a product feature or product
image that differs enough from competing
products to attract consumers
 What Is Pricing?
Pricing is selecting the best price at
which to sell a product.
– Prices must support a variety of costs
– Prices must be competitive
• Low- and high-price strategies can be effective
in different situations
 What Is Distribution (Place)?
Distribution is part of the marketing mix
concerned with getting products from
producers to consumers.
– Decisions about warehousing, inventory control
and transportation options
– Decisions about channels
 What Is Promotion?
• Promotion is the techniques for
communicating information about products.
– Advertising
– Personal Selling
– Sales Promotions
 What Is Target Marketing and Market
Segmentation?
• Target markets are groups of people with
similar wants and needs
• Market segmentation is the process of
dividing a market into categories of customer
types
 Identifying Market Segments

– Geographic variables are geographical units

• Demographic variables are characteristics of
populations
Demographic Variables
 Identifying Market SegmentsIdentifying
Market Segments
 Psychographic variables
are consumer characteristics such as lifestyles,
opinions, interests and attitude
 Behavioral variables
are consumer characteristics based on the use
of a product, benefits sought from it, reasons
for its purchase and brand loyalty

Toothpaste w/
-Whiteners
-Fluoride
-etc.
 What Is Marketing Research?
• Study of consumer needs and wants and the
ways in which sellers can best meet them
Market Research and the Marketing Process
 The Research Process
1 Study the current situation
2 . Select a research method
3 . Collect data
• Secondary data are already available from
previous research
• Primary data are developed through new
research
4 . Analyze the data
5 . Prepare a report
 Research Methods
• Observation involves watching and recording
consumer behavior

• Survey uses a questionnaire either mailed to

individuals or used as the basis of interviews
 Research Methods
• Focus group involves a small gathering of
people that are presented with an issue and
asked to discuss it in depth
• Experimentation compares the responses of
the same or similar people under different
circumstances
What Is Data Warehousing and
Data Mining?
• Data warehousing
is the process of collecting,
storing and retrieving data in
electronic files
• Data mining
is the application of electronic
technologies for searching,
sifting and reorganizing data to
uncover useful marketing
information and target
products in the marketplace
What Is Consumer Behavior?
Study of the decision process by
which people buy and consume
products
 Influences on Consumer
Behavior
Psychological influences:
individual’s motivations,
perceptions and attitudes
Personal influences:
lifestyle, personality and
economic status
Social influences:
family, opinion leaders and
reference groups
Cultural influences:
culture, subculture and social
class
What Is Brand Loyalty?
Pattern of regular consumer purchasing
based on satisfaction with a product
Consumer Buying Behavior
The Consumer Buying Process
• Problem/Need Recognition 
Consumer recognizes a problem or need
• Information Seeking 
Consumer often seeks information
• Evaluation of Alternatives 
Consumer compares products by analyzing product
attributes
• Purchase Decision 
Consumer makes “buy” decision based on rational and/or
emotional motives
• Postpurchase Evaluations 
Consumer repurchases products based on levels of
satisfaction
Organizational Markets
• Industrial market
includes businesses that buy goods to be
converted into other products or used during
production
• Reseller market
consists of intermediaries that buy and resell
finished goods
Organizational vs. Consumer
Buying Behaviors
• Differences in Buyers:
Organizational buyers are
professional, specialized and
expert
• Differences in the Buyer-
Seller Relationship:

Organizational buying involves

frequent and enduring buyer-
seller relationships
Selling and marketing
contrasted