INTRODUCTION TO MARKETING

OBJECTIVES
This introductory session is aimed at answering the following specific questions:
1. What is marketing?
2. What are the core concepts that underlie the discipline of marketing?
3. What are the marketing philosophies of doing business?
4. What role does the marketing play in different industries, in non-profit organizations,
e.t.c.?

Meaning of marketing
The word marketing has been defined in different ways by several authors and scholars. The
following are some of the definitions which have been given;
1. American Marketing Association – A.M.A. (1964)
Marketing is the performance of business activities that direct the flow of goods and
services from producers to consumers or users.
2. Stanton William J. (7th Edition 1984)
i) Marketing is the creation and the delivery of a standard of living. It involves:
Finding out what consumers want.
Then planning and developing a product or service that will satisfy these
wants.
And then determining the best way to price, promote and distribute the
products or services.
ii) That marketing is a total system of business activities designed to plan, price,
promote and distribute want-satisfying goods and services to present and
potential customers.
3. Kotler Philip (1997)
Marketing is a social and a managerial process by which individuals and groups obtain
what they need and want through creating, offering and exchanging products of value
with others.

Other meanings.
 Marketing is the bridge between production and consumption.
 Marketing forms the vital link between people’s needs and means of satisfying them.
 Marketing is an activity that satisfies human needs through exchange processes.
 Marketing is merely a civilized form of welfare in which battles are won with words,
ideas and disciplined thinking.

The above definitions have several implications.

1. Marketing is a managerial process - a system’s definition.
2. The entire systems of business activities must be market oriented or customer oriented.
Customers’ needs and wants must be recognized and satisfied effectively.
3. Marketing, as the definitions suggests, is a dynamic process – a total integrated process
rather than a fragmented assortment of institutions or functions. Marketing is not any one
activity, nor is it exactly the sum of several, rather, is it the result of the interaction of
many activities.
4. The marketing programme starts with the product idea and does not end until the
customers’ needs and wants are completely satisfied. This may be some time after the
sales are made.

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 5. Customers must be satisfied in order for a company to make repeat business. This
implies that the success of a firm is not profitability perse but profitability through
customer satisfaction.
6. Marketing is not limited to business. Whenever you are trying to:
Persuade somebody to do something.
Donate to the Red Cross
Save energy
Vote for your candidate
Reform from littering the streets of Nairobi,
You are engaging in business. Marketing has a broad societal meaning. Modern business
marketing activities are, to a large extent, a consequence of societal marketing.

The core concepts of Marketing

From the foregoing definitions, it is evident that the definition of marketing rests on the following
core concepts.
i) Needs, wants and demands.
ii) Products
iii) Utility, values and satisfaction.
iv) Exchange, transactions and relationships.
v) Markets.
vi) Marketing and marketers.

Needs wants
and demands

Products

Utility, value and

satisfaction

Exchange,
transactions and
relationships

Markets

Marketing and Marketers.

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Needs, Wants and demands.
The study of marketing begins with the understanding of human needs and wants.

Needs.
A human need is a state felt deprivision of some basic satisfaction. People acquire food, shelter,
clothing, safety, belonging, e.t.c. for survival.
 These needs are not created by the society for marketers.
 They exist in their very texture of human biology and conditions.

Wants.
Are desires for specific satisfiers of these deeper needs.
 While people’s needs are fewer, their wants are many.

Demands.
Are wants for specific products that are backed up by an ability and willingness to buy them.
 Wants become demands when backed up by the purchasing power.
 Marketers influence demands.
 They try to influence demand by making the product attractive, affordable and easily
available.

Product
1. People satisfy their needs and wants with products.
A product is anything that can be offered to someone to satisfy a need of want. Products
may take different forms, e.g.
Physical products
Persons – as service providers
Places – vacation land
Activities – Physical exercise.
Organizations – E.g. Lonely hearts club
Ideas – E.g. family planning or safe driving
When we buy a physical product or any of the above, we are buying a service. Therefore,
a product is necessarily a service.

Utility, Value and Satisfaction

Utility.
Utility answers the question – “How do consumers choose among alternative products (Product
choice set) in order to satisfy his needs and wants?”
Utility is the overall estimate of a product’s capacity a consumer’s needs or wants. This is the
basis on which consumers choose particular products from product choice sets.

Value.
Value is equated with price. A product is said to be of better value if it is more for the price.
Marketers should provide value to customers.

Satisfaction.
Occurs when a product conforms to a consumer’s needs.

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Exchange, Transactions and Relationships.

Exchange.
Marketing emerges when people decide to satisfy their needs and wants through exchange.
Exchange is one of the four ways that people can acquire products they need. Other ways include:
 Self production
 Inheritance
 Coarse
 Begging
 Stealing.

Meaning
1. Exchange is the act of obtaining a desired product from someone by offering something
in return.
2. Exchange is the defining concept underlying the discipline of marketing.
3. For exchange to take place, five conditions must be satisfactory.
 There has to be at last two parties to the exchange
 Each party has something that might be of value to the other party
 Each party is capable of communication and delivery
 Each party is free to accept or reject the offer.
 Each party believes it is appropriate or desirable to deal with the other party.
4. If these conditions exist, there is a potential for exchange.
5. Whether exchange actually takes place, depends upon whether the two parties can agree
on the terms of exchange that will leave them both better off than before the exchange.
6. Exchange must be seen as a continuous process rather than an event.
7. Two parties are seen to be engaging in exchange if they are negotiating and moving
towards an agreement

Transaction.
If an agreement is reached, we say that a transaction has taken place.
A transaction consists of a trade of values between two parties.
It involves several dimensions:-
 At least two things of value
 Agreed upon conditions
 A time of agreement
 A place of agreement
 Usually a legal system arises to support or enforce compliance on the part of the
transactors.

Markets.
The concept of exchange leads to the concept of markets.
A market consists of all the potential customers sharing a particular need or want who
might be willing and be able to engage in exchange to satisfy that need or want.

 The size of the market therefore depends on the number of persons who exhibit the need;
have resources that interest others and are willing to offer these resources in exchange for
what they want.
 Sellers constitute the industry and

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  Buyers constitute the market.

Marketing and Marketers.

Marketing consists of human activities taking place in relation to markets.
Marketing means working with marketers to actualize potential exchanges for the purpose of
satisfying human needs.

A marketer is someone seeking a resource from someone else and is willing to offer something of
value for exchange. The marketer can therefore be the buyer or the seller.

MARKETING MANAGEMENT.
Marketing management takes place when at least one party to a potential for exchange gives
thought to objectives and means of achieving desired responses from other parties.
A.M.A. (1985) defines marketing management as:
“The process of planning and executing the conception, planning, promotion and
distribution of ideas, goods and services to create exchanges that satisfy individual and
organizational objectives”
 The definition recognizes that marketing management in a process involving analysis,
planning, implementation and control.
 It covers ideas, goods and services.
 It rests on the notion of exchange,
 The goal is to produce satisfaction for the parties involved.

Demand states and marketing task

1. Negative demand – This arises when a major part of the market dislikes the product and
may pay a price to avoid it.
Task of a marketer:-
 Analyze why demand is negative and whether the product can be modified or
more positive promotion done to change a market’s attitude.

2. No demand
Target customers may be uninterested or indifferent to the product. E.g. College students
may not be interested in a foreign language.

Task - Find ways to connect the benefits of the products with the person’s natural needs
and interests.

3. Latent demand.
Many consumers may share a strong need that cannot be satisfied by any existing
product.
Task - Conduct a survey to identify the unmet needs
4. Falling demand.
Every organization, sooner or later faces failing demand for one or more of its products.
E.g.
 Decline in church membership
 Decline in private college enrolment.

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 Task
 Analyze causes of falling demand
 Determine whether demand can be re-stimulated by finding new target markets
 Changing products features.
 Reversing the declining demand through creative remarketing of the product.
5. Irregular demand
Many organizations face demand that varies on a seasonal, daily or even hourly basis,
causing problems of idle capacity or over-worked capacity.
Task - This calls for synchro-marketing. I.e. find ways to alter the same pattern of
demand through promotion, flexible pricing and other incentives.
6. Full demand
Organizations face full demand when they are pleased with their volume of business.
Task - Maintain the current level of demand in the face of changing customer preferences
and increasing competition; improve or maintain quality, continuously measure customer
satisfaction to make sure it’s doing a good job.
7. Overfull demand
Some organizations face a demand level that is higher than they can or want to handle.
Task - Demarketing – Finding ways to reduce the demand temporarily or permanently
e.g. raising prices or reducing promotion.
8. Unwholesome demand
Unwholesome products will attract organized efforts to discourage their consumption.
Unselling campaigns have been conducted against cigarettes, alcohol, hard drugs, hand
guns, x-rated movies and large families.
Task - Get people who like something to give it up.
You can use fear communication, price hikes and reduced availability.

MARKETING MANAGEMENT PHILOSOPHIES

INTRODUCTION

Marketers need guidance regarding their conduct in the market place. This is because conflicts
are bound to arise between the needs of the society. Customers and the company. These guidance
are known as the marketing principles, rules, concepts or philosophies.
There are five competing concepts that may govern the operations of companies, namely;
1. The production concept
2. The product concept
3. The selling concept
4. The marketing concept and
5. The societal marketing concept.

THE PRODUCTION CONCEPT

This concept holds that “consumers will favor those products that are widely available and low in
cost.” Management focuses on high production efficiency and wider distribution coverage.

This concept makes sense under the following circumstances;

1. When the product is a basic necessity
2. The customers are low income earners

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 3. When the production costs are high and have to be brought down through high
production efficiency
4. When the market is highly price sensitive.
5. When demand for the product exceeds the supply and some other means have to be used
to allocate the products to the customers.

Examples of companies guided by this concept include,

1. City Council primary schools
2. Unilever- for its basic foodstuff
3. City Council health services.

This concept ensures product availability to the consumers. However, product quality is
compromised.

THE PRODUCT CONCEPT

The product concept holds that “consumers favor those products that offer the most
Quality, performance and features. Marketers assume that consumers will buy those
products of high quality and shun those products of inferior quality.”
Management focuses on producing high quality products and improves on them over time.

This concept may apply under the following conditions;

1. When the market is not price sensitive
2. In the case of conspicuous goods
3. Where the customers are well-off financially.

The concept has been criticized on the following grounds:

1. The idea of a good product is defined from the company’s end but not the consumer’s.
The concept thus leads to marketing myopia [short-sightedness]. There is undue
concentration on the product rather than the needs of the consumer.
2. A company may end up producing goods that may not have demand.
3. The concept ignores the needs of the society

Examples of firms practicing this concept are;

1. Those selling jewelleries,
2. Private schools and
3. Private hospitals

THE SELLING CONCEPT

This concept holds that consumers, if left alone, will ordinarily not buy a lot of a company’s
products. The organization must therefore undertake aggressive selling and promotion effort.
That is, a company must focus on hard selling. Under hard selling, consumers are not willing to
buy such products easily.

Examples of products sold under this concept are;

1. Life insurance policies
2. Political campaigns
3. Fund raisings

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 4. New products
5. Encyclopedias
6. Funeral plots
7. Coffins.

The concept may work under the following circumstances;

1. Where the company is operating under excess capacity and wishes to fully utilize its
resources with no regard to the product’s demand
2. Where the product is new in the market
3. Where the firm has adequate machinery for effective promotion
4. where the products are obsolete or are slow moving

The selling concept has some limitations. Namely:

1. Consumers may be forced to buy products that they do not have real need for
2. It is an expensive concept as it requires a lot of resources, both human and financial.

THE MARKETING CONCEPT

The marketing concept holds that “the key to achieving organizational goals lies in
determining the needs and wants of the target market and delivering the desired satisfaction
more effectively and efficiently than competitors This concept has been expressed in many
colorful ways;
 Find needs and meet them
 The customer is always right
 The customer is the king
 At Your service.
 Your problem is our business
 Have it Your way
 You are the Boss, e.t.c.

The concept rests on five main pillars;

MARKET FOCUS
The company must define the boundaries of its market. It should know those customers that are
members of their market. This can be done through a process known as segmentation.
CUSTOMER FOCUS
The company should determine the needs and wants of the customers from the customers’ point
of view but not the company’s. Customers’ needs must be identified and satisfied as this result
into customer loyalty which is a source of Co goodwill.

INTEGRATED OR COORDINATED MARKETING

When all company Departments work together to achieve the consumers’ interest, the result is
integrated marketing
It takes place at two levels;
 The Marketing function
The various marketing functions – advertising, marketing research, sales, branding, e.t.c.
must work together. They must be well coordinated from the customers’ point of view.
 Company-wide orientation
Marketing must be embraced by other departments. They must think customer.
Marketing is not a department but much of a Co-wide orientation. Teamwork must be

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 fostered among all departments. This requires the practice of internal as well as external
marketing. Whereas the latter is directed at people outside the firm, the former is the task
of hiring, training and motivating employees to serve customers well. Internal marketing
must external marketing. Managers must consider customers as the true profit centers
hence adopt a modern organizational chart.

 PROFITABILITY
The ultimate purpose of the marketing concept is to help organizations achieve their
objectives. In the case of private firms, the major one is profit. However, they should aim for
profits through customer satisfaction.

 COMPETITION
The concept recognizes the existence of competition. However a Co should offer superior
customer value. It should serve customers better than competitors.

Circumstances under which the marketing concept may be practiced by companies.

Most companies do not embrace the marketing concept until driven to it by circumstances
Various events forcing companies to adopt the marketing concept includes:-

 Sales decline: - when sales fall, companies panic and look for ways of increasing sales.
 Slow growth in sales forces some companies to search for new markets. They realize they
need marketing skills to identify new opportunities.
 Changing buying patterns –
Most companies operate in markets characterized by rapidly customer ways such
companies need more marketing know-how if they are to track buyers’ changing values.
 Increasing competition.
Complacent companies may suddenly be attacked by powerful competitors, e.g. Kenya
Breweries
 Increased market expenditures.
REASONS TO EMBRACE THE MARKETING CONCEPT.

Marketers’ arguments
 The company assets have little value without the existence of customers.
 The key company task therefore is to attract and retain customers.
 Customers are attracted through competitive superior offerings and retained
through satisfaction.
 Marketing’s task is to develop a superior offering and deliver customer
satisfaction.
SOCIETAL MARKETING CONCEPT

Some people have questioned whether the marketing concept is an appropriate philosophy in the
age of:
 Environmental deterioration
 Resource shortages
 Explosure population growth.
 World hunger and poverty
 Neglected social services.

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I.e. are companies that do the excellent job of satisfying customer needs necessarily getting in the
best long-run interest of consumers and society?
The marketing concept sidesteps the potential conflicts among consumers.
 Wants
 Interests and
 Long-run societal welfare

The societal marketing concept holds that

“Organization’s task is to determine the needs wants and interests of the target markets and to
deliver the desired satisfactions, more effectively and efficiently than competitors in a way that
preserves or enhances the consumers’ and the society’s well being.”
The societal marketing concept calls upon marketers to build
 Social and
 Ethical considerations into their marketing practices
They must balance the conflict criteria of
 Company profits
 Consumer needs and
 Public interests

DIFFERENCES BETWEEN THE SELLING AN MARKETING CONCEPTS

Selling
1. Emphasis is on the product
2. Company Manufactures the
product first
3. Management is sales volume
oriented
4. Planning is short-run-oriented in
terms of today’s
products and markets
5. Stresses needs of seller
6. Views business as a good
producing process
7. Emphasis on staying with existing
technology and
reducing costs
8. Different departments work as in a
highly separate
water tight compartments
9. Cost determines Price
Marketing
1. Emphasis on consumer needs wants
2. Company first determines customers needs
and wants
and then decides out how to deliver a product to
satisfy these wants
3. Management is profit oriented
4. Planning is long-run-oriented in today’s
products
and terms of new products, tomorrow’s markets
and future growth
5. Stresses needs and wants of buyers
6. Views business as consumer producing
process satisfying
process
7. Emphasis on innovation on every existing
technology
and reducing every sphere, on providing better
costs value to the customer by adopting a
superior
technology
8. All departments of the business integrated
manner,
the sole purpose being generation of consumer
satisfaction
9. Consumer determine price, price determines

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

Maore K.S(2010) Introduction 11