CHAPTER 1

Principles of Marketing

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 Learning Outcomes

1 Define and understand marketing

2 Describe the traditional approaches

3 Discuss the goals of marketing

4 Identify and explain contemporary marketing
approaches
 Introduction

Marketing started in the

early part of the twentieth
century (between 1900 and
1910) Out of questions and
issues neglected by its mother
science, economics.
 Introduction

In the early years of study

and teaching of trade
practices, the word “marketing”
was not used. Instead, “trade,”
“commerce,” and “distribution”
were the common operations
of the area to which the term
“marketing” is identified today.
 What Is Marketing?

Define the term

marketing
Marketing is…

1. A philosophy, an attitude, a
perspective, or a management
orientation that stresses customer
satisfaction.
2. An organizational activity, set of
institutions, and processes.

PM
 American Marketing Association
Definition of Marketing
(as of October 25, 2007)

Marketing is the activity, set of

institutions, and processes for creating,
communicating, delivering, and
exchanging offerings that have value
for customers, clients, partners, and
society at large.
PM
 entails processes that
focus on delivering value
Marketing… and benefits to customers,
not just selling goods and
services.

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 is simply defined as
Marketing… managing profitable
customer relationships.

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 Old view of Making a Sale –
Marketing: “Telling & Selling”

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 New view of Satisfying
Marketing: Customer Needs

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 Marketing as One of the Functions in
Business Organization

A simple business organization

consists of the following functions:
1) Finance and accounting,
2) Human resource management,
3) Production and materials
management, and
4) marketing
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 Functions in Management

The different functions of managers in a

business organization are as follows:
1) Planning,
2) Organizing,
3) Staffing,
4) Directing/supervising, and
5) Evaluating of personnel, plans and
programs in the different departments
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 Marketing as a Management Function

Marketing is a part of four key

management functions---

 Marketing,
 Production,
 Finance, and
 Human Resource
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 Behavioral Concepts Relevant to
Marketing

Behavioral Marketing
Concept Thought
• Comparative
From • Culture approach
anthropology • Climate for business
• subculture
(community • Market Research
in entity) • Culture restraints
• Word association
• Communication
• Retailing structures
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 Behavioral Concepts Relevant to
Marketing

Behavioral Marketing
Concept Thought
• Market segments
• Social class
From • Social class awareness
• Social • New product acceptance
Sociology differentiation • Shopping behavior
(individuals in • Reference group • Communication
relation to • Informal group • Leisure
other •
• Social role Groups, product, brands
individuals) • References
• The Family
• Life cycle
• Individuals • Personal influence
• Institutions • Decision making
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16 • Aspirations
 Behavioral Concepts Relevant to
Marketing
Behavioral Marketing
Concept Thought
• Motivation
• Motivation
• Drives • Risk reduction
From • Cognitive • Ego
Psychology dissonance • Self-image
• Achievement • Concept generalization
(Centers on
• Affiliations • Brand choice
the
individuals) • Perception
• Orientation
• Scope
• Thresholds
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17 • Time
 Behavioral Concepts Relevant to
Marketing

Marketing
Behavioral
Thought
Concept

From Political • Power groups • Trade associations

Science Values • Public policy

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 #1 Attract new
customers by promising
superior value.
Goals
#2 Keep and grow
current customers by
delivering satisfaction.

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Four Goals of a Marketing System:

 Maximize consumption,
 Maximize consumer
satisfaction,
 Maximize choice, and
 Maximize life quality (Kotler
2000) PM
Marketing: The Strategic 3Cs Concept

3Cs Key Objectives

1. Customers  To satisfy the
needs, wants
and
expectations
of target
customers PM
Marketing: The Strategic 3Cs Concept

3Cs Key Objectives

2. Competition  To outperform
competition.
3. Company  To ensure
corporate
health and profit
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 Contemporary Marketing Approaches
Marketing mix

Conceptual approach

Social marketing
Approaches
and concepts Systems or holistic approach
in Marketing
Marketing management

Macro-marketing

Comparative marketing
(Llanes & Jurado: 1980)
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 The Marketing Mix
• The marketing mix developed by E. Jerome
McCarthy (McCarthy 1975:44) consists of 4Ps –
product, price, place, and promotion – all of which
influence buyer’s decision and responses.
• Each Ps relates to and is dependent on every other
Ps.
• The Ps are controllable variables that a company
may use in mapping a successful marketing
strategy.
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 Below is the formula for marketing success
(Schwartz 1977:67)

Product
(desirable)

Price
Promotion
Consumer (affordabl
(Effective)
e)

Place
(Availability
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 Conceptual Approach
This approach studies ideas of marketing
rather than the activities of marketing.
Its emphasis is on theoretical analysis and
development of new concepts whether of
consumer, products, marketing institutions,
functions, processes, or policies.
The concept of marketing is more important
that the definition of marketing
The conceptual approach is recognized when
marketing is defined to bring out various ideas
for which “ marketing stands.”
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 Social Marketing
Kotler and Anderson – Social Marketing
as “differing from other areas of
marketing only with respect to the
objectives of the marketer and his or her
organization.

Seeks to influence social behaviors not

the benefit the marketer, but to benefit
the target audience and the general
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society.
 Systems (Holistic) Approach
A system is set of interacting or
interdependent groups coordinated to form
a unified whole and organized to
accomplish a set of goals (Markin 1979:28).
Thus, marketing is perceived as whole,
interdependent units, the marketing
process conceptualized as “flows” and the
marketing structure as “systems” (Bartels
1976:202)
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 Marketing Management
This concept is a managerial approach to
marketing.
It emphasizes marketing management as a
decision making process and how decision
markers, specifically the marketing
manager, handles specific marketing
problems and situations.

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 Marketing Management
Marketing activities and strategies are
evaluated and developed to achieve
specific management objectives.

The approach establishes the position of

the “marketing manager” as a top-level
position in a company’s organization.

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 Macro Marketing Approach
• Macro marketing is the study of marketing
activities, institutions, and processes from
the national (societal) perspective.

• It looks at the aggregate flow of goods and

services in an economy to determine if it
benefits the society in terms of its resource
consumption and environmental effects
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 Comparative Marketing

Focus on the systematic study of

similarities and differences between
national marketing systems across
time, space and sectors for the purpose
of theory-building and theory.

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 Thank You!

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