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Introduction to marketing.

MK definitions
The definition of marketing can be grouped into 2 big
categories:
1st classical(or narrow)
2 one - modern (broad)
In classical terms marketing is defined as the
performance of business activities that direct the flow
of goods and services from producer to consumer or
user. The classical definition is oriented to the
physical distribution of ec. Goods and services and it
has several disadvantages or weaknesses:
-The role of distribution and marketing channels is
overvalued.
-Government and nonprofit organizations which are
frequently engaged in marketing activities are
omitted.
-The strong impact of marketing by many publics
such as stockholders,employees unions or consumer
organizations is not considered.
The modern definition of marketing was officially
recognized by the American Marketing Association
1985 when it replaced the classical definition with this
one. Marketing is the process of planing and
executing the conception, pricing, promotion, and
distribution of ideas, goods and services in order to
create exchanges, that satisfy individual and
organizational objectives.
The modern definition is much broader because a
good definition of marketing should imply not only ec.
Goods and services but it should cover nonprofit
organizations, people ideas, places and it must be
oriented to satisfy consumer needs and preferences.
The most used definition nowadays is the definition
given by Kotler that is also accepted by the
American Marketing Association. According to this
definition marketing is the process of anticipation
management and satisfaction of demand throw the
exchange process involving goods, services
organizations, people, places and ideas. This
definition has 3 terms:
1.-anticipation of demand these activities
require a company to do consumer research on a
regular basis so that it develops and introduces
products that are desired by consumers.
2.-management of demand it includes
stimulation,facilitation and regulation tasks.
*Stimulation task make consumers to want the firms
products through attractive product design, intensive
promotion, reasonable prices and other strategies.
*Facilitation the process whereby the firm makes it
easy to buy it products through convenient locations,
availability of credit and well informed sales people.
*Regulation is needed when there are peak periods
or when demand is grater than supply.
3.-satisfaction of demand it involves actual
performance, safety and availability of options after
sale services. For consumers to be satisfied, the
goods, services, organizations, people, places and
ideas, they are interested in must to fulfill the
expectations.
The evolution of marketing.
The origins of marketing can be traced to peoples
earliest use of the exchange process, meaning
barter(trading one resource on another).
During the industrial revolution the modern system of
marketing began, it includes 3 periods:
1. Production (during the initial stage of
the industrial revolution output was limited and
marketing was devoted to the physical distribution of
products. Companies didnt have to conduct
consumer research, modify products or adapt to
consumer needs because the demand was high and
competition low. Their goal was to increase the
production to keep up with demand.
2. Sales period/era (once a company
was able to maximize its production capabilities it
hired a sales force to sell its inventory. During this
stage consumer tastes and needs received little
consideration, and the role of advertising and sales
people was to make desires of consumers feet the
products being manufactured).
3. Marketing period - it includes 2
periods:
a. Marketing department (as competition grew,
supply began to exceed demand , a firm could not
survive without marketing activities, so a marketing
department was created , it conduced consumer

research and advised managers on how to design


price, distribute, and promote products. The
marketing department participated in company
decisions
b. marketing company period (competition is high
and sophisticated so the major decisions within one
organization are made on the bases of consumer
research. )
The central role of marketing has been recognized by
many companies and marketing department has
beeduel the equal of others in the
company.Consumers must be drown and kept to the
firms brands.
Marketing functions.
There are 8 basic functions :
1.- marketing management it includes
planing, implementing and controlling the
marketing program and individual marketing
functions. It evaluates the risks and benefits in
decision making.
2.- marketing research and analysis it
involves adapting to external factors that affect
the success of company and collecting data for
solving specific marketing issues.
3.- product planing involves developing and
maintaining products, product assortment,
product images, brands, packing, and optional
features.
4.-pricing,planing involves determining
price levels and ranges, pricing techniques,
terms of purchase, price adjustments, and the
use o price as an active or passive element.
5. promotion planing involves
communicating with customers and general
public through advertising, public relations,
personal selling and sales promotion.
6. distribution planing includes establishing
relations with distribution general
intermediaries physical distribution, inventory
management warehousing, transportation, hall
selling, retailing
7. consumer analysis includes evaluation of
consumer characteristics, needs and purchases
process and also the selection of target
segments at which we concentrate marketing
efforts.
8.broadering the organization marketing
scope involves deciding on the marketing
implementing strategy or marketing approach
that a company should use on internal and
international markets.

Marketing performers.
There are several types of marketing
performers.
Marketing performers are the organizations
or individuals that undertake one or more
marketing functions. They include
manufacturers/producers and service
providers.

Final consumers family or person


who buys goods and services for personal or
family use.

Organizational consumers institutions or organizations that buy goods


and services for use in its operations.

Wholesalers (distribuitori angro)


persons or organizations that buy products to
resale them to retailers or organizational an
final consumers.

Retailers- these are persons and


companies whose activities involve the sale of
goods and services to final consumers.

Marketing specialists include firs


or persons that concentrate on one specific
marketing function.
Marketing Approaches (Philosophies)
Production concept- according to this approach
consumers will desire products that are available and
highly affordable , so the management should focus
on improvement production and distribution
efficiency.
Product concept consumers will want products
that offer the post quality, performance and features;
and organization should devote energy to make
continuous product improvements.
Selling concept consumers will not buy enough of

the organizations products unless it undertakes a


large selling and promotion effort.
Marketing concept - achieving organizational goals
depends on determining the needs and wants of
target markets and delivering the desired satisfaction
more efficiently and effectively.
Societal concept the organization should
determine the needs, wants and interests of target
markets and deliver the desired satisfaction more
efficiently than competitors but in a way that
maintains and improves the consumers and societys
well being.
Relationship concept achieving organizational
goals depends on establishing long term relationship
with its customers and creating loyal consumers.
Marketing environments
Microinveronement of the companies
all the actors and forces outside marketing that affect
management ability to develop and maintain
successful transactions with its target customers. The
companys microenvironment refers to the company
that affect directly its ability to serve its customers.
Types: 1. suppliers (there are 3 main groups of
resources obtained from suppliers:
a.fix assets(land,equipment,buildings);
b.current assets (raw material that is
used for the 1 process);
c.labor
2.intermediars
a.middleman(retailers,wholesalers),
b.physical distribution firms
(warehouses,transportation firms),
c. financial
intermediaries(companies with financial
resources);
3.customers markets(final consumers),
industrial markets(organizational
consumers),
resale markets(organizations that buy
goods and services in order to resell them for profit),
government markets(government
agencies that buy goods and services in order to
produce public services or transfer these goods and
services to others who need them)
4.international markets and consumers (foreign
buyers: consumers, , government in foreign market)
Competitors
A company make face with the following types of
competition:
1.direct among producers and sellers of similar
products.
2.indirect among goods and services that can be
substituted for one another.
3.inter-industrial among all organizations that
compete for the consumer purchasing power.
Publics (organisme publice) may include:
1 financial publics(banks,investment funds,
stockholders)
2.media publics (magazines, news papers, radio
and TV- stations)
3.government publics(government agencies, local
authority)
4.citizan action publics (consumers organizations,
nonprofit organizations, employees unions
(sindicatele))
5.general publics( general image of the company
within a society).
Macroenvironement of the companies
Include the larger societal forces that affect whole
microenvironment and indirectly its company.
No one business is large or powerful to create
important changes in the external environment, thus
marketing managers need to adapt to all
microenvironment influences.
Microenvironment include the following
forces/factors:
1.demografic factors (people statistics such as the
age, race,ethnicity, and location.Demogr.fact. are
very important because the basis for any market are
people and they are strongly related to consumers
buyer behavior in the marketplace.
2.natrual factors- the company should be
concerned about the following problems related to the
natural resources: a. The lack of raw materials;
b.increased level of pollution
c. increased cost of energy
d.government intervention in natural resource
management

Secondary data sources


It is important to distinguish secondary and
primary sources of information.Secondary
information sources are goals that already
exist and were not developed for the
particular problems being studied. Marketing
managers always consult secondary sources before
passing to primary data collection because
secondary sources are usually less expensive and
quiklier to obtain.
Secondary data sources can be of 2 types:
1. internal sources a good place to start
collecting information is within the organization. A
company may use the following sources:
a. past marketing plans this source made
statistical and strategical information such as:
pervious marketing strategies, risks that
appeared,time needed for achieving the
strategy,etc.
b.accounting department collects considerable
amount of detailed information on all the company
transactions. It includes such information as :the
total value of sales, stock inventory, the sales of
retailers and wholesalers.
c.sales people this source may give information
related to: changes in attitudes and behavior of
consumers, attitudes of members in distribution
system, information about competitors and also
consumer preferences.
d.research and development department this
department not only focus on bringing the
companies product ideas but may also analyze
competitors products, costs, technology, and
quality.
2.external data sources- this information is
collected by external organizations or persons for
public use. The most often used external secondary
sources are:
a.trade associations this industry organizations
often collect information about the member
companies, the sales and profits.
b.general business publications newspapers,
company activity, strategy, the introduction of new
products,and consumer preferences and attitude.
c. trade publications these sources often
provide detailed sale and share information; also
new products strategies, promotional plans or
personal changes.
d.academic publications ( old books,articles
that you may find in libraries)
e.corporate reports (annual companies reports)
d. government publications- this sources is most
commonly used in international marketing activities
3.economic factors
marketing managers must understand and react to
the ec. Environment and its changes.
The 3 ec.problems of greatest concern to the most
marketers are :
a.income distribution;
b.inflation;
c.recession.
During recession a company might use the following
marketing strategies:
. improve existing products and introduce
newones.The goal is to reduce the productivity hours
waste, and the cost of materials.
.mantin and expand customer services such as sales
of replacement parts and other after sale
services(warranty) ;
.promoting product value. Customers may switch
from high quality products to less expensive ones; in
this case,companies may try to focus and promote
quality, durability of the product and also satisfaction
and capacity to save time and money.
4.technological factors are very important
because they may become an effective instrument
against recession.New technology that reduces
production costs, can be one of the companies most
valuable asset. External technologies are important to
managers for 2 reasons:
a.aquering the technology the company may be able
to operate more efficiently or to create a better
product.
b. a new technology may give a company a strong
competitive advantage
5.legal and political factors these factors
include:
a.legislation(regulating business)
b.the general political climate of the society

c.the degree of concentration of political power


d.the number and the nature of political
organizations
e.the activity of public interest groups and
regulatory agencies
6.cultural factors include religion, cultural values
and attitudes
,subcultures, role of family and society and the
gender problems.
Marketing research process
Marketing research is the function which links the
consumer competition and public to the marketer
trough information. This information is used to
identify and define marketing opportunities and
problems, generate and evaluate marketing actions,
monitor marketing performance and improve
understanding of marketing as a process. The
mission of marketing research department is to
obtain, analyse and interpret marketing as other
relevant information needed for decision making at all
levels of management. These activities need to be
carried out in a cost-effective way and with high
professional standards.
Marketing research has 3 important functions:
1. scanning for opportunities and problems (a
good research operation collects and analyzes
information about customers, competitors,
technology, global ec. Conditions;it provides input to
marketing managers that they can use to find new
markets or existent products,cover new segments
and anticipate competitors movements)
2. the risk assessment of future problems (when
considering alternative marketing strategies the
marketing manager should test them against
different situations in order to minimize all future
risks)
3. maintaining of current programs(marketing
research plays a key role in monitoring the progress
of the programs to its objectives)
Marketing research is most commonly used for the
following topics:
1.understand competitors
2.develop a new strategy for existing products
3.identify marketing segmentation opportunities
4.understand how customers perceive the product
5.evaluate how customers in different market
segments make buying decisions and react to various
advertising messages.
6.determine what price to set
7.forecast the sales of existing and new products
8.develop new product concept
Marketing research can be conducted in six steps:
1.problem definition a key to any kind of
research is to establish the problem to be addressed.
2.information needs the marketer researcher
needs to establish what kinds are most appropriate to
solve the problem.
3.type of research the company may use 3 types
of research :
a.exploratory- this type of study obtain preliminary
information that will help better to define the
problem.
b.descriptive this type of research is used to
describe things such as the market potential for a
product, demographic data and altitudes of
consumers who buy the product.
c. causal this type of research tests hypothesis
about cause and effect relationships.
4.data collection at this stage depending on the
time of information the researcher must establish the
specific data sources including the sample (esantion)
of people or organizations that are studied.
5. data analysis and conclusions internal
organization or external must analyze the data and
draw conclusions that address the stated problem
6.reporting an report is usually written to
communicate the conclusions to the marketing
organizations and other relevant groups.
Primary data sources are those that are
generated for the particular problem being studied
and are obtained by the company itself.
Primary data sources may be obtained trough:
1.informal research it is often useful to collect
information trough informal
observation(friends,relatives, customers); these
sources may not be representatives samples, but
such information can help the company to form an
hypothesis about the quality of the companys
product or the competitors product of the companys

marketing strategy.
2. qualitative research usually involves small
samples of customers and provides information that
does not lead directly to decisions, but may give an
important input for other researches.This type of
research may be of 2 types:
a.focus group is the best known and most widely
used qualitative method.Represent a small group of
people typically chosen for their membership in
various target groups of interests.
The people could be consumers, non-consumers,
former consumers, influencers of buying decisions or
they may be chosen for their personal
characteristics.
These people are usually brought together in a room
and have a discussion about the topic chosen by the
marketing manager and led by an professional
moderator.
The focus group is often observed on videotape by
the marketing group. The moderator usually develops
a repot on his conclusions.
The most common disadvantage of focus group is
attempting to use these conclusions to draw general
solutions. This may be an inexpensive to do research,
but because the groups are small and not all
behaviors may be generalized, the results of focus
group may be misleading.
However, focus group is an important source of
information for keeping-in-touch with customers,
their attitudes and preferences.
b.observation not all observational techniques are
informal, so a common observational method is to set
up a one-way mirror in a supermarket or other retail
outlet. In this way, the marketing manager can
observe the behaviors of the shoppers in different
demographic groups. The researcher might count the
different items that are examined, calculate how
much time is spent considering a purchase in a
product category or evaluate the interactions with a
sales person.
3.quantitative research involves statistical
analysis of data in order to provide descriptive
results. It is usually applied to a large number of
respondents and provides very concrete results that
lead directly to conclusions.
Quantitative methods may be of 3 types:
a. survey a big portion of many research budgets
that is devoted to survey research that is performed
by giving questionnaires to people. The two primary
issues for the marketer to consider are the sample
from which the responses are taken and that can be
used.
A company may use the following types of survey
research:
Personal interview
Phone interview
Mail survey
Internet survey
The main criteria for evaluating the survey
alternatives are:
Cost most marketers have a fixed budget for
research, so cost considerations are very important.
Control this refers to how percentage of
completed surveys
Time to obtain data.
Flexibility this characteristic describes how
many different kinds of questions can be used.
b.experiment in science,experiment is the only
true way to determine the cause and effect
relationship.The purpose of an experiment is to allow
the marketing manager to analyze different
interactions between variables.
Experiments can be of 2 types:
Laboratory experiment that is run in an
artificial environment, such as laboratory,
classroom,marketing department(car testing);
Field experiment that takes place in a
realistic environment, where the product is usually
used or the process usually happens
c.panel (panelul de consumatori)- a set of customers
who are enlisted to give responses or to provide data
repeatedly over a period of time. The main benefit of
this method is the opportunity to observe changes in
behavior caused by changes in marketing variables or
other external factors.
There are several problems with panels.The most
important is panel drop-out (refuz), because it is
difficult for marketer to keep panel members
sufficiently interested to remain on panels.The second

problem is that people who agree to be o panels are


not always representative .