MARKETING MANAGEMENT 1

MODULE # 1

Title: UNDERSTANDING MARKETING AND CORE CONCEPTS

6 Reasons Why do we need to study marketing management?

1. To understand that as a consumer, we pay for marketing activities;

2. To ensure an understanding of things today that contributes to the full development of a relevant
marketing man, or marketer, equipped with the tools necessary to make an analysis of obtaining
business conditions and consumer needs;

3. To respond to the present reality that today’s companies must urgently and critically rethink their
business mission and marketing strategies;

4. To fully appreciate the impact of market-driven strategies on gaining competitive advantage;

5. To fully understand that the overriding objective of the company is to satisfy its customers better than
the competition;

6. Finally, Marketing Management answers the persistent and nagging clamour of marketing
educators and students in many business schools, colleges, and universities; of marketing practitioners,
entrepreneurs and allied business professionals wanting to enrich their basic knowledge and skills in
marketing management that combines theory and varied applications workable within the Philippines
and Asian regions.

What is Marketing?
Defined as exchange of activities conducted by an individual and organization for the purpose of
satisfying needs and wants with the view of accomplishing individual and organizational objectives.

What is Management?
The process of planning, organizing, directing and controlling using the organizational resources to
attain individual and organizational objectives.

What is Marketing Management?

Many authors of marketing books, marketing educators or even marketers will define marketing
differently. The real meaning of marketing is either improved or modified or adapted to their own
operational needs.

“Marketing Management is the process of planning and executing the conception, pricing, promotions
and distribution of ideas, goods and services to create exchanges that satisfy individual and
organizational objectives.”

Marketing Process
 Determine if there is a potential demand for the product.
 Develop and test-market the product prior to mass production
 Name the product, through branding or generic name brands
 Design a package for the product, relative to competition
 Analyze direct competitors’ products
 Determine the price of the product, vis-à-vis competition
 Develop creative advertisement for the product
 Recruit and train qualified salespeople
 Plan sales promotions techniques such as displays and coupons, for trade channels or end-users
 Develop procedures for transportation products at right place and time
 Determine locations for plants and warehouses at least cost

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SELLING CONCEPT VERSUS MARKETING CONCEPT

 PRODUCTION CONCEPT holds that consumers will prefer products that are widely available and
inexpensive.
 PRODUCT CONCEPT holds that consumer will favor those products that offer the most quality,
performance and innovative features.
 SELLING CONCEPT holds that consumers will not buy enough of the organization’s products
unless the organization undertakes a large selling and promotions efforts.
 MARKETING CONCEPT holds that achieving organizational goals depends on determining the
needs and wants of target markets and delivering the desired expectations more effectively and
efficiently than competitors.
 SOCIETAL MARKETING CONCEPT holds that the organization’s task is to determine the needs,
wants and interests of the target markets and to deliver the desired satisfaction efficiently and effectively
in an way that preserves or enhances the consumer’s and society’s well-being.


3 KEY ELEMENTS OF MARKETING MIX

1. SATISFYING OUR CUSTOMERS
2. DELIGHTING OUR CUSTOMERS
3. SUPRISING OUR CUSTOMERS

Exhibit 1
PRACTICAL EXAMPLES OF NEEDS AND WANTS
PARTICULARS NEEDS WANTS
1. HUNGER FOODS Chinese:
Noodles, siomai, tikoy, buchi
Americans:
Fries, hamburger, muffins
Filipinos:
Rice-intensive meals: kare-kare
with bagoong, adob, bicol express
2. FASHION WEAR CLOTHIN Signature items:
G Jag jeans, bench, bally

3. SHELTER HOUSING Apartment, dorm, townhouse,

condominium
4. TRANSPORTATIO VEHICLE Car, vans, bus, jeepney,
N motorcycle, airplane, roro
5. INTERMENT MEMORIA Memorial plans or family-initiated
L services
SERVICES

8 CORE CONCEPTS OF MARKETING

1. NEEDS & WANTS 5. TRANSACTION

2. DEMANDS 6. RELATIONSHIP
MARKETING

3. VALUE AND COST 7. PRODUCTS

4. EXCHANGE 8. MARKETS

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1. NEEDS AND WANTS

Human Needs and Human Wants are oftentimes interchanged or interpreted to be synonymous. So, we
have some distinction of the 2 terms.
NEED: to be in want of, ought to have; be unable to do without; to be necessary; requirements.
HUMAN NEED is a state of felt deprivation of some basic satisfaction.
According to Maslow’s Hierarchy of Needs they include the 5 stages:
1. Physiological or body needs
2. Security and safety needs
3. Social needs
4. Ego needs
5. Self-actualization

WANT: to require; to wish to have, something desired; lack.

HUMAN WANTS are desires or intentions or expectations for specific satisfiers of these deeper needs.
These are the expression of needs and are shaped and attributed by one’s culture, individual personality
and such social and environmental forces: schools, firms and community, families, religion and socio-
civic organizations.

2. DEMAND to ask for as a right; to ask for with authority; to ask to know or to be told; a claim; the
desire and ability to buy; the quantity of a commodity wanted at a particular price.

8 DIFFERENT STATE OF DEMAND

NEGATIVE DEMAND
NO DEMAND
LATENT DEMAND
DECLINING DEMAND
IRREGULAR DEMAND
FULL DEMAND
OVERFULL DEMAND
UNWHOLESOME DEMAND

3. VALUE AND COST

VALUE an estimate of the capacity of each product( goods and services) to satisfy a set of needs; the
consumer’s estimate of product’s overall capacity to satisfy one’s needs and wants.
COST the equivalent amount to obtain the product. The intended buyer will consider the product’s
value and price before making a choice, i.e., the product that will have the most value per amount spent.
4. THE EXCHANGE PROCESS
Exchange is the act of obtaining a desired product for someone by offering something in return.
5 WAYS TO SATISFY THE EXCHANGE PROCESS
1. There are at least two parties, the seller and the buyer.
2. Each party has something that might be of value to the other party.
3. Each party is capable of communication, commitment and delivery.
4. Each party is free to accept or reject the offer partly or completely.
5. Each party believes it is appropriate or desirable to deal with the other party, any place and anytime.

5. TRANSACTIONS
The basic unit of exchange, and consists of a trade of values between two parties, and there are contracts
to support and enforce compliance of the transactions.
When an agreement is arrived at, transaction takes place.

Transaction involves several dimensions

 At least 2 things or concerns value;
 Agreed-upon terms and conditions;
 A suitable time of agreement, and

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 A place convenient for agreement

6. RELATIONSHIP MARKETING
Aim of building long-term mutually satisfying relations with key parties-customer, suppliers,
distributors-in order to earn and retain their long –term preference and business.

7. PRODUCTS
Is anything that can be offered to target market to satisfy a need and want.
A product is a set of tangible and intangible attributes, including packaging, color, price, quality, and
brand plus the services and reputation of the seller; consumers are buying more than a set of physical
attributes they are buying want-satisfaction in the form of product benefits.

7 TYPES OF PRODUCTS
1. PHYSICAL OBJECTS. These are tangible goods such as computers, fax machines, cellular phones
etc. Something we can hold, touch, feel, see, read, use or consume.
2. PLACE. These are vacation resort or tourism spots such as Boracay and Palawan.
3. ACTIVITIES. These are what we enjoy doing for relaxation such as ballroom dancing, sing-along
and gardening.
4. PERSON. These could be political candidates, actors, teacher, singers and radio/tv personalities.
5. ORGANIZATION. These are entities we join such as slimmers world international for health and
physical fitness program and alumni association.
6. IDEA. These are socio-economic-technological-political philosophies such as family planning
program and project feasibility study or term paper.
7. SERVICE. Are intangible products that often involve human or mechanical effort such as travel
services, hotel and restaurant services, dental and medical services, beauty parlor and laundry services.

THE FIVE LEVELS OF A PRODUCT

1. THE CORE BENEFIT. The fundamental service or benefit that the target customer is really buying.
Sellers and Marketers must see themselves as benefit provider

MUST READ!!!
10 REAL-LIFE REASONS WHY
PEOPLE BUY
1. In the case of cosmetics, the women are
buying: HOPE
2. In the case of beauty parlors, the
customer is buying : MIRACLES
3. In the case of a Motel, the client is
buying: SHORT TIME ROMANCE
4. In the case of HEALTH and FITNESS
CENTERS, the target markets are
buying: MUSCLES; MS. BODY
BEAUTIFUL or MR. BEAUTIFUL.
5. In a Hair Rejuvenating Salon, you’re
after: BMW (BUHOK MO WIG).
6. In funeral homes: AIRTIGHT BEDS
7. In Mercedes Benz : STATUS
8. In politics : POWER, FAME
9. In groceries: FEEDS
10. In cemeteries: FOREVER REST

2. GENERIC PRODUCT. A generic version of the product like goods or services. Ascorbic Acid
Tablet, Corn beef, Oven, a public beach resort and talipapa.

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3. EXPECTED PRODUCT.A set of attributes and conditions that target buyers normally expect and
agree to when they actually purchase this product.
4. AUGMENTED PRODUCT. This includes among others additional services and benefits that
distinguish the company’s offer from competitors’ offers.

3 examples of augmented product:

1. Offering target customers, “free Goods” in addition to the regular discounts, such as “Buy 10 plus 1
free”.
2. Free scholarship or seminars
3. Delivery arrangement, warehousing and other marketing services.

5. THE POTENTIAL PRODUCT. This includes all of the augmentations and transformations that this
product might ultimately undergo in the future; company

Products can be classified into 3 groups according to their durability or tangibility.

1. NON-DURABLE GOODS. These are tangible goods that normally are assumed in one or few uses
every day or anytime of the day.
2. DURABLE GOODS. These are tangible goods that normally survive many uses or that last longer
after the purchase time.
3. SERVICES. These are activities, benefits or satisfactions that are intangible and perishable.

4 TYPES OF GOODS ACCORDING TO CONSUMER SHOPPING HABBITS:

1. CONVENIENCE GOODS. There are goods a customer usually purchases frequently, immediately
and with a minimum of effort.
Kinds of convenience goods
1.1 Staple Goods. Goods that consumers purchase on a regular basis such as : toothpaste, coffee,
sugar, rice and milk.
1.2 Impulse Goods. Purchased without any planning or search effort such as :Supermarket check-
out counter’s products like battery, toothbrush, candies, blades etc..
1.3 Emergency Goods. Purchased when a need is urgent, such as : candles, emergency lamps,
band-aids, medicine and umbrellas.
2. SHOPPING GOODS. Goods that the customer, in the process of selection and purchase,
characteristically compares on such basis as suitability, quality , price and style.
3. SPECIALTY GOODS. With unique characteristics and/or brand identification for which a
significant group of buyers are habitually willing to make purchasing effort.
4. UNSOUGHT GOODS. These are goods that the consumer does not know about or knows about but
does not normally think of buying.

8. MARKETS.
Consists of all the potential customers sharing a particular need or want who might be willing and able
to engage in exchange to satisfy that need and want.

5 BASIC MARKETS

RESOUCE MARKETS

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MANUFACTURER CONSUMER MARKETS

GOVERNMENT
MARKET

INTERMEDIARY MARKET

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