BERHAN COLLEGE

Graduate Program
WELLCOME TO MANAGEMENT DEPARTMENT
course : ADVANCED MARKETING
MANAGEMENT
Instructor:
Birhanu Moltot (Assistant Professor)
E –mail: moltot2112@gmail.com
 CHAPTER ONE-
An Overview Of Marketing And Marketing
Management
❑ What is marketing?
❑ What is Market?
❑ What is marketing Management?
❑What are the different core concepts of
marketing?
❑ What philosophy (Orientation) should guide a
company's marketing efforts?
❑ What is Marketed?
 Marketing and its core concepts
What is marketing?
• Marketing is a process/an act of
➢Identifying, serving and fulfilling unfulfilled demands of
customers
➢Is all about producing, pricing, promoting and placing
the right product to the right market and sale it at
desired profit/price
➢Refers to conducting business activities, which involves
exchanging some thing of value i.e. birr for
product/service either with in or out side a given nation
➢Is an act of either producing a product/service or
purchase and resale it at a desired profit/price.
What is Marketing?

• Many people think of marketing only as

selling and advertising.
• Selling and advertising are only the tip of the
marketing iceberg.
• Today marketing must be understood not in
the old sense of making a sale---“telling and
selling” – but in the new sense of “Satisfying
customer needs”.
 Marketing Definition by AMA

• ‘Marketing consists of those activities

involved in the flow of goods and services
from the point of production to the point of
consumption.’ (AMA, 1938)
• ‘Marketing is the process of planning and
executing the conception, pricing, promotion
and distribution of ideas, goods and services
to create exchange and satisfy individual and
organizational objectives.’ (AMA, 1985)
Marketing Definition by AMA

• ‘Marketing is an organizational function and a

set of processes for creating, communicating
and delivering value to customers and for
managing customer relationships in ways that
benefit the organization and its stakeholders.’
(AMA, 2004)
• ‘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.’ (AMA, 2007)
 Definition of Marketing

Generally, the definition of marketing can be

grouped in to two: classical (narrow) definition
and modern (broad) definition.
Classical Definition
➢ In classical terms marketing can be defined as
“the performance of business activities that
direct the flow of goods and services from
producers to consumers”.
➢This definition is too narrow to describe marketing.
➢It emphasizes the distribution aspect of marketing.
Definition of Marketing

Modern Definition
• In broader terms marketing is defined as a
system of business activities designed to
plan, price, distribute and promote want
satisfying products (goods and services) to
present and potential customers.
In general, Marketing can be defined in different
ways
Marketing as a Learning discipline.
Marketing as a function of a Company
Marketing as a way of doing business
Marketing is the delivery of customer satisfaction at
a profit.
Marketing deals with identifying and meeting human
and social needs profitably.
The shortest definitions of marketing is "meeting
needs profitably.”
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Criticisms of Marketing
▪ Marketing communications are not always honest
“They can sometimes play on people’s emotions
and fears and can cause them to buy things they
really don’t need.”
▪ It can “psychologically manipulate” consumers.
▪ Youth may be targeted by companies selling adult
products (e.g. alcohol).
▪ Marketing sells products that can be harmful. Some
ads are crude.
 What is Marketing Management?
▪ Marketing management is a business discipline focused
on the practical application of marketing techniques
and the management of a firm's marketing resources
and activities.
▪ It is The art and science of choosing target markets and
getting, keeping, and growing customers through
creating, delivering, and communicating superior
customer value.
▪ The marketing management process requires an
understanding of the following.
- The company and its mission, strategies, and
resources;
- The macro environmental context in which it operates;
- Customers and their needs and wants; and
- Competitors.
Marketing management process includes the
following:
▪ Analysis/Audit - where are we now?

▪ Objectives - where do we want to be?

▪ Strategies - which way is best?

▪ Tactics - how do we get there?

▪ Implementation - Getting there!

▪ Control - Ensuring arrival

 Marketing Management Involves
✓ Demand Management : The organization has a
desired level of demand for its products.

▪ At any point in time, there may be no demand,

adequate demand, irregular demand, or too much
demand, and marketing management must find
ways to deal with these different demand states.

✓ Building Profitable Customer Relationships: Beyond

designing strategies to attract new customers and
create transactions with them, companies now are
striving to retain current customers and build lasting
customer relationships.
 What is Market?
• Economists describes a market as a collection of
buyers and sellers who transact over a particular
product or product class.
• Marketers define a market as:
– Market is the set of actual and potential buyers of
a product.
– These buyers share a particular need and want
that can be satisfied through exchange
relationship.
▪ Market = population+ Purchasing Power +
Purchasing Need
Examples:
- How to understand the market of purified water?
- What is the market of Nike?
- How to understand the Nike’s market?
 Consider the following Key Customer
Markets
Consumer Market
▪ The aim of buying is to consume for their
own or somebody who has something to do
with in consumer market.

Business Market
▪ Business buyers buy goods for their utility in
enabling them to make or resell a product
to others for the purpose of making profits.
 Global Market
▪ Companies selling their goods and services
in the global marketplace face additional
decisions and challenges.

Nonprofit and Government Markets

▪ Companies selling their goods to nonprofit
organizations such as churches,
universities, charitable organizations, or
government agencies.
 Simple Marketing System
Communication

Goods/services
Industry Market
(a collection (a collection
of sellers) Money of Buyers)

Information
The five basic market and their connecting flows
Core Concepts of Marketing
Customer, Needs, Wants, and Demands

Market Offers

Customer Value and Satisfaction

Exchange and Transactions

Relationship Marketing
1. Who is a Customer?
▪ A customer is anyone who is in the market
looking at a product or service for attention,
acquisition, use or consumption that
satisfies a want or a need.
✓ Customer has needs, wants, demands and
desires.
✓ Understanding these needs is starting point
of the entire marketing.
✓ These needs, wants …… arise within a
framework or an ecosystem.
✓ Understanding both the needs and the
ecosystem is the starting point of a long
term relationship.
 Needs, Wants and Demands
Needs:
▪ The most basic concept underlying marketing is that
of human needs.
▪ Human beings are born with needs to be satisfied
and they are in continuous struggle and effort to
satisfy them.
▪ Human have many complex needs:
– Basic needs for food, clothing, warmth, and safety
– Social needs or belonging and affection
– Individual needs for knowledge and self –
expression
▪ Human needs are state of felt deprivation of the basic
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human requirements.
Discussion Questions

Do you think Marketers can create human

needs?.
Wants:
➢ Wants are shaped by ones society and described in
terms of objects that satisfy needs.
• When they are directed to specific objects that
might satisfy the need.
– Ex: An Ethiopian needs food but wants enjera
and bread.
▪ It express in terms of objects.
▪ Are not to be backed up by purchasing power
Demands:
➢Demand–are wants for specific products
backed by purchasing power.
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Demands:

➢Demands are occurred when there is only the

willingness to buy a product and the ability to pay
for it.
➢E.g. many people want a Mercedes but only few
are able and willing to buy one. (Want + money )
➢Companies must measures not only how
many people want their product but also how
many would actually be willing and able to
buy it.
 Demand States and Marketing Tasks
1. Negative demand
▪ If a major part of the market dislikes the
product and may even pay a price to avoid it.
➢ E.g. People prefer tablet than surgery

✓Reason: Poor income, wrong perceptions,

attitudes
2. No demand
▪ Target consumers may be unaware of or
uninterested in the product.
E.g. Farmers may not be interested in a new farming
method, college students may not be interested in
foreign-language courses.
3. Latent demand
▪ Many consumers may share a strong need that
cannot be satisfied by any existing product.
➢ E.g. harmless cigarettes, safer neighborhoods, more fuel-efficient
cars and better school.
4. Declining demand:
▪ lower demand in the market.
✓Every organization faces declining demand for
one or more of its products.
✓Consumers begin to buy the product less
frequently or not at all.
✓Churches have seen membership decline;
private colleges have seen applications fall.
5. Irregular demand
▪ Many organizations face demand that varies on
a seasonal, daily, or even hourly basis, causing
problems of idle or overworked capacity.
6. Full demand
▪ Consumers are adequately buying all
products put into the market place.
✓ Organizations face full demand when they are
pleased with their volume of business.
Marketing task: maintain the current level of
demand in the face of changing consumer
preferences and increasing competition
7. Overfull demand:
▪ More demand than can be handled or delivered
▪ A demand level that is higher than they can or
want to handle.
8. Unwholesome demand:
▪ Demand for unhealthy or dangerous products.
▪ Unwholesome products will attract organized
efforts to discourage their consumption.
Marketing Tasks: Unselling campaigns should
be conducted against cigarettes, alcohol, hard drugs,
handguns, X- rated movies, and large families.
In each case, marketers must identify the
underlying cause(s) of the demand state and then
determine a plan for action to shift the demand to
a more desired state.
2. Market Offers (Product, Services,
Information, etc.)

• Consumers’ needs and wants are fulfilled

through market offerings
–Offerings include products, services,
information, or experiences as well as persons,
places, organizations, information, and ideas.
– Services—activities or benefits offered for sale
that are essentially intangible and do not result
in the ownership of anything.
 3. Customer Value and Satisfaction
• The offering will be successful if it delivers value
and satisfaction to the target buyer.
✓ Value is the customer estimate of the product’s
over all capacity to satisfy his/her needs and wants
or a measure of the usefulness of the product.
✓ Reflects the perceived tangible and intangible benefits
and costs to customers.
✓ It is the combinations of quality, service and price.
• Customer value is the difference b/n the values
that the customers gain from owning and using
product and the cost of obtaining it.
 Cont’……,

• Satisfaction: is a person’s feeling of pleasure resulting

from comparing product perceived performance and
expectation
– Customer satisfaction– reflects person’s comparative
judgments resulting from a product’s perceived
performance (or outcomes) in relation to his/her
expectations.
• It is the key influence on future buying behavior
• Customers expectations must be set at the right level of
expectations, neither too low or too high.
– Customer Value & Satisfaction are key building blocks for
developing & managing customer relationships
 Cont’……,

• Satisfaction = f (perceived performance and

expectation).
A. if P > E = delighted
B. if P = E = satisfied
C. if P < E = dissatisfied
➢Satisfied customer repurchases, spreads word
of mouth and maintains long term relationship
with the company.
➢Dissatisfied consumer switches to competitors
brands and disparages the product.
 4. Exchange and Relationships

▪ Exchange: The act of obtaining a desired object from

someone by offering something in return.
• There are five conditions that needs to be satisfied:
➢There are at least two parties
➢Each party has something that might be of value to
the other party
➢ Each party is capable of communication & delivery
➢ Each party is free to accept or reject the exchange
offer
➢Each party believes it is appropriate or desirable to
deal with the other party
Cont’……,

▪ Transaction: It takes place when the two

parties reach into an agreement.
– A transaction consists of a trading of values between
two parties: one party gives X to another party and
gets Y in return.
– Transaction-A trade between two parties that involves
at least two things of value, agreed-upon conditions, a
time of agreement and a place of agreement.
– It involves two things:
➢A time of agreement and a place of agreement
 5. Customer Relationship Management
▪ Customer Relationship Management /CRM/: The
process of creating, maintaining and enhancing
strong, value-laden relationships with customers
and other stakeholders.
▪ Beyond creating short-term transactions, smart
marketers work at building long-term relationships
with valued customers, distributors, dealers and
suppliers.
▪ They build strong economic and social connections
by promising and consistently delivering high-quality
products (good/service) and fair prices.
▪ The overall process of building and maintaining profitable customer
relationships by delivering superior customer value and
satisfaction.
▪ Relationship Building Blocks: Customer Value and Satisfaction
 Philosophies of Marketing
❖ What philosophy (Orientation) should guide
a company's marketing efforts?

✓ The production concept

✓ The product concept
✓ The selling concept
✓ The marketing concept
✓ The societal marketing concept
 ▪ Consumers prefer products that are
widely available and inexpensive
Production Concept ▪ Demand for a product is greater than
supply

▪ Focusing too much on one’s product

▪ Consumers favor products that
offer the most quality, performance,
Product Concept or innovative features.

▪Marketing myopia is a term coined

by Theodore Levitt (1975) to describe
firms that define themselves in terms
of a product rather than in terms of
the need that the product satisfies.
▪ e.g. Rail transportation
 ▪ Consumers will buy products only
if the company aggressively
promotes/sells these products.
▪ Focus on advertising.

▪ The selling concept holds that

consumers and businesses if left
Selling Concept alone, will ordinarily not buy
enough of the organization’s
products.
▪ The organization must, therefore,
undertake an aggressive selling and
promotion effort.

▪ Useful for unsought goods, i.e.,

encyclopedias, funeral plots and
Political candidates.
 ✓ Focuses on needs/ wants of target
markets & delivering value better
than competitors.

✓ Supply for a product is greater

than demand

✓ Creating intense competition

among suppliers.
Marketing Concept ✓ Company first determines what
the consumer wants, then produces
what the consumer wants, then sells
the consumer what it wants.

✓ The marketing concept holds that

the key to achieving its
organizational goals consists of the
company being more effective than
competitors in creating, delivering,
and communicating customer value to
its chosen target markets.
 ✓Satisfying customers’ short-term
needs may not be compatible with
society’s needs.
✓ Should a firm worry about its
customers’ short-term needs, or
consider what is best for society?
Societal Marketing ✓Social responsibility is the belief
Concept that organizations have a
responsibility to society as a
whole.
✓ An organization must think of
the effects of its actions have on
society.
✓ Need to balance 3 items
▪Company profits
▪Customer wants
▪Society's interests
Three Considerations Underlying The Societal Marketing
Concept

Society
(Human welfare)

Societal
marketing
concept
Consumers Company
(Want satisfaction) (Profits)
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 ✓ The societal marketing concept holds that
the organization’s task is to determine the
needs, wants, and interests of target
markets and to deliver the desired
satisfaction more effectively and
efficiently than competitors in a way that
preserves or enhances the consumer’s
and the society’s well-being.

▪ What era are we in now? Why?

▪ Do you think the production concept is outdated?
 The Scope of Marketing
▪ What are the different entities that can be marketed?
❑ Goods- Physical goods constitute the bulk of most
countries' production and marketing effort.
❑ Services: Services include airlines, hotels, and
maintenance as well as professionals such as
accountants, lawyers, engineers, and doctors.
➢ As economies advance, a growing proportion of
their activities are focused on the production of
services
❑ Experience- By orchestrating several services and
goods, a firm can create, stage, and market
experiences.
❑ Events- Marketers promote time-based
events, such as the Olympics, trade shows,
sports events, and artistic performances.
❑ Persons- Celebrity marketing has become
a major business. Artists, musicians, CEOs,
physicians, high-profile lawyers and
financiers, and other professionals getting
help from celebrity marketers.
❑Places- Cities, states, regions, and nations
compete to attract tourists, factories,
company headquarters, and new residents.
❑ Properties - Properties are intangible rights of
ownership of either real property (real estate) or
financial property (stocks and bonds).
❑ Organizations- Organizations actively work to build
a strong, favorable image in the mind of their publics.
❑ Information- The production, packaging, and
distribution of information is one of society’s major
industries.
❑ Ideas- Every market offering has a basic idea at its
core. In essence, products and services are platforms
for delivering some idea or benefit to satisfy a core
need.
 Marketing debate
1. Does marketing create or satisfy needs?
▪ Marketing has often been defined in terms of
satisfying customers’ needs and wants. Critics,
however, maintain that marketing goes beyond that
and creates needs and wants that did not exist before.
They feel marketers encourage consumers to spend
more money than they should on goods and services
they do not really need.

▪ Take a position: Marketing shapes consumer

needs and wants versus marketing merely reflects
the needs and wants of consumers.
 THANK YOU
FOR YOUR
ATTENTION!!!
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