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Chapter One: An Overview of Marketing and Marketing Management

Marketing and Its Core Concepts
Marketing refers to any actions a company takes to attract an audience to the company's product
through high-quality messaging. Marketing aims to deliver standalone value for prospects and
consumers through content, with the long-term goal of demonstrating product value,
strengthening brand loyalty, and ultimately increasing sales. It is activity of meeting customers’
needs and wants profitably. It is the economic process by which goods and services are
exchanged between the producer/seller and the customers via getting people interested in
company's product and their values determined in terms of money prices. This happens through
market research, analysis, and understanding your ideal customer's interests. The purpose of
marketing is to research and analyse consumers all the time, conduct focus groups, send out
surveys, study shopping habits, and ask underlying questions: "Where, when, and how does our
consumer want to communicate with our business?"
Marketing pertains to all aspects of a business, including product development, distribution methods,
sales, and advertising. All of us engage in marketing in one or another way
 When we are searching job we are marketing ourselves.
 When we are trying to convince customers to buy our products and services, we are
marketing.
Marketing is a viewpoint, which looks at the entire business process as highly integrated effort
to discover, create, arouse and satisfy consumer needs. Many people think that marketing and
selling mean the same thing. Others think that marketing is the same as selling and advertising,
still others have a notion that marketing has got something to do with making products available
in the stores, arranging displays and maintaining inventories of products for future sales.
Actually marketing includes all these activities and many more. Marketing is a key function of
management. It brings success to business organization. A business organization performs two
key functions producing goods and services and making them available to potential customers
for use. An organization business success largely depends on how efficiently the products are
delivered to customers and how differently do the customers perceive the difference in delivery
in comparison to the competitors. This is true of all firms.
Modern marketing began in the 1950s when people started to use more than just print media to
endorse a product. As TV and soon, the internet entered households, marketers could conduct
entire campaigns across multiple platforms. Over the last 70 years, marketers have become
increasingly important to fine-tuning how business sells products to consumers to optimize
success. In fact, the fundamental purpose of marketing is to attract consumers to your brand
through persuasive messaging and maximum satisfaction that results profit.
Defining Marketing
Business in general relies on marketing tools to attract and satisfy customers, so too does the
business of social change. No business relies solely on marketing i.e., finance, production,
transport and warehousing, etc., are essential. But without marketing no company could survive.
No matter how good a product is, if consumers are not made aware of how it could meet their
needs, and if it is not readily available and affordable, the company will fail. In short, marketing
is necessary, but not sufficient factor for success. Therefore, central idea of marketing is

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matching between company’s capabilities and the want of customers in order to achieve the
objectives of both parties.

So what is marketing?
There are different definitions of marketing that have been forwarded by different authors,
scholars and institutions. To mention few:-
 Marketing is management process through which goods and services move from concept to
the customers via designing, which is the process of defining all aspects and features of
product characteristics to meet customers demand. According to this definition, marketing
includes the coordination of four elements called the 4P's of marketing which is
identification, selection and development of a product, determination of its price, selection of
distribution channel to reach the customer's place, and development and implementation of a
promotional strategy.
 American Marketing Association’s (AMA) definition is very broad and a state marketing as
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.
 “Marketing is the process by which companies create customer interest in products or
services. It generates the strategy that underlies sales techniques, business communication,
and business development. It is an integrated process through which companies build
strong customer relationships and create value for their customers and for themselves.”
 Marketing is the social and managerial process by which individuals and groups obtain
what they need and want through creating, offering and exchanging products and/or services
of value with others.” — Philip Kotler
 Marketing is any contact that your business has with anyone who isn’t a part
of your business. It is also the truth made fascinating, the art of getting people to change
their minds, opportunity for you to earn profits with your business, chance to cooperate with
other businesses in your community or your industry and process of building lasting
relationships.” Jay Conrad Levinson
 Marketing is the process of planning and executing the conception, pricing, promotion, and
distribution of ideas, goods, and services to create exchanges that satisfy individual and
organizational goals
 Marketing is management process responsible for identifying, anticipating and satisfying
customer requirements profitably.” The Chartered Institute of Marketing
In general, all marketing definitions focus on:
 Identifying customer needs and wants
 Translating customers’ needs to product and/or service to satisfying them
 Communicating effectively and efficiently
 Offering that in the way promised or as designed based on customers’ need analysis
For many people, ‘marketing’ is simply the tactics used by companies to sell their products and
services; that is, the first half of previous definition ‘the process of planning and executing the
conception, pricing, promotion, and distribution of ideas, goods and services’. However, the
second half of this definition – ‘to create exchanges that satisfy individual and organizational
goals’ – is the essence of marketing and the basis for what has been called the ‘ marketing
concept’ or ‘marketing philosophy’ approach to doing business. The key words here refer to

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‘satisfying exchanges’ – for both the buyer (the benefits derived from the product or service
meet the customer’s needs) and the seller (at a price that meets costs and returns a profit)
Core concepts of Marketing
Marketing has been defined in various ways. The definition that serves our purpose best is that,
“Marketing is a Social and Managerial process by which individuals and groups obtain what
they need and want through creating, offering, and exchanging products of value with others”.
This definition of marketing rests on the following core concepts: needs, wants, and demands;
products (goods, services, and ideas); value, cost and satisfaction, exchange and transactions;
markets, and marketers.
 Needs – The most basic concept underlying marketing is that of human needs. Marketing
starts with human needs and wants. A human need is a state of felt deprivation of some
basic satisfaction; people require food, clothing, shelter, safety, belonging, and esteem.
These needs are not created by society or by marketers. They exist in the very texture of
human biology and the human condition.
 Wants – Wants are desires for specific satisfiers of needs. Wants are shaped by society,
culture and individual personality. In different society, wants can be satisfied in different
ways. For e.g. an Ethiopian needs food and wants "Injera" & "wet", and an American
needs food and wants “hamburger”. Although people's needs are few, their wants are
many. Human wants are continually shaped and reshaped by social forces and
institutions, including churches, schools, families, and business corporations.
 Demands – are human wants for specific products that are backed by an ability and
willingness to buy them. Wants become demands when supported by purchasing power.
Many people want to have personal computer; only a few are able and willing to buy.
Companies must therefore measure not only how many would want a product but more
importantly would actually be willing and able to buy it.
 Product (Goods, Services, and Ideas): People satisfy their needs and wants with
products. A product is anything that can be offered to satisfy a need or want. It can be
physical goods, services, ideas or a combination of physical product along with services.
For example, a computer manufacturer is supplying goods (computer, monitor, and
printer), services (delivery, installation, training, maintenance and repair) and an idea
(computational power).
 Value and satisfaction: Consumers usually face a broad array of products and services
that might satisfy a given need. Hence, consumers make buying choices based on their
perceptions of the value that various products and services deliver. Customer value is the
difference between the value of customer gains from owning and using a product and the
costs of obtaining the product. Customer Satisfaction depends on a product’s perceived
performance in delivering value relative to buyer expectations. If a product's performance
falls short of the customer's expectations, the buyer is dissatisfied. If performance matches
expectations, the buyer is satisfied. If performance exceeds expectations, the buyer is
delighted. Outstanding marketing companies do out of their way to keep their customers
satisfied because satisfied customers make repeat purchases, and they tell others about
their experience which obviously provides the firm with competitive advantage (good
word of mouth communication), otherwise, if they are not satisfied, customers will not
only be refrained from buying a company’s products but also they are likely to talk
negatively about the firm to the very prospective customers who may possibly purchase
the company’s products (bad word of mouth communication). Some companies even aim
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to delight customers by promising only what they can deliver, then delivering more than
they promised.
 Exchange: Earlier when we defined marketing we said that it involves exchange of
products from one party to the other party to satisfy need. Hence, we can say that
marketing occurs when people decide to satisfy needs and wants through exchange.
Exchange is the act of obtaining a desired product from someone by offering something in
return. It is only one of the ways that people can obtain what they need. A person may get
what he needs by begging others, hunting, robbing etc. As a means of satisfying needs,
exchange has much in its favor. People do not have to prey on others or depend on
donations, nor do they must possess every necessity for themselves. They can concentrate
on making things that they are good at making and trading them for needed items made
by others. Thus, exchange allows a society to produce much more than it would with any
alternative system. Exchange must be seen as a process rather than as an event. Two
parties are engaged in exchange if they are negotiating and moving toward an agreement.
When an agreement is reached, we say that a transaction takes place. A transaction
consists of a trade-off values between two parties. In conjunction to exchange, the
marketer should be able to offer something (product) valuable to the customer so that they
will be initiated to make the exchange. Generally transaction marketing is a means by
which the so-called marketer and prospect (customer) exchange values to each other,
hence with this relationship in between the marketer and the customer is to be created.
Here, the relationship might turn out to be for short-term transaction (relationship that
lasts with the completion of the exchange process) or long-term transaction (relationship
that continues after the transaction is completed.). Obviously the relationship that a
marketer should strive to build should be long-term relation with customers by promising
and consistently delivering high quality products, good service, and fair prices then profit
will be gained from customers on long term basis from repeated purchases.
 Markets: The concept of exchange leads to the concept of a market. A market consists of
all the potential and actual customers sharing a particular need or want who might be
willing and able to engage in exchange to satisfy that need or want. Thus the size of the
market depends on the number of people who exhibit the need or want, have resources
that interest others, and are willing and able to offer these resources in exchange for what
they want. Here, unlike the Economics approach that considers market as a collection of
buyers and sellers, we shall consider market as a collection of buyers only and the sellers
are considered as industry.
 Marketer: The concept of markets abounds us to the concept of marketing as marketing
means simply human activity that takes place in relation to markets to make an exchange
of values among individuals. Simply we can say that marketing means working with
markets to actualize potential exchanges for the purpose of satisfying human needs and
wants. If one of the two parties involved is more actively seeking an exchange than the
other party, obviously it should make some efforts to make the other party interested in
the exchange and hence, this party is referred to as marketer. This means marketer is a
party that seeks a resource from the other party and in return willing to offer something
valuable to the other party and the party with whom the marketer needs to make exchange
is known as prospect. In the event that both the parties actively seek an exchange, we say
that both of them are marketers and call the situation as reciprocal marketing.

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Marketing Management Philosophies

Marketing is the concept to know your customers’ needs and wants, providing products which
serve as a solution for customers’ problem. In short, Marketing is meeting needs and wants of
customers at profit. There is always the remaining logic behind each work. In modern world
organizations take care of their customers and maintaining long term relationship. In past
organizations not had similar thinking as it is today. This logic of meeting needs and wants of
customers at profit is said the philosophy of marketing management.
Marketing management philosophy is thinking and perceptions of organization to provide
products which serves as a solution for customers’ problem. It is “Organization mental picture
of marketing”. Marketing management philosophy is the key concept or ideas for the
management of marketing practices. Every company may have different idea regarding
philosophy of marketing. Some companies concentrate on the large scale production while some
concentrate only on the quality of the product etc. Although there are many marketing
management philosophies, the following five are most common concepts: These are
production concept, product concept, selling concept, marketing concept and societal
marketing concept.

The Production Concept

The production concept holds that consumers will favor products that are available and highly
affordable. Therefore, management should focus on improving production and distribution
efficiency. This concept is one of the oldest orientations that guide sellers.
The production concept is still a useful philosophy in two types of situations. The first occurs
when the demand for a product exceeds the supply. Here consumers are more interested in
obtaining the product than in its fine points (features), and suppliers taking this advantage will
concentrate on finding ways to increase production and distribution. The second situation
occurs when the product’s cost is too high and has to be decreased to expand the market
through by achieving economies of scale. It uses its lower costs to cut prices and attract more
consumers and hence expand the market size. Although useful in some situations, the production
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concept can lead to marketing their own operations and losing sight of the real objective –
satisfying customer needs and building customer relationships.
2. The Product Concept
The product concept holds that consumers will favour those products that offer the most quality,
performance or innovative best features. Managers in these organizations focus their energy on
making superior products and improving them over time at their best. They assume that buyers
admire well-made products and can appraise product quality and performance. However, these
managers are sometimes caught up in a love affair with their product and do not realize what
the market needs.
Product oriented company’s often design their products with little or no customer input. They
trust that their engineers can design exceptional products. Very often they will not even examine
competitor's products. Even, whatever, quality product is produced without considering the
consumers’ needs, there will be no demand for the product in market. Consumers place orders
to purchase a product because there is certain problem with them. The solution to the problem is
the product. The consumers buy the product only when there is a problem and when they wish a
solution from the product. Otherwise, no need of buying the product even if the product is
quality and provides the best performance for some other purpose. This concept leads marketers
to marketing Myopia., mistake of paying more attention to specific products that company offers
than to the benefits and experiences produced by those these products.

3. The Selling Concept

The selling concept assumes that consumers and businesses will not buy enough of the firm’s
products unless it undertakes large-scale selling and promotion effort. This concept is typically
practiced with unsought goods – goods the consumer does not know about or knows about but
does not normally think of buying, such as insurance or blood donations. These industries must
be good at tracking down prospects and selling them on product benefits. Most firms practice
the selling concept when they have overcapacity.
The basis of this thinking is that the customers can be attracted. Keeping in view this concept
these companies concentrate their marketing efforts towards educating and attracting the
customers. In such a case their main thinking is ‘selling what you have’. The selling concept
basically reflects the possibility that customers won’t buy enough of the organization’s products
unless comprehensive promotional as well as selling endeavors are undertaken by it. This
concept offers the idea that by repeated efforts one can sell-anything to the customers. This may
be right for some time, but you cannot do it for a long-time. If you succeed in enticing the
customer once, he cannot be won over every time. On the contrary, he will work for damaging
your reputation. Therefore, it can be asserted that this philosophy offers only a short-term
advantage and is not for long-term gains. Nevertheless, marketing based on hard selling carries
high risks. It assumes that customers who are coaxed into buying a product will like it, and even
if they do not like it, they will not bad-mouth it or complain to consumer organizations and will
forget their disappointment and buy it again. These are indefensible assumptions because one
study showed that dissatisfied customers may bad-mouth the product to 10 or more
acquaintances; bad news travels fast.
4. The Marketing Concept
The marketing concept holds that achieving organizational goals depends on knowing the needs
and wants of target markets and delivering the desired satisfactions better than competitors do.
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The basis of this thinking is that the product should be made which the consumers
want. You should not sell what you can make but you should make what you can sell.
Under the marketing concept, customer focus and value are the paths to sales and profits.
Keeping in mind this idea or concept, the companies direct their marketing efforts to
achieve success. Instead of a product-centered “make and sell” philosophy, the marketing
concept is a customer-centered “sense and respond” philosophy. It views marketing not as
“hunting,” but as “gardening,” The job is not to find the right customers for your product, but
to find the right products for your customers. This marketing concept is a modern concept
and by adopting this concept profit can be earned on both a short or long-term basis.
Marketing concept compared with the Selling concept
Starting Focus Means Ends
Point
Selling Factory Existing Promoting Profit through sales
concept Products and Selling Volume
Marketing Market Customer Integrated Profit through Sales
concept Needs Marketing volume& customer
satisfaction
Selling concept takes an inside-out perspective. It starts with the factory, focuses on the
company’s existing products, and calls for heavy selling and promotion to obtain profitable
sales. It focuses primarily on customer conquest – getting short-term sales with little concern
about who buys or why. In contrast, the marketing concept takes an outside-in perspective.
Marketing concept starts with a well-defined market, focuses on customer needs, and integrates
all the marketing activities that affect customers. In turn, it yields profits by creating lasting
relationships with the right customers based on customer value and satisfaction.

5. The Societal Marketing Concept

The Societal marketing concept questions whether the pure marketing concept overlooks
possible conflicts between consumer short-run wants and consumer long-run welfare. Is a firm
that satisfies the immediate needs and wants of target markets always doing what’s best for
consumers in the long run? A socially responsible company must take into account the long-run
consumer and societal welfare. The drawback of marketing concept is that it ignores the long-
run societal welfare and focuses only on the short-run benefits. For example, a product, which
gives short-run consumer satisfaction, may have adverse effects in the long- run. Cigarette
factories and automobile companies which causes environmental problem are good examples
for this. It has, therefore, been felt that the marketing concept be revised incorporating the long-
run societal welfare. The societal marketing concept holds that marketing strategy should
deliver value to customers in a way that maintains or improves both the consumer’s and the
society’s well-being. This concept balances consumers’ wants satisfaction, company profits and
societal/human welfare productivity. Societal marketing uses companies that act in socially
responsible ways in the achievement of their profit goals (e.g., companies that voluntarily use
biodegradable products in production processes, recyclable packaging, etc.). This was
considered an extension of the original marketing concept from profit through identification and
satisfaction of consumer needs, to profit through identification and satisfaction of consumer
needs ‘in a way that preserves or improves the consumer’s and the society’s Wellbeing.
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In Commercial marketing, Societal Marketing emphasizes on social responsibilities and

suggests that to sustain long-term success, the company should develop a marketing strategy to
provide value to the customers to maintain and improve both the customers and society’s
wellbeing better than the competitors. Societal marketing concept holds that a company should
make good marketing decisions by considering consumer’s wants, the company’s
requirements, and society’s long-term interests. It puts Human welfare on top before profits
and satisfying the wants. Societal marketing concept questions whether the pure marketing
concept overlooks possible conflicts between consumer short-run wants and consumer long-run
welfare.
Companies should balance three considerations in setting their marketing strategies: company
profits, the consumer wants, and society’s interests.
1. Consumers (Satisfaction)
Products and services should be satisfying the consumer’s needs.
2. Company (Profits)
Building long-term customer relationships, being socially responsible, and providing
satisfactory products are important for profit-making and wealth maximization.
3. Society (Human Welfare)
Companies must make sure the products, services, actions, investment innovations
servers society first.

Three Considerations of Societal Marketing Concept

Importance of Marketing

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A consumer may pay more for an item just because of marketing, but without marketing he may
not be purchasing the item at all. Marketing has incredible benefits and our economy would
collapse without it. Marketing employ many people; it increases competition, and it leads to
better products. Marketing is an essential part of the capitalist society
Marketing employs many people, directly and indirectly. Not only does it employ the people who
make advertisements and get the word out there, but it employs many people indirectly.
Advertisements and sponsorships pay for many athletes salaries. Advertisements help pay for
newspaper, television shows, internet websites, and many other items. The sustainability of
people’s jobs is like the food chain, if one small, but important, item is taken out then everything
and everyone is affected. If marketing is to cease its existence many people would lose their jobs,
which in turn causes them to lose their buying power, which causes less items to be sold, which
causes people to be laid off and then the cycle gets worse. A product may be cheaper without
marketing, but few people would be able to buy it because many people would be unemployed.
Marketing is also important as it allows competition. Competition is a crucial part of our
economy, it helps keep prices fair and keep businesses on the cutting edge. Marketing helps
inform the public about different companies’ version of the same basic product. Without
marketing, only the company that is well known will get business, while the other companies
don't stand a chance. Big corporations got where they are today by effectively marketing their
products, without any marketing these businesses never would have expanded so much. The
negative effects of one company dominating the business is that they can set any price and sell
any quality product they chose. If there are people to compete with, the business must keep its
prices low enough and its quality high enough in order to prevent its competition from getting its
customers. Marketing facilitates the competition that is so important to our society. Finally,
marketing is beneficial because it encourages the invention of new products. Creating a new
product is incredibly risky; a lot of time and money go into the project. In order to break even
the inventor must sell a considerable number of his products. Unfortunately, this would be
virtually impossible in a marketing-free society. Advertisements and promotions help get the
word out about a new product. Without marketing very few people would ever hear about the
new product; therefore, very few people would buy it. Getting a new product to sell without any
marketing is too huge of a risk for most business men. This large risk would lead to a stagnation
in the creation of new items and severely limit our ability to compete with other nations.
Marketing is essential to our economy and many problems would be encountered if we chose to
get rid of it. Without marketing there wouldn't be a market to buy and there won't be innovative
products to sell. The lack of money being spent and received will promptly lead to deflation and
a disintegration of society as we know it
Scope of Marketing
Scope of Marketing is seen as the task of creating, promoting & delivering goods & services to
consumers & businesses. Marketers are skilled in stimulating demand for company’s products;
they are responsible for demand management. Marketing managers seek to influent the level,
timing & composition of demand to meet the organization’s objectives. Marketing people are
involved in marketing 10 types of entities;
 Goods and services
 Experiences
 Events
 Persons and Places
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 Properties
 Organizations
 Information and Ideas

The goals of marketing System

Marketing is not a onetime activity it is a continuous process and affects different parties with
different interests such as, customers, suppliers, and the public etc. Most of the time the interest
of these different parties conflict each other. The marketing system generally has four goals.
1. Maximizing choices—marketing system provides varieties. As a result the consumer will
find products that fit to their exact test
2. Maximizing consumption- marketing stimulates maximum demand. Maximum
consumption inter maximize production, employment and wealth.
3. Maximizing Satisfaction-Owning one product gives sense when it maximized
satisfaction to customers. Marketing systems maximize satisfaction by creating and
providing –quality products --variety products etc.
4. Maximizing life quality—the participation of marketing system in environmental
protection maximize the quality of life of consumer. As a result of this the life style
consumers leads to quality of life achieved.

For setting strong goals in marketing

If your team is going to meet its marketing goals, you need to create a clear plan that outlines what you
want to achieve, why it is important, how to achieve it and how to measure success. Here are some tips
when setting marketing goals
 Determine who on the team is responsible for setting goals and tracking progress.
 Make sure your marketing goals match the company's broader strategic goals
and Set measurable goals, so you can determine whether your efforts have
been successful.
 Use historical data to set current and future goals.
 Set short-term and small goals, in addition to long-term and major goals, to
keep your team motivated and feeling like they are constantly achieving
objectives.
 Set key performance indicators (KPI) so you know which metrics to evaluate.
Measure marketing results weekly, monthly, quarterly and annually so you can
track progress, compare data over time and quickly make adjustments
To achieve this above stated primary marketing goals, marketing use unique approaches. This
basic marketing model is defined as the ADIA (awareness, desire, interest and action) marketing
model:
 Awareness: create awareness to target audience knows your brand and solution.
 Desire: create desire to target audience feels the pain your solution promises to resolve
and wants your solution to relieve that pain.
 Interest: create interest to target audience understands the outcomes they will achieve
only when they hire your solution.

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 Action: take action that guarantees target audience follows through on their desire
and hires your solution to achieve the promised outcomes (preferably repeatedly long
term).

Chapter One: An Overview of Marketing Management

Prepared by Woldesilassie Hailemichael, BA and MBA in Management