Chapter One: An Overview of

Marketing Management

1 By
By
Dinkisa
DinkisaK.
K.
(PhD,
(PhD,Assistant
Assistantprofessor
professor))

1
 Learning Objectives
1. Marketing and its core concepts
2. Describe four marketing management

1 philosophies
3. Importance of marketing
4. Scope of marketing
5. Companies’ orientation to marketing

2
What is Marketing?
 Personal Selling?

 Advertising?

 Making products available in stores?

 Maintaining inventories?

All of the above, plus much more!

3
What is Marketing?

A Philosophy A Set of Activities,

including:
An Attitude
Products
A Perspective
Pricing
A Management
Orientation Promotion
Distribution

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Many people immediately think the term
marketing as:
 advertizing
 Pricing
 Promotion
 telling and selling activities
 But marketing is more than telling and
selling
 Marketing focuses on satisfying the need
of customers
• Different authors defined marketing
differently
o but the most important definitions are:
- Marketing is the performance of business
organization that directs the flow of goods
and services from producers to final
consumers in exchange of something of
value.
-Marketing is getting the right goods and
services to the right people at the right place
at the right time at the right price with the
right communication or promotion
Marketing- is defined as the process of
determining the needs and wants of
consumers and being able to deliver
products that satisfy those needs and
wants

Marketer- is a person whose duties

include the identification of goods and
services desired by a set of consumers,
as well as the marketing of those goods
and services on behalf of a company
Marketing Management
• Marketing management: 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 management has a task of

influencing the level, timing, and
composition of demand in a way that will
help the organization achieve its
objectives. From this, one can conclude
that marketing management is essentially
Demand Management.
The major important functions of marketing
 The functions are:
• Buying
• Selling
• Production
• Promotion/ Advertising
• Branding
• Design Packaging and Labeling
• Financing
• Storage and warehousing
• Transportation and distribution
• Risk-Taking
• Market Information
• Grading and Standardizing
 Basic marketing concepts
1. Needs, wants and demands

Needs:
 Exist in the very nature of human biology
 Not created by society or by marketers
 Example- the need for food, clothing, shelter
Wants:
 the desire for specific satisfiers of needs
 are the form taken by human needs as they are
shaped by social and cultural forces.
Demand:
 Wants for specific products that are backed by an
ability and willingness to buy them
NB. Marketers do not create needs but wants and
demands
2. what to be offered in the market

A. Products
 Anything that can be offered to someone to satisfy a need or want
 Are both goods and services

B. services
 Intangible product or market offering
 Inseparable
 They can not be saved and stored

C. Idea
 Intangible value proposition

NB. Products, services and Idea are market offering,

value proposition to satisfy the needs of
customers
D. Information
 Can be produced and marketed as a product
Example: encyclopedia and Notification box

E. Place
 Like cities, state, region , compute activities to attract
tourists

F. Events
 Marketers promote time based events

G. Persons
 Celebrity marketing - famous persons promote themselves
The Concept of Exchange

The idea that people give

up something to receive
something they would
rather have.

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 The Concept of Exchange
At
At Least
Least Two
Two
Parties
Parties Something
Something of
of
Value
Value

Necessary
Necessary Ability
Ability to
to
Conditions
Conditions Communicate
Communicate Offer
Offer
for
for Exchange
Exchange
Freedom
Freedom toto
Accept
Accept or
or Reject
Reject
Desire
Desire to
to Deal
Deal
With
With Other
Other Party
Party
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Conditions for Exchange
• There must be at least two parties
and each party…

• Must have something the other party

values
• Must communicate and deliver goods
• Must be free to accept or reject offer
• Must want to deal with other party
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The Concept of Exchange
 Exchange may not take place even if
conditions met

 An agreement must be reached

A LE
O S
N  Marketing occurs even if exchange
does not take place

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Marketing may includes the following:
Global marketing
International marketing
Foreign marketing
Domestic marketing

-How can you differentiate between

them?
 Global marketing
 The business thinks of the whole world as its operating space
and does not adapt its products or services, communication
and distribution channels to domestic requirements.
 It uses the same or similar marketing strategies all over the
world
 A company adopts the same promotional and advertisement
tactics, offers the same products ,packaging, branding,
labeling and services across the world. moreover,
commercials are run all over the world

 International marketing
 Opens a subsidiary in a country and lets the subsidiary serve
the local market, paying attention to local customs in terms of
customer difference, styles and eating habits
 Commercials and other promotion tactics are tailored for the
local market.
 A company adopt different marketing strategies to different
countries specification. Various tactics all over the world
Domestic marketing
 It is when commercialization of goods
and services are limited to the home
country only.
 The marketing strategies are formulated
and implemented to the home countries .

Foreign marketing
 Commercialization of goods and
services in a few foreign countries, uses
the same or similar marketing strategies
to a few countries
Company orientation towards the Market place
• There are a number of different philosophies that
guide a marketing effort. These Marketing
Philosophies also called as Evolution of marketing/
eras/ concepts

I. Production concept
 Oldest concept: One of the earliest strategies now
recognized as "marketing“ enter the industrial age.
 Since goods were scarce, businesses focused mainly
in manufacturing
 This orientation rose to popularity due to shortages in
the market.
 The famous remark: "Supply creates its own demand."
 Assumes that the customers will prefer products that
are widely available and inexpensive
 Companies stressed mass production and
efficiency -- producing as much as possible
at low cost
 Marketing efforts were based on securing the
widest possible distribution.
 Today, companies still use this strategy when
trying to expand the market for a product.
 Thus, this signifies a firm exploiting
economies of scale until the minimum
efficient scale is reached.
 As long as someone was producing,
someone else would want to buy it.
II. Product concept
 Marketing was less about establishing cost
leadership and universal distribution
 However, more about relying on the attributes of
the product itself to attract consumers.
 Companies built marketing efforts around quality,
performance and innovative product features.
 Chiefly concerned with the quality of products.
 It assumes that as long as the product is in a
high standard, people would buy and consume
the product
 It is product quality oriented concept
 The concepts of the product era remain important
in marketing today, but producers must be aware
that a good product by itself usually isn't enough.
 III. Selling concept
 Companies viewed aggressive promotion as
the key to success. Any product can
succeed, the thinking went, if a company
just pushed it hard enough
 Focuses primarily on the selling/promotion
of a particular product, and not determining
new consumer desires as such.
 Consequently, this entails simply selling an
already existing product, and using
promotion techniques to attain the highest
sales possible.
• It is finding the right customers for your products.

 Kotler refers to this as businesses "selling what they

make, rather than making what the market wants to buy."
• This strain of marketing continues in the modern era,
particularly with "unsought goods" -- things people may need
but don't normally think of without prompting, such as life
insurance.
• Selling-era tactics can be risky for companies, as the hard sell
can turn off consumers, perhaps even push them into the
arms of a competitor.
• Sales became an important pillar as outputs surpassed
demand, and companies competed for customers.
IV. Marketing concept

The most common orientation used in contemporary

marketing
It is the consumer centered concept
Do not find the right consumer for your products, but the
right products for your consumers to satisfy them.
First, deciding which products to make through market
research

The customer concept

It is an advanced of marketing concepts
It is a separated and segmented consumer
centered philosophy
Application of the marketing concept in the
segmented customers
V. The Societal marketing concept
• Social Marketing-is the Contemporary
approaches.
• It Pays attention to the best long- run
interest of the customers and society
• It has similar characteristics as marketing
orientation but with the added provision that
there will be a restriction of any harmful
activities to society, in either product,
production, or selling methods.

• Example-Tobacco, Khat, and drinking

alcohol business is not a concept of Social
Marketing
 Marketing Management
Philosophies
Philosophy
Philosophy Key Ideas

Production
Production Focus on efficiency of internal operations

Focus on aggressive techniques for

Sales
Sales overcoming customer resistance

Market Focus on satisfying customer needs and wants

Market
Focus on satisfying customer needs and
Societal
Societal wants while enhancing individual and
societal well-being
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The Four Marketing Management Philosophies

Orientation Focus

Production What can we make or do best?

Sales How can we sell more aggressively?

What do customers
Marketing want and need?

Societal What do customers want and need,

and how can we benefit society?
Customer Value

The ratio of benefits to the

sacrifice necessary to
obtain those benefits

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Customer Value Requirements

• Offer products that perform

• Give consumers more than they expect
• Avoid unrealistic pricing
• Give the buyer facts
• Offer organization-wide commitment in
service and after-sales support

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Customer Satisfaction

Customer
Satisfaction

The customers’
evaluation of a good or
service in terms of
whether it has met their
needs and
expectations.

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Maintaining Customer Satisfaction

 Meet or exceed customer’s expectations

 Focus on delighting customers
 Provide solutions to customer’s
problems

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Building Relationships

Relationship
Marketing

A strategy that focuses

on keeping and
improving
Relationships with
current customers.

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Relationship Marketing’s
Importance

Attracting a new customer

may be
TEN TIMES
the cost of keeping
an old customer

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Why Study Marketing?
 Plays an important role in society

 Vital to business survival, profits

and growth

 Offers career opportunities

 Affects your life every day

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Why Study Marketing?

Vital Marketing Activities for Organizations

Assess the wants and satisfaction of customers

Design and manage product offerings

Determine prices and pricing policies

Develop distribution strategies

Communicate with present and potential customers
Why Study Marketing?
 1/4th to 1/3rd of the •• Professional
ProfessionalSelling
Selling
entire civilian •• Marketing
MarketingResearch
Research
workforce in the U.S. •• Advertising
Advertising
performs •• Retail
RetailBuying
Buying
marketing activities
•• Distribution
DistributionManagement
Management
•• Product
ProductManagement
Management
 Fastest route up the
corporate ladder •• Product
ProductDevelopment
Development
•• Wholesaling
Wholesaling

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Reasons for Studying Marketing

Why
WhyStudy
StudyMarketing?
Marketing?

Important
Important Important
Important Good
Good
to
to to
to Career
Career
Society Business Opportunities
Opportunities
Society Business

+
Marketing affects you every day!

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End of chapter one

Any question?