Core Concepts of Marketing

Definition:
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.

Alternative Definition:
Producing and distributing the right goods:
• to the right people
• at the right place
• at the right time
• at the right price
• with the right communication and promotion.
Concepts:
• Needs, Wants, Demand
• Products, Services, Ideas
• Exchange, Transactions, Relationships
• Markets, Marketer
• Consumers, Customers
4

Satisfaction = Σ (utilities)
L=1

1. Form
2. Place
3. Time
4. Possession
Exchange:
The Process by which needs and wants are satisfied.

Fife Necessary Conditions:

1. Two or more parties
2. Each has something of value to other
3. Each can communicate and deliver
4. Each is free to accept or reject offers
5. Each finds it desirable or appropriate to deal with the
other.

Transactions: Measurable Entities:

1. At least two things of value
2. Agreeable Conditions
3. Time of Agreement
4. Place of Agreement

“Law of Contracts”
Countertrading:
1. Barter
2. Compensation Deal
3. Product Buyback
4. Counterpurchase
 T1-A Summary of factors that affect an organization’s
marketing program
Environmental forces

Competitive Economic
forces forces

Marketing program

Information

Regulatory
Social
forces Product Consumer Promotion
forces

Price Place

Technological
forces

© 1994 Richard D. Irwin, Inc. To accompany MARKETING, 4/E by Berkowitz, Kerin, Hartley, and Rudelius.
 T1-5 Marketing’s second task: Satisfying consumer needs

Organization’s marketing department

Satisfy
Satisfyconsumer
consumerneeds
needsby
by
Concept for finding
products findingright:
right:
Product
Product
Discover
Discoverconsumer
consumerneeds
needs Price
Price
Promotion
Promotion
Place
Place

Ideas
Ideasabout
aboutneeds
needs Actual
Actualproducts
products

Potential consumers: The market

© 1994 Richard D. Irwin, Inc. To accompany MARKETING, 4/E by Berkowitz, Kerin, Hartley, and Rudelius.
 Company orientation toward the
market place
1. Production approach:
• Large Scale Production
• Wide Distribution
• Homogeneous Product
Problem: Consumer insensitive

2. Product approach:
• Quality
• Performance
• Features
Problem: Emphasis on product rather than consumer needs

Examples:
ELGIN WATCH CO.
KEVIAR
ISDN
DIOLIGHT
3. Sales approach:
• Unsought goods
• Methods to sell whatever products are produced

4. Marketing approach:
• Know customer needs and satisfy them more
efficiently than your competitors
• Optimal combination of the four “P”
• Marketing research
 T1-6 Four different orientation in the history of
American business

Product area

Sales area

Marketing
concept area

Market
orientation area

1860 1880 1900 1920 1940 1960 1980 2000

© 1994 Richard D. Irwin, Inc. To accompany MARKETING, 4/E by Berkowitz, Kerin, Hartley, and Rudelius.
 T3-1 Environmental forces affecting the organization,
as well as its suppliers and customers

Organization
Organization
Suppliers • •Marketing
Marketingdepartment
department Customers
Suppliers Customers
Other
Otherdepartments
departments
Employees
Employees

Environmental forces

Social
Social Economic
Economic Technological
Technological Competitive
Competitive Regulatory
Regulatory
• •Demographic
Demographic • •Macroeconomic
Macroeconomic • •Changing
Changing • •Alternative
Alternativeforms
forms • •Laws
Lawsprotecting
protecting
shifts
shifts conditions
conditions technology
technology ofofcompetition
competition competition
competition
• •Cultural
Cultural • •Consumer
Consumer • •Economical
Economical • •Components
Componentsofof Laws
Lawsaffecting
affecting
changes
changes income
income impact
impactofof competition
competition marketing
marketingmix
mix
technology
technology actions
actions
• •Increasing
Increasing
foreign
foreign Self-regulation
Self-regulation
competition
competition Consumerism
Consumerism

© 1994 Richard D. Irwin, Inc. To accompany MARKETING, 4/E by Berkowitz, Kerin, Hartley, and Rudelius.