Chapter One

Introduction To Marketing
Management

By
Mesfin A. (PhD Scholar)
Target Groups: For 2nd Year MBA
Students
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Definition of Marketing
Marketing is a managerial and societal process by which
individuals and groups obtain what they need and want
through creating, offering, and freely exchanging
products and services of value with others (Philip
Kotler )

Good marketing is no accident, but a result of careful

planning and execution”.

Marketing is both an "art" and a "science"—there is

constant tension between the formulated side of marketing
and the creative side.
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 Marketing, more than any other business
function, deals with customers .

Creating customer value and satisfaction are

the heart of modern marketing thinking and
practice.

Marketing as the process by which companies

create value for customers and build strong
customer relationships in order to capture value
from customers in return
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 Marketing deals with identifying and meeting
human and social needs. One of the shortest
definitions of marketing is "meeting needs
profitably."

The American Marketing Association offers the

following formal definition:
“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 stake holders.”
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Simple Marketing System

Communication

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

Information
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 Marketing means managing markets to bring
about exchanges for the purpose of satisfying
human needs and wants.

Consumers do 'marketing' when they search

for the goods they need at prices they can
afford

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 What is marketed?
Goods
Services
Events
Experience
Persons
Places
Properties
Organizations
Information/ideas
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 Goods: Physical goods constitute the bulk of
most countries' production and marketing
effort.
Services are activities or benefits offered for
sale that are essentially intangible and do not
result in the ownership of anything. Including
the work of airlines, hotels, car rental firms,
barbers and beauticians, maintenance and
repair people, accountants, bankers, lawyers,
engineers, doctors, software programmers, and
management consultants.
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 Events: Marketers promote time-based
events, such as major trade shows, artistic
performances, and company anniversaries .
Experiences By orchestrating several
services and goods, a firm can create, stage,
and market experiences.
Places Cities, states, regions, and whole
nations compete actively to attract tourists,
factories, company headquarters, and new
residents

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• Persons: Celebrity marketing is a major
business. Today, every major film star has an
agent, a personal manager, and ties to a public
relations agency. Artists, musicians, CEOs,
physicians, high-profile lawyers and
financiers, and other professionals are also
getting help from celebrity marketers.
• Properties: are intangible rights of ownership
of either real property (real estate) or financial
property (stocks and bonds). Properties are
bought and sold, and this requires marketing.

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• Organizations actively work to build a strong,
favourable, and unique image in the minds of
their target publics.

• Information can be produced and marketed as

a product. This is essentially what schools and
universities produce and distribute at a price to
parents, students, and communities.
Encyclopaedias and most nonfiction books
market information.

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 Fundamental Marketing concepts
Needs, Wants and Demands
Marketing offers
Value, Satisfaction and Quality
Exchange, Transactions and Relationships
Market
Marketing channels
Competition
Marketing Environment
Marketing planning
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1. Needs, Wants and Demand
A need is state of felt deprivation the want is form
taken by human needs as they are shaped by culture
and individual personality
• Demand is a human need and want backed by an
ability to pay - that is, buying power

2. Marketing offers –is a combination of products,

services, ideas, place, organization, events that are
offers to sale.

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3. Value, Satisfaction and Quality
• Customer value is the difference between the
values the customer gains from owning and using
a product and the costs of obtaining the product
• Customer satisfaction depends on the product's
perceived performance in delivering value
relative to a buyer's expectations.
• Quality is defined in terms of customer
satisfaction

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4. Exchange, Transaction and Relationship
• Exchange is the act of obtaining a desired
object from someone by offering something in
return
• For exchange potential to exist, five conditions
must be satisfied:
1. There are at least two parties.
2. Each party has something that might be of
value to the other party.

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3. Each party is capable of communication and
delivery.
4. Each party is free to accept or reject the
exchange offer.
5. Each party believes it is appropriate or
desirable to deal with the other party.

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Transaction is a trade of values between two or
more parties: A gives X to B and receives Y in
return.
Two kinds of transaction
A. Barter
B. Monetary
Relationship Marketing is building long-term
relationships with valued customers, distributors,
dealers and suppliers

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• A marketing network consists of the company
and all of its supporting stakeholders:
customers, employees, suppliers, distributors,
retailers, agencies, and others with whom it
has built mutually profitable business
relationships.

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5. Market is the set of actual and potential
buyers of a product
Traditionally, a "market" was a physical place
where buyers and sellers gathered to buy and sell
goods. Economists describe a market as a
collection of buyers and sellers who transact
over a particular product or product class.
There are two types of markets:
1. Consumer Market
2. Business Market

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6. Marketing channel
Marketing channel- reaching target markets
and are of three kinds
Communication channels deliver and receive
messages from target buyers, and include
newspapers, magazines, radio, television,
mail, telephone, billboards, posters, fliers,
CDs, audiotapes, and the Internet.

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• Distribution channels used to display, sell, or
deliver the physical product or service(s) to the
buyer or user. They include distributors,
wholesalers, retailers, and agents.

• Service channels include warehouses,

transportation companies, banks, and
insurance companies that facilitate
transactions.

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7. Competition- Competition includes all the
actual and potential rival offerings and
substitutes that a buyer might consider.

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9. Marketing Environment
• The marketing environment consists of the
task environment and the broad environment.

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 Marketing Management
• Marketing management is the analysis, planning,
implementation and control of programs
designed to create, build and maintain beneficial
exchanges with target buyers for the purpose of
achieving organizational objectives.

• Thus, marketing management involves managing

demand, which in turn involves managing
customer relationships.

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 Marketing Management
Marketers are skilled at stimulating demand for
their products and services.

To stimulate demand means, brands must

understand customers' needs and motives.

Marketers seek to influence the level, timing, and

composition of demand to meet the organization's
objectives.
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 Marketing Management Philosophies
(Company Orientations Towards the Marketplace)

Consumers prefer products that are

Production
ProductionConcept
Concept widely available and inexpensive

Consumers favour products that

Product
ProductConcept
Concept offer the most quality, performance,
or innovative features
Consumers will buy products only if
Selling
SellingConcept
Concept the company aggressively
promotes/sells these products

Focuses on needs/ wants of target

Marketing
MarketingConcept
Concept markets & delivering value
better than competitors

Focus on societal welfare and

Holistic
HolisticMarketing
Marketing sustainability
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 Marketing Plan
This is a document that puts together the process that
the organisation will undergo in order to achieve its
marketing objectives.
• It spells out the following activities that marketing
managers need to do:

Set marketing objectives

Evaluate opportunities
Create marketing strategies
Prepare marketing programmes
Specify expected results
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 The Goal of Strategic Marketing
Management
To select reality-based desired accomplishments
(e.g., goals & objectives)
To effectively develop business strategies
Increase customer satisfaction
Increase sales
To set priorities for operational change
To improve the organisation’s performance
Launch a new product or solution
Re-brand or re-position
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 Marketing Mix Elements (Approach): 4 Ps of Marketing

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 Thank You!!

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