Subject: Business Marketing

Author: Dr. Ma. Theresa V. Racelis

Editors: Dr. Ma. Theresa V. Racelis
Reviewer:

LESSON 1: Introduction to Marketing

Description of the Lesson:

The topic will revolve around in Marketing Introduction. Discussion will

include the Definition, Functions of Marketing and Core Concepts of
Marketing.

Objectives
After this module you will be able to:
a. Identify the functions of marketing.
b. Discuss the 3Cs of marketing and its key objectives.
c. Enumerate and discuss the marketing concept philosophies.

Lesson Content (What’s New)

Marketing
Marketing has often been misunderstood. One of the most common misconception is associating
“marketing as selling” or “marketing equals advertising”. Selling and advertising is merely part of the
many functions of marketing. Marketing is a system concerned with the planning and development of
products and services, determination of prices, creation of promotional programs and distribution system
to present and prospective market for satisfaction of their existing needs and wants, thus maximizing
profit in the long-run.
Definition of Marketing
 It is the process of continuously and profitably satisfying target customer’s needs, wants, and
expectations more superiorly than competition.
 It is a social and managerial process by which individuals and groups obtain what they need and
want through creating and exchanging products and value with others.
Functions of Marketing
Production and distribution complement the total marketing system. It requires planning to determine the
products or services that shall be produced. It also involves the organization of basic resources involving
money or budget and machineries which will be utilized for creating the goods or services. Finally, the
direction and control of these elements make it a system in itself, for purposes of evaluating whether
products planned were successful or failures thus requiring further development. The definition includes

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the four P’s of marketing. Known as the marketing mix, they are the following: product planning or
service planning and development, pricing, place of distribution, and promotions. As a marketing
manager, the first task of any service and profit-oriented entrepreneur is the product planning and
development which is to determine the right product or service, produce or sell, and evaluate whether
existing products or services require modification.
Of course, as a business entrepreneur, profit maximization in the long-run is aimed, so that reasonable
price determination is necessary. These products can be sold best with the help of promotional programs
which include administration of personal selling, advertising, publicity, public relations and sales
promotions. Finally, marketing objective can only be achieved if these products and services will reach
the hands of the consumers. Development of strategic places of distribution or selling outlets should be
planned, so that consumers can avail of the goods or services when their needs arise.
Core Concepts of Marketing
Needs
 It is a state of felt deprivation in a person.
 Basic reason or minimum requirement consumers look for in a product or service.
 Basic human needs include food, clothing, shelter, and safety; social needs for affection and
belonging; individual needs for knowledge and self-expression.
Wants
 The form taken by human needs as they are shaped by culture and individual personality.
 Described in terms of objects that will satisfy a need.
 The wants of people expand as they become more exposed to an increasing number of objects that
arouse their desires and interests.
Demands
 Human wants that are backed by buying powers.
 Consumers view products as bundles of benefits and choose products that give them the best
bundle for their money.
 People demand products with the benefits that add up to the most satisfaction.
Products
 Anything that can be offered to a market for attention, acquisition, use, or consumption that might
satisfy a need or want.
 Products are anything capable of satisfying a need or want. In addition to goods and services,
products include ideas, activities, persons, places, and organizations.
 Other terms for product include: satisfier, resource, or offer. All describe something of value to
someone.
Customer value
Is the difference between the values that the customer gains from owning and using a product and the
costs of obtaining the product. Customers do usually judge product values and costs accurately or
objectively--they act on perceived value.
Customer satisfaction
 Depends on a product’s perceived performance in delivering value relative to a buyer’s
expectations. If performance exceeds expectations, the buyer is delighted (certainly a worthy goal
of the
marketing company).

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  Smart companies aim to delight customers by promising only
what they can deliver, then delivering more than they promise.
 The aim of successful companies today is total customer satisfaction.
 Customer delight creates an emotional affinity for a product or service, not just a rational
preference, and this creates high customer loyalty.
 Quality has a direct impact on product or service performance.
Total Quality Management (TQM)
 It is an approach in which all the company’s people are involved in constantly improving the
quality of products, services, and business processes. Marketers have two major responsibilities in
a quality-centered company:
 They must participate in forming strategies that will help the
company win through total quality excellence--they must be the
customer’s watchdog.
 Marketers must deliver marketing quality as well as production
quality.
Exchange
Through exchange, marketing occurs. It is the act of obtaining a desired object from someone by offering
something in return.
Types of Exchange
 Hunting
 Begging
 Stealing
 Exchanging
Five conditions for an exchange to take place:
 There must be at least two parties
 Each party must have something of value to offer to the other
 Each party must want to deal with the other party
 Each must be free to accept or reject the other’s offer
 Each party must be able to communicate and deliver
Transactions
 Marketing’s unit of measurement.
 It consists of a trade of values between two parties.
Four conditions for a transaction to take place:
 At least two things of value present
 Conditions that are agreed to
 Time of agreement
 Place of agreement
Markets
 The concepts of exchange and relationships lead to the concept of a market. A market is the set of
actual and potential buyers of a product.
 Originally a market was a place where buyers and sellers gathered

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  to exchange goods (such as a village square).
 Economists use the term to designate a collection of buyers and sellers who transact in a particular
product class (as in the housing market).
 Marketers see buyers as constituting a market.
 Modern economies operate on the principle of division of labor, where each person specializes in
producing something, receives payment, and buys needed things with this money. Thus, modern
economies abound in markets.
The Marketing Concept Philosophies
The Production Concept
The production concept holds that consumers will favor products that are available and highly affordable
and that management should, therefore, focus on improving production and distribution efficiency. This is
one of the oldest philosophies that guide sellers.
The production concept is useful when:
 Demand for a product exceeds the supply.
 The product’s cost is too high and improved productivity is needed to bring it down.
The risk with this concept is in focusing company operations too
narrowly. Do not ignore the desires of the market.
The Product Concept
The product concept states that consumers will favor products that offer the most quality, performance,
and features. The organization should, therefore, devote its energy to making continuous product
improvements.
 Some manufacturers mistakenly believe that if they “build a better mousetrap,” consumers will
beat a path to their door just for their product.
 The product concept can also lead to “marketing myopia,” the failure to see the challenges being
presented by other products.
The Selling Concept
Many organizations follow the selling concept. The selling concept is the idea that consumers will not buy
enough of the organization’s products unless the organization undertakes a large-scale selling and
promotion effort.
 This concept is typically practiced with unsought goods (those that buyers do not normally think of
buying).
 To be successful with this concept, the organization must be good at tracking down the interested
buyer and selling them on product benefits.
 Industries that use this concept usually have overcapacity. Their aim is to sell what they make
rather than make what will sell in the market.
 There are not only high risks with this approach but low satisfaction by customers.

The Marketing Concept

The marketing concept holds that achieving organizational goals depends on determining the needs and
wants of target markets and delivering the desired satisfactions more effectively and efficiently than
competitors. The marketing and selling concepts are often confused. The primary differences are:
 The selling concept takes an “inside-out” perspective (focuses on existing products and uses heavy
promotion and selling efforts).

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  The marketing concept takes an “outside-in” perspective (focuses on customer needs, values, and
satisfactions).
Many companies claim to adopt the marketing concept but really do not unless they commit to market-
focused and customer-driven philosophies.

Answer the following:

1. Enumerate and discuss at least 3 concepts of marketing.

2. Explain the Marketing Philosophies.
3. Define Marketing in your own words.

REMINDERS:

If you have questions, clarifications and suggestions regarding this lesson, you may consult
your teacher through a text message or chat to help you understand the lesson.

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