Principles of
Marketing
(BBA 3rd)
By
Basic Concepts
Need:
“State of felt of deprivation”
or
“The basic human requirements”
e.g.
Food, shelter, clothes, health,
education
Want:
“The form human needs take as
shaped by culture and individual
personality”
e.g.
A person is hungry and he wants to
satisfy his hunger with zinger
burger along with Pepsi.
Demand:
Human wants that are backed by
purchasing power. (want +
purchasing power)
e.g.
A person who wants to have
something (good, service, idea etc)
and also have money in his pocket.
Marketing offer:
Consumer’s needs and wants are
fulfilled through a marketing offer.
“ It is some combination of products,
services, information or experiences
offered to a market to satisfy a need
or want”
• Not limited to physical products
• Pay attention to benefits and
experiences
Exchange:
Marketing occurs when people decide
to satisfy their needs and wants
through exchange relationship.
“ The act of obtaining a desired object
from someone by offering something
in return is exchange”
Market:
• A place where we buy and sell our
products (general concept)
• A commodity (in economics)
e.g. wheat market, rice market etc
• “The set of actual and potential
buyers of a product or service” (in
marketing)
Conti…
In marketing, the term market refers
to the group of consumers or
organizations that is interested in the
product, has the resources to
purchase the product, and is
permitted by law and other
regulations to acquire the product.
The market definition begins with the
total population and progressively
narrows as shown in the diagram.
Market
Explanation:
Total population
Potential market- those in the total
population who have interest in acquiring
the product.
Available market - those in the potential
market who have enough money to buy
the product.
Qualified available market - those in the
available market who legally are permitted
to buy the product.
Target market- the segment of the
qualified available market that the
firm has decided to serve (the served
market.
Penetrated market - those in the
target market who have purchased
the product.
Customer Relationship
Management:
“The overall process of building and
maintaining profitable customer
relationships by delivering superior
customer value and satisfaction”
Companies build good relations by
creating value and satisfying their
customers.
Customer satisfaction:
“The extent to which product’s
perceived performance matches a
buyer’s expectation”
Customer perceived value:
“ The difference between total
customer value and total customer
cost”
Quality:
“The features and characteristics of a
product that influence its ability to
satisfy customer needs”
Customer life time value:
“The value of entire stream of
purchases that the customer would
make over a life time of patronage”
Customer equity:
“The total combined customer lifetime
values of all the company’s
customers”
Demarketing:
“It is to reduce demand temporarily or
permanently; the aim is not to destroy the
demand but only to reduce or shift”
Efforts aimed at discouraging (not destroying)
the demand for a product which
(1)a firm cannot supply in large-enough
quantities, or
(2) does not want to supply in a certain region
where the high costs of distribution or
promotion allow only a too little profit
margin. Common demarketing strategies
include higher prices, scaled-down
advertising, and product redesign.
Music to a
Marketer’s Ears
“They’re the best.”
“I always eat there.”
“I only fly with that airline.”
“I buy my electronics at that store.”
“I will prefer to go in that school.”
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PREFACE
Today’s successful companies have
one thing in common, i.e.
• Customer focused
• Heavily committed to marketing
• Strive to satisfy customer needs
Conti…
• Well defined customer markets
• Motivate everyone to build lasting
customer relations
• Smart companies try hard to delight
their customers by delivering on their
promise.
Definitions:
Marketing: The
process of creating
consumer value in the
form of goods, services,
or ideas that can
improve the consumer’s
life.
‘Marketing is the management
process that identifies, anticipates
and satisfies customer
requirements profitably’
The Chartered Institute of
Marketing
‘The right product, in the
right place, at the right
time, and at the right
price’
Adcock et al
‘Marketing is a social and
managerial process by which
individuals and groups obtain
what they want and need
through creating, offering
and exchanging products of
value with others’
Kotler 1991
Marketing is
“ The process by which companies
create value for customers and build
strong customer relationships in
order to capture value from
customers in return”
Marketing
Product Price
Customers
Place Promotion
Simple Marketing
System
Communication
Product/Service
Producer/Seller Consumer
Money
Feedback
Reasons for
Studying
Marketing
Costs Careers
About 50% of total About 25 to 33% of
product costs are the work force hold
marketing positions.
marketing costs
Why Study
Marketing ?
Contributions to Society
Contributions to Marketing decisions affect
Individual Organizations the lives of individual
Critical to the success consumers and society as
Why Study
Marketing?
Plays an important role in
society
Vital to business
Offers outstanding career
opportunities
Affects your life every day
Marketing management
process
• Analysis/Audit - where are we now?
• Objectives - where do we want to
be?
• Strategies - which way is best?
• Tactics - how do we get there?
• (Implementation - Getting there!)
• Control - Ensuring arrival
t o p
s s
et ’ r e
L th e
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