Principles of Marketing - Chapter 1: Detailed Notes
FUNDAMENTALS OF MARKETING - CHAPTER 1 DETAILED NOTES
1. INTRODUCTION TO MARKETING
Marketing is more than just advertising or selling. It is the comprehensive process of understanding
customer needs, developing products or services that satisfy those needs, and building long-term
relationships that benefit both the company and its customers.
2. CORE CONCEPTS OF MARKETING
a) Needs, Wants, and Demands:
- Needs: Basic human requirements such as food, water, clothing, safety, and social belonging.
- Wants: Form that needs take as they are shaped by culture and individual personality.
- Demands: When wants are backed by purchasing power.
b) Market Offerings:
Market offerings include physical products, services, ideas, experiences, or a combination thereof
offered to a market to satisfy a need or want.
c) Customer Value and Satisfaction:
- Value: Customer's evaluation of the difference between all benefits and all costs of a market
offering.
- Satisfaction: The extent to which a product's perceived performance matches a buyer's
expectations.
d) Exchange and Relationships:
Exchange is the act of obtaining a desired object from someone by offering something in return.
Marketing occurs when people decide to satisfy needs and wants through exchange relationships.
e) Markets:
A market is the set of all actual and potential buyers of a product or service.
3. THE MARKETING PROCESS
The marketing process consists of five steps:
1. Understanding the marketplace and customer needs and wants.
2. Designing a customer-driven marketing strategy.
3. Constructing an integrated marketing program.
4. Building profitable customer relationships.
5. Capturing value from customers.
4. MARKETING MANAGEMENT ORIENTATIONS
a) Production Concept:
- Focus: Efficiency in production and distribution.
- Risk: Can lead to marketing myopia - focusing too narrowly on own operations.
b) Product Concept:
- Focus: Product quality, performance, and features.
- Risk: Might ignore actual customer needs.
c) Selling Concept:
- Focus: Large-scale selling and promotion.
- Best used: For unsought goods (e.g., insurance, blood donations).
d) Marketing Concept:
- Focus: Knowing the needs and wants of target markets and delivering satisfaction better than
competitors.
- Customer-centered approach.
e) Societal Marketing Concept:
- Focus: Delivering value to customers in a way that maintains or improves both the consumer's and
society's well-being.
5. MARKETING MIX (4Ps)
a) Product:
- Includes product variety, quality, design, features, brand name, packaging, services, etc.
b) Price:
- Amount of money customers must pay. Includes discounts, allowances, payment periods, and
credit terms.
c) Place:
- Company activities that make the product available to target customers. Includes channels,
coverage, locations, inventory, and logistics.
d) Promotion:
- Activities that communicate the product and persuade target customers to buy it. Includes
advertising, personal selling, sales promotion, public relations, etc.
6. CUSTOMER RELATIONSHIP MANAGEMENT (CRM)
CRM is the process of managing detailed information about individual customers and carefully
managing customer touchpoints to maximize customer loyalty.
- Customer Perceived Value: Difference between total customer value and total customer cost.
- Customer Satisfaction: Based on customer's expectations and product performance.
7. CAPTURING VALUE FROM CUSTOMERS
a) Customer Lifetime Value (CLV):
- The total stream of purchases that the customer would make over a lifetime of patronage.
b) Share of Customer:
- The portion of the customer's purchasing in a product category that a company gets.
c) Customer Equity:
- The total combined customer lifetime values of all the company's customers.
8. THE CHANGING MARKETING LANDSCAPE
a) Digital Age:
- Rapid growth of digital technologies has transformed marketing practices. Companies now use
websites, social media, mobile apps, and e-commerce to reach customers.
b) Globalization:
- Companies market beyond borders. Strategies must be adapted to different cultural, economic,
and political environments.
c) Sustainable Marketing:
- Emphasizes social and environmental responsibility. More consumers expect ethical practices from
companies.
d) Ethics and Social Responsibility:
- Marketers must ensure fair practices, avoid deceptive advertising, and prioritize customer and
environmental well-being.
e) Not-for-Profit Marketing:
- Used by charities, educational institutions, religious organizations, and government agencies.
9. MARKETING IN THE REAL WORLD
a) Importance in the Economy:
- Drives competition, innovation, and economic growth.
- Helps create jobs and improve standard of living.
b) Marketing Careers:
- Includes market research, product management, brand management, advertising, sales, public
relations, and digital marketing.
10. CONCLUSION
Marketing is a dynamic, evolving discipline that plays a vital role in business and society.
Companies that understand and respond effectively to customer needs through ethical and
innovative marketing practices can achieve lasting success and contribute to societal progress.
