ADVERTISING PRACTICE 2 What Marketing is Not

• One of the most common misconceptions is

associating “marketing as selling”.
While selling is an important activity of marketing and is a

Understanding
central function in daily business, marketing is not selling.
• Another common misconception – “marketing
Marketing equals advertising”

Management It is often reinforced when some of the companies spend

their huge advertising budget.
Selling and advertising are merely a part of
many functions of marketing. Thus, selling
and advertising are only the tip of the
marketing iceberg.
ADVERTISING PRACTICE 2

The Environmental

Definition of Marketing
Assessment Research

Marketing
Stage
Consumer
Assessment

Overview Determine
Objectives Strategic
• The simplest definition is: Marketing is the
Strategic Decisions
Stage delivery of customer satisfaction at a profit.
Marketing Mix
• In a general sense, marketing is any
Tactical
Communication Price Distribution Product Stage exchange activity intended to satisfy human
wants. It is practiced by individuals,
Marketing
Point of Sale/
Packaging
Direct
Marketing
Advertising
Sales
Promotion
Public
Relations
Personal
Selling
businesses and non-profit organization.
• Marketing is the process of continuously
Implementation
Timing/Size
Creative
Decisions
Media
Decisions Stage and profitably satisfying the target
customer’s needs, wants and expectations
Creative Evaluation
Response Evaluation
Evaluation
superior to competition.
Stage - Josiah Go -
Revision

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Definition of Marketing Twofold Goal of Marketing
• Marketing is an organizational function and a set • To attract new customers by promising
of processes for creating, communicating and
superior values
delivering value to customers and for managing
customer relationships in ways that benefit the • To keep and grow current customers by
organization and its stakes holders. delivering satisfaction.
- American Marketing Association -
• Marketing 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.
- Philip Kotler -
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What is Marketed? Goods
• Marketing is typically seen as the task of
creating, promoting and delivering products to
consumers and businesses.
• Marketing people are involved in marketing the
following entities:
– Goods – Places
– Services – Properties
– Experiences – Organizations
– Events – Information
– Persons – Ideas
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Services Events

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Experiences Persons

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Places Properties

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Organizations Information

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Ideas Core Marketing Concept

Needs, wants
& demands

Core
Marketing
Markets
Concepts
Marketing offers
(products,
services &
experiences)
Exchange,
transactions and
relationships Value and
satisfaction
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Markets Types Of Markets
• The set of all actual and potential buyers of • Consumer Markets
a product or service.
• Business Markets (Industrial Markets)
• The size of the market depends on the
number of people who • Reseller Markets
exhibit the need, have • Government Markets
resources to engage in • International Markets
exchange and are willing
to exchange these
resources for what they
want.
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Types Of Markets Types Of Markets

• Consumer Markets • Government Markets
– It consist of individuals and households that buy – Made up of government agencies that buy
goods and services for personal consumption.
goods and services to produce public
• Business Markets (Industrial Markets) services or transfer the goods and services
– Companies that buy goods and services for further to others who need them.
processing or for use in their production process.
• International Markets
• Reseller Markets
– Wholesalers, retailers and distributors who buy – Consist of buyers in other countries,
finished or semifinished products to resell at a including consumers, producers, resellers
profit. and governments.
BACK
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Needs
• These are states of felt deprivation. They are
a basic part of the human makeup.
• They include basic physical needs for food,
clothing, warmth and safety; social needs for
belonging and affection and individual needs
for knowledge and self-expression.
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Demands
• These are human wants supported by the
willingness and ability to pay for them.
• Demand = Want + willingness to buy +
ability to buy
• Demand is brand specific.
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Wants
• These are the form taken by human needs
take as they are shaped by culture and
individual personality.
• Needs become wants when they are directed
to specific objects that might satisfy the need.
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Needs, Wants & Demands
• Marketing companies must learn about and
understand their customers’ needs, wants
and demands.
• Companies must measure not only how
many people want their product but also
how many would actually be willing and
able to buy it.
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Needs, Wants & Demands
• Simply giving customer what they want isn’t
enough anymore – to gain an edge
companies must help customers learn what
they want.
Marketing Offers/Products
• Product is any offering that can satisfy a
need or want.
• Major types of basic offerings: goods,
services, experiences, events, persons,
places, properties, organizations,
information and ideas.
• A Brand is an offering from a known
source.

BACK
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Is it a Goods, Service or
Marketing Offers/Products
Idea?
• Goods • Overnight stay in a (S) • Advice from a (I/S)
– It is a physical entity you can touch, objects, hotel marriage counselor
devices or things. • DVD player (G) • Utilities, such as (S)
– Physical goods constitute the bulk of most • This marketing (S) electricity
countries’ production and marketing effort. subject • Meal at Red Crab (G/S)
• Services • Dry cleaning (S) • A movie at a theater (S)
– It is any activity or benefit that one party can offer • Political party platform (I) • Candy bar (G)
to another that is essentially intangible and does • Pair of jeans (G) • Airplane flight (S)
not result in the ownership of anything. • Toothpaste (G) • Beauticians (S)
• Ideas • Lawyers (S) • Shampoo (G)
– It is a concept, philosophy, image or issue • Save the environment (I) • Insurance (S)
BACK
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Customer Value Customer Value
• Value = Benefits/Costs
• Customer value is the difference between
– Benefits = Emotional benefits + Functional
the values the customer gains from owning benefits
and using a product and the costs of – Costs = Monetary + Time + Energy + psychic
obtaining the product.
• Value can be increased through
• A ratio between what the customer gets – Lowering costs
and what he gives. – Increasing benefits
• The buyer chooses between different – Combination of both
offerings on the basis of which is perceived – Raise benefits by more than the raise in costs
to deliver the most value. – Lower benefits by less than the reduction of
costs
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Customer Satisfaction Exchange

• Customer satisfaction is the extent to
which a product’s perceived performance
matches a buyer’s expectations.
• It is meeting or exceeding customer
expectations.
BACK
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• Exchange is the act of obtaining a desired
object from someone by offering something
in return.
• A person can obtain product in four ways:
– Self-produce
– Use force to get a product
– Beg
– Offer a product, service or money for
something he or she desires.
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Exchange Communication
Transactions
Product/services • Transactions is a trade of values between
INDUSTRY MARKET
(a collection (a collection
two or more parties.
of sellers) Money of buyers) – Monetary transaction
– Barter transaction
Information
For exchange potential to exist, it must satisfy the following conditions:
• It involves several dimensions:
1. There are at least two parties. – at least two things of value
2. Each party has something that may be valuable to the other party. – agreed-upon conditions
3. Each party must have the ability to communicate with and make
available what is being offered to the other. – a time of agreement
4. Each party is free to accept or reject the exchange offer. – a place of agreement.
5. Each party believes it is appropriate or desirable to deal with the
other party.
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Exchange, Transactions and

Relationship Marketing
Relationships
• It is the process of creating, maintaining Learning Environment
and enhancing strong, value-laden
relationships with customers and other
stakeholders (employees, suppliers,
distributors, retailers, etc.) Tuition
• Beyond attracting customers and creating Promised Action
transactions, the goal is to retain customers
and grow their business with the company.

Votes
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Exchange, Transactions and
Relationships
Fee
Consulting
Products/services
Money
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You Can Be A Marketing
Expert!
Would you sell more Sony Discmans
at P500 or P5,000?
Your experience helped you
pick the right answer.
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You Can Be A Marketing
Expert!
Marketing is a simple concept.
We all see lots of advertising,
and we know what works.
Marketing is just common sense!
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You Can Be A Marketing
Expert!
In a magazine article, a well-known actress
said she often play badminton for fun and
exercise.
What was the reaction of the badminton
apparel company? (a) delighted, (b)
upset, or (c) somewhere in between?
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Marketing Management
• The art and science of choosing target
markets and building profitable
relationships with them.
• Involves getting, keeping and growing
customers through creating, delivering and
communicating superior customer value.
• It is customer management and demand
management.
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The Production Concept
• The idea that consumers will favor products
that are available and highly affordable.
Management should concentrate on
achieving high production efficiency, low
costs and mass distribution.
ADVERTISING PRACTICE 2
Marketing Management
Orientations
• The Production Concept
• The Product Concept
• The Selling Concept
• The Marketing Concept
• The Societal Marketing Concept
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The Product Concept
• The idea that consumers will favor products
that offer the most quality, performance and
innovative features.
The organization should therefore devote its
energy to making continuous product
improvements.
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Marketing Myopia
• Sellers pay more attention to the specific
products they offer than to the benefits and
experiences produced by the products.
• They focus on the “wants” and lose sight of
the “needs.”
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The Selling Concept
• The idea that the consumers will not buy
enough of the organization’s products
unless the organization undertakes a large-
scale selling and promotion effort.
This concept assumes that consumers
typically show buying resistance and must
be coaxed into buying.
It is typically practiced with unsought goods –
those that buyers do not normally think of
buying.
ADVERTISING PRACTICE 2

The Selling Concept The Marketing Concept

• The marketing concept holds that the key
to achieving organizational goals consists
of the company being more effective than
competitors in creating, delivering and
communicating customer value to its
chosen target markets.

The job is not to find the right customers for

your product, but the right products for your
customers.
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The Marketing Concept The Marketing Concept
Customer Total Company • The marketing concept rests on four pillars:
Satisfaction Effort
– Target market
– Customer needs
The
Marketing – Integrated marketing
Concept – Profitability

Profit
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The Societal Marketing

Customer Delivered Value
Concept
Starting • The idea that organization should
point Focus Means Ends determine the needs, wants and interests
Existing Selling and Profits through of target markets and deliver the desired
Factory products promotion sales volume satisfactions more effectively and efficiently
(a) The selling concept than do competitors in a way that maintains
or improves the consumer’s and society’s
Customer Integrated Profits through well-being.
Market needs marketing customer
satisfaction

(b) The marketing concept

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The Societal Marketing The Societal Marketing
Concept Concept
• Three considerations underlying the
societal marketing concept:
Society
(Human Welfare)

Societal
Marketing Concept

Consumers Company
(Want Satisfactions) (Profits)

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How Marketing Are

Changing?
• Changing technology
• Globalization
• Deregulation
• Privatization
• Customer Empowerment
• Customization
• Heightened Competition
• Industry Convergence
• Retail Transformation
• Disintermediation
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