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Core Marketing Concepts

To have more clear view about the marketing and to understand the marketing process first we should discuss the some basic concepts, which we will be discussing in the coming Lessons and what is the main essence of the marketing process and we can say that the marketing revolves around theses concepts.

a. Needs, wants, and demandsNeeds

Human needs are the most basic concept underlying marketing. A human need is a state of felt deprivation.

1). Humans have many complex needs.
a). Basic, physical needs for food, clothing, warmth, and safety.
b). Social needs for belonging and affection.
c). Individual needs for knowledge and selfexpression.

2). These needs are part of the basic human makeup.

Wants A human want is the form that a human need takes as shaped by culture and individual personality.

Demands are human wants that are backed by buying power.

1). Consumers view products as bundles of benefits and choose products that give them the best bundle for their money.
2). People demand products with the benefits that add up to the most satisfaction. Outstanding marketing companies go to great lengths to learn about and understand their customer’s needs, wants, and demands. The outstanding company strives to stay close to the customer.

b. Products and Services

A product is anything that can be offered to a market to satisfy a need or want. A service is an activity or benefit offered for sale that is essentially intangible and does not result in the ownership of anything.
1). The concept of product is not limited to physical objects and can include experiences, persons, places, organizations, information, and ideas.
2). Be careful of paying attention to the product and not the benefit being satisfied.
3). “Marketing myopia” is caused by shortsightedness or losing sight of underlying customer needs by only focusing on existing wants.

c. Value, satisfaction, and quality

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 not often 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).

1). Smart companies aim to delight customers by promising only what they can deliver, then delivering more than they promise.
2). The aim of successful companies today is total customer satisfaction.
3). Customer delight creates an emotional affinity for a product or service, not just a rational preference, and this creates high customer loyalty.
4). Quality has a direct impact on product or service performance. Quality is defined in terms of customer satisfaction.

The term total quality management (TQM) is an approach in which all the company’s people are involved in constantly improving the quality of products, services, and marketing processes.

1). In the narrowest sense, quality can be defined as “freedom from defects.”
2). Quality has a direct impact on product or service performance. Quality is defined in terms of customer satisfaction.
3). The fundamental aim of today’s total quality movement has become total customer satisfaction.

d. Exchange, transactions, And relationships

Marketing occurs when people decide to satisfy needs and wants through exchange.

Exchange is the act of obtaining a desired object from someone by offering something in return. Exchange is only one of many ways to obtain a desired object. Exchange is the core concept of marketing. Conditions of exchange include:

1. At least two parties must participate.
2. Each must have something of value to the other.
3. Each must want to deal with the other party.

Each must be free to accept or reject the other's offer

Whereas exchange is a core concept of marketing, a transaction (a trade of values between two parties) is marketing’s unit of measurement. Most involve money, a response, and action. Transaction marketing is part of a larger idea of relationship marketing. Beyond creating shortterm transactions, marketers need to build long- term relationships with valued customers, distributors, dealers, and suppliers. Ultimately, a company wants to build a unique company asset called a marketing network (the company and all its supporting stakeholders). The goal of relationship marketing is to deliver long-term value to the customer and thereby secure customer satisfaction and retention of patronage.

1). Competition is increasingly between networks.
2). Build a good network of relationships with key stakeholders and profits will follow.

e. 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.  

1). Originally a market was a place where buyers and sellers gathered to exchange goods (such as a village square).
2). Economists use the term to designate a collection of buyers and sellers who transact in a particular product class (as in the housing market).
3). Marketers see buyers as constituting a market and sellers constituting an industry.
4). 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.
5). Marketers are keenly interested in markets.

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