Introduction to Marketing & The Marketing Process

Introduction to Marketing

Welcome to Introduction to Marketing.
Today we will explore the foundational principles of modern marketing.
We will cover definitions, evolution, and the five-step marketing process.

Part 1

What is Marketing?

Key Takeaway

Marketing is often misunderstood as just advertising or selling.

In reality, it is a comprehensive process of creating value for customers.
The ultimate goal is to capture value from customers in return.

Knowledge Check

What is the primary purpose of the marketing process?

Definition

The Definition of Marketing

Marketing is the process by which companies engage customers.

It involves building strong customer relationships.

The Objective

It is designed to create customer value in order to capture value in return.

Objective

The Core Goal: Customer Value

Customer value is the perceived benefit a customer gains from a product.
It is compared to the cost of obtaining that product.

"Highly satisfied customers buy again and tell others about their good experiences."
— The Loyalty Loop

Knowledge Check

What is the relationship between marketers and consumer needs?

Foundation

Needs, Wants, and Demands

React Flow

These three concepts are the foundation of marketing.
Understanding the difference between them is critical for any strategy.
Marketers do not create needs, but they can influence wants.

Needs

Needs: The Basic Requirements

What They Are

Needs are states of felt deprivation.

Physical Needs

They include physical needs for food, clothing, warmth, and safety.

Social & Individual Needs

They also include social needs for belonging and individual needs for knowledge.

Wants

Wants: Shaped by Culture and Personality

Wants are the form human needs take as they are shaped by culture.
An individual needs food but wants a specific type of cuisine or restaurant.

Key Takeaway

Marketing helps shape wants by exposing consumers to attractive options.

Demands

Demands: Backed by Buying Power

"When backed by purchasing power, wants become demands."

Consumers view products as bundles of benefits and choose products that add up to the most satisfaction.
A company must understand its customers' demands to offer the right products at the right price.

Discussion

Needs vs Wants

Group Discussion

If a consumer buys a highly expensive luxury watch, which specific psychological needs and culturally shaped wants are they satisfying compared to buying a basic timepiece?

Part 2

The Evolution of Marketing

React Flow

Marketing has evolved through several distinct philosophies over time.

Each era represents a shift in how companies interact with the market.

Key Takeaway

Understanding this history helps us see why modern marketing is customer focused.

History

The Production Concept

Origins

This is one of the oldest concepts in business.

Premise

It holds that consumers will favor products that are available and highly affordable.

Focus

Management focuses on improving production and distribution efficiency.

History

The Product Concept

This concept holds that consumers will favor products that offer the most in quality and performance.
The focus is on making continuous product improvements.

Warning

A risk here is marketing myopia, focusing only on the product instead of the customer's underlying need.

Knowledge Check

Which of the following is a core characteristic of the selling concept?

History

The Selling Concept

This approach assumes consumers will not buy enough of the firm's products unless it undertakes a large scale selling and promotion effort.
It focuses on creating sales transactions rather than building long-term relationships.

Common Application

It is typically practiced with unsought goods, like insurance or blood donations.

Knowledge Check

The marketing concept is a customer-centered philosophy that suggests organizational goals are achieved by:

Modern Paradigm

The Marketing Concept

"It is a customer-centered, sense and respond philosophy."

This philosophy holds that achieving organizational goals depends on knowing the needs and wants of target markets.
It requires delivering the desired satisfactions better than competitors do.

Future

The Societal Marketing Concept

This concept questions whether the pure marketing concept overlooks possible conflicts between consumer short-term wants and consumer long-term welfare.

This leads to sustainable marketing practices.

The Dual Objective

It holds that marketing strategy should deliver value to customers in a way that maintains or improves both the consumer's and society's well-being.

Discussion

Applying the Concepts

Group Discussion

How can a traditional fast-food company pivot from a purely product and selling concept to a societal marketing concept without completely losing its core, price-sensitive customer base?

Part 3

The Marketing Process

React Flow

The marketing process is a simple five-step model.
The first four steps create value for customers.

Key Takeaway

The final step captures value from customers in return.

Step 1

Understand the Marketplace

Objective

Marketers must understand customer needs and wants.

Methodology

This requires extensive market research and data collection.

Scope

It involves analyzing the broader marketing environment.

Knowledge Check

In the process of designing a customer value-driven strategy, what are the two primary questions a marketing manager must answer?

Step 2

Design a Customer Value-Driven Strategy

The marketing manager must answer two important questions.

1. What customers will we serve?

This involves market segmentation and targeting.

2. How can we serve these customers best?

This involves differentiation and positioning.

Step 3

Construct an Integrated Marketing Program

The company's marketing strategy outlines which customers it will serve and how it will create value for them.
Next, the marketer develops an integrated marketing program that will actually deliver the intended value.

Key Takeaway

This is done using the marketing mix, often called the four Ps: Product, Price, Place, and Promotion.

Step 4

Engage Customers and Build Relationships

"Customer relationship management is the overall process of building and maintaining profitable customer relationships."

It involves delivering superior customer value and satisfaction.
The goal is to produce high customer equity, the combined customer lifetime values of all the company's customers.

Step 5

Capture Value from Customers

The first four steps involve creating value for the customer.

In the final step, the company captures value in return in the form of sales, market share, and profit.

The Value Loop

Creating superior customer value creates highly satisfied customers who stay loyal and buy more.

Concept

The Concept: Customer Lifetime Value

Key Takeaway

Keeping customers loyal makes good economic sense.

Losing a customer means losing more than a single sale.
It means losing the entire stream of purchases that the customer would make over a lifetime of patronage.

Discussion

Value Creation

Group Discussion

Consider a brand to which you are highly loyal; how does this brand capture value from you beyond just your financial purchases over time?

Conclusion

Introduction to Marketing

The Core

Marketing is not just selling, it is a process of creating and capturing value.

The Foundation

Understanding needs, wants, and demands is the starting point for all marketing strategies.

The Process

The five-step marketing process provides a structured approach to building lasting customer relationships.