Principle of marketing for community development experts

1. PRINCIPLES OF MARKETING
(PPU 08203)
Sarah E.Mmari
TENGERU INSTITUTE OF COMMUNITY
DEVELOPMENT ( TICD)-ARUSHA

2. What is a Market?
Marketing has been defined in the following
manner:
• ◦American Marketing Association (AMA),
“Marketing is an organizational function and
a set of processes for creating,
communicating and delivering value to
customers and for managing customer
relationships in ways that benefit the
organization and its stakeholders.”

3. Cont…
• Peter Drucker, “The aim of marketing is to know and
understand the customer so well that the product or
service fits him and sells itself.”
• Philip Kotler, “Marketing Management is the analysis,
planning, implementation and control of programs
designed to bring about desired exchanges with
target audiences for the purpose of personal and of
mutual gain. It relies heavily on the adoption and
coordination of product, price, promotion, and place
for achieving responses.”

4. NATURE OF MARKETING
Marketing is a never ending task. Marketing
concerns itself with a arranging all the resources
in a way that meets the needs of the customers
• Marketing is customer oriented;
Marketing begins and ends with the customer.
Customers must be allowed to decree product
specifications and standards regarding quality.
And for this, customer’s needs must be
examined continuously.

5. Cont..
Marketing is the delivery of value:
When a customer is satisfied from a particular
product based on its overall performance, then the
satisfaction that he has received is known as
customer value. Customers will choose a product that
gives more value per amount of money spent. “Value
is the satisfaction of customer requirements at the
lowest possible cost of acquisition, ownership and
use” De Rose. Thus, the organization must aim to
deliver greater customer value than that of their
competitors.

6. Cont..
• Marketing is network of relationships:
The focal point of all marketing activities is the
customer. Relationships Marketing came to light
in1990’s. “Relationship Marketing is the practice of
building long-term satisfying relations with key
parties like customers, suppliers and distributors in
order to retain their long term preference and
business.” Philip Kotler, So the marketers should aim
at maintaining long term relationships by delivering
high quality products, better services and fair prices
than their competitors.

7. • Marketing is business:
All activities start from marketing i.e. through
knowing customer’s needs and wants and
ends on the customer i.e. providing after
sales service and knowing customer
dissonance. The entire business revolves
around marketing.

8. Cont..
• Marketing is dynamic:
The word dynamic means ever changing. The needs and
wants of the customer are changing constantly. Since the
goal of marketing is to meet customer’s needs and wants
by furnishing them with the products they want to buy,
therefore, marketing must also change constantly to meet
those needs and wants.
“Marketing is so basic that it cannot be considered as a
separate function. It is the whole business seen from the
point of view of its final result, that is, from the customer’s
point of view. Business success is not determined by the
producer but by the customer.” Peter F. Drucker

9. Core Marketing Concepts
• Marketing can be further understood by defining the
core concepts applied by marketing managers.
1. Target Markets and Segmentation
 Market segment-this can be divided by examining
demographic, psychographic and behavioral
differences among buyers.
 Target market- is the market segment which
represents a greatest opportunity.
 Market offering- from the target market, the firm
develops the offering which is positioned in the minds
of the target buyers. Example, Samsung, Apple PC etc

10. Cont..
2. Marketplace, Market space and Meta market
 Market place- is the physical place where one goes
shopping in a store
 Market space- is digital, as when one goes shopping on the
internet
 Meta market- is a cluster of complementary products and
services that are closely related in the minds of consumers
but are spread across a diverse set of industries.
3. Marketers and Prospects
 A marketer is someone seeking a response( attention, a
purchase, donation)from another party called prospect.

11. 4.Needs, wants and demands
 Needs describe basic human requirements such as food, air, water,
clothing, and shelter. People also have strong needs for recreation,
education, and entertainment.
 These needs become wants when they are directed to specific objects
that might satisfy the need
 Demands are wants for specific products backed by an ability to pay. Eg;
Many people want a Mercedes; only a few are able and willing to buy one.
 Companies must measure not only how many people want their product,
but also how many would actually be willing and able to buy it.
 However, marketers do not create needs: Needs preexist marketers.
Marketers, along with other societal influences, influence wants.
Marketers might promote the idea that a Mercedes would satisfy a
person’s need for social status. They do not, however, create the need for
social status.

12. 5. Product or Offering
People satisfy their needs and wants with
products.
 A product is any offering that can satisfy a need
or want.
 A brand is an offering from a known source. A
brand name such as McDonald’s carries many
associations in the minds of people
All companies strive to build a strong, favorable
brand image.

13. 6.Value and Satisfaction
 In terms of marketing, the product or offering
will be successful if it delivers value and
satisfaction to the target buyer.
The buyer chooses between different offerings
on the basis of which is perceived to deliver
the most value
After the delivering of the value the customer
is likely to be satisfied.

14. 7. Exchange and Transactions
 Exchange, the core of marketing, involves
obtaining a desired product from someone by
offering something in return.
 Two parties are engaged in exchange if they are
negotiating
 When an agreement is reached, we say that a
transaction takes place
 A transaction involves at least two things of
value, agreed-upon conditions, a time of
agreement, and a place of agreement.

15. 8. Relationships and Networks
Relationship marketing aims to build long-term
mutually satisfying relations with key parties—
customers, suppliers, distributors—in order to
earn and retain their long-term preference and
business
 A marketing network consists of the company
and its supporting stakeholders (customers,
employees, suppliers, distributors, university
scientists, and others) with whom it has built
mutually profitable business relationships

16. 9. Marketing Channels
To reach a target market, the marketer uses three
kinds of marketing channels.
a) Communication channels deliver messages to
and receive messages from target buyers.
They include newspapers, magazines, radio,
television, mail, telephone, billboards, posters,
fliers, CDs, audiotapes, and the Internet.
Beyond these, communications are conveyed by
facial expressions and clothing, the look of retail
stores, and many other media.

17. b) Distribution channels- displays or deliver the
physical product or service(s) to the buyer or
user. There are physical distribution
channels(warehouses) and service distribution
(transportation vehicles), and various trade
channels such as distributors (wholesalers, and
retailers).
c) selling channels- This includes the banks and
insurance companies that facilitate transactions.

18. 10. Supply Chain
describes a longer channel stretching from raw
materials to components to final products that
are carried to final buyers.
 For example, the supply chain for women’s shoes
starts with animal leather, cutting operations,
manufacturing, and the marketing channels that
bring products to customers.
This supply chain represents a value delivery
system.

19. 11. Competition
Competition- Is the rivalry between companies selling similar products
and services with the goal of achieving revenue, profit, and market
share growth.
There are four levels of competition, based on degree of product
substitutability:
a) Brand competition:
 Direct competition-Is the rivalry between the companies offering
similar line of products or services in the same target market and
to the same target audience with the goal to have the higher
market share, increased revenues, huge profits, and growth
• The promotional strategy and goals are similar
• Considerations are kept on brand’s latest offerings, innovative
techniques, and other business aspects.
Example; Coke and Pepsi, smart phone mobile companies namely
Apple and Samsung

20.  Indirect Competition-occurs when the two brands offer
similar line of products but nature, attribute, features,
business strategy and goals are quite indifferent.
• The rivalry and competition are not as tough as compared
to the direct competition but the brands have to keep a
watch and stay consistently successful in the market.
• For example: Mobile brands Apple and Tecno are the
indirect competitors of each other as Apple is majorly into
luxury segment and Tecno offer the affordable range of cell
phones.
• Their brand strategies, target audience, and business goals
are also different.

21. Replacement Competition –Is a situation
when your customer purchases other product
instead of choosing your product to which he
has been committed for a longer period of
time.
• For Example: Instead of buying story books for
children, parents nowadays make them watch
cartoon videos on YouTube replacing books
with the digital technology.

22. Ways to defend against Brand
Competition :
1) Have a thorough market research and study
• Have a market research on the new products
and services in the market, brand strengths,
features and attributes of their offerings, and
what are their unique selling propositions.
• government policies and rules that can affect
the business operations along with the
research on the developing and evolving
tastes and preferences of the customers.

23. 2. Advocate the brand
• To clearly state how its offerings are different
from the ones of the competitive brands.
• Use conventional and modern marketing and
promotional channels to make the customers
aware and increase the reach of the brand.

24. 3. Add new customers
• To defeat the threat of Brand Competition, the brand has to
keep on tapping new markets with a motive to add the new
and fresh database of customers that will result in the
higher market share and the loyal set of customers
4.Stay true to the brand promise
• If the brand is known for offering the high-quality products
or offering affordable products or is recognized for
providing the excellent levels of customer service
experience, it should always stay true to its brand promise
that has made the brand attain high market share.

25. b) Industry competition: A company sees its
competitors as all companies that make the
same product or class of products. Thus,
Toyota would be competing against all other
car manufacturers.

26. c) Form competition: A company sees its competitors as
all companies that manufacture products that supply
the same service. Toyota would see itself competing
against manufacturers of all vehicles, such as
motorcycles, bicycles, and trucks.
d) Generic competition: A company sees its competitors
as all companies that compete for the same consumer
dollars. Volkswagen would see itself competing with
companies that sell major consumer durables, foreign
vacations, and new homes.

27. 12.Marketing Environment
Competition represents only one force in the environment in
which all marketers operate. The overall marketing
environment consists of the task environment and the
broad environment.
 The task environment includes the immediate actors
involved in producing, distributing, and promoting. Eg. the
company, suppliers, distributors, dealers, and the target
customers. Web site designers, banking and insurance
companies, and transportation and telecommunications
companies are included in the supplier group. Agents,
brokers, manufacturer representatives.

28. The broad environment consists of six
components: demographic environment,
economic environment, natural environment,
technological environment, political-legal
environment, and social-cultural environment.
• These environments contain forces that can
have a major impact on the actors in the task
environment, which is why marketers track
environmental trends and changes closely.

29. 13.Marketing Mix
• Marketing mix is the set of marketing tools
that the firm uses to pursue its marketing
objectives in the target market.
• Marketing-mix decisions must be made to
influence the trade channels as well as the
final consumers.

30. Cont..
• The marketing mix comprises of the “4ps” (price,
place promotion and product)
1) Product- Product variety, Quality, Design
Features, Brand name, Packaging Sizes, Services,
Warranties Returns.
2) Price- List price, Discounts Allowances, Payment
period, etc
3) Promotion-Sales promotion, Advertising, Sales
force, Public relations, Direct marketing
4) Place- Channels Coverage, Locations, Inventory
Transport

31. Robert Lauterborn suggested that the sellers’
four Ps correspond to the customers’ four Cs.
 Four Ps
• product
• Price
• Place
• promotion
 Four Cs
• Customer solution
• Customer cost
• Convenience
• Communication

32. STRATEGIC MARKETING
MANAGEMENT

33. COMPANY ORIENTATIONS TOWARD THE
MARKETPLACE
• Marketing management is the conscious effort
to achieve desired exchange outcomes with
target markets.
• But what philosophy should guide a
company’s marketing efforts?
• What relative weights should be given to the
often conflicting interests of the organization,
customers, and society?

34. MARKETING CONCEPTS/PHILOSOPHIES
OF MARKETING
1. The Production Concept
Holds that consumers prefer products that are widely available and inexpensive.
Managers of production-oriented focus on;
• achieving high production efficiency, low costs, and mass distribution.
• This orientation makes sense in developing countries, where consumers are more
interested in obtaining the product than in its features.
• It is also used when a company wants to expand the market.
• It concentrates on building production volume and upgrading technology
in order to bring costs down, leading to lower prices and expansion of the market.
• This orientation has also been a key strategy of many Japanese companies.

35. 2. The Product Concept
• Holds that consumers favor those products
that offer the most quality, performance, or
innovative features.
• Managers in these organizations focus on
making superior products and improving them
over time, assuming that buyers can appraise
quality and performance.

36. • Product-oriented companies often design
their products with little or no customer input,
trusting that their engineers can design
exceptional products.
• However, the product concept can lead to
marketing myopia

37. 3. The Selling Concept
• Holds that consumers and businesses, if left
alone, will ordinarily not buy enough of the
organization’s products.
• The organization must, therefore, undertake
an aggressive selling and promotion effort.
• This concept assumes that consumers must be
coaxed into buying, so the company has a
selling and promotion tools to stimulate
buying.

38. • The selling concept is practiced most
aggressively with unsought goods—goods that
buyers normally do not think of buying, such
as insurance and funeral plots.
• practiced in the nonprofit area by fund-raisers,
college admissions offices, and political
parties.

39. • Most firms practice the selling concept when
they have overcapacity.
• Their aim is to sell what they make rather than
make what the market wants.
• It assumes that customers who are coaxed
into buying a product will like it;

40. 4. The Marketing Concept
• The marketing concept, based on central
tenets crystallized in the mid-1950s,
challenges the three business orientations we
just discussed.
• Holds that the key to achieving organizational
goals consists of the company being more
effective than its competitors in creating,
delivering, and communicating customer
value to its chosen target markets.

41. Difference between the selling
concept and marketing concept
i. Selling focuses on the needs of the seller;
marketing on the needs of the
buyer/customers.
ii. Selling is preoccupied with the seller’s need
to convert his product into cash; marketing
with the idea of satisfying the needs of the
customer by means of the product and the
whole cluster of things associated with
creating, delivering and finally consuming it.

42. iii. The selling concept takes an inside-out
perspective. It starts with the factory, focuses
on existing products, and calls for heavy selling
and promoting to produce profitable sales.
Whereas;
The marketing concept takes an outside-in
perspective. It starts with a well-defined market,
focuses on customer needs, coordinates activities
that affect customers, and produces profits by
satisfying customers.

43. difference…
STARTING
POINT
FOCUS MEANS ENDS
The selling
concept
Factory Existing
products
Selling and
promoting
Profits through
sales volume
The marketing
concept
Market Customer
needs
Integrated
marketing
Profits through
customer
satisfaction

44. Pillars of marketing concept
a) Target Market
• Companies do best when they choose their target market(s)
carefully and prepare tailored marketing programs.
b) Customer Needs
• A company can carefully define its target market yet fail to correctly
understand the customers’ needs.
• Clearly, understanding customer needs and wants is not always
simple.
• Some customers have needs of which they are not fully conscious;
some cannot articulate these needs or use words that require some
interpretation.
• We can distinguish among five types of needs: (1) stated needs, (2)
real needs, (3) unstated needs,(4) delight needs, and (5) secret
needs.

45. • Responding only to the stated need may
shortchange the customer.
• For example; if a customer enters a hardware
store and asks for a sealant to seal glass
window panes, she is stating a solution, not a
need. If the salesperson suggests that tape
would provide a better solution, the customer
may appreciate that the salesperson met her
need and not her stated solution.

46. • A distinction should be drawn between
responsive marketing, anticipative marketing, and
creative marketing.
• A responsive marketer finds a stated need and
fills it, while an anticipative marketer looks ahead
to the needs that customers may have in the near
future.
• In contrast, a creative marketer discovers and
produces solutions that customers did not ask for,
but to which they enthusiastically respond.

47. QUESTION: Why is it important to satisfy the needs
of target customers?
• Because a company’s sales come from two
groups: new customers and repeat customers.
• attracting a new customer can cost five times as
much as pleasing an existing one. And it might
cost 16 times as much to bring the new customer
to the same level of profitability as that of the
lost customer.
• Customer retention is thus more important than
customer attraction.

48. c) Integrated Marketing
When all of the company’s departments work together to serve the
customers’ interests, the result is integrated marketing. Integrated
marketing takes place on two levels.
 First, the various marketing functions—sales force, advertising,
customer service, product management, marketing research
 Second, marketing must be embraced by the other departments -To
foster teamwork among all departments, the company must carry
out internal marketing as well as external marketing.
• External marketing- is marketing directed at people outside the
company.
• Internal marketing - is the task of hiring, training, and motivating
able employees who want to serve customers well.

49. • Modern marketing companies chart, consider
putting customers at the top.
• Next in importance are the front-line people who
meet, serve, and satisfy the customers;
• under them are the middle managers, who
support the front-line people so they can serve
the customers;
• and at the base is top management, whose job is
to hire and support good middle managers.

50. d) Profitability
• The ultimate purpose of the marketing concept is
to help organizations achieve their objectives.
• In the case of private firms, the major objective is
profit. It is a consequence of creating superior
customer value, by satisfying customer needs
better than competitors
• in the case of nonprofit and public organizations,
it is surviving and attracting enough funds to
perform useful work.

51. ASSIGNMENT
• Clearly scan through Tanzanian
companies/industries/business organization
and state which marketing
concept/philosophy do they opt. And why?

52. 5. The Societal Marketing Concept
• Some have questioned whether the marketing
concept is an appropriate philosophy in an age of
environmental deterioration, resource shortages,
explosive population growth, world hunger and
poverty, and neglected social services.
• Are companies that successfully satisfy consumer
wants necessarily acting in the best, long-run
interests of consumers and society?
• The marketing concept sidesteps the potential
conflicts among consumer wants, consumer
interests, and long-run societal welfare.

53. • societal marketing concept, which holds that the
organization’s task is to determine the needs, wants,
and interests of target markets and to deliver the
desired satisfactions more effectively and efficiently
than competitors in a way that preserves or enhances
the consumer’s and the society’s well-being.
• The societal marketing concept calls upon marketers to
build social and ethical considerations into their
marketing practices.
• They must balance the often conflicting criteria of
company profits, consumer want satisfaction, and
public interest.

54. Example;
• Fast food industry results in unhealthy society. Leading to a
national obesity epidemic
• Products are wrapped in convenient packaging which leads
to waste and pollution
• Thus in satisfying short-term consumer wants, the highly
successful fast-food chains may be harming consumer
health and causing environmental problems in the long run.
• Therefore; companies should balance three considerations
in setting their marketing strategies, thus company profits,
consumer wants and society’s interest.

55. QUESTION
The combination of new forces attributed from
technology and globalization are influencing
customers, brand manufacturers, and store-
based retailers in a variety of ways. Responding to
these changes and new demands brought on by
these forces has caused many adjustments.
Clearly substantiate these responses and
adjustments in view of companies and marketers.

56. THE MARKETNG ENVIRONMNET

57. • In the previous lessons, you have learned about the
basic concepts of marketing and the steps in the
marketing process (1. create value for customers 2.
design a customer-driven marketing strategy 3.
construct marketing programme 4. build profitable
customer relationships)
• In this lesson, we will look deeper into the first step of
marketing process-understanding the market place
and customer needs and wants.
• It will be discovered that, marketing does not operate
in a vacuum but rather in a complex and changing
environment.

58. • There are two ways marketers collect
information about the marketing
environment.
1. Marketing research
2. Marketing intelligence
• Studying the marketing environment enables
the marketers to adapt strategies to meet the
new marketplace challenges and
opportunities.

59. Marketing environment- are the actors and forces
outside marketing that affect marketing
management’s ability to build and maintain
successful relationships with the target
customers.
Types of Marketing Environment
• Microenvironment- this consists of actors close
the company that affect its ability to serve its
customers
• Macroenvironment- this consists of the lager
societal forces that affects the microenvironment

60. 1. Microenvironment. This consists of;
a) The company- this involves a company managers to work
closely with other department like; top management,
finance, research and development (R&D), purchasing,
operations and accounting. These creates an internal
environment.
b) Supplers- they form an important link in the company’s
overall customer value delivery system. They provide the
resources needed by the company to produce its goods
and services. Supplies problems can seriously affect
marketing (shortage/delays, labour strikes)
Managers also monitor the price trends of their key inputs-
rising of the supply costs may force price increase that can
harm the company’s sales volume.

61. c) Marketing intermediaries- helps the company to
promote sells and distribute its products to final
buyers. They include
• Resellers- they find customers or make sales to them.
They include wholesalers and retailers who buy and
resale merchandise
• physical distribution firms- helps the firm to stock and
move goods from their points of origin to their
destinations.
As a company must determine best ways to store and
ship goods and balancing factors such as costs,
delivery, speed and safety.

62. • Marketing services agencies- these are the
marketing research firms, advertising agencies,
media firms, marketing consulting firms that help
the company target and promote its products to
the right markets.
• Financial intermediaries- include banks, credit
companies, insurance companies and other
business that helps finance transactions or insure
against the risks associated with the buying and
selling of goods.

63. d) Customers- the company needs to study the five
types of customers markets closely( consumer
markets, business market, resellers markets,
government market, international markets)
e) Competitors- to be successful, a company must
provide a greater customer value and satisfaction
than its competitors do.
f) Publics- is any group that has an actual interest
and impact in an organization to achieve its
objectives.

64. There are seven types of publics
i. Financial publics-influence the company’s ability to obtain
funds.
ii. Media publics- carry news, features and the editorial
opinion
iii. Government publics- product safety, truth in advertising
and other matters
iv. Citizen-action publics- environmental groups, minority
groups.
v. Local publics- neighborhood residents and community
organization.
vi. General public- attitude towards its product and service
and activities
vii. Internal publics- workers, managers, volunteers.

65. 2. Macroenvironment.This consists of;
• These are the forces that shape opportunities
and pose threat to the company.
• There are six major forces in the company’s
macroenvironment which affect the marketing
plans.

66. a) Demographic Environment- is the study of human
population in terms of size, density, location, age,
gender, race, occupation and other statistics.
• This is the major interest to the marketers because it
involves people and people make up markets.
• The change in the demographic environment poses
both opportunities and challenges
• Eg. Chinese regulations limiting families to one child.
They are being showered with attention and luxuries
creating opportunities for marketers.

67. b) Economic environment- these are factors that
affect consumer purchasing power and spending
patterns.
• They include aspects such as change in income.
Example, countries that constitute most of their
own agricultural and industrial output which
offers few market opportunities
• and countries that are extreme industrial
economies constituting rich markets for many
different kinds of goods , changing consumer
spending pattern.

68. c) Natural Environment- involve natural resources
that are needed as inputs by marketers or that
affect marketing activities. Eg. Growing shortage
of raw materials, increased population,
government interventions in natural resource
management
d) Technological Environment- are the forces that
create new technologies, creating new products
and market opportunities. Example. Amazon
super market

69. e) Political Environment- these are the laws, government
agencies and pressure groups that influence and limit
various organizations and individuals in a given society.
• Legislation regulating business issues- such as
competition, fair trade practices, environmental
protection, product safety, truth in advertising,
consumer privacy, packaging and labeling, pricing
Question; why has business legislation been enacted?
protect companies from each other, protect consumers
from unfair business practices, protect the interest of
the society against unrestricted business behaviors.

70. f) Cultural Environment- these are the
institutions and other forces that affect
society’s basic values, perceptions,
preferences and behaviors.

71. How cultural characteristics affect
marketing decision making.
i. Persistence of cultural values- core believes and
values are passed on from parents to children
and are reinforced by schools, churches,
business and government. The secondary
believes and values are more open to change.
ii. Shift in secondary cultural values- people’s
views of themselves, views of the organization,
society, nature and the universe.

72. QUESTIONS
1. Describe the environmental forces that affect
the company’s ability to serve its customers
2. Explain how changes in the demographic and
economic environments affect marketing
decisions
3. Identify the major trends in the firm’s natural
and technological environment
4. Explain the key changes in the political and
cultural environments
5. Discuss how companies can react to the
marketing environment.

73. 6. Assume you are a marketing manager for an
automobile company. Your job is to reposition
an SUV model that was once identified as a
poor fuel consumption. The model now comes
with super efficient engine. Which of the
seven types of publics discussed would have
the greatest impact on your plans to the more
fuel efficient model.

74. 7. What can a mobile phone marketer do to take a
more proactive approach to the changes in the
marketing environment? Discuss specific forces
including macro environmental and micro
environmental forces.
8. Most of the Tanzanian culture is based on
products from Bongo Movie. This includes movies
and television shows. Choose a current top rated
television show and explain how it might affect
the cultural environment.