This document provides an introduction to marketing. It defines marketing as "the management process which identifies, anticipates and supplies customer requirements efficiently and profitably." It discusses the importance of understanding customer needs, wants, and demands, and using market research and planning to develop products and services that satisfy customers. The goal of marketing is to create long-term customer loyalty and satisfaction through an ongoing exchange process between customers and businesses.

1. Unit one: What is marketing?
Session one:
The definition and purpose of marketing

2. What is marketing?
The CIM defines marketing as:
‘The management process which identifies, anticipates
and supplies customer requirements efficiently and
profitably’
Chartered Institute of Marketing, www.cim.co.uk, 2008

3. What is marketing?
• Marketing is a business philosophy.
• It is a way of doing things that puts the customer at
the heart of the organisation.
• It is not just about having a marketing department,
but about the whole company being dedicated to
serving and delighting the customer.
• Firms that put their customers at the heart of their
organisation are marketing-oriented.

4. What is marketing?
• Let’s look at the CIM definition in more detail:
— The management process . . .
— Marketing should be considered at board level and the marketing
strategy should be integral to the firm’s business plan.
— This is because the firm is nothing without its customers.
— . . . which identifies, anticipates and . . .
— The firm uses market research and environmental scanning to
identify and anticipate customer needs, and then puts together a
marketing plan, in the form of a marketing mix so that it:
— . . . supplies customer requirements efficiently and profitably
— The firm must delight the customer at all times but it must also do so
profitably, so it must select products / services and customer groups
that will allow this to happen.

5. Where did the concept of marketing come
from?
• Marketing is an ancient practice (there were market
traders in ancient Greece, for instance).
• The word ‘market’ originally meant a place where buyers
and sellers would go to exchange goods and services.
• Marketing became an important discipline in the US in
the 1930s and is now a business philosophy.
• The term ‘market’ can now be used to describe all buyers
and sellers of a product, e.g. the ‘shoe market’.

6. Why is marketing so important?
• We live in very competitive times, so firms must persuade
customers to choose them over and above another supplier.
• Organisations must adapt to changes in their environment if
they are to survive and prosper, and it is the marketer’s job to
spot these changes.
• A firm will only survive in the long term if it focuses on a group
of people with similar needs and satisfies their needs by
providing them with a product or service; marketing is about
finding these people and constantly innovating to make sure
their needs are satisfied.

7. Marketing is an exchange process
 Key concept: exchange process
• Customers provide payment to a firm in exchange for goods or
services. This is an exchange process.
• Remember though that a customer makes a sacrifice when they
part with some money, so the product or service they receive in
return has to outweigh the sacrifice.
• Equally, the firm has to value what it gets in return for the goods
or services it has provided (it has to receive a fair price for its
effort).
• In modern, market-based economies, customers can choose from
a range of potential partners, and firms can decide who they want
to do business with.

8. Marketing is an exchange process
• It is much easier for businesses to sell to existing
customers than to new ones.
— This is because existing customers are already in a
relationship with a firm, so for them there is less risk involved
in continuing to shop with that firm than in trying to find a
new supplier.
• So marketers aim to repeat the exchange
process over and over again and to build up
customer loyalty.

9. Needs Wants Demand Exchange Offers for
sale
Research
Needs, wants, demands and exchange
A. Palmer, Introduction to Marketing, 2004

10. What is the difference between marketing
and selling?
• Marketing considers what the customer needs
to buy and then produces something to meet that
need.
• Selling is about trying to sell what a firm has
produced, regardless of whether the person you
are selling it to actually needs it.

11. What makes a firm marketing-oriented?
 Key concept: marketing orientation
• Firms that put their customers at the heart of
their organisation are marketing-oriented.
• In a marketing oriented firm, all employees will
be dedicated to understanding and satisfying
customer needs.

12. How can marketing achieve customer
satisfaction?
• As we have already seen, the role of marketing is to ensure
that customers feel they have received value from their
purchase.
— For a customer, the acid test is whether they perceive that the
benefit they have received from the product outweighs the cost of
acquiring the product.
• A customer will perceive a benefit when they think they have
received value from the product or service.
• Value is based on personal perception. For instance, I may
purchase a Toyota Prius because I am concerned about the
environment and this car has a dual engine; however, a
customer who wants a sporting model of car may not perceive
any value in a Toyota Prius.

13. What is a customer?
 Key concepts: customers and consumers
• A customer is the person who makes the decision to buy the
product or service.
• There is a difference though between a customer and a
consumer.
• They are not necessarily the same person:
— A customer is the person who buys the product or service from your
firm.
— A consumer is the person who uses the product or service.
— So, you may sell toys and the people you sell to may be parents (the
customers), but the person who uses the toys will be a child (the
consumer). It is important that you understand the difference as the
marketing messages will be different for each group.

14. Customer needs, wants and demands
 Key concept: customer needs
• To survive, human beings have a basic need for food, drink and
shelter.
• However, in modern societies these needs are satisfied quite easily
for most people, so they start looking around for deeper fulfilment
(the model on the next slide is of Maslow’s hierarchy of needs and
will help you to understand this concept).
• Untapped customer needs present an opportunity for marketers.
For instance, mobile phones are simply a tool to meet the
fundamental need that human beings have to communicate with
one another; in the future it is possible that marketers will come up
with another solution to meet that need.

15. Maslow’s hierarchy of needs

16. Maslow’s hierarchy of needs explained
• Physiological needs
— I need a pair of shoes to run in.
• Safety needs
— Can I be sure that these shoes will protect my feet as I run around?
• Social needs
— I will be using these shoes to play team sports with others and it’s
important that I fit in.
• Esteem needs
— I want to be confident that I don’t look a fool in these shoes.
• Self-fulfilment
— I am so comfortable with my own identity that I don’t care what
others think about my running shoes.

17. Customer needs, wants and demands
 Key concepts: customer wants and demands.
• Wants are different from needs in that they are
culturally conditioned by the societies in which
we live.
— For instance, I may want to go to university and study for an MBA
because that is the norm for the career I have chosen to pursue.
• Demands occur once enough people are willing
to pay money for the thing they want. The
marketer can then carry out research to
determine the size and nature of this demand.

18. How can marketing achieve customer
satisfaction?
 Key concepts: analysis and planning.
• Now we have looked at how customers break
down into the categories of customers and
consumers, each with their own needs and
wants, we can start to understand the role of the
marketer in analysing these needs and
planning products and services to satisfy them.

19. The marketing management process
• A firm that is marketing oriented and committed to
delivering customer value will regularly consider the
following:
— Analysis: Where are we now? What are the key strengths and
weaknesses with the business and what are the opportunities and
threats for us in the marketplace.
— Planning: Now we have the information from our analysis, where
shall we take the business?
— Implementation: Now we have decided where we are going to take
the business, what plan shall we put together to get us there?
— Control: Whilst we implement our plan, we must keep monitoring it
to check we are on course to meet the objectives we set for
ourselves in the planning stage.

20. How can marketing achieve customer
satisfaction?
• The main outcome of the marketing
management process is the marketing mix,
which we will discuss in session six.
• The marketing mix is about giving customers
what they want, at the right time, in the right
place, and at the right price.
• In essence, it’s about how you position your
product to meet the needs of the customer.

21. Summary of this session
• Marketing puts the customer at the heart of the organisation.
• Firms that do this are marketing oriented.
• Marketing is an exchange process: the firm finds customers whose
needs it can satisfy, and these customers must then feel that the
benefit they receive from the firm’s product or service is worth the
sacrifice they have made to get it.
• There is a difference between a customer and a consumer.
• Customers have needs, wants and demands and the marketer must
understand what these are.
• Marketers use a process of analysis and planning to understand and
satisfy customer needs.