This document provides an overview of marketing principles and concepts. It defines marketing as identifying and satisfying customer needs profitably. The key concepts discussed include needs, products, value, exchange, markets, and different philosophies like production, product, selling, and marketing concepts. The marketing concept holds that organizations should determine customer needs and wants, then deliver superior value to satisfy customers while maintaining societal well-being.

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PRINCIPLES OF MARKETING
BBAM $BSc. ACC $ FINANCE (umu)
OVERVIEW OF MARKETING
MARKETING DEFINED
Marketing is the management process responsible for identifying, anticipating and
satisfying customers’ requirements profitably. Marketing is the delivery of
customer satisfaction at a profit. Marketing has two goals, that is, to attract new
customers by promising superior value and to keep current customers by delivering
satisfaction. Marketing activities are designed to satisfy consumers and meet
organizational needs. In commercial business, this specifically means generating
revenue and contributing to profitability.
Today, marketing must be understood not in the old sense of making a sale-“telling
and selling”-but in the new sense of satisfying customer needs. Selling occurs only
after a product is produced. By contrast, marketing starts long before a company
has a product. It continues throughout the product’s life, trying to find new
customers and keep current customers by improving product appeal and
performance, learning from product sales results, and managing repeat
performance.
If the marketer does a good job of understanding consumer needs, develops
products that provide superior value, prices, proper distribution and promotes them
effectively, these products will sell very easily.
Marketing is part of all of our lives and touches us in some way every day.
Marketing is a key factor in business success. According to Kotler and Armstrong

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(2002), marketing is defined as a social and managerial process whereby
individuals and groups obtain what they need and want through creating and
exchanging products and value with others.
Core marketing concepts
These include the following:
a) Needs, wants, and demands.
A human need is a state of felt deprivation in a person. It is basic and not
creative. It is a basic part of the human makeup. It can be a physical need
such as hunger, thirst, sex or it can be a psychological need such as self
esteem needs. These needs are not invented by marketers. Whereas human
wants are the form human needs take as they are shaped by culture and
individual personality. Wants are shaped by one’s society and are described
in terms of objects that will satisfy needs.
Demands: human wants are backed by buying power. We call such a
situation demand. People have almost unlimited wants but limited resources.
Therefore, they must choose products that provide the most value and
satisfaction for their money.
b) Products and services:
A product is anything that can be offered to a market for attention,
acquisition, use, or consumption that might satisfy a want or need. It
includes physical objects, services, persons, places, organizations and ideas.
People satisfy their needs with products. Therefore, anything capable of
satisfying a need can be called a product.
Products include services. A service is any activity or benefit that one party
can offer to another that is essentially intangible and does not result in the

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ownership of anything. Examples include banking, airline, home repair
services, etc. at times we substitute the term product as satisfier, resource, or
marketing offer. It is providing the solutions to the needs.
c) Value, satisfaction, and quality:
Customer value is the difference between the values the customer gains from
owning and using a productand the costof obtaining the product. Customers
often do not judge product values and costs accurately 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 the product’s
performance falls short of the customer’s expectations, the buyer is
dissatisfied. If performance matches expectations, the buyer is satisfied. If
performance exceeds expectations, the buyer is delighted. Satisfied
customers make repeat purchases, and they tell others about their good
experiences with the product.
Quality: it is the totality of features and characteristics of a product or
service that bear on its ability to satisfy customer needs. Quality begins with
customer needs and ends with customer satisfaction.
d) Exchange, transactions,and relationships.
Exchange is the act of obtaining a desired object from someone by offering
something in return. It is the only one of many ways to obtain a desired
object. exchange is the core concept of marketing. Exchange process
involves work. Sellers must search for buyers, identify their needs, design
good products and services, set prices for them, promote them, and store and
deliver them.
Conditions of exchange include:

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- At least two parties must participate.
- Each party has something that might be of value to the other party
- Each party believes it is appropriate or desirable to deal with the other
party.
- Each party must be free to accept or reject the other’s offer.
- Each party is capable of communication and delivery.
The exchange process creates utility. Utility is the satisfaction, value or
usefulness a user receives from a good or a service. There are four types
of utility. These are:
i) Form: production of the goods, driven by the marketing function e.g. sugar
and milk into ice-cream.
ii) Place: making the product available where customers will buy the product.
E.g. ice-cream van at a construction site, beach, supermarket etc
iii) Time: make a product available when customers want to buy the product.
iv) Possession: once you own the product, do what you want with it, i.e. eat it,
and offer it.
Transaction: it is a trade between two parties that involves at least two things of
value, agreed-upon conditions, a time of agreement, and a place of agreement. It
involves sellers and buyers. A seller is an exchange partner that makes the offer
to buyers. Buyers are individuals, households, businesses, professionals and
others who are party to marketing exchanges and seek to satisfy their needs and
wants from exchange.
Relationship marketing: it is the process of creating, maintaining, and enhancing
strong, value-laden relationships with customers and other stakeholders.
Transaction marketing is part of the larger idea of relationship marketing.
Beyond creating short-term transactions, marketers need to build long-term

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relationships with valued customers, distributors, dealers, and suppliers. They
want to build strong economic and social connections by promising and
consistently delivering high-quality products, good service, and fair prices.
Increasingly, marketing is shifting from trying to maximize the profit on each
individual transaction to building mutually beneficial relationships with
consumers and other parties.
e) Markets:
A market is the set of actual and potential buyers of a product. These buyers
share a particular need or want that can be satisfied through exchanges and
relationships. Thus, the size of a market depends on the number of people who
exhibit the need, have resources to engage in exchange, and are willing to offer
these resources in exchange for what they want.
Marketers are always interested in markets. Their goal is to understand the
needs and wants of specific markets and to select the markets that they can
serve best. In turn they can develop products and services that will create value
and satisfaction for customers in these markets, resulting in sales and profits for
the company. Below is a figure showing the core marketing concepts

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DIFFERENCES BETWEEN SELLING APPROACH AND MARKETING
APPROACH
SELLING APPROACH MARKETING APPROACH
1 It focuses on the needs of the seller 1 It focuses on the customers(buyers)
2. Pre-occupied with the sellers needs
to convert his productinto cash
only.
2. Pre-occupied with the idea of
satisfying the customer’s needs by
means of the products and the whole
clusters of things associated with the
product.
3. Selling tries to get the customer to
want what the company has.
3 Tries to get the company have what
the customer want.
4. Selling is highly a one way process,
that is it sends outwards from a
company a productit has.
4 It takes a two-way process, that is, it
sends inwards in the company the
information of what exactly the
customers require so that a company
can develop those required for the
customer.
5. The selling conceptonly pushes the
productto the customer.
5. It does however more than pushing a
product. It ensures that a product
offered is satisfying the customer.
Marketing management philosophies/concepts.
Marketing management is defined as the analysis, planning, implementation, and
control of programs designed to create, build, and maintain beneficial exchanges
with target buyers for the purpose of achieving organizational objectives. Thus

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marketing management involves managing demand, which in turn involves
managing customer relationship.
Demand management.
The organization has a desired level of demand for its product. At any point in
time, there may be no demand, adequate demand, irregular demand, or too much
demand, and marketing management must find ways to deal with these different
demand states. Marketing management must find ways to deal with these different
demand states. Marketing management is concerned not only with finding and
increasing demand but also with changing or even reducing it.
In case of excess demand, demarketing may be required to reduce demand
temporarily or permanently. The aim is not to destroy demand, but only to reduce
or shift it.
Therefore, marketing management seeks to affect the level, timing, and nature of
demand in a way that helps the organization achieve its objectives. In simple
terms, marketing management is demand management.
There are five alternative concepts under which organizations conduct their
marketing activities. These philosophies that guide the marketing efforts include
the following.
a) The production concept.
The production concept is the philosophy that states that consumers will
favor products that are available and highly affordable and management
should therefore focus on improving productivity and distribution efficiency.
This concept is one of the oldest philosophies that guide sellers.
It is useful in the following situations:

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- When demand for a product exceeds the supply, management should
look for ways to increase production.
- When the product’s cost is too high, improved productivity is needed to
bring it down. E.g. This concept has been a key strategy of many
Japanese companies i.e. bringing down the price to buyers.
b) The product concept: the product concept holds that consumers will favour
those products that offer the most quality, performance, and features.
Managers in these product-oriented organizations focus their energy on
making products and improving them overtime.
Management spends resources trying to improve and design product features
and style. A major problem with this concept is that, it is very difficult to
define quality. According to technical people, quality simply means meeting
the required technical specifications. To customers, quality is meeting and
exceeding customers’ expectations.
c) Selling concept: the selling concept holds that consumers, if left alone, will
ordinarily not buy enough of the organization’s products. The organization
must therefore undertake an aggressive selling and promotion effort. The
aim is to sell what they make rather than make what they can sell.
The concept assumes that consumers show buying resistance and have to be
coaxed to buy more, through effective selling and promotion tools to
stimulate more buying. For example, a political party will vigorously sell its
candidates to the voters as being fantastic person for the job. The candidate
spends his time shaking hands, kissing babies, meeting donors, making good
speeches. Countless dollars are spent on radio and television advertising,
posters and mailings. They aim to get the sale and are not worried about post
purchase satisfaction.

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d) The marketing concept: this holds that achieving organizational goals
depends on determining the needs and wants of the target markets and
delivering the desired satisfaction more effectively and efficiently than
competitors do. The marketing concepthas been stated in colorful ways such
as “ we make it happen for you”, “the customer is a king”, “love the
customer and not the product”, “we are not satisfied until you are”
The marketing conceptstands on four main pillars. These are
- Market focus
- Customer orientations
- Coordinated marketing
- Profitability.
Marketfocus:under market focus, we define target markets carefully. We
prepare tailored marketing programmes for target markets.
Customer orientation: it requires the company to define customer needs from
customer point of view not from the company point of view. Every product
involves trade- offs and management cannot know what these are without
talking to and researching customers. The aim after all is to make a sale
through meeting the customer’s needs. Company sales each period comes
from two groups:
I) New customers
II) Repeat customers.
It always costs more to attract new customers than to retain old customers.
Therefore customer retention is more critical than customer attraction. The key to
customer retention is customer satisfaction.
A satisfied customer:

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- Buys again.
- Talks favorably to others about the company.
- Pays less attention to competing brands and advertising.
- Buys other products that the company later adds to its line.
Coordinatedmarketing means two things:
Marketing function such as sales force, advertising, marketing research, etc
must be coordinated among themselves. These marketing functions must be
coordinated from the customer point of view.
Marketing must be well coordinated with other departments in the company.
Marketing does not work when it is merely a department. It only works
when all employees appreciate the effects they have on customer
satisfaction.
Profitability: the purposeof the marketing conceptis to help organization to
achieve their goals. In caseof private firms, the major goal is profit, in case
of a non-profit and public organization, it is surviving and attracting enough
firms to perform their work. Now the key is not to aim for profit but to
achieve them as a by-productof doing the job well.
e) The societalmarketing concept:
This holds that the organization should determine the needs, the wants and
interests of target markets. It should then deliver superior value to customers
in a way that maintains or improves the consumer and the society’s well-
being.
The societal marketing conceptquestions whether the pure marketing
conceptis adequate in any of the environmental problems. E.t.c