Marketing_6

A Simple Marketing System
© Copyright 2008 Pearson Education Canada

Core Concepts of Marketing
Needs, wants,
and demands
Markets Products
and services
Exchange,
Value and
transactions,
satisfaction
and relationships
• Need
• Needs, wants, and • Basic human requirements
demands • State of felt deprivation
• Marketing offers: including • Example: Need food
products, services and
experiences • Wants
Needs directed to specific objects
• Value and satisfaction The form of needs as shaped by
culture and the individual
• Exchange, transactions and Example: Want a Big Mac
relationships
• Markets • Demands
Wants which are backed by buying
power
Maslow’s Hierarchy of Needs
Physiological Needs:
When a restaurant commercial advertises how filling their food is, or when an
advertisement for living in Hawai’i is produced that showcases its naturally purified
water system, these types of marketing communications seek to appeal to our
psychological need to physically satisfy our survival needs.
Safety Needs:
When you see insurance commercials that depict a customer in an accident, or health companies advocating
immunizations, they are appealing to your safety motivations.
Another example would be a commercial featuring the safety ratings of a new car being release, prioritizing
that value of the product over price, tech, luxury, etc. The fear of not being able to recover from an illness or
economic damage (getting into a car accident), is a very popular marketing communications technique to
assure the customer that the company will protect them from such dangers.
I do see fear being used to appeal to safety needs very commonly, and this theory explains why we as humans
respond so well to these messages.
Love/Belonging:
This is because as a company, we seek to build brand communities that allow our customers to feel like they
belong to something. Creating a feeling of belonging with our customers satisfies the love and belonging
psychological need. Since it is the third level, it’s also especially powerful.
Our strongest brand advocates are often time other customers that feel like part of their social identity is tied
in with our brand (known as word of mouth marketing).
Creating a great brand community (Examples of brands with strong communities on and offline: Harley
Davidson, Starbucks, Apple) creates great engagement and interest in everything your company does because
it helps to satisfy an individuals need to belong.
Esteem:
For example, with luxury cars and watches, they appeal to esteem by positioning themselves as a
symbol of a person’s status, and something that people of a high status use/have.
Additionally, software programs that teach you skills like the Khan Academy and Lynda.com offer
you an opportunity to gain competency/mastery in a wide variety of skills and subjects, which
increases your esteem.
Self-Actualization:
Taking Nike example, a lot of their marketing communications help inspire their customers achieve
physical self-actualization.
Their slogan is “Just Do It,” as a motivational statement to help users get through the physical pain of
training that’s required to achieve results in their activities.
Nike embraces their role in helping an individual accomplish self-actualization by becoming a source for inspiration, and this
method of connecting with their audience is part of the reason why Nike is so successful in advertising.
• Needs, wants, and • Marketing offering

demands • Combination of products,
services, information or
• Marketing offers: including experiences that satisfy a
products, services and need or want
experiences • Offer may include services,
• Value and satisfaction activities, people, places,
information or ideas
• Exchange, transactions and • banking, airline, hotel, tax
relationships preparation, and home
repair services
• Markets
• Value
• Needs, wants, and • Customers form expectations
demands regarding value
• Marketing offers: including • Marketers must deliver value to
products, services and consumers
experiences • Satisfaction
• Value and satisfaction • A satisfied customer will buy
again and tell others about
• Exchange, transactions and their good experience
relationships
• Markets
• Exchange
• Needs, wants, and • The act of obtaining a desired
object from someone by
demands offering something in return
• Marketing offers: including • Transaction
products, services and • Trade of values between two or
experiences more parties
• Value and satisfaction • One exchange is not the goal,
relationships with several exchanges are
• Exchange, transactions and the goal
relationships
• Markets • Relationships are built through
delivering value and satisfaction
• Marketing network consists of
the company and all its supporting
stakeholders
• Needs, wants, and • Market

demands • Set of actual and potential
• Marketing offers: including buyers of a product
products, services and • Marketers seek buyers that
are profitable
experiences
• Value and satisfaction
• Exchange, transactions and
relationships
• Markets
Different types of Markets:
1. Consumer Markets
2. Business Markets
3. Institutional (non-profit) Markets
4. Government Markets
5. Global Markets
6. Meta Markets
Marketing Process
Capture
value from
Create value for customers and customers
build customer relationships in return
Capture
Understand Design a Construct a Build value from
the customer- marketing profitable customers
marketplace driven program that relationships to create
and customer marketing delivers and create profits and
needs&wants strategy superior customer customer
value delight quality
Market Orientations / Concepts
Consumers prefer products that are

Production Concept widely available and inexpensive
Consumers favor products that

Product Concept offer the most quality, performance,
or innovative features
Consumers will buy products only if

Selling Concept the company aggressively
promotes/sells these products
Focuses on needs/ wants of target

Marketing Concept markets & delivering value
better than competitors
Production Concept
• Consumers will favor those products that are widely
available and low in cost.
• Managers concentrate on achieving high production
efficiency and wide distribution.
• The assumption is valid at least in 2 situations :

• The demand for a product exceeds supply (suppliers will
concentrate on finding ways to increase production)
• The product’s cost is high and has to be decreased to expand
the market.
Product Concept
• Consumers will favor those products that offer the

most quality, performance or innovative features.
• Managers in product-oriented organizations
concentrate on making superior products and
improving them over time.
• The assumption the customers will admire well-
made products and can evaluate product quality and
performance
Selling Concept
• Agressive selling and promotion
• Assumptions are;
• Consumers must be convinced of buying company products
• Company is powerful in generating effective selling and
promotion to stimulate more buying
• This concept is mostly used by firms which have
overcapacity.
• The aim is “to sell what they make” rather than “make
what the market wants.”
• Short-term profits are more important (customer
dissatisfaction may occur)
Marketing Concept
• Key to achieving organizational goals consists of
being more effective than competitors in
creating, delivering and communicating
customer value to target markets.
• 4 pillars of modern marketing :

1. Target market
2. Customer needs
3. Integrated marketing
4. Profitability through customer satisfaction
Marketing and Sales Concepts Contrasted
Starting
point Focus Means Ends
Existing Selling and Profits through

Factory products promotion sales volume
(a) The selling concept
Customer Integrated Profits through

Market needs marketing customer
satisfaction
(b) The marketing concept

Marketing Concept (cont.)
1) Target market homogenous group of customers to
whom the company wishes to appeal
2) Customer needs
• Consumers may not be fully conscious of their needs
• It may not be easy to articulate these needs
• They may use words that require some interpretation
• Customer-oriented thinking to define customer needs from the
customer’s point of view
• Sales revenue New customers + Repeat customers
• “Customer Retention” vs. “Customer Attraction”
• Customer satisfaction is a function of the product perceived
performance and buyer’s expectations
Marketing Concept (cont.)
3) Integrated Marketing
Various marketing functions must work together for customer
satisfaction (coordination of 4Ps; marketing mix elements)
• Marketing Mix controllable variables (tactics) the company puts
together to satisfy its target market(s).
Product: Product variety, quality, design, features, brand name,
packaging, sizes, services, warranties, returns
Price: List price, discounts, allowances, payment period, credit terms
Promotion: Sales promotion, advertising, public relations, direct
marketing
Place: Channels, coverage, assortments, locations, inventory,
transport
Marketing Concept - The 4 P’s
Marketing Concept - The 4 P’s The 4 Cs
Marketing
Mix
Product Place
Convenience
Customer
Solution Price
Promotion
Customer
Cost Communication
Extended Marketing Mix

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A Simple Marketing System

© Copyright 2008 Pearson Education Canada

• Needs, wants, and • Marketing offering

• Needs, wants, and • Market

Consumers prefer products that are

Consumers favor products that

Consumers will buy products only if

Focuses on needs/ wants of target

• The assumption is valid at least in 2 situations :

• Consumers will favor those products that offer the

• 4 pillars of modern marketing :

Existing Selling and Profits through

(a) The selling concept

Customer Integrated Profits through

(b) The marketing concept

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