Step into the World of Marketing

Hello there! Welcome to Topic 1: Step into the World of Marketing. In our first topic, you will learn about:

• What is marketing? 
• Core marketing concepts and terminologies 
• Marketing management orientations 
• Being market-orientated. 

This topic will form a foundation for the rest of the topics in the course. Studying these concepts will help enhance your understanding of key concepts regarding marketing, marketing processes and various basic marketing terms.

These relate to the Subject Learning Outcomes: 

1. Demonstrate an understanding of the importance in business practice of market orientation.
2. Evaluate market conditions and consumer needs when forming marketing strategies.
3. Describe a range of common strategies for use with each of the various marketing mix tools: product, pricing, promotion and distribution.

Welcome to your pre-seminar learning tasks for this week. Please ensure you complete these prior to attending your scheduled seminar with your lecturer.

Click on each of the following headings to read more about what is required for each of your pre-seminar learning tasks.

What is marketing?

What you might think of as marketing, such as the advertisement you see or the salesperson you deal with, is just a part of marketing, its tools. There is more thought, planning, and process involved before what you see actually happens!

Kotler and Armstrong  (2021, p.25) define marketing as a "social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others." The definition encompasses various elements that need proper understanding. These are: products, needs, wants and demands, a market, exchange, value and satisfaction. Other definitions include:

• “Marketing is about identifying and meeting human and social needs” (Kotler & Keller 2012, p. 29).
• "The aim of marketing is to know and understand the customer so well that the product or service fits [the customer] and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed then is to make the product or service available” (Drucker as cited in Kotler & Keller 2012).

Core marketing concepts and terminologies

What are demands? What is value? What is a market? All these concepts and terminologies are linked with one another and are useful to understand clearly for the purpose of designing effective marketing strategies. They help a marketer understand what the basic needs of consumers are, how or what kind of product satisfies such needs, how to make sure such products reach potential customers, what a marketer can expect in return, and how a marketer could keep customers satisfied and thereby loyal to their products (Breschi 2021).

Needs, wants and demands

A need is a state of deprivation, while a want is a form of human need that is shaped by culture and individual personality (Kotler et al. 2017; Whalley 2000). We might both be thirsty and need something to drink but you want a can of Coke while it is tea for me. Demands are wants empowered by the capacity to buy. Everyone will have desires to buy something but perhaps might not have the means to do so.

A good starting point to explore human needs is the Maslow's Hierarchy of Needs:

1. Self-actualisation: morality, creativity, spontaneity, acceptance, experience, purpose, meaning and inner potential
2. Self-esteem: confidence, achievement, respect of others, need to be a unique individual
3. Love and belonging: friendship, family, intimacy, sense of connection
4. Safety and security: health, employment, property, family and social ability
5. Physiological needs: breathing, food, water, shelter, clothing, sleep

Needs can also be triggered when there is an imbalance between actual and desired states. For example, you might have a problem yet to be solved that needs a solution or you could have a solution but may not be fully satisfied. But do consumers always know what they need or want? Take a look at the following article which discusses valuable insights regarding consumer needs and wants.

The following video discusses the importance of identifying the needs of consumers with research and specific questioning, based on their wants and needs, to ensure they are satisfied. 

Market offerings – products, services and experiences

A product does not just refer to physical goods such as mobile phones and clothing. It is anything that can be offered to the market or consumers to satisfy a need (Kotler & Armstrong 2021). A service is an intangible product that delivers a benefit (Armstrong et al. 2020), which can also be tied to a physical good. For example, when you go to a restaurant and pay for a meal, you pay for the food, which is tangible goods; and for the service, which is that someone purchased and cooked that food, and someone brought it to your table cleared it away. Products sit within a spectrum depending on whether it is more tangible (goods) or less tangible (services):

^{Adapted from ‘Breaking free from product marketing’, by GL Shostack 1977, Journal of Marketing, 41(2):73-80, Copyright 2021 by American Marketing Association.} 

Nowadays, more and more businesses are focusing on the experiences they can deliver to customers. An experience is born out of a product or service (Armstrong et al. 2020). For example, Tiffany and Co do not just offer jewellery, they create an emotional and physical experience for its guests (PYMNTS 2018).

The following video outlines the importance of an engaging customer experience in developing an effective marketing strategy.

Customer value and satisfaction

The following video illustrates customer value and satisfaction

Imagine if you had to drive 50 kilometres and queue up an hour for a product. Is it worth it? Well, it depends on the perceived value you receive. The simple equation to figure this out would be the perceived benefits gained subtracted by the perceived cost incurred (for example, money, time & effort) as specified in the following diagram:

^{Adapted from ‘Study on customer perceived value of online group purchase in Beijing’, by G Juan, Information Technology Journal, 13:1843-1847, Copyright n.d. by Science Alert.}

What consumers value differs from person to person. Some might value low prices while some value product quality. From a cross-cultural perspective, it is also important to note that customer satisfaction and what drives it can vary greatly from country to country. For example, cost is predominantly a determining factor in Asia, Northern Europe, and Southern Europe, but not in Latin American (Maruca 2000).

The following article, within Harvard Business Review, discusses some useful insights as to how companies manage and deliver more value to their customers through considering The elements of Value.

Exchanges and relationships

A marketing exchange is what happens any time two or more people trade goods or services. These goods or services are of some value to the parties involved (Armstrong et al. 2020). For example, you may engage in an exchange by purchasing a television from Amazon for $1000. Both parties benefit from this exchange. The conditions of an exchange include:

• At least two (2) parties
• Something of value (usually money)
• Communication and delivery
• Freedom to accept or reject
• Desire to deal with other parties.

Markets

A market is a collection of buyers and sellers where exchanges take place (Kotler & Keller 2012, p. 30) and these buyers share a common characteristic (for example, geographical location, particular needs). Think about a farmers’ market. There will be farmers selling their produce and buyers needing produce. When we talk about markets, it does not have to be bounded by a physical location (marketplace), it can exist digitally too (marketspace).

Click on each of the following articles to see how e-commerce has changed how we buy and sell:

• The curious origins of online shopping
• How e-commerce is changing retail
• The evolution of the internet and its impact on retail spaces
• The online shopping revolution changing the way we buy our food

Marketing management orientations

Strategies and decisions are guided by philosophies, what an organisation believes in. Within the school of marketing thought, there are different concepts and orientations that places different levels of importance on the organisation, the customer, and the society (Armstrong et al. 2020; Kotler et al. 2017; Kotler & Armstrong 2021). Some common ones include:

The production concept

This refers to a marketing philosophy focusing on making a product available to consumers, improving the production line, and the distribution efficiency (Armstrong et al. 2020). For example, the smartphone Huawei is a phone brand available globally, including online distributors such as Amazon and eBay.

The product concept

This refers to a marketing philosophy where the focus is on making a good quality and innovative product (Armstrong et al. 2020). The idea is to make continuous product improvement. Organisations working on such a philosophy believe that consumers will buy a product if they are innovative and of good quality. Apple’s line of Macs, iPads and iPhones would fall under this category.

The selling concept

This refers to a marketing philosophy where the focus is on selling. The idea is to engage in large-scale selling, and organisations working on such a philosophy believe that the consumer will not buy enough unless extensive selling and promotional efforts are undertaken (Armstrong et al. 2020). In some cases, this means comprehensive effort on distribution to ensure easy availability. For example, the McDonald's chain of fast-food restaurants makes more profit as the number of franchisees increases and the food becomes available in more places.

The marketing concept

This refers to a marketing philosophy where the focus is on determining the needs and wants of customers and delivering the desired product and services effectively. The idea is to understand consumer needs. Organisations working on such a philosophy believe that consumer needs are of the highest importance, and one should deliver the needs better than competitors. For example, ‘Lowest prices everyday’ highlights that Officeworks aligns with the needs and wants of their target market (Armstrong et al. 2020).

The societal marketing concept

This concept is the newest addition to marketing philosophies. It adds society’s well-being as another core aspect to satisfying customers’ needs and wants. An example of this is TOMS who adopted a model of donating a pair of shoes for each pair purchased.

The following video discusses the TOMS model, including how they donated 10 million pairs of shoes.

In summary, the marketing concept and the societal marketing concept are consumer-oriented philosophies, while the rest are oriented towards the organisation itself (Armstrong et al. 2020). These concepts were also argued as evolution or sign of the times shaped by historical events (for example, industrial revolution), which was subsequently debunked by Jones & Richardson (2007).

Marketing mix

The product you use, the discount you receive, the advertisement you get. These observable aspects of marketing which are catered by businesses to your needs & wants, are known as the marketing mix. The marketing mix is the application of a mix of marketing activities to address the customer's needs and entice them to choose one’s product over a competitor. According to Kotler & Armstrong (2021, p.68), “to find the best marketing strategy and mix, the company watches and adapts to the actors and forces in the marketing environment”.

Traditional marketing mix

A marketing mix refers to the set of tactical marketing tools that the company blends to produce the response it wants in the target market. An effective marketing program blends the marketing mix elements into an integrated marketing program designed to achieve the company’s marketing objectives by delivering value to consumers.

A traditional marketing mix comprises the four (4) Ps of marketing (Kotler & Armstrong 2021).

1. Product: This includes both tangible and intangible elements of the products and services offered to the target market (Thabit & Raewf 2018). For example, Telstra sells mobiles phones, phone plans, insurance and accessories plans. What does your product satisfy? What features does it have?
2. Pricing: This is the amount the customer must pay (money, time, effort) and comprises combinations of prices such as bundles, offers etc, that represent the consumers’ perceived value (Dominici 2009). For example, the cost of the mobile phone plan. Are our customers price sensitive? Do we offer discounts to selected segments?
3. Place (Placement or Distribution): This comprises the various channels that facilitate the delivery of products. For example, Samsung sells mobile phones in different distributions such as Telstra, Vodafone, Optus, and directly online. Where do customers look for our product? Where do they purchase?
4. Promotion: This comprises all the communication activities that take place between the business and their customers. For example, Samsung uses websites, and social media platforms such as Facebook, Twitter, YouTube, and Instagram to promote their brand, products, and services. So how do we reach our audience? What messages do we want them to receive?

The following video outlines how the four (4) Ps of marketing help business' succeed in their sales. 

Expanded marketing mix for services

There are some characteristics of services that differ them from physical goods. For example, you do not need to deal with someone from a confectionary company or go to the manufacturing facility when buying lollies. Booms & Bitner (1981) added three new elements to the 4P's marketing mix, which is now known as the expanded marketing mix in order to cater to these characteristics. These include:

1. People: All people who play a part in the service delivery, such as service employees, immediate customers, and other customers (Ensor & Drummond 2006).
2. Processes: Includes the service delivery and operating systems. It is concerned with how the service is produced and delivered. For example, the steps taken to service a customer browsing in a retail store (in other words,  service blueprint).
3. Physical Evidence: The tangible evidence of the firm such as the décor, uniform, layout and other servicescape features.

Being market-orientated

Being market-orientated means organisations are constantly satisfying their customer's needs (Armstrong et al. 2020) and creating value for them. While a large part of being market-orientated is to be customer-orientated, companies will first need to look at the environment or market conditions in which consumers exist in. Further topics within this subject will delve deeper in understanding the marketplace and consumers, formulating marketing strategies to create customer value and developing an integrated marketing mix to deliver value to our target market. Welcome again to this learning journey with us and here’s to a successful term ahead!

Welcome to your seminar for this topic. Your lecturer will start a video stream during your scheduled class time. You can access your scheduled class by clicking on ‘Live Sessions’ found within your navigation bar and locating the relevant day/class or by clicking on the following link and then clicking 'Join' to enter the class.

Click here to access your seminar.

The learning tasks are listed below. These will be completed during the seminar with your lecturer. Should you be unable to attend, you will be able to watch the recording, which can be found via the following link or by navigating to the class through ‘Live Sessions’ via your navigation bar.

Click here to access the recording. (Please note: this will be available shortly after the live session has ended.)

In-seminar learning tasks

The in-seminar learning tasks identified below will be completed during the scheduled seminar. Your lecturer will guide you through these tasks.

Click on each of the following headings to read more about the requirements for each of your in-seminar learning tasks.

Welcome to your post-seminar learning task for this week. Please ensure you complete this after attending your scheduled seminar with your lecturer. Your lecturer will advise you if this is to be completed during your consultation session.

Click the following heading to learn the requirements of the post-seminar learning task. 

Each week you will have a consultation session, which will be facilitated by your lecturer. You can join in and work with your peers on activities relating to this subject. These session times and activities will be communicated to you by your lecturer each week. Your lecturer will start a video stream during your scheduled class time. You can access your scheduled class by clicking on ‘Live Sessions’ found within your navigation bar and locating the relevant day/class or by clicking on the following link and then clicking 'Join' to enter the class.

Click here to access your consultation session.

Should you be unable to attend, you will be able to watch the recording, which can be found via the following link or by navigating to the class through ‘Live Sessions’ via your navigation bar.

Click here to access the recording. (Please note: this will be available shortly after the live session has ended.)

• Booms, BH & Bitner, MJ 1981, Marketing strategies and organizational structures for service firms marketing of services, American Marketing Association.
• Breschi, A 2021, 16 types of customer needs and how to solve them, HubSpot.
• Brudner, E 2020, The psychology of customer perceived value (Infographic), HubSpot. 
• Shapiro, BP 1988, What the Hell Is “Market Oriented”?, Harvard Business Review.

References

• Armstrong, G, Denize, S, Volkov, M, Adam, S, Kotler, P, Ang, SH, Love, A, Doherty, S & Esch, PV 2020, Principles of Marketing, 8th edn., Pearson.
• Booms, BH & Bitner, MJ 1981, Marketing strategies and organizational structures for service firms marketing of services, American Marketing Association.
• Breschi, A 2021, 16 types of customer needs and how to solve them, HubSpot, https://blog.hubspot.com/service/customer-needs
• Brudner, E 2020, The psychology of customer perceived value (Infographic), https://blog.hubspot.com/sales/the-psychology-of-value-perception-infographic
• Business Qld Gov 2011, Identifying customer needs, https://www.youtube.com/watch?v=7RVoXdOUDI8
• CNN Business 2013, How TOMS donated 10 million shoes, https://www.youtube.com/watch?v=jm2vRDQ8GSQ
• Dominici, G 2009, ‘From marketing mix to e-marketing mix: a literature overview and classification’, International Journal of Business and management, 4(9):17-24.
• Ensor & Drummond, G, J 2006, Introduction to marketing concepts, Taylor & Francis.
• Jones, DGB & Richardson, AJ 2007, ‘The myth of the marketing revolution’, Journal of Macromarketing, 27(1):15-24.
• Juan, G 2014, ‘Study on customer perceived value of online group purchase in Beijing’, Information Technology Journal, 13:1843-1847.
• Kotler, P & Armstrong, G 2021, Principles of Marketing Global Edition, 18th edn., Pearson.
• Kotler, P & Keller, K 2012, A Framework for Marketing Management, 5th edn, Pearson.
• Kotler, P, Wong, V, Saunders, J & Armstrong, G 2005, Principles of Marketing, 4th European edn., Pearson.
• Maruca, RF 2000, Mapping the world of customer satisfaction, Harvard Business Review.
• Mind Tools n.d., The marketing mix and the 4Ps of marketing, https://www.mindtools.com/pages/article/newSTR_94.htm
• PYMNTS 2018, How Tiffany & Co. is bringing breakfast to its reimagined retail experience, https://www.pymnts.com/news/retail/2018/tiffany-jewelry-stores-luxury-vip-brick-and-mortar/
• Rayport, J & Sviokla, J 1994, Managing in the Marketspace, Harvard Business Review, https://hbr.org/1994/11/managing-in-the-marketspace
• Riserbato, R 2020, Customer orientation: what it is and how to implement it, https://blog.hubspot.com/service/customer-orientation
• Shostack, GL 1977, ‘Breaking free from product marketing’, Journal of Marketing, 41(2):73-80.
• Solomon, MR, Russell-Bennett, R & Previte, J 2018, Consumer behaviour: buying, having being, 4th edn, Pearson.
• Strategic Horizons LLP 2011, The experience is the marketing, https://www.youtube.com/watch?v=jGLJRTlHR9A
• Thabit, TH & Raewf, MB 2018, ‘The evaluation of marketing mix elements: A case study’, International Journal of Social Sciences & Educational Studies
• Two Teachers 2019, Marketing Mix 4 P’s / Apple iPhone Example / How do these 4P’s help a business sell more products, https://youtu.be/4TYWhZ3IFhc
• Whalley, A 2000, Strategic Marketing, 1st edn, Bookboon.com
• Zeithaml, CP & Zeithaml, VA 1984, ‘Environmental Management: Revising the Marketing Perspective’, Journal of Marketing, 48:46-53.