Kabul University

Economics Faculty
BBA Department

Subject: Principles of Marketing

Instructor: Asst. Prof. Abdullah Nael

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 Faculty Of Business Administration

Introduction to Marketing
Chapter 1
Objective
After compellation of this lecture students will be able to know:

1. Understanding definition of marketing, market, product.

2. Marketing mix

3. Evolution of Marketing

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Outline
✓ Marketing
✓ Market
✓ Marketing Management
✓ Core Concepts of Marketing (Need, Want & Demand)
✓ Supplier
✓ Marketing Mix
✓ Evolution of Marketing

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Marketing: Managing Profitable
Customer Relationships
 Marketing
Word “market” is derived from a Latin word

“mercatus” and “mercatus” in Latin language means

“a meeting place” so in English it became “market”

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Marketing Definition
Marketing is the process by which companies create value for
customers and build strong customer relationships to capture value
from customers in return.
2. Marketing
Marketing is the delivery
of customer satisfaction at
a profit.
(Philip Kotler)
3.Marketing
“Marketing is the management
process that identifies and satisfies
customer requirements profitably”.

The Chartered Institute of Marketing

4. Marketing
The process of creating consumer value in the form of goods,
services, or ideas that can improve the consumer’s life.
 Market
• A place where buyers and sellers are meet together offer goods and services
for sale and the transfer of ownership are occurred.

• A market may also be defined as the

demand made by a certain group of
potential buyers for a good or service.
 Marketing Management
Marketing management is the art and science of
choosing target markets and building profitable
relationships with them.

• What customers will we serve?

• How can we best serve these customers?

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Need
• Needs are states of deprivation.
• Any thing which is need by humans but they
don’t have.
• Example: food, clothing, warmth, safety etc.

Want
• The needs which are shaped by culture and
individual personality
• Example. Pizza, Ice cream, energy drink etc.
Demand is want backed by buying power.
(wants + purchasing power = demand)
Demands are the desires to have something with the money to buy it.

Example: Ahmad has money and he wants to buy a laptop computer. He

goes to shop and buy the laptop.
Customer: A person who buys the Products for
resale purposes is called as customer.
Example: Ahmad purchased a Mobile Phone for 1500
AFs and sold it to Ismail for 2000AFs

Consumer: A person who buys the Products for

personal use and do not resale them is called consumer.
The person who uses the product is called consumer.
Example: Ali purchased a pen for himself and started
using it.
Suppliers
Those firms which supply raw-material,
products, or services to producers are
called suppliers.

Example: Dell Company receives

micro chips from Intel firm.
 Exchange
• The act of obtaining a desired object from someone by offering something
in return.

• Exchange is the processs of offer some thing and take some thing in
return.

Example: Ali offers his laptop to Ahmad at 300$.

 Conditions for Exchange
1) Two or more parties with needs and wants to satisfy.

2) The parties should give and take something to each other.

3) There should be a market place where buyer and seller can meet.

4) Both the parties must be involved voluntarily.

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 Market Segmentation & Target Market

Market Segmentation
• A process of dividing the total market for a good
or service into small, same groups.
• Dividing the market into segments of customers.
 Benefits of Market Segmentation
• Customers with similar wants, needs and characteristics can be focused.
• It is easy to design promotional activities for a specific segment.
• By targeting a specific segment, much investment can be saved.
• It is easy to manage a specific segment of market.
Market Segments
Groups of customers with different wants, needs and
behaviors in a market are called market segments.

Target Market
A specific market segment (customers or organizations)
for which the seller designs specific promotional
activities is called as target market.

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 Ultimate Consumer and Business Consumers
• Ultimate consumers who buy goods or services for their own
personal or household use. Or the final users of a product.
• Business users who buy goods or services to use in their
businesses, to make other products, or to resell to other business
users or consumers.
 Share of Customer
The portion of the customer’s purchasing that a company gets in its product categories.
• Banks want more “share of wallet”
• Restaurants want more “share of stomach”
• Airlines want more “share of travel”

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 Market Offerings—Products, Services, and Experiences
Market offerings are combination of some products, services, information or
experiences offered to a market to satisfy a need or want.

Example: Toyota company offer cars for selling

Marketing system consists of all the actors (suppliers, company, competitors,
intermediaries, and end users) in the system who are affected by major environmental
forces
• Demographic
• Economic
• Physical
• Technological
• Political–legal
• Socio-cultural
Marketing Myopia
Marketing myopia is the mistake of a company by focusing only on existing product
and existing wants and losing sight of basic consumer needs.

Example: If Nokia company focus only on

N73 mobile in the Afghanistan market.
De-marketing: Marketing to reduce demand temporarily or permanently;
the aim is not to destroy demand but to reduce or shift it.
 Integrated Marketing Program
Integrated marketing program is a
comprehensive plan that communicates and
delivers the intended (planned) value to chosen
customers.
 Marketing Mix
The marketing mix is the set of tools (four Ps) the firm uses to implement its marketing
strategy

o Product

o Price

o Placement

o Promotion
Marketing Mix…
Constructing an effective marketing program consist the 4 P’s of marketing.

Product:
Anything that can be offered to a market, It consists features, design, finishing, packaging
and labeling etc. Product may be tangible (goods) or intangible (services).

Price:
Give a reasonable price to your product by checking the price of competitor’s products.
How much customer should pay for a product.
Marketing Mix…
Placement:
Make the easy availability of your product possible to your target customers.

Availability of the product at the right place, at the right time and in the right
quantity is crucial in placement decisions.

Promotion:

Communicating your product by selecting an effective means from promotional

mix, which is directly accessing target customers like advertisement, personal
selling etc.
 Evolution of Marketing
o Production Concept (mass production + low prices)

o Product Concept (Product Quality)

o Selling Concept (Promotion + Push)

o Marketing Concept (Market Needs)

o Societal Marketing Concept

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Production Concept:
The idea that consumers will favor products that are available and highly

affordable. (cheap)

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Product Concept:
The idea that consumers will favor products that offer the most in quality, performance

and features; therefore, the organization should devote its energy to making continuous

product improvements.

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Selling Concept:
The idea that consumers will not buy enough of the firm’s products unless it undertakes a

large-scale selling and promotion effort.

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Marketing Concept:
The idea that achieving organizational goals depends on knowing the needs and wants of

target markets and delivering the desired satisfaction better than the competitors do.

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Societal marketing concept:
Is the idea that a company should make good marketing decisions by considering
consumers’ wants, the company’s requirements, consumers’ long-term interests, and
society’s long-run welfare.
 Societal Marketing Concept
• Companies show their responsibilities like a good citizenship.
• Company want Profit.
• Customers want Satisfaction.
• Companies should contribute something for the welfare of society.

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 Customer Relationship Management (CRM)
Customer relationship management is the overall process of building and
maintaining profitable customer relationship by delivering superior value and
satisfaction.

Customer Relationship Levels and Tools

• Basic relationship

• Full relationships

CRM-tools (telephone, mail order, Internet)

 Partner Relationship Management
• Partner relationship management refers to working closely with partners
inside and outside the company to jointly bring greater value to customers.

• Partners outside the company think how marketers connect with their suppliers,
channel partners, and competitors by developing partnership.
 Rapid Globalization

• The world is smaller.

• Think globally, act locally.
Suspect

Prospect

Customer

Consumer

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SUSPECT:
The whole target market about whom we are uncertain is known as a suspect. It
may be considered as the total population of a target market who are unknown that
they will buy or not.

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PROSPECT:
When people from the target market after awareness may try to collect
information about the product, they may or may not purchase the product are
known as prospect.

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CUSTOMER:
Customer is a person who purchase product (goods and services) for resale
purpose and wants to earn more profit.

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ULTIMATE CONSUMERS:
Ultimate consumers buy goods or services for their own personal or household
use. They are satisfying strictly non business wants.

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BUSINESS USERS
Business users are business, industrial, or institutional organizations that buy goods or
services to use in their own businesses to make other products.

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 Reasons for Studying/ Importance of Marketing

Costs Careers
About 50% of total product About 33 to 45% of the
costs are marketing costs. work force hold marketing
positions.

Why Study
Marketing ?
Contributions to Society
Contributions to
Marketing decisions affect
Individual Organizations
the lives of individual
Critical to the success of consumers and society as
a firm. a whole.
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“Within five years, if you run your business in the
same way as you do now, you’re going to be out of
business.”
Philip Kotler
The End

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