Marketing is a social and managerial process whereby

individuals and groups obtain what they need and want

through creating and exchanging products and services with
others.
This definition includes the following terms:
1-Needs and wants
2-Products
3-Value, satisfaction and quality
4-Exchange and transactions
5-Market

Customer Value: is the difference between the value that the

customer gains from owning and using a product and the costs
of obtaining this product.

Customer satisfaction: depends on a product’s perceived

performance relative to a buyer’s expectations. The marketer
can face three situations:
1. The product’s performance is less than expected (customer
is dissatisfied)
2. The product's performance meets expectations (the
customer is satisfied)
3. The product's performance exceeds expectations (the
customer is delighted)

Business practices are changing:

- From focusing on customer acquisition to focusing on
customer retention.
- From over-promise, under-deliver to under-promise, over-
deliver.
- From focusing on profitable transactions to focusing on
customer lifetime value.
- From focusing on shareholders to focusing on stakeholders.
- E-business and E-marketing.
Customer relationships management CRM: is the process
of building and maintaining profitable customer relationships
by delivering superior customer value and satisfaction.
It costs 5 to 10 times more to attract a new customer than it
does to keep a current customer satisfied.

Evolution of marketing: There are five alternative concepts

under which organizations conduct their marketing activities:
A.The production orientation.
. It assumes that consumers will favor Products that are
available and highly affordable.
. Therefore, management should focus on improving
production and distribution performance.
. This concept is applicable in two situations:
- when the demand of the product exceeds the supply.
- when the cost is too high and improved productivity is
needed to
bring it down.
B.The product orientation.
- It assumes that consumers will favor products that over
the most quality, performance and innovative features.
- thus, an organization should focus its efforts on making
continuous product improvements.
C.The sales orientation.
- It assumes that consumers will not buy enough of the
organization unless it takes a large-scale selling and
promotion effort.
- most firms conduct this orientation when they have
overcapacity.
- They aim to sell what they make rather than make what
the market wants.
- This concept focuses on creating sales transactions rather
than on building long-term, profitable relationships with
customers.
D. The marketing orientation.
- It assumes that achieving organizational goals depends
on determining the needs and wants of target markets
 delivering the desired satisfaction more effectively and
efficiently than competitors.
- This philosophy emphasizes:
a- Consumer orientation.
Find what consumers want and provide it.
b- Service orientation.
Make sure everyone in the organization have the
same objective –
customer satisfaction. This requires that:
* All marketing functions should be integrated.
* All business functions should be integrated.
c- Profit orientation.
Market those goods and services that will earn the
firm a profit
and enable it to survive and expand.
E. The societal concept of marketing.
this philosophy emphasizes the balance among a
consumer, society and the company.
The scope of marketing: 10 types of items can be
marketed: goods (physical goods constitute the bulk of most
countries’ productions.), services (includes airlines, hotels and
maintenance), places, ideas, events (Olympics, exhibitions,
conferences), persons, properties, organizations, information,
experiences (orchestrating several services and goods).

A broadened view of marketing tasks:

 Negative demand (Avoidance of product).
 No demand (lake of awareness or interest in a product).
 Latent demand (a strong need that cannot be satisfied by
existing products).
 Declining demand (lower demand).
 Irregular demand (varying by season, day or hour).
 Full demand (a satisfying level of demand).
 Overfull demand (more demand than can be handled).
 Unwholesome demand (demand for unhealthy or
dangerous products).

Competition, a critical factor in marketing management.

Includes all the actual and potential rival offerings and
substitutes that a buyer might consider.
There’re four types of competition based on degree of product
substitutability:
- Brand competition:
A company sees its competitors as other companies that
offer similar
products and services to the same customer at similar
price.
(Volkswagen might see its major competitors as Toyota,
Honda and
other manufacturers of medium price automobiles,
rather than
Mercedes or BMW)
- Industry competition:
A company sees its competitors as other companies that
make the
same product. (Volkswagen would be competing
against all other
car manufacturers.)
- Form competition:
A company sees its competitors as all companies that
manufacture
products that supply the same service. (Volkswagen
would see itself
competing against manufacturers of all vehicles, such
as
motorcycles, bicycles and trucks.)
- Generic competition:
A company sees its competitors as all companies that
compete for the
same consumer dollars. (Volkswagen would see itself
competing
against companies that sell major consumer durable
products,
foreign vacations and new homes.)
Marketing environment consists of the actors and forces
outside marketing that affect marketing management’s ability
to develop and maintain successful relationships with its
targeted customers.
Consist of:
Microenvironment + Macroenvironment

Microenvironment: Forces close to the company that affect

the ability to serve the customer.
Includes:
- internal environment
Areas inside the company affecting the marketing
department’s plans.
(Top Management – finance – R&D – Purchasing –
Manufacturing – etc.)
- suppliers
Provide resources needed to produce goods and services.
Important link in the “value delivery system”.
- market intermediaries
Help the company to promote, sell and distribute its goods
to final
buyers.
(resellers – physical distribution firms – marketing services
agencies -
financial intermediaries.)
- customers
Five types of markets that purchase companies’ goods
and services.
(Consumer – business – reseller – government –
international).
- competitors
Serve a target market with similar products and services.
Company must gain strategic advantage against them.
- publics
Group that has an interest in or impact on organization’s
ability to
to achieve its objectives.
(financial – media – government – citizen action – local –
general
internal)
Macroenvironment: larger societal forces that affect the
microenvironment:
Demographic:
Studying populations in terms of size, density, location, age,
gender, race, occupation, etc.
Economic:
factors that affect consumers purchasing power and
spending patterns.
Natural:
natural resources needed as inputs by marketers or that are
affected by
marketing activities.
Technological:
most dramatic force now shaping our destiny.
Political:
laws, government agencies, and pressure groups that
influence and limit
organizations and individuals in a given society.
Cultural:
institutions and other forces that a society’s basic values,
perceptions,
preferences and behaviors.

Relationship between the organization ability of

controlling its internal environment factors, and the
extent of its control on its external environment factors:
Strong internal control (efficient processes, motivated staff)
allows a company to better respond to external changes
(competition, technology) and even influence the external
environment (customer perceptions, regulations).
Weak internal control hinders a company's ability to adapt to
external challenges and capitalize on opportunities.
Essentially, a strong internal foundation empowers external
influence, while a weak one limits it.

Consumer buying behavior:

Buying behavior of individuals and households that buy
products for personal consumption.

Consumer market:
All individuals and households who buy products for personal
consumption.
Marketing and other stimuli Buyer’s black box Buyer’s
responses
Marketin Other Buyr’s Buyer Product choice
Characteristi decision Brand choice
g Economic cs process Dealer choice
product Technologic Purchase
timing
price al Purchase
place Political amount

promotio Cultural
n

Stimulus response model

Marketing and other stimuli enter the buyer’s black box and
produce certain choices / purchases responses.
Marketers must figure out inside the buyer's black box and how
stimuli are changed to responses.

The Buyer Decision Process:

 Need recognition
needs can be triggered by:
* Internal stimuli
normal needs become strong enough to drive
behavior.
* external stimuli
Advertisements.
Friends to friends
 Information search
Sources of Information: (personal – commercial – public –
experiential).
Word of mouth.
 Evaluation of alternatives
most buyers evaluate multiple attributes, each of which is
weighed differently.
At the end of evaluation stage, purchase intensions are
formed.
 Purchase decision

 Purchases behavior