Sales & Marketing : Introduction to marketing

Specialization: Sales & Marketing
Chapter one
Introduction to marketing
Marketing concepts
5 Marketing Concepts Explained with Examples
The marketing concept is the strategy that firms implement to satisfy customers needs, increase sales,
maximize profit and beat the competition. There are five marketing concepts that organizations adopt and
execute. Marketing is a department of management that tries to design strategies that will build profitable
relationships with target consumers. But what philosophy is the best for a company in setting marketing
strategies? There are five alternative concepts under which organizations design and carry out their
marketing strategies.
5 Marketing Concepts
1- Production Concept,
2- Product Concept,
3- Selling Concept,
4- Marketing Concept,
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Prepared By : Dr. Samar Sabra

Specialization: Sales & Marketing
5- Societal Marketing Concept.
These concepts are described below;
Production Concept
The idea of production concept – “Consumers will favor products that are available and highly
affordable”. This concept is one of the oldest Marketing management orientations that guide sellers.
Companies adopting this orientation run a major risk of focusing too narrowly on their own operations
and losing sight of the real objective.
Most times; the production concept can lead to marketing myopia. Management focuses on improving
production and distribution efficiency.
Although; in some situations; the production concept is still a useful philosophy.
Product Concept
The product concept holds that the consumers will favor products that offer the most in quality,
performance and innovative features.
Here; under this concept,
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Prepared By : Dr. Samar Sabra

Specialization: Sales & Marketing
Marketing strategies are focused on making continuous product improvements.
Product quality and improvement are important parts of marketing strategies, sometimes the only part.
Targeting only on the company’s products could also lead to marketing myopia.
Selling Concept
The selling concept holds the idea- “consumers will not buy enough of the firm’s products unless it
undertakes a large-scale selling and promotion effort”.
Here the management focuses on creating sales transactions rather than on building long-term, profitable
customer relationships.
Marketing Concept
The marketing concept holds- “achieving organizational goals depends on knowing the needs and wants
of target markets and delivering the desired satisfactions better than competitors do”.
Here marketing management takes a “customer first” approach.
Under the marketing concept, customer focus and value are the routes to achieve sales and profits. The
marketing concept is a customer-centered “sense and responds” philosophy. The job is not to find the
right customers for your product but to find the right products for your customers. The marketing concept
and the selling concepts are two extreme concepts and totally different from each other.
Difference between Selling Concept and Marketing Concept
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Prepared By : Dr. Samar Sabra

Specialization: Sales & Marketing
No. The Selling Concept The Marketing Concept
1 undertakes a large-scale selling and
promotion effort
undertakes activities such as; market
research,
2 The Selling Concept is suitable with
unsought goods—those that buyers do not
normally think of buying, such as insurance
or blood donations.
The Marketing Concept is suitable for
almost any type of product and market.
3 Focus of the selling concept starts at the
production level.
Focus of the marketing concept starts at
understanding the market.
4 Any company following selling concept
undertakes a high-risk
Companies that are following the
marketing concept requires to bare less
risk and uncertainty.
5 The Selling Concept assumes –“customers
who are coaxed into buying the product
will like it. Or, if they don’t like it, they will
possibly forget their disappointment and
buy it again later.”
Instead of making an assumption, The
marketing concept finds out what really
the consumer requires and acts
accordingly to them.
6 The Selling Concept makes poor
assumptions.
Marketing concept works on facts
gathered by its “market and customer
first” approach.
Societal Marketing Concept
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Prepared By : Dr. Samar Sabra

Specialization: Sales & Marketing
Societal marketing concept questions whether the pure marketing concept overlooks possible conflicts
between consumer short-run wants and consumer long-run welfare.
The societal marketing concept holds “marketing strategy should deliver value to customers in a way that
maintains or improves both the consumer’s and society’s well-being”.
It calls for sustainable marketing, socially and environmentally responsible marketing that meets the
present needs of consumers and businesses while also preserving or enhancing the ability of future
generations to meet their needs.
The Societal Marketing Concept puts the Human welfare on top before profits and satisfying the wants.
The global warming panic button is pushed and a revelation is required in the way we use our resources.
So companies are slowly either fully or partially trying to implement the societal marketing concept.
Marketing Definition, Functions, Importance, Process
Marketing; a tricky topic to define and frame in. the Marketing studies or field has rapidly moved and
reached a very high level but still defining is into some fixed variables is just impossible.
Marketing is the part of the management process which responsible for identifying, anticipating and
satisfying customer requirements profitably.
Let’s try to understand the definition of marketing and also get a sense of its importance, reach, and
radius in business, corporations, organizations and in your life.
The AMA (American Marketing Association) is a prestigious and influential organization not just in the
USA but also in the international arena. The definition of marketing in 1964 was-
The process of planning and executing the conception, pricing, promotion, and distribution of
goods, services, and ideas to create exchanges that satisfy individual and organizational objectives.
It was until AMA approved and punished another on 2004;
Marketing is an organizational function and a set of processes for creating, communicating, and
delivering value to customers and for managing customer relationships in ways that benefit the
organization and its stakeholders.
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Prepared By : Dr. Samar Sabra

Specialization: Sales & Marketing
In October 2007, they published a new one;
Marketing is the activity, set of institutions, and processes for creating, communicating, delivering,
and exchanging offerings that have value for customers, clients, partners, and society at large.
In the first definition of AMA “create exchanges that satisfy individual and organizational objectives”
indicates that marketing is there for creating exchanges for the involved parties to serve their purpose.
They totally forgot about me and you; the customer’s benefit or value. They also somehow put a
boundary to the marketing functions; “process of planning and executing the conception, pricing,
promotion, and distribution of goods, services, and ideas”.
In the second definition; they include us-the customers’ value but “in ways that benefit the organization
and its stakeholders”. Here they showed the Extend of the marketing activities; “function and a set of
processes for creating, communicating, and delivering value”.
The third definition of marketing by AMA is to me the most precise one or the closet on. Well, they put
values of customers and society at equals to the organization’s objectives. Also, they put it in front and
regarded it is as the main force behind the marketing activates. See the third change come very quick.
And it is rightly so. Businesses have found out that it is customers who are the only reason for the
success, not the large capital or the product/service they produce. For some of them, it had to be found in
a hard way.
We can say that marketing is all about delivering customer value and the businesses should be too.
Businesses in trying to get customers attention and marketing include all those activates.
And at the end, we are defining marketing like this- Every action of an organization; either orbits
around, depends on, forced by the activates that marketing makes to communicate with customers for
indicating product’s or service’s value to them.
Marketing Functions The universal functions of marketing are buying, selling, transporting, sorting,
standardization and grading, financing, risk taking and market information.
The Selling The selling function involves promoting the product. It includes the use of personal selling,
advertising, and other mass selling methods.
The Transportation The transporting function. means the movement of goods from one place to another.
The Sorting The sorting function means involves holding goods until customers need.
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Prepared By : Dr. Samar Sabra

Specialization: Sales & Marketing
The Standardization and Grading The standardization and grading involve sorting products according
to size and quality. This makes buying and selling easier because it reduces the need for inspection and
sampling.
Financing Financing provides the necessary cash and credit to produce, transport, store, promote, sell and
buy products.
Risk Taking It involves bearing the uncertainties that are part of the marketing process. A firm can never
be sure that customers will want to buy its products can also be damaged, stolen or outdated.
Who Performs Marketing Functions?
Marketing functions are all part of the marketing process and must be done by someone.
None of them eliminated. In a planned economy, some of the functions may be performed by government
agencies. Others may be left to individual producers and consumers. In marketing directed economy,
marketing functions are performed by producers, consumers and a variety of marketing specialists.
Importance of Marketing. Why Marketing is Important?
Effective Marketing is difficult because producers and consumers are separated in several ways. The
exchange between producers and consumers is hampered by spatial separation of ownership exchange of
further complicated by discrepancies of quality and discrepancies of assortment between producers and
Consumers. Marketing facilitates production and consumption in different ways. The goals of marketing
are depicted below:
Spatial Separation Producers and consumers are separated geographically. Producers tend to cluster
together by industry. In a few concentrated locations, while consumers are located in many scattered
locations. Marketing needed to overcome the spatial separation.
Separation in Time Consumers may not want to consume goods at the time they are produced and time
may be required to transport goods from producer to’ customer.
To overcome the separation in time marketing aids closely.
Separation of Information Producers do not know who needs, what, when, where and at what price
consumers don’t know what is available from whom, where, when and at what price. The marketing
system is necessary to overcome that type of separation of information.
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Prepared By : Dr. Samar Sabra

Specialization: Sales & Marketing
Separation in Values Producers value goods and services in terms of cost and competitive prices.
Consumers value goods and services in terms of utility and ability to pay. To overcome the separation in
values marketing facilitate?-.
Separation of Ownership Producers hold title to goods and services which they themselves do not want
to consume. Consumers want to consume, goods and services which they do not own. The marketing
function is necessary to overcome the separation of ownership.
Discrepancies of Quantity Producers prefer to produce and sell in large quantities. Consumer ’ prefer to
buy and consume h small quantities. Marketing needed to overcome discripancies of quantity.
Discrepancies of Assortment Producers specialize in producing a narrow assortment of goods and ‘
services. Consumers need a broad assortment. The goal of marketing function is also to overcome the
discrepancies of assortment.
The goals of marketing from the social foundation according to Philip Kotler and Gar/ Armstrong
are; Maximize Consumption. Maximize Consumer Satisfaction. Maximize Choice. Maximize Quality
Living.
Role of Marketing in Economic Development
Main purpose of markets and middlemen is to make exchange easier and allow greater time for
production, consumption and other activities including recreation. Effective marketing system is
necessary for economic development. Improved marketing may be the key to growth in less-developed
nations. Without an effective marketing system, the less developed nations may not be able to escape the
“vicious circle of poverty”. Many people in these nations can’t leave their subsistence way of life to
produce for the market because there are no buyers for what they produce. And there are no buyers
because everyone else is producing for their own needs. As a result, distribution systems and middlemen
do not develop. Breaking this vicious circle of poverty may require major changes in the in-efficient
marketing systems that are typical in less- developed nations. Without an effective marketing system,
people can’t leave their subsistence way of life. Marketing means delivering the goods and services that
customers want and need. It means getting products to them at the right time, in the right place and at a
price they’re willing to pay. So, effective marketing is needed to link producers and consumers.
Steps in Marketing Process Marketing as the process by which companies create value for customers
and building strong customer relationships in order to capture value from customers in return.
5 step process of the marketing framework wherein value is created for customers and marketers
capture value from customers in return.
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Prepared By : Dr. Samar Sabra