SUPPLEMENTARY

NOTES OF MKT243
(FUNDAMENTALS OF
MARKETING):
FOR STUDENT’S
REVISION PURPOSE

PREPARED BY:
MADAM NURUL SYAQIRAH BT
ZULQERNAIN
Faculty of Business & Management
UiTM Kelantan (Machang Campus)

Source: C.W. Lamb, Hr. J. F. Hair, Jr., & Mc Daniel, C. ‘Marketing’ 12th
Edition, South-Western College Publishing (2018)

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CHAPTER 1: OVERVIEW OF MARKETING
Syllabus content:
1. Overview of marketing
2. Elements of marketing mix (4P’s)
3. Marketing management philosophies
4. External marketing environment

Definition of 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 (The American Marketing Association, AMA).

 Marketing entails processes that focus on delivery value and benefits to customers, not

just selling goods, services, and/or ideas.

 It uses communication, distribution, and pricing strategies to provide customers and

stakeholders with the goods, services, ideas, values, and benefits they desire when and

where they want them.

 It involves building long-term, mutually rewarding relationships when these benefit all

parties concerned.

 Marketing also entails an understanding that organizations have many connected

stakeholder “partners,” including employees, suppliers, stockholders, distributors, and

others.

The marketing mix refers to a unique blend of product, place (distribution), promotion, and

pricing strategies (often referred to as the four Ps) designed to produce mutually satisfying

exchanges with a target market.

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The elements of marketing mix:

1. Product

- The product includes not only the physical unit but also its package, warranty, after-

sale service, brand name, company image, value, and many other factors. Products can

be tangible goods such as computers, ideals like those offered by a consultant, or

services such as medical care. Products should also offer customer value.

2. Place (distribution)

- Place or distribution, strategies are concerned with making product available when and

where customer want them. Place is physical distribution, which involves all the

business activities concerned with storing and transporting raw materials or finished

products. The goal is to make sure products arrive in usable conditions at designated

places when needed.

3. Promotion

- Promotion includes advertising, public relations, sales promotion, and personal selling.

Promotion’s role in the marketing mix is to bring about mutually satisfying exchanges

with target markets by informing, educating, persuading, and reminding them of the

benefits of an organization or a product. Each element of this promotion is coordinated

and managed with the others to create a promotional blend or mix

4. Pricing

- Price is what a buyer must give up in order to obtain a product. It is often the most

flexible of the four Ps- the quickest element to change. Marketer can raise or lower

prices more frequently and easily then they can change other marketing mix variables.

Price is an important competitive weapon and is very important to the organization

because price multiplied by the number of units sold equals total revenue for the firm.

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Marketing management philosophies/ orientations

Four competing philosophies strongly influence an organization’s marketing processes. These

philosophies are commonly referred to as:

1. Production orientation

- A philosophy that focuses on the internal capabilities of the firm rather than on the

desires and needs of the marketplace.

- A production orientation means that management assesses its resources and asks these

questions: ‘What can we do best?” “What can our engineers design?” “What is easy to

produce, given our equipment?”

- For example; the furniture industry is infamous for its disregard of customers and for

its slow cycle times. Most traditional furniture stores carry the same styles and varieties

of furniture that they have carried for many years. They always produce and stock sofas,

coffee tables, arm chairs, and end tables for the living room. Master bed-room suites

always include at least a queen- or king-sized bed, two dressers, and two side tables.

Regardless of what customers may actually be looking for, this is what they will find at

these stores- and they have been so long-lived because what they produce has matched

up with customer expectations. This has always been a production-oriented industry.

- A production orientation can fall short if it does not consider whether the goods and

services that the firm produces most efficiently also meet the needs of the marketplace.

In some situations, as when competition is weak or demand exceeds supply, a

production-oriented firm can survive and even prosper. More often, however, firms that

succeed in competitive markets have a clear understanding that they must first

determine what customers want and then produce it, rather than focus on what company

management thinks should be produced and hope that the product is something

customers want.

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2. Sales orientation

- Based on the belief that people will buy more goods and services if aggressive sales

techniques are used and that high sales result in high profits.

- Not only are sales to the final buyer emphasized, but intermediaries are also encouraged

to push manufacturers’ products more aggressively. To sales-oriented firms, marketing

means selling things and collecting money.

- The fundamental problem with a sales orientation, as with a production orientation, is

lack of understanding of the needs and wants of the marketplace. Sales-oriented

companies often find that, despite the quality of their sales force, they cannot convince

people to buy goods or services that are neither wanted nor needed.

3. Market orientation

- The marketing concept is a simple and intuitively appealing philosophy that articulates

a market orientation. It states that the social and economic justification for an

organization’s existence is the satisfaction of customer wants and needs while meeting

organizational objectives.

- The marketing concept includes the following:

 Focusing on customer wants and needs so that the organization can distinguish

its product(s) from competitors’ offerings

 Integrating all the organization’s activities, including production, to satisfy

customer wants

 Achieving long-term goals for the organization by satisfying customer wants

and needs legally and responsibly

- Firms that adopt and implement the marketing concept are said to be market oriented,

meaning they assume that a sale does not depend on an aggressive sales force but rather

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 on a customer’s decision to purchase a product. Achieving a market orientation

involves:

 Obtaining information about customers, competitors, and markets

 Examining the information from a total business perspective

 Determining how to deliver superior customer value; and

 Implementing actions to provide value to customers

- Some firms are known for delivering superior customer value and satisfaction.

4. Societal marketing orientation

- The societal marketing orientation extends the marketing concept by acknowledging

that some products that customers want may not really be in their best interests or the

best interests of society as a whole.

- This philosophy states that an organization exists not only to satisfy customer wants

and needs and to meet organizational objectives but also to preserve or enhance

individual’s and society’s long-term best interests.

- Marketing products and containers that are less toxic than normal, are more durable,

contain reusable materials, or are made of recyclable materials is consistent with a

societal marketing orientation.

- The importance of a societal marketing orientation by including “society at large” as

one of the constituencies for which marketing seeks to provide value.

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Although managers can control the marketing mix, they cannot control elements in the external

environment that continually mould and reshape the target market. Controllable and

uncontrollable variables affect the target market whether it consists of consumers or business

purchasers. Thus, the external marketing environment is refers to the situation, elements,

variables and forces that cannot be controlled (uncontrollable) by marketer that affect the target

market.

The uncontrollable elements in the centre of the environment continually evolve and create

changes in the target market. For example, about how social media have changed your world.

In contrast, managers can shape and reshape the marketing mix to influence the target market.

That is, managers react to changes in the external environment and attempt to create a more

effective marketing mix.

Unless marketing managers understand the external environment, the firm cannot intelligently

plan for the future. Thus, many organizations assemble a team of specialists to continually

collect and evaluate environmental information, a process called environmental scanning. The

goal in gathering the environmental data is to identify future market opportunities and threats.

Factors within the external marketing environment include:

1. Social factors

- Social factors include our attitudes, values, and lifestyles.

- Social factors influence the products people buy; the prices paid for products; the

effectiveness of specific promotions; and how, where, and when people expect to

purchase products.

- For example; American values, the growth of component lifestyles, role of families and

working women.

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2. Demographic factors

- Demography is the study of people’s vital statistics, such as age, race and ethnicity, and

location.

- Demographics are significant because the basis for any market is people.

- Demographic characteristics are strongly related to consumer buying behaviour in the

marketplace.

- For example; population, tweens, teens, generation Y, generation X, baby boomers.

3. Economic factors

- Marketing managers must understand and react to the economic environment. The three

economic areas of greatest concern to most marketers are consumer’s incomes,

inflation, and recession.

- Consumers’ incomes as disposable incomes rise, more families and individuals can

afford the “good life”.

- Purchasing power is measured by comparing income to the relative cost of a standard

set of goods and services in different geographic areas, usually referred to as the cost

of living.

- Inflation is a measure of the decrease in the value of money, generally expresses as the

percentage reduction in value since the previous year, which is the rate of inflation.

- Recession is a period of economic activity characterized by negative growth.

4. Technological factors

- Technological success is based on innovation, and innovation requires imagination and

risk taking. Bringing new technology to the marketplace requires a corporate structure

and management actions that will lead to success. Great corporate leaders must embed

innovation into lifeblood of the company.

- New technology internally is a key to long-term competitive advantage;

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  Create more efficient operation or better products

 May render existing products obsolete

- Marketer must aware of new developments in technology

- Business can easily decline when they ignore the emergence of new technologies.

- For example; research (applied & basic research), stimulating innovation, technological

advances.

5. Political and legal factors

- Business needs government regulation to protect innovators of new technology, the

interest of society in general, one business from another, and consumers. in turn,

government needs business because the marketplace generates taxes that support public

efforts to educate our youth, pave our roads, protect our shores, and etc.

- Every aspect of the marketing mix is subject to laws and restrictions. It is the duty of

marketing mangers or their legal assistants to understand these laws and conform to

them, because failure to comply with regulations can have major consequences for a

firm.

- For example; Federal legislation, state and local laws, consumer privacy.

6. Competitive factors

- The competitive environment encompasses the number of competitors a firm must face,

the relative size of the competitors, and the degree of interdependence within the

industry.

- Management has little control over the competitive environment confronting a firm.

- For example; competition for market share and profits, global competition.