Introduction to Business Study

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  • Topic: Marketing, Market segmentation, Consumer behaviour
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Book 4
An Introduction to Marketing in Business

Session 1
What is marketing?

1.1 The marketing concept:
• Marketing is a business philosophy of doing business which start with a focus on customer needs and expectations. • The UK Chartered Institute of Marketing (CIM) defined marketing as: "Marketing is the management process which identifies, anticipates, and supplies customer requirements efficiently and profitably". • In 2004, the American Marketing Association (AMA) defined the “Marketing” as: “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.” • In 2007, the AMA revised the official definition of “Marketing” as: “Marketing is the activity, conducted by organizations and individuals, that operates through a set of institutions and processes for creating, communicating, delivering, and exchanging market offerings that have value for customers, clients, marketers, and society at large.” • Marketing is the sum of all the activities involved in planning, pricing, promoting, distributing, and selling of goods and services to satisfy consumers’ needs and wants. • Marketing seeks to: discover the needs and wants of prospective customers; and satisfy them.

Marketing Orientation:
|Orientation |Key ideas | |Product |“An approach to business that centres its activities on continually improving and refining its products, assuming that | | |customers simply want the best possible quality for their money.” | | |Assumes consumers will favor those products that offer the most quality, performance, and features (Focus: Superior product).| | |Low price, convenient distribution or convincing selling or advertising becomes secondary considerations. | | |People also want value for money. | | |- E.g. Luxury sports cars (such as Lamborghini). | |Production |- “An approach to business that centres its activities on producing goods more efficiently and cost effectively, assuming | | |that price is the only factor important to customers.” | | |- Assumption: buyers will buy it if it’s cheap (Lower prices). In other words, buyers are very price conscious and are | | |prepared to accept merely adequate quality. | | |Assumes consumers favor those products that are widely available and highly affordable. (Focus: wide distribution ‘mass | | |production’; high volume). | | |Improve production, distribution, and focus on efficiency of internal operations (How can we make it cheaper?). | | |E.g. Ford’s Model T, Henry Ford offering the Model T car to the public “in any color they wanted as long as it was black” is | | |at the basis of mass marketing. The early car industry, exemplified by Henry Ford’s Model T, provides the classic example of | | |production orientation. At this time production orientation, an industry-wide...
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