INTRODUCTION

PRINCIPLES OF
MARKETING

For questions, please email ejggramaje@addu.edu.ph

Lectio
A. Learning Content

What is Marketing?

From the moment you wake up in the morning… until you lay yourself in bed at night, you have
involved yourself in Marketing. How so? Try to figure out the daily situation where you are exposed to
marketing activities. How many times have you used or experienced products or services that are provided
with marketing support?
We do not even bother to count them because of the regularity of using these products or
services. For example, what do you attend to first thing in the morning? Is it Samsung or iPhone? Are you
satisfied with the services of Sun, Smart, or Globe when it comes to speed or cost? Which fast-food chain
do you prefer – Jollibee, KFC, Chow king, or McDonald’s? Which school are you loyal to – Ateneo de Davao
University, University of Immaculate Conception, San Pedro College, or University of Mindanao? All these
questions are linked to brands that you are familiar with. These brands manifest a personality of its own.
The brand’s personality is the major task every marketer should take care, nurture, and protect. Once the
brand becomes imbedded in our mind, it is difficult to dislodge it. Over time these brands that are so
secured and positioned in our minds develop a long-term value. If the brand and the product category
(where the brand is attached to) are uniquely intertwined – the brand and the product become one and
the same – thus the brand name is the generic name of the product. For example, Colgate (brand name)
is synonymous with toothpaste, and some would say “Pabili ng Colgate yung Closeup” (Let me buy
Colgate’s Closeup). The generic identity of the product (toothpaste) is now delegated to Colgate, although
unintentionally the customer wants the Closeup brand. In the past, companies that were pioneer in their
respective product category managed to convert their products into “generic” state. We could cite several
here – Coke (for soft drink), Colgate (for toothpaste) , Caltex (for motor oil), Kraft (for cheese) , Xerox (for
photocopier), and Kodak (for photography).
However, the new generation of customers is different from the customers of old (customers of
the past). The customers now are more knowledgeable. In fact, they are empowered because of the
internet, technology, and communication access. They are not confused with the generic name and the
brand name. But the “generic effect” is still felt if the product is well positioned (clearly and superiorly
communicated) to their mind. Thus, the marketers are seeing and understanding the new breed of
customers – customers that belong more to the digital age. They are meticulous, they argue a lot, and
they are less loyal to a product. The challenge for marketers is greater today than in the past. And this is
reason enough to study and understand marketing.
Marketing is everywhere, and it surrounds us!

Marketing is the process of creating, distributing, promoting and pricing

goods, services and ideas to facilitate satisfying exchange relationships
with customers and to develop and maintain favorable relationships with
stakeholders in the dynamic environment.
(This definition is consistent with American Marketing Association definition of Marketing).

Marketing Focuses on Customers. As the purchasers of the products that organizations develop,
promote, distribute, and price, customers are the focal point of all marketing activities. The essence of
marketing is to develop satisfying exchanges from which both customers and marketers’ benefit. a) Both
customer and marketer expect to gain something of value from the exchange. Organizations generally
focus their marketing efforts on a specific group of customers, or target market.
Top marketers share a common goal: putting the consumer at the heart of marketing. Today’s
marketing is all about creating customer value and engagement in a fast-changing, increasingly digital and
social marketplace. Marketing starts with understanding consumer needs and wants, determining which
target markets the organization can serve best, and developing a compelling value proposition by which
the organization can attract and grow valued consumers. Then, more than just making a sale, today’s
marketers want to engage customers and build deep customer relationships that make their brands a
meaningful part of consumers’ conversations and lives.
In this digital age, to go along with their tried-and-true traditional marketing methods, marketers
have a dazzling set of new customer relationship-building tools—from the Internet, smartphones, and
tablets to online, mobile, and social media—for engaging customers anytime, anyplace to shape brand
conversations, experiences, and community. If marketers do these things well, they will reap the rewards
in terms of market share, profits, and customer equity. In this session of Principles of Marketing, you’ll
learn how customer value and customer engagement drive every good marketing strategy.

How important is marketing then?

• Marketing Is an Effective Way of Engaging Customers
Engaging customers is different from pushing your offers. Engaging involves furnishing your customers
with relevant information about your products and your business as well. It’s all about creating fresh
content. Tell your customers what they don’t know. Let it be interesting and worth their time. Social media
is one of the best platforms where you can engage your customers. Some organizations use short videos
and other humor-laden tricks to engage their customer base. By engaging your customers, marketing gives
them a sense of belonging.

• Marketing Helps to Build and Maintain the Company’s Reputation

The growth and life span of your business is positively correlated to your business’s reputation. Hence,
it’s fair to say your reputation determines your brand equity. Most marketing activities are geared towards
building the brand equity of the company. Your business’s reputation is built when it effectively meets
the expectations of its customers. Such a business is considered a responsible member of the community.
The customers become proud to be associated with your products. Marketers use effective
communication, branding, PR and CSR strategies to ensure that a business’s reputation is maintained.

• Marketing Helps to Build a Relationship Between a Business and Its Customers

Loyal customers will have the confidence to buy more products from you. The trust and understanding
between the business and its customers make your commercial activities more fruitful.

• Marketing Is a Communication Channel Used to Inform Customers

Through marketing, the customers get to know about the value of the products, their usage and additional
info that might be helpful to the customers. It creates brand awareness and makes the business stand
out. There’s stiff competition in the market and you need to be a constant voice to convince the
customers. Inform your customers of discounts and other competitive tricks you intend to use.
 • Marketing Helps to Boosts Sales
Marketing utilizes different ways to promote your products or services. Once a product has been
advertised, it’s already on the radar and this increases your chances of selling it. Customers may want to
try your products or services, and this will trigger a purchase decision.
When customers are happy about your products or services, they become your brand ambassadors
without your knowledge. They will spread the word and your sales will start to increase. Ensure you offer
high-quality products and services to complement your marketing efforts.

• Marketing Aids in Providing Insights About Your Business

Every marketer understands the need for targeting the right audience. However, you must have the right
content to share with such an audience. Your marketing strategies can help you establish what business
messaging will convince the target audience. At this point, you must test different messages and see what
works. Once you have tested different sets of messaging on the target audience, you will find a viable
baseline for your marketing efforts. It acts as a metric and provides the insight needed to make you avoid
guesswork.

• Marketing Helps Your Business to Maintain Relevance

Every marketer understands the need for disrupting a potential consumer’s opinion about other products.
But don’t make a mistake of taking this chance for granted. Most businesses assume that they will always
remain the client’s favorite brand because up to now the client has never complained. This is the wrong
mindset. You need to find ways to remain at the top of the client’s mind. Every relationship needs to be
maintained. Marketing helps your business to maintain a good relationship with customers by making you
remain relevant. Don’t focus on gaining new customers before addressing the need to retain the present
ones.

• Marketing Creates Revenue Options

During the startup phase, your options are sparse since you’re mostly cash strapped. This limits your
options. As your marketing strategies generate more customers and revenue opportunities, you’ll begin
having options. Having options is comparable to having a nice war chest. Having options will give you the
courage you need to penetrate new markets. You will have the freedom to start letting go of customers
who are too demanding to your sanity and well-being. Without marketing, you will be forced to continue
working with clients who you have outgrown and are paying you peanuts.

• Marketing Helps the Management Team to Make Informed Decisions

Every business is confronted with problems such as to what, when, for whom and how much to produce.
A complex and tedious process determine your business’s survival. As a result, businesses heavily rely on
marketing mechanisms to make these decisions. Why should you rely on marketing mechanisms? These
mechanisms serve as a reliable link between your business and society. They cultivate people’s mind,
educate the public and convince them to buy.

Why should I learn marketing?

Through marketing, we can create value for customers in order to capture value from customers in
return. Outstanding marketing businesses understand the marketplace and customer needs. They design
strategies that targets the value and satisfaction of customers, engaging them to maintain a strong
profitable relationship. In return, they capture value from the customers in forms of sales, profits and
customer equality.
Customer engagement is greatly affected by today’s digital and social media. It provides us an overview
of how dramatic the changes can occur in businesses and how consumers connect and influence each
other’s buying behavior.

Building and managing strong, value-creating brands. Well-positioned brands with strong brand equity
provide the basis upon which to build customer value and profitable customer relationships. You can
create a mindset as a trend depending on how you position yourself.

Measuring and managing return on marketing. In the past, many marketers spent freely on big, expensive
marketing programs, often without thinking carefully about the financial returns on their spending. But
all that has changed rapidly. “Marketing accountability”—measuring and managing marketing return on
investment—has now become an important part of strategic marketing decision making.

Sustainable marketing around the globe. As technological developments make the world an increasingly
smaller and more fragile place, marketers must be good at marketing their brands globally and in
sustainable ways. Emphasis on the concepts of global marketing and sustainable marketing— meeting the
present needs of consumers and businesses while also preserving or enhancing the ability of future
generations to meet their needs

How can I maximize marketing in my daily life?

Understanding the importance of marketing in general breaks the barrier of why you are learning
marketing in the first place. After you can appreciate the importance of marketing in your daily life, you
can subconsciously practice marketing in your daily life.

Understanding the marketing

concept. We want to shift the
traditional concept of just for
the sake of earning into
satisfying our customer’s
wants and needs. We can
deliver a more stable
profitable relationship with
our customers instead of
milking them for cash. We want to create a model where It starts with a well-defined market, focuses on
customer needs, integrates all marketing activities that affect customers, so it yields profits by creating
lasting relationships with the right customers based on customer value. In the marketing concept, the job
is not to find the right customers for your product, but instead, to find the right products for your
customers. The Marketing concept focuses on customer needs and integrates all the marketing activities
that affect the customer, and in return the company makes profits through the creation of a long-lasting
relation with the right customer.
Philosophies in Marketing

There are five alternative concepts under which organizations design and carry out their marketing
strategies: the production, product, selling, marketing, and societal marketing concepts.

The Production Concept. The production concept holds that consumers will favor products that are
available and highly affordable. Therefore, management should focus on improving production and
distribution efficiency. This concept is one of the oldest orientations that guides sellers. The production
concept is still a useful philosophy in some situations. For example, both personal computer maker Lenovo
and home appliance maker Haier dominate the highly competitive, price-sensitive Chinese market
through low labor costs, high production efficiency, and mass distribution. However, although useful in
some situations, the production concept can lead to marketing myopia. Companies adopting this
orientation run a major risk of focusing too narrowly on their own operations and losing sight of the real
objective—satisfying customer needs and building customer relationships.

The Product Concept. The product concept holds that consumers will favor products that offer the
most in quality, performance, and innovative features. Under this concept, marketing strategy focuses on
making continuous product improvements. Product quality and improvement are important parts of most
marketing strategies. However, focusing only on the company’s products can also lead to marketing
myopia. For example, some manufacturers believe that if they can “build a better mousetrap, the world
will beat a path to their doors.” But they are often rudely shocked. Buyers may be looking for a better
solution to a mouse problem but not necessarily for a better mousetrap. The better solution might be a
chemical spray, an exterminating service, a housecat, or something else that suits their needs even better
than a mousetrap. Furthermore, a better mousetrap will not sell unless the manufacturer designs,
packages, and prices it attractively; places it in convenient distribution channels; brings it to the attention
of people who need it; and convinces buyers that it is a better product.

The Selling Concept. Many companies follow the selling concept, which holds that consumers will not
buy enough of the firm’s products unless it undertakes a large-scale selling and promotion effort. The
selling concept is typically practiced with unsought goods—those that buyers do not normally think of
buying, such as life insurance or blood donations. These industries must be good at tracking down
prospects and selling them on a product’s benefits. Such aggressive selling, however, carries high risks. It
focuses on creating sales transactions rather than on building long-term, profitable customer
relationships. The aim often is to sell what the company makes rather than making what the market
wants. It assumes that 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. These are usually poor
assumptions.

The Marketing Concept The marketing concept holds that achieving organizational goals depends on
knowing the needs and wants of target markets and delivering the desired satisfactions better than
competitors do. Under the marketing concept, customer focus and value are the paths to sales and profits.
Instead of a product-centered make-and-sell philosophy, the marketing concept is a customer-centered
sense-and-respond philosophy. The job is not to find the right customers for your product but to find the
right products for your customers
Figure 1.3 contrasts the selling concept and the marketing concept. The selling concept takes an inside-
out perspective. It starts with the factory, focuses on the company’s existing products, and calls for heavy
selling and promotion to obtain profitable sales. It focuses primarily on customer conquest—getting short-
term sales with little concern about who buys or why. In contrast, the marketing concept takes an outside-
in perspective. As Herb Kelleher, the colorful founder of Southwest Airlines, once put it, “We don’t have
a marketing department; we have a customer department.” The marketing concept starts with a well-
defined market, focuses on customer needs, and integrates all the marketing activities that affect
customers. In turn, it yields profits by creating relationships with the right customers based on customer
value and satisfaction. Implementing the marketing concept often means more than simply responding
to customers’ stated desires and obvious needs. Customer-driven companies research customers deeply
to learn about their desires, gather new product ideas, and test product improvements. Such customer-
driven marketing usually works well when a clear need exists and when customers know what they want.

The Societal Marketing Concept The societal marketing concept questions whether the pure
marketing concept overlooks possible conflicts between consumer short-run wants and consumer long-
run welfare. Is a firm that satisfies the immediate needs and wants of target markets always doing what’s
best for its consumers in the long run? The societal marketing concept holds that 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.
 Marketing Process
A marketing process is a series of steps you take to identify opportunities, define customers and
select a strategy to attract leads and convert them to customers. The marketing process can be
divided into two aspects, the planning and the doing.

What are the steps involved in the marketing process?

1. Market research: What’s missing in my industry? What problems am I uniquely qualified to
solve?
2. Segmentation: What are the different groups of people who most value what I’m selling?
3. Targeting: Who is my ideal customer? Who needs what I offer most and values it the most?
4. Positioning: How can I describe my product or service that resonates with them?
5. Strategize the marketing mix: What is my irresistible offer? The irresistible bundle of
product, service, price, promotion and distribution?
6. Implement your strategy: Where will my customers come from? Your choices are: Content
marketing, Direct Marketing and Paid advertising. This is the DOING part. All you need to
decide here is WHICH of these three marketing strategies are you going to DO.
7. Measure your results: This element doesn’t need to be fancy. It can include something as
simple as counting phone calls or as complex as tracking Google Analytics.