Chapter 1: Marketing Principles and Society
Customer: buyer
Consumer: user
Customer and consumer can be the same person
There is marketing within every department of a company, they all work with the consumer in mind.
A company with marketing orientation: recognizes the importance of marketing within the
organization.
Market orientation: organization-wide generation of market intelligence including
- customer orientation: creating superior value by developing offerings to meet customer needs
- competitor orientation: develop an understanding of its competitor’s short term weakness and
strengths.
- inter-functional coordination: all functions of an organization need to work together for long
term profit growth.
- also includes marketing
What influences marketing?
Industrial economics influences: marketing is influenced by tax, supplies, laws, external factors.
Psychological influences: consumer attitudes, motivation, information processing. Understanding of
consumer personality and customer satisfaction
Sociological influences: Knowledge of how groups behave (gender, age, social class) why we do
things the way we do (motivation)k, public opinion
Anthropological influences: research consumer behavior and look at the behavior of subgroups.
It is not possible to develop principles that apply to all aspects of marketing. There are some general
principles.
★ advertising has a positive influence on sales
★ selective advertising has a direct positive influence on the individual (brand) sales
★ the elasticity of selective advertising on company sales is low (inelastic)
★ increasing display space has a positive impact on sales of non-staple grocery items.
★ distribution defined by several outlets has a positive influence on company sales
The marketing mix exists out of 4p’s.
Product → the offering, how does it meet customer’s needs, packaging, labeling
Place → how the offering meets the customer needs
Price → the cost to the customer and cost-plus profit to the seller.
Promotion → of how the offering benefits and features are conveyed to the potential
buyer.
for a service, we have extended marketing with 3 additional p’s
Physical Evidence → you try to emphasize that the tangible components of service are
strategically important to your product.
Process → service delivery, what is there between order/booking and receiving.
People → who are the people involved, staff, customer services.
Relationships
Marketing is also about maintaining relationships with customers, suppliers, recruiters, referral
markets (where they exist), influence markets (authorities, politicians), and internal markets.
Customer retention is significant to businesses and a big part of marketing. When a company retains
loyal customers, it is more likely to be profitable. Loyal customers will:
*Increase purchase over time
*Cheaper targets for promotion
*will refer the company to others
* are often prepared to pay a small premium membership price
The new way of looking at marketing is that there is a shift from a product-focused approach towards
a service-focused approach.
, Marketing isn’t always looked at in a positive light, it is often criticized for being manipulative and
creating wants and needs where there used to be none. There are 4 critical points.
Marketing as Manipulation
Marketers often frame customers. Framing is the action of presenting persuasive communication and
the action of audiences in interpreting that communication to assimilate it into their existing
understanding. This happens by offering promotions for a fixed time only.
Sometimes companies also use other products than the ones they are promoting to make their
products look better.
Commodity Fetishism
Based on the Marxist economic theory by Karl Marx. This proposes the idea that society is overly
dominated by consumption thus fetishizes it. In the time of industrialization, products were made for
their use-value. After Marx thought that products should be priced by the number of work hours that
went into it.
Need and choice
Alevesson argues that people from affluent countries consume without gaining long term satisfaction
from it because much of the consumption is superficial.
Some companies also don’t meet the needs of customers but get them to buy stuff anyway by
misleading them.
The market system is amoral, this is not the same as immoral (designed to harm) but it is not
designed without any care whether a product harms or not. Products like gambling, alcohol, and
tobacco are available for anyone to buy but they can be very harmful.
Sustainable marketing→ accepts limitations of marketing philosophy and acknowledges
they need to put constraints on marketing concerning its impact on the environment.
They need to meet the needs of the current generation without imposing constraints on
future generations
Sustainable marketers use the following maxims
● Ecological → marketing should not negatively impact the environment
● Equitable → marketing should not allow or promote unfair social practices
● Economic → marketing should encourage long-term economic development as
opposed to short term economic development
Sustainable marketers should focus on positioning and demand stimulation for recycled products and
enabling reverse logistics for recycling.
Such long term thinking has led to the circular economy, this is a way in which there is as little waste
as possible and products are recycled.
CSR = Corporate Social Responsibility
stands for how companies integrate social, environmental, and economic aspects into their values,
culture, decisions, strategy, and business operations
Collaborative consumption = the trend towards the sharing, swapping and renting of possesions
Dyadic = essentially meaning ‘two-way’; a dyadic commercial relationship is an exchange between
two people, typically buyer and seller.
Procurement = the purchasing process in a firm of organization
Reverse logistics = the process of returning good in a physical distribution channel, which might be a
flow from customer to manufacturer via retailer.
Servicescape = the physical environment in which a service takes place such as a stadium or a
football game.
Customer: buyer
Consumer: user
Customer and consumer can be the same person
There is marketing within every department of a company, they all work with the consumer in mind.
A company with marketing orientation: recognizes the importance of marketing within the
organization.
Market orientation: organization-wide generation of market intelligence including
- customer orientation: creating superior value by developing offerings to meet customer needs
- competitor orientation: develop an understanding of its competitor’s short term weakness and
strengths.
- inter-functional coordination: all functions of an organization need to work together for long
term profit growth.
- also includes marketing
What influences marketing?
Industrial economics influences: marketing is influenced by tax, supplies, laws, external factors.
Psychological influences: consumer attitudes, motivation, information processing. Understanding of
consumer personality and customer satisfaction
Sociological influences: Knowledge of how groups behave (gender, age, social class) why we do
things the way we do (motivation)k, public opinion
Anthropological influences: research consumer behavior and look at the behavior of subgroups.
It is not possible to develop principles that apply to all aspects of marketing. There are some general
principles.
★ advertising has a positive influence on sales
★ selective advertising has a direct positive influence on the individual (brand) sales
★ the elasticity of selective advertising on company sales is low (inelastic)
★ increasing display space has a positive impact on sales of non-staple grocery items.
★ distribution defined by several outlets has a positive influence on company sales
The marketing mix exists out of 4p’s.
Product → the offering, how does it meet customer’s needs, packaging, labeling
Place → how the offering meets the customer needs
Price → the cost to the customer and cost-plus profit to the seller.
Promotion → of how the offering benefits and features are conveyed to the potential
buyer.
for a service, we have extended marketing with 3 additional p’s
Physical Evidence → you try to emphasize that the tangible components of service are
strategically important to your product.
Process → service delivery, what is there between order/booking and receiving.
People → who are the people involved, staff, customer services.
Relationships
Marketing is also about maintaining relationships with customers, suppliers, recruiters, referral
markets (where they exist), influence markets (authorities, politicians), and internal markets.
Customer retention is significant to businesses and a big part of marketing. When a company retains
loyal customers, it is more likely to be profitable. Loyal customers will:
*Increase purchase over time
*Cheaper targets for promotion
*will refer the company to others
* are often prepared to pay a small premium membership price
The new way of looking at marketing is that there is a shift from a product-focused approach towards
a service-focused approach.
, Marketing isn’t always looked at in a positive light, it is often criticized for being manipulative and
creating wants and needs where there used to be none. There are 4 critical points.
Marketing as Manipulation
Marketers often frame customers. Framing is the action of presenting persuasive communication and
the action of audiences in interpreting that communication to assimilate it into their existing
understanding. This happens by offering promotions for a fixed time only.
Sometimes companies also use other products than the ones they are promoting to make their
products look better.
Commodity Fetishism
Based on the Marxist economic theory by Karl Marx. This proposes the idea that society is overly
dominated by consumption thus fetishizes it. In the time of industrialization, products were made for
their use-value. After Marx thought that products should be priced by the number of work hours that
went into it.
Need and choice
Alevesson argues that people from affluent countries consume without gaining long term satisfaction
from it because much of the consumption is superficial.
Some companies also don’t meet the needs of customers but get them to buy stuff anyway by
misleading them.
The market system is amoral, this is not the same as immoral (designed to harm) but it is not
designed without any care whether a product harms or not. Products like gambling, alcohol, and
tobacco are available for anyone to buy but they can be very harmful.
Sustainable marketing→ accepts limitations of marketing philosophy and acknowledges
they need to put constraints on marketing concerning its impact on the environment.
They need to meet the needs of the current generation without imposing constraints on
future generations
Sustainable marketers use the following maxims
● Ecological → marketing should not negatively impact the environment
● Equitable → marketing should not allow or promote unfair social practices
● Economic → marketing should encourage long-term economic development as
opposed to short term economic development
Sustainable marketers should focus on positioning and demand stimulation for recycled products and
enabling reverse logistics for recycling.
Such long term thinking has led to the circular economy, this is a way in which there is as little waste
as possible and products are recycled.
CSR = Corporate Social Responsibility
stands for how companies integrate social, environmental, and economic aspects into their values,
culture, decisions, strategy, and business operations
Collaborative consumption = the trend towards the sharing, swapping and renting of possesions
Dyadic = essentially meaning ‘two-way’; a dyadic commercial relationship is an exchange between
two people, typically buyer and seller.
Procurement = the purchasing process in a firm of organization
Reverse logistics = the process of returning good in a physical distribution channel, which might be a
flow from customer to manufacturer via retailer.
Servicescape = the physical environment in which a service takes place such as a stadium or a
football game.
