OM&C
Chapter 1 – What is marketing?
The meaning of marketing
Differences between selling and marketing
The main purpose of marketing- oriented companies – to anticipate and satisfy the needs and
wants of the customer
Marketing builds a bridge between production and consumption
Selling is ‘trying to get rid of what you have on the shelves’, while marketing is ‘making sure
that what you have on the shelves is what the customer wants’
A definition of marketing
Requires an appropriate product, the right type of distribution, the right price and the right
kind of promotion -> marketing mix
o If any of 4 elements is lacking, a product will not achieve the sales and profit
objectives as listen in its annual plan or marketing plan
Marketing – the process of developing, pricing, promoting and distributing products, services
or ideas that are tailored to the market
o Includes all other activities that create value and systematically lead to increased
sales or another desired response, establish a good reputation and ongoing
relationships with customer, so that all stakeholders achieve their objectives
The marketing mix (4 Ps)
An effective marketing strategy = clever combination of four marketing instruments that are
used to tackle the market
o The marketing mix variables are closely related to one another (if we change one of
them -> consequences for the other 3 -> entirely new mix)
Product
o Goods, services or ideas that meet the wants and needs of the customer
o Not only the physical product, but also the warranty, packaging, brand image,
product range and customer service
o Product strategy examples: the development of new products and services, the
refinement of existing products, the decision to take products off the market when
they no longer satisfy a need
Price
o The amount of money exchanged for a product or service
o Product’s manufacturing cost, the prices being charged by the competitors, how an
increase or reduction in the selling price is likely to affect demand
Place (‘Distribution’)
o How company gets its product into the buyers’ hands
o Often matters more in determining its success than the product itself
o Distribution strategy: which distribution channels and intermediaries (the wholesale
and retail trade) should be used, the number of sales outlets, the necessary stock
levels and best forms of transportation (physical distribution)
o An efficient distribution system -> the right products are on sale in the right place at
the right time
1
, Promotion
o The supplier’s activities to communicate with the market and to promote sales
o Advertising, sponsorship, sales promotion, direct marketing, personal selling and
public relations activities (such as free publicity)
o Marketing communication strategy: establishing the marketing communication
target market, formulating the communication objectives, determining the
proposition and communication message, selecting the best combination of
marketing communication instruments and media, setting the budget, determining
the best method of measuring whether objectives have been met, efficient use of
displays, offering special discounts, attending trade fairs
From 4P-model to 4C-model:
Four Ps Four Cs
Product Customer solution: the solution for the customer
Price Cost to the customer: value for money
Place Convenience: ease for the customer
Promotion Communication: mutual communication between the organization and the customer
Target market selection and the process of
exchange
Target market – the part of the market that an
organization concentrates on and wants to turn into
customers, who will make repeat purchases
Dividing the market into market segments on the basis
of certain criteria -> selecting one or more target
markets -> bringing about an exchange, in which the two
parties agree to exchange something of value so that both
parties’ needs are met
o Exchange transactions – items of worth
products that are exchanged for money
a service, and idea, labour or status
o Process of exchange – a process that creates, communicates and delivers value
Levels of marketing systems
Micromarketing
Marketing of the individual firm
Marketing management – the analysis, planning, implementation and constant evaluation of
all activities designed to ensure that the products and services produced and provided by and
organization are tailored to meet the needs and wants of potential consumers as effectively
as possible (m
arket,d
U
B lb
)YER
n ff
u
o
Sh .gfyL
svic:p
o Seeing company from the viewpoint of his
customers
o Process of strategy development and
business decision-making
2
,Macromarketing
Marketing as a process that must function effectively for a society as a whole to realise its
economic objectives
The role of marketing is described only in general terms
Interest in the system that a society has developed to arrange the exchange of goods and
services to ensure that its scarce resources will meet its needs as effectively as possible
Mesomarketing
Lies between micro- and micromarketing
The framework of the supply chain
o The series of persons and organisations involved in the production, distribution and
consumption of products and services
Mesomarketing – all activities developed by several collaborating organisations within a
supply chain or sector to match supply and demand and meet certain need, in order to
realise their shared marketing objectives
o Collective activities of organisations in a specific sector or of companies with a
common interest
o Collective marketing of certain types of products
Development of the marketing mindset
Production- and product-oriented companies
Production concept – concentrating on mechanizing and increasing production, greatly
reducing the cost of the products
Product concept – focusing on the product, improving its quality
Sellers’ market – suppliers or sellers have the upper hand
3
, Selling-oriented companies
Buyers’ market – the buyers were in a stronger position than the suppliers because supply
exceeded demand -> a battle for winning over the customer
Selling concept – the sales departments became more important
Marketing-oriented companies
Market orientation – for making business decisions at all levels of the organisation, not only
consumers are considered, but also intermediaries and competitors
The social marketing concept
o Interest in macromarketing in the sense of socially responsible marketing
o Societal marketing concept – since the production and marketing of certain products
may, in the long term, have damaging consequnces for society as a whole, every
effort must be made to prevent harming the interests of buyers and non-buyers
o Marketing should balance the interests of the consumer, the producer and society
o Marketing 4.0 – taking a social-marketing first approach, responding to the increased
interactivity inside and towards the market, and the increasing importance of social
relationships on purchasing decisions
o SOCIETY (human welfare) + CONSUMER (satisfaction of needs) + COMPANY (profit
motive)
Relationship marketing
The emphasis on developing long-term relationships with customers and suppliers who add
value to the collaboration for all parties involved
Outcome – a lot of strategic alliances within the market
4
Chapter 1 – What is marketing?
The meaning of marketing
Differences between selling and marketing
The main purpose of marketing- oriented companies – to anticipate and satisfy the needs and
wants of the customer
Marketing builds a bridge between production and consumption
Selling is ‘trying to get rid of what you have on the shelves’, while marketing is ‘making sure
that what you have on the shelves is what the customer wants’
A definition of marketing
Requires an appropriate product, the right type of distribution, the right price and the right
kind of promotion -> marketing mix
o If any of 4 elements is lacking, a product will not achieve the sales and profit
objectives as listen in its annual plan or marketing plan
Marketing – the process of developing, pricing, promoting and distributing products, services
or ideas that are tailored to the market
o Includes all other activities that create value and systematically lead to increased
sales or another desired response, establish a good reputation and ongoing
relationships with customer, so that all stakeholders achieve their objectives
The marketing mix (4 Ps)
An effective marketing strategy = clever combination of four marketing instruments that are
used to tackle the market
o The marketing mix variables are closely related to one another (if we change one of
them -> consequences for the other 3 -> entirely new mix)
Product
o Goods, services or ideas that meet the wants and needs of the customer
o Not only the physical product, but also the warranty, packaging, brand image,
product range and customer service
o Product strategy examples: the development of new products and services, the
refinement of existing products, the decision to take products off the market when
they no longer satisfy a need
Price
o The amount of money exchanged for a product or service
o Product’s manufacturing cost, the prices being charged by the competitors, how an
increase or reduction in the selling price is likely to affect demand
Place (‘Distribution’)
o How company gets its product into the buyers’ hands
o Often matters more in determining its success than the product itself
o Distribution strategy: which distribution channels and intermediaries (the wholesale
and retail trade) should be used, the number of sales outlets, the necessary stock
levels and best forms of transportation (physical distribution)
o An efficient distribution system -> the right products are on sale in the right place at
the right time
1
, Promotion
o The supplier’s activities to communicate with the market and to promote sales
o Advertising, sponsorship, sales promotion, direct marketing, personal selling and
public relations activities (such as free publicity)
o Marketing communication strategy: establishing the marketing communication
target market, formulating the communication objectives, determining the
proposition and communication message, selecting the best combination of
marketing communication instruments and media, setting the budget, determining
the best method of measuring whether objectives have been met, efficient use of
displays, offering special discounts, attending trade fairs
From 4P-model to 4C-model:
Four Ps Four Cs
Product Customer solution: the solution for the customer
Price Cost to the customer: value for money
Place Convenience: ease for the customer
Promotion Communication: mutual communication between the organization and the customer
Target market selection and the process of
exchange
Target market – the part of the market that an
organization concentrates on and wants to turn into
customers, who will make repeat purchases
Dividing the market into market segments on the basis
of certain criteria -> selecting one or more target
markets -> bringing about an exchange, in which the two
parties agree to exchange something of value so that both
parties’ needs are met
o Exchange transactions – items of worth
products that are exchanged for money
a service, and idea, labour or status
o Process of exchange – a process that creates, communicates and delivers value
Levels of marketing systems
Micromarketing
Marketing of the individual firm
Marketing management – the analysis, planning, implementation and constant evaluation of
all activities designed to ensure that the products and services produced and provided by and
organization are tailored to meet the needs and wants of potential consumers as effectively
as possible (m
arket,d
U
B lb
)YER
n ff
u
o
Sh .gfyL
svic:p
o Seeing company from the viewpoint of his
customers
o Process of strategy development and
business decision-making
2
,Macromarketing
Marketing as a process that must function effectively for a society as a whole to realise its
economic objectives
The role of marketing is described only in general terms
Interest in the system that a society has developed to arrange the exchange of goods and
services to ensure that its scarce resources will meet its needs as effectively as possible
Mesomarketing
Lies between micro- and micromarketing
The framework of the supply chain
o The series of persons and organisations involved in the production, distribution and
consumption of products and services
Mesomarketing – all activities developed by several collaborating organisations within a
supply chain or sector to match supply and demand and meet certain need, in order to
realise their shared marketing objectives
o Collective activities of organisations in a specific sector or of companies with a
common interest
o Collective marketing of certain types of products
Development of the marketing mindset
Production- and product-oriented companies
Production concept – concentrating on mechanizing and increasing production, greatly
reducing the cost of the products
Product concept – focusing on the product, improving its quality
Sellers’ market – suppliers or sellers have the upper hand
3
, Selling-oriented companies
Buyers’ market – the buyers were in a stronger position than the suppliers because supply
exceeded demand -> a battle for winning over the customer
Selling concept – the sales departments became more important
Marketing-oriented companies
Market orientation – for making business decisions at all levels of the organisation, not only
consumers are considered, but also intermediaries and competitors
The social marketing concept
o Interest in macromarketing in the sense of socially responsible marketing
o Societal marketing concept – since the production and marketing of certain products
may, in the long term, have damaging consequnces for society as a whole, every
effort must be made to prevent harming the interests of buyers and non-buyers
o Marketing should balance the interests of the consumer, the producer and society
o Marketing 4.0 – taking a social-marketing first approach, responding to the increased
interactivity inside and towards the market, and the increasing importance of social
relationships on purchasing decisions
o SOCIETY (human welfare) + CONSUMER (satisfaction of needs) + COMPANY (profit
motive)
Relationship marketing
The emphasis on developing long-term relationships with customers and suppliers who add
value to the collaboration for all parties involved
Outcome – a lot of strategic alliances within the market
4
