Principles of Marketing: Introduction and definition

Principles of Marketing
(UBTM1013/UKTM1013)
Lecturer:
Garry Tan Wei Han, BEc(Hons) (UM), MSc (Edinburgh), ALMI,ACS, AMIM
Co-Lecturer (FBF):
Lam Siew Yong, BSc (UPM), MSc (UPM)
Co-Lecturer (FAM):
Loke Yoke Mei, BA(Hons)(UEL), MSc (Notts)
Tutors:
ChoyJohnn Yee, BMktg(Hons) UTAR
Garry Tan Wei Han, BEc(Hons) (UM), MSc (Edinburgh), ALMI,ACS, AMIM
Gengeswari a/p Krishnapillai , BMgt(Hons) (UTM), MMgt (UTM)
Jenny Marisa Lim Dao Siang, BA(BAdmin), Abertay Dundee, MBA (MMU)
Lam Siew Yong, BSc (UPM), MSc (UPM)
Lee Weng Onn, BA(Hons)(UNN), MBA (UPM)
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Loke Yoke Mei, BA(Hons)(UEL), MSc (Notts)
Prepared by: Tan Boon In, 2009, main text reference Kurtz.
 Principles of Marketing: Introduction and definition

Lecture: 14 weeks, 2 hours.

Tutorial: 14 weeks, 1.5 hours.
Assessment:
 Attendance (Lecture and tutorial)
 Mid-term test (end of week 7) (1 hour). Topics covered in
this test are from topic 1 to 5.
 Answer two out of three essay questions (12%)
 End-semester examination:
UBTM (2 ½ hours), UKTM1013(3 hours)
 One compulsory case study and answer two out of three essay
questions (60%)
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 Principles of Marketing: Introduction and definition

Learning Objectives for the module:

To introduce marketing concepts with an understanding and knowledge of the
functions and role of marketing in an organisation and its relationship to
organisational management.
To enable students to understand the marketing management process and
analyse market structure and buying behaviour.
To expose students to the product, pricing, distribution and promotion
decisions (The 4Ps or marketing mix).

Learning Outcome for the module:

Students will be able to apply the marketing concepts in detail relating to
making decisions in the future.
Students will be able to use the theoretical frameworks to understand the
interactions between business organisations.
Students will be able to apply the knowledge of buyer behaviour in practice
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 Principles of Marketing: Introduction and definition

Main text:
Kurtz and Boone, (2008). Principles of Contemporary Marketing:
International Student Edition. (14th ed.).Thomson South-Western.

Supplementary texts:
Kotler, P & Armstrong, G. (2008). Principles of Marketing. (12th ed.). New
Jersey: Prentice Hall.
Kotler, P., Armstrong, G., Ang, S.H., Leong, S.M., and Tse, D. K., (2005).
Principles of Marketing: An Asian Perspective. Prentice Hall.

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 Principles of Marketing: Introduction and definition

My consultation hours:
Wednesday : 3.30pm – 5.00pm
Thursday : 2.00am – 5.00am

Email: lamsy@utar.edu.my
Room: H146

Always look for your respective tutor first.

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Marketing: The Art and Science of Satisfying Customers

Learning Objectives

1 Define marketing, explain 4 Describe the 7 Explain the shift from

how it creates utility, and characteristics of not-for- transaction-based
describe its role in the profit marketing. marketing to relationship
marketplace. marketing.
Identify and briefly
Contrast marketing 5 explain nontraditional
2 activities during the four marketing and tactics
eras in the history of used.
marketing.
Outline the importance of
Explain the marketing creativity, critical
3 myopia and importance 6 thinking, and the
of avoiding technology revolution in
marketing.
 Principles of Marketing: Introduction and definition

What is marketing?
In our society, producing and marketing goods and services are the essence of
economic activities, creating a benefit called utility.

Utility is the want-satisfying power of a good or service or in another word,

the sum of benefits we receive from using a good or services. By working to
ensure that people have the type of product they want, where and when they
want it, the marketing system makes our lives easier.

Marketing can provide several different kids of utility in order to provide value
to consumers
a. Form utility
b. Time utility
c. Place utility
d. Ownership utility
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 Principles of Marketing: Introduction and definition

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 Principles of Marketing: Introduction and definition

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 Principles of Marketing: Introduction and definition

So how do organizations and marketers deal with this ‘wants-

satisfying power’ (utility)?
Organizations can create customers by a three-step approach:
• Identifying needs in the marketplace.
• Finding out which needs the organization can profitably serve.
• Developing goods and services that appeal to potential buyers.

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 Principles of Marketing: Introduction and definition

Whereas marketers are responsible for:

•Identifying customer needs.

•Designing products that meet those needs.

•Communicating information about those goods and services to prospective

buyers.

•Making the items available at the right times and places.

•Pricing merchandise and services to reflect costs, competition, and customers’

ability to buy.

•Providing the necessary service and follow-up to ensure customer satisfaction

after the purchase.

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 Principles of Marketing: Introduction and definition

A DEFINITION OF MARKETING
• Marketing is a concept that companywide consumer orientation* with the
objective of achieving long-run success.
• Involves:
• Analyzing customer needs.
• Obtaining the information necessary for design and production
that match buyer expectations.
• Satisfying customer preferences.
• Creating and maintaining relationships with customers and suppliers
*Companywide consumer orientation here means marketing involves the total
company, not just the marketing department staff. Everyone works for the benefits of
the customers and to fulfill the company’s objectives.

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 Principles of Marketing: Introduction and definition

A DEFINITION OF MARKETING
The word marketing encompasses a broad scope of activities

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.

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 Principles of Marketing: Introduction and definition

Marketing is defined by the American Marketing Association as 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.

“ A social and managerial process whereby individuals and groups obtain

what they need and want through creating and exchanging products and
value with others” - Philip Kotler

“The aim of marketing is to make selling superfluous. The aim is to know

and to understand the customer so well that the products or services fits
him/her and sells itself.” - Peter Drucker

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 Principles of Marketing: Introduction and definition

FOUR ERAS IN THE HISTORY OF MARKETING

• Exchange process Activity in which two or more parties give something of
value to each other to satisfy perceived need.

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 Principles of Marketing: Introduction and definition

The Production Era

• Highly developed economics in western Europe and North America
focused narrowly on production. Manufacturing stressed that consumers will
favor products that are available and highly affordable.
•Management should focus on improving production and distribution
efficiency. For example Henry Ford’s philosophy was to perfect the Model T
so that the cost could be reduced
•‘You can have any color as long as it was black’ – Henry Ford

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 Principles of Marketing: Introduction and definition

The Selling Era

• Products availability exceeds demand Competition grew.
•During the Great Depression in the 1930s when money was scare for most
people. Firms shifted from a product orientation to moving their goods in
any way they could.
•Holds the view that marketing as a sales function, or a way to move
products out of warehouse so that inventory don’t pile up. The philosophy at
this stage ‘was to hire more sales people to sell it’ .

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 Principles of Marketing: Introduction and definition

Emergence of the Marketing Concept

• Occurred during the shift from a sellers’ market to a buyer’s market after
World War II.
• Created the need for greater consumer orientation.
• Business philosophy incorporating the marketing concept that
emphasizes first determining un-met consumer needs and then
designing a system for satisfying them.
• Marketing concept Company-wide consumer orientation for achieving
long-term success. This is especially important where service quality is
perceived to be important in the society.
•See attachment ‘ Mc Donald’s Applies The Marketing Concept
• Relationship marketing Developing and maintaining of long-term, cost-
effective relationships with individual customers, suppliers, employees, and
other partners for mutual benefit.
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 Principles of Marketing: Introduction and definition

•The American Marketing Association (AMA) was

established in – 1915
http://www.marketingpower.com/Pages/default.aspx

•And Institute of Marketing Malaysia was

established in – 1977
http://www.imm.org.my/index.html

•Association of Accredited Advertising Agencies

Malaysia (aaaa or 4As) – 1960s
http://www.aaaa.org.my/v2/index.php?option=com_content&view=frontpage&Itemid=1

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 Principles of Marketing: Introduction and definition

AVOIDING MARKETING MYOPIA

• Marketing myopia is when management’s failure to recognize the scope
of its business - Theodore Levitt
Production oriented rather than customer-oriented management endangers
future growth

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 Principles of Marketing: Introduction and definition

AVOIDING MARKETING MYOPIA

Air Asia? - Now Everyone can fly

Great Eastern Life Assurance? – Life is Great !

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 Principles of Marketing: Introduction and definition

EXPANDING THE TRADITIONAL BOUNDARIES

OF MARKETING
MARKETING IN NOT-FOR-PROFIT
ORGANIZATIONS
• 25 percent of U.S. population works or volunteers for a not-
for-profit organization.
• Operate in public sector and private sector.
• Not-for-profits sometimes promote their messages through
partnerships with commercial firms.
Some of the notable names in Malaysia for non-profit
organizations are MAKNA (Majlis Kanser Nasional), MERCY
(Malaysia Medical Relief Society) , WWF, Red Crescent, St
John, UTAR etc.
22 In overseas, Salvation Army, Oxfam, Greenpeace etc.
Prepared by: Tan Boon In, 2009, main text reference Kurtz.
 Principles of Marketing: Introduction and definition

CHARACTERISTICS OF NOT-
FOR-PROFIT MARKETING
• Purpose is to generate revenue to support
their causes.
•Must compete with other organizations
for donors’ dollars.
•Must often market to multiple audiences.
•Example: College or university targets
prospective students, but also current
students, parents, donors, alumni, faculty,
government agencies, and others.
Therefore, non-profit organizations also
need marketing.

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 Principles of Marketing: Introduction and definition

CHARACTERISTICS OF NOT-FOR-
PROFIT MARKETING

•How much Bill-Melinda Foundation has?

(About USD35b).

•Anyone recognize this symbol?

(Prince Charles Foundation).

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 Principles of Marketing: Introduction and definition

NONTRADITIONAL MARKETING

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 Principles of Marketing: Introduction and definition

Challenges in the 21st century for marketing

• See attachment ‘Taking Advantage of Global Opportunities’
i) To be creative and thinking critically
ii) From transaction based marketing to relationship based marketing
iii) Challenges from technology change factor
iv) Cost effectiveness factor in marketing

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 Principles of Marketing: Introduction and definition

i) CREATIVITY AND CRITICAL THINKING

• The challenges of the marketplace require critical thinking and creativity.

• Creativity produces original ideas or knowledge.
Example : Coca-Cola vs. Pepsi

• Critical thinking determines the authenticity, accuracy, and worth of

information, knowledge, claims, and arguments.

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 Principles of Marketing: Introduction and definition

ii) FROM TRANSACTION-BASED MARKETING

TO RELATIONSHIP MARKETING
• View of marketing as transaction-based is being replaced by a longer-
term approach.
• Focus is on developing customers into repeat, loyal customers.
• Over long-term, increases lifetime value of the customer.
• Goal is to move customer up the loyalty ladder:
• New customer
• Regular purchaser
• Loyal supporter
• Advocate
• Repeat customers are a source of buzz marketing.

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 Principles of Marketing: Introduction and definition

iii) TECHNOLOGY REVOLUTION IN MARKETING

• Technology—The business application of knowledge based on scientific
discoveries, inventions, and innovations.
• Communications technology has revolutionized the way we do business.
• More than half of all U.S. households have at least one computer.
• Internet sales in U.S. topped $143 billion in a recent year.
• Technology also opens new markets.
INTERACTIVE AND INTERNET MARKETING
• Interactive, customizable technology that gives users quick access to
information.
• Interactive marketing—Customer controls amount and type of
information received from a marketer.

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 Principles of Marketing: Introduction and definition

iii) TECHNOLOGY REVOLUTION IN MARKETING

• Internet sales in Malaysia (purchase of goods and services and bill payments to reach
US$4.2bil (RM15.3bil) this year 2009 (Star Newspaper 11, April 2009)
•A RECENT survey conducted by The Nielsen Company on online shopping habits
reveals that about 30% of Malaysian Internet users have conducted online purchases.
(Star Newspaper 11, April 2009)
•According to IDC’s Skypad 2008 Study, Malaysia ranks with the highest in percentage
of users among the nine countries surveyed in Asia Pacific who uses the Internet to
purchase travel-related items. Up to 82% of Malaysian Internet users have purchased
travel items online. Apart from that, shopping for books is also high on the list with
69% of them. (Star Newspaper 11, April 2009)
•Implementation of mandatory rebates (5% rebate in the first year and a 10% rebate for
renewals) for car owners if they buy motor insurance directly from the companies via
other channels such as the Internet (Star Newspaper 20,May 2009) How will this
translate into?

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 Principles of Marketing: Introduction and definition

iv) COSTS AND FUNCTIONS OF MARKETING

• Marketing costs are typically 40 to 60 percent of total product costs.

On average. Half of the costs involved in a product..
•And these cost resulted from the eight business functions that perform within
the marketing ambit.
The challenge is how to spend effectively.

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 Principles of Marketing: Introduction and definition

TODAYS GLOBAL MARKETPLACE - Challenges

• Growing importance because of international trade agreements such as
AFTA (ASEAN Free Trade Agreement), NAFTA (North American Free
Trade Agreement), WTO (World Trade Organization), bilateral free trade
agreements, growth of electronic business, and economic interdependence.
• Companies seek the most efficient manufacturing sites and most lucrative
markets worldwide.
Marketing is even more important in this globalization era, how can SIA,
Samsung and Sony achieved the icon status worldwide today without good
marketing?

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 Principles of Marketing: Introduction and definition

Jobs for Marketing

Entry Level (approximately less 3 years experience)

Marketing executive – most of the time you will be doing sales.

Sales executive – sales in any industry
Marketing research executive - very few openings
Merchandisers – in the super and hypermarkets
Account service executive – advertising agency, servicing clients
Key account executive – servicing major clients such as supermarkets and
hypermarkets, B2B (business-to-business)
Management trainee – usually in large corporations
Product executive – junior marketing level with less than three years experience
Brand Executive - junior marketing level with less than three years experience

(RM2-3k)

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 Principles of Marketing: Introduction and definition

Jobs for Marketing

Middle Level (approximately 2 – 7 years experience)

Brand manager
Product manager
Key account manager
Product group manager
Merchandising Manager
Sales / Business manager
Account Manager
Media Manager

(RM3 – 6k)

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 Principles of Marketing: Introduction and definition

Jobs for Marketing

Senior Level (approximately 7 – 15 years experience)

Marketing manager
Marketing research manager
Product category manager
Sales director
Marketing director
Retail director
Media director
GM – Sales / Marketing
Account director
Media director
Creative director
Regional manager
Regional director
Consumer Banking Director
35 (RM6 – 15k ….)
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 Principles of Marketing: Introduction and definition

Good luck,

study hard and you

will enjoy marketing!

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