Marketing

Marketing

Marketing

Task 1:

Marketing is defined as a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and values with others.(Kotler.P 2002 : 5) The goals of marketing is to attract new customers by promising superior value and keep and grow current customers by delivering satisfaction. There are five core concepts of marketing, which includes needs, wants and demand; products, services and experience; value, satisfaction and quality; exchanges, transactions and relationships; and finally, market and marketing.

After World War II, the variety of products increased and hard selling no longer could be relied upon to generate sales. Customers afford to be selective and buy products which can precisely met their changing needs with increased discretionary income. The key questions arose: What do customers want? Can we develop it while they still want it, and how can we keep our customers satisfied?

In order to response to these discerning customers, firms began to adopt the marketing concept. This involves focusing on customer needs before developing the product, aligning all functions of the company to focus on those needs, and realizing a profit by successfully satisfying customer needs in long-term. In other words, in the context of marketing concept, company must first determine what the consumer wants, then produces what they wants, then sells the consumer what they wants(Menguc 1997).

In marketing concept, more listening to and eventual accommodation of the target market occurs. Two-way communication is emphasized in marketing so "learning" can take place and product offerings can be improved. Business must first fulfill consumers' needs and wants. Marketing concept "holds that the key to achieving organizational goals consists in determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors" (online material #5)

To illustrate the marketing concept, Peter Drucker, in 1954 said:

"If we want to know what business is, we must first start with its purpose... There is only one valid definition of business purpose: to create a customer. What business thinks it produces is not of first importance - especially not to the future of the business or to its success. What the customer thinks he/she is buying, what he/she considers "value" is decisive - it determines what a business is, what it produces, and whether it will prosper." (Online material #4)

Marketing concept was considered a breakthrough in business philosophy. It's because it represented the antithesis of the product, production, and selling concepts. The marketing concept holds that businesses should first determine the existing needs in the marketplace and then design and produce a product to satisfy this need rather than taking an existing product and endeavoring to modify demand for it by reducing price or varying promotional technique.

Marketing concept plays an important part in an organization. According to the Customer Service Institute, it costs as much as five times as much to acquire a new customer than it does to service an existing one and that the customers tell twice as many people ...