IMS 554 Info. Marketing for Information System Department Principles of Marketing 1

Marketing : Definition Marketing consists of the performance activities that direct the flows of goods and services from producer to users. (American Marketing Association) 2

Needs Kotler (1996) has defines needs as a state of felt deprivation in a person They include the basic physiological needs like food, clothing, shelter, warmth and safety, social needs for belonging, influence and affection, individual needs for knowledge and self expression. Needs exists in an individual, marketing do not create these needs. 3

Wants Kotler (1996) - the form of human needs as shaped by culture and personal development. Needs are more basic than wants Example: Malaysian – nasi lemak, roti canai Europe – cereal, toast and milk 4

Demand Exist when a person is able and willing to buy This requires a person to have the ability to pay Demands are constantly changing People’s wants become demand when backed by their purchasing power.

Transaction A transaction consists of at least two things of value between two parties Example: – between a seller and a buyer – between a suppliers and organization 6

Transaction – cont. Criteria for a transaction to exist: o condition that are agreed to oA time and place of agreement between the two parties. 7

Exchange Kotler (1996) had defined an exchange as the act of obtaining a desired object from someone by offering something in return Example: when you pay RM 1.85 for a kilogram of sugar to the retailer. Exchange is a core concept in the discipline of marketing 8

Exchange- cont. Five conditions must exist for an exchange to occur 1.There are at least two parties 2.Each party has something that may be of value to the other party 3.Each party is capable of communication and delivery 4.Each party is free to accept or reject the other party’s offer 5.Each parties believes it is appropriate or desirable to deal with the other party e.g. You may only buy a ring from a Habib Jewel shop, and not from a side way stall. 9

An exchange process a buyer and a seller BuyerSeller Something of value-goods, services, ideas, Money, credit, labor, goods 10

The Evolution of Marketing Barter era Production era Sales era Marketing era 11

The barter era People’s earliest use of barter system People trade one resource for another 12

Marketing Management Philosophies 1.The Production Concept 2.The Product Concept 3.The Selling Concept 4.The Marketing Concept (1950’s ’s) 5.The Societal Marketing Concept (1960’s – present) 13

The Production Concept A philosophy that holds consumer who will favor products that available and highly affordable Thus, management should concentrate on improving production and distribution efficiency 19thCentury – industrial revolution in US brought great economic expansion Electricity, rail transportation, the division of labor, the assembly line and mass production have made it possible for manufacture products more efficiently Products were streaming out of factories into the marketplace, where consumer’s demand for manufactured goods was strong. 14

The Product Concept The consumer will favor those products that offer the most quality, performance and features and therefore the organization should devote its energy to making continous product improvement Believe that a good quality product at a reasonable price are mostly demanded by consumers. Thus, require minimum of marketing effort by the firm. 15

The Selling Concept The consumer will not buy enough of the organization’s products unless the organization undertakes substantial selling and promotion efforts Believes that in order to achieve cost efficiencies through sales of large volumes of output, the marketers must invest heavily in promotions through advertisement and sales promotion 16

The Marketing Concept Believes in order to achieve the organizational goals, the organization have to determine the needs and wants of the market and adapt itself to delivering the desired satisfaction more effectively than its competitors 17

The Societal Marketing Concept Holds that it is the organization’s task to determine the needs, wants, and interest of target markets and to deliver the desired satisfaction more effectively and efficiently than competitors in a way that preserves or enhances the consumer’s and society’s well-being 18