Diploma in sales and marketing

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Higher Diploma in Sales and Marketing
What is marketing? 3

Marketing management 8

The marketing concept 11

Market Research 19

Product and branding strategy 26

Product classification 27

Product decisions 30

International product decisions 48

Why do new products fail? 51

New product development 52

Product life-cycle strategies 63

Pricing 71

Marketing objectives 73

Managing marketing channels 99

Transportation 121

Logistics information management 122

Channel trends 124

Marketing research and information systems 128


Customer led-communication 170

Influencing external and internal customers 176

Customer problem solving 180

Providing customer value 187

Customer satisfaction 190

Customer retention 190

Module 2 Principles of Marketing 1 The Marketing Culture


What does the term marketing mean?

Many people think of marketing only as selling and advertising. And no wonder, for every day we are bombarded with television commercials, newspaper advertisements, direct mail campaigns, Internet pitches and sales calls. Although they are important, they are only two of many marketing functions and are often not the most important ones.

Today, marketing must be understood not in the old sense of making a sale – ‘telling and selling’ – but in the new sense of satisfying customer needs. Selling occurs only after a product is produced. By contrast, marketing starts long before a company has a product. Marketing is the homework that managers undertake to assess needs, measures their extent and intensity and determine whether a profitable opportunity exists. Marketing continues throughout the product’s life, trying to find new customers and keep current customers by improving products appeal and performance.

Everyone knows something about ‘hot’ products. When Sony designed PlayStation, when Nokia introduced fashionable mobile phones, when The Body Shop introduced animal-cruelty-free cosmetics and toiletries, these manufacturers were swamped with orders. Like Swatch and Smart Car, they were ‘right’ products offering new benefits; not ‘me-too’ products. Peter Drucker, a leading management thinker, has put it this way: ‘the aim of marketing is to make selling superfluous’. The aim is to know and understand the customer so well that the product or service fits … and sell itself. If the marketer does a good job of identifying customer needs, develops products that provide superior value, distributes and promotes them effectively, these goods will sell very easily. This does not mean that selling and advertising are unimportant. Rather, it means that they are part of a larger marketing mix – a set of marketing tools that work together to affect the marketplace.

We define marketing as a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others. To explain this definition, we examine the following important terms: needs, wants and demands; products and services; value, satisfaction and quality; exchange, transactions and relationships; and market.

Each part of the marketing definition defines what marketing is and how it is practiced. In business-to-business marketing, where professional organizations exchange products of value to each other, marketing can be an exchange between similar individuals and groups. This contrasts with consumer markets where marketing is not an exchange between similar individuals and groups. In consumer markets, for one group marketing is a managerial process pursued to fulfill their needs and wants, while the other group is just going through life fulfilling their needs and wants. With this difference identified, the definition of marketing identifies marketing’s unique contribution to an organization and the demands it imposes.

The essence of marketing is a very simple idea that extends to all walks of life. Success comes from understanding the needs and wants of others and creating ideas, services or products that fulfill those needs and wants. Most organizations, from Boo.com to WorldCom, fail because they fail to fulfill the wants and needs of others.

Module 2 Principles of Marketing 1 The Marketing Culture

Need, wants and demands

The most basic concept underlying marketing is that of human needs. Human needs are states of felt deprivation. They include basic physical needs for food, clothing, warmth and safety; social needs for belonging and affection; and individual needs for knowledge and self-expression. Marketers did not invent these needs; they are a basic part of the human make-up. When a need is not satisfied, a person will do one of two things:

  1. Look for an object that will satisfy it; or

  2. Try to reduce the need.

People in industrial societies may try to find or develop objects that will satisfy their desires. People in less developing societies may try to reduce their desires and satisfy them with what is available.

Wants are the form human needs takes as they are shaped by culture and individual personality. A hungry person in Mauritius may want a mango, rice, lentils and beans. A hungry person in Eindhoven may want a ham and cheese roll and a beer. A hungry person in Hong Kong may want a bowl of noodles, ‘char-siu’ pork and jasmine tea. A British drinker may want an Indian curry after leaving the pub. Wants are shaped by one’s society and are described in terms of objects that will satisfy needs. As a society evolves, the wants of its members expand. As people are exposed to more objects that arouse their interest and desire, producers try to provide more want-satisfying products and services.

People have narrow, basic needs (e.g. for food or shelter), but almost unlimited wants. However, they also have limited resources. Thus, they want to choose products that provide the most satisfaction for their money. When backed by an ability to pay – that is, buying products that give them the best bundles for their money. Thus, a Toyota Yaris gives basic safe and reliable transport, low price and fuel economy. A Jaguar gives spottiness, comfort, luxury and status. Given their wants and resources, people demand products with the benefits that add up to the most satisfaction.

Outstanding marketing companies go to great lengths to learn about and understand their customers’ needs, wants and demands. They conduct consumer research about consumer likes and dislikes. They analyse customer complaint, enquiry, warranty and service data. They observe customers using their own and competing products and train salespeople to be on the lookout for unfulfilled customer needs. Understanding customer needs, wants and demands in details provide important input for designing marketing strategies.

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