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Principles of Marketing: Introduction and definition
Prepared by: Tan Boon In, 2009, main text reference Kurtz.
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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)
Loke Yoke Mei, BA(Hons)(UEL), MSc (Notts))
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Principles of Marketing: Introduction and definition
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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 inthis test are from topic 1 to 5.
Answer two out of three essay questions (12%)
End-semester examination:
UBTM (2 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
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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 toorganisational 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
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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
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My consultation hours:
Wednesday : 3.30pm 5.00pm
Thursday : 2.00am 5.00am
Email: [email protected]: H146
Always look for your respective tutor first.
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Learning Objectives
Marketing: The Art and Science of Satisfying Customers
1
2
3
4
5
6
7Define marketing,
explain how it creates
utility, and describe its
role in the marketplace.
Contrast marketing
activities during the
four eras in the history
of marketing.
Explain the marketingmyopia and importance
of avoiding
Describe the
characteristics of not-
for-profit marketing.
Identify and briefly
explain nontraditional
marketing and tactics
used.
Outline the importance
of creativity, criticalthinking, and the
technology revolution in
marketing.
Explain the shift from
transaction-based
marketing to
relationship marketing.
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Principles of Marketing: Introduction and definition
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What is marketing?In our society, producing and marketing goods and services are the essence ofeconomic activities, creating a benefit called utility.
Utility is the want-satisfying power ofa good or service or in another word,
the sum of benefits we receive from using a good or services. By working toensure 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 consumersa. 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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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
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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
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ADEFINITION OF MARKETING
Marketing is aconcept that companywide consumerorientation* with theobjective ofachieving long-run success.
Involves:
Analyzing customer needs.
Obtaining the information necessary for design and productionthat match buyer expectations.
Satisfying customer preferences.
Creating and maintaining relationships with customers and suppliers
*Companywide consumer orientation here means marketing involves the totalcompany, not just the marketing department staff. Everyone works for the benefits of
the customers and to fulfill the companys objectives.
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Principles of Marketing: Introduction and definition
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ADEFINITION 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 itsstakeholders.
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Principles of Marketing: Introduction and definition
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FOURERAS IN THE HISTORYOFMARKETING
Exchange processActivity in which two or more parties give something ofvalue to each other to satisfy perceived need.
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Principles of Marketing: Introduction and definition
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The Production Era
Highly developed economics in western Europe and North America focusednarrowly 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 Fords 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
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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 dont 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
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Emergence of the Marketing Concept
Occurred during the shift from a sellers market to a buyers market afterWorld War II.
Created the need for greaterconsumer 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 DonaldsApplies 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
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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 4A
s) 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
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AVOIDING MARKETING MYOPIA
Marketing myopia is when managements failure to recognize the scopeof its business - Theodore Levitt
Production oriented rather than customer-oriented management endangers
future growth
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Principles of Marketing: Introduction and definition
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EXPANDING THE TRADITIONAL BOUNDARIES
OFMARKETING
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-profitorganizations are MAKNA (Majlis Kanser Nasional), MERCY
(Malaysia Medical Relief Society) , WWF, Red Crescent, St
John, UTAR etc.
In overseas, SalvationArmy, Oxfam, Greenpeace etc.
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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
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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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NONTRADITIONAL MARKETING
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Principles of Marketing: Introduction and definition
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i)CREATIVITYAND 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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ii) FROM TRANSACTION-BASED MARKETING
TORELATIONSHIPMARKETING
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
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iii)TECHNOLOGYREVOLUTION IN MARKETING
Internet sales in Malaysia (purchase of goods and services and bill payments to reachUS$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 IDCs Skypad 2008 Study, Malaysia ranks with the highest in percentageof 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
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iv)COSTS AND FUNCTIONSOFMARKETING
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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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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Jobs forMarketing
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 clientsKey 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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Jobs forMarketing
Middle Level(approximately 2 7 years experience)
Brand manager
Product manager
Key account manager
Product group managerMerchandising Manager
Sales / Business manager
Account Manager
Media Manager
(RM3 6k)
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Jobs forMarketing
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 directorCreative director
Regional manager
Regional director
Consumer Banking Director
(RM6 15k .)
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Good luck,
study hard and you
will enjoy
marketing!