Part IV: Marketing According to Theodore Levitt, Harvard Business School professor, the

purpose of all business is to “find and keep customers”. Marketing is

Learning Objectives: instrumental in helping business to achieve this purpose. Therefore, it is
At the end of this lecture, the students should be able to:
much more than just advertising and selling stuff and collecting money.
 Define marketing;
Marketing generates value by creating the connections between people and
 Analyze the role of marketing function in a business;
products and/or services, customers, companies.
 Examine the market segmentation and its information;
 Identify the concepts in marketing;
 Describe the marketing mix.

What is marketing?
Defined by the American Marketing Association (AMA), marketing is 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.

In contemporary view, marketing is the process of planning and executing

the conception, pricing, promotion, and distribution of ideas, goods, and
services to create exchanges that satisfy the needs and wants of the
consumers and in the achievement of the goals and objectives of a firm.

The concept of exchange means that people give up something in order

Marketing and Other Business Activities
to receive something that they would rather have. There are five conditions
Marketing encompasses different activities. It covers an entire spectrum of
for an exchange takes place:
techniques focused on identifying, satisfying, and retaining customers.
1. There must be at least two parties.
However, most of us are confuse in the concept of marketing, including:
2. Each party must have something the other party values.
3. Each party must be able to communicate with the other party
Concept 1: Marketing is advertising.
and deliver the products and/or services sought by the other
Advertising uses paid notices in different forms of media to draw
party.
public attention to a company, product, or message for the purpose
4. Each party must be free to accept or reject the other’s offer.
of selling products and/or services. However, advertising is only one
5. Each party must want to deal with other party.
of techniques used for marketing to achieve the goals and
objectives of a firm.
The Role of Marketing
In business, the function of marketing is to bring value to customers, whom
Concept 2: Marketing is branding.
they seeks to identify, satisfy, and retain. Therefore, the role of marketing
Branding is the process of “creating a unique name and image for
in a business can be seen on the figure below.
a product in the customer’s mind.” However, branding is one of the
important strategic consideration in any marketing activities done
 by businesses. Therefore, marketing activities and processes build Demographic qualities of customers can be easily identified including their
brand. age, household composition, and state in the life cycle. Even the education
and income are frequently used in segmentation studies as it shape
consumer preferences and facilitate certain consumer choices.
Concept 3: Marketing is sales.
Sales refers to the process of actual selling products and/or Many more demographic variables have been used in segmenting markets
services, leading up to an exchange of value. While marketing and as it has the potential to the relevance of a certain product category. While
sales are intertwined, the scope of marketing is broader than demographics have an advantage of being clear and easy to recognize, it
supporting sales. Marketing helps salespeople to identify prospect is sometimes border on being simplistic stereotyping. Therefore, marketers
and prepare them to enter the sales process that leads to sales must seek demographic qualities that could be use as the segmenting
leads. variable.

Geographic Segmentation
The central aim of marketing is to help businesses understand and respond Geographic distinctions among customers have also been used to segment
to customer needs and met their expectations. When business people markets. Given that there is country and cultural differences that could
employ marketing correctly, this function will be easier to take steps to influence the decision-making of consumers. When geographic and
know more about the characteristics, interests, and behavior of their demographic information are combined, the segmentation can be smarter.
customers over the changes in a certain time period.
Psychographic/Attitude Segmentation
It would be ideal to get inside the heads and hearts of our customers.
Market Segmentation
Psychological traits and lifestyle choices would be more useful to marketers
Market segmentation refers to aggregating prospects into market segment that is relevant to the brand.
with common needs and who respond similarly to marketing action. It
enables marketers and companies to target certain segments who perceive Behavioral Segmentation
value of certain offering. Market segment is a group of customers who Beyond attitudes, psychographics, and lifestyles, marketers would like to
share similar inclinations toward a brand. know what customers purchase. Behaviors are important as it tells
marketers something about who are the customers.
Every market strategy begins with market segmentation as it helps
marketers to minimize risks and develop the best ways to deliver the However, it is more challenging to identify, obtain information, and woo
offerings in the market. Additionally, it also allows marketers and customers who are currently using a certain brand or who aren’t even
companies to increase its overall efficiency by focusing in the limited purchasers in the product category. Thus, these behavioral qualities are
resources that produce return on investment (ROI). worth knowing as it provides a good segmentation schemes.

What information serves as bases for segmentation?

All kinds of information about customers have been used to segment
markets. There are four bases for segmentation that marketers
considered, to discuss:

Demographic Segmentation
Some product attributes are constructed differently, other times the
product formulations are identical, but differs in the marketing appeals
through the customers attributes.
Segmenting Consumers Segmenting Businesses with what customers actually want that leaves them vulnerable to
customer-oriented businesses.
Age, gender, income and
Company size, account
education, number of kids, DEMOGRAPHIC size, industry, industry B. The Sales Concept
marital status, household growth rate
lifecycle Businesses follow a sales orientation in which they emphasize the
sales process and try to make it as effective as possible. They
Country, area, climate,
Country, sales force assume that a good salesperson with the right tools and incentives
coverage, urban or rural,
market size, cultural GEOGRAPHIC is capable of selling almost anything. This may focus on the selling
proximity to suppliers
sensitiveness
process that ignore the customer view as they sell what they make,
which isn’t necessarily what customers want.
Awareness, involvement, Country, sales force
attributes sought, price ATTITUDE coverage, urban or rural, C. The Marketing Concept
sensitivity, risk tolerance, proximity to suppliers
traits A business adopt this concept when it takes steps to know as much
about the customers as possible, coupled with a decision to base
Type of firm: marketing, product, and even strategic decisions on this
manufacturer (value information.
Media, loyalty, frequency, efficiency), retailer
BEHAVIORAL (values aesthetics),
co-purchases, affiliations
government Businesses start with the customers’ needs and work backward
(conservative, big, slow
from customer base to create value. They operate on the
to pay)
assumption that success depends on doing better than competitors
at understanding, creating, delivering, and communicating value to
The Concepts in Marketing their target customers.
The following are the concepts in marketing that has been used by many
businesses, from product-focused concept to customer-oriented concept. How Businesses Use Marketing
To discuss: An important distinction on how businesses use marketing is whether their
efforts target business-to-consumer (B2C) transactions or business-to-
A. The Product Concept business (B2B) transactions.
Historically, businesses do not follow the marketing concept. They
tend to follow a product orientation, in which the primary focus of First, in business and marketing, what is the difference between consumer
a business is technology and innovation. They are heavily invested and customer?
in building and showcasing impressive features and product  Consumer is the individual who actually uses the product.
advancements.  Customer is the individual who buys the product from a business.

Rather than focusing on a deep understanding of customers, these In marketing, this distinction is important as it helps marketers better
businesses assume that a technically superior or less expensive understand where to focus their attention. B2C marketers focus their
product will sell itself. However, there is high risk of losing touch marketing efforts on consumers, the individual who consumed a finished
products, while B2B marketers sell to other business or institutions that
consume the product as part of operating the business or use the product
in the assembling the finished product they sell to their consumers.

The Marketing Mix

The tool that marketers use to create and deliver values for their
consumers. To discuss:

A. Product
It means the solution to the problem of the consumers to address
their needs and wants. Products should have a unique set of
features, design, name, and brand that are focused on a target
market. These characteristics should be different from the
competitor’s products to sustain its competitive advantage. C. Place
It refers to the location and distribution of the products. In today’s
landscape, the “place” could be a traditional brick-and-mortar store
and an online store.

B. Price
It refers to the cost of the product to be paid by the target market.
This requires the business to analyze the product’s value from what
the target market is willing to pay, what competitors are charging,
and what the price means to the target market. D. Promotion
It refers to the communications that occur between the company
and the target market. It includes both the message sent by the
company and messages that target market send to the public about
their experience.
 Place Convenience In today’s era, consumers don’t have to
go to a particular location to satisfy a
want or need. Therefore, marketers
should know how the target market
prefers to buy and how to be there, in
order to provide convenience of buying.

Convenience takes into account the

ease of buying the product, finding the
product, finding information about the
product, and other factors.
Promotion Communication Communications include advertising,
public relations, personal selling,
In today’s landscape, this categorization continues to be useful in advertising, and any form of
understanding the basic activities associated with marketing. This mix communication between the business
represents the way a business’ marketing strategies are translated into and the target market.
marketing programs for action.

However, over time, more customer-oriented concepts attempt to better

fit the movement toward a marketing orientation and a greater emphasis
on customer value. One of these concepts is proposed by Robert F.
Lauterborn in 1990.

4Cs in Marketing
The 4Cs include a greater focus on the customers. Lauterborn enable to
think that this 4Cs not only focus on marketing mix for product, but also
for services. To discuss:

Four Ps Four Cs Definition

Product Consumer A business will only sell what the
Solution consumer specifically needs or wants to
buy. Therefore, marketers should
understand consumer wants and needs
in order to attract them one by one.
Price Cost Price is only a part of the total cost to
satisfy a want or need.