CHAPTER 1

INTRODUCTION - WHAT IS MARKETING ABOUT?

CHAPTLR OB]LCTIVLS
1. To exIuIn wIy murketIng exIsts In u modern socIety.
2. To demonstrute tIe roIe oI murketIng In u modern socIety.
3. To Introduce u number oI key murketIng Ideus tIut wIII be consIdered
In greuter detI In Iuter cIuters oI tIe book.
CHAPTLR SUMMARY
This chapter can be used by tutors as a scene setter to introduce the
subject of marketing to any students undertaking the subject for the first
time. It presents some of the key concepts in marketing and how
marketing itself has come to exist in modern society. It is divided into a
series of short sections beginning with a simple example to demonstrate
the complexities involved in supplying goods in highly developed
economies.
ANNOTATLD ILCTURL OUTIINL
PoInt 1 - IntroductIon
In sImIe terms, tIe sub]ect oI murketIng Is concerned wItI Iow IIrms
decIde wIut tIey sIouId oIIer to muke und seII und wIut Iorm tIeIr
roducts goods or servIces) sIouId tuke. However, In reuIIty tIe unswer to
tIese Issues Is deendent uon u number oI comIex Iuctors.
Point 2 - The factors that influence demand for a product.
The demand for most products is affected by a number of factors:
population, tastes and fashions, economic conditions, technology and
politics and regulations. Demand is usually affected by the combined
effects of these factors as well as second order effects i.e. the effect on
organisations far removed from the consumer.
Point 3 - The factors that influence the way a product is produced.
The factors identified in Point 2 have an impact here also and as a result
both the market and supplying organizations will change over time. The
foregoing can also be applied to the theory of supply and demand in
organizational markets as opposed to consumer ones.
Point 4
As a result of this change, organizations can respond in one of three ways,
they can become production, sales or marketing orientated. Most
organizations today are committed to the latter i.e. putting the interests of
the customer first. However, in practice this is not always as easy as it
sounds:-
1. it is not always clear what customers interests are;
2. customer perceptions of their wants can be limited;
3. organizations are made up of bundles of assets into which
considerable investment has been made;
4. most organisations face competition in some form.
Point 5 - The problem of establishing customer needs and wants.
The bedrock of any marketing effort is to establish customer needs and
wants, however, many customers do not know what they need or want.
Perceptions of their future wants are also very poor as is their ability to
predict the uses to which they may put new technologies. The essential
thing is to pay attention to what customers do and then try to understand
the want they are satisfying through that action.
Point 6 - The firms investment in its assets.
A very real issue faced by all organisations is that of matching an
organizations capabilities with the needs of the marketplace. The
challenge for all marketers is to strike a balance between the apparent
advantage of adapting to market developments and the need to exploit as
fully as possible investments made in the firms asset base i.e. asset based
marketing. This can then lead into a discussion of the difficulties of
balancing costs and prices.
Point 7 - The difference between needs and wants.
One key marketing problem is how to distinguish between needs and
wants i.e. one persons want is another persons need. In addition, some
needs are satisfied by the State as a public good e.g. police ambulance,
and fire services.
Point 8 - Conclusion
What then is marketing? It is the exchange process that occurs between
individuals; between an organization and individuals; or between
organizations as they seek to satisfy their needs and wants. However not
all suppliers or customers are equally attractive - in marketing a supplier
should determine which customers they prefer to deal with. Marketing
managements function is to ensure that the organization identifies,
anticipates, and satisfies customers wants profitably. In the future
organizations must not become distracted from the central notion of being
customer focused i.e. the driving force of business is to create a satisfied
customer.
Answers to the discussion questions:-
1. This question is useful to get students to consider the notion of
exchange. It would then be a good idea to ask students to identify
some fundamental features of modern lifestyles e.g. the speed at which
we live, the growth in the use of technology, the level and diversity of
consumption of goods and services etc., etc., and how complex
exchanges have grown from this.
2. This question should stimulate an interesting debate about the role and
importance of marketing versus more obviously productive
departments like sales, production, and distribution! The discussion
can include why organisations need to be customer focused in order to
survive rather than production or sales orientated. Students could be
encouraged to sight examples of organisations they consider to be
good at marketing themselves and why, and those that are not and
what has happened to them.
3. This should open up healthy discussion about mass produced goods at
low prices versus demand for more tailor made products with high
levels of customer service. The answer to this lies in the factors that
influence demand for a product as well as the needs of the
organisation. Discussion will also inevitably focus on production
versus marketing orientation.

4. The lessons referred to here are covered in Section 6. This question is
designed to make students realise that successful products are not
always obvious and do not necessarily come from readily identifiable
consumers needs and wants. Essentially, organisations should ignore
what customers say but more importantly look at what customers do
and understand the want that is being satisfied.
5. Many changes in fashion are not predictable, certainly not in the long
term. (Your students should be able to give many examples of this.)
However, they should be manageable, and discussion here should be
around the ability of marketers to be proactive rather than reactive.
6. Any product or service could be used here to promote discussion of
what factors influence demand (population, taste and fashions,
economic conditions, technology, politics and regulations) The
importance of the factors will vary depending upon the product or
service being offered.
7. The essence of this question lies in the fact that marketing does not
deal with exchanges of all types of needs and wants. The exchange is
often a qualified one and not all exchanges are necessarily desirable
from the suppliers point of view. It is important that suppliers identify
who they wish to enter an exchange with.
8. Here the inference is that these managers may be more product
orientated than marketing orientated. Discussion therefore should
revolve around the merits of being marketing orientated and
specifically customer-orientated i.e. ensuring that they understand and
meet the needs of the customer rather than focusing on the latest
technological development per se.
Suggested activities:
1. In groups, collect examples e.g. press cuttings of how one or more of
the five factors identified in the Chapter (population; tastes and
fashions; economic conditions; technology; and politics and
regulations) have affected the demand for a product(s) and also outline
the possible second order effects. Present your findings to the other
groups.
2. For an organization of your choice, prepare a report that details how it
has changed its product offering over time in response to various
changes in market demand. (See Fig. 1.3. pp 10)
In grous, druw u u IIst oI orgunIzutIons Irom us muny dIIIerent murkets
us ossIbIe, e.g. consumer, busIness to busIness, servIce, etc. und try to
decIde u) wIut customer needs), und b) wIut orgunIzutIonuI needs) tIey
ure sutIsIyIng.