INTRODUCTION TO MARKETING
Marketing literature development
In the establishment and growth of a firm, addressing economic, technical, and management challenges is crucial, with production and distribution being the most significant concerns While production has traditionally been the focal point of business operations, the importance of distribution has surged in recent years, often becoming a critical factor for success As a result, companies and managers are increasingly prioritizing strategies to enhance the distribution of their products and services to effectively reach their customers.
In the mid-17th century, Japanese and Chinese businessmen distilled their practical experiences into five key principles for success: (i) ensure product quality, (ii) prioritize customer satisfaction, (iii) uphold customers' right to purchase, (iv) offer replacements or refunds for unsatisfied customers, and (v) meticulously track sales to identify top-selling products These foundational experiences and sales techniques laid the groundwork for the development of modern marketing theory.
By the end of the 19 th century, beginning of
20 th century, with the development of science and marketing is to best satisfy customers’ needs and wants
Marketing aims to create value for customers while capturing value in return This involves understanding customer needs, designing effective marketing strategies, and implementing integrated marketing programs Additionally, building strong customer relationships is essential for capturing value for the firm Marketing principles have been widely taught globally throughout the century.
Emerging in the 20th century, marketing has evolved significantly, encompassing a wide range of theories, business concepts, and practical applications This evolution can be categorized into two primary stages: classic marketing theory and modern marketing theory.
Classic marketing theory, emerging in the early 20th century in the United States, reflects a time when the demand-supply relationship exerted minimal pressure on product and service distribution due to the close proximity of production and consumption During this period, market competition was limited, with monopolies and oligopolies dominating many sectors, favoring producers Consequently, sellers held a prominent role in market dynamics, leading to the concept of a "Market of sellers."
Marketing activities have evolved from basic goods distribution by producers to more complex strategies aimed at exploring new markets and enhancing sales Key tactics now include advertising, promotions, and leveraging technological advancements As businesses navigate challenges related to supply and demand and increased competition, finding efficient solutions to streamline the distribution of goods and services has become essential.
In the process of seeking solutions to speed up the distribution, attracting customers and strengthening the market competitiveness, a scientific subject which was gradually found and that is marketing
The term “Marketing” first appeared in a lecture of “Product Marketing” in 1905 by Dr W.E.Krensi of
Pensylvania University (United States of America)
From its official introduction in California University and other institutions until 1915, marketing education has significantly evolved, prompting numerous businesses to adopt marketing strategies Over the years, the subject's concepts and philosophies have been refined, enhancing its effectiveness in driving business success By 1937, this evolution continued to shape the landscape of marketing practices.
American Marketing Association was established, a real contribution to the development of marketing in terms of both practical and theoretical aspects.
After the Second World War, marketing had spread to many countries worldwide Some Socialist countries such as Poland, Rumania, Hungary, German Democratic
Since the 1960s, economic colleges in the Republic have incorporated marketing into their curricula, reflecting significant shifts in market dynamics By the end of the 20th century, the transition from a seller's market to a buyer's market necessitated a reevaluation of traditional marketing practices Classic marketing strategies proved insufficient, prompting businesses to adapt their approaches This evolution led to the emergence of modern marketing theory, which represents both a continuation and a transformative shift in the business landscape.
Modern marketing extends beyond traditional market seeking and salesmanship, encompassing the entire product lifecycle—from pre-production to post-sale services It now integrates crucial business stages: production, distribution, and consumption This comprehensive approach enables businesses to effectively address two fundamental questions: "What to produce?" and "How to distribute products to end customers?"
Modern marketing emphasizes the importance of research and prioritizes customer satisfaction at the core of all activities It views salesmanship as merely one aspect of marketing, contrasting with traditional perspectives that equate marketing solely with selling products and services The American Marketing Association has defined marketing as the activities involved in distributing final products and services from manufacturers to end consumers.
Classic marketing theory suggests that businesses should focus on selling what they already have, rather than conducting market demand research or finding ways to meet customer needs In this approach, customers are not prioritized in marketing research and activities.
In practice, classic marketing theory limited its activities only to goods and service trading, not yet developed in to other domains of the social life.
Following World War II, the rapid advancements in science and technology, along with other influencing factors, led to a swift evolution of the commodity market, resulting in an oversupply and market saturation.
Distribution and sales have become critical concerns for businesses as competition intensifies Governments are now implementing anti-monopoly laws and effective solutions to promote fair market practices Additionally, various socioeconomic issues, including economic crises, are further complicating the landscape.
At the core of marketing lies the fundamental concept of human needs, which are essential for survival As societies evolve, these natural needs become increasingly complex and diverse According to Kotler and Armstrong (1980), human needs can be defined as "states of deprivation," highlighting the importance of addressing these needs in effective marketing strategies.
Thus, the needs of human being exists objectively; coming from the instinct sense of shortage which then call for the needs to fulfill these shortages to achieve satisfaction.
Human needs are inherent and cannot be influenced by marketing efforts; marketers cannot alter these fundamental needs For instance, hunger triggers the desire for food and drink, while feeling cold creates a need for warmth Similarly, a lack of knowledge leads to a natural inclination towards learning and education.
Basic concepts of marketing
To understand the marketing term in the most profound manner we need to study a series of related concepts as following.
Understanding the wants of individuals or groups is crucial in business, as it mirrors their specific needs By identifying these wants, companies can tailor their marketing strategies to better align with their target audience, ultimately enhancing production efficiency and market adaptation.
Understanding customer needs involves recognizing products that fulfill those requirements By gaining insights into customers' wants, companies can identify the specific attributes and characteristics necessary to address these needs effectively For example, the general need for transportation can be refined into the desire to own a motorbike, which includes measurable features like size, design, color, and brand.
Human desires are vast and varied, influenced by a range of subjective and objective factors within the social environment As a result, identifying these wants is not overly challenging; companies simply require thorough and precise research to uncover them effectively.
Wants exist in a latent state and can transform over time, often without individuals being fully aware of them It is the responsibility of businesses to identify and stimulate these wants through effective marketing strategies For instance, insurance consultants work to create a desire for their products among the public In a monopolistic market, businesses can dictate what products, such as food and drinks, customers must accept However, as competition intensifies, aggressively imposing products on consumers can be detrimental; businesses must now adopt innovative solutions to enhance their competitive edge.
Thus, research on human natural need is only a starting point of marketing Marketers need a more concrete way of need expression and that is want.
Kotler and Armstrong (2016) defined human wants as the form taken by human needs as they are shaped by culture and individual personality.
Wants are shaped by cultural characteristics, conscious knowledge, and consumption customs, reflecting the objects that satisfy our needs For instance, a hungry individual in Vietnam may desire rice, while someone in Europe may prefer bread As human wants evolve with exposure to various stimuli, producers strive to offer products and services that fulfill these desires Market research plays a crucial role in understanding customer needs, determining essential product specifications, and identifying appropriate pricing As society and markets develop, these factors continuously shift in response to changing customer needs, wants, income, and purchasing power.
From a marketing perspective, market offerings encompass anything that fulfills customer needs and desires This concept extends beyond tangible products like cars and televisions to include intangible services, such as activities, ideas, or administrative support, which do not confer ownership Thus, market offerings can be viewed as a means to satisfy consumer demands effectively.
“means to make up demands”.
The ability to meet the diverse needs and wants of products varies significantly, making it a key goal for businesses striving for market acceptance of their offerings Customer satisfaction can be categorized into three levels, reflecting the dynamic nature of consumer preferences, which can shift with trends or specific events Consequently, companies aim to influence these evolving desires to align with their strategic interests.
Human desires are infinite, prompting companies to continually explore ways to fulfill them profitably However, individual financial resources are finite, necessitating a balance between corporate benefits and consumer purchasing power Therefore, it is essential to focus on wants that align with consumers' ability to buy.
That is demand on market.
Demands are human wants that are backed by buying power (Kotler and Armstrong, 2016)
When purchasing a product, consumers are influenced by their needs, represented by demand, and their financial resources Demand reflects a desire for a product at a specific price point Businesses must balance production costs with pricing to avoid exceeding what target customers can afford Therefore, it is essential for companies to ensure their products fulfill both the needs and financial capabilities of their customers.
Therefore, to ensure business success, companies must answer a series of questions when making their
- Each party must recognize that he should do or - want to take transaction with another.
An exchange occurs when both parties agree on favorable conditions, ensuring that neither side experiences harm This process involves negotiation, leading to mutual agreements that facilitate the exchange.
A transaction is a commercial exchange of valuable items between two parties, typically involving a transfer Unlike a transfer, which may not yield a similar item in return, transactions require specific conditions to be met Examples of non-transactional transfers include sponsorships, charitable donations, and gifts, highlighting the fundamental differences between these two concepts.
- There are at least two valuable articles;-
- Conditions for transaction have been negotiated;-
- Time and place for implementation have been - negotiated.
Markets are often perceived differently by individuals, but fundamentally, a market can be defined as the collective group of all current and prospective buyers for a specific product or service, rooted in the concepts of exchange and transaction.
Figure 1.1: Levels of customers’ satisfaction for market offerings 1.2.5 Exchange
To satisfy a need, there are many ways: self- supplying, using of others, begging, and exchanging
Marketing activity appears only when people seek ways to satisfy needs via exchanging Exchange is the process of obtaining a desired product from someone by offering something in return.
Exchanging is a concept that creates a foundation for marketing science For voluntary exchange, the five following conditions need to be met.
- There are at least two parties;-
- Each party should have a certain valuable thing to - the other party;
- Each party has ability for transaction and hands - over what he has to another;
- Each party has the free right to accept or refuse - suggestions from another;
“ marketing as the management process which is responsible for identifying, anticipating, and satisfying customer requirements profitably ”.
Various researchers and academics have proposed numerous definitions of marketing; however, the core concept remains consistent across all interpretations To achieve business objectives and outperform competitors, companies must concentrate on tailoring their solutions to effectively meet the needs and desires of their customers.
Marketing management
Marketing management, as defined by the American Marketing Association (2004), involves the strategic planning and execution of the conception, pricing, promotion, and distribution of ideas, goods, and services Its primary goal is to facilitate exchanges that meet the needs of both individuals and organizations This discipline combines the art and science of selecting target markets and fostering profitable relationships with them.
Marketing management involves executing strategies to facilitate successful exchanges with target markets A guiding philosophy for these marketing efforts is essential, particularly in balancing the interests of the organization, customers, and society, which often conflict Understanding this dynamic is crucial for effective marketing management.
Market scale is determined by the number of customers interested in a specific product When conducting market research, businesses focus on individuals with similar needs and desires who are capable of engaging in the exchange process For example, the target market for Hanoi Beer Company consists of consumers who wish to drink Hanoi Beer and are able to participate in purchasing this product.
Marketing, as defined by Kotler and Armstrong (1980), is a human activity aimed at fulfilling needs and wants through an exchange process This involves sellers identifying buyer demand, creating suitable products, and launching them into the market The ultimate goal of these exchanges is to generate profit, which is essential for a company's survival.
Satisfying human needs and wants is a complex process that requires identifying customer requirements for products or services and finding effective solutions to meet those needs This process demands careful management and planning to ensure success Recognizing this importance, Chartered established key strategies in 2001 to enhance customer satisfaction.
Institute of Marketing (United Kingdom) has re-defined offer the most quality, performance and innovative features, and that an organization should thus devote energy to making continuous product improvements.
A product-oriented approach can result in an overemphasis on technology, as managers often equate technical superiority with business success This mindset may lead to "marketing myopia," where companies fail to recognize broader consumer needs For example, railway management focused on improving trains rather than understanding that customers sought transportation options By ignoring the rise of airlines, buses, trucks, and cars, they missed the opportunity to diversify and enhance transportation choices for consumers.
Many organizations adopt the selling concept, which suggests that consumers are unlikely to purchase products without significant selling and promotional efforts This approach is particularly effective for unsought goods—items that consumers typically do not consider purchasing, such as encyclopedias and funeral plots Industries focusing on these products must excel at identifying potential customers and demonstrating the benefits of their offerings Additionally, the selling concept is also utilized in the nonprofit sector.
Many companies adopt the selling concept during periods of overcapacity, focusing on selling their existing products rather than understanding customer needs Marketing management orientation significantly shapes how businesses engage with their customers Organizations typically operate under five key marketing concepts: production, product, selling, marketing, and societal marketing.
The production concept suggests that consumers favor products that are easily accessible and affordable, prompting management to prioritize enhancements in production and distribution efficiency This philosophy is one of the oldest guiding principles for sellers in the market.
The production concept is a valuable approach in two key scenarios: when product demand surpasses supply, necessitating increased production, and when high costs require enhanced productivity to reduce expenses However, companies that prioritize this philosophy risk becoming overly focused on their internal operations In their pursuit of lower prices, they may overlook critical customer desires such as quality, design, and brand reputation.
The product concept suggests that consumers prioritize the product itself, regardless of the buyer or the reasons behind the purchase In contrast, the marketing concept adopts an outside-in approach, beginning with a clearly defined market and emphasizing customer needs It integrates all marketing activities to enhance customer satisfaction and aims to build long-term relationships based on value By aligning production with consumer desires, companies can effectively meet customer demands and achieve profitability.
Many successful and well-known global companies have adopted the marketing concept such as IKEA, Marks
& Spencer, Procter & Gamble, Marriott, Nordstrom and McDonald’s.
The societal marketing concept emphasizes that organizations must identify the needs, wants, and interests of their target markets By doing so, they can provide desired satisfactions more effectively and efficiently than competitors, all while ensuring the well-being of both consumers and society as a whole.
The societal marketing concept represents the latest evolution in marketing management philosophies, challenging the adequacy of traditional marketing approaches in light of pressing environmental issues, resource shortages, and social service neglect It emphasizes the importance of understanding customer needs over merely pushing products through hard selling, which often prioritizes short-term sales over the establishment of lasting, profitable customer relationships This concept highlights the risks associated with assuming that customers will continue to repurchase products they were initially coaxed into buying, as research indicates that dissatisfied customers are unlikely to return Furthermore, satisfied customers tend to share positive experiences with three others, while dissatisfied customers often spread negative feedback to ten, underscoring the critical need for businesses to prioritize customer satisfaction.
The marketing concept emphasizes that organizational success relies on understanding and fulfilling the needs and wants of target markets, while providing superior satisfaction compared to competitors Remarkably, this philosophy is a relatively recent development in the business world.
The selling concept and the marketing concept are often misunderstood The selling concept adopts an inside-out approach, beginning with the factory and emphasizing the company's current products It relies heavily on aggressive selling and promotion strategies to achieve profitable sales, prioritizing short-term customer acquisition over long-term relationships.
Marketing plays an important role in strategic planning