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10 Marketing: the Basics
parties. Finally, marketing managers are managers. They have face-to-face contact with other members of the organization; they oversee projects and rely on their personal values to help them through ethically difficult situations. Even when the job is simplified, a marketing manager needs to wear many hats.
THE FUNDAMENTAL PRINCIPLES OF MARKETING
In every subject, there are fundamental axioms that underlie its theoretical foundation. In economics, for example, it is assumed that all actors are rational beings, have access to the same set of information and seek to maximize their utility. Being a subset of economics, it’s no surprise that many of the fundamental assumptions of economics also apply to marketing, however we don’t assume that information is uniformly distributed. We do assume that actors in this world are rational, but they might not make the same decision given the same set of circumstances, because – and this is our third assumption – there is an abundance of choice.
The fundamental principle underlying marketing theory is that throughout the course of a day, humans instinctually seek to satisfy their intrinsic needs. These needs can be classified into three groups: physical, social or individual. Physical needs include food, shelter and security. Social needs include a desire for companionship or acceptance within a group. Finally, self-expression and desire for knowledge are types of individual needs.
To satisfy these needs, humans must consume. Though the desire to satisfy unmet needs is instinctual, the items or actions chosen to satisfy those needs are not motivated by carnal impulses. On the contrary, the choices a person makes, called wants, are influenced by cultural and personal experiences. For example, if you live in East Asia, eating rice for breakfast is commonplace. In Western Europe and North America, however, a typical breakfast entails eating a grain or corn-based cereal. Since humans have the same needs but different wants, it opens up the possibility for many products to exist.
But how does a company determine the extent of the variation? The process is called market segmentation, a process which entails