MKB1700 · Fundamentals Of Marketing
Marketing Foundations
Marketing is not selling or advertising — it is the whole set of activities a business uses to create, communicate, deliver and exchange things of value. Foundations sets up the one question the rest of MKB1700 keeps answering: how do we create value a customer will exchange for? You meet the marketing concept (marketing as a way of running the firm, not a department), the five orientations firms can adopt (production, product, selling, marketing, societal), and the value equation — value is what a customer gets (functional, experiential and symbolic benefits) minus what they give up (cost / sacrifice). Smith & Colgate's four value types are the spine that returns in Product, Price and buyer involvement. The chapter closes with exchange and the Triple Bottom Line, and the chain of needs → wants → demands beneath Maslow's hierarchy. For the concept map, these are big, near-the-centre nodes almost everything else links back to.
What this chapter covers
- 011.1 Marketing as a philosophy, not a department
- 021.2 The five orientations (production → societal)
- 031.3 Exchange — restricted, generalised, complex
- 041.4 The Triple Bottom Line (people, planet, profit)
- 05Customer value — the four types (Smith & Colgate)
- 061.5 Needs → wants → demands, and satisfaction
- 071.6 Maslow's hierarchy of needs
Worked example: needs, wants & demands, and the value type behind a buy
- +1(a) Need: a state of felt deprivation — the student is hungry (a physiological need that pre-exists; marketers do not create it).
- +1(a) Want & demand: the want is the specific form — a GYG burrito (shaped by culture and taste); the demand is that want backed by buying power — $15 they will spend on it.
- +1(b) Value type: mainly functional / instrumental value (it satisfies hunger reliably), with some experiential value (taste, ritual).
- +1(b) Cost / sacrifice: not just the $15 price — also the time queuing and any health trade-off; the fourth value type bundles economic, psychological and time costs.
- +1(c) Orientation: starting from the customer's need (not the product the firm already makes) is the marketing orientation — the marketing concept itself.
Key terms
- The marketing concept
- The philosophy that a firm succeeds by starting from customer needs and delivering value better than rivals — marketing as a way of running the whole business, not a function bolted on at the end.
- Customer value
- What a customer gets (functional, experiential and symbolic benefits) relative to what they give up (cost / sacrifice). Smith & Colgate's four-type lens is the spine of the subject, reused in Product, Price and involvement.
- Exchange
- Obtaining a desired product from someone by offering something in return. It needs at least two parties, each with something the other values and each free to accept or reject, ending mutually better off.
- Triple Bottom Line
- Judging a firm on three bottom lines — people (social), planet (environmental) and profit (economic) — not profit alone. It reappears as a pricing objective and a planning/control measure.
- Needs, wants & demands
- A need is felt deprivation (pre-exists); a want is the specific form a need takes, shaped by culture; a demand is a want backed by buying power. Marketers shape wants, they do not create needs.
Marketing Foundations FAQ
What is the difference between a need, a want and a demand?
A need is a state of felt deprivation that pre-exists (hunger, belonging) — marketers do not create needs. A want is the specific form a need takes, shaped by culture and the individual (a particular burrito brand). A demand is a want backed by buying power and willingness to pay. The exam and oral both test this chain, so keep one worked example ready.
What are the five marketing orientations?
Production (make it cheap and available), product (keep improving quality/features), selling (push hard to shift what you made), marketing (start with customer needs and deliver value better than rivals), and societal marketing (deliver customer value and protect society's long-run wellbeing). The first three look inward; the last two look outward.
What are the four types of customer value?
Smith & Colgate (2007): functional / instrumental (it does the job), experiential / hedonic (how it makes you feel), symbolic / expressive (what it says about you), and cost / sacrifice (what you give up — price plus effort, time and risk). The fourth is the one students under-rate; cost is more than the price tag.
Is there a CLV formula to memorise in MKB1700?
No. The subject frames customer lifetime value loosely as the customer's current and future revenue stream — there is no CLV formula to compute here, so do not over-claim it in the essay or oral. Foundations is conceptual: the value equation is stated as a relationship, not an arithmetic procedure.
Exam move
Anchor everything to the value equation: value = benefits gained − sacrifices given up. Learn Smith & Colgate's four types once — functional, experiential, symbolic, cost/sacrifice — because they return in Product, Price and involvement, and reusing one node in several places with different labelled links is exactly what the concept map rewards. Keep one need–want–demand worked example you can recite, and be able to place the five orientations as a mid-level cluster hanging off 'marketing philosophy'. For the oral, practise saying why the marketing and societal orientations sit closest to the rest of your map.
