MKTG1001 · Marketing Principles
What Marketing Is & Creating Value
What Marketing Is & Creating Value reframes marketing as the work of creating, communicating, delivering and exchanging value — not just advertising or selling. The anchor ideas are the distinction between needs, wants and demand; that value = benefits − costs and the customer (not the firm) decides it; the simple five-step marketing process; and the marketing mix (4 Ps, plus the extra 3 Ps for services).
Week 1 sits in the mid-semester scope rather than the final, but it is the foundation the whole unit and major build on. It is examined mostly through precise MCQ vocabulary (need vs want vs demand; create vs communicate value) and short-answer definitions, so the marks come from a clean own-words definition of marketing and value plus the ability to name the five process steps and the 4 Ps from memory.
What this chapter covers
- 01Marketing = create, communicate, deliver and exchange offerings of value (NOT just advertising or selling)
- 02Need (felt deprivation) vs want (need shaped by culture/personality) vs demand (want backed by buying power)
- 03Value = benefits − costs; costs include price, time, effort and process; the firm sets price, the customer decides value
- 04The 5-step marketing process: understand the market → design a value-driven strategy → build the marketing program → engage & build relationships → capture value
- 05The marketing mix (4 Ps): product, price, promotion, place — the controllable toolbox
- 06Create value (product, price) vs communicate & deliver value (promotion, place)
- 07Services add 3 Ps: people, process, physical evidence (the 7 Ps)
Define marketing and place a benefit as value (short-answer)
- 2 marksDefine marketing. Marketing is the process of creating, communicating, delivering and exchanging offerings that have value for customers — it identifies what customers value and builds an offer to deliver it; advertising and selling are only the downstream 'communicate' step inside that larger job.
- 2 marksSeparate benefits from costs. 'No shopping' and 'dinner in 20 minutes' are benefits (they save effort and time); 'less stress' is an emotional benefit. The price of the kit, and the time/effort still needed to cook, are the costs. Value = benefits − costs.
- 2 marksState who decides value. The firm sets the price, but the customer determines the value by weighing those benefits against the costs and against alternatives (cooking from scratch, takeaway). A high price only works if the customer perceives matching value.
Key terms
- Marketing
- The activity, set of institutions and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners and society. It is fundamentally about satisfying needs and wants, not merely advertising or selling.
- Need vs want vs demand
- A need is a basic state of felt deprivation; a want is a need shaped by culture and personality (the specific form it takes); a demand is a want backed by buying power. Marketers shape wants and serve demand but do not create needs.
- Value
- The customer's perception of what an offering is worth versus the alternatives. Value = benefits − costs, where costs include price, time, effort and the steps of the process. The firm sets the price; the customer determines the value.
- The marketing process (5 steps)
- Understand the marketplace and customer needs → design a customer-value-driven marketing strategy → construct an integrated marketing program (the mix) that delivers superior value → engage customers and build profitable relationships → capture value from customers in return (profit and customer equity).
- Marketing mix (4 Ps / 7 Ps)
- The controllable strategic toolbox: product, price, promotion and place. Product and price create value; promotion and place communicate and deliver it. Services add people, process and physical evidence (the 7 Ps).
What Marketing Is & Creating Value FAQ
Why is marketing not the same as advertising or selling?
Advertising and selling are downstream tactics — promoting and pushing something already made. Marketing is the whole job of working out what value customers want and building an offer that delivers it: it starts from customer needs, not from the product. Advertising is just the 'communicate value' step (one P, promotion) inside the larger five-step marketing process.
Who decides a product's value — the firm or the customer?
The customer. The course rule is that the firm sets the price, but the customer determines the value by comparing benefits minus costs against the alternatives available to them. That is why marketing starts from customer perception, not from cost: a high price only 'works' if the customer perceives matching value.
What is the difference between a need, a want and a demand?
A need is a basic state of felt deprivation (hunger). A want is that need shaped by culture and personality into a specific form (a particular cuisine or brand). A demand is a want backed by buying power — a want you can actually pay for. Marketers do not create needs; they shape wants and aim to convert them into demand.
Which of the 4 Ps create value and which deliver it?
Product and price create value (they are what the customer gets and what they give up), while promotion and place communicate and deliver that value (they get the message out and make the offer available). For services you add three more Ps — people, process and physical evidence — because the service experience is co-produced with the customer.
Exam move
Memorise three things cold: the own-words definition of marketing (create, communicate, deliver and exchange value), the need/want/demand ladder, and the five process steps in order. Practise the price-vs-value sentence until it is automatic, and be ready to sort any benefit or cost into the value = benefits − costs equation for a named customer. Finally, learn the 4 Ps split (product+price create value, promotion+place deliver it) and the extra 3 Ps for services, since MCQs love testing which P does which job.
