Introduction to Marketing

Concepts
Dr.Sita Mishra
 Learning Objectives
 Define marketing
 Outline the steps in the marketing
process.
 Identify the core marketplace concepts.
 Discuss the marketing management
orientations that guide marketing strategy.
 Describe the major trends and forces that
are changing the marketing landscape in
this new age of relationships.
 The New Economy
– Increased buying power.
– Greater variety of goods and services.
– Increased information.
– Enhanced shopping convenience.
– Greater opportunities to compare
product information with others.
 The New Economy
 Websites can provide companies with powerful
new information and sales channels.
 Companies can collect fuller and richer
information about markets, customers,
prospects and competitors.
 Companies can facilitate and speed up
communications among employees.
 Companies can have 2-way communication
with customers and prospects
 The New Economy
 Companies can send ads, coupons, samples,
information to targeted customers.
 Companies can customize offerings and
services to individual customers.
 The Internet can be used as a communication
channel for purchasing, training, and
recruiting.
 Companies can improve logistics and
operations for cost savings while improving
accuracy and service quality.
 What is Marketing
 Simple Definition: Marketing is managing
profitable customer relationships.
Goals:
 Attract new customers by promising
superior value.
 Keep and grow current customers by
delivering satisfaction.
The AMA managerial definition:

“Marketing is the process of planning

and executing the conception, pricing,
promotion, and distribution of ideas,
goods, and services to create
exchanges that satisfy individual and
organizational objectives.”
 Marketing Defined
 Kotler’s social definition:
“Marketing is a societal process by
which individuals and groups obtain
what they need and want through
creating, offering, and freely
exchanging products and services of
value with others.”
 Core Marketing Concepts
 Needs, wants, •Product offering and
demands brand
 Target markets •Value and satisfaction
•Exchange and
and market transactions
segmentation •Relationship and
 Marketers & networks
prospects •Market
 This is a Need


Needs - state of felt

deprivation
including physical,
social, and
individual needs.
Maslow’s Hierarchy of Needs
This is a Want

Wants – Needs
become wants
when they are
directed to
specific objects
that might satisfy
the need.
 This is Demand
Wants Buying Power

“Demand”
 Need / Want Fulfillment
 Needs and Wants
Fulfilled through a
Marketing Offer :
Some combination of
products, services,
information, or
experiences offered
to a market to satisfy
a need or want.
 What Satisfies Consumers’ Needs and Wants?

Products
nything that can be Offered to a Market to Satisfy a Need or Want


Persons Places Organizations

Information Ideas

Experiences Events Properties

Services
Activity or Benefit Offered for Sale That is Essentially
Intangible and Does Not Result in the Ownership of Anything
 Product as an idea
Products do not have
to be physical
objects.
Here the “product” is
an idea—protecting
animals.
 Core Marketing Concepts
 Target markets & segmentation
– Differences in needs, behavior,
demographics or psychographics are
used to identify segments.
– The segment served by the firm is
called the target market.
– The market offering is customized to
the needs of the target market.
Marketplace, Marketspace,Metamarkets

The Marketplace is physical, as when one

goes for shopping in a store.

Marketspace is digital, as when one goes

shopping on the internet.

Metamarket is described as a cluster of

complementary products and services that
are closely related in the minds of
consumers but are spread across a diverse
set of industries.
 Exchange & Transactions
Exchange is one of the four ways in which a
person can obtain a product. It is a core
concept of marketing. For exchange potential
to exist, five conditions must be satisfied :

 At least two participants in the process.

 Each party must offer something of value to
the other.
 Both parties must want to deal with each other.
 Both participants have the right to accept or to
reject the offer.
 Both groups must have the ability to
communicate and deliver on the mutual
agreement.
Exchange what they want &
need
 Transaction
 Transaction is a trade of values
between two or more parties.

It involves at least two things of

value, agreed-upon conditions, a
time of agreement, and a place of
agreement.
Value and Satisfaction
 How Do Consumers Choose Among
Products and Services?

Value Gained From Owning a Product and Costs of

Obtaining the Product is

Customer Value

Product’s Perceived Performance in Delivering Value

Relative to Buyer’s Expectations is

Customer Satisfaction

Total Quality Management

Involves Improving the Quality of Products, Services, and
Marketing Processes
How Do Consumers Obtain
Products and Services?

Exchanges Transactions

Relationships
Building a Marketing
Network Consisting of
The Company and All
Its Supporting
Stakeholders
 Relationship Marketing
Four key constituents for marketing are:
 Customer
 Marketing Partners ( channel, suppliers,
distributors, dealers and agencies)
 Employee
 Members of financial community (shareholders,
investors)
The development of strong relationships requires
an understanding of the capabilities and
resources of different groups, as well as their
needs, goals and desires.
 What is a Market?
 The set of actual and potential buyers
of a product.

 These people share a need or want

that can be satisfied through exchange
relationships.
 Who Purchases
Products and Services?
People Who
Exhibit Need Market –
Ethical Actual
Buyers who
Factors
Buyers
share a
Situational
Unexpected
Resources to particular
Exchange need or
want that
can be Potential
Buyers
Willingness to satisfied
Exchange through
exchange
 What is Market?
A market consists of all the potential customers sharing
a particular need or want who might be willing and
able to engage in exchange to satisfy that need or
want.
 Potential Market (have sufficient level of interest in a
market offer)

 Available Market (who have interest, income and

access to a particular offer)

 Qualified available market

 Target Market or Served Market (a co. can go for

serving whole available market or can concentrate on
certain segments)

 Penetrated Market (set of buyers who are buying the

co.’s product)
What do marketers do?
Marketing Mix
 7 P’s in Services Marketing
3 additional P’s in services marketing
 People: Any person coming into contact with
customers can have an impact on overall
satisfaction.
 Process: Process(es) involved in providing a
service and the behaviour of people, which can be
crucial to customer satisfaction.
 Physical evidence- The ability and environment in
which the service is delivered. It includes both the
tangible goods that help to communicate and
perform the service or intangible experience of the
customers.
 Matching Mix Concepts (A & S)

 4 A’s 4 S’s
Acceptability Solution
Affordable Sense
Accessible Spread
Awareness Supports
 PACS Matrix
 Product Acceptability Customer Sol Solution
Price Affordable Cost Sense
Place Access Convenience Spread
Promo Awareness Communicate Support
 SIVA approach
 Solution: How appropriate is the solution to the
customers problem/need

 Information: Does the customer know about the

solution, and if so how, who from, do they know
enough to let them make a buying decision

 Value: Does the customer know the value of the

transaction, what it will cost, what are the benefits,
what might they have to sacrifice, what will be their
reward?

 Access: Where can the customer find the solution.

How easily/locally/remotely can they buy it and take
delivery.

This model was proposed by Chekitan Dev and Don

Schultz
 Production Concept
 Consumers will favour those products
that are widely available and low in cost.

 Therefore increase production and cut

down costs.

 And build profit through volume.

 The Production Concept

A customer can have any colour he likes for

his car so long as it's black’

Henry Ford
 Product Concept
 Consumers will favour those products
that offer the most quality, performance,
or innovative features.
 Therefore, improve quality, performance
and features.
 This would lead to increased sales and
profits.
 Marketing Myopia

 Management’s failure to recognize a company’s

scope of business.

 Sellers pay more attention to the specific products

they offer than to the benefits and experiences
produced by the products.

 They focus on the “wants” and lose sight of the

“needs.”
 Marketing Myopia

To overcome this
-Be customer led
-Whole company must
have market orientation
-Management must be
visionary and pro-active
 The Selling Concept
 Consumers , if left alone , will not buy
enough of company’s products.

 Therefore, promote sales aggressively.

 And,build profit through quick turnover.

 The Marketing Concept
 The key to achieving organizational goals
consist in determining the needs and wants
of target markets and delivering the desired
satisfactions more effectively and efficiently
than competitors.
 And build profit through customer
satisfaction and loyalty.
Marketing and Sales Concepts Contrasted
 Customer Needs
Stated need, Real need ,Unstated need,
Delight need, Secret need
-Responsive marketing (finding stated need
and filling it)
-Anticipative marketing (looking ahead into
what needs consumer may have in future)
- Creative marketing (discovering and
producing solution consumers never ask for
but to which they respond enthusiastically)
 The Societal Marketing Concept
 The societal marketing concept holds that the
organization’s task is to determine the needs,
wants, and interests of target markets and to
deliver the desired satisfactions more
effectively and efficiently than competitors in a
way that preserves or enhances the
consumer’s and the society’s well being.

 - It addresses conflicts between consumer’s

and firm’s short run wants and long term
welfare.
 The Societal Marketing Concept
 It calls for social and ethical considerations
in marketing. They must balance the
conflicting criteria of company profit,
consumer want satisfaction and public
interest.
 Cause-related marketing (Activity by which
a company with an image, product or
service to market builds a
relationship/partnership with a
cause/causes for mutual benefit.
 The Holistic Marketing Concept
 It is based on the development, design and
implementation of marketing programmes,
processes and activities that recognises
their breadth and interdependencies. Four
components are:
 Relationship marketing
 Integrated marketing
 Internal marketing
 Social responsibility marketing
Marketing Senior Other
deptt Deptt Communications Products & Channels
Mgt
Services

Internal
Marketing Integrated
marketing

Holistic
Marketing

Social
Relationship
Responsibility
Marketing
Marketing

Ethics Community Customers Partners

Environment Channels
Legal
 STATE OF DEMAND AND
MARKETING TASK
State of demand Marketing task
 Negative Demand •Conversional Mktg.
 No Demand •Stimulational Mktg.
 Latent Demand •Developmental Mktg.
 Falling Demand •Remarketing
 Irregular Demand •Synchro-marketing
 Full Demand •Maintenance Mktg.
 Overfull Demand •De-marketing
 Un-wholesome •Counter-marketing
Demand
 Four Levels of Competition


Generic competition
Form competition

Industry competition
Brand competition
How Business and Marketing are Changing/
Marketing themes in the new economy
 Changing Technology
 Globalization
 Customer Empowerment
 Customization
 Customer relationship marketing
 Customer lifetime value
 Target marketing
 Integrated marketing communication
 Channels as partners
 Every employee a marketer
 WHAT IS MARKETING
MANAGEMENT ?
 Marketing Management is the analysis,
planning, implementation and control of
programs designed to create, build and
maintain beneficial exchanges and
relationships with target markets for the
purpose of achieving Organisational
objectives.
 Shifts in Marketing Management
 From Marketing does the marketing to
Everyone does the marketing
 From organizing by product units to
organizing by customer segments
 From making everything to
buying more goods and services from outside
 From using many supplier to
working with fewer suppliers in a partnership
 From relying on old market positions to
uncovering new ones
 From focusing on shareholders to
focusing on stakeholders
 Shifts in Marketing Management
 From emphasizing tangible assets to
emphasizing intangible assets
 From building brands through advertising to
building brands through integrated communication
 From offline to online
 From mass market to target market
 From focusing on profitable transactions to
focusing on customer lifetime value
 From focus on gaining market share to
focus on building customer share
 From being local to being “Glocal”
 Other Concepts in Marketing
 Green marketing
 Neuro marketing
 Ambush marketing
 Permission marketing
 Contextual marketing
 Buzz marketing (WOM)
 Viral marketing
 Stealth marketing
 Experiential marketing
 Guerilla marketing
 Covert advertising
 Surrogate advertising