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.
Selling is only the tip of the iceberg

“There will always be a need for

some selling. But the aim of marketing is to
make selling superfluous. The aim of
marketing is to know and understand the
customer so well that the product or
service fits him and sells itself. Ideally,
marketing should result in a customer who
is ready to buy. All that should be needed
is to make the product or service
available.”
Peter Drucker
Costs and Functions of Marketing
 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.
‘Marketing is the management process
that identifies, anticipates and satisfies
customer requirements profitably’

The Chartered Institute of Marketing

 American Marketing Association’s new
official definition of marketing released
August 2004:

– Marketing is an organizational function and a

set of processes for creating, communicating
and delivering value to customers and for
managing customer relationships in ways that
benefit the organization and its stakeholders.
 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.”
 Implications of marketing

 Who are our existing / potential

customers?
 What are their current / future needs?
 How can we satisfy these needs?
 Can we offer a product/ service that the
customer would value?
 Can we communicate with our customers?
 Can we deliver a competitive product of
service?
 Why should customers buy from us?
 Core Marketing Concepts
 Needs, wants, •Product offering and
demands brand
•Value and satisfaction
 Target markets
•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
Products
Anything
Anything that
that can
can be
be Offered
Offered to
to aa Market
Market to
to Satisfy
Satisfy aa Need
Need or
or Want
Want


Persons
Persons Places
Places Organizations
Organizations

Information
Information Ideas
Ideas

Experiences
Experiences Events
Events Properties
Properties

Services
Services
Activity
Activity or
or Benefit
Benefit Offered
Offered for
for Sale
Sale That
That isis Essentially
Essentially
Intangible
Intangible and
and Does
Does Not
Not Result
Result in
in the
the Ownership
Ownership of of Anything
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.
 Core Marketing Concepts

 Shopping can take place in a:

– Marketplace (physical entity)
– Marketspace (virtual entity)
 Metamarkets refer to complementary
goods and services that are related in
the minds of consumers.
 Marketers seek responses from
prospects.
 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
 Marketing creates utility through the
exchange process
– Utility: Want-satisfying power of a good or
service
 Form utility
 Time utility
 Place utility
 Ownership utility
 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 Market
Exhibit Need – Buyers who
Ethical Actual
share a
Factors
Situational Buyers
particular
Unexpected
Resources to need or want
Exchange
that can be
satisfied
Potential
through Buyers
Willingness to exchange or
Exchange
relationships.
 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

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 Acceptable 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
Four Eras in the History of Marketing

1-44
 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
 Modern Day perspectives of
Production concept
 Managers of production oriented firms
concentrate on achieving high production
efficiency, Low costs, and mass distribution
 This orientation makes sense in developing
countries such as china. Companies like Lenovo
& Haier take advantage of country’s huge and
inexpensive labour pool to dominate the market.
 Marketers also use the production concept when
a firm wants to expand the market
 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.
 Avoiding Marketing Myopia
 Marketing Myopia is management’s
failure to recognize the scope of its
business.
– To avoid marketing myopia, companies
must broadly define organizational goals
toward consumer needs
– Focus on benefits
 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.
Ethics and Social Responsibility:
Doing Well by Doing Good
 Increased Employee Loyalty

 Better Public Image

 Market Place Success

 Improved Financial Performance

 Social marketing should not be
confused with the Societal Marketing
Concept which integrates issues of
social responsibility into commercial
marketing strategies. In contrast to
that, social marketing uses
commercial marketing theories, tools
and techniques to social issues.
 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”
 Word of Mouth Marketing (WOMM), is a
marketing effort designed to stimulate
consumers by verbal means such as
recommendations
Techniques
Viral Marketing (Viral marketing is creating interesting and entertaining messages
that spread exponentially, usually through methods such as the web and email, to large

numbers of people .
Buzz Marketing
Blog Branding
Guerrilla Marketing (a way to market and get the message of an product out on a low
.
profile

 Community Marketing Online, niche communities and publications that

create lasting relationships between community members and brands
 Other Concepts in Marketing
 Green marketing
 Person marketing
 Neuro marketing
 Ambush marketing
 Permission marketing
 Contextual marketing
 Stealth marketing
 Experiential marketing
 Covert advertising
 Surrogate advertising
 Creativity and Critical Thinking
 Challenges presented by today’s complex
and technologically sophisticated marketing
environment require critical-thinking skills
and creativity from marketing professionals
 Critical Thinking refers to the process of
determining the authenticity, accuracy, and
worth of information, knowledge, claims and
arguments
 Creativity helps to develop novel solutions
to perceived marketing problems