1

Chapter

Introduction to
Marketing
Introduction
 Marketing is as old as civilization. Though marketing is
talked and discussed in business terms today, but its origin
goes back to the ancient civilization. Modern marketing
revolves around the concepts, which are age old.

 The first signs that man made to communicate with others

gave birth to the idea of marketing. The evolution of
marketing has made it a structured discipline to study;
otherwise marketing existed in ancient past.
 Evolution of Marketing

2000
1990
1980
1970
Time line

1960
1950
1940
1930
Advertising Customer Marketing Strategic Internet
Focus + Mgmt. Concept +
M.R CRM
Disciplines
STAGES OF MARKETING

ENTREPRENEURIAL MARKETING

FORMULATED MARKETING

INTREPRENEURIAL MARKETING
Meaning of Marketing Management
 American Marketing Association defines marketing
as “the performance of business activities that direct
the flow of goods and services from producer to
consumer or user”.

 Phillip Kotler defines marketing as 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 to each
other.
 SCOPE OF MARKETING
 GOODS  PLACES

 SERVICES  PROPERTIES

 EXPERIENCES  ORGANISATIONS

 EVENTS  INFORMATION

 PERSONS  IDEAS
 Define A Market

•Market is a set of potential and actual buyers and

marketers who Offer some value to consumers.

•A traditional definition of marketing is a place

where buyers and Sellers meet for exchange of
products and services with value of products and
services
 CORE MARKETING CONCEPTS
 TARGET MARKET AND SEGMENTATION

 MARKETPLACE AND MARKETSPACE

 MARKETERS AND PROSPECTS

 NEEDS, WANTS AND DEMANDS

 VALUE PROPOSITION
 TYPES OF MARKET
 CONSUMER MARKET

 INDUSTRIAL MARKET

 NON PROFIT MARKETS

 INTERNATIONAL MARKETS
 MARKETING CONCEPTS

SOCIETAL MARKETING
PRODUCTION
CONCEPT
CONCEPT

MARKETING CONCEPT

PRODUCT CONCEPT

CUSTOMER CONCEPT
SELLING CONCEPT
 The Production Concept

The Production Concept emerges out of the production orientation of

the firm. It is based on the idea that the more we make, the more
profitable it becomes. So let us go out there and make customers buy
our products.

The Product Concept

The Product Concept has the proposition that consumers will favor
those products that offer the attributes like quality, performance and
other innovative features. Managers focus on developing superior
products and improving the existing product lines over a period of time.
The Selling Concept

The Selling Concept proposes that customers, be

individuals or organizations will not buy enough of the firm’s
products unless they are persuaded to do so through selling
effort.

The Marketing Concept

The Marketing Concept proposes that the reason for

success lies in the company’s ability to create, deliver and
communicate a better value proposition through its marketing
offer in comparison to the competitors for its chosen target
segment.
 The Societal Marketing Concept

The Societal Concept proposes that the enterprise’s task

is to determine the needs, wants and intentions of the
target market and to deliver the expected satisfaction
more effectively and efficiently than the competitors in a
way to preserve or enhance the consumer’s and society’s
well being.
 Difference between Selling and Marketing
Emphasis is on the product Emphasis on consumer needs and wants

Company manufactures the product first and Company first determines customers’ needs
then decides to sell it and wants and then decides on how to deliver
a product to satisfy these wants

Management is sales volume oriented Management is profit oriented

Planning is short-run-oriented, in terms of Planning is long-run-oriented,in terms of new

today’s products and markets products tomorrow’s markets and future
growth

Stresses needs of seller Stresses needs and wants of buyers

Views business as a goods producing process Views business as consumer satisfying

process

Emphasis is on staying with existing Emphasis is on innovation in every sphere, on

technology and reducing costs providing better value to the customer by
adopting a superior technology
 Marketing Management Process
 “is a process of identifying customer needs and
wants and then developing a marketing program
to satisfy customer needs with a profit”.
 MARKETING PROGRAM
 ‘ consists of numerous decisions on the mix of
marketing tools to use”.

 MARKETING MIX “is the set of marketing tools

the firm uses to pursue its marketing objectives in
the target market”.

- McCarthy classified these tools into four broad

categories
- Product -Price -Promotion -Place
Four P of Marketing Mix
MARKETING MIX
STRATEGY
 SELLER Ps / CUSTOMER Cs
 PRODUCT  CUSTOMER SOLUTION

 PRICE  CUSTOMER COST

 PLACE  CONVENIENCE

 PROMOTION  COMMUNICATION
 Developing Marketing Orientation
 Integrated plan or development of marketing  We will become a fully customer
orientation driven organization
 Formalized definitions of markets and  Customers Come First
mission  Marketing Expenditures are an
 Detailed specifications of marketing investment
objectives  Service is paramount
 Commitment to Implementation

Share
 Top management support for
d
values marketing
Strateg  Open communications between all
y
functions
Style  Recognition of reward of customer
oriented behavior

Systems
 Simple structure
 Key accounts sales structure
 Customer intelligence to service most important
Structure
report customers
 Competitor  Decentralized marketing
Staffin
Intelligence report g
Skills  Staff rotation
 Marketing planning
and control systems
 Knowledge of the market
 Remuneration and  Recruitment of an
 Analytical skills in segmenting and
performance appraisal adequate number of people
targeting the market
 Financial Reporting with requisite marketing
 Skills for identifying decision
System orientation
making skills
 Training programs and
 Total Customer Value
 Total customer value, is the perceived monetary
value of the bundle of economic, functional and
psychological benefits consumers expect from a
given market offering.
 Customer’s perceived value is the difference
between the prospective customer’s evaluation of all
the benefits and all the costs of an offering and the
available perceived alternatives.
 Total customer cost is the bundle of costs that
customers expect to incur in evaluating, obtaining,
using ad disposing of the given market offering.
Total Benefits and Cost Diagram

Emotional/Self Customer Value

Expressive
Benefits Cost of Disposing
The Product
Cost of Maintaining
Service And Repairing the
Benefits Product
Cost Associated with
using the Product
Total
Cost of Acquiring
Total Performance Customer
and Inventorying the
Customer Benefits Cost
Product
Benefit

Brand/Company
Purchase Price
Benefits

Product Channel Margin

Benefits Firm Point
 TYPES OF CUSTOMER VALUE

Epistemic value Conditional value

Customer choice behavior

and
Consumer expectations

Functional value Emotional value

Social value
Steps in Value Creation process

 Understand Customer Needs

 Design Value Driven Segments
 Develop Value Propositions
 Link Customer Knowledge and Business Strategy
 Develop New Product and Services
 Delivering Customer Value
 Measure and Monitor Customer Satisfaction and
Retention
 Delivering Customer Value
• A value delivery system includes all the experiences the
customer will have on the way of obtaining and using the
product or service offer.

• Value delivery network is a connector between the

resources and the end user.

• As mentioned customer satisfaction is the end result of

value delivery process, so it’s a goal as well as a tool.

• If a company has a highly satisfied set of customers, he

should also make people know about this.
VALUE MANAGEMENT DIAGRAM

Value
Discovery

Value
Value Value Proposition
Retention Manageme
nt

Value
Delivery
 VALUE CHAIN
“as a chain of activities by which a firm can bring in
materials , create a good or service , market it and provide
service after a sale is made”.

Inputs, The
Assets Raw Offering Channels Customer
Material Template
Generic Value Chain

Upstream Activities Primary Activities Downstream Activities

Transport
Raw Material Company
Supplier

Component Intermediaries Customer

Parts Suppliers Company

Customer
Service Support Service
Supplier Supplier