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MBM 2nd Semester

Marketing Management, MGMT 522

Unit-1 Introduction

Meaning and Definition of Marketing

 “Marketing is the activities, set of institutions and process for creating, communicating,
delivering and exchanging offerings that have value for customers, clients, partners, and
society at large.”
- American Marketing Association
 “Marketing is a social and managerial process by which individuals and groups obtain what
they need and want through creating and exchanging products and value with other”.
- Philip Kotler
Marketing is the process of planning and executing the conception, pricing, promotion, and
distribution of ideas, products or services to create exchanges that satisfies, individuals and
organizational objectives. It ensures the right product in the right place, at the right time, at the
reasonable price for the benefits of the consumers.

 Marketing is a societal process

 Marketing consists of activities
 Marketing satisfies customer needs
 Marketing facilitates exchange relationships
 Marketing helps achieve objectives
 Marketing occurs in a dynamic environment

Importance of Marketing
1. Marketing helps in transfer, exchange and movement of goods
2. Marketing helps to build and maintain the company’s reputation
3. Marketing helps to build a relationship between a business and its customers
4. Marketing is a communication channel used to inform customers
5. Marketing helps to boosts sales
6. Marketing aids in providing insights about the business
7. Marketing as a source of income and revenue
8. Marketing helps the business to maintain relevance
9. Marketing helps the management team to make informed decision
10. Marketing acts as a source of new ideas
11. Delivery of standard of living to the society
12. Marketing creates employment
13. Increase in national income
14. Marketing is helpful in development of an economy

Marketing Concepts
1. The Production Concept
This concept is the oldest of the concepts in business.  It holds that consumers will prefer products
that are widely available and inexpensive.  Managers focusing on this concept concentrate on
achieving high production efficiency, low costs, and mass distribution.  They assume that consumers
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are primarily interested in product availability and low prices.  This orientation makes sense in
developing countries, where consumers are more interested in obtaining the product than in its
features.

Starting point Focus Means Ends

Profit through
 Low price production
Factory Mass production  Mass distribution efficiency

2. The Product Concept 

Starting point Focus Means Ends

Profit through well

 High quality made product
Factory Product quality  Innovation
 Performance
guarantee

This orientation holds that consumers will favor those products that offer the most quality,
performance, or innovative features.  Managers focusing on this concept concentrate on making
superior products and improving them over time. They assume that buyers admire well-made
products and can appraise quality and performance.  However, these managers are sometimes caught
up in a love affair with their product and do not realize what the market needs.  Management might
commit the “better-mousetrap” fallacy, believing that a better mousetrap will lead people to beat a
path to its door.

3. The Selling Concept 

Starting point Focus Means Ends

Profit through high

 Aggressive selling sales volume
Factory Product  Heavy promotion
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This is another common business orientation. It holds that consumers and businesses, if left alone,
will ordinarily not buy enough of the selling company’s products.  The organization must, therefore,
undertake an aggressive selling and promotion effort.  This concept assumes that consumers typically
show buying inertia or resistance and must be coaxed into buying.  It also assumes that the company
has a whole battery of effective selling and promotional tools to stimulate more buying. Most firms
practice the selling concept when they have overcapacity.  Their aim is to sell what they make rather
than make what the market wants.

4. The Marketing Concept

Marketing concept or modern marketing concept is a business philosophy that challenges the above
three business orientations.  Its central tenets crystallized in the 1950s.  It holds that the key to
achieving its organizational goals (goals of the selling company) consists of the company being more
effective than competitors in creating, delivering, and communicating customer value to its selected
target customers. The marketing concept rests on four pillars:  target market, customer needs,
integrated marketing and profitability.

Principles/ features of marketing concept:

 Target market
 Customer oriented
 Customer needs and satisfaction
 Integrated marketing
 Objectives achievement
 Profit through customer satisfaction

Starting point Focus Means Ends

Profit through
 Integrated customer
Target market Customer needs marketing satisfaction

5. The Societal Marketing Concept

This 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 (this is the original Marketing Concept).  Additionally, it holds that this all must be done
in a way that preserves or enhances the consumer’s and the society’s well-being.

Starting point Focus Means Ends

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Profit through
consumer and
 Protecting and social well-being
Target market Social needs supporting
consumer and
social well-being

6. Holistic Marketing Concept

Holistic marketing considers a business and all its parts. It sees a business as one entirety. As a
result, it gives a shared aim and purpose for each activity within a business. It thinks about a
business’s place in the wider society. For example where does a business fit into the broader
economy and how does it impact the lives of its customers. Think of the human body that can only
function when all parts are working together. In the same way, holistic marketing understands all the
different parts of a business need to work together to operate at its optimum. Consequently, this
approach drives towards the alignment of your business’s processes, services, systems and customer
touch points. This creates a consistent and seamless customer experience on multiple channels.

Principles/ Components of Holistic Marketing

a) Internal Marketing: Internal marketing refers to the internal management of system, the
marketing department and the collaboration between the marketing department and other
departments.
b) Integrated Marketing: Integrated marketing involves the pricing strategy, product strategy,
placing strategy, promotion strategy and communication strategy.
c) Performance Marketing: Performance marketing is focused on different business activities, such
as how to sell a product, brand and customer equity, and the ethical and legal responsibilities a
business and product upholds.
d) Relationship Marketing: Relationship marketing is centred on the relationship you have with
your customers, employees, partners and competitors.

Starting point Focus Means Ends

Goals achievements
 Integrated marketing through
All marketing  Relationship marketing marketing
Target market matters  Internal marketing think
 Societal marketing
 Performance marketing

Marketing Mix
 "Marketing mix is the set of marketing tools that the firm uses to pursue its marketing
objectives in the target market". - Philip Kotler
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 The marketing mix is the result of blending, compounding and mixing marketing factors into
an integrated whole at a particular period of time." – William Lazer

Marketing Mix is a group of marketing variables that the firm combines and controls, to produce the
desired response in the target market. It is an important marketing tool that comprises of all the
elements which influence the demand for the products offered by the firm.

The different marketing activities are categorised by McCarthy into marketing mix tools, of four
types, which are commonly known as ‘four Ps of marketing’:
 Product: Product refers to the goods and services that are offered to the customers for sale
and are capable of satisfying their wants. A firm makes strategies to introduce products which are
high in demand and drop the ones which cause loss to the company. Strategic decisions regarding the
product variety, quality, design, features, brand name, packaging, size, returns, after-sales services,
etc., are to be made.
 Price: Price is described as the amount which a customer pays to get the desired product or
service. The pricing of the product should be done keeping in mind the list price, competitor’s price,
terms of sale, customer location, discounts and so forth. While deciding the prices, the value and
utility of the product to its customers are to be considered.
 Place: Place refers to the easy availability of the product in the target market. It implies that a
suitable marketing channel is to be chosen, to reach the customers, because the better the chain of
distribution, the higher would be the coverage.
 Promotion: Promotion implies marketing communication, as in publicizing the product to
convey product features. It aims at grabbing the attention of customers and instigating them to buy it.
Promotion mix implies the promotional tools used by the marketers to reach the target audience. It
could be Advertising, Direct marketing, Sales Promotion, Personal Selling, etc.
In addition to the 4P’s, when there is consumer-oriented or service marketing, 3P’s are added to it,
which are known as 7P's.
 People: It comprises of all the human beings that play an active role in offering the product
or service to the customer such as the employees. It also views customers as people not as buyers, to
understand their needs and fulfil them.
 Process: The complete procedure and the flow of activities through which the product
reaches the final consumer.
 Physical Environment: As the name suggests, it refers to the marketing environment
wherein the interaction between customer and firm takes place.

Marketing Management
 Marketing management is the art and science of choosing target markets and getting keeping
and growing customers through creating, delivering and communicating superior customer
value”. -Philip Kotler  
Marketing management is planning, organising, controlling and implementing of marketing
programmes, policies, strategies and tactics designed to create and satisfy the demand for the firms’
product offerings or services as a means of generating an acceptable profit.
Marketing Management Process:
• Situation analysis
• Formulation of marketing plan and program
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• Program implementation
• Marketing control

Marketing Organization
Marketing organization is made up of two words – marketing and organization. Marketing
organization is a framework for planning and executing decisions in marketing activities. It is a
group of marketing people working together in a coordinated manner to achieve pre-determined
marketing objectives.
 “Internal organization is the structural framework of duties and responsibilities required of
personal in performing various functions within the company. It is the blue-prints, a
mechanism”. - Professor Wheeler
 "Organization is the establishment of effective authority relationship among selected work,
person and work places in order for the group to work together”. - George Terry

The Marketing organization is the vehicle for making decisions on all marketing areas viz. products,
marketing channels, prices, physical distributions and promotions. It establishes the authority
relationships among marketing personals and specialists who are responsible for making marketing
decisions and planning that are essential for the success of any business firm.

Marketing Environment
 "A company marketing environment consists of the actors and forces that affect the
company's ability to develop and maintain successful transactions and relationship with its
target customers". - Philip Kotler
The marketing environment refers to all internal and external factors, which directly or indirectly
influence the organization’s decisions related to marketing activities. Internal factors are within the
control of an organization; whereas, external factors do not fall within its control. The external
factors include government, technological, economical, social, and competitive forces; whereas,
organization’s strengths, weaknesses, and competencies form the part of internal factors.

Components of Marketing Environment

1. Micro Environment 2. Macro Environment

1. Micro Environment:
i. The Company
• Marketing mix
• Objectives and policies
• Resources
• Organization structure
ii. Suppliers
iii. Marketing Intermediaries
• Resellers
• Distribution Centers
• Marketing Agencies
• Financial Intermediaries
iv. Customers
v. Competitors
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vi. Public and Media

2. Macro Environment
i. Demographic Environment
• Population size and growth
• Migration and urbanization
• Age factor
• Gender
ii. Economic Environment
• Consumer income
• Change in income
• Purchasing power
• Income distribution
• Spending trend
• Inflation
• Fiscal Policy
• Available of credit facility
iii. Socio-Cultural Environment
• Social institutions ( family, Reference group, Social class)
• Social change
• Life style
• Attitude, value and beliefs
• Religion and language
iv. Political and Legal Environment
• Law and government policies
• Political system
• Political stability
• Pressure groups
• Regional association
v. Natural Environment
• Natural resources
• Climate
• Topography
• Environmentalism
vi. Technological environment
• Level of technology
• Pace of technological change
• Technology transfer
• Research and development

Nepalese Marketing Environment

Political and Legal Environment: The major setback for any business in Nepal concerned with the
political aspect is the lack of strong and consistent government. For many decades the Nepal hasn’t
been able to have a strong and consistent government hence the rise in corruption, unclear foreign
policies, minimal economic development, etc affecting the marketing ability of foreign as well as
national business organizations.
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The major fault in Nepalese legal system is the lack of clarity in many laws, rules and
regulation. Nepal has a very poor legislative and administrative system.

Economic Environment: Nepal, an under-developed nation, has since the past many decades not
been able to lift its economic status. Due to various factors the economic performance of our nation
has been below par. There is and increasing gap between rich and poor, heavy dependence on
remittance which will affect the performance of the economy in the long run. The slow economic
growth and increasing unemployment negatively affects the marketing environment of Nepal.

Social-cultural Environment: The major portions of Nepalese population live in rural areas with
very small markets. High numbers of population are uneducated. There is an increasing trend of
domestic and international migration. Major religion being Hindu and with joint family structure the
major number of population are very traditional in thinking which affects the marketing strategies of
businesses.

Technological Environment: Nepal is far behind in use of contemporary technologies. The level of
research and development is poor with very minimal level of technological transfer. There is heavy
dependence on manual labor and older technologies.

Natural Environment: Nepal's geographical location between two Asian giant's India and China is
important for the development of marketing activities. These two countries comprise half of world's
population and largest market in world. It is opportunity to Nepal effectively assesses its competitive
advantage can enter these markets. Nepal is bestowed with variety of topography and climate that
facilitate production of horticulture products; tourism can be promoted in these countries.

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