Introduction To Marketing

Lesson 1:
Defining Marketing & Marketing Process

25 June 2022
Lesson Learning Outcome

- Definition of ‘marketing’

- Gain knowledge about the concepts and processes

involved/related to Marketing
Scenario
What is Marketing?
Marketing is engaging customers and managing customer
relationship! (Philip Kolter & Gary Armstrong)
It also refers to managing profitable customer relationships. The
two-fold goal of marketing is to attract new customers by promising
superior value and to keep and grow current customers by
delivering satisfaction.
Involves several activities: developing products or services that
provide superior customer value, pricing, promotion and place (4Ps)
4Ps – Product/Services, Pricing, Promotion & Place
Discussion

Based on the 4Ps mentioned in brief, in your view what

would you consider as successful marketing? Choose a
product/services & why do you think it is a success
story?
Marketing – Success Story!
1976 – started business in selling personal
computer – ‘Apple 1’

Became the first U.S. company to reach $2 trillion

in market capitalization.
Apple Inc.
Steve Jobs
It has over 147,000 employees worldwide and
Steve Wozniak $247.5 billion in revenue in 2020.
Ronald Wayne
The Marketing Process
The marketing process involves 5 steps:
Step 1
Understanding the market place and customer needs; needs,
wants and demands
Discussion

What do you think sellers could do to understand their

customer needs, wants & demands?
Step 1: Understand Your Customers

Outstanding marketing companies go to great lengths to learn

about and understand their customers’ needs, wants and
demands.

They conduct consumer research analyze based on customer

data (survey, feedback, mystery shopper).

Their people at all levels - including top management - stay

close to customers.
1.1 Market Offerings Products, Services and
Experiences
Consumers’ needs and wants are fulfilled through a market offering.

Market offering refers to product or services offered by sellers to the

market (customers/buyers); it is coupled by information or experiences
offered to a market to satisfy a need or want.

However, many sellers make the mistake of paying more attention to a

specific product they offer than to the benefits and experiences
produced by these products i.e. they suffer from marketing myopia.

E.g. Hollywood vs Netflix, Kodak vs Sony

1.2 Value and Satisfaction
Customers form expectations about the value and satisfaction that various market
offerings will deliver and buy accordingly.

Satisfied customers buy again and tell others about their good experiences.
Dissatisfied customers often switch to competitors and disparage the products to
others
Customers
• Value and
satisfaction

Marketers
• Set the right level of
expectations
• Not too high or low
1.3 Exchange and Relationships

Marketing occurs when people decide to satisfy their needs

and wants through exchange relationships.

Exchange is the act of obtaining a desired object or response

from someone by offering something in return.

Marketers/Sellers want to build strong relationships by

consistently delivering superior customer value.
1.4 What are ‘Markets’?

A ‘market’ is the act of actual and potential buyers of a product or service.

These buyers share a particular need or want that can be satisfied through
exchange relationships.

Sellers must search for buyers, identify their needs, design good market
offerings, set prices for them, promote them and store and deliver them -
activities such as product development, research, communication, distribution,
pricing and services are core marketing activities.

The concepts of exchange and relationships lead to the concept of a ‘market’.

Discussion

What is ‘modern marketing’?

1.5 Modern Marketing & its Elements
Although it is normally believed that marketing is being carried on by sellers, buyers
also carry on marketing.

Consumers/buyers do marketing when they search for the goods they need at prices
they can afford.

Company purchasing agents do marketing when they track down sellers and bargain
for good terms.

In the usual situation, marketing involves serving a market of final consumers in the
face of competitors.

The company and the competitors send their respective offers and messages to
consumers, either directly or through marketing intermediaries.
1.6 Marketing Intermediaries

Resellers: wholesalers & retailers to buy and sell merchandise

Physical distribution firms: help companies to move goods from their

origin to their destination

Marketing service agencies: advertising firms, media firms, marketing

consulting and marketing research firms

Financial intermediaries: banks, credit companies, insurance co – help

with financial transactions that help ensure security and insure risks
related to buying & selling of goods
Step 2: Designing a Customer-Driven Marketing
Strategy
Once it fully understands consumers and market place, marketing management can
design a customer-driven marketing strategy.

Marketing Management can be defined as the art and science of choosing target
markets and building profitable relationships with them.

The marketing manager’s aim is to find, attract, keep and grow target customers by
creating, delivering and communicating superior customer value:

“What customers will we serve?”

“How can we best serve these customers?”
 “What customers will we serve?”

Market segmentation: refers to dividing the markets into segments of customers.

By trying to serve all customers, companies may not serve any customers well.

Instead, the company needs to select only customers that it can serve well and
profitably. •

Thus, marketing managers must decide which customers they want to target and the
level, timing and nature of their demand.

To simply put it, marketing management is customer management and demand

management.
 “How can we best serve these customers?”

Target marketing: refers to which segments to go after - how it will

differentiate and position itself in the marketplace.

A company’s value proposition is the set of benefits or values it promises

to deliver to consumers to satisfy their needs.

Such value propositions differentiate one brand from another. They

answer the customer’s question- “Why should I buy your brand rather than
a competitor’s?”

e.g. BMW vs Cadillac - companies must have strong value propositions to

give them the greatest advantage in the target market.
Discussion

Based on the following video, share your views/understanding

about market segmentation & target market.

https://www.youtube.com/watch?v=PPuna-4WMZY
Step 3: Preparing an Integrated Marketing
Plan and Program

So, the company’s marketing strategy outlines which customers the

company will serve and how it will create value for these customers.

Next, the seller develops an integrated marketing program that will

actually deliver the intended value to its target customers.

The marketing program builds customer relationships by transforming the

marketing strategy into action – using the firm’s marketing mix – 4Ps:
Product, Pricing, Promotion & Place.
4Ps – Product, Pricing, Promotion & Place

To deliver on its value proposition, the firm must first create a need-satisfying
market offering (product).

It must decide how much it will charge for the offer (price) and how it will
make the offer available to its target consumers (place).

Finally, it must communicate with target consumers about the offer and
persuade them to its merits (promotion).

The firm must blend all these marketing mix tools into a comprehensive,
integrated marketing program that communicates and delivers the intended
value to chosen customers
Step 4: Building Customer Relationships

The first three steps in the marketing process- understanding the market place
and customer needs, designing a customer-driven marketing strategy and
constructing marketing programs all lead up to Step 4, the most important step:
i.e. building customer relationships.

Customer relationship management (CRM) is perhaps the most important

concept of modern marketing.

By this definition it involves managing detailed information about individual

customers. In a broader sense, CRM is the overall process of building and
maintaining profitable customer relationships by delivering superior customer
value and satisfaction.
Step 5: Capturing Value from Customers

The final step involves capturing value in return, in the form of

current and future sales, market share and profits.

By creating superior customer value, the company/seller creates

highly satisfied customers who stay loyal and buy more.

This in turn means greater long-term returns for the seller.

 Marketing Concepts – 5 concepts
Business enterprises conduct their marketing activity around these 5 concepts:

1. The Production Concept

2. The Product Concept
3. The Selling Concept
4. The Marketing Concept
5. The Societal Marketing Concept
 1. Production Concept

Production concept is the idea that consumers will favor

products that are available or highly affordable.

Management should focus on improving production and

distribution efficiency.
 2. Product Concept

Product concept is the idea that consumers will favor

products that offer the most quality, performance, and
features.

Organization should therefore devote its energy to

making continuous product improvements.
 3. Selling Concept

Selling concept is the idea that consumers will not

buy enough of the firm’s products unless it
undertakes a large scale selling and promotion
effort.
 Selling Concept…cont.

The concept is typically practiced with unsought goods—those

that buyers do not normally think of buying, such as insurance or
blood donations.

These industries must be good at tracking down prospects and

selling them on product benefits.
 4. Marketing Concept
Marketing concept is the idea that achieving organizational goals depends on knowing
the needs and wants of the target markets and delivering the desired satisfactions
better than competitors do.

Under the marketing concept, customer focus and value are the paths to sales and
profits.

Rather than a “make and sell” philosophy, it is a customer-centered “sense and

respond” philosophy.

The task is not to find the right customers for your product but to find the right
products for your customers.
 Marketing Concept… cont.

Customer-driven companies research current customers deeply to learn

about their desires, gather new product and service ideas, and test
proposed product improvements.

Customer-driven marketing is understanding customer needs even better

than customers themselves do and creating products and services that
meet existing and latent needs.
 5. Societal Marketing Concept

Societal marketing concept is the idea that a company should make

good marketing decisions by considering consumers’ wants, the
company’s requirements, consumers’ long-term interests, and society’s
long-run interests.

The societal marketing concept holds that marketing strategy should

deliver value to customers in a way that maintains or improves both the
consumer’s and society’s well-being.
 Importance of Marketing in a Developing Economy
i) Importance to Society

- provides goods and services to the society according to their needs and taste at reasonable and
affordable prices. In order to satisfy the various wants of people
- provide employment
- reduction of distribution cost - so that the commodities might be within the reach of maximum
number of consumers.
- increases income of a country - Sound marketing system is associated with creation of increased
demand for goods and services. An increased demand stimulates production activity in the country
which in turn increases the national income.
- Protection against business slump- Trade cycles causes fluctuations in prices. Sometimes there is a
period of depression followed by a period of boom. A period of depression and low prices is very harmful
to the economy. With the decrease in demand, many small units stop production, leading to wide
spread unemployment and poverty. A sound marketing system can give protection against business
slumps by discovering new markets, reducing cost of distribution, making it acceptable to customer,
modifying or improving the existing product and suggesting alternative uses.
 Importance of Marketing in a Developing Economy
ii) Importance to Companies

Business planning and decision-making: Marketing is helpful not only to plan the production but also
in business planning and taking various decisions regarding business. In today’s economy, production is
planned according to the sales forecasts and not according to the production capacity of the firm. All
activities such as planning, production, purchase, finance or design revolve around the marketing
decisions. Thus, marketing decisions influence the business decisions

Increasing profits: Every business is carried on with the profit motive. Marketing helps in increasing the
business profits by reducing the selling cost on one hand and increasing the demand of the product on
the other hand through advertising and sales promotion activities

Source of information: Business collects various information regarding customer’s changing behaviors
from time to time through marketing. Marketing also provides information to the firm about the
competitors, products, production, marketing and price policies. It helps the firm in framing its own
policies or making necessary adjustments therein accordingly