Unit -1

Marketing Definition
Marketing is a process or a set of processes used to understand the
target audience better, develop a valuable offering, communicate and
deliver value to satisfy the needs, wants, and desires of the target
audience at a profit.

In simple terms, marketing is an umbrella that includes –

• Identifying the unfulfilled needs, wants, and desires of the target

market,
• Developing a valuable offering that satisfies the unmet needs,
• Communicating the value to the target audience,
• Delivering value to meet the needs, wants, and desires of the
customers, and
• Earning a profit.
A simple definition of marketing would be, as Kotler puts it, “meeting
the needs of your customer at a profit.” Thus, marketing involves
everything that a business requires to meet the needs of its
customers, and that too, at a profit.

Besides this, other institutes and renowned personalities define

marketing as –

The activity, set of institutions, and processes for creating,

communicating, delivering, and exchanging offerings that have
value for customers, clients, partners, and society at
large.American Marketing Association (AMA)
The science and art of exploring, creating, and delivering value
to satisfy the needs of a target market at a profit.Dr Philip Kotler

Nature Of Marketing
Marketing is considered to be holistic in nature. While there is usually
a focus on a particular goal, marketing tries to make use of a 360-
degree approach to fulfil the goal.

• Managerial Function: Marketing is a process that requires

officials to manage product, place, price, and promotion of the
business in a holistic manner.
• Economic Function: Earning profit and developing a
sustainable business is a crucial objective of marketing.
• Social Process: Marketing is a social process that results in the
parties obtaining what they need through the creation and
exchange of offerings and values.
• Consumer-Oriented: Marketing revolves around fulfilling the
needs, wants, and demands of the customers and earning
profits in the process of doing so.
• Both Art and Science: It is science as it requires the marketer
to understand customer behaviour and art as it involves using
this knowledge along with skills to create the demand for the
offering.
• Goal-Oriented: Marketing revolves fulfilling the goals of the
business by aligning it with the customers’ goals.
• Interactive Activity: Marketing involves the marketer to actively
interact with the audience at all stages of the business.
• Dynamic Process: It makes sure that the business keeps at
pace with the changing business environment, trends, and
demands of the customers.
• Creates Utility: Marketing aims at providing utility to the
customer through four different means – offering (kind of product
or service), time (whenever needed), place (distribution
availability), and possession (ownership).

Scope Of Marketing
When compared to other functions of the business, marketing’s scope
seems to be a bit more vast. It flows within almost all of the business
activities and present at all stages of the customer buying cycle.

Even a separate type of marketing, known as digital marketing, has

evolved to expand the scope of marketing over the internet.

• Market Research: Researching consumer demands and

consumer behaviour.
• Product Planning and Development: Planning and developing
the offering according to what’s needed in the market.
• Product Pricing: Pricing the offering according to the product
value and the buyer’s paying capacity to maximise profits.
• Distribution: Distributing the offering, so it is available wherever
and whenever the customer demands it.
• Promotion: Communicating the right message that results in
demand creation.
• Sales: Offering incentives that increase sales.
• After-Sales: Providing after-sales support to the customer to
maintain a good brand image in the market.

FIVE Main Marketing Concepts?

The Production Concept

The production concept is focused on operations and is based on the assumption
that customers will be more attracted to products that are readily available and can
be purchased for less than competing products of the same kind. This concept came
about as a result of the rise of early capitalism in the 1950s, at which time,
companies were focused on efficiency in manufacturing to ensure maximum profits
and scalability.
This philosophy can be useful when a company markets in an industry experiencing
tremendous growth, but it also carries a risk. Businesses that are overly focused on
cheap production can easily lose touch with the needs of the customer and ultimately
lose business despite its cheap and accessible goods.

The Product Concept

The product concept is the opposite of the production concept in that it assumes that
availability and price don’t have a role in customer buying habits and that people
generally prefer quality, innovation, and performance over low cost. Thus, this
marketing strategy focuses on continuous product improvement and innovation.

Apple Inc. is a prime example of this concept in action. Its target audience always
eagerly anticipates the company’s new releases. Even though there are off-brand
products that perform many of the same functions for a lower price, many folks will
not compromise just to save money.

Working on this principle alone, however, a marketer could fail to attract those who
are also motivated by availability and price.

The Selling Concept

Marketing on the selling concept entails a focus on getting the consumer to the
actual transaction without regard for the customer’s needs or the product quality — a
costly tactic. This concept frequently excludes customer satisfaction efforts and
doesn’t usually lead to repeat purchases.

The selling concept is centered on the belief that you must convince a customer to
buy a product through aggressive marketing of the benefits of the product or service
because it isn’t a necessity. An example is soda pop. Ever wonder why you continue
to see ads for Coca Cola despite the prevalence of the brand? Everyone knows what
Coke has to offer, but it’s widely known that soda lacks nutrients and is bad for your
health. Coca Cola knows this, and that’s why they spend astonishing amounts of
money pushing their product.

The Marketing Concept

The marketing concept is based on increasing a company’s ability to compete and
achieve maximum profits by marketing the ways in which it offers better value to
customers than its competitors. It’s all about knowing the target market, sensing its
needs, and meeting them most effectively. Many refer to this as the “customer-first
approach.”

Glossier is a recognizable example of this marketing concept. The company

understands that many women are unhappy with the way that makeup affects the
health of their skin. They also noticed that women are fed up with being told what
makeup products to use. With this in mind, Glossier introduced a line of skincare and
 makeup products that not only nourish the skin but are also easy to use and promote
individualism and personal expression with makeup.

The Societal Concept

The societal marketing concept is an emerging one that emphasizes the welfare of
society. It’s based on the idea that marketers have a moral responsibility to market
conscientiously to promote what’s good for people over what people may want,
regardless of a company’s sales goals. Employees of a company live in the societies
they market to, and they should advertise with the best interests of their local
community in mind.

The fast-food industry is an example of what the societal concept aims to address.
There’s a high societal demand for fast food, but this food is high in fat and sugar
and contributes to excess waste. Even though the industry is answering the desires
of the modern consumer, it’s hurting our health and detracting from our society’s goal
of environmental sustainability.

What Is Marketing Vs Selling?

Point of
Marketing Concept Selling Concept
Difference

Marketing is the process of delivering goods and services to Sales are the process of rounding up
Definition
create value for the customer and make a profit. customers to increase sales.

It views business as a goods-producing

View on business It views the business as a customer-satisfactory process.
process.

Price Consumers determine the price. The cost determines the price.

This concept is useless in a pure

Effectiveness This concept is applicable to the pure competition market.
competition market

This concept gives importance to only

Marketing mix This concept gives equal importance to the marketing mix.
promotion.
Market This concept never thinks about the market
This concept thinks about market segmentation deeply.
segmentation concept.

Start This concept starts with actual and potential customers. This concept starts with existing products.

This concept earns profit through attractive

Profit This concept earns profit through customer satisfaction.
sales and promotion.

This concept emphasizes products or

Emphasis This concept emphasizes customer needs.
services.

Scope The scope of the marketing concept is wider. The scope of the selling concept is narrow.

The objective of this concept is to satisfy the customer The objective of the selling concept is to
Objective
through goods and services. increase sales of goods and services.

HOLISTIC MARKETING

What Is Holistic Marketing?

Holistic marketing concept considers all the different parts of a business as one single entity.
It is based on the premise that the whole is greater than the sum of its parts. As such, there is
a shared aim and purpose for all the activities related to a business. This ensures that each
person in every department, from sales to operations to HR to marketing and others, work
towards one common goal.

Holistic Marketing Example

Coca-Cola has one of the best examples of holistic marketing concept. They have recently
refreshed their entire global identity to “Real Magic”. The idea behind this strategy is to
showcase the brand’s goal to refresh the world and make a difference. Manuel Arroyo, the
global chief marketing officer for The Coca-Cola Company says, “Real Magic is not just a
tagline. We see it as a philosophy that transcends advertising and embodies all that is special
about the brand.”

5 Holistic Marketing Concepts and Components

Holistic marketing has five different components that come together to unify a
company’s brand image.

1. Relationship Marketing

Relationship marketing is centered on the relationships you have with your potential
and existing customers, employees, partners, and competitors. This component of
holistic marketing focuses on creating a comprehensive business plan with long-term
goals that cover the whole business system. The main goal is to focus on marketing
activities that create a strong, emotional bond and cultivate loyalty from these
stakeholders, rather than simply interacting with them only when required.

2. Internal Marketing

Holistic marketing sees two types of customers - internal and external. While
external customers are the top priority for any business, internal customers
(employees) also play a vital role in the marketing process. Internal marketing treats
employees as customers who must be convinced of the company’s core values just
as aggressively as its external customers. This ensures that they understand their
role in the marketing process.

3. Integrated Marketing

Integrated marketing creates a seamless experience for the consumer to interact

with the brand by integrating various communication channels (sales promotion,
public relations, advertising, direct marketing, digital marketing, etc). This ensures
that the communication is in sync and projects a strong and focused brand image.

4. Societal Marketing

Societal or socially responsible marketing involves a broader concern for society at

large. It follows the philosophy that a business is part of a society and should give
back to it. This requires following certain business ethics and focusing on
philanthropy and community organizations. Societal marketing encourages all
stakeholders of a business to have a positive impact on society.

5. Performance Marketing

Performance marketing is focused on the different activities of a business, such as

selling a product or service, ethical and legal responsibilities as a business, brand
and customer equity, etc

What is Customer Lifetime Value (CLV)?

Customer Lifetime Value (CLV) is the total predictable revenue your business
can make from a customer during their lifetime as a paying customer.

For instance, if a customer subscribes to one of your products under a one-year

plan, at that time, the lifetime of that customer is one year long. Their lifetime
value will be the amount you expect to make in that year.

Hence, the longer the customers stay and the more often the customer buys from
you, the greater will be their CLV. If you can determine the profile of the
customers that produce the highest CLV, you can use those profiles to acquire
more customers that closely resemble those existing high-value customers.

Customer Lifetime Value formula:

Coffee shop

A coffee shop is a perfect starting example for CLV, as it is easy to

understand even if you don’t have an extensive business background. Let’s
say a local coffee chain with three locations has an average sale of 40. The
typical customer is a local worker who visits two times per week, 50 weeks
per year, over an average of five years.
CLV = 40(average sale) x 100 (annual visits) x 5 (years) = 2,0000

Marketing Environment

Macro Environment of Marketing

Macro environment factors consist of external forces. These

external factors influence the company’s marketing strategy is a
great length.

The external environmental factors are uncontrollable, and the

company finds it hard to tackle the external factors.

Elements of the macro-environment of marketing are;

1. Demographic factors.
2. Economic factors.
3. Natural forces.
4. Technology factors.
5. Political factors.
6. Cultural factors.

In the following ways, they affect business strategy.

Demographic Environment

Demography is the study of human populations in terms of size,

destiny, location, age, gender, race, occupation, and other statistics.

These is the very important factors that help the marketer divide the
population into different market segments and target markets.

Demographic data also helps in preparing geographical marketing

plans, and age, and sex-wise plans.
Economic Environment

Economic Environment is those macro factors that affect consumer

buying power and spending patterns.

It includes the level of income, policies, and nature of an economy,

economic resources, trade cycles, and distribution of income and
wealth.

When the income of a family or country (per capita income)

changes, it also changes the buying behavior and spending pattern
of the family or country.

Natural Environment

The natural environment involves the natural resources that are

needed as inputs by marketers or they are affected by marketing
activities.

So marketers should be aware of several trends in the natural

environment.

Technological Environment

Technological forces are perhaps the most dramatic forces which

are changing rapidly. These macro-environmental forces create new
products, new markets, and marketing opportunities for marketers.

Political Environment

It includes government actions, government legislation, public

policies, and acts that affect the operations of a company or
business.

These forces may affect an organization on a local, regional,

national, or international level.
So marketers and business management pay close attention to the
political forces to judge how government actions which will affect
their company.

Cultural Environment

Cultural factors in heritage, living styles, religion, etc., also affect a

company’s marketing strategy. Social responsibility also became
part of marketing and slowly emerged in marketing literature.

Socially responsible marketing is that business firms should take

the lead in eliminating socially harmful products.

Micro Marketing environment

The micro-environment refers to the forces that are close to the

company and affect its ability to serve its customers. It influences
the organization directly.

It includes the company itself, its suppliers, marketing

intermediaries, customer markets, competitors, and the public.

5 components of the microenvironment of marketing are;

1. Internal Organizational Environment.

2. Marketing Channel.
3. Types of Market.
4. Competition.
5. Organizational Objectives.

Internal Organizational Environment

The first is the organization’s internal environment—its several

departments and management levels as it affects marketing
management’s decision-making.
Marketing Channel

The second component includes the marketing channel firms that

cooperate to create value: the suppliers and marketing
intermediaries (middlemen, physical distribution firms, marketing-
service agencies, and financial intermediaries).

Types of Market

The third component consists of the five types of markets in which

the organization can sell: the consumer, producer, reseller,
government, and international markets.

Competition

The fourth component consists of the competitors facing the

organization.

Organizational Objectives

The fifth component consists of all the public that have an actual or
potential interest in or impact on the organization’s ability to
achieve its objectives: financial, media, government, citizen action,
and local, general, and internal publics

Elements of the macro-environment of marketing are;

1. Demographic factors.
2. Economic factors.
3. Natural forces.
4. Technology factors.
5. Political factors.
6. Cultural factors.

In the following ways, they affect business strategy.

Demographic Environment

Demography is the study of human populations in terms of size,

destiny, location, age, gender, race, occupation, and other statistics.

These is the very important factors that help the marketer divide the
population into different market segments and target markets.

Demographic data also helps in preparing geographical marketing

plans, and age, and sex-wise plans.

Economic Environment

Economic Environment is those macro factors that affect consumer

buying power and spending patterns.

It includes the level of income, policies, and nature of an economy,

economic resources, trade cycles, and distribution of income and
wealth.

When the income of a family or country (per capita income)

changes, it also changes the buying behavior and spending pattern
of the family or country.

Natural Environment

The natural environment involves the natural resources that are

needed as inputs by marketers or they are affected by marketing
activities.

So marketers should be aware of several trends in the natural

environment.
Technological Environment

Technological forces are perhaps the most dramatic forces which

are changing rapidly. These macro-environmental forces create new
products, new markets, and marketing opportunities for marketers.

Political Environment

It includes government actions, government legislation, public

policies, and acts that affect the operations of a company or
business.

These forces may affect an organization on a local, regional,

national, or international level.

So marketers and business management pay close attention to the

political forces to judge how government actions which will affect
their company.

Cultural Environment

Cultural factors in heritage, living styles, religion, etc., also affect a

company’s marketing strategy. Social responsibility also became
part of marketing and slowly emerged in marketing literature.

Socially responsible marketing is that business firms should take

the lead in eliminating socially harmful products.

Micro Marketing environment

The micro-environment refers to the forces that are close to the
company and affect its ability to serve its customers. It influences
the organization directly.

It includes the company itself, its suppliers, marketing

intermediaries, customer markets, competitors, and the public.
5 components of the microenvironment of marketing are;

1. Internal Organizational Environment.

2. Marketing Channel.
3. Types of Market.
4. Competition.
5. Organizational Objectives.

Internal Organizational Environment

The first is the organization’s internal environment—its several

departments and management levels as it affects marketing
management’s decision-making.

Marketing Channel

The second component includes the marketing channel firms that

cooperate to create value: the suppliers and marketing
intermediaries (middlemen, physical distribution firms, marketing-
service agencies, and financial intermediaries).

Types of Market

The third component consists of the five types of markets in which

the organization can sell: the consumer, producer, reseller,
government, and international markets.

Competition

The fourth component consists of the competitors facing the

organization.
Organizational Objectives

The fifth component consists of all the public that have an

actual or potential interest in or impact on the
organization’s ability to achieve its objectives: financial,
media, government, citizen action, and local, general, and
internal publics.

By- prof.Akansha pathak