Principles of Marketing

MODULE 01
INTRODUCTION TO MARKETING
 Marketing: Creating & Capturing Customer Value

• What Is Marketing?

• Understand the Marketplace and Customer Needs

• Designing a Customer-Driven Marketing Strategy

• Preparing an Integrated Marketing Plan and Program

• Building Customer Relationships

• Capturing Value from Customers

• The Changing Marketing Landscape

 Introduction
• Main objective of any business organization is
to satisfy the needs and wants of the society
• Production or purchase is of no meaning if a
firm is unable to market its goods and services
• Marketing is the focal point of all business
activities
 Introduction
• Marketing is an ancient art & is everywhere.
• Formally or informally, people & organizations
engage in a vast numbers of activities that
could be called marketing.
• Good marketing has become an increasingly
vital ingredient for business success.
• It is embedded in everything we do- from the
clothes we wear, to the web sites we click on,
to the ads we see.
 Marketing Defined
• The term Marketing has been derived from
the word Market.
• Market is a place or geographical area where
buyers and sellers meet and enter into
transactions involving transfer of ownership of
goods and services
 Marketing Defined
• Traditional View
– Performance of business activities that direct the
flow of goods and services from producers to
consumers or users
• Modern View
– A business process through which products are
matched with the markets and through which
transfer of ownerships are effected
 What Marketing is…
• Marketing is the process of aligning your
offering with the customer’s needs and
communicating that to them
• Marketing is the process of creating and
maintaining a customer relationship

https://www.youtube.com/watch?v=IyTv_SR2uUo
 Marketing Defined
• The American Marketing Association has
defined marketing as “an organizational
function & a set of processes for creating,
communicating & delivering value to the
customers & for managing customer
relationships so as to benefit the organization
& the stake holders.
 What is Marketing?
•Marketing is a process by which companies create value
for customers and build strong customer relationships to
capture value from customers in return.
•According to Philip Kotler, “Marketing is a social process
by which individuals and groups obtain what they need
and want through creating, offering, freely exchanging
products and services of value with others”
A Simple Model of The Marketing Process
 Nature of Marketing
• Exchange is the essence of marketing.
• Marketing is customer/ consumer oriented.
• Marketing starts and ends with customers/ consumers.
• Modern marketing precedes and succeeds production.
• Marketing is goal oriented and the goal being profit
maximization through satisfaction of human needs.
• Marketing is a science as well as an art.
• Marketing is the guiding element of business (It tells what,
when, how to produce; Marketing is capable of guiding and
controlling business.
• Marketing is a process, i.e., series of interrelated functions.
 Scope of Marketing
Marketing has a very wide scope it covers all the activities from conception
of ideas to realization of profits. Some of them as discussed as below:
• Study of Consumer Wants and Needs: Goods are produced to satisfy
consumer wants. Therefore study is done to identify consumer needs
and wants. These needs and wants motivates consumer to purchase.
• Study of Consumer behaviour: Marketers performs study of consumer
behaviour. Analysis of buyer behaviour helps marketer in market
segmentation and targeting.
• Product Planning and development: It includes the activities of product
research, marketing research, market segmentation, product
development, determination of the attributes, quantity and quality of
the products.
• Branding: Branding of products is adopted by many reputed enterprises
to make their products popular among their customer and for many
other benefits. Marketing manager has to take decision regarding the
branding policy, procedures and implementation programs.
• Packaging: Packaging is to provide a container or wrapper to the product
for safety, attraction and ease of use and transportation of the product.
 Scope of Marketing
• Channels of Distribution: Decision regarding selection of most appropriate
channel of distribution like wholesaling, distribution and retailing is taken by
the marketing manager and sales manager.
• Pricing Policies: Marketer has to determine pricing policies for their products.
Pricing policies differs form product to product. It depends on the level of
competition, product life cycle, marketing goals and objectives, etc.
• Sales Management: Selling is a part of marketing. Marketing is concerned
about all the selling activities like customer identification, finding customer
needs, persuading customer to buy products, customer service, etc.
• Promotion: Promotion includes personal selling, sales promotion, and
advertising. Right promotion mix is crucial in accomplishment of marketing
goals.
• Finance: Marketing is also concerned about the finance, as for every
marketing activity be it packaging, advertising, sales force budget is fixed and
all the activities have to be completed with in the limit of that budget.
• After Sales services: Marketing covers after sales services given to customers,
maintaining good relationships with customers, attending their queries and
solving their problems.
 Point of difference Selling Marketing

• The difference between selling and marketing

can be best illustrated by this popular
customer quote: ‘Don’t tell me how good your
product is, but tell me how good it will make
me’.
Understanding the Marketplace &
Customer Needs
Customer Needs, Wants and Demands
• States of deprivation

Needs • Physical—food, clothing, warmth, safety

• Social—belonging and affection
• Individual—knowledge and self-expression

Wants • Form that needs take as they are shaped by culture and individual
personality

Demands • Wants backed by buying power

Understanding the Marketplace &
Customer Needs
Market Offerings and Marketing Myopia

• Market offerings are some combination of products,

services, information, or experiences offered to a
market to satisfy a need or want.

• Marketing myopia is focusing only on existing wants

and losing sight of underlying consumer needs
Understanding the Marketplace &
Customer Needs
Customer Value and Satisfaction Expectation

Customers
• Value and
satisfaction

Marketers
• Set the right level of
expectations
• Not too high or low
Understanding the Marketplace &
Customer Needs
Exchange is the act of obtaining a desired object from
someone by offering something in return.
Markets are the set of actual and potential buyers of a product

A Modern Marketing System

 Designing a Customer-Driven
Marketing Strategy

Marketing management is the art and science of

choosing target markets and building profitable
relationships with them
• What customers will we serve?
• How can we best serve these customers?
 Designing a Customer-Driven
Marketing Strategy
Selecting Customers to Serve
Market segmentation refers to dividing the markets
into segments of customers

Target marketing refers to which segments to go after

Demarketing is marketing to reduce demand

temporarily or permanently; the aim is not to destroy
demand but to reduce or shift it
 Designing a Customer-Driven
Marketing Strategy
Choosing a Value Proposition

The value proposition is the set of benefits or values

a company promises to deliver to customers to satisfy
their needs
 Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations

Production Product Selling Marketing Relationship

concept concept concept concept concept
Various Concepts
 Core Concepts/ Philosophies of
Marketing
Marketing Management Orientations
• 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
Building Customer Relationships
Relationship Building Blocks: Customer Value and
Satisfaction

Customer- Customer
perceived value satisfaction
• The difference • The extent to
between total which a product’s
customer value perceived
and total performance
customer cost matches a buyer’s
expectations
Product and Service Decisions
Individual Product and Service Decisions

Brand is the name, term, sign, or design—or a

combination of these—that identifies the
maker or seller of a product or service

Brand equity is the differential effect that the

brand name has on customer response to the
product and its marketing
Product and Service Decisions
Individual Product and Service Decisions
• Branding has become so strong that today
hardly anything goes unbranded.
• Salt is packaged in branded containers,
common nuts and bolts are packaged with a
distributor’s label, and automobile parts—
spark plugs, tires, filters—bear brand names
that differ from those of the automakers.
• Even fruits, vegetables, dairy products, and
poultry are branded
•https://www.youtube.com/watch?v=924dvZQ431s
Difference between Sales and
Marketing Orientation
Production Sales Customers

Emphasis on
Seller’s Needs

Sales Orientation

Customer Production Sales

Needs

Emphasis on
Customer Needs

Marketing Orientation
Difference between Sales and
Marketing Orientation
Starting point Focus Means Ends

Factory Factory Selling and promoting Profits though sales

volume

Selling concept

Market Customer needs Coordinated Profits through customer

marketing satisfaction

Marketing concept
 Managerial Recap
• Marketing can make customers happier, and
companies more profitable.

• Marketing is about trying to find out what

customers would like, providing it to them,
and doing so profitably.

• Marketing facilitates a relationship between

customers and a company.