CHAPTER 2

Fundamentals Of
Marketing

© Macmillan Publishers India Ltd. Chapter 2 / Slide 1

 Chapter 2: Fundamentals of Marketing
At the end of this chapter, you should be able to:

⮚ Define Marketing
⮚ Understand Marketing by Checking ‘What does it do’
⮚ State the Perspectives on Marketing Already in Vogue
⮚ Differentiate between ‘Selling’ and ‘Marketing’
⮚ State the key attributes of ‘The Marketing Concept’
⮚ Appreciate that a Difference in Orientation is the Separating Factor
between one concept and the other
⮚ State why the Existing Perspectives are Not Sufficient for
Interpreting Marketing
⮚ Understand the Need for the ‘Value Perspective’

© Macmillan Publishers India Ltd. Chapter 2 / Slide 2

 Chapter 2: Fundamentals of Marketing
Marketing – An Introduction
■ An Ancient Art, an Omnipresent Entity, a Vital Function of Business
⮚ Business = Marketing
■ Business has just two basic functions: marketing and
innovation’. – Peter Drucker
⮚ Entrepreneurial part of business
■ ‘Marketing is the logic of business’. - Peter Drucker
⮚ Strategic part of business
■ Represents the real strategic activity in a business and the
real strategic function of management.
⮚ Intricate for practice
■ ‘Marketing is fast-paced and dynamic; it is highly visible; it is
essential to the survival of organisations; it is rewarding to its
successful practitioners’. - Stanton et al.

© Macmillan Publishers India Ltd. Chapter 2 / Slide 3

 Chapter 2: Fundamentals of
Marketing
What is Marketing?
■ Art/Science/System/Business Function etc.
■ Understand Marketing through select definitions

■ None of these definitions bring out the full meaning of marketing.

© Macmillan Publishers India Ltd. Chapter 2 / Slide 4

 Chapter 2: Fundamentals of
Understand Marketing by Checking ‘What does it do’ Marketing

■ Meeting Human/Customer Needs

■ Being Empathetic to Customers

■ What Else is Embedded in Marketing?

■ What is Marketed?

■ What is Meant by ‘Market’?

■ Marketing as a Process

■ Marketing, a Dynamic and Complex Idea

© Macmillan Publishers India Ltd. Chapter 2 / Slide 5

 Chapter 2: Fundamentals of
Marketing
■ Meeting Human/Customer Needs

⮚ Marketing must know

■ Who are our customers?
■ What are their needs?
■ What must we do to meet their needs?

⮚ Meeting latent and future needs

■ Marketing searches/spots/visualises the latent and future
needs of customers.

⮚ Meeting needs at a profit

■ Marketing meets customer needs at a profit.

© Macmillan Publishers India Ltd. Chapter 2 / Slide 6

 Chapter 2: Fundamentals of
Marketing
■ Being Empathetic to Customers

⮚ Generating customer satisfaction

■ Product/Service
■ Ambience associated with product/service
■ Peripheral things
■ Speed of response

⮚ Measuring customer satisfaction

■ Satisfaction generated may fall short of or match or exceed
the expectations of customers.

⮚ Is it then correct to assume Marketing = Customers?

© Macmillan Publishers India Ltd. Chapter 2 / Slide 7

 Chapter 2: Fundamentals of
Marketing
■ What Else is Embedded in Marketing?

⮚ Demand

■ Generating the demand

■ Meeting the demand

⮚ Competition

■ Understanding the objectives and strategies of competitors

■ Anticipating the actions and reaction patterns of competitors

© Macmillan Publishers India Ltd. Chapter 2 / Slide 8

What is Marketed?

⮚ Customers buy benefits/services/solutions, not products

⮚ Customers seek Value in benefits/services/solutions

(Example: Channa, Channa-Batura, TCS Certainty)

© Macmillan Publishers India Ltd. Chapter 2 / Slide 9

 Chapter 2: Fundamentals of
Marketing
■ What is Meant by ‘Market’?

⮚ People/Consumers with purchasing power

⮚ Demand

■ Marketing as a Process
⮚ Is a process of exchange
⮚ Means offering something and getting something in return
⮚ Involves a buyer and a seller
⮚ The transaction takes place as per agreed upon conditions
⮚ The transaction succeeds when both parties are satisfied

■ Marketing, a Dynamic and Complex Idea

⮚ Increased levels of competition
⮚ More sophisticated consumer

© Macmillan Publishers India Ltd. Chapter 2 / Slide 10

 Chapter 2: Fundamentals of
Marketing
Perspectives on Marketing Already in Vogue

■ Exchange Concept

■ The Production Concept

■ The Product Concept

■ The Sales Concept

■ The Marketing Concept

Chart 2.2 The Five Commonly noted Perspectives on Marketing (Page 16)

© Macmillan Publishers India Ltd. Chapter 2 / Slide 11

 Chapter 2: Fundamentals of
Marketing
■ Exchange Concept
⮚ Holds that the central idea in Marketing is Exchange: exchange of a
Product between the seller and buyer
⮚ This is the most short sighted view of the marketing process
■ The Production Concept
⮚ Maximise output, achieve a lower unit cost; and sell at a lower price
■ The Product Concept
⮚ Holds that Quality and Features of the Product is the main thing
⮚ Results in Marketing Myopia
■ ‘A coloured or crooked perception of marketing and a shortsighted view
of business’. - Theodore Levitt.
⮚ The right thing is to Focus on the basic human needs the product
satisfies
■ The Sales Concept
⮚ Aggressively promote and push products
■ The Marketing Concept
⮚ Customer is central to business
© Macmillan Publishers India Ltd. Chapter 2 / Slide 12
 Chapter 2: Fundamentals of
Marketing
Difference Between Selling and Marketing

■ Selling revolves around the needs and interests of the seller

■ Marketing revolves around the needs and interests of the buyer

■ Levitt and Drucker on Marketing

■ Is not ‘Selling’ a part of ‘Marketing’?

■ Does not Marketing seek profit just as Selling does?

Chart 2.3 Definition of Businesses- With Product focus and Need focus
(Page 18)

© Macmillan Publishers India Ltd. Chapter 2 / Slide 13

 Chapter 2: Fundamentals of
Marketing
■ Selling revolves around the needs
and interests of the seller
⮚ The purpose of selling is to sell
what is made rather than make
what the customer wants.
⮚ Views business as a task of
somehow disposing off existing
products.
■ Marketing revolves around the
needs and interests of the buyer
⮚ Marketing starts with the
customers.
⮚ Views business as a task of
meeting the needs of the
customers.

© Macmillan Publishers India Ltd. Chapter 2 / Slide 14

 Chapter 2: Fundamentals of
Marketing
■ Levitt and Drucker on Marketing
⮚ Customer orientation is the essence of marketing

■ Is not ‘selling’ a part of ‘marketing’? Certainly yes; but marketing

recognises the futility of ‘pushing’ that is inherent in the sales approach. In the
marketing approach, there is no need for pushing the product on the consumers
■ Does not marketing seek profit just as selling does? Yes; but
selling seeks profits by pushing the products on the consumers, while marketing
seeks profits by creating value satisfaction for the consumers

© Macmillan Publishers India Ltd. Chapter 2 / Slide 15

 Chapter 2: Fundamentals of
Marketing
How does the ‘ Marketing Concept’ Conceive Marketing?
■ Key Attributes of ‘ Marketing Concept’
⮚ Unflinching consumer orientation
■ Overwhelming emphasis on the consumer and his needs
■ The customer, not the corporation, has to be the centre of the business
universe.
⮚ Integrated management action with marketing as the fulcrum
■ All the limbs of the business are tightly integrated with each other,
keeping marketing as the pivot.
⮚ Emphasis on generating consumer satisfaction
■ It is essential that consumer orientation leads to/translates into
consumer satisfaction.
⮚ Emphasis on profit
■ Creation of profits or surpluses as an essential requirement.
⮚ Attaining all the goals of the corporation through customer
satisfaction
■ All goals must be realised through consumer orientation and generation
of consumer satisfaction.
Exhibit 2.2: British Airways example (Pg 22)
© Macmillan Publishers India Ltd. Chapter 2 / Slide 16
 Chapter 2: Fundamentals of
Marketing
Difference in Orientation – the Separating Factor
Between One Concept and the Other

■ Contrast the Sales concept and the Marketing concept. A difference

in orientation towards the market/conduct of business is the real
differentiating factor between the two concepts.

Why the Existing Perspectives are Not Sufficient

for Interpreting Marketing

■ Do Not provide the Needed Practical Direction

■ Do Not explicitly project Value

■ ‘Customer Orientation’ and ‘Value Delivery’ are Not the same

© Macmillan Publishers India Ltd. Chapter 2 / Slide 17

 Chapter 2: Fundamentals of
Marketing
Need for the ‘Value Perspective’

■ There is a need for a new perspective revolving around Value and

providing practical direction

■ Delivering Value to the customer is marketing’s basic job

■ Exchange, Production, Product, Place, Price, Promotion and

everything else are incidental

■ When Value Delivery to the customer is highlighted, the application

aspect of marketing gets the emphasis

© Macmillan Publishers India Ltd. Chapter 2 / Slide 18