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CORE CONCEPTS
LET’s UNDERSTAND
MARKETING
What is Marketing?

‘Marketing is the management

process that identifies, anticipates
and satisfies customer requirements
profitably’

The Chartered Institute of Marketing

 ‘Marketing is reaching the right
product, in the right place, at the right
time, and at the right price’

Adcock et al
 ‘Marketing is the human activity
directed at satisfying human needs
and wants through an exchange
process’

Kotler 1980
‘Marketing is a social and managerial
process by which individuals and
groups obtain what they want and
need through creating, offering and
exchanging products of value with
others’

Kotler 1991
• Marketing: “The (1) process of (2)
planning and (3) executing the (4)
conception, (5) pricing, (6)
promotion, and (7) distribution of (8)
ideas, (9) goods, and (10) services
to create (11) exchanges that (12)
satisfy (13) individual and (14)
organizational (15) objectives.”

American Marketing Association “official” definition

 ACQUIRING
&
RETAINIG CUSTOMERS
The Marketing Concept

• Focus on finding (or

creating) consumer needs
and wants, and satisfying
them—not

– just producing--no guarantee that anyone

will buy

Or

– aggressive selling--there is too much

competition around
Marketing is Important

Achieves top line

Contributes to society as a whole

Builds strong brands and loyal customers

Decides on the 4 Ps

Meets challenges for sustainability

Marketing is Versatile

Goods
Services
Events
Experiences
Persons
Places
Properties
Organisations
Informations
Ideas
Marketing is Demand Management

NEGATIVE - Change consumer perception, Redesign Mix

NO DEMAND - Connect benefits to need, Generate interest
LATENT - Measure the size of potential market, Develop effective product
FALLING - Creative remarketing, Change the product
IRREGULAR - Use flexible pricing, Promotion
FULL - Maintain
OVERFULL - Use selective de-marketing, Reduce promotion
UNWHOLESOME - Use laws, fear, price hike, reduced availability
Marketing is Addressing Customers

B2C – Brand image, Availability, Communication and Services

B2B – Informed people, Volume, Price, Sales force, Reputation
Global – Adapting, Culture, Quotas, Currency, Political
NGOs & Government – Tender, Volume, Price, Contracts, Quality?
Some Core Marketing Concepts

Marketplace is physical, as when one goes shopping in a store

Marketspace is digital, as when one goes shopping on the internet

Metamarket a cluster of complementary products & services

that are closely related in the minds of customers but are
spread across a diverse set of industries

eg. the Automobile Metamarket consists of automobile manufacturers, new car

& used car dealers, financing companies, insurance companies, spare parts
dealers, service shops, auto magazines, car mechanics etc.
Some Core Marketing Concepts

Needs are basic human requirements

Wants specific satisfiers of need

Demand wants backed by ability and willingness to pay

Some Core Marketing Concepts

Stated Needs - Product Demanded: wants an affordable car

Real Needs - Functional Benefit Desired: low maintenance cost
Unstated Needs - Expectation from Company: want good service
Delight Needs - Complimentary Freebies: want insurance, warranty
Secret Needs - Emotional Benefits: Image oriented
Some Core Marketing Concepts

Segmentation: process of dividing a market into distinct subsets

(segments) that behave in the same way or have similar needs

Target Markets: that which presents the greatest opportunity

Positioning: find a slot in the customers mind space

Some Core Marketing Concepts

Product a value proposition, a set of benefits they offer to

customers to satisfy their needs

Offering the intangible value proposition that is made physical

through a combination of products, services, information, and
experiences

Brand is an offering from a known source. A brand carry

many associations in the minds of people. These
associations make up the brand image
Some Core Marketing Concepts

The offering will be successful if it delivers value &

satisfaction, The buyer chooses between different offerings
on the basis of which is perceived to deliver the most value

Value is primarily a combination of Quality, Service & Price

(QSP), called the Customer Value Triad

Value increases with quality & service and decreases with

price

Value can be defined as a ratio between what the customer

gets and what he gives – the customer gets benefits for a
cost
Some Core Marketing Concepts

Value = Benefits = Functional Benefits + Emotional Benefits

Costs Monetary Cost + Time Cost + Energy Cost + Psychic Cost

P-S-P-I

The marketer can increase the value of the offering to customers

in several ways;

Raise benefits
Reduce costs
Raise benefits and reduce costs
Raise benefits by more than the raise in costs
Lower benefits by less than the reduction in costs
Some Core Marketing Concepts

To reach a target market, the marketer uses 3 kinds of

Marketing Channels;

Communication Channels

Distribution Channels

Service Channels
Some Core Marketing Concepts

While marketing channels connect the marketer to the

target buyers, the Supply Chain describes a longer
channel stretching from raw materials to final product
to final buyers.

When a company moves upstream or downstream, its aim is to

capture a higher percentage of Supply Chain value.
Some Core Marketing Concepts

Competition includes all the actual and potential rival

offerings and substitutes that a buyer might consider

There are 4 levels of competition, based on the degree of

product substitutability;

Brand Competition other companies offering similar

products and services to the same customers

Industry Competition all companies making the same

product or class of products
Some Core Marketing Concepts

Form Competition all companies manufacturing products that

supply the same service

eg. A car manufacturer will not only compete with other car manufacturers but
also against manufacturers of motorcycles, bicycles, trucks etc.

Generic Competition all companies that compete for the same

consumer income

eg. A car manufacturer would see itself competing with companies that sell
major consumer durables, foreign vacations and new homes.
Some Core Marketing Concepts

Competitors

Industry Competition
(Eating, Cinema, Exercise)

Generic Competition
(Chocolates, Chips, Drinks)

Form Competition
(Aerated, Fruit juice, Beverages)

Brand Competition
(Coke, Pepsi, Thumbs Up)
Some Core Marketing Concepts

Competition represents only one force in the environment in

which the marketer operates

The other force is Marketing Environment: consists of the

Task Environment & the Broad Environment

Task Environment includes the immediate actors involved in

producing, distributing, and promoting the offering. The main
actors are the company, suppliers, distributors, dealers and
the target customers

Broad Environment consists of 6 components; Demographic

environment, Economic environment, Natural environment,
Technological environment, Political-legal environment, and
Socio-cultural environment (PESTLE)
Some Core Marketing Concepts

The Marketing Mix is the set of marketing tools the company

uses to pursue its marketing objectives in the target market

The 4 Ps of Marketing

PRODUCT PRICE PROMOTION PLACE

Some Core Marketing Concepts

MARKETING MIX

PRODUCT PRICE PROMOTION PLACE

Product variety List price Sales promotion Channel type

Quality Discounts Advertising Coverage
Design Credit terms Sales force Locations
Features Allowances Public relations Inventory
Brand name Direct marketing Transport
Packaging Storage
Sizes
Services
Warranties
Some Core Marketing Concepts

People Physical Evidence Process

- Employees Facility design - Flow of activities

Recruiting Equipment Standardized
Training Signage Customized
Motivation Employees dress - Number of steps
Rewards - Other tangibles Simple
Teamwork Reports Complex
- Customers Business cards - Customer involvement
Education Statements
Training Guarantees
Some Core Marketing Concepts

Robert Lauterborn propounded that the Sellers 4-Ps

correspond to the Buyers’ 4-Cs

Four Ps Four Cs
Product Customer Solution
Price Customer Cost
Place Convenience
Promotion Communication

“Winning companies will be those that can meet customer

Needs Economically and Conveniently and with Effective
Communication”
Marketing is Changing…

Information Technology
Globalization
Deregulation / Liberalization
Intense competition
Retail Transformation

Disintermediation
Increasing Consumer Buying Power
Proliferation of Consumer Information
Reducing brand loyalty
Co-creation
Evolution of Company Orientation

PRODUCTION – volume, low cost, easy availability

(D>S / Product cost / Prodn. Efficiency)
(Texas Instruments, Ford, Scooters in 1970s, CD, LCD, RMs,)

PRODUCT - superior products, innovative features

(Marketing Myopia / Fallacy of Better Mousetrap)
(Reliance, Nokia, Slide Rule, Bajaj, IBM, LCA, BEST, Post Office, Cameras, Tata TS
Elgin watches, Kevlar, Amazon)

SELLING - aggressive selling and promotion (Over

capacity, Push and Make & Sell)
(Insurance, MFs, Pharmaceuticals, Political parties, Housing loans, Commodities)
Evolution of Company Orientation

MARKETING / CUSTOMER - customer focused / centric,

more effective than competitors (Sense & Respond /
Creating, delivering & communicating superior customer value)
(DuPont, Nestle, HUL, Maruti, Taj Group, ITC)

SOCIETAL - consumer wants, company profits and

social welfare (Preserves and enhances consumer’s and
society’s well being)
(McDonalds, HUL detergents, CFC free, Body Shop, Aquafina, Jain Irrigation, Energy
saving mfg, American autos, Aerated drinks)
Evolution of Company Orientation

Starting Focus Means Ends

Point

Selling Profits
Existing
Factory and through
Products
Promoting Volume
TheSelling
The Concept
SellingConcept

Profits
Customer Integrated
Market through
Needs Marketing
Satisfaction
TheMarketing
The Concept
MarketingConcept
Evolution of Company Orientation

Starting Focus Means Ends

Point

Mfg & Profits

Existing
Factory Dist. through
Products
Efficiency Volume
TheProduction
The Concept
ProductionConcept

Profits
Customer Integrated
Market through
Needs Marketing
Satisfaction
TheMarketing
The Concept
MarketingConcept
 Holistic Marketing Concept
Product &
Senior Other Services
Marketing Communications Channels
Management Departments
Department

Internal Integrated
Marketing Marketing

Holistic
Marketing

Performance Relationship
Marketing
Sales Marketing
Revenue

Ethics
Brand & Customers Channel Partners
Community
Customer Environment Legal
Equity
Delivering Customer Value
MICHAEL PORTER’S GENERIC VALUE CHAIN

PRIMARY ACTIVITIES
• Inbound Logistics
• Operations
• Outbound Logistics
• Marketing and Sales
• Services

SUPPORT ACTIVITIES
• Procurement
• Technology development
• Human Resource Management
• Firm infrastructure

BENCHMARK AGAINST COMPETITION

Vision, Mission, Goals, Strategy & Tactics

Strategic Planning Gap & Growth Strategy

• Intensive Growth: (Ansoff’s Growth Strategy)

• Integrative Growth
• Diversification Growth
• Downsizing and Divesting: (Prune, Harvest or Sell)
Strategic Planning Process

PLANNING (Corp, Div, Busi & Pdt)

ORGANIZING

IMPLEMENTING or EXECUTING

CONTROLLING (Ensuring Implementation & Measuring Results)

EVALUATING (Results)

CORRECTIVE ACTION
Strategic Planning Process

External
Environment
Analysis
(O&T)

Business SWOT Goal Strategy Implementation Control &

Mission Analysis Formulation Formulation or Execution Feedback

SMART Porter’s
Internal Generic
Environment Strategy
Analysis
(S&W)
Merci