CHAPTER ONE

Understanding Marketing as a Value-delivering Task

 Topics Covered

Marketing drawing a lot of criticism in recent times

Current times add to marketing’s difficulties
A broadened understanding of marketing is needed
Basics of marketing; different concepts of marketing in vogue
Marketing myopia
Difference between selling and marketing
Why go for a new concept of marketing?
The value concept of marketing and the value-delivery process
Marketing is all about delivering value
 Marketing Drawing a Lot of
Criticism in Recent Times
Chart 1.1 Criticisms Levelled Against Marketing
Attack from top managements
Marketing’s efficiencies are being questioned, their strategies doubted and results
criticised.
Attack from customers
‘Consumers have more choices that yield less value …

We need a new reference for value creation’: —Prahalad and Ramaswamy

Attack from society
Marketing is on overdrive, exploiting society.
 Current Times Add to
Marketing’s Difficulties
Disruption of the times impacts marketing
Disruption and discontinuity challenge ongoing practices.
Breaking down of entry barriers
Capital becomes cheap and easily accessible.
Brand clout is waning
Customers are just asking: Am I getting my money’s worth?

Mini Case 1.1 ‘BYJU’S—The Learning App, Giving Value and Capturing Value’ is a pointer
to the new trends in marketing/business.
 A Broadened Understanding of
Marketing Is a Must Today

Existing ideas about marketing appear to be inadequate.

A new prescription with something more durable as the
base is needed.
Rest of the chapter examines what could be the contours of
such a framework.
 Basics of Marketing

• Marketing has been described in various ways:

A practice, a process, an orientation and so on.
What does it do?
It meets customer’s needs, generates his satisfaction, earns
some profit, builds relationships, meets competition and so on. It
does many things.
 Marketing is multidimensional, dynamic and complex
It cannot be confined within the limits of any single definition.
 Different Concepts of
Marketing in Vogue

• Exchange concept

• Production concept

• Product concept

• Sales concept

• Marketing concept

A ‘difference in orientation’ is what separates one concept from the

other.
Chart 1.2 ‘Salient Features of Different Concepts of Marketing’
presents the salient features of these concepts.
 Marketing Myopia

• It is a term coined by Professor Theodore Levitt, which means

a crooked perception of marketing and a short-sighted view of
business.

• It is caused by an excessive emphasis on the ‘product’, almost

forgetting the customer.

• Wise firms approach business ‘in terms of the human need’

met by their products. ‘Product’ is not the basis.
 Difference Between Selling and
Marketing
Table 1.1 ‘Difference Between Selling and Marketing’ describes the
difference between selling and marketing.

• Marketing is much wider than selling, and much more dynamic

• Selling revolves around the interests of the seller.
• Marketing revolves around the interests of the buyer.
Exhibit 1.1 ‘Levitt and Drucker on How Marketing Differs from Selling’
presents some of the ideas of Levitt and Drucker on the true meaning
of marketing as well as the difference between selling and marketing.
 Why Go for a New Concept of
Marketing?
• Existing concepts do not provide practical direction.
• Existing concepts do not explicitly project ‘value’ as the crux in
marketing

• How come marketing neglected ‘value delivery’?

Chart 1.3 ‘How Come Marketing Neglected “Value Delivery”’ explains in
a nutshell how marketing came to ignore ‘value delivery’.
 The Value Concept of Marketing

Chart 1.4 ‘Value Concept Includes All Attributes of Marketing Concept

and Goes Beyond’ shows that the value concept includes all attributes
of the marketing concept and goes beyond.

• Marketing defined as per the value concept

• Distinction of the value concept
• Main tenets of the value concept
Chart 1.5 ‘Value Concept of Marketing: Main Tenets’ shows the main
tenets of the ‘value concept’ of marketing.
 Value: The Basics
• Meaning of value in the marketing context
• It is ‘benefits’ that translate into ‘value’
• People do not buy products; they buy value
• Customer benefit and customer cost
• Value is ‘benefits relative to costs’
Exhibit 1.2 ‘Nano: A Low Price Need Not Necessarily Mean Value to the
Target Buyer’ explains that a cheap product offer/low price need not
necessarily be accepted as value by the targeted customer.
Exhibit 1.3 ‘Tangible and Intangible Customer Value’ illustrates tangible and
intangible values.
 Value-delivery Process: Concept to
Action
Chart 1.6 ‘Components of the Value-delivery Process’ presents the components of the
value-delivery task in a nutshell.

• Selecting the value to be offered

• Creating the value
• Communicating the value
• Delivering the value
• Capturing value back for the firm from market
• Enhancing the value

Mini Case 1.2 ‘Nexa: Maruti’s Innovative Value Creation’ provides a good exposition of
the total process of value creation and delivery.
Exhibit 1.4 ‘Coca-Cola Is Still Searching: What Will Give “Value” to the Indian
Consumer?’ explains what a customer sees as value in a product/offer.
Marketing is all about creating, delivering and communicating value.