Chapter 1

Defining Marketing for the new realities

Marketing Management
Course Instructor : Hadiqa Riaz
Business Studies Department, BUKC
1
What is Marketing

• Marketing deals with identifying and meeting human and social needs. One of the shortest
definitions of marketing is "meeting needs profitably."
• marketing's role is to "deliver a higher standard of living.“
• Marketing is an organizational function and a set of processes for creating, communicating,
and delivering value to customers and for managing customer relationships in ways that benefit
the organization and its stake holders.
• The aim of marketing is to know and understand the customer so well that the product or
service fits him and sells itself.
Scope of Marketing

• The scope of marketing is determined by the marketing offering of an organization. Market

offering is a combination of goods, services, events, experiences, ideas, persons, places,
properties, information, organizations offered to a market to satisfy specific needs and wants of
people.
• Market offerings are not limited to physical goods. They also include services like banking, air
travel, hotel stay, tourism, etc. which are not tangible in nature and can’t be owned by the
buyers.
Scope of Marketing
Exchange: which is the core concept of marketing, is the process of obtaining a desired product
from someone by offering something in return. For exchange potential to exist, five conditions
must be satisfied:
1. There are at least two parties.
2. Each party has something that might be of value to the other party.
3. Each party is capable of communication and delivery.
4. Each party is free to accept or reject the exchange offer.
5. Each party believes it is appropriate or desirable to deal with the other party.
Scope of Marketing
Transactions: Two parties are engaged in exchange if they are negotiating—trying to arrive at
mutually agreeable terms. When an agreement is reached, we say that a transaction takes place. A
transaction is a trade of values between two or more parties.
Markets:
Economist's definition: Place (virtual or physical) where buyers and sellers meet.
Marketer's definition: The set of actual and potential buyers of a product. The sellers of a product
are labeled as the “industry”.
A Market is the set of all actual and potential buyers of a product or service. Marketing involves
serving a market of final consumers in the face of competitors.
Scope of Marketing

Key Customer Markets: Consider the following key customer markets: consumer, business,
global, and nonprofit.
1. Consumer Markets
2. Business Markets
3. Global Markets
4. Non-Profit & Government Markets
Simple Marketing Concept

Sellers and buyers are connected by

four flows. The sellers send goods
and services and communications
(ads, direct mail) to the market; in
return they receive money and
information (attitudes, sales data).
Core Marketing Concept

Customer needs wants and demands

Market offerings (products & services)

Customer value and satisfaction

Exchanges and relationships

Markets
Core Marketing Concept

Needs: Needs are the state of self-deprivation in an individual. The starting point of marketing is
human needs.
Wants: Wants are a step ahead of needs and are largely dependent on the needs of humans
themselves.
Demands: Demands are requests for specific products that the buyer is willing to and able to pay
for. When an individual wants something which is premium, but he also has the ability to buy it,
then these wants are converted to demands.
Core Marketing Concept

Target Market: It involves breaking a market into segments and then concentrating your
marketing efforts on one or a few key segments consisting of the customers whose needs and
desires most closely match your product or service offerings. It can be the key to attracting new
business, increasing sales, and making your business a success.
Market segmentation: It is the process of dividing a target market into smaller, more defined
categories. It segments customers and audiences into groups that share similar characteristics
such as demographics, interests, needs, or location.
Market Positioning: It refers to the ability to influence consumer perception regarding a brand
or product relative to competitors. The objective of market positioning is to establish the image or
identity of a brand or product so that consumers perceive it in a certain way.
Core Marketing Concept

Market offerings: Market offerings are a combinations of products, services and experiences offered
to a market to satisfy a need or want. These can be physical products, but also services – activities that
are essentially intangible.
The phenomenon of Marketing Myopia is paying more attention to company products, than to the
underlying needs of consumers.
Customer Value:
Difference between “value gained by owning and using a product” and “cost of
obtaining the product”.
Customers act on perceived value [and perceived cost]
Customer Satisfaction:
Perceived performance relative to expectations.
Core Marketing Concept

• Value proposition is the set of benefits or values a company promises to

deliver to consumers to satisfy their needs.
Example: Imtiaz Value Proposition: Imtiaz Provides wide variety of products at
lowest possible price in most convenient way.
Apple’s iPhone, “Touching is believing”.
Core Marketing Concept

Customer value and satisfaction are key building blocks for customer relationships.
Exchanges are the acts of obtaining a desired object form someone by offering something in
return.
Marketing consists of actions trying to build an exchange relationship with an audience.
Relationship (Marketing): Going beyond short-term transactions. Long-term relationships with
valued customers, partners, etc.
Core Marketing Concept
The marketing environment : Competition represents only one force in the environment in
which the marketer operates. The marketing environment consists of the task environment and
the broad environment.
1. The task environment includes the immediate actors involved in producing, distributing,
and promoting the offering. The main actors are the company, suppliers, distributors, dealers,
the target customers, marketing research agencies, advertising agencies, banking, insurance
companies, transportation companies, and telecommunications companies, agents, brokers,
manufacturer representatives, and others who facilitate finding and selling to customers.
2. The broad environment consists of six components: demographic environment, economic
environment, physical environment, technological environment, political-legal environment,
and social-cultural environment. These environments contain forces that can have a major
impact on the actors in the task environment.
Core Marketing Concept

Marketplace: The marketplace is physical, as when you shop in a store. Marketspace is digital,
as when you shop on the Internet.
Mohan Sawhney has proposed the concept of a Meta-market to describe a cluster of
complementary products and services that are closely related in the minds of consumers but are
spread across a diverse set of industries.
For Example: The automobile Meta-market consists of automobile manufacturers, new car and
used car dealers, financing companies, insurance companies, mechanics, spare parts dealers,
service shops, auto magazines, classified auto ads in newspapers, and auto sites on the Internet.
In purchasing a car, a buyer will get involved in many parts of this Meta-market, and this has
created an opportunity for Meta-mediaries to assist buyers to move seamlessly through these
groups, although they are disconnected in physical space.
Company Orientations Toward the
Marketplace

Whilst marketers and marketing teams can usually dictate the marketing strategies it adopts, it
cannot always dictate the organization's marketing orientation.
There are five key categories for market orientation:
• Production orientation
• product orientation
• sales orientation
• societal orientation
• market orientation.
Company Orientations Toward the
Marketplace

The production concept: the idea that consumers will favor products that are available and
highly affordable, and that the organization should therefore focus on improving production and
distribution efficiency.
The product concept: the idea that consumers will favor products that offer the most quality,
performance, and features and that the organization should therefore devote its energy to making
continuous product improvements.
The selling concept: the idea that consumers will not buy enough of the firm’s product, unless it
undertakes a large-scale selling and promotion effort.
Watch the video to further understand selling concept
https://www.youtube.com/watch?v=VooHiweb1sw&t=246s
Company Orientations Toward the
Marketplace

The marketing concept: the idea that achieving organizational goals depends on knowing the
needs and wants of target markets and delivering the desired satisfactions better than competitors
do. It can be regarded as an “outside-in view”.
The societal marketing concept is the idea that a company’s marketing decisions should
consider consumer wants, the company’s requirements, consumers’ long-term interests and
society’s long-term interests. Companies should deliver value in a way that maintains consumers
and society’s well-being.
Examples of Societal Marketing
The Holistic Marketing
Concept
The holistic marketing concept is based on the development, design, and implementation of
marketing programs, processes, and activities that recognizes their breadth and
interdependencies. Holistic marketing recognizes that "everything matters" with marketing—and
that a broad, integrated perspective is often necessary. Four components of holistic marketing
are:
The Holistic Marketing Concept
The Holistic Marketing Concept

1. Internal marketing – Marketing between all the departments in an organization.

2. Relationship marketing – Building a better relationship with your customers, internal as
well as end customers is beneficial for holistic marketing.
3. Performance marketing – Driving the sales and revenue growth of an organization
holistically by reducing costs and increasing sales.
4. Integrated marketing – Products, services and marketing should work hand in hand
towards to growth of the organization.
Updating the Four Ps
Updating the Four Ps
The New Marketing Realities

“The marketplace isn't what it used to be.”

It is radically different as a result of major, sometimes interlinking societal forces that have
created new behaviors, new opportunities, and new challenges. Here we’ll discuss three
transformative forces:
1. Technology
2. Globalization
3. Social Responsibility
The New Marketing Realities
How Khaadi Deals with the New Marketing
Realities

• Watch Video
• https://www.youtube.com/watch?v=S80YZVrMOhw