MODULE 1

DR. ANJALI MOTWANI

 INTRODUCTION
• Marketing is all pervasive in today’s world. It begins with the
fundamental idea that most human behaviour is a purposeful quest
for the need for satisfaction and this activity is rooted in “exchange”
notion. Marketing requires the existence of two or more persons or
groups having certain wants and also possessing certain products.
• Marketing deals with identifying and meeting human and social
needs. Whether the marketer is Hindustan Lever limited, Colgate
Palmolive, Maruti or Bajaj, with their products or services, they all
illustrate a drive to turn a private or social need into a profitable
business opportunity.
• Marketing is the process of creating, distributing, promoting and
pricing goods, services and ideas to facilitate satisfying exchange
relationships with customers and develop and maintain favorable
relationships with stakeholders in a dynamic environment.
 DEFINITION OF MARKETING
• The American Marketing Association offers the
following definition: “Marketing is the process of
planning and executing the conception, pricing,
promotion, and distribution of ideas, goods, services to
create exchanges that satisfy individual and
organizational goals’
• According to Phillip Kotler, Marketing management
may be defined as “analysis, planning, implementation
and control of program and designs to create, built and
maintain beneficial exchanges with target markets for
the purpose of achieving organisational objectives”
 DESIRE
• Desire is the emotion of longing or hoping for
a person, object, or outcome. The same sense
is expressed by words such as "craving". When
a person desires something or someone, their
sense of longing is excited by the enjoyment
or the thought of the item or person, and they
want to take actions to obtain their goal.
 SATISFACTION
• Satisfaction is the act of fulfilling a need,
desire, or appetite, or the feeling gained from
such fulfillment. Satisfaction means you've
had enough — in a good way. When a product
says "Satisfaction guaranteed" it means you'll
like it or they'll give you your money back.
 MARKETING CONCEPTS
• The Production Concept:
• The production concept is the oldest concept in business. According to this
concept consumers will prefer products that are widely available and
inexpensive. The concept believes that product should be available and
affordable. This concept works well in developing countries where consumers
are more interested in obtaining the product than its features.
• Managers of production-oriented business concentrate on achieving high
production efficiency, low costs and mass distribution. They assume that
consumers are primarily interested in product availability and low prices.
• This orientation makes sense in developing countries such as China, where
the largest PC manufacturer, Lenovo, and domestic appliances giant Haier
take advantage of the country’s huge and inexpensive labour pool to
dominate the market. Marketers also use this concept when they need to
expand the market. But this concept does not concentrate on the type of
product and does not give importance to customization or customer
satisfaction.
• The Product Concept:
• The product concept holds that consumers will favor
those products that offer the most quality,
performance, or innovative features.
• Managers in these organizations focus on making
superior products and improving them over time. They
assume that buyers admire well-made products and can
appraise quality and performance.
• However, Product oriented companies often design
their products with little or no customer input. The
customer needs are ignored. They overlook
competition and this also leads to marketing
myopia(Kodak, Nokia, Hollywood, Yahoo).
• The Selling Concept:
• The selling concept holds that consumers will not be interested in
buying on their own; they need to be coaxed into buying. This
concept believes that a company needs effective selling and
promotional tools to stimulate more buying. Salesmen are hired
to make people aware about the availability of the product and
also to the increase the sales. The selling concept is practiced most
aggressively with unsought goods, goods that buyers normally do
not think of buying, such as insurance and encyclopedias. Most
firms also practice the selling concept when they have over
capacity. Their aim is to sell what they make, rather than make
what the market wants.
• The selling concept is also practiced in the non-profit area by fund-
raisers, college admission offices and political parties. When the
product is new, this method is beneficial and people become aware
of the product; but, at the same time, it carries high risks also. They
sell what they make rather than make what the market wants.
 MODERN MARKETING CONCEPT
• The Marketing Concept:
• According to this concept, achieving organizational goals depends on knowing the needs
and wants of target markets and delivering the desired satisfaction better than the
competitors. It is based on premise like customer orientation, marketing information
system, systems approach and dual objectives. Therefore, under this concept, customer
focus and value are the paths to sales and profits. Instead of “make and sell” philosophy, here
we focus on “sense and respond” tactics. Therefore this is a customer-centred concept. The
job is not to find the right customers for your product but to find the right product for your
customers.
• The Selling concept is an inside-out perspective where the focus is the company’s existing
products. But the Marketing concept is an outside-in perspective where the focus is the
customer needs. The modern marketing concept believes that the philosophy of marketing is
to deliver goods more efficiently and effectively than the competitors with a view of overall
customer satisfaction.
• This concept insists on a good marketing information system with a view of maintaining such
information and data which will help in satisfying the customer. Each and every department is
well co-ordinated and inter related with one another in bringing about customer satisfaction.
This concept concentrates on dual objectives of profit maximization and customer
satisfaction. Several scholars have found that companies that apply the marketing concept
achieve superior performance.
• The Social Marketing Concept:
• According to the Social marketing concept, the
marketing strategy should deliver value to
customers in a way that maintains or improves
both the customer’s and the society’s well-being.
• Therefore, it’s similar to the Marketing concept
but adds the focusing on society’s well-fare. So
there are three considerations underlying the
social marketing concept: Consumers Satisfaction,
Company’s Profit and Society’s Welfare.
• The Holistic Marketing Concept:
• The holistic marketing concept is based on the development, design and
implementation of marketing programs, processes and activities their
breadth and interdependencies. Holistic marketing recognizes that
“everything matters” in marketing and that a broad and integrated
perspective is often necessary.
• Holistic marketing is thus an approach that attempts to recognize and
reconcile the scope and complexities of marketing activities. There are four
broad components characterizing holistic marketing:
• Relationship marketing : It aims at building mutually satisfying long term
relationships with key constituents in order to earn and retain their business.
• Integrated Marketing : Integrated marketing is a process of coordinating
various marketing activities to maximize their joint efforts.
• Internal Marketing : Internal marketing is the task of hiring, training, and
motivating able employees who want to serve customers well. It’s a process
of ensuring that everyone in the organization embraces appropriate marketing
principles.
• Performance Marketing : It is a process of understanding the returns to the
business from marketing activities and programs, as well as addressing broader
concerns and their legal, ethical, social and environmental effects.
 CHARACTERISTICS OF MARKETING
MANAGEMENT
• 1. Customer focus: The marketing function of a business is customer-centered. It makes an attempt to
study the customer needs, and goods are produced accordingly. The business existence depends on
human needs. In a competitive market, the goods that are best suited to the customer are the ones that
are well-accepted. Hence, every activity of a business is customer-oriented.
• 2. Customer satisfaction: A customer expects some services or benefits from the product for which
payment is made. If this benefit is more than the amount paid, then the customer is satisfied. In the long
run, customer satisfaction helps to retain market demand. It helps achieve organizational objectives.
Customer satisfaction can be enhanced by providing value-added services, which includes providing
additional facilities at little or no extra cost.
• 3. Objective-oriented: All marketing activities are objective-oriented. Different objectives are fixed at
different levels, but the main objective is to earn profit from business along with the satisfaction of human
wants. Marketing activities undertaken by sellers make an attempt to find out the weaknesses in the
existing system, and measures are taken to improve the shortfalls so that the objectives are achieved.
• 4. Marketing is both art and science: Art refers to a specific skill that is required in marketing activities of
any type of business. Science refers to a systematic body of knowledge, based on facts and principles. The
concept of marketing includes a bunch of social sciences such as economics, sociology, psychology and
law. It indicates market operations based on some principles. Hence, marketing is an art as well as a
science.
• 5. Continuous and regular activity: Marketing is an activity designed to plan, price, promote and
distribute products. At the same time, it also addresses both the current and future consumers. Thus, it is
a continuous process. A marketer has to consistently monitor environment. This helps in coming up with
new products.
• 6. Exchange process: Marketing involves exchange of goods, services and ideas with the
medium of money. Exchange takes place between sellers and buyers. Most of marketing
activities are concerned with the exchange of goods. Functions such as distribution, after-sale
services and packaging help in the exchange process. Channels of distribution and physical
distribution play an important role in the exchange process by creating place utility.
• 7. Marketing environment: Economic policies, market conditions, environmental factors such
as: political, technological, demographic and international, influence marketing activities.
Marketing activities are inseparable from such environmental factors. A successful marketer
needs to adapt to these changing factors and adjust marketing strategies to suit new market
developments.
• 8. Marketing mix: A combination of four inputs constitutes the core of a company’s marketing
system—product, price, place, and promotion. Marketing mix is a flexible combination of
variables. They are influenced by consumer behaviour, trade factors, competition and
government regulatory measures.
• 9. Integrated approach: The marketing activities must be co-ordinated with other functional
areas of an organization. Functions such as production, finance, research, purchasing,
storekeeping and public relations (PR) are to be integrated with marketing. This will help in
achieving organizational objectives. Otherwise, it will result in organizational conflicts.
• 10. Commercial and non-commercial organizations: With the societal marketing concept
gaining importance, social marketers are finding useful new ways of applying marketing
principles. Commercial organizations are also adopting cause-related marketing to strike long-
term relations with consumers
 SCOPE OF MARKETING
• Goods: Physical goods form the bulk of production and marketing effort of most of the countries. Steel,
cotton, clothing, housing etc.
• Services: Services include like airlines, hotels, barbers, lawyers, doctors, engineers etc. Many market offerings
consist of a variable mix of goods and services.
• Experiences: With the help of various goods and services one can create, stage, and market experiences. like
Walt Disney world’s magic kingdom, climbing Mount Everest etc are great experiences.
• Events: Marketers promote time based events like Olympics, trade shows, sports events and artistic
performances.
• Persons: Celebrity marketing became a major business. Hiring film personalities or sports personalities to
market the product is a major form of marketing today.
• Places: cities, states, nations compete to attract tourists, to build plant and machineries, company
headquarters and new residents. For ex, Tourism development boards of various states, Confederation of
Indian Industries etc.
• Properties: Properties are intangible rights of ownership of either real property( real estate) or financial
property (stocks and bonds).
• Organizations: They work to build a strong favourable image in the mind of the customers. We can see
corporate identity ads like ‘Lets make things better’ (Philips), or HSBC ‘The world’s local bank,’ etc.
• Information: Information can be produced and marketed as a product, like through encyclopedias, magazines
CDs etc. Information marketing is one of the major industries in the world today.
• Ideas: Products and services are platforms for delivering some idea or benefit. The buyer of a drill is really
burying a hole. Marketers must search the core need that they are trying to satisfy.
 MARKETING ENVIRONMENT
• According to Philip Kotler, Marketing
environment maybe defined as, “ the totality
of all those forces and institutions that are
external and potentially relevant to the
marketing of a firm.”
• In other words, marketing environment is the
sum total of all those forces, institutions, and
activities that directly or indirectly impact the
marketing operations of a business.
MICRO ENVIRONMENT
 CONTROLLABLE ENVIRONMENT
• It includes two variables:
• Business Mix:
• This refers to all the components and elements of business which can be combined in order to
make an enterprise run. It includes the 5 M’s – Man, Machine, Method, Material and Money.
• Marketing Mix:-
• Marketing mix may be defined as a set of those key inputs or variables which are necessary for
the marketing of the firm. They include the 4 P’s, namely, Product, Price, Place, and Promotion.
• In the service industry, there are 3 additional P’s namely, a) Physical Evidence b) Process c)
People.
• Characteristics of the marketing Mix :
1. Marketing Mix changes from firm to firm and industry to industry.
2. It is dynamic and changes from time to time.
3. It is aimed at maximizing customer satisfaction.
4. It is flexible and changes according to the customers’ requirement.
5. It determines the success and failure of a firm.
CHANNELS OF DISTRIBUTION
ELEMENTS OF MARKETING MIX
 PRODUCT
• According to Philip Kotler, “A product is
anything that can be offered to a market for
attention, acquisition, use, or consumption
that might satisfy a need or want.” In effect,
according to this definition, products include
physical products, services, persons, places,
organisations and ideas.
 PROMOTION
• Promotion is a key element of marketing
programme and is concerned with effectively
and efficiently communicating the decisions of
marketing strategy, to favourably influence
target customers’ perceptions to facilitate an
exchange between the marketer and the
customer that may satisfy the objectives of
both the customers and the company.
 PLACE
• Place or distribution stands for the matching
arrangement for the smooth flow of goods
and services from the producers to the
consumers. It is concerned with the creation
of place, time and possession of utilities.
 PRICE
• Pricing helps in directing the product to a
specific consumer segment. Price is the value
of the product expressed in terms of money.
• According to a few marketing experts, there
are additional 3 P’s, namely, Physical evidence,
Process, People.
 PHYSICAL EVIDENCE
• It is the process of establishing service which
is to be offered by leaving some evidence of
its existence.
• For example, Lodges and hotels give
broachers, put attractive show pieces,
chandeliers to create ambience of comfort.
 PROCESS
• Process refers to the manner in which services
are rendered. Different services may be
rendered.
• Example:- Serving food in a hotel can take the
form of self service , buffet or personalized
servicing by the waiter
 PEOPLE
• Every service is rendered by people and those
individuals who render service must have
necessary appearance attitude and talent to
make service memorable examples air
hostesses in a plane
 BUSINESS MIX
• The term business mix refers to the
overall mix of guest types that make up the
clientele staying at a hotel. The business
mix varies from hotel to hotel, the most
common is a business mix is found in central
city hotels and is a mix of both leisure
and business guests.
 SEMI CONTROLLABLE MARKETING
ENVIRONMENT
SUPPLIERS
• They are providers of raw material or finished
goods for manufacturing or trading of
business. They have a direct impact on the
marketing of business products.
 MARKETING INTERMEDIARIES
• They are those individuals and agencies who help in the
promotion distribution and marketing of goods and services to
customers. Intermediaries exert a considerable influence on
the marketing environment. They can also be considered as
the major determining force in business. In many cases the
consumers are not aware of the manufacturer and buy the
product from renowned intermediaries. They are divided into:
• a) Physical distribution intermediaries
• b) Channel intermediaries
• c) Financial intermediaries
• d) Marketing service intermediaries.
 COMPETITORS
• Competition shapes business. A study of the competitive
scenario is essential for the marketer, particularly,
threats from competition.
• Who are the competitors?
• What are their present strategies and business
objectives?
• Who are the most aggressive and powerful competitors?
• Those competitors who are the immediate vicinity of
business can be controlled to a limited extent and,
therefore, quality as semi controllable environment.
 CUSTOMER
• According to Peter Drucker, the aim of business is to
create and retain the customer. Hence, the consumer
occupies the central position in the marketing
environment. The marketer has to closely monitor and
analyze changes in consumer tastes and preferences and
cater to (if not try and anticipate) their buying habits.
• What constitutes the consumer value system?
• What benefits is the consumer looking for?
• Who are the consumers?
• What are their buying patterns?
 PUBLIC
• Public may be defined as all those individuals and
group of individuals who are directly or indirectly
interested and impacted by the market operation of a
firm.
• Public constitute a major force in the micro environment
and marketers have to very carefully study their opinion,
values, beliefs and attitudes in order to design a proper
marketing strategy for goods carefully tailored to meet
the needs of the target consumer segment.
• They include Financial public, Media public, Citizen
Action public, Government public, Local public, General
public, etc.
 Market share
• Market share is the percentage of an industry
or market's total sales that is earned by a
particular company over a specified time
period. Market share is calculated by taking
the company's sales over the period and
dividing it by the total sales of the industry
over the same period. This metric is used to
give a general idea of the size of a company to
its market and its competitors.