An Introduction

to Marketing
DEFINITION:
‡ MARKETING IS A SOCIAL AND MANAGERIAL PROCESS…….

BY WHICH INDIVIDUALS AND GROUPS OBTAIN WHAT THEY

NEED & WANT…..

THROUGH CREATING & EXCHANGING PRODUCTS & VALUE

WITH OTHERS. (in a mutually sustainable & perpetual manner)
AMA (1985) DEFINITION:
MARKETING IS THE PROCESS OF PLANNING &
EXECUTING THE CONCEPTION, PRICING,
PROMOTION AND DISTRIBUTION OF IDEAS,
GOODS & SERVICES TO CREATE EXCHANGE &
SATISFY INDIVIDUAL & ORGANISATIONAL
OBJECTIVES.
Re-defining Marketing:
“Marketing is the activity, set of institutions,
and processes for creating,
communicating, delivering, and
exchanging offerings that have value for
customers, clients, partners, and society
at large.

(Approved by Board of Directors of

American Marketing Association October
2007
Re-defining Marketing:
Marketing is now changing its focus from
Transaction/ Exchange to Relationship.

Focus is changing from ‘each transaction to

be profitable’
to
The relationship (overall) is profitable.
Components / Characteristics
‡ Marketer/Manager
‡ Customer/Society
‡ Needs/Wants/demands
‡ Exchange
‡ Sustainability
‡ Perpetuity
‡ Continuous
What is marketed
‡ Consumer & Industrial Products Marketing
Soap, Car, Cutting Machines, Chemicals, etc.

‡ Consumer & Industrial Services

Education, Entertainment, Travel, Vehicle Repair,
Hospitals…….
What is marketed
Meta Marketing
Person
Place
Cause
Profession
Institution
 MARKETING PROCESSS
CREATE VALUE FOR CUSTOMERS & BUILD CUSTOMER RELATIONSHIP

Understand Design a Construct an Build

the customer integrated profitable
marketplace driven marketing relationship
and customer Marketing program that and create
needs and strategy delivers customer
wants. superior value delight

CAPTURE VALUE FROM CUSTOMERS IN RETURN

Capture value from

customers to create profits
and customer equity.
 1 2
1A 1B
1D
1C
MARKETING PROCESSS
1. CREATE VALUE FOR CUSTOMERS & BUILD CUSTOMER
RELATIONSHIP
1A.Understand the marketplace and customer needs and wants.
1B.Design a customer driven Marketing strategy
1C.Constuct an integrated marketing program that delivers superior value
1D.Build profitable relationship and create customer delight

2. CAPTURE VALUE FROM CUSTOMERS IN RETURN

Capture value from customers to create profits and customer equity.
1A.Understand the marketplace and customer
needs and wants.
‡ Customer needs, wants, and demands

‡ Market offerings

‡ Value and satisfaction

‡ Exchanges and relationships

‡ Markets
1A.Customer Needs, Wants, and
Demands
 Example
Setting up restaurant in UK
NEED 1 Lakh Indians need
Indian Food

40000 SIF 60000 NIF

WANT 10000 20000 10000 15000 35000 10000
HSIF MSIF LSIF
HNIF MNIF LNIF

H @ 100/M HSIF =1000000 HNIF=15000000

DEMAND
M@ 50/M MSIF=1000000 MNIF=1750000
L@ 30/M LSIF=30000 LNIF=30000
1A.Understanding the Marketplace
and Customer Needs
‡ Market offerings are some combination of products,
services, information, or experiences offered to a
market to satisfy a need or want
1A. Understanding the Marketplace
and Customer Needs
Customer Value Expectations and Satisfaction
VALUE: SUM TOTAL OF PHYSICAL, EMOTIONAL AND SOCIAL BENEFITS
DERIVED OUT OF A PRODUCT / SERVICE
1A. Understanding the Marketplace
and Customer Needs
Markets are the set of actual and potential buyers of a product

Exchange is the act of obtaining a desired object from someone

by offering something in return

Marketing myopia
is focusing only on existing wants and losing sight of underlying
consumer needs Eg: Horlicks / Viva
1B.Designing a Customer-Driven Marketing
Strategy
Marketing management is the art and science of choosing target
markets and building profitable relationships with them

„ What customers will we serve? i.e. segment

„ How can we best serve these customers? i.e. strategy

1B.Designing a Customer-Driven Marketing
Strategy
Market segmentation refers to dividing the markets into
segments of customers

Target marketing refers to which segments to go after

Demarketing is marketing to reduce demand temporarily or

permanently; the aim is not to destroy demand but to reduce
or shift it

The value proposition is the set of benefits or values a company

promises to deliver to customers to satisfy their needs
1B.Designing a Customer-Driven Marketing
Strategy
Marketing Management Orientations
1B.Designing a Customer-Driven Marketing
Strategy
Marketing Management Orientations

Production concept is the idea that consumers will

favor products that are available or highly
affordable
1B.Designing a Customer-Driven Marketing
Strategy
Marketing Management Orientations

Product concept is the idea that consumers will favor

products that offer the most quality, performance,
and features. Organization should therefore devote
its energy to making continuous product
improvements.
1B.Designing a Customer-Driven Marketing
Strategy
Marketing Management Orientations

Selling concept is the idea that consumers will not buy

enough of the firm’s products unless it undertakes a
large scale selling and promotion effort
1B.Designing a Customer-Driven Marketing
Strategy
Marketing Management Orientations

Marketing concept is the idea that achieving

organizational goals depends on knowing the needs
and wants of the target markets and delivering the
desired satisfactions better than competitors do
1B.Designing a Customer-Driven Marketing
Strategy
Marketing Management Orientations

Selling Profits
Existing
Factory and through Sales
Products
Promoting Volume
The
The Selling
Selling Concept
Concept

Profits
Customer Integrated
Market through Customer
Needs Marketing
Satisfaction

The
The Marketing
Marketing Concept
Concept
1B.Designing a Customer-Driven Marketing
Strategy
Marketing Management Orientations

Societal marketing concept is the idea that a company

should make good marketing decisions by
considering consumers’ wants, the company’s
requirements, consumers’ long-term interests, and
society’s long-run interests
1B.Designing a Customer-Driven Marketing
Strategy
Marketing Management Orientations: Societal marketing

SOCIETY
(Human welfare)

CONSUMERS Company
(Need satisfaction) (Profits)
1B.Designing a Customer-Driven Marketing
Strategy Holistic Marketing
Holistic marketing: recognizes that every thing matters.
It is based on design, development& implementation of marketing
programs, process & activities that recognizes their
interdependencies
1C.Construct an integrated marketing
program that delivers superior value

Integrated marketing program is a comprehensive plan that

communicates and delivers the intended value to chosen
customers.

The marketing mix is the set of tools (four Ps) the firm uses to
implement its marketing strategy. It includes product, price,
promotion, and place.
1C.Construct an integrated marketing
program that delivers superior value

Value bundle

McCarthy’s 4P
1C.Construct an integrated marketing
program that delivers superior value
Coined by Neil Borden in 1953 as president of AMA,
the mix has been extended to 7P’s

‡ Product
‡ Promotion
‡ Price
‡ Place
‡ People
‡ Physical evidence
‡ Process

In truly great marketing organisation, you can’t tell who is in the

marketing department. Every one in the organisation has to
make decisions based on the impact on the customer
Prof. Stephen Burnnet.
1C.Construct an integrated marketing
program that delivers superior value

Product : Anything that can be offered to a market that

might satisfy a need/want

Price : The amount of money charged for a product or

service

Promotion: A blend of communication tools that

convey the customer value and build customer
relationship

Place / Distribution: The activities involved in making

the product available to the customer
1D.Build profitable relationship and create
customer delight

Customer Relationship Management (CRM)

The overall process of building and maintaining
profitable customer relationships by delivering
superior customer value and satisfaction
Partner Relationship Management (Supply Chain)
‡ Partners inside the company is every function area
interacting with customers
„ Electronically
„ Cross-functional teams
‡ Partners outside the company is how marketers
connect with their suppliers, channel partners, and
competitors by developing partnerships
1D.Build profitable relationship and
create customer delight
Relationship Building Blocks: Customer Value and Satisfaction
Eg: Alfred Hitchcock
1D.Build profitable relationship and
create customer delight
Customer Relationship Levels
1D.Build profitable relationship and
create customer delight
The Changing Nature of Customer Relationships
‡ Customer Discrimination: Relating with more carefully
selected customers uses selective relationship management
to target fewer, more profitable customers
‡ Customer Partnerships: Relating more deeply and
interactively by incorporating more interactive two way
relationships through blogs, Websites, online communities
and social networks
2. CAPTURE VALUE FROM CUSTOMERS IN
RETURN
Creating Customer Loyalty and Retention

Customer lifetime value

is the value of the entire stream of purchases that the customer
would make over a lifetime of patronage

Share of customer
is the portion of the customer’s purchasing that a company gets
in its product categories

Customer equity
is the total combined customer lifetime values of all of the
company’s customers
The Changing Marketing Landscape
The Changing Marketing Landscape
‡ Government deregulation
‡ Privatization
‡ Heightened competition
‡ Industry convergence
‡ Consumer resistance
‡ Retail transformation
‡ Disintermediation
‡ Higher buying power
‡ Education and information
‡ Variety of goods and services
Types of Markets
Markets: Are a collection of current and potential
buyers
Industry: Are a collection of current and potential
sellers
‡ Resources market
‡ Manufacturers market
‡ Intermediary markets
‡ Consumer markets
‡ Government markets
Types of Demands
‡ Overfull demand
‡ Full demand
‡ Declining demand
‡ Irregular/seasonal demand
‡ Unwholesome demand
‡ Latent demand
The Marketing Environment
The marketing environment includes the
actors and forces outside marketing that
affect marketing management’s ability to
build and maintain successful relationships
with customers
Microenvironment
consists of the actors close to the company that affect its ability to serve
its customers, they are controllable in nature.
Microenvironment
The Company: consists of employees and departments with in the
company. Eg: a public sector bank vs a private sector bank.
Suppliers: Provide the resources to produce goods and services. Eg:
Maruthi car recall.
Marketing Intermediaries: Help the company to promote, sell
and distribute its products to final buyers. Eg: oil marketing company
distributors.
Competitors: firms that affect the company’s strategic advantages
and market prospects. Eg: Nokia vs Micromax, Deccan airline vs Jet.
Publics: Any group that has an actual or potential interest in or
impact on an organization’s ability to achieve its objectives includes
share holders, general publics, government agencies, internal
publics, media publics, citizen action publics.
Macroenvironment
consists of the actors not close to the company that affect its ability to
conduct business, they are uncontrollable in nature.
Macroenvironment
Demographic Environment: Demography is the study of human
populations in terms of size, density, location, age, gender, race,
occupation, and other statistics. Eg: a hospital will have to shift its
specialties depending on age groups.
Economic environment: consists of factors that affect consumer
purchasing power and spending patterns. Eg: economic meltdown of
2008.
Natural environment: involves the natural resources that are
needed as inputs by marketers or that are affected by marketing
activities. Eg: water pollution and purifier sales, mosquitoes and
repellent sales.
Technological Environment: Most dramatic force in changing
the marketplace Creates new products and opportunities. Eg:
computer chips.
Macroenvironment
Political environment: consists of laws, government agencies,
and pressure groups that influence or limit various organizations and
individuals in a given society. Eg: pollution control laws and two
wheeler market in India.

Cultural environment: consists of institutions and other forces

that affect a society’s basic values, perceptions, and behaviors. It
constantly shifts and change the consumer behavior. Eg: fast food
restaurants.
Self Administered Exercise 1.
Compare two companies, one adopting selling
concept and another adopting marketing
concept. Find out the major differences in
their marketing mix.
Eg: Nokia vs Micromax
Class test 1 – Gr:7,10,13 11/09/2010
Instructions: 1. all questions carry equal marks / attempt any 4
2. write in not more than 50 words
3. time allotted maximum is 30 minutes
4. write with examples where ever possible.
5. mention Name, Roll number & Group on the answer sheet

1. Write any 5 needs an user may seek while using a toothpaste

with an example. ( for a soap it may be freshness – Eg:
cinthol)
2. Write 3 differences between selling concept and marketing
concept
3. What is societal marketing concept? Explain with an example
4. Mention 5 major changes in the marketing landscape.
5. What impact can the political environment have on a
marketer? Explain with an example.