Four Ps Four Cs

Product Customer solution

Price Customer cost

Place Convenience

Promotion Communication

Core concept of marketing

As a managerial definition, marketing has often been described as “the art of selling products.” But
Peter Drucker, a leading management theorist, says that “the aim of marketing is to make selling
superfluous. The aim of marketing is to know and understand the customer so well that the product
or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy.”

Marketing is about identifying and meeting human and social needs. One of the shortest good
definitions of marketing is “meeting needs profitably.”

Marketing is the process of finding customer needs and serving that needs profitably.

Marketing is a societal process by which individuals and groups obtain what they need and want
thro creating, offering and exchanging products and services of value with others (Philip Kotler).

Need Want
Needs describe basic human requirements such as food, air, water, clothing, and shelter. People also
have strong needs for recreation, education, and entertainment. These needs become wants when
they are directed to specific objects that might satisfy the need. An American needs food but wants
a hamburger, French fries, and a soft drink. A person in Mauritius needs food but wants a mango,
rice, lentils, and beans. Clearly, wants are shaped by one’s society.

Demands are wants for specific products backed by an ability to pay

Markets

Market, a means by which the exchange of goods and services takes place as a result of buyers and
sellers being in contact with one another, either directly or through mediating agents or institutions.

Product vs services
Evolution of marketing

The Production Concept

The production concept, one of the oldest in business, holds that consumers prefer products that
are widely available and inexpensive. Managers of production-oriented businesses concentrate on
achieving high production efficiency, low costs, and mass distribution. This orientation makes sense
in developing countries, where consumers are more interested in obtaining the product than in its
features. It is also used when a company wants to expand the market

product concept, which holds that consumers 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, assuming that buyers can appraise quality and
performance.

Product-oriented companies often design their products with little or no customer input, trusting
that their engineers can design exceptional products. A General Motors executive said years ago:
“How can the public know what kind of car they want until they see what is available?” GM today
asks customers what they value in a car and includes marketing people in the very beginning stages
of design

The Selling Concept

The organization must, therefore, undertake an aggressive selling and promotion effort. This concept
assumes that consumers must be coaxed into buying, so the company has a battery of selling and
promotion tools to stimulate buying. The selling concept is practiced most aggressively with
unsought goods—goods that buyers normally do not think of buying, such as insurance and funeral
plots. The selling concept is also practiced in the nonprofit area by fund-raisers, college admissions
offices, and political parties. Most firms practice the selling concept when they have overcapacity.
Their aim is to sell what they make rather than make what the market wants. In modern industrial
economies, productive capacity has been built up to a point where most markets are buyer markets
(the buyers are dominant) and sellers have to scramble for customers

The marketing concept holds that the key to achieving organizational goals consists of the company
being more effective than its competitors in creating, delivering, and communicating customer value
to its chosen target markets.

The marketing concept rests on four pillars: target market, customer needs, integrated marketing,
and profitability. The selling concept takes an inside-out perspective. It starts with the factory,
focuses on existing products, and calls for heavy selling and promoting to produce profitable sales.
The marketing concept takes an outside-in perspective. It starts with a well-defined market, focuses
on customer needs, coordinates activities that affect customers, and produces profits by satisfying
customers

The Societal Marketing Concept

societal marketing concept, which holds that the organization’s task is to determine the needs,
wants, and interests of target markets and to deliver the desired satisfactions more effectively and
efficiently than competitors in a way that preserves or enhances the consumer’s and the society’s
well-being. The societal marketing concept calls upon marketers to build social and ethical
considerations into their marketing practices. They must balance and juggle the often conflicting
criteria of company profits, consumer want satisfaction, and public interest. Yet a number of
companies have achieved notable sales and profit gains by adopting and practicing the societal
marketing concept.
Scanning the environment

Demographic Factors : Study of people in terms of their age, gender, location, population, growth
rate, age distribution, literacy level. Over one billion, 2% per annum, literacy level 65 %. Marketers
are keenly interested in the size and growth of population

Socio-cultural environment: Customers live in societies. Social - Attitude, values, lifestyles (Mode of
living - way people decide to live their lives) Social class: Any society is composed of different social
classes. A social class is determined by income, occupation, location of residence. Each class has its
own standards with respect to lifestyle, behaviour. Cultural: Savings, spending pattern. India – seven
different religious groups, 17 major languages. People are tradition bound – reflect – family life,
marriage and rituals

Economic environment: GDP, Per capita Income, Inflation, Classification population.

Political environment: Ruling party, Government - Policy formualtion.

Technological environment: Innovation, Speed of upgradation.

Natural environment: Natural resources-Raw material, Environment, pollution, Deforestation,Global

warming

Importance of marketing

Factors influencing consumer behavior

Five factors 1. Personal- Age, occupation, Economic, lifestyle, personality,

self concept- (How one views about himself)

2. Psychological (Motivation, learning, belief, attitudes)

Learning-change in individual behaviour arising from experience

Belief-Descriptive thought that a person holds about something

Attitude - persons favourable or unfavourable evaluation or feeling towards some object or idea

3. Cultural Factors

4. Social factors (Family, reference group, social roles, status).

5. Brand - Marketing Program

Buying decision process

Five stage Model

Problem Recognition

Information search

Evaluation of alternatives

Purchase decision

Post purchase behaviour

Organizational buying

Decision Making process by the organisation by which it select, evaluate and choose from suppliers.
Characteristics: Goes through long negotiations several participants in the buying process

⚫ Fewer buyers

⚫ Larger buyers

⚫ Close supplier-customer relationship

⚫ Derived demand

⚫ Professional purchasing

Value creation to consumer

Value: Consumers estimate of the products overall capacity to satisfy.

Economic terms – utility. Consumer select a product that offers him the maximum utility for the
money. (Mix of benefits).
Every activity performed by the firm creates some value, which reflects finally in the firm’s product.
Value is created by combining several elements (performance, reliability, special characteristics). All
4Ps

Increasing the functionality of the product

Reducing the price

Giving better service support

Offering beneficial communication.

Marketing is a value creating and value delivering process.

VFM: While buying a product, a consumer wants value for his money. What constitutes value will be
decided by the customer.

According Kotler, value propositions are built on three value disciplines for the company.

1) Product leadership - leads to best product value proposition.

2) Operational excellence - best total cost proposition.

3) Customer intimacy – (To provide total best solution) - specific problem of Customer is identified
and its best solution offered.

Customer satisfaction

Satisfaction: fulfillment of expectations.

✔ Persons feelings of pleasure or disappointment resulting from comparing a product perceived

performance.

✔ Successful firm satisfies the customer by offering him superior value compared to competing
offer

Customer delight

Customer Delight is surprising a customer by exceeding his/her expectations and thus creating a
positive emotional reaction, also called a wow-effect. This wow-effect leads to word of mouth; a
most powerful marketing tool.

⚫ The ultimate goal of delivering Customer Delight is creating a feeling of belonging, a TINA: There
Is No Alternative ( K and R Seth).

⚫ Customer Delight creates a competitive advantage as it directly affects sales and profitability of a
company by distinguishing it’s brand, products and services from the competition.

⚫ In order to consistently deliver Customer Delight at all customer touch points throughout the
company, acustomer-centric-corporate culture has to be developed