A Simple Introduction to Marketing

What is marketing?
For the common man marketing is sales and marketing is advertising. We see a lot of advertisements
whenever we read magazines and newspapers .The situation is no different when we watch television or
listen to radio. We also find a lot of selling being done from vacuum cleaners to encyclopaedias to
insurance. Medical representatives try to persuade doctors to prescribe their products to patients.
Insurance company agents try to sell their policies to customers. There are many door-to-door salesmen
who go about selling a variety of products to customers from encyclopaedias to water purifiers and
toilet cleaners to vacuum cleaners. All of these are marketing. But marketing is much more than just
sales and advertising. It is an important business function which helps a business to be successful. In fact
in many cases, business failures are because of poor marketing. All businessmen and all managers must
therefore understand marketing. Marketing provides a lot of employment opportunities also and there
are many management students who choose marketing for a career. For them, the knowledge of
marketing is critical to ensure success in their career. Let us try to look at what exactly is marketing.
Marketing is a Business function
A business makes many products. These products can be manufactured goods like cement, steel,
television, toilet soap etc. or services like banking, education or medical care. Whether a business is
manufacturing goods or is in services, it needs to have the customers to buy those goods and services.
It is from the customers that a business makes its revenue. It is the customers that provide a business
with the profits. All other business activities whether it is production, purchase, information systems or
human resource management, incur cost. A business is able to make revenues and profits to meet all
those costs only through customers. This is why we say customers are the most important people in any
business .A business cannot survive with out customers. Therefore a business has to take care of its
customers. A business must identify the customers, make them buy the products and keep them
satisfied so that they continue to remain as customers. Marketing is the important business function
that is responsible for doing all these activities related to customers. We can therefore define marketing
as the business function of customer management.
Marketing in simple terms is the business function responsible for managing the customers. Marketing
identifies customers, informs them about products and persuades the customers to buy those products.
Marketing takes care of receiving the payments in time and maintaining continued relationships
between the firm and the customer. Marketing is responsible for designing the product according to the
customers preferences, communicating the product benefits to the customers, distributing the
products effectively and efficiently, and pricing those products appropriately so that the business is
profitable. Whether a business is big or small, in manufacturing or services, as long as customers remain
important, marketing is a key business function. As long as a firm wants its customers, marketing cannot
be ignored. It has to identify its customers and maintain them using the marketing function.

Marketing Defined
So what is marketing? Marketing is a business function responsible for creating and retaining
customers. This is a definition that presents marketing as primarily a business function concerned about
customer management. This is the view which the American Marketing Association (AMA) used in the
past to define marketing. According to AMA, Marketing is the process of planning and executing the
conception, pricing, promotion, and distribution of goods, services, and ideas to create exchanges with
the target groups that satisfy customer and organisational objectives. Target groups here are
customers and exchanges with such customers result in meeting the objectives of both customers and
the firm. This is easier said than done because customers have choices- many competing products to
choose from. Competing firms offer their products to the customer and customers tend to choose those
products which they perceive to be of better value to them. The customers and all the competing firms
together can be defined as a market. Marketing is all that we do in a market so that customers choose
our products above competition.
Marketing definition and marketing mix
In the AMA definition for marketing, the target groups are the customers and marketing is defined as
the process by which organisational objectives can be achieved by satisfying the objectives of the
customers. A firm can have several objectives both short-term and long-term. They can include revenue,
profitability and growth. Such objectives can be only achieved if the customers objectives can be
satisfied by the firm. According to the definition, this is done by creating the products which can be
goods or services, communicating the benefits of such goods or services to the customer, distributing
such goods and services and by pricing them appropriately. These four aspects of marketing are typically
referred to as the four Ps of marketing or in other words marketing mix.
The first P for Product
Creating and managing goods and services come under the first P which is the P for the all important
product. The firm has to understand the customer and use this knowledge to create better products
that will satisfy them. Every product will have a certain successful life in the market. Sooner or later
better products will come to the market and customers may prefer such products. When such switching
happens, a firm has to introduce new products. Products need to be packaged appropriately. Innovative
features must be present in products. All these decisions related to products are fundamentally
managed by marketing. The key input in all these decisions is customer knowledge. So firms need to
continuously keep track of customers and their preferences.
For example, for several years mosquito repellent coils were very popular. Many of us grew up watching
advertisements for tortoise mosquito repellent coil. Mosquito repellent coils were selling well. However
competition introduced better technology to the market in the form of mosquito repellent mats and
liquids. These mats and liquids had an advantage that they were smokeless. So many customers moved
away from coils to mats and liquids. This is a case where a product which is mosquito repellent coil
reached the end of its product life-cycle. If the firm that was in the business of mosquito repellent coils
wants to succeed, they will have to come up with better products by understanding the changing

preferences of customers. This is a typical product decision which comes under the first P.
The second P for promotion
Communicating the benefits of goods and services to the customers, informing them of the availability
of such products, persuading them that such products are superior to the competition; these are all
what come under the second P of marketing which stands for promotion. Promotion is basically the
marketing communication function. It includes advertising, sales promotion, personal selling, public
relations, point of purchase displays etc. These different methods of promotion are collectively called
the promotion mix. The most visible part of marketing is the promotion function and advertising is an
important part of it. Customers come to know about products, their benefits, and the relative advantage
over competition all through advertising.
For example we know that iodised salt is better for health. We know this because iodised salt is
promoted both by the manufacturers and sellers and by the government. We believe that children must
take health drinks like, Complan and Horlicks because there are many advertisements that talk about
additional nourishment growing children require. These are cases where consumption of such products
is promoted to us by marketing. The benefits of various products and why it is important to consume
such products are all communicated and promotion deals with this marketing communication.
Another important component of the promotion mix is the so-called sales promotion. Sales promotion is
typically a short-term measure to provide an immediate spurt in sales. It may be customer promotion or
trade promotion. Customer promotion is targeted at customers. Scratch and Win offer, take one get one
free, discounts, free gifts, exchange offers etc. all are different types of sales promotion targeted at
customers.
Recently retail chain Big Bazaar came up with an innovative offer that whatever old household junk you
have like old clothes, old furniture, old shoes etc. can be exchanged at Big Bazaar. They will estimate the
value of all your old material and give you coupons which you can use in buying products from their
shops.
Now it is very common for most firms to come up with a sales promotion during the time of popular
festivals. Religious and Cultural festivals are also now occasions for shopping.
Trade promotions are typically targeted at dealers through which they are encouraged to concentrate
more on the firm's products. These trade promotions take the form of display contests, sales contests,
incentives for reaching certain targets etc. There are many other types of sales promotions that are very
popular and widely used in marketing.
The third P for Place (distribution)
The goods and services are to be made available to the customer through various channels involving
wholesalers, distributors, retailers etc. Customers seldom visit your premises to buy your products.
Instead a firm has to ensure that the products are distributed to wherever the customers are. In modern
world most products are mass manufactured at a few locations while customers are distributed over a

wide geographic area. For example Maruti cars are manufactured in Gurgaon near New Delhi while the
customers are scattered all over the country from Kerala to Meghalaya. It is therefore an important task
for a firm to reach out to the customer by making available the products in small lots across geographic
areas. It is through this process of distribution that a firm creates place utility for the customers. In this
process of distribution, firms use a lot of intermediaries. These intermediaries serve important functions
of transportation, storage, display, sales, collecting money from the customer, providing service support
to the customer etc. They may be called by different names like distributors, consignment agents,
wholesalers, retailers etc. Some of them may also perform the role of transporting the products and
taking care of handling and storage. All these intermediaries can be collectively called the channel of
distribution. Without an appropriate channel it is very difficult for a firm to be successful in the business.
Distributing products and managing such channels come under the third P which stands for place. It is
called P for place because by distributing products we are creating place utility to the customer.
The fourth and final P for price
The final P is pricing. All products are to be priced appropriately. If the pricing is very high customers will
not buy them. And if the pricing is very low it may not be profitable for the business. Pricing is therefore
a very important decision. It is also a very complex decision. Several factors are to be taken into
consideration before arriving at an appropriate price.
A firm has to look at the cost of production which itself is a very complex task. There are fixed costs and
variable costs. There are overheads that get distributed among the large number of units manufactured.
Therefore, often the cost of production depends on the volume of production. More is the volume of
production typically less is the cost per unit. Once we determine the cost and relate it with the volume
of production then a baseline is created.
A firm must also look at the demand for the product and how much is the price customers are able to
afford and are willing to pay. They may also look at what is the competitor's price. Considering these
three aspects namely the cost of production, the demand and the price customers are willing and
prepared to pay and the prevailing competitors prices, a firm may decide on an appropriate pricing
strategy. Various quantity and cash discounts may be also offered as a part of a firms pricing strategy.
Pricing also see a lot of innovative ideas. Some firms use a method called loss leader pricing where a
very low level of pricing is used on certain products to attract customers to the firm. The loss they suffer
on account of this is compensated by the higher margins they charge on other products. This is a very
common practice in retailing. Pricing also involves taking decisions on increasing and decreasing the
prices with respect to the competition under changing market conditions.
We will discuss more about the marketing mix or the 4 Ps later in the book. In fact most of the
marketing can be understood and organised under the four headings of Ps.
Marketing and Exchange
So far we have looked at marketing primarily as a business function. The definition suggested that a
firms objectives can be realised by satisfying the customer objectives. Customer satisfaction is the way

through which we can attract and retain the customers. So we look at marketing as the business
function of attracting, satisfying and retaining the customers.
The key word in marketing is customer satisfaction. The customers will buy from a firm only if they are
satisfied with the products. What make the customers satisfied? Customers are satisfied when their
objectives are met. What are these customer objectives? In marketing we understand that customers
buy products because they have several needs to fulfil. Products are nothing but vehicles to satisfy the
customer needs. If needs are not there customers do not need products and marketing cannot exist. All
human beings do have several needs and we are not self-sufficient to create whatever we require to
satisfy all our needs. Therefore we engage in exchange as a mechanism of satisfying our needs. Here
exchange is any transaction of value between two parties.
Exchange and barter
Exchange is very common in our society. For example in our villages people routinely engage in
exchanges to see that mutual needs are met. Somebody may have surplus eggs which they would
exchange for milk. In many places, still we can give agricultural produce like fruits, rice etc. and buy
utensils and clothes. Exchanging something for another is called barter. In olden societies, barter was
the most common method of marketing. People used to specialise in some kind of an activity and
whatever surplus they created were exchanged for other goods and services which they required.
Villages used to have places where such barter could take place. Such places where people came to
exchange goods and services were called markets. Even now though barter takes place, mostly the
exchanges are in terms of some common currency which is money.
Marketing as a social process
Whether it is exchange of money or exchange of items as barter, it is basically marketing as a social
process that is at work. Now you will be able to see that marketing is not only a business function but a
social process. People engage in mutual exchange to satisfy their needs and this social process is called
marketing. Formal organized businesses are only one but a very significant part of the marketing
landscape.
So another view of marketing is it is a social process where people exchange products of value with each
other to satisfy their needs. Here buyer and seller engage in an exchange and both their needs are
satisfied. We can see that it is the unmet human needs that make us do this exchange. Needs are
therefore the basic driver of marketing. A human need can be defined as a state of felt deprivation of
some basic satisfaction. We have a large number of needs including needs for food, water, clothing,
shelter, safety, love; respect etc.
Customer Needs and marketing
Some of them are biological. For example we cannot survive without food and water and therefore
hunger and thirst are the basic drivers that make us eat and drink. Another powerful biological need is
the need to have sex. But not all our needs are biological. Some of them are psychological or even

sociological. We may love and affection, we may need the company of others. We feel upset when we
are lonely. When we are afraid we want others around us. These needs of love, affection, belonging etc.
can be called psychological needs. Every human being is having a large number of needs and all our
behaviours are targeted at meeting one or more of these needs. If the needs are met we are satisfied,
otherwise we continue to look at other ways of meeting them. Marketing is therefore can be defined as
a process by which customers needs can be satisfied.
Needs and Wants
For every need, not only one but several options exist for customers to satisfying the need. For example
if you're hungry you can have bread, boiled rice, a burger or even a chocolate. People select a particular
food based on several factors like the culture we are born in, food habits, personal likes and dislikes,
climate, religion, availability etc. Even though the basic human needs are very similar, human beings
may select different products to satisfy such basic needs. In marketing we say that these are wants that
vary from person to person though the underlying need is the same. Wants are defined as desires for
specific options to satisfy our needs. When we are thirsty, if we choose tea or coffee it is a question of
differences in wants to satisfy the basic need thirst. A customer may say he or she wants coffee or
Cola and these are specific choices of products to satisfy the basic needs. In marketing, wants are
defined as specific choices people make to address basic human needs.
Now we can define a product as anything that can be offered to satisfy customers needs and wants. We
have already seen that products can be goods or services. Cornflakes and Noodles are products that
meet the human need of hunger. Medicines target the need for health. Music is targeted at the need for
relaxation. In a broader sense we can also look at products as people, places, ideas and even activities.
For example, actors are people who meet a human need of entertainment and doctors are people who
meet the need for recovering from diseases and stay healthy. In tourism, destinations are marketed.
Here a place becomes a product. We vote for a political party for social change when we are convinced
by the idea that the party is able to bring in social change. We may join a health club for physical
exercise. These are all cases where people, places, ideas or activities tend to satisfy human needs.
Generally all such cases are discussed under services.
We must not forget the fact that whether it is physical goods or services, the basic issue is customer
needs and customer satisfaction. We buy a mosquito repellent because there is a need that is addressed
by the product. The need can be peaceful sleep or protecting from diseases carried by mosquitoes. The
mosquito repellent is purchased simply because it helps us in sleeping peacefully and protects us from
diseases spread by mosquitoes.
Demand
People may have a huge number of needs and wants. Just because they have needs and wants they may
not be in a position to buy goods and services. Along with the basic needs and wants they must also
have an ability and willingness to purchase products. When needs and wants are backed by an ability
and willingness to buy, we say demand exists. Therefore demand is defined as wants for specific
products which are backed by ability and willingness to buy such products. Only such people can be

considered to be active participants in the market. According to this view marketing can be considered
to be managing the demand.
Marketing is a Universal human activity
So we have seen that marketing can be seen as both a business function and as a social process. Looking
at marketing as a social process, we can see that all of us engage in marketing whether consciously or
not. When we are exchanging anything with anyone, we are actually doing the marketing. We are both
consumers as well as marketers in life. People exchange favours, students exchange notebooks, friends
extend mutual help. Politicians exchange promises for votes. In its broadest sense all these exchanges
comes under marketing. Marketing is a universal activity not just limited to business.
Customer Choice behaviour and Customer Value
However we'll study marketing primarily as a business function where a business firm has to take the
initiative in meeting the needs of the customer and thereby satisfying them. But this process is not very
simple. The firm may have a lot of control over its production process but on its customers it may not
be able to have the same kind of control. This is because customers have a lot of choices. Whatever be
the need, people have a lot of options to choose from. On basic level all the alternate options available
to the customer are competing for satisfying their needs. For example when a customer is thirsty he can
choose milk, coffee, fruit juice or a soft drink like, cola.
How does a customer choose between all these options? It is important that we must understand this
customer choice behaviour. In marketing we believe that customers make choices based on value. Value
is defined as the customers estimate of a products overall capacity to satisfy his or her needs. Typically
consumers may have an estimate of the value obtained from a product. But at the same time consumers
have to pay a cost for this particular product. Consumer choices are made by comparing the value of
various options available for him and the cost incurred.
Customer Choice and Competition
Choices available to the consumers may be generic, say between categories of drinks to satisfy thirst or
categories of foods to satisfy hunger. But within each category a lot of specific products offered by
competitors may exist. There is no market without such competition. Whatever is the product that we
select we find that there is always competition. This competition between firms for the customers
creates choices for them.
So we can differentiate here between two types of competition. The first type is generic competition.
This type of competition exists when several types of product categories are available to the consumer
to satisfy their needs. The second type of competition is the category specific competition where within
a particular category different firms may make different products which are all competing for the same
customers.
For example, tea and coffee are competing with the soft drinks. The more people go for soft drinks, the
consumption of tea and coffee and even milk may come down. With the television and broadcast widely

available, the circulation of newspapers is coming down. Television is also causing film industry several
problems since consumers are avoiding theatres. All these are examples of generic competition between
product categories.
Within, each product category there will be several companies and several brands of products which are
competing with each other. For example if you're buying toothpaste you have choice between Colgate,
Closeup, Babool, Dabur Red, and Anchor etc. For each of these brands there are many variants like
white toothpaste, gel toothpaste, two-in-one toothpaste etc. All these brands and the firms that own
them are fighting with each other for the consumer. So in fact we must have to look at competition as a
very important issue in marketing. Every market therefore can be understood as having several
customers and firms, competing with each other for customers. A business is about attracting and
retaining consumers against the competition and their efforts. It is this competitive dynamics that makes
marketing extremely challenging
Business success comes when a company (a corporation) is able to do better than competitors in
creating and retaining its customers. Every business attempts to do it by creating better value to the
customer by understanding them better and designing the products better suited to customer needs.
This model of Corporation, Customer and Competition is the very famous 3C model of business.
You will see that I have been using the terms customers and consumers interchangeably. Is there a
difference between these two terms? Many marketing books seem to have different opinions. But the
general consensus is that consumer is someone who consumes the product or service. When you use
the term customer what we assume is that there is a relationship which goes beyond a one-time buying.
All customers need not consume the products they buy themselves. They may buy it for using it in their
own business for other consumers to use. A typical business buy a lot of products which are used in the
production of further products meant at end users. A manufacturer of banana chips buy vegetable oil
and their end products are bought by consumers. However, many of us use these terms interchangeably
and we will continue this practice for the convenience.
Different marketing Concepts
We have seen that competition is a crucial element that determines marketing success. How do we
operate in a very competitive market and how do we cope with competition? The basic idea is that we
must be able to do better than the competition in meeting the consumers expectations. If we provide
better value than the competition, customers will stay with us. But if the value equation is disrupted,
customers may switch to the competition. Therefore marketing is about managing the value we offer to
the customer.
For managing the value delivered to customers in a competitive market, we must be able to understand
the customer and find out what they want from the product. Then only we will be able to deliver what
they want and do it better than the competitors. When we are able to deliver what they want and
provide better value, they will remain with us and this would ultimately lead to the firm's profitability.
How do we do that? Different firms in fact approach marketing differently. But all of them try to have
some understanding of what the customer is like? These understandings guide the business behaviour

of firms. You can say these are business philosophies corporations have about customers. If you look at
the history of marketing you could see that there are five different such philosophies firms had about
marketing and customers. They are the production concept, the product concept, the sales concept, the
marketing concept and the societal marketing concept. These concepts are also called the firms
orientations to marketing.
The production concept
In some markets there may be more of demand than the firm is able to meet. Such markets are typically
called sellers markets. Firms in such markets may consider that what is most important is making the
products available widely at a very low cost. This can be achieved by mass production. When the
production volumes are very high, the fixed cost will get distributed among the large number of units
manufactured and this will bring down the unit cost of production. Therefore by using mass production
it is possible for a company to make available products at a considerable low price. However such mass
produced products tend to be standardised. This kind of an approach which focuses more on mass
production as a means of making available low-cost products to the consumer is called a production
concept.
Firms that follow production concept believe that customers prefer those products which are widely
available and at low price. An example is the one lakh rupee car project of the Tata motors. Tata
motors must have believed that by making available a low-priced car Nano they will be able to capture
the market since there are many customers who want a low priced car. Many years back when the
mobile phones were very expensive, Reliance came up with a campaign called monsoon hungama
which was a promotional offer of mobile phone and connection. They offered a mobile phone and
post-paid connection at Rs.500 to customers.
One of the first exponents of production concept was Ford Motor Company under the leadership of
Henry Ford. More than a century back, Henry Ford came up with the first assembly line where cars
were mass manufactured at an affordable cost. This was the time when cars were custom made and
considered luxuries affordable only the very rich. Such cars became very popular in United States and
lead to a revolution in passenger cars. However this mass manufacturing of an affordable car was made
possible by having a much standardised product without any variations. It is said that Mr Henry Ford
made this very famous statement. You can have any colour you want as long as it is black. Even now
there are companies that practice production orientation with the belief that customers will buy those
products that are available widely at a low cost. However with innovations in manufacturing technology
like flexible manufacturing and mass customisation, firms are able to have both low costs and
customisation possible.
Product concept
Some other firms are of the view that customers are always looking for the best quality products rather
than the most affordable ones. According to this view, customers favour those products that offer the
highest quality, performance or features. Therefore a firm must try to put their best effort into designing
the best possible product. Firms that believe in product concept tend to be research and development

focused.
There are manufacturers of very high quality audios and speaker systems. These speaker systems are
very highly priced but offer an exceptional quality of sound. Such speaker systems can be affordable
only to very few customers. The manufacturer may not get huge volumes but tend to have higher
profitability. An example can be the very famous firm BOSE very well known for high-quality audio
systems.
Product concept cannot be considered to be a wrong idea. Even now there are many businesses that
focus on product development as a means to have market leadership. In pharmaceutical industry firms
invest in research and development and their success depends on their ability to come up with
high-quality innovative products before competition. So product concept may be the right idea here.
Sometimes they succeed like in the case of the drug Viagra. Sometimes they may fail also.
New product failures and Marketing Myopia
There are many failures in the case of innovative product introductions. The company Polaroid was the
undisputed leader in the instant photography market. They put in a lot of efforts to develop an instant
movie camera called Polavision. Polaroid were already very famous for their instant developing films
and camera while most other products needed a time consuming film development and printing process
before pictures shot can be seen. They had an advantage over other competitors during those days
when optical films and chemical based development was popular. They thought if instant photo cameras
and films can be successful, why not instant movie cameras where people can make a movie, develop it
and watch it immediately. However this product was a major flop since by the time polavision was
introduced, other firms came up with video cameras that used film-less electronic methods of capturing
and playing back video content. This is a case of product orientation going wrong because the company
somehow forgot to notice changes that are happening in the market.
Another example is the iridium satellite phone project where a group of multinational companies
thought of creating a satellite network which can be used for making and receiving phone calls wherever
in the world. A lot of money was spent in creating the satellite network and making the infrastructure
investments. But by the time the facility was made available the cost was so prohibitively high that there
were not many customers to opt for satellite telephone. Further mobile phones and mobile networks
became so widely popular that people could call anyone anywhere in the world even without using
satellite phone.

The basic characteristic of businesses with the product concept ideology is an obsessive focus on
research and development to come up with the best possible product. Sometimes this kind of a
concentration on research and development may make the firm lose focus of what is actually happening
in the marketplace as we have seen in the case of earlier examples. This kind of an obsession with
product happens often at the cost of forgetting the customer. The very famous management thinker
Theodore Levitt suggested that this is a case of marketing myopia which is short-sightedness towards

own products and R&D and losing sight of customer needs. A classic example of this syndrome is
manufacturers of typewriters. While the world was moving to computers, typewriter manufacturers
kept on making better typewriters like lighter and portable typewriters, typewriters that are capable of
producing documents in multiple colours etc. These firms never thought that what customers need is
convenience and better documents rather than typewriters as an end itself.
Sales Concept
The selling concept or sales concept is another common approach of many firms towards customers.
Here it is firmly believed that customers if left alone will not buy products and services. There is inertia
and therefore a firm must aggressively promote and sell the company's products and services to
customers. This kind of an approach by a company is called sales concept. In many markets there will be
a lot of very similar products and customers may not find any difference at all between these products.
In such a case customers may buy those products which are aggressively pushed to them. Hard selling is
a method of aggressively pushing products and services through personal selling effort.
There are unsought goods which are those goods that the consumers normally do not think of buying.
Such goods like encyclopaedias and services like insurance are hard-sold. In India you would find
products like vacuum cleaners, encyclopaedias, insurance policies etc. are subject to hard selling. Such
firms will have a strong sales force trained to persuade the customers to buy their products. It is not
only in business that hard selling is done. In fundraising by charitable organisations as well by NGOs hard
selling is very commonly used.
In all these cases salesman tries to work on the inability of many people to say no against strong
persuasion methods. They will do regular follow up and keep on requesting for order that finally the
customer will yield to pressure. Many salesmen are very good at guiding the customers to place the
order by using very effective methods of persuasion. Telling the customer that the price is going to
increase next week, enticing them with discounts, using emotional approaches like I will be losing the
job if I don't achieve the target, proceeding to close the sale without asking the customer whether they
are buying or not; these are all methods of hard sales. Salespeople in many retail outlets try many of
these methods.
For example the threat of price going up soon is a very commonly used a ploy in selling automobiles. I
am sure you must have come across these methods whenever you shop for goods and services. One of
the downsides of selling approach is customers are forced to buy products and services which they do
not really require or may not be seriously interested in. This actually causes them to regret their decision
later and such regret and bad feeling make them badmouth about the firms products. Studies show
that such frustrated customers may badmouth more about products than satisfied customers speaking
positively.
Marketing Concept
By now we have seen that a firm may have different approaches and philosophies that guide the
marketing efforts. Production concept, product concept and the sales concept are all different

orientations firms use. The assumptions underlying these approaches typically determine what kind of
marketing strategies a company may develop with respect to their customers.
All the above orientations suffer from a serious disadvantage that they focus more on the goals of the
firm than on the customer. In a very competitive market such an approach may prove to be very
dangerous in the long run. Ultimately the customers are the reason for the existence of a business firm.
They provide the profitability, growth and ultimately success of the firm. Therefore a firm must focus on
continuously on customers and their needs. The emphasis must be on customers, customer needs and
customer satisfaction. If a firm actually believes that they can be profitable only by ensuring that the
customer needs are satisfied, that firm is said follow marketing concept.
In short, the marketing concept is the belief that a firm's goals can be achieved by determining the needs
and wants of customers and delivering satisfaction to them better than the competitors. Those
customers on whom the business choose to focus can be called the target market.
If you follow marketing concept you focus on the customer and the customer needs. But in selling you
are more preoccupied by your need to convert your products into cash. Marketing concept tries to
create a customer centric organisation where customers and customer needs are considered to be the
central focus.
Marketing is having Customer Centricity
Some people misunderstand marketing concept as giving importance to the marketing department of a
form. In fact if you practice marketing it is not the marketing department that is important but it is the
customer. A very common saying in marketing is that marketing is too important to be left alone to the
marketing department. Marketing is not the job of the marketing department alone, but instead every
member in the firm must try to deliver customer satisfaction. So when the entire organisation is focused
on customers and customer needs you create a customer centric organisation and then one can say that
the firm is practising marketing.
Take the case of a business where the marketing department promises the customer many things. But
when the product is not delivered in time or when the product is delivered in a defective condition, the
customer is dissatisfied. Here the customer satisfaction is not only the job of the marketing department
but also the job of those who manage delivery as well as those who manage production and quality
control.
Take the example of a customer who buys a post-paid connection from a mobile telephone company.
Often after taking the connection he may have problems with the billing. When the customer is having
problems with the billing, the company must have some mechanisms for solving such problems. When
such options are not available or when the customer who contacts the company is not treated properly
and his problems are not addressed, marketing is failing. Poor service is a marketing failure.
Many customers feel that after sales service for many firms and products is very poor. This is seen in the
case of automobiles as well as in the case of mobile connections. Promises that are made at the time of

purchase are not always delivered. Sometimes the customer complaints are not addressed properly;
sometimes the defective parts are not replaced.
In the case of an insurance company, the sales agents may be very pleasant and they will be very active
in the selling effort. They behave with utmost politeness to the customers. But once a policy is taken,
after many years when the policy matures customers may find problems in receiving the payment. In all
these cases you'll be able to see that customer dissatisfaction is not caused because of marketing
department, but because of problems in other areas of business. It maybe a case of poor service support
after purchase. It maybe also a case of wrong billing. Whether it is a manufacturing defect, wrong billing
or lack of service support, in all these cases what we can see is that marketing fails not because of failure
in the marketing department but because of problems in other areas of the business. That is why we say
that marketing is too important and it is not just the job of the marketing department. It is the job of
everyone in the company. Every department in the firm whether it is HR or accounting or quality control
or stores must be concerned about customers and all of them must ensure customer satisfaction.
Customer retention and satisfaction
It is not only important to attract new customers but also we must be able to retain them. Researchers
suggest that the cost of attracting customers is much more than the cost of retaining the existing
customers. Again the key to ensure customer retention is customer satisfaction. A satisfied customer is
much mote likely to stay loyal and committed to the business. They talk favourably about the firm and
the products. They recommend your products to other customers. Since you know about them, it cost
less to serve them. All these reasons suggest that a firm must try to invest in customer satisfaction so
that the customers will remain with it.
So marketing concept is defined as the practice of marketing as a coordinated activity involving every
member in the organisation and designed to deliver customer satisfaction. The outcomes of marketing
are customer satisfaction, customer loyalty and enhanced profitability thereof. It involves salespeople. It
involves service personnel as well as every other department from production to human resource
management.

Societal marketing Concept

In recent years there are many thinkers who are questioning whether it is proper to consider marketing
as merely customer orientation. Yes, it is important that customers must be satisfied. But at the same
time consumption in several cases may have other serious implications for the firm and the customer
and also for the larger society. For example one of the problems in our State is disposal of plastic waste.
Plastic is not biodegradable and its burning causes considerable environmental damage. A lot of plastic
waste accumulates in our households as a result of our shopping. Whenever we shop in a supermarket
or in a textile showroom, the materials are wrapped in plastic or put in plastic carry bags. Customers
often are not prepared to carry their own shopping bags. They may not be willing to buy and carry
expensive bags made of clothe or jute. Customers want convenience and a firm trying to provide

convenience to the customer may end up distributing a lot of plastic carry bags with the belief that they
are trying to enhance customer satisfaction. Alright, in the short-run they are delivering customer
satisfaction but at the same time they are doing something which is damaging the environment and
causing harm to the larger society in the long-run.
Similarly there are a lot of situations where trying to satisfy customer needs may result in a having a
consequence of harming the society. People like tasty food; they want the food to have bright colours
and nice smell. Because of these customer likings, most of food items use artificial colouring agents and
chemicals like ajinomoto which enhance the taste. In the short-term these deliver customer
satisfaction but we cannot say these are very ethical practices either good for the customer or the
society. Therefore as responsible members of the society business firms must go beyond just focusing
on the narrow idea of customer satisfaction and instead consider the larger well-being of the society. If a
firm adopts this position you can call it a practice of societal marketing concept. The societal marketing
concept holds that a firm has to consider not only the explicit interest of the customers but also the
larger well-being of the society.
Societal marketing tries to balance three considerations in shaping their marketing strategies namely the
profitability of the company, the customer satisfaction and the interest of the society.
In the modern society, a lot of customers are now very conscious and concerned about the larger
interest of the society. For example the interest in environment friendly products is increasing. Many
customers realise that the food items they buy may be contaminated with the chemicals, insecticides,
and poisonous preservatives. They are even prepared to pay a premium for those products free from
such chemical contamination. Since there is a market however small it may be, there are some
businesses that focus on this kind of a socially responsible market. The so-called organic products
whether it is organic tea or coffee are cultivated without use of chemical fertilisers, insecticides and
packed without using preservatives. Such organic tea and coffee are now available in our market. Since
the cost of production of these products is higher they are also priced a little higher. But certainly there
is a good market which is emerging in response to customer consciousness on the benefits of organic
farming and the resultant demand for such products.
Corporate Social Responsibility
Caring capitalism or conscious capitalism are related ideas where there is an emerging realisation that
corporations of today must have a social concern beyond the narrow view of profitability and customer
satisfaction. The corporate social responsibility takes into consideration the larger interests of various
stakeholders who are affected by the policies of the business. When we take into consideration such
larger interests and the expectations from various stakeholders, marketing can have a broadened scope
as not just a customer oriented philosophy and practice but a business philosophy that looks at the
interest of all the stakeholders, larger well-being of the society and the world we live in. Here
stakeholders are any group of people who is having an interest in the business and are affected by the
business. They include not only customers but the shareholders, the employees, the government, the
larger public etc. A firm has to understand these diverse expectations from various stakeholders and try

to balance all these expectations. Such a practice of marketing is the modern emerging marketing
concept.

American Marketing Association has approved the following definition considering this broadened role
of 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 October 2007). As it can be seen from the definition this incorporates the role of
various stakeholders and trying to provide value to all of them including the society at large.
Marketing is a dynamic subject which keeps on changing and evolving in response to the changing
world. Ultimately committed practice of marketing would lead to satisfied customers and business
success.