FUNDAMENTALS OF

MARKETING

LEARNING OBJECTIVES
The marketing concept: An understanding of the
nature of marketing, its key components and
limitations.
The difference between production orientation and
marketing orientation
Service concept of marketing
Experience concept of marketing
Differing roles of efficiency and effectiveness in
achieving corporate success
Differences between market-driven and internally
driven businesses

Learning Objectives (contd.)

Profile of customer-centric organizations

How an effective marketing mix is designed, and
the criticisms of the 4-Ps approach to marketing
management
Need for segmentation, targeting and positioning
Relationship between characteristics, market
orientation, adoption of a marketing philosophy
and business performance

UNDERSTANDING
MARKETING
Process of finding out customer needs and
serving those needs profitably
Profit is a legitimate goal of a business
organization
Essence of marketing is providing desired
value to customers
Marketing should be considered a central
business function

What is marketing?
Marketing is building profitable customer relationships. The
aim of marketing is to create value for customers and to
capture value in return. Companies know if they take care of
their customers ( delivering on their promises) , market share
and profits will follow.
Definition:
We define marketing as a social and managerial process by
which individuals and groups obtain what they need and want
through creating and exchanging value with others.

The Marketing Process

Understand the marketplace and customer needs and
wants.
Design a customer-driven marketing strategy.
Construct a marketing program that delivers superior
value.
Build profitable relationships and create
customer delight.
Capture value from customers to create
profits and customer equity.

Marketing process

Capture value from

Customers to
Create profits and
Customer quality
Build profitable
Relationships and
Create customer
delight

Construct a
Marketing program
That delivers
Superior value

Design a
Customer-driven
Marketing strategy
Understand
The marketplace
And customer needs
And wants

 Understanding the marketplace and consumer

needs:

There are five core marketplace concepts;

1- Needs, wants, and demands ;
Needs are states of felt deprivation. All humanity have
the same needs;
Physical needs:
Food, clothing, shelter, safety.

Social needs:
Belonging, affection.

Individual needs:
Learning, knowledge, self-expression

 Understanding the marketplace and consumer

needs:

There are five core marketplace concepts;

Wants; are needs shaped by culture and individual
personality. Example; An American needs for food
but wants a Big Mac. A Chinese needs for food but
wants frog legs.
Demands are wants combined with buying power.
Example; Porsche or Kia.
Marketers spends time and money for a market research
to understand the customers needs, wants, and
demands.

 Understanding the marketplace and consumer

needs:

There are five core marketplace concepts;

2- Products, Services, Experiences
consumer needs and wants are fulfilled through a
marketing offer, which is some combination of
products, services, or experiences offered to a
market to satisfy a need.
Products; tangible, like food, goodsetc.
Services; intangible, banking, telecometc.
Experiences; Brand experiences, like theater.

 Understanding the marketplace and consumer

needs:

Marketing Myopia
Sellers pay more attention to the specific products they offer
than to the benefits and experiences produced by the
products. They focus on the wants and lose sight of the
needs.
An article published by Harvard Business school defined the
term marketing Myopia;
- Marketing myopia is true for all companies who define their
markets too narrowly. urging organizations to define their
industries broadly to take advantage of growth opportunities.
Experience shows that when a business has redefined its
market, it has continued to grow as new targets are set .

 Understanding the marketplace and consumer

needs:

There are five core marketplace concepts;

3- Value and Satisfaction
If the performance and the customers experience is
lower than expectations, then customer satisfaction
is low.
If the performance and the customers experience
meets expectations, then the customer is satisfied.
If the performance and the customers experience
exceeds expectations, then the customer is
delighted.

 Understanding the marketplace and consumer

needs:

There are five core marketplace concepts;

4- Exchange, transactions, and relationships
Exchange.
The act of obtaining a desired object from someone by offering
something in return.

Transaction
- consists of a trade values between two parties.
The goal of marketers is to build solid relationship with
customers and retaining them by delivering superior
value.

 Understanding the marketplace and consumer

needs:

There are five core marketplace concepts;

5- Markets
The set of all actual and potential buyers of a
product. Sellers must search for buyers, both buyers
and sellers are carried out by marketing.

The Evolution of Marketing

Production Era
Sales Era
Marketing Era

Dr. Rosebloom

Relationship
Marketing Era

The Evolution of Marketing

Production Era

Orientation:

Business philosophy
focusing on manufacturing
efficiency; demand exceeds
supply = sellers market

Prior to the
Dominant 1920s

time period:

Dr. Rosebloom

The Evolution of Marketing

Sales Era

Orientation:

Business philosophy
focusing on selling existing
products; supply exceeds
demand = buyers market

Prior to the
Dominant 1950s

time period:

Dr. Rosebloom

The Evolution of Marketing

Marketing Era

Orientation:

Business philosophy
focusing on consumer
wants and needs; any
supply/demand situation

Last half of 20th

Dominant century

time period:

Dr. Rosebloom

The Evolution of Marketing

Relationship Marketing Era

Orientation:

Business philosophy
focusing on reinforcing the
customer-oriented focus of
the marketing era

Last decade of
Dominant 20th century

time period:

Dr. Rosebloom

THE MARKETING
CONCEPT
All activities are focused upon providing
customer satisfaction
Every employee in an organization is a
marketer
Internal communication

PRODUCTION CONCEPT

Inward looking orientation

Management becomes cost focused
Objective is cost reduction
Business mission is focused on current
production capabilities
Manufacture products and aggressively sell
them to customers

SELLING CONCEPT
Product or service is not designed and made
according to customers requirements
Customer has to be persuaded to believe
that the product or the service meets his
requirements
Customer dissatisfied and bad-mouths
company
Marketing makes selling redundant

PRODUCT CONCEPT
Companies become centered on constantly
improving the product
Myopic focus on the product
No attention on the other ways in which
customers can fulfill their needs
MARKETING MYOPIA
Customer does not buy a product, he buys
an offering that fulfills his needs

SERVICE CONCEPT
Customers buy services, not products
Service model of marketing instead of
selling the title to the products
Hindrance: Mindset of the customer and
marketer, and their unwillingness to
experiment with this model
Can be easily applied in businesses like
automobiles, carpeting, furnishing, and for
most consumer durable items

EXPERIENCE CONCEPT
Create an experience around the product to
make it memorable
Reaffirm it with cues at every customer
interaction point
Experiences are inherently personal for a
customer
An experience should be built around a well
defined theme

Experience Concept (Contd.)

Companies must introduce cues that affirm the

nature of the experience to the guest
Eliminate anything that diminishes, contradicts,
or distracts from the theme
Customers purchase memorabilia as a physical
reminder of an experience
The more senses an experience engages, the
more effective and memorable it becomes

EFFICIENCY VERSUS
EFFECTIVENESS
An efficient company produces its products
and services economically
An effective company serves the needs of
the customers
No inherent conflict between being efficient
and effective

Efficiency Versus Effectiveness (Contd.)

An inefficient but an effective company can

remain in business though its profits would
be lower
An ineffective but an efficient company will
not survive
Choosing to become effective reflects the
marketing orientation of the company

MARKET VERSUS INTERNALLY

DRIVEN BUSINESSES
MARKET DRIVEN
BUSINESS

INTERNALLY DRIVEN
BUSINESS

Display customer concern

throughout the business

Fail to understand the real

concerns of customers

Expenditure on marketing
research is an investment

Marketing research is nonproductive activity and rely on

anecdotes and received wisdom

Understand competitors
objectives and strategies, and
anticipate competitive actions

Content to underplay the

competition

Marketing spend is an
investment that has long term
consequences

Marketing expenditure Is
superfluous that never appears to
produce benefits

Market Versus Internally Driven Businesses (Contd.)

MARKET DRIVEN
BUSINESS

INTERNALLY DRIVEN
BUSINESS

Employees who take risks and

are innovative in serving
customers rewarded

Reward time serving, and ability

to not make mistakes

Search for latent markets

Happy to stick to their existing
markets that no other company products and markets
has exploited
Sensitive, fast and flexible to
be able to respond to changes
in the market

produce me-too copies of

offerings already in the market

Impact of marketers commitments

PROFILE OF CUSTOMERCENTRIC ORGANIZATIONS

Shared values and beliefs
Skills in understanding and responding to
customers
Market intelligence
Formal and informal means of information
dissemination
Responsiveness

Profile of Customer-centric Organizations (Contd.)

Desire to serve customer needs better than

competition
Organizational structure must reflect
marketing strategy
Clear communication

LIMITATIONS OF THE
MARKETING CONCEPT
Marketing concept as an ideology
Marketing and society
Marketing as a constraint to innovation

MARKETING MIX

PRODUCT
PRICE
PLACE
PROMOTION
CRITICISM OF THE 4Ps APPROACH TO
MARKETING

CHARACTERISTICS OF AN
EFFECTIVE MARKETING MIX
Marketing mix should match customer
needs
True source of competitive advantage
Well blended to form a consistent theme
Match corporate resources

Characteristics Of An Effective Marketing Mix (Contd.)

SEGMENTATION, TARGETING, AND

POSITIONING
Segmentation
Target markets
Positioning
MARKETING ORIENTATION AND
BUSINESS PERFORMANCE

 Designing a customer- driven marketing strategy

Segmentation and Targeting

Selecting customer to serve; first dividing the market
into segments, Second select the segment to be our
target market. Porsche company target customers
with high income.
Deciding on a value proposition; A set of benefits or
values it promises to deliver to consumers to satisfy
their needs. means the company must decide how it
will differentiate itself from other competitors.
Porsche promises driving performance and
excitement. They say what a dog feels when the
leash breaks.