Introduction to Marketing

Markets
The set of all actual and potential buyers of a product
or service

Communication

Products / Services
Industry Market (a
(a collection collection of
of sellers) buyers)
Money

Information

A simple marketing system

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 Needs, Wants, and Demands
Needs:
• The most basic concept underlying marketing is that of human needs.
• Human needs are states of felt deprivation.
• Human have many complex needs:
– Physical needs for food, clothing, warmth, and safety
– Social needs or belonging and affection
– Individual needs for knowledge and self – expression
Wants:
• Want are the form taken by human needs as they are shaped by culture and
individual personality.
• People have almost unlimited wants but limited resources.
• They want to choose products that provide the most value and satisfaction for
their money.
Demands:
• When want backed by buying power, wants become demands.
• Consumers view products as bundles of benefits and choose products that give
them the best bundle for their money. 3
 Products and Services
Product:
• Anything that can be offered to a market to satisfy a need or want.
• The concept of product is not limited to physical objects – anything
capable of satisfying a need can be called a product.
Services:
• In addition to tangible goods, products also include services, which
are activities or benefits offered for sale that are essentially
intangible and do not result in the ownership of anything.

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 Values, Satisfaction, and Quality

Values:
• Customer value is the difference between the values the customer gains from
owning and using a product and the costs of obtaining the products.
• Customers often do not judge product value and costs accurately or objectively.
They act on perceived value.
Satisfaction:
• Customer satisfaction depends on a product’s perceived performance in delivering
value relative to a buyer’s expectation.
• If the product’s performance falls short of the customer’s expectations, the buyer is
dissatisfied.
Quality:
• Customer satisfaction is closely linked to quality.
• Quality has a direct impact on product performance.
• Quality can be defined as “freedom from defects”.
• TQM programs designed to constantly improve the quality of products, services,
and marketing processes. 5
 Exchange, Transactions, and
Relationships
Exchange :
• The act of obtaining a desired object from someone by
offering something in return
Transaction :
• A trade between two parties that involves at least two things
of value, agreed – upon conditions a time of agreement, and a
place of agreement.
Relationship marketing :
• The process of creating, maintaining, and enhancing strong,
value – laden relationships with customers and other
stakeholders

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 What Is Marketing?
According to chartered institute of marketing :
Marketing is the management process responsible for identifying,
anticipating, and satisfying customer requirements profitably.”
OR

According to kotler
Marketing is a social and managerial process by which individuals
and groups obtain what they need and want through creating and
exchanging products and value with others.
 Marketing
• Marketing is the activity, set of instructions, and processes
for creating, communicating, delivering, and exchanging
offerings that have value for customers, clients, partners,
and society at large.

OLD view of NEW view of

marketing: marketing:

Making a sale Satisfying

—“telling and customer needs
selling”
 Marketing Management
The analysis, planning, implementation, and
control of programs designed to create, build,
and maintain beneficial exchanges with target
buyers for the purpose of achieving
organizational objectives.

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 Marketing Management Involves:

• Demand Management : The organization has a desired level

of demand for its products. At any point in time, There may
be no demand, adequate demand, irregular demand, or too
much demand, and marketing management must find ways
to deal with these different demand states.
• Building Profitable Customer Relationships : Beyond
designing strategies to attract new customers and create
transactions with them, companies now are striving to retain
current customers and build lasting customer relationships.

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 The Marketing Process
A simple model of the marketing process:
• Understand the marketplace and customer needs and
wants.
• Design a customer-driven marketing strategy.
• Construct an integrated marketing program that delivers
superior value.
• Build profitable relationships and create customer delight.
• Capture value from customers to create profits and
customer quality.
 Main actors and forces in a modern marketing system

Competitors

Marketing
intermediaries End user market
Suppliers
Company
(marketer)

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MARKETING MANAGEMENT PHILOSOPHIES /CONCEPT
• The role that marketing plays within a company varies
according to the overall strategy and philosophy of each firm.
• There are five alternative concepts under which
organizations conduct their marketing activities:
– Production concept
– Product concept
– Selling concept
– Marketing concept
– Societal marketing concepts

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 Production Concept
The philosophy that consumers will favour
products that are available and highly
affordable and that management should
therefore focus on improving production and
distribution efficiency.

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 Product Concept
The philosophy that consumers will favour
products that offer the most quality,
performance, and innovative features.

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 Selling Concept
The idea that consumers will not buy enough of
the organization’s products unless the
organization undertakes a large – scale selling
and promotion effort.

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 Marketing Concept
The marketing management philosophy that
holds that achieving organizational goals
depends on determining the needs and wants
of target markets and delivering the desired
satisfactions more effectively and efficiently
than competitors do.

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 Societal Marketing Concept
The idea that the organization should
determine the needs, wants, and interests of
target markets and deliver the desired
satisfactions more effectively and efficiently
than competitors in a way that maintains or
improves the consumer’s and society’s well –
being.

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 Societal Marketing Orientation 2

Marketing that preserves or enhances an

individual’s and society’s long-term best
interests

 Less toxic products

 More durable products
 Products with reusable or recyclable
materials

Chapter 1 Version 3e 19
Three Considerations Underlying The Societal Marketing

Society
(Human welfare)

Societal
marketing
concept

Consumers Company
(Want satisfaction) (Profits)

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 Marketing mix
• Marketing mix is the planned mix of the
controllable element of a marketing plan commonly
termed as 4 p’s : product, price , place, and
promotion. These element are adjusted until a right
combination of found that serves the needs of the
product’s customer while generating optimum
income .
 Product
• Product variety,
• Quality,
• Design
• Features,
• Brand name
• Packaging size
• Services,
• Warranties,
• Return.
 Price
• Price
• Discount
• Allowances
• Payment period
• Credit term
 Promotion

• Advertising,
• Personal selling
• Sales promotion
• Public relation
 Place
• Channels,
• Coverage,
• Assortments
• Location
• Inventory
• Transpotation
• logistics
Consumer Behaviors
An Introduction
 What is Consumer Behaviour?
In very simple term CB is process of understanding
why a consumer makes a purchase, when he buys it,
where he buy the product and the frequency of the
purchase. Thus it help us understand the why where
and how often of a purchase decision.
Those activities directly involved in obtaining ,
consuming and disposing of products and services.
 Why there is a need to study CB
Consumer behaviour refers to the actions of
consumers in the market place & underlying motives
for those actions.
Marketers need to understand why customer buy
a particular goods & services they will be able to
determine-
Which products are needed in the market place,
Which are obsolete,& How best to present the goods
to the consumers.
It attempts to understand the buyer decision
making process, both individually and in groups.
 It also tries to assess influences on the consumer from groups
such as family, friends, reference groups, and society in general
‘ You cannot take the consumer for granted any more’
Therefore a sound understanding of consumer behaviour is
essential for the long run success of any marketing program
 It studies characteristics of individual consumers such as
demographics and behavioural variables in an attempt to
understand people's wants.
 Understanding and adapting to consumer motivation and
behaviour is not an option – it becomes a necessity for
competitive survival

•
Customer decision making
process
MARKETING ENVIRONMENT
 THE MARKETING ENVIRONMENT

• The forces that directly and indirectly influence an

organization’s capability to undertake its business.

• The trading forces operating in a market place

over which a business has no direct control ,but
which shape the manner in which the business
function and is able to satisfy its customers.
 COMPONENTS OF MARKETING
ENVIRONMENT
• Internal environment : Forces and actions inside the firm that
affect the marketing operation composed of internal stake holders
and the other functional areas within the business organization.

• External environment
• Macro environment
• Micro environment
 External environment
MICRO ENVIRONMENT

• The factors in the immediate environment .

MACRO ENVIRONMENT

• Broad forces which shape the character of

opportunities and threats.
 External environment

Micro environment
• The forces close to the company that affects its ability to
serve.
• It comprises all those organizations and individuals who
directly affect the activities of a company.
• All factors which impact directly on a firm and its
activities in relation to a particular market.

1. Suppliers
2. The market channel
3. Customers.
4. Competitors
5. Public
 Macro environment

The macro-environment consists of broader forces that not only affect

the company and the industry, but also other factors in the micro-
environment.
The components of a macro-environment are:
• (a) Demographic Environment
• (b) Economic Environment
• (c) Physical Environment
• (d) Technological Environment
• (e) Political Environment
• (f) Legal Environment
• (g) Social and Cultural Environment
 WHY IS IT IMPORTANT?

• An understanding of macro and micro marketing

environment forces is essential for planning.

• Helps a business to compete more effectively against its

rivals.

• Assists in the identification of opportunities and threats.

• Enables an organization to take advantage of emerging

strategic opportunities.
 What is “Relationship Marketing?”

• It isn’t “talking to customers,” and it’s more than

“listening to customers.”
• It is actively listening to and being involved with
customers and suppliers as a normal part of your
business.
• It is “an organization’s effort to develop a long
term effective link with all stakeholders for mutual
benefit.”
 Meaning of RM
• Relationship marketing has the aim to building
mutually satisfying long term relationship with key
parties in order to earn and retain their business.
• Relationship marketing builds strong economic,
technical and social ties among the parties

• -KOTLER
• What is “Relationship Marketing?” “Relationship marketing
refers to all marketing activities directed toward
establishing, developing, and maintaining successful
relational exchanges." 
  Main characteristics of relationship
marketing
• It focuses on partners and customers rather than on the
company’s products.

• It puts more emphasis on customer retention and growth than on

customer acquisition.

• It relies on cross-functional teams rather than on departmental-

level work.

• It relies more on listening and learning than on talking.

 10 Critical players in rm
1. Supplier
2. Distributors
3. End users
4. Employees
5. Financial firms
6. Government
7. Media
8. Allies
9. Competitors
10. General public