1. BASIC MARKETING
CONCEPTS

2. What Is Marketing?
Any Interpersonal And Inter-organisational Relationship
Involving An Exchange Is Marketing .
WILLIAM J.STANTON

3. What Is Marketing?
The essence of Marketing is a transaction -
an exchange- intended to satisfy human
needs and wants. There are three elements in
the marketing process :
(A) MARKETERS
(B) WHAT IS BEING MARKETED
(C) TARGET MARKET

4. What Is Marketing?
Marketing is a social process by which
individuals and groups obtain what they need
and want through creating and exchanging
products and value with others
PHILIP KOTLER
Simply put:
Marketing is the delivery of customer satisfaction
at a profit.

5. Core concepts of Marketing

6. Needs, Wants And Demands
 NEED : A state of felt deprivation of
some basic satisfaction ( Food,
Clothing, Shelter, Belonging etc. )
 WANTS : Wants are desires for specific
satisfiers of the deeper needs. Needs
are few and wants are many .
 DEMANDS : are wants backed by
------Ability to buy and Willingness to
buy

7. Products / Offers / Satisfiers / Resources
 Anything that can be offered to someone
to satisfy a need or want is a product .
 Product refers to physical object
 Services refer to intangible object

8. Value and Satisfaction
 Value is the customers’ estimate of the
Product’s capacity to satisfy a set of goals
 Value is the ratio between what the
customer gets and what he gives (V=B/C)
 Customer gets benefits & assume costs
 WHEN :Customer Expectance=Performance
(satisfied)
 Customer Expectance>Performance (dis-satisfied)
 Customer Expectance<Performance (Highly
satisfied)

9. Three Basic Principles Of Marketing
(1) The Customer Value and Value Equation:
V=B/P Where; V=Value
B= Perceived Benefits
P= Price
(Value is increased by increasing the numerator
and/or reducing the denominator)

10. Value Map
A
B
C
DE
VEL
Value Advantaged Area
Value
Disadvantaged
Area
Customer Perceived Benefits
Perceived
Price

11. Value Proposition
Involving all benefits: All benefits are a complete list of positive features
that a supplier believes its offerings might deliver to end customers as a result
of good knowledge about the customers and the competitors.
Favourable points of difference: Favourable points of difference are the
factors that distinguish the supplier’s offerings among the next alternatives. To
achieve that, detailed knowledge about the next best competitor(s) is required
in order to shape the company’s strategy.
Resonating focus: The resonating focus approach differs in two respects:
more is not always better and it is better to focus on one or two key points to
deliver to the target customer. Suppliers in this approach must identify the
elements that make their offer superior in order to demonstrate, document
and communicate them clearly to the targeted customers.

12. Value Proposition - Advertisements
AC ad 1.flv AC ad 2.flv
AC ad 3.flv Bank ad.flv
Insurance Ad.flv
Insurance ad (2).flv Ketchup ad.flv
ToothPaste Ad.flv Competitive Advertising.flv

13. Value Proposition – Assignment 1
Involving all benefits
Favourable points of difference
Resonating focus

14. Exchange and Transaction
 Exchange is the act of obtaining a desired
product by offering something in return .
 Exchange takes place when 5 conditions are satisfied:
(a) Two parties should be there
(b) Each party must have something of value to the other
(c) Each party is capable of communication & delivery
(d) Each party is free to accept or reject the offer
(e) Each party believes that it is appropriate to deal with
the other party

15. Exchange and Transaction
 Exchange is a process rather than event.
It is a value creating process because it
normally leaves both parties better off.
 A transaction is a trade of values between
two or more parties ( A BARTER
TRANSACTION OR A MONETARY
TRANSACTION ).

16. Strategic Concept of Marketing
 Shifted the focus of Marketing from Product
or customer to the CUSTOMER IN THE
CONTEXT OF THE BROADER EXTERNAL
ENVIRONMENT .
 To succeed, marketers must know the
customer in a context including the
competition, Govt. Policy& regulation and the
broader economic, social and political macro
forces that shape the evolution of market.

17. Strategic Concept of Marketing
 Shifted the Marketing Objectives
from PROFIT TO STAKEHOLDER
BENEFITS.
 Stakeholders are individuals or groups
who have an interest in the activity of a
company . They include-----The employees and
management, Customers, Society, Shareholders,
Financiers/ Bankers, Government etc.

18. Strategic Concept of Marketing
 Strategic Marketing Concept is
Strategic Management, which
integrates marketing with the other
management functions. ( Major task
is Profit for Stakeholders’ benefits ).

19. Marketing System
 Marketing is concerned with the flow of goods
and services from the points of production to the
points of consumption.
 There is a systematic arrangement of these
functions of marketing to move the goods and
services to the needy persons. This system is
essential to the creation of time, place and
possession utilities.

20. Marketing System
 A dynamic marketing system must be willing
to undertake the following specific activities:
1. Define market area.
2. Research consumer wants and needs.
3. Develop and redevelop product / service.
4. Select, train, motivate and control human
resources.
5. Develop sales approach and advertising
support.

21. Goals Of The Marketing System
1. MAXIMIZE CONSUMPTION
2. MAXIMIZE CONSUMER SATISFACTION
3. MAXIMIZE CHOICE
4. MAXIMIZE LIFE QUALITY

22. Three Basic Principles Of Marketing
The essence of marketing can be summarized
in three great principles.
 first identifies the purpose and task of
marketing,
 second is the competitive reality of
marketing and
 Third is the principal means for achieving the
first two.

23. Three Basic Principles Of Marketing
(2) Competitive or Differential Advantage :
The total offer must be more attractive than that
of the competition in order to create a
competitive advantage.
(3) Focus or the Concentration of
Attention : The task of creating
Customer Value at a Competitive advantage.

24. Customer As The Controlling Function
Production Finance
Marketing Personnel
CUSTOMER

25. Marketing As The Integrative Function
CUSTOMER
Production
HR Finance
Marketing

26. Three Levels Of Marketing
 Responsive Marketing
 Anticipative Marketing
 Need Shaping Marketing

27. Responsive Marketing
It is the form of marketing when some
company defines an existing clear need
and prepare an affordable solution.
(Recognizing that women wanted to spend
less time for cooking and cleaning, led to
the invention of modern washing
machine, microwave oven etc.)

28. Anticipative Marketing
It is a form of marketing when a company recognize
an emergent or latent need, and come out with an
affordable solution. Evian, Perrier anticipated
growing market for bottled drinking water as the
quality of water deteriorated in many places.
Anticipative marketing is more risky than responsive
marketing; companies may come into market too
early or too late, or may even be totally wrong about
thinking that such a market would develop.(eg. Dish
washers in India)

29. Need Shaped Marketing
The broadest level of marketing occurs when
a company introduces product that nobody
asked for and often could not even conceive
of.
(e.g. Sony Walkman, Sony Compact Disc )
Late Akio Morita, founder and chairman of
Sony, who introduced these and many other
new products, summarized his marketing
philosophy in these words: “ I don’t serve
markets. I create them.”

31. WHAT IS MARKET ?
 A market consists of all the potential
customers sharing a particular need or
want who might be willing and able to
engage in exchange to satisfy that need or
want.

32. WHAT IS MARKETING ?
 Marketing is the management process
which identifies, anticipates, and
supplies customer requirements
efficiently and profitably.
 In other words, it is the process of
understanding, creating, and delivering
profitable value to targeted customers
better than the competition.

33. WHAT IS MARKETING ?
 Its aim is to establish, maintain, enhance
long term relationship with customers at a
profit so that the objectives of the parties
involved are met.
 In short marketing consists of attracting,
developing, and retaining profitable
customers.

34. BUSINESS IS MARKETING
 Marketing can not be considered as a
separate function , it is the whole
business, seen from the point of view of
its final results.................that is
profit,through customer satisfaction
PETER DRUCKER

35. A SIMPLE MARKETING SYSTEM
Industry Market
Communication
Information/Feedback
Goods & Services
Money

36. WHAT IS MARKETING MANAGEMENT ?
 Marketing Management is the analysis,
planning, implementation and control of
programs designed to create, build and
maintain beneficial exchanges and
relationships with target markets for the
purpose of achieving Organisational
objectives.

37. WHAT IS MARKETING MANAGEMENT ?
 Marketing management is demand
management or it involves the task of
influencing the level, timing and
composition of demand. At times the
actual demand level may be below,
equal to, or above the desired demand
level and the major task of marketing
management is to regulate the level of
demand.

38. STATE OF DEMAND AND MARKETING TASK
 State of demand
 Negative Demand
 No Demand
 Latent Demand
 Falling Demand
 Irregular Demand
 Full Demand
 Overfull Demand
 Un-wholesome Demand

 Marketing task
 Conversional Mktg.
 Stimulational Mktg.
 Developmental Mktg.
 Remarketing
 Synchro-marketing
 Maintenance Mktg.
 Demarketing
 Counter-marketing

39. EVOLUTION OF MARKETING
MANAGEMENT
 Marketing management has evolved
through following stages :
 (1) Production Orientation Stage
 (2) Sales Orientation Stage
 (3) Marketing Orientation Stage
 (4) Social Responsibility & Human
Orientation Stage

40. COMPANY ORIENTATION FOR
MARKETING ACTIVITIES
 Marketing Management can be defined as the
effort to achieve desired EXCHANGE
outcomes with TARGET MARKETS.
 Now the question arises :
(1) What philosophy should guide the
marketing activities?
(2) What weights should be given to the
interests of the organisation,the customers
and the society?

41. MARKETING CONCEPTS
 There are FIVE competing concepts under
which organizations conduct their
marketing activities:
 The Production Concept
 The Product Concept
 The Selling Concept
 The Marketing Concept
 The Societal Marketing Concept

42. (1) THE PRODUCTION CONCEPT
Produce
Sell
Consumers
Company
Produce more & more
Practically sells itself

43. THE PRODUCTION CONCEPT
 Consumers will favour those products
that are widely available and low in cost.
 Therefore increase production and cut
down costs.
 And build profit through volume.

44. (2) THE PRODUCT CONCEPT
Produce
Quality
Products
Sell
Consumers
Practically sells itself,if
it gives most quality
for money
Buyers admire well-made products and can
appraise product quality and performance.

45. THE PRODUCT CONCEPT
 Consumers will favour those products
that offer the most quality, performance,
or innovative features.
 Therefore, improve quality, performance
and features.
 This would lead to increased sales and
profits.

46. (3) SELLING CONCEPT
 Consumers have normal tendency to resist.
Produce
Sell it Consumers
Aggressive selling &
promotion efforts
Making sales becomes primary function and
consumer satisfaction secondary .

47. THE SELLING CONCEPT
 Consumers , if left alone , will not buy
enough of company’s products.
 Therefore, promote sales aggressively.
 And,build profit through quick turnover.

48. (4) MARKETING CONCEPT
 “ LOVE THE CUSTOMER , NOT THE
PRODUCT ”
Consumers
Produce it
Market it
Learn what they
want(MR)
Sell what they want(Satisfy
needs of customers)

49. THE MARKETING CONCEPT
 The key to achieving organizational goals
consist in determining the needs and
wants of target markets and delivering the
desired satisfactions more effectively and
efficiently than competitors.
 And build profit through customer
satisfaction and loyalty.

50. (5) THE SOCIETAL MARKETING CONCEPT
 It is Marketing Concept (+) Society’s well
being.
 Balancing of following three considerations
while setting marketing policies :
-Customer’s want satisfaction
-Society’s well being
-Company’s profits

51. THE SOCIETAL MARKETING CONCEPT
 The societal marketing concept 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.
- It addresses conflicts between
consumer’s and firm’s short run wants and
long term welfare.

52. SELLING AND MARKETING CONCEPT

53. Marketing starts with the buyer and focuses constantly on
buyer’s needs.
Selling starts with the seller and is preoccupied all the time with
the seller’s needs
Seeks to convert “customer needs” into products’ Seeks to convert ‘products’ into “Cash”.
Views business as a customer satisfying process Views business as a goods producing process
Marketing effort leads to the products that the
customers actually want to buy in their own interest
The company makes the product first and then figures out how to
sell it and make a profit
Marketing communication is looked upon as a tool for
communicating the benefits/ satisfactions provided by the
product
Seller’s motives dominate marketing communication
(promotions).
Marketing views the customer as the very purpose of the
business. It sees the business from the point of view of
the customer.
Customer consciousness permeates the entire
organization – all departments, all the people and all the
time.
Selling views the customer as the last link in the business.
‘Customer satisfaction’ is the primary motive. ‘Sales’ is the primary motive.
External market orientation ‘Sales’ is the primary motive
Marketing concept takes an outside in
Perspective.
Selling concept takes an inside-out perspective.

54. Marketing is more ‘pull’ than ‘push’ Selling involves ‘push’ strategy.
Marketing begins much before the production
of goods and services, i.e. with identification of customers’
needs. It continues even after the sale to ensure customer
satisfaction through after sales services
Selling comes after production and ends with the delivery of the
product and collection of payment.
Marketing has a wider connotation and includes many
activities like marketing research,
product planning & development, pricing, promotion,
distribution, selling etc.
Selling is a part of marketing.
It concerns itself primarily and truly with the
‘value satisfactions’ that should flow to the customer from
the exchange
It over emphasizes “the exchange’ aspect, without caring for the
‘value satisfactions’ inherent in the exchange.
It assumes: “Let the seller beware” It assumes: “Let the buyer beware”
The main job is to find the right products for
your customers.
The main job is to find the customers for your products.
The mindset is “What is that we can make here or source
from outside to satisfy the needs of the target customers”.
The mindset is “Hook the customer”
Conceptual and analytical skills are required Selling and conversational skills are required.

55. To illustrate the relationship between sales objectives,
strategies and tactics, consider:
Sales Goals /
Objectives
Marketing
Strategy
Sales and Distribution Strategy Tactics /
Action plans
• Increase sales
volume by 15
percent
• Enter export
markets
• Identify the countries
• Decide distribution channels
• Marketing / sales head to get
relevant information
• Negotiate and sign agreements
in 3-5 months with
intermediaries
• Penetrate
existing
domestic
markets
• Review and improve salesforce
training, motivation and
compensation
• Use effective and efficient
channels
• Add channels and members
• Train salespeople in deficient
areas
• Train field salesmanagers in
effective supervision
• Link sales volume quotas to
the incentive scheme of the
compensation plan

56. Sales & Marketing Thought Worlds
Marketing says… Sales says…
“Marketing people work long, hard hours, but
salespeople make more money.”
‘Sales makes the money for the company;
marketing just spends it.”
“Marketing develops strategies and plans and sales
is the implementation arm of marketing.
Salespeople are paid agents of marketing.”
“Marketers are locked in the ivory tower and don’t
have a clue about what customers really want.”
“Marketing is more reflective; sales is more
reactive.”
“Marketing is more bureaucratic than sales.
Marketing is too internally focused.”
“Salespeople are driven by specific accounts, the
volumes and price discounts.”
“The sales force will lose significant business if it
accepts the marketing price.”

57. Division of work between Marketing & Sales

58. USP (Unique selling proposition)
USP is a unique product attribute that a company
uses to set its (brand) product apart from the
competition.
e.g.
Volvo is a safe vehicle
Big Bazaar is the low priced supermarket.

59. USP ???
Emphasizing a single
attribute as the tactic to
position your brand can be
beneficial, as it allows us to
focus all the marketing input
towards one single attribute.
Can also be dangerous as
the attribute should be such,
which is identified as
valuable by the target
consumer. In addition,
since you are hanging your
hat on one attribute to
position your brand, the
competitor may have easy
time attacking you.

60. Conveying USP through a slogan…
(1 sentence that says it all)
 Consistency is the key when it comes to the slogans.
 Slogan should be consistent with the intended
positioning of the brand.
 In general, should be consistent overtime.
 When the market environment changes the positioning
of a brand, the slogan should also change.

61. Some Examples
 Domino's Pizza: "You get fresh, hot pizza
delivered to your door in 30 minutes or less—
or it's free."
 Head & Shoulders: "You get rid of dandruff"
 Anacin: "Fast, fast, incredibly fast relief.“
 Nirma: “Doodh si safedi Nirma se Aaye”
 Close-up: Freshness
 Vicco Vajradanti: Ayurvedic

62. Marketing Mix

63. The Marketing Mix
 The tools available to a business to gain the
reaction it is seeking from its target market in
relation to its marketing objectives
 7Ps – Price, Product, Promotion, Place, People,
Process, Physical Environment
 Traditional 4Ps extended to cope with today's
changing environment

64. The Marketing Mix

65. ProductProduct

66. Product
 The firm must come up with a product
or service that people will want to buy.
 It must fulfil some need
or want.
 It must be (or at least seem) unique.

67. Product
 Methods used to
improve/differentiate
the product and increase
sales or target sales more
effectively to gain
a competitive advantage e.g.
 Extension strategies
 Specialised versions
 New editions
 Improvements – real or
otherwise!
 Changed packaging
 Technology, etc.
Image copyright: www.freeimages.co.uk

68. Product or service Core Product Actual Product
Augmented
Product
CAR Transportation A motor car Finance Availability
Hotel Accommodation Rooms Room service
Airline Transportation An air plane
In flight
Entertainment
A Football Club Entertainment
T-shirts – photos
with players
An Insurance Company Safety Insurance policy Online availability
Air Condition Cooling AC Warranty

69. PricePrice

70. Price
 Pricing Strategy
- International
 Comparative
 Cost plus
• The price must be one thatThe price must be one that
the customer thinks is goodthe customer thinks is good
value for moneyvalue for money..
• This is not the same asThis is not the same as
beingbeing cheap!cheap!
• Prices have a greatPrices have a great
psychological effect onpsychological effect on
customers.customers.

71. Price
 Pricing Strategy
 Importance of:
 knowing the market
 elasticity
 keeping an eye
on rivals
Image copyright: www.freeimages.co.uk

72. PromotionPromotion

73. Promotion
 Strategies
to make the
consumer aware of
the existence of a
product
or service
 NOT just advertising

75. The promotional message should
Grab Attention
Stimulate Interest
Create Desire
Promote Action

76. PlacePlace

77. Place
 The means by which products and services
get from producer
to consumer and where they can be
accessed by the consumer
 The more places to buy the product and the
easier it is made to buy it, the better for the
business (and the consumer?)

79. PeoplePeople

80. People
 People represent the business
 The image they present can be important
 First contact often human – what is the lasting image
they provide to the customer?
 Extent of training and knowledge
of the product/service concerned
 Do staff represent the desired culture
of the business?

81. People
 People represent the business
 The image they present can be important
 First contact often human – what is the lasting image
they provide to the customer?
 Extent of training and knowledge
of the product/service concerned
 Mission statement – how relevant?
 Do staff represent the desired culture
of the business?

82. People
 People represent the business
 The image they present can be important
 First contact often human – what is the lasting image
they provide to the customer?
 Extent of training and knowledge
of the product/service concerned
 Mission statement – how relevant?
 Do staff represent the desired culture
of the business?

83. ProcessProcess

84. Process
 How do people consume services?
 What processes do they have to go through
to acquire the services?
 Where do they find the availability
of the service?
 Contact
 Reminders
 Registration
 Subscription
 Form filling
 Degree of technology

85. Physical EnvironmentPhysical Environment

86. Physical Environment
 The ambience, mood or physical presentation of the environment
 Packaging.
 Internet/web pages.
 Paperwork (such as invoices, tickets,…..).
 Brochures.
 Furnishings.
 Uniforms.
 Business cards.
 The building itself (such as prestigious offices or scenic
headquarters).
 Mailboxes and many others . . . . . .

87. Marketing Myopia

88. What is Myopia
• Nearsightedness--not inherited. It can be
prevented.
• Short sighted and inward looking approach to
marketing that focuses on the needs of the
firm instead of defining the firm and its
products in terms of the customers' needs
and wants.

89. “There is no such thing as a
growth industry, what we have
is growth opportunities.”
-Theodore Levitt

90. Guarantee a Self-Deceiving Cycle
 Believe growth is guaranteed by an
expanding population
 Believe there is no competitive substitutes
 Have too much faith in mass production
 Preoccupation with a product: focus on
product instead of customer

91. Assured Growth by Expansion
• Belief that increases in population and
affluence ensure growth
• Lack of innovation – A common
characteristic
▫ Companies focus on efficiency, not innovation
• Petroleum industry
▫ A prime example of this fallacy
▫ Reinforces Levitt’s caution of myopically
defining one’s industry

92. No Threat of Obsolescence
• The fallacy of believing competitive substitutes
don’t exist
• Petroleum industry
▫ A history of obsolete products due to competitive
substitutes
 Kerosene Lamp
 Kerosene Space Heater

93. Mass Production
• Lower product’s unit costs as output increases
• Focus on production, neglect marketing
• Selling is not marketing
• Focus on company’s needs, not customer’s
needs

94. Henry Ford
Brilliant Marketer Senseless Marketer
• Created a product
customer’s needed
• Created a product
customer’s could afford
• Created production
system to fit market
needs
• Refused to make cars in
any other color but black

95. Preoccupation with Product
• Industry declines instead of growing
• Example – Oil Companies
• Survival entails change

96. Creative Destruction
• When something new eliminates something
old
• Must become innovative – reinvent business
• Must change business strategy to survive

97. Marketing Myopia Today
 Airline Industry
 - IndiGo V/s Kingfisher
 - Private carriers v/s National Carriers

98. Marketing Myopia Today
• Technology Industry
▫ More focused on the customer today than in 1960
▫ Apple
▫ E-commerce and E-Business ranked high in
customer satisfaction report

99. • The key question – “what business are
you in?”

100. Vision Statements
ITC: Sustain ITC's position as one of India's most
valuable corporations through world class performance,
creating growing value for the Indian economy and the
Company's stakeholders
GE: We bring good things to life
Amazon: To be earth’s most customer centric
company; to build a place where people can come to find
and discover anything they might want to buy online

101. Vision Statements
SONY: To create exciting new digital entertainment
experiences for consumers by bringing together cutting-
edge products with latest generation content and services.
TCS: TCS will be recognized and respected as
professional,
innovative, profitable information, and knowledge based
logistics/services enterprise

102. Vision Statements
Apple: "We believe that we are on the face of the earth to make great
products and that's not changing. We are constantly focusing on
innovating. We believe in the simple not the complex. We believe that we
need to own and control the primary technologies behind the products
that we make, and participate only in markets where we can make a
significant contribution. We believe in saying no to thousands of projects,
so that we can really focus on the few that are truly important and
meaningful to us. We believe in deep collaboration and cross-pollination
of our groups, which allow us to innovate in a way that others cannot. And
frankly, we don't settle for anything less than excellence in every group in
the company, and we have the self-honesty to admit when we're wrong
and the courage to change. And I think regardless of who is in what job
those values are so embedded in this company that Apple will do
extremely well.

103. Conclusion
 “Organizations must learn to think of itself not
as producing goods or services but as buying
customers, as doing the things that will make
people want to do business with it.”
Theodore Levitt