Marketing - Concepts of Marketing

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What is Marketing…??
Selling?
Advertising?
Promotions?
Making products available in stores?
Maintaining inventories?
All of the above, plus much more!
Marketing is the fulfillment of consumers’
aspirations.

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Characteristics of modern market
1. A substantially enhanced buying power
2. A broader “bandwidth of available
products and services with greater amount
of information
3. A greater ease in trading through e-
commerce
4. An ability to easily benchmark and
compare products and services globally

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Marketing = ?
Marketing management is the art and science of choosing
target markets and getting, keeping, and growing customers
through creating, delivering, and communicating superior
customer value.
A societal process by which individuals and groups obtain
what they need and want through creating , offering and freely
exchanging products and services of value with others. -
Kotler

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Marketing = ?
Marketing is the social and managerial process of
planning and executing the conception, pricing,
promotion, and distribution of ideas, goods, services to
create exchanges that satisfy individual and
organizational goals
American Marketing Association

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Marketing = ?
 Marketing is the sum of all activities that take a consumer
to a sales outlet. After that sales takes over.
 Marketing is all about creating a pull, sales is all about
push.
 Marketing is all about managing the four P’s –
 product
 price
 place
 promotion

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The 4 Ps & 4Cs
Marketing
Mix
Product
Price Promotion
Place
Customer
Solution
Customer
Cost
Communication
Convenience

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4 A’s
• Affordability
• Accessibility
• Awareness
• Acceptability

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Basic Marketing model
Communicative Information
SELLERS
BUYERS
FEEDBACK
Money
Market offering

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Scope – What do we market
 Goods - any product
 Services - Warranty, customer care
 Events - Amul Campaign, world cup
 Experiences – Amusement parks
 Personalities - Advertisements
 Place – Malaysia truly asia, Incredible India
 Organizations - taglines
 Properties – real estate
 Information - kotler
 Ideas and concepts - Being human, CRY

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Core Concepts of Marketing
Based on :
 Needs, Wants, Desires / demand
 Products, Utility, Value & Satisfaction
 Exchange, Transactions & Relationships
 Markets, Marketing & Marketers.

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Needs , Wants and Desires
Needs are the states of felt deprivation.
Wants are educated needs based on human needs as
shaped by culture and individual personality. They are
described in terms of objectives that will satisfy needs.
Demands are empowered human wants i.e when the
consumers have the ability to satisfy their wants. They
must have willingness and the purchasing power to
buy a particular product.

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Maslow’s Hierarchy of Needs
Esteem Needs
(self-esteem, status)
Social Needs
(sense of belonging, love)
Safety Needs
(security, protection)
Physiological Needs
(hunger, thirst)
Self
Actualization
(Self-development)

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Utility
- that something which makes a
product capable of satisfying wants
1. Form -leather takes the form of a shoe
2. Place – oven in kitchen
3. Time – newspaper in the early morning
4. Information – tv news providing relevant
information
5. Possession - owning a car and riding it.

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Who is a Customer/
Consumer ??
Anyone who is in the market looking at a product /
service for attention, acquisition, use or consumption
that satisfies a want or a need
CUSTOMER/ Consumer IS . . . . .
Customers purchase the products but a consumer may actually use the
products.

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Customer –
CUSTOMER has needs, wants, demands and
desires
Understanding these needs is starting point of the
entire marketing
These needs, wants …… arise within a framework
or an ecosystem
Understanding both the needs and the ecosystem is
the starting point of a long term relationship

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Customers - Problem Solution
As a priority , we must bring to our customers
“WHAT THEY NEED”
We must be in a position to UNDERSTAND their
problems
Or in a new situation to give them a chance to AVOID
the problems

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Customer looks for Value
Value = Benefit / Cost
Benefit = Functional Benefit + Emotional
Benefit
Cost = Monetary Cost + Time Cost +
Energy Cost + Psychic Cost

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Defining Customer Value
Aim is to create and retain customers.
Customer Perceived/Delivered Value( CPV/CDV) –
diff. b/w prospective cust.’s evaluation of all benefits
and costs of an offering and the alternatives.
Total Cust. Value – perceived monetary value of the
bundle of eco., func. and psycho. benefits that cust.
expect from a given mkt offering.

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Total Customer value
Product value – fuel efficiency, sitting comfort, driving ease
etc.,
Service value – quality of services
Personnel value – derived from the level of knowledge,
skill, responsiveness of the emp. with whom the cust.
Interact during acquisition/ consumption of the product.
Image value – purely psych. Benefit derived from product’s
brand power, eg: using luxurious products

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Total Customer Cost
Monetary Cost – financial expenses
Time cost – Monetary equiv. of the time spent ( B2B –
time with CEO more than junior)
Energy Cost – Trouble / hassles
Psychic cost - Amount of risk and uncertainty of the
consumer experiences eg: medical life saving drugs,
insurance.
Customer delivered value = Total cust Value – total
Cust. Cost

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Attracting and retaining customers -
Decreasing Total Customer Cost
 Monetary cost
 Time cost
 Energy cost
 Psychic cost
Increasing Tot. cust. Value
 Product value
 Service value
 Personnel value
 Brand value

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Defining satisfaction
S=P-E where s= satisfaction level
P = performance level of the company as perceived by
the consumer while consuming the product
E= performance level of the company as already
expected by the consumer while purchasing the
product
If P<E , dissatis., P=E, satis., P>E , cust. Is delighted.
Levels of cust., satis- Cust. Satis. Index.

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Delivering Customer Value & Value chain
Value proposition – cluster of benefits the company
promises to deliver
Value delivery system – experiences the cust will
have on the way to obtaining and using the
product.
Value chain – primary value
activities( logistics,operations, mktg&sales,
services) , support activities ( procurement,
tech.,hr,infrastruc).

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Benchmarking
Finding ways to improve by analysing costs and
performance
Mkt sensing process
New offering realisation
Cust. Acquisition process
CRM process
Fulfillment mgmt process
Identifying core competency

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Core competency
Special areas/ distinctive capabilities
Unique to a part.org
Difficult for competitor to imitate
Source of competitive advantage – makes a
significant contribution.

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Exchange and transaction
Exchange is a process by which an individual gets a
desired object from someone by offering something
of value in return.
Transaction is 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.

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Management of Demand
1.Negative Demand – When a major part of the market dislikes
the product and may even pay a price to avoid it. Eg.:
woolen garments for very hot countries.
(Task of product redesigning, lower prices and more +ve
promotion)
2.No demand – When the target consumers are unaware of or
uninterested in the product. Eg.: students in learning regional
languages
(Tasks of relating product benefits with people’s needs and
interests)

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3.Latent Demand : When a strong need exits in
consumers’ minds but they cannot satisfy it by any
existing product. Eg: solar products/battery-operated
cars, harmless cigarettes.
(Task of good mkt research and suitable product
development).
4.Declining Demand : When demand for a part.
Product declines over time, eg: demand for
typewriters.
( Task of changing product features or more effective
promotion to boost the demand).

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5.Irregular Demand : When demand varies on a
seasonal, daily or even hourly basis which generally
exists for services like tour and travel, electricity and
telephone services – peak hours / peak season
demand.Eg.: special schemes for slack hours
(Task of synchromarketing – offer flexible pricing,
promotion + other incentives)
6.Full Demand: bus. Org. are at full demand & pleased
with their volume
(Task of facing cons. pref. and competition, by
optimising availability of products & maximising
returns by aggressive promotion schemes)

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7.Overfull demand: Demand level higher than what the company
can handle.Eg: Some forms of mass transformation system.
(Task of demarketing – reducing or discouraging demand
temporarily by rising prices, reducing overheads by less
promotion & services).
8.Unwholesome demand : A demand to be discouraged –
unhealthy for society. Eg: Demand for drugs, alcohol
(Task of making it unavailable, steep price hike, sending fear
messages).

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Evolution Of Marketing
Production Concept / Production orientation
1. Demand usually greater than supply,
2. Companies found little problem in finding
customers
3. Focus mainly on improving production and
distribution efficiency

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Marketing Myopia
Term by Theodore Levitt
The marketer has to see the buyer’s needs rather than
the product he sells, otherwise he suffers from what is
known as “marketing myopia.”
Father of marketing management

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Selling Concept/ Sells orientation
Consumers will buy enough of the org.’s products
only if they are convinced through large-scale
selling and promotion efforts, because consumers
have the opportunity to choose from many
alternatives.
Selling whatever they have made rather than making
goods which the market wants.

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Marketing Concept/ Marketing
orientation
Org. work at the level of customer segment - their needs are
identified and activities are tailored accordingly.
Customer Concept - Customers are the kings, shaping separate
offers, services and messages etc., individually
Societal Marketing Concept – The firms’ activities directed
towards meeting societal needs. eg,.: environmental needs,
health needs .

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Xerox We make copy
machines.
We automate
offices.
Eastman Kodak We make cameras
and film.
We help preserve
beautiful
memories.
Revlon We make
cosmetics, in the
factory.
We sell hope, in
the stores.
Company Production –
oriented answer
Marketing –
oriented answer
“What Business Are We In ?”

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Company Production –
oriented answer
Marketing –oriented
answer
AT&T We operate a long-
distance telephone
company.
We provide multiple
forms of reliable,
efficient inexpensive
telecomm. services.
Indian Oil We produce oil and
gasoline products.
We provide types of
safe & cost effective
energy.
Indian Railways We run a rail road. We offer a
transportation &
material –handling
solution.

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Marketers and Markets
Marketers are focused on stimulating exchanges with
customers who make up markets – B2C or B2B.
The market is comprised of people who play a series
of roles: decision makers, consumers,
purchasers, and influencers.
It is absolutely essential that marketers have a detailed
understanding of consumers, their needs and
wants.
Much happens before and after the sale to affect
customer satisfaction

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Drivers of Customer Satisfaction
Many aspects of the firm’s value proposition contribute to
customer satisfaction:
 The core product or service offered
 Support services and systems
 The technical performance of the firm
 Interaction with the firm and it employees
 The emotional connection with customers
Ability to add value and to differentiate as a firm focuses more on
the top levels -- Emergence of Relationship Marketing.

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Myth 1 – The larger the range of products, the more
customer-centric I am.
Mythbuster – The range of products hasMythbuster – The range of products has
emerged from beingemerged from being
competition-centric.competition-centric.

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Myth 2 – Better technology leads to
better customer service.
Mythbuster – TechnologyMythbuster – Technology
alone does not deliver,alone does not deliver,
helps people do.helps people do.

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Myth 3 – Launch a product and the customer will start
using instantly.
- Give a customer a card and he will learn how to play
with it immediately
Mythbuster – Customers needMythbuster – Customers need
To be educated too…To be educated too…

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Mythbuster – CustomersMythbuster – Customers
are not only presentare not only present
where competition is.where competition is.
Myth 4 – The only way to get a customer is from
competition.

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Myth 5 – Just advertise and - You will sell.
Mythbuster – Advertising will only sell,Mythbuster – Advertising will only sell,
Not retain customers.Not retain customers.

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Myth 6 – No difference between marketing & selling
Mythbuster –Mythbuster – “Selling focuses on the needs of the“Selling focuses on the needs of the
seller; marketing on the needs of the buyer.seller; marketing on the needs of the buyer.

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Difference Between - Sales & Marketing ?
Sales
trying to get the customer to want what the
company produces
Marketing
trying to get the company produce what
the customer wants