Marketing

What is Marketing?
Marketing is a societal and managerial
process where people and organizations (
customers) obtain what they need and want by
exchanging products and services of value
with each other
Marketing focuses on the needs and wants of
customers.
It is concerned about satisfying customers
through supply of goods and services
Many think marketing is only advertising and
selling. But marketing is almost a way of life
that everybody needs to know.

Iceberg Theory
M

Selling &

advertising

Water

K
E
T
I
N
G

Iceberg- under
water

Real Iceberg

Few definitions of Marketing

Marketing is not a science and there is
no single universally adopted definition.
Lets discuss about some widely used
definitions.

Definition- Marketing
Phillip Kotler( The Millennium
Edition 2000) Marketing is a
societal
process
by
which
individuals and groups obtain what
they want through creating,
offering and freely exchanging
products and services of value
with others

Definition of Marketing
According

to

Eldridge

(1970)

"Marketing is the combination of

activities designed to produce profit
through
ascertaining,
creating,
stimulating, and satisfying the needs
and/or wants of a selected segment
of the market."

Definition- Marketing
Dibb, Simkin,Pride and Ferrel
Marketing Consists of individual and
organizational activities that facilitate and
expedite satisfying exchange relationships in
dynamic environment through the creation,
distribution, promotion and pricing of goods,
services and ideas

Nature of Marketing
1. Marketing is an integrated process :
Marketing is not a single activity. It is rather a
coordination of several inter-related activities. The
interaction between different activities gives a unique
character to marketing.
Marketing is a managerial process in so far as it
involves the functions of planning and control.
Marketing is also a social process as it is concerned
with the satisfaction of human needs and this is one
of the most important Characteristics of Marketing.

Nature of Marketing
2. Marketing is customer orientedMarketing exists to identify and satisfy the
wants of present and potential consumers.
Customer is the focus of all marketing
activities.
3. Marketing is a system- Another important
characteristic of marketing is its function as a
system. Marketing is a system comprising
several sub systems. Under marketing, inputs
are drawn from the society and converted into
outputs which are supplied to the society.

Nature of Marketing
4. Marketing is a part of total environmentMarketing operates within the framework of
total environment which comprises economic,
social, legal, political, international and other
forces. Changes in the environment influence
marketing activities. Marketing is, therefore, a
dynamic process as it keeps on adjusting to
the changing environment.

Nature of Marketing
5. Marketing is creative- Marketing creates
time, place and possession utilities. Time
utility is created by preserving goods for use in
future. Place utility is created by carrying
goods to places where they are needed the
most. Marketing creates possession utility by
transferring products and services from
producer to customer. Exchange process
between buyer and seller is the essential
element in marketing.

Nature of Marketing
6. Marketing is goal -oriented- Of the many
important characteristics of marketing; one
very important aspect is it is goal-oriented.
Marketing seeks to achieve benefits, for both
buyer and seller. It results in mutually
beneficial relationship by satisfying wants of
customers and by generating revenues for
marketers.

Nature of Marketing
7. Marketing is pervasive- marketing is
required in business as well in social and
other organizations. In other organizations,
marketing is necessary for spreading socially
useful ideas and programs family planning,
adult education, communal harmony, national
integration, environmental protection, etc.
Such marketing is called social marketing.

Functions of Marketing
Customer is the center of all Marketing
activities.
Marketing focuses on the needs and wants of
customers.
Identifying favorable emerging market
opportunities
It is concerned about satisfying customers
through supply of goods and services

Functions of Marketing
Marketing involves analysis, planning and
control
Marketing is concerned about staying ahead
with competition and making profits
Marketing has a heavy emphasis on
relationships
Creating value to both the customer and
organization

Development of Marketing
Marketing as an exchange process
Exchange is the act of obtaining something by
offering something in return ( money, services, goods
or a combination)
For an exchange to take place following conditions
must exists:
1. Two parties
2. Each party must possess something of value that
the other party likes
3. The parties must be involved voluntarily
4. Parties must be able to communicate about their
value proposition

All profit and non profits are using marketing

Marketing is not only used by commercial profit
oriented organizations but also by other organizations
such as temples, churches and many other not for
profit organizations and persons.
For example : Temple/Church provide their service (
product) to its congregation( customer) It announcers
its activities (promotion) to its congregation (target
market).
Customer would be the most important element of any
marketing organization.
Marketer needs to strive to satisfy its customers as
No customers means No business

Is Marketing a function of management or a

business philosophy ? Discuss
It is a function of management as well as a business
philosophy
It is considered as a function of management as it
uses management techniques in satisfying
customers.
Businesses has various divisions that handles
different functions such as human resource,
financial, operations and marketing.
In a typical Marketing Department there are
marketing managers, product managers, sales
managers, sales representatives, sales persons,
delivery assistants etc.

Marketing as a business philosophy

Marketing is considered as a overall business
philosophy which runs through all departments of an
organisation and embedded in all the activities of a
marketing organization. It is a way of business
thinking.

The idea rooted in satisfying customers through the

supply of goods and services does not restrict to one
department or function.
It is the purpose of the whole business. Everyone
should have the customer oriented attitude in an
organisation.

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.

On the Line:
Ingram Micro

Ingram

Ingram Micro is an American electronics

company
Took leadership in creating a demand chain
among its supply chain partners.
$22 billion sales of 200,000 products from 1,500
manufacturers to 140,000 resellers in 130
countries.
Ingram Micro is using a demand chain, rather
than a supply chain, to focus on meeting
consumer demand.

On the Line:
Ingram Micro

Demand Management - Ingram Micro

1 .Gathering and analyzing knowledge about
consumers, their problems, and their unmet needs.
2. Identifying partners to perform the functions
needed in the demand chain.
3. Developing products and services that solve
customers problems.
4. Moving the functions that need to be done to the
channel member that can perform them most
effectively and efficiently.

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.

25

Marketing Management
Defined as an art and science that determines
and chooses target markets and attempts to
build profitable relationships with them.
Managing customer demand and customer
relationships.
Different approaches to the marketing function
evolved over time
directly affect the way marketing takes place.

Definition- Marketing Management

American Marketing Association
Marketing Management is the process of
planning and executing the conception, pricing,
promotion, and distribution of ideas, goods and
services to create exchanges that satisfy
individual and organizational goals
"Marketing Management is the management
process responsible for identifying, anticipating
and satisfying customer requirements profitably."
Chartered Institute of Marketing (2001).

Principles of Marketing Management

Demand management
Promotional activities to increase demand
Building profitable customer relationships
Attracting
Retaining
Building customer lifetime relationships and
value

Functions-Marketing Management
Identifying customer requirements through
research
Study about customer perception and
products, set prices, involved in distribution
systems, promotional activities, etc.
Anticipate customer demand by forecasting
Work with other functional departments to
develop goods and services to satisfy
customer needs
Simply analyzing, planning, implementation
and control of all the marketing activities.

Philosophies of Marketing
Management

The Production Concept

Product Concept
The Selling Concept
The Marketing Concept
The Societal Marketing Concept

1. Production concept:
All the focus is on the production.

Concentrate on achieving high production

efficiency, low cost& mass distribution.
Maximization of output will decline in the unit cost
&would bring the customers and the profit.
Assume that consumers are primarily
interested in product availability and low prices

1. Production concept:
Ex-This
orientation
makes
sense
in
developing countries such as China, where
the largest PC manufacturer, Legend
(principal owner of Lenovo Group), and
domestic appliances giant Haier take
advantage of the countrys huge and
inexpensive labor pool to dominate the
market.
Marketers also use the production concept
when they want to expand the market.

1. Production concept:
Ex-Inexpensive Toys , Electronics
Example : Ford T- Model

: Govt. Hospital and other Service

Depts.

Ford T Model

2. Product Concept:

Consumers will favor those products

that offer most quality, performance or
innovative features
Just making superior products will
make customers seek and buy them.
More focus on
Marketing Mix.

Product

in

the

2. Product Concept:
Ex- Better mouse trap of Woolverth Co.
Made a very effective reusable mousetrap that
the existing ones but price was more than
double. It did not sell well. People did not want
to spend twice as they used to throw the
mousetrap also with the catch.
Marketing Myopia- shortsightedness of not
considering customer needs and behavior

Woolverths mouse trap

3.The Selling concept:

The selling concept maintains that a company
cannot expects its product to get picked up
automatically by the customers.
The company has to consciously push its products.

3.The Selling concept:

Aggressive advertising , high power personal
selling , large scale promotion , heavy price
discounts , strong publicity and public relations are
the normal tools that rely on this concept.

Their aim is to sell what they make rather than

make what the market wants.
Ex-It is practiced most aggressively with
unsought goodsgoods buyers dont normally
think of buying such as insurance and hotel
services

The Marketing Concept

The marketing concept has been expressed :
.Meeting needs profitably..
.Find wants and fill them..
.Love the customer, not the product..
Have it your way.. (Burger King)
You are the boss.. (United Airlines)
Putting people first.. (British Airways)
Partners for profit.. (Milliken and Company)

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.
It build profit through customer satisfaction
and loyalty.
Ex-Dell doesnt prepare a perfect computer for
its target market. Rather, it provides product
platforms on which each person customizes
the features he or she desires in the computer.

4 PILLARS
The marketing concept rests on 4 pillars,
namely

1. Target Market

2. Customer Needs

3. Integrated marketing

4. Profitability

Marketing and Sales Concepts Contrasted

The Societal Marketing Concept

The societal marketing concept holds that the
organizations 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
consumers and the societys well being.
Societal Marketing =

Consumer Satisfaction + Company s Profits + Societys well

being.

The Societal Marketing Concept

Ex-McDonalds earmarking of $1 for Ronald
McDonald Childrens Charities from the sale of
every Big Mac and pizza sold on Mc Happy
Day.
McDonalds sponsorship of Forest (a gorilla) at
Sydneys
Zooa
10-year
sponsorship
commitment, aimed at preserving this
endangered species

Marketing

Selling

1.Marketing starts with the customer ,present and

potential and focuses constantly on the need of the
buyer.Buyer is the centre of the business
universe.activities follow the buyer and his needs.

1.Selling starts with the seller.It focuses on the need of the

need.Seller is the centre of the business universe.activities
starts with sellers existing products.

2.Emphasis on identification of a market opportunity and

fulfilling the needs of the customer.

2.Emphasis on saleable surpluses available within the

corporation.

3.Seeks to convert customer needs into products.

3.Seeks to convert productinto cash,concerns itself with

the tricks and techniques of getting the customers to buy
the product available with the salesman in exchange of
cash.

4.View business as customer satisfying process.

4.View business as a goods producing process.

5.It is concern with the value satisfaction customer

should get from the exchange.

5.Overemphasis the exchangeaspect without caring for

the value satisfaction inherent in the exchange.

6.The firm makes a total product offeringthat would

match and satisfy the identified needs of the customers.

6.The firm makes the product first and then figure out how
to sell it and make profit.

7.Adopting more innovative technology to provide better

value to the customer.

7.Emphasis on staying with the existing technology and

reducing the cost of production.

8.If the enterprise has a customer orientation-concerned

more about his needs,and make genuine efforts to satisfy
those needs ,then it is practising Marketing.

8.If the enterprise has internal orientation concerned more

about itself and its products and the need to dispose off its
products,then it is practicing Selling.

Marketing

Selling

9.Consumer determines price ; price

determines cost.

9.Costs determine price.

10.They are seen as vital services to be

provided to the customers keeping in mind
their convenience.

10.Transportation,storage and other

distribution functions are merely a part of
production function.

11.In firms practicing marketing,marketing

is the central function of the business;the
entire company is organised around the
marketing function.

11.In firms practising selling,production is

the central function of the business.

12.Marketingviews the customer as the

very purpose of the business;sees business
from point of view of the customer.

12.Selling views the customer as the last

link in the business.

Holistic Marketing
The holistic marketing concept is based on
the
development,
design,
and
implementation of marketing programs,
processes, and activities that recognize their
breadth and interdependencies.
Holistic
marketing
acknowledges
that
everything matters in marketingand that a
broad, integrated perspective is often
necessary.

Holistic Marketing
Holistic marketing thus recognizes and
reconciles the scope and complexities of
marketing activities.
Holistic Marketing a schematic overview of
four broad components characterizing holistic
marketing: Internal Marketing, integrated
marketing , relationship marketing, and
Societal marketing.

Components of Holistic Marketing

1. Internal marketing
2. Integrated marketing
3. Relationship marketing
4. Social responsibility marketing

Diagram of Holistic Marketing

Senior

Marketing

Products&

Other

Management

Department

Services

Departments
Communications

Channels

Internal

Integrated
Marketing

Marketing

Holistic
Marketing
Socially
Responsible
Marketing

Relationship
Marketing

Ethics

Community
Environment

Partners

Customers

Legal
Channel

Internal Marketing
Internal marketing is based on the theme that
employees are the internal customers of a firm
and their satisfaction is of utmost importance
in order to achieve the goal of customer
satisfaction.
Internal marketing ensures building a skilled
and self-motivated workforce and that every
member of the organization properly
understands
the
companys
marketing
orientation and philosophy towards the
customer satisfaction.

Internal Marketing
Internal marketing is also about maintaining
harmony and co-ordination among various
marketing functions and activities within the
organization.
There should not be any conflicts within the
marketing department or between marketing
and other departments because that would
somehow negatively affect external marketing
also.

Internal Marketing
Ex- Snowshoe has established Mountain Ski
resort incorporated the new brand promise in
a 40-page brand book that contained the
history of the resort and a list of seven attitude
words that characterized how employees
should interact with guests.
On-mountain messaging and signs also
reminded employees to deliver on the brand
promise.

Integrated Marketing

Integrated marketing is based on the

proposition that the marketers instead of
deciding for individual marketing activities
should make an integrated marketing program
with the purpose to create, communicate and
deliver value for the customers.
The aim of integrated marketing is to gain
synergy out of all marketing activities and it is
only possible when an integrated approach is
adopted.
It is basically about designing an effective
integrated marketing mix executed well to

Integrated Marketing
Ex-BMW launched the modernized MINI
Cooper in 2002, it employed an integrated
marketing strategy in the United States that
included a broad mix of media: billboards,
posters,
Internet,
print,
PR,
product
placement, and grassroots campaigns.

Relationship marketing
Relationship marketing includes
of building mutual
satisfaction with customers & long term relationships with
key parties as well as go through profit of the business.
key parties are Customers-People those who are the target market for a firm.
Channel - Suppliers, distributors
Partner- Dealers, agencies

Relationship marketing involves cultivating the right kind of

Relationship with right kind of groups.
Outcomes of Relationship marketing is to create marketing
network which consist of customers, employees, suppliers,
distributors, retailer, agencies and so on.

 Ex-Royal Bank of Canada (RBC) has put each of its

roughly 11 million clients into meaningful segments
whose profitability it can measure.
In the process, it discovered a sizable sub-segment
of customers hidden within its broader categories of
wealth preservers and wealth accumulators.
Dubbed snowbirds,
These individuals spent a number of months each
winter in Florida, where they were experiencing
difficulties establishing credit as well as missing their
Canadian communities, particularly the familiarity of
the French-Canadian accent and fluency in French.
To meet their unique needs, RBC created a
Canadian banking experience in Florida.

Societal Marketing
Holistic marketing suggests that the
marketers responsibility is not limited to the
customers but it extends to the society in
general.
Societal marketing suggests that marketing
should consider ethics, society, laws and the
environment while designing activities.

Societal Marketing
Any such marketing activities which are economically
profitable but socially harmful are strictly restricted
under societal marketing aspect of holistic marketing.
The marketing should not adopt an irresponsible
behavior towards the society.
Ex-McDonalds promotion of a statewide childhood
immunization campaign in Oklahoma.
McDonalds sponsorship of Forest (a gorilla) at
Sydneys Zooa 10-year sponsorship commitment,
aimed at preserving this endangered species

What is Green Marketing?

This stems from how marketer responds to the
environment. The marketers have been practicing
very environmental destructive activities.
Resource depletion and degradation - Genetic
engineering- Pollution- Harmful emissions and
products- health hazards
Barriers to Green M- Cost- Technological problemsless innovation -less commitment and ignoranceconsidering world as bundle of raw materials for the
benefit of the current generation.

What is ethical Marketing?

Ethical Marketing are the rules of conduct and moral
principals regulating marketing.
- The limit of Claims/Promises that can be made as to
product benefits
- Discriminating competing products
- Marketing of products like cigarettes, alcohol
- Limitations in Marketing products to children
- Religious/racially susceptible Brand names and images
- Unaccepted Promotional methods
- Using women in unaccepted manner
- Purposeful deception
-

Relationship Marketing
Customer retention has
become a major problem in
the competitive world of
business
Relationship Marketing is
the process of creating,
building and managing long
term relationship with
customers, distributors and
suppliers. Life Time Value of
a customer is emphasized
more than a value of a
single transaction

 Traditional Marketing is
concerned with the
exchanges with customers.
The emphasis was to
develop products that will
satisfy customers and focus
was basically on (single)
transaction.
Not much effort was kept on
keeping the customer for a
long time and Life Time
Value was not considered
much.

 Types and Levels of Relationship

Transactional approach- Marketer concludes a
transaction of selling a product. The marketer, in
offering the product, is looking for a response.
Transaction based marketing is on individual
transaction
Relationship approach- The concluded transaction is
not the end of a process, but start of a long term
relationship with the customer.

 Benefits of relationship marketing

Retaining existing customers is cheaper than getting new
ones
Repeat customers are costing less to service as they are
familiar with the company
Reduce customer deflection and bad word of mouth
Keep customer databases and service more effectively
Small changes in retention rates have large effects on
revenue

Identify and explain the anticipated benefits of

introducing marketing orientation to an organisation.
If a company to be successful in the long run the
most important philosophy they should follow is the
marketing orientation/ concept
The mere survival of a company in the modern
globalised world depends on how much of customer
satisfaction that it can offer.
Therefore the customer focus should be an integral
part of the organisation
All the departments in the company should have an
integrated approach towards satisfying customers

 Further it would be able to reduce the

number of dissatisfied customers.
Dissatisfied customers will tell others
Research confirms it takes six times of
effort and cost to make anew customer
than keeping the existing ones.
It would make the organisation gain a
competitive advantage

If an organisation can adopt a marketing

oriented approach it would be able to get
Increased customer satisfaction
Increased customer loyalty
Increased reputation
Increased motivation among staff
Increased market share
Reduction of waste
Combat threats from competitors