AN INTRODUCTION TO MARKETING AND
ITS BASIC CONCEPTS
1. Meaning and Scope of Marketing,
2. Fundamental Marketing Concepts,
3. Company orientations towards the Marketplace,
4. Marketing and customer value,
5. Strategic Planning,
6. Marketing plan,
7. Marketing in the Indian Economy, implications.
Company’s orientation towards the
The various concepts used by
organizations can be classified as
• Production concept
• Product concept
• Selling concept
• Marketing concept
• Holistic marketing concept
A special insight
In this context what needs to be understand is that the 4P’s have to
be added with two more Ps’.
6Ps’ make a holistic framework.
4P’s + 5th P (people) + 6th P (process).
People will have to be oriented towards the market place and
the processes will have to be constantly reviewed to ensure that
every business action is in sync with the market philosophy.
Only when this concept sinks into an organizational approach
will Holistic Marketing have truly been assimilated.
Marketing and customer value
Value ,is a sum total of tangible and
intangible perceived by the consumer
for the price that he pays.
Marketers must first choose the value
delivery process and communicate
superior value by fine tuning the
Marketing has to constantly create and deliver value to
The Customer delivered value is the difference between
total customer value and total customer cost.
The total customer value is the bundle of benefits
customer expects from a given product or service.
Total customer cost is the bundle of costs customers
expect to incur in evaluating, obtaining, using and
disposing of the product or service.
Value delivery process :
The delivery process has three stages ,
– First phase : choosing the value
This is the first phase of determining what should be the value
offered to the consumer.
• Homework before any product is marketed
• Segment the market, select the target and develop the
• STP – seg, targeting, positioning is the essence of
– Second phase: providing the value
• Developing product, features, pricing, sourcing, making,
distributing the product
Third phase: communicating the value
Utilise sales force, promotion, advertising, mass
Nirmallya Kumar, has proposed a 3 V approach to marketing
3V’s : Value segment
• Value segments – customers ( his/her needs)
• Value proposition – product / offering
• Value network - channel / method of delivering the
The concept of Value Chain :
• Michael Porter’s value chain is a tool for
creating more customer value
According to this model, every business
gets into nine value creating activities ,
out of which five are primary activities
and four are support activities
• Primary activities :
bringing materials (inbound logistics) ,
converting them into final products (operations)
shipping out final products (outbound logistics)
marketing (marketing and sales)
• Support activities : procurement, HR, technology
development and firm infrastructure.
The firm constantly examines costs and performance in each of
these value creating activity and looks for ways to improve the
function. The firm analyses the competitors costs and
benchmarks against which to perform. It also establishes ‘ best
practices’ and makes them industry standards.
• All of these must be aligned to the core business
• Today companies are partnering with suppliers and
distributors to create a superior value network or a supply
Core Competencies refer to areas of special technical and
production expertise, distinctive capabilities describes
excellence in broader business process.
Outsource others to reduce overheads and concentrate on
Holistic marketing framework
and customer value
Holistic marketing is about
Value exploration, Value creation, Value
A marketer is someone who has a product, service to offer /
He seeks response from the other party, a prospect, the
one who receives the message and decides to act upon it.
Marketers stimulate demand in the marketplace for their
company’s products; demand management is an important
function for any marketing department.
Marketers seek to influence the level of demand, time of
demand and composition of demand.
Eight states of demand are possible :
1. Negative demand : Consumers dislike the product
and may even pay a price to avoid it.
2. Non Existent demand : Consumes may be
unaware or uninterested in the product.
3. Latent demand : Consumers may share a strong
need that cannot be satisfied by an existing product.
4. Declining demand : Consumers buy less frequently or not
5. Irregular demand: Consumer purchases vary on
occasional basis, seasonal, weekly, monthly.
6. Full demand : Consumers are adequately purchasing
expected levels of products
7. Overfull demand : More consumers want the product, but
can’t be satisfied
8. Unwholesome demand: Consumers are attracted to
products that have undesirable social consequences
What are the tasks of Marketing
• Developing marketing strategies and plans
• Capturing marketing insights
• Connecting with the consumers
• Building strong brands
• Shaping the market offerings
• Delivering value
• Communicating value
• Creating long term growth
Apple unveils new tablet
computer, the iPad
28 January 2010,
SAN FRANSISCO: Apple Inc CEO Steve Jobs took the wraps off the highly anticipated "iPad" tablet and
pitched it at a surprisingly low price, aiming to bridge the gap between smartphones and laptops.
Jobs, who returned to the helm last year after a much-scrutinized liver transplant, took the stage at a
packed theater on Wednesday and showed off a sleek, half-inch thick tablet computer with a 9.7-inch
"What once occupied half your living room can now be dropped in a bag," said NPD analyst Ned May. "It's
pulling together a variety of needs (in) a universal entertainment device."
The iPad will sell from late March for as low as $499 for 16 gigabytes of storage.
"Pricing is very aggressive, so it's pretty positive from a mass adoption perspective. It was about $200
lower than what I was expecting," said Brian Marshall, an analyst with Broadpoint Amtech.
Other analysts had speculated that the tablet may cost as much as $1,000.
In an online poll before Wednesday's media event, 37 percent of more than 1,000 respondents said they
would pay $500-$699 for the tablet.
The iPad is Apple's biggest product launch since the iPhone three years ago, and arguably
rivals the smartphone as the most anticipated in the company's history.
Wednesday's event follows months of feverish speculation on the Web and on Wall Street.
Shares of Apple rose to as high as $210.58 after the pricing news, up 5.5 percent from
their session low. Apple announced a data plan with AT&T Inc, which appeared to have
beaten out Verizon Wireless for the deal.
Shares of AT&T, Apple's carrier partner on the iPhone, rose 1.14 percent while Verizon
Communications Inc fell about 1 percent
Apple hopes to sell consumers on the value of tablets after other technology companies,
including Microsoft Corp and Toshiba Corp, have failed in recent years.
Developing marketing strategies and plans
– Identify long and short term potentials
– Make strategic and tactical plans
• Capturing marketing insights
– Closely monitor marketing environment
– Gather information both at micro and macro levels
– Establish marketing information system, marketing
research system, marketing implementation system,
marketing control system
Originally, the word strategy has been derived
from Greek ‘Strategos’, which means
generalship. The word strategy, therefore,
means the art of the general.
When the term strategy is used in military
sense, it refers to action that can be taken in
the light of action taken by opposite party.
Strategic planning refers to
management process in organizations
through which future impact of change
is determined and current decisions are
taken to reach a designed future
Connecting with the consumers
– Develop strong long term relationship with
– Where , what , why they buy is to be understood
– Segment the market and identify the targets in each
Building strong brands
– Develop products with strong brand names
– Establish these brands, monitor them and keep
• Shaping the market offerings
– Product quality , design, shape, price, maintenance,
after sales service, discounts, schemes, credit terms
• Delivering value
– Determine channels of distribution
– Make it available within easy reach of the customers
– Develop and run marketing communications to
inform, persuade, remind consumers directly or
indirectly about the brands they sell
– Develop mass programmes, sales promotions, direct
selling, public relations, interactive marketing and
• Creating long term growth
– Initiate programmes to constantly monitor growth
– Product relaunches, new product development
,evaluating marketing programmes should be
What is a marketing plan ?
- A marketing plan is a written document that
summarizes what the marketer has learned
about the marketplace and indicates how the
firm plans to reach its marketing objectives.
- It is the act of putting together in a plan, the
various elements of the marketing mix in a
forecasted / futuristic approach
Elements in a plan
- Mission statement – Why we are here and what
the company’s end aim of business is
- SWOT (Situation) Analysis – Where are we
- Objectives of the plan – where do we want to be
- Strategy, programme – How do we reach there
- Budgets, forecast, P&L – At what cost
1. Mission Statement
- Mission statement – company’s end aim of business
- Mission statements reflect a vision
- Mission statement should have three characteristics
Focus on limited no. of goals
Stress the major policies and values
Define competitive sphere within which the company
2. SWOT Analysis
SWOT analysis is the strengths, weaknesses , opportunities
and threats analysis. It involves monitoring external and
internal environment factors
Opportunity and Threat are external factors, external
environmental issues, having a bearing on our business.
A major purpose of environmental scanning is to find new
Companies can use a Market Opportunity Analysis (MOA) to
determine the attractiveness and probability of success:
Social / Cultural
Factors influencing the strategy
3. Goal Formulation / Objective setting
After the SWOT, goals have to be set for the specified plan
While setting goals, care should be taken to do the following:
1. They must be arranged hierarchically, from the most
important to the least important.
2. Objectives should be stated quantitatively as far as
3. Goals should be realistic
4. Objectives must be consistent.
4. Strategy Formulation / Programme
Goals indicate what the business wants to achieve,
down a long term approach path to reach there.
Michael Porter , laid out three generic strategies that
starting point in building a strategy plan.
1. Overall cost leadership
Overall cost leadership means that in the industry , the firm will
achieve the best value engineering and thereby reduce cost of
Differentiation means achieving performance in an important
customer benefit area valued by a large part of the market. The
firm should be able to offer a superior differentiation compared
Focus means that the business will focus on a narrow segment.
They will achieve cost leadership or differentiation within the
Yet another area of strategy formulation is the idea of strategic
alliance with another partner. Strategic alliances can take the
form of marketing alliances.
5. Budgets / Forecasts /P&L
Any plan has to be followed with a
detailed budgeting exercise , putting
down costs, money required for the
project and the expected returns and
variances expected. This should be
done for the plan period and also for the
next two or three years.
Feedback and control becomes very
important to do course correction and
also redraft the plan if necessary.