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
• Holds the view that mass distributed inexpensive products
are required to expand the market
e.g. Chinese products, take advantage of inexpensive
labour and low costs to dominate the market
• Holds the view that products of good features and quality
will attract the market itself
• It might , but not on a long standing basis
• Unless the distribution, pricing, advertisements are correct
the concept will not work
• Holds the view that products should be aggressively sold /
• Hard sell is the method
• Used extensively by unsought goods
– e.g. insurance,
• Assumes that consumers will buy a product and
eventually like it and will not complain even if there is a
• Sell more, to make more money and more profit
Holistic marketing concept
This concept is based on the development, design and
implementation of marketing programmes , processes and
activities that recognises their breadth and interdependencies.
This concept assumes that everything matters in marketing.
Four components of holistic marketing are :
Relationship marketing is the process of building a mutually
healthy and beneficial relationship between the marketer and
Four key constituents for marketing are : customers,
employees, marketing partners ( channel partners, suppliers,
distributors, dealers) and members of the financial
community(shareholders, investors, analysts).
The outcome of this relationship is building of a strong
marketing network. The operating principle of this network is
that,“build the network and profits will follow”
A growing number of organizations are customizing offers,
services and messages to suit individual needs. These
companies collect information on each customers past
transactions, demographics, psychographics , media and
distribution preferences. They hope to capture a large share
of each customer’s expenditures by building high customer
loyalty and focusing on customer lifetime value.
The ability of a company to deal with customers individually
has become possible because of advances in factory
customization, computers, internet, database marketing
The marketer has to devise the marketing programs to create,
communicate and deliver value to the consumers.
One traditional depiction of marketing is in terms of the
It is a set of marketing tools that the firm uses to pursue
its marketing objectives in the target market.
McCarthy classified the mix into four broad groups, which he
called the 4 P’s of Marketing: Product, Price, Promotion, Place.
From a sellers point of view, each of the component signifies a
tool to influence a buyer.
From a buyers view, each of this connotes a customer value.
Robert Lauterborn suggests that the seller’s 4 P’s correspond to
4 C’s as follows:
Four P’s Four C’s
Product Customer solution
Price Customer cost
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.
Two key themes of integrated marketing are:
1. Many marketing activities are strung together
to deliver value and customer satisfaction
2. All these activities are co-ordinated to get the
An integrated marketing communications
strategy involves choosing communications
that reinforce and complement each other.
Holistic marketing incorporates internal marketing, ensuring that
everyone in the organization embraces appropriate marketing
principles, especially senior management.
Internal marketing should work at two levels :
One, between the various marketing functions like sales,
advertising, product management, marketing research must
work together. All these functions must be co-ordinated from
the customer’s point of view.
Next, the various other departments like production, finance, R
& D should also “think customer”. Marketing orientation must
become pervasive throughout the company.
Social Responsibility Marketing
Holistic marketing tells us the importance of understanding
broader concerns and the ethical and social issues in the
context of marketing actions.
One should approach issues with ‘humanistic marketing’ and
Social marketing concept holds that the marketing company
should deliver value to its target customer, in a way better than
competition does, by protecting social and environmental needs
and enhance social well being.
Cause related marketing, i.e. building market relationships with
a cause or causes for mutual benefit is what companies aspire
Needs, Wants, Demands
Needs are basic human requirements.
Wants are directed to specific objects that satisfy a need.
Demands are wants for specific products backed by ability to
Pay.There are five types of needs :
1.Stated Needs (customer says he wants an inexpensive car)
2.Real Needs ( customer wants a car whose operating cost is
low, not the initial price)
3.Unstated Needs (customer expects good service from dealer,
does not ask for it)
4.Delight Needs(customer would like to get extra fittings at no
5.Secret Need (customer wants to be seen a savvy consumer
owning the car)
Value , Satisfaction
Value reflects the perceived tangible and intangible benefits and
costs to the customers.
Value is a combination of quality, service and price (QSP) ,
called the ‘customer value triad’.
Value increases with quality and decreases with price.
Marketing constantly works on increasing and communicating
value to the consumers.
Satisfaction is the cumulative comparative judgements resulting
from the product’s perceived performance or outcome in
relation to his or her expectations. Satisfaction is directly
proportional to expectations and exceeds and decreases with it.
• Customer value
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.
Now we shall go to the section of how marketing creates value
for the consumer.
Marketing has to constantly create and deliver value to the
Value , we saw in the previous chapter as , 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 process
Value delivery process :
The delivery process has three stages , as is explained below
– 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
The need for developing Core competencies
• Core business processes need resources – labour, power,
materials, machines, information
• Nurture resources to gain better competencies
• Outsource others to reduce overheads and concentrate on
Holistic marketing framework
and customer value
Holistic marketing talks about three key
management questions on value.
Value exploration, Value creation, Value
Let us examine each in detail.
- Must integrate, cognitive space, competency of the
company and resource space of the organization
- Cognitive space : includes existing and latent needs
- Competency space : understanding scope of
business and physical and knowledge competencies
- Resource space : partners who can collaborate with
- Marketers must identify the following:
- Customer benefits
- Utilise core competencies
- Manage business partners
- To realign core competencies :
- Define the business concept
- Reshape the scope of business
- Position (re) the company’s identity in people’s
- Customer relationship : constantly
understand customer needs
- Internal resource management : single
family of software to link all business
- Business partnership allows to manage
complex business relationships
A marketer is someone who has a product, service to offer /
sell. 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
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
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