2. Defining Marketing
Marketing is 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
Example: tangible goods – furniture, shampoo
Example: service – hospital offers health care
service
Marketing is the art of creating and satisfying
customers at a profit
‘The right product, in the right place, at the right
time, and at the right price’
3. Core Marketing Concepts
• Needs describe basic human
requirements such as food, air, water,
clothing, shelter, recreation, education,
and entertainments
• Needs become Wants when they are
directed to specific objects that might
satisfy the need (Fast food for US)
• Demands are wants for specific products
backed by an ability to pay
4. Selling Vs. Marketing
• The sellers aim is to sell what they can make, the
marketers aim is to make what they can sell
• The aim of good marketing is to make sales
meaningful
Exchange Vs. Transaction
• Exchange involves obtaining a desired product
from someone by offering something in return
• Transaction involves at least two things of value,
agreed-upon conditions, a time of agreement, and
a place of agreement
5. Marketing Evolution
1. Production Orientation (1840-1920’s)
• Industrial revolution in the 19th century
• Demand for new products was great and
producers were concerned with increased
production and operating efficiency rather than
with consumer preferences
• Marketing consisted of taking orders and
shipping products
6. Marketing Evolution
2. Sales Orientation (1920-1950’s)
• In the mid 1920s by producing abundance of
goods pushed marketing people to emphasize
advertising and sales
• Companies started sales techniques
• Companies did not look to the marketplace to
ensure that consumers’ needs and desires were
met
3. Customer Orientation (1950’s – till date)
• After World War II, companies began to focus
on satisfying consumers (early 1950s)
7. Developing a Marketing Strategy
• Marketing Strategy– A plan for selecting and
analyzing a target market and developing and
maintaining marketing mix that will satisfy this
target market
• Firms developing a marketing strategy
follow two basic steps –
1. Select a target market
2. Design a marketing mix (a combination of
product, price, promotion and distribution) that
will satisfy the needs of the target market
8. Select a Target Market
• Market– People with the authority, financial
ability and willingness to purchase a product
Market divided into two broad categories
• Consumer Market– People who purchase
products for personal use (toothpaste)
• Industrial Market– Those who purchase
products to use in the production of other
products or to resell (manufacturers, stores,
hospitals etc.)
9. Select a Target Market
Market Segments– A group of individuals
with one or more similar product needs
Target Market– A group to which a firm
directs its marketing activities
• Selecting a target market is crucial in
developing an effective marketing strategy.
• To select a target market, firms use either
undifferentiated approach or the market
segmentation approach
10. Market Segment
i. Undifferentiated Approach –
• The tactic of developing one marketing mix for
the total market for a product
• It offers one type of product with little or no
variation, sets one price, establishes one
distribution system and conducts one
promotional program
• Used mostly for staple food items like salt,
sugar, flour, rice, fruits or vegetables etc.
11. Market Segment
Product Differentiation –
• The use of advertising, packaging or other
product characteristics to establish the
superiority of a product
ii. Market Segmentation Approach –
• The division of the total market into segments,
with a marketing mix directed to one of the
segments
• To do this, marketers use segmentation bases to
define characteristics of individuals or groups
of customers
12. Segmentation Base
• The individual or group characteristics that
marketing managers use to divide a total market into
segments
• Marketers can segment consumer markets according
to the following bases –
Geographic
• Include city, state, region, district as well as
characteristics such as climate, terrain and
population density
Demographic
• Divide a market in terms of personal characteristics
such as age, income, education, occupation, gender,
race, social class, marital status, family size
13. Segmentation Base
Psychographic
• Person’s attitudes, personality, opinions,
lifestyle, interests and motives
Product-related
• Divide the total market according to aspects of
product use including volume of use (heavy or
light, frequent or infrequent), brand loyalty and
expected benefits
14. Designing a Marketing Mix
• Marketing Mix – the combination of four elements –
product, price, promotion and distribution – used to
satisfy the needs of the target market
• Product – product can be a good, service, idea
(brand names, packaging, warranties)
• Price – after developing firm has to set price. Price is
very crucial, since it is very visible to consumer and is
closely tied to a company’s profit
• Promotion – advertisement, publicity, informs or
reminds the target market about a product and tries
to persuade consumers to buy or adopt it
• Distribution, (place) – involves decisions about
transportation, storage and store selection
15. The Four Ps: Marketing Mix
Marketing
Mix
Product
Price Promotion
Place
Customer
Solution
Customer
Cost
Communication
Convenience
Four Cs
16. The Marketing Environment
• Marketing does not take
place in vacuum
• All the forces outside an
organization the directly
or indirectly influence its
marketing activities
• These forces provide
opportunities or threats
to the marketing
companies
• Companies adjust to the
need of the time
• Economic Conditions
• Government
Regulations
• Society
• Technology
• Competition
• Political Conditions
17. Understanding Buyer Behavior
Consumer Buying Behavior –
• The decisions and actions of individuals who
purchase products for personal use
• The process differ from buyer to buyer and
from product to product
• Decision making continuum (product cost and
frequency of purchase influence consumer
decision)
18. Types of Buying Behavior
• Routine Decision Making – Low-cost, often used
products requires little thought and makes quick
purchase (bread, butter, egg, chips etc.)
• Limited Decision Making – Purchase occasionally
and that require some consideration (jeans, blender,
personal computer etc.)
• Extensive Decision Making – expensive,
infrequently purchased products involves complex
thought (car, home etc.)
20. Factors Affecting Buying Decision
• Cognitive Dissonance – the conflict buyers experience
when they have doubts about a purchase (could be
reduced by advertising, follow-up information or
service)
• Several factors, some within individuals and some
external affect the buying decisions of consumers –
• Social Factors – family members, peers
• Psychographic Factors – attitudes, personality
• Demographic Factors – personal characteristics
such as age, gender, income, education
• Situational Factors – specific conditions that exist
at the time of purchase decision
