This chapter discusses key marketing concepts including the marketing concept, production concept, selling concept, and product concept. It explains that the marketing concept focuses on determining customer needs and satisfying them profitably. In contrast, the production, selling, and product concepts are more product-focused than customer-focused. The chapter also discusses the importance of market orientation versus internal orientation for business success and outlines characteristics of effective marketing strategies like segmentation, targeting, and positioning.

1. Marketing Management by Arun Kumar and N Meenakshi
CHAPTER 1
FUNDAMENTALS OF
MARKETING

2. Marketing Management by Arun Kumar and N Meenakshi
LEARNING OBJECTIVES
• The marketing concept: An understanding of the
nature of marketing, its key components and
limitations.
• The difference between production orientation and
marketing orientation
• Service concept of marketing
• Experience concept of marketing
• Differing roles of efficiency and effectiveness in
achieving corporate success
• Differences between market-driven and internally
driven businesses

3. Marketing Management by Arun Kumar and N Meenakshi
Learning Objectives (contd.)
• Profile of customer-centric organizations
• How an effective marketing mix is designed, and
the criticisms of the 4-Ps approach to marketing
management
• Need for segmentation, targeting and positioning
• Relationship between characteristics, market
orientation, adoption of a marketing philosophy
and business performance

4. Marketing Management by Arun Kumar and N Meenakshi
UNDERSTANDING
MARKETING
• Process of finding out customer needs and
serving those needs profitably
• Profit is a legitimate goal of a business
organization
• Essence of marketing is providing desired
value to customers
• Marketing should be considered a central
business function

5. Marketing Management by Arun Kumar and N Meenakshi
THE MARKETING
CONCEPT
• All activities are focused upon providing
customer satisfaction
• Every employee in an organization is a
marketer
• Internal communication

6. Marketing Management by Arun Kumar and N Meenakshi
PRODUCTION CONCEPT
• Inward looking orientation
• Management becomes cost focused
• Objective is cost reduction
• Business mission is focused on current
production capabilities
• Manufacture products and aggressively sell
them to customers

7. Marketing Management by Arun Kumar and N Meenakshi
SELLING CONCEPT
• Product or service is not designed and made
according to customer’s requirements
• Customer has to be persuaded to believe
that the product or the service meets his
requirements
• Customer dissatisfied and bad-mouths
company
• Marketing makes selling redundant

8. Marketing Management by Arun Kumar and N Meenakshi
PRODUCT CONCEPT
• Companies become centered on constantly
improving the product
• Myopic focus on the product
• No attention on the other ways in which
customers can fulfill their needs –
MARKETING MYOPIA
• Customer does not buy a product, he buys
an offering that fulfills his needs

9. Marketing Management by Arun Kumar and N Meenakshi
SERVICE CONCEPT
• Customers buy services, not products
• Service model of marketing instead of
selling the title to the products
• Hindrance: Mindset of the customer and
marketer, and their unwillingness to
experiment with this model
• Can be easily applied in businesses like
automobiles, carpeting, furnishing, and for
most consumer durable items

10. Marketing Management by Arun Kumar and N Meenakshi
EXPERIENCE CONCEPT
• Create an experience around the product to
make it memorable
• Reaffirm it with cues at every customer
interaction point
• Experiences are inherently personal for a
customer
• An experience should be built around a well
defined theme

11. Marketing Management by Arun Kumar and N Meenakshi
Experience Concept (Contd.)
• Companies must introduce cues that affirm
the nature of the experience to the guest
• Eliminate anything that diminishes,
contradicts, or distracts from the theme
• Customers purchase memorabilia as a
physical reminder of an experience
• The more senses an experience engages, the
more effective and memorable it becomes

12. Marketing Management by Arun Kumar and N Meenakshi
EFFICIENCY VERSUS
EFFECTIVENESS
• An efficient company produces its products
and services economically
• An effective company serves the needs of
the customers
• No inherent conflict between being efficient
and effective

13. Marketing Management by Arun Kumar and N Meenakshi
• An inefficient but an effective company can
remain in business though its profits would
be lower
• An ineffective but an efficient company will
not survive
• Choosing to become effective reflects the
marketing orientation of the company
Efficiency Versus Effectiveness (Contd.)

14. Marketing Management by Arun Kumar and N Meenakshi
MARKET VERSUS INTERNALLY
DRIVEN BUSINESSES
MARKET DRIVEN
BUSINESS
INTERNALLY DRIVEN
BUSINESS
Display customer concern
throughout the business
Fail to understand the real
concerns of customers
Expenditure on marketing
research is an investment
Marketing research is non-
productive activity and rely on
anecdotes and received wisdom
Understand competitors’
objectives and strategies, and
anticipate competitive actions
Content to underplay the
competition
Marketing spend is an
investment that has long term
consequences
Marketing expenditure Is
superfluous that never appears to
produce benefits

15. Marketing Management by Arun Kumar and N Meenakshi
MARKET DRIVEN
BUSINESS
INTERNALLY DRIVEN
BUSINESS
Employees who take risks and
are innovative in serving
customers rewarded
Reward time serving, and ability
to not make mistakes
Search for latent markets –
markets that no other company
has exploited
Happy to stick to their existing
products and markets
Sensitive, fast and flexible to
be able to respond to changes
in the market
produce me-too copies of
offerings already in the market
• Impact of marketers’ commitments
Market Versus Internally Driven Businesses (Contd.)

16. Marketing Management by Arun Kumar and N Meenakshi
PROFILE OF CUSTOMER-
CENTRIC ORGANIZATIONS
• Shared values and beliefs
• Skills in understanding and responding to
customers
• Market intelligence
• Formal and informal means of information
dissemination
• Responsiveness

17. Marketing Management by Arun Kumar and N Meenakshi
• Desire to serve customer needs better than
competition
• Organizational structure must reflect
marketing strategy
• Clear communication
Profile of Customer-centric Organizations (Contd.)

18. Marketing Management by Arun Kumar and N Meenakshi
LIMITATIONS OF THE
MARKETING CONCEPT
• Marketing concept as an ideology
• Marketing and society
• Marketing as a constraint to innovation

19. Marketing Management by Arun Kumar and N Meenakshi
MARKETING MIX
• PRODUCT
• PRICE
• PLACE
• PROMOTION
• CRITICISM OF THE 4Ps APPROACH TO
MARKETING

20. Marketing Management by Arun Kumar and N Meenakshi
CHARACTERISTICS OF AN
EFFECTIVE MARKETING MIX
• Marketing mix should match customer
needs
• True source of competitive advantage
• Well blended to form a consistent theme
• Match corporate resources

21. Marketing Management by Arun Kumar and N Meenakshi
• SEGMENTATION, TARGETING, AND
POSITIONING
Segmentation
Target markets
Positioning
• MARKETING ORIENTATION AND
BUSINESS PERFORMANCE
Characteristics Of An Effective Marketing Mix (Contd.)