Marketing concepts

WHAT IS MARKETING ?
• In loose
sense,
marketing
is the act of
buying and
selling
products.
• In broader sense, marketing is a social, economic
and managerial process by which business
organizations determine what customers need
and want, design and develop the products as per
customers' need and wants, set price for the
product, communicate customers about the
product, develop distribution strategy, and sell the
product to the customers
• So, we define marketing as the process by which companies
create value for customers and build strong customer
relationships in order to capture value from customers in
return.
2

WHAT IS MARKETING ?
• Marketing is an economic process by which goods and
services are exchanged between the producers and
consumers and their values is determined in terms of money
prices.
• Marketing is a social process by which individuals and groups
obtain what they need and want through creating and
exchanging products and value with others. - PHI LI P
KOTLER
• This definition includes following core concepts : NEEDS ,WANTS and
DEMANDS --- PRODUCTS------VALUE & SATISFACTION---EXCHANGE &
TRANSACTION---MARKETS & MARKETERS
• So, we define marketing as the process by which companies
create value for customers and build strong customer
relationships in order to capture value from customers in
return. 3

The marketing process
Understanding
customer
needs and
wants
Formulating
specific
marketing
strategy
Building
integrated
marketing
program and
plan
Creating
profitable
relationship
and
delightment
Capture
Value from
Customers
to create
Profits
Creating Value for Customers
Production to Distribution to the doorstep of customers
4

1. Needs ,wants and demands
Needs - state of felt deprivation
The necessity of something is need.
Food is needed when on is hungry; water is needed when
one is thirsty.
Human needs are of complex nature. When one need is
fulfilled another need is felt.
There are different types of human needs which the human
tries to fulfill one after another- They are physical needs
(Foods, Shelter, and cloths), security needs (free from fear,
security of job etc.), Social needs (giving importance by
society, involvement of social activities etc.) Ego needs
(respected post, honor, praise, etc.) and self-actualization
needs (creativeness expectation of challenging task,
7

Wants
Expectation of things for meeting the need is called
wants.
There are various types of wants of human being
which are directly influences by level of income, family,
education, school, personality, life style etc.
Wants are also affected by religious, cultural and
social component.
For example a hungry Nepalese wants to eat rice,
curry, momo etc but a hungry American wants pizza and
burger.
So needs can be same but wants are different.
8

Demand
The want with willingness and ability to pay price of
things is called demand.
If a poor man wants to buy a car, it is not a demand
because he cannot have ability to pay the price of
Ferrari if he has willingness.
Similarly, if a rich but miser man wants to buy a car, he
does not become ready to pay the bill of car. So it is
compulsory to be both willingness and ability to pay the
price to be demand.

 Demand
Wants Buying Power
9

2. Marketing offering-Product service and experience
• The thing which satisfies human wants and needs is
called products.
• Product may or may not have physical existence.
• Machines, tools foods cloths etc. have physical
existence but service experience, ideas, personality
etc. have no physical existence.
10

3. Customer Value, Satisfaction and Quality
• Customer Value:- The capacity of the goods to satisfy the want
of customer' as expected is called customer value. Value may be
in the form of status, image, benefit, beauty, attractiveness,
confidence etc.
• Satisfaction:- The customer feels satisfied from the value of the
goods what they expects to get from. Satisfied customer
becomes brands loyal. If product performance is equal to
customer's expectation then customer becomes satisfied. If
product performance is less than customer's expectation then
they becomes dissatisfied. If the product performance exceeds
customer’s expectation then customer becomes delighted.
• Quality:- Customer satisfaction depends on the quality of the
goods. In the recent year, most of the companies are found to
have followed the total quality management-TQM. They are
trying to improve the quality of goods, services and the
processes of marketing. The quality of goods or services starts
from wants of customers and ends in their satisfaction.
11

4. Exchange, Transaction and relationship
• Exchange:- Giving something and taking
any other needed thing from others is
called exchange. In simple words, the task
of giving and taking things to fulfill natural
interest is called interest. Exchange is main
concept of marketing.
• Transaction:- Trade between two or more
sides is called transaction. In other words
the result of exchange is transaction.
Transaction can be made in barter system,
or in money exchange.
• Relationship:- The transaction taken
place between two or more parties/ sides
establishes relationship among them. A
marketer should established good and long
lasting relationship with customers,
distributers, dealers and suppliers.
12

5. Markets:-
• The process of buying and selling of goods or services is
called market.
• Goods, buyer, seller, price, and area are necessary to be a
market. Some concepts have been developed about
markets.
• They are place concept, demand concept, and exchange
concept.
13

Marketing PhilosoPhies
or
concePts of Marketing
14

Marketing Philosophies of Concepts of Marketing
• The system of thinking and studying for the success of
business is called marketing concept.
• Marketing is a business activity but marketing concept is a
philosophy of business thought.
• The concept of marketing is found to have developed along
with the development of business principle and
management thoughts.
• Many concepts of marketing have been developed from
long experience, studies and researches and are being
applied actual practice.
• Some alternative concepts of marketing that have evolved
with time are as follows.
15

Marketing Philosophies of Concepts of Marketing cont.,
16

1. THE PRODUCTION CONCEPT
• This is an old concept of marketing which was famous before 1920.
• This concept gives emphasis on huge production and sale. The basic
idea behind production concept was: The firms will produce what
they can produce efficiently. This will ensure enough supply of the
products at low-cost and demand will be created by itself.
• It believes that the customers are conscious and sensitive towards
goods and brand. They are well-informed about substitute goods and
are attracted towards cheap goods. So the marketing manager
believing in production concept want to extend market by producing
huge quantity and reducing price.
• During 1960 -70 many Japanese companies had adopted this concept.
Many of the Nepalese, Chinas companies are operating with the same
concept even today. Production concept is based on following
assumption.
17

1. THE PRODUCTION CONCEPT CONT…
•Production concept is based on following assumption.
i. To produce goods in huge quantity and make available in the places
at the right time as desired by the customer.
ii. Customers are sensitive, remain conscious of goods and brand and
are well- informed about goods for substitution.
iii. Demand for cheap goods becomes high in market. So production cost
should be minimized by using advances technology and machinery
and increasing work efficiency.
•In conclusion production concept of marketing is the oldest
concept. It gives emphasis on huge production, reduction of
production cost by using advanced technology, machinery and
efficiency and should control market providing goods in a large
quantity at the place and time as desired by customer.
19

2. THE PRODUCT CONCEPT
 The product concept holds that consumers will favor products that
offer the most in quality, performance, and innovative features.
 Thus, an organization should devote energy to making continuous
product improvements.
 The production concept of marketing is famous during the period
of 1920 to 1930 AD. It is the improved form of production concept.
 Production concept gives emphasis on the price of product but
product concept give emphasis on the quality and other features of
product including price of products.
 This concept advocates that higher quality goods should be
produce at lower cost using efficient management, high skill and
modern technology.
 The manufacturers accepting this concept produce high quality
goods and give warranty for certain time.
20

THE PRODUCT CONCEPT
Product concept is based on the following assumption
i. Customers like quality, long lasting and newer goods.
ii. Regular improvement should be made to produce goods
to meet demand of market
iii. Goods should be made long lasting by improving their
quality.
iv. Customers select goods of lower price and higher quality
among competitive goods.
v. Besides lower cost quality of goods should be improved to
attract customers.
vi. Skilled management as well as high efficiency is needed to
bring improvement in quality of goods.
22

THE PRODUCT CONCEPT
The conclusion of this concept is to produce quality goods in
huge quantity at lower cost and collect maximum profit by selling
large amount.
Under product concept managers pay more attention to
produce quality goods but they do not care the interest, wants
and customer's priority.
So the changes in technology, customer's interest, want desire,
fashion etc. are the major threats to this concept. This concept is
followed Japanese companies even today.
Television, Air condition, food and watch companies are using
this concept. Kathmandu University, B and B Hospital, Norvic
Hospital, BMW, Mercedes, Bench Car, Sky Shoes etc are some
example.
23

Selling concept
• The selling concept holds that customers should be
persuaded into buying through aggressive selling and
promotion efforts.
• Firms adopting this concept assume that customers will
not buy enough of the firms' products unless it
undertakes a large scale selling and promotion effort.
• Whatever the quality of goods or service may be, the
customers do not become ready to buy them without
making efforts to sell them.
• So after producing goods or services, customers should
be informed about them through different selling and
promotional activities.
• This concept is typically practiced with unsought goods.
24

Selling concept cont…
• Most of the firms practice this concept when they face
overcapacity. Their aim is to sell what they make rather
than make what the market wants. It focuses on crating
sales transactions rather than on building long term
profitable customer relationships.
25

Selling concept cont….
• The selling concept of marketing is based on the
following assumption:
Confidential, attractive exciting, sensitive promotion attract
customers towards goods or services.
This concept does not care for wants of customer; it only
cares to meet the needs of sellers.
The customers do not buy goods or services unless
attractive promotional activities are conducted.
This concept of marketing applies to the unsought things
like encyclopedia, insurance etc.
• Those managers adopting selling concept believes that
sale of goods or services can be increased through
advertisement, Sales promotion, public relation,
publicity, personal selling and different promotional
activities. 26

The Marketing Concept or Modern Marketing Concept:
• The marketing concept holds that achieving
organizational goals depends on knowing the needs and
wants of target markets and delivering the desired
satisfactions better than competitors do. Under this
concept, customer focus and value are the paths to sales
and profits.
27

The Marketing Concept or Modern Marketing Concept:
• The marketing concept is a customer centered "sense
and respond" philosophy.
• It views marketing not as "hunting", but as
"gardening." The job is not to find the right customers
for your products, but the right product for your
customers.
• The marketing concept starts with a well-defined
market, focuses on customer needs, and integrates all
the marketing activities that affect customers.
• It turns, it yields profits by creating long term
customer relationships based on customer value and
satisfaction.
28

• The societal marketing concept holds that
organization should determine the needs, wants, and
interests of target markets. It should then deliver
superior value to customers in a way that maintains or
improves the consumer's and society's well-being.
• This concept emphasizes that, besides customers'
satisfaction, business organizations should be
responsible and accountable towards the society.
• This concept balances the aim of the marketing
concept i.e. Short run wants satisfaction of customer,
and long run welfare of customers. It stress on
satisfying customers' needs and social welfare at a
same time without pardoning company profit.
29

Societal marketing concept
Features or assumptions of this concept are as follows:
•It gives priority to social demographic responsibility.
•It tries to earn profit only by fulfilling customers' interest and
promoting social welfare.
•This concept believes that the customers and society should be
positively influenced by promotional activities of goods and
services.
•Business organizational produce goods or services by identifying
the needs, wants and interest of their customers.
In conclusion this concept of marketing advocates for the interest
of customers, business organizations and society. So this concept
is broad and appropriate compared to other customers. Three
star club sponsored by Nabil bank, Barcelona FC sponsored by
Qatar foundation, free health service in Rolpa provided by Gorkha
Hospital are some examples of societal marketing.
31

Holistic marketing concpet
• The focus of this concept is all matters related to marketing. It
integrates the new marketing concept with the societal
marketing concept.
• Integrated marketing is used to meet different stakeholders
need. Relationship marketing is used to make all members of
the organization customer oriented. Social responsibility is
practiced to promote customer and societal welfare.
The major premises of this concept are:-
Marketing starts with the identification of target markets.
The main focus is on the identification of needs and wants of
the customer groups; all needs and wants are placed as much
important as possible.
The important means for satisfying the needs and wants may
include all possible marketing efforts and tools. Over emphasis
is not given to any single effort or tool.
32

• The major means and tools of holistic marketing are as
follows.
1.Internal marketing:
2.Integrated marketing:-
3.Relationship marketing:-
4.Social responsibility marketing:-
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The major means and tools of holistic marketing are as follows.
1.Internal marketing: It focus on involving the internal system of a company in marketing
activities. It means making all the company staffs, including managers and subordinates, customers
oriented so that customer may get better treatment and quality services from the staffs. Similarly,
other method of managing internal marketing may include simplifying service delivery, process
making company's internal atmosphere more attractive and favorable to the customers that may
help in motivating prospective customers towards the company and its services. Orienting the
company staffs or providing better opportunities, job related training and other benefits that can be
helpful in providing services to the customers efficiently and effectively can support in managing
internal marketing.
2.Integrated marketing:- It focuses on utilizing the available resources more efficiently and
effectively. It includes coordinating marketing tools, activities, channels and establishing inter-
departmental and coordination.
3.Relationship marketing:- It is developed long-term relationship with the customer , channels
partners and other stakeholder. It is one of the best methods of retaining the existing loyal
customers in the company's product family group.
4.Social responsibility marketing:- Another major tool of holistic marketing concept is societal
marketing concept. It includes the financial and societal aspect related to organization. It aims at
making company more society-oriented by enhancing social welfare and safely in the long run. This
is because company is also a part of society; its long run survival depends upon the positive
response of the whole society in the long run. This element moreover focuses on sales, ethics, brand
and customer equity, environment, legal aspect, etc.
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