Marketing Fundammentals...................

Unit 1: Marketing Fundamentals
1
Marketing Fundamentals

Why Study Marketing?
Important
to
Society
Important
to
Business
Good
Career
Opportunities
+
Marketing affects you every day!
Role in
Everyday
Life

What is Marketing
 Marketing is about identifying and meeting human and social needs in a way that
harmonizes with the goals of the organization.
 Marketing is the activity, set of institutions, and processes for creating,
communicating, delivering, and exchanging offerings that have value for customers,
clients, partners, and society at large. (Source: American Marketing Association)
 The process of delivering the right products or services at the right place, right
time, and right price.
3

• Selling is not the most important part of marketing! Selling is
only the tip of the marketing iceberg.
• But the aim of marketing is to make selling superfluous.
• The aim of marketing is to know and understand the customer
so well that the product or service fits and sells itself.
• Ideally, marketing should result in a customer who is ready to
buy.
2 December 2023 Marketing Fundamentals 4

What is Marketing Management?
Marketing management is the
art and science
of choosing target markets
and getting, keeping, and growing
customers through
creating, delivering, and communicating
superior customer value.
5

What is Marketed? Market Offerings
10 main types of entities
• Goods
• Services
• Events
• Experiences
• Persons
• Places
• Properties
• Organizations
• Information
• Ideas
6

Marketing System

MARKETPLACES, MARKETSPACES,
AND METAMARKETS
• The marketplace is physical, such as a store you shop in;
• The marketspace is digital, as when you shop on the Internet.
• Meta market is a cluster of complementary products and services closely
related in the minds of consumers, but spread across a diverse set of
industries.

Core Marketing Concepts
• Needs, Wants and Demands
• Markets
• Market Offerings
• Customer Value and Satisfaction
• Exchanges

Need
• Needs are the basic human requirements. It is necessary for survival.
• They include basic physical needs for air, food, clothing , water, shelter
and safety, etc.,
• Social needs for belonging and affection
• These needs were not created by marketers. They are the basic part of
human make up.
• “Needs Pre-exists” (can’t be created).
• A marketer company cannot create needs but can identify customer
needs and create value for them.

Wants
• Wants that are desire for specific products that are not
necessary for survival.
• An Indians need foods but wants a bowl of rice and fish curry,
biryani, masala dosa, shahi paneer, nan roti
• An American needs food but wants a Big Mac, fries, and a soft
drink.
• Wants are shaped by one’s society, culture and individual
personality.

Demand
• Demands are wants for a particular product backed by an ability to pay.
• Example: Many people want a Rolls Royce but are they able to buy the
one.
• Wants become demand when backed by buying power.

Value and Satisfaction
• Value is the difference between the benefits that the customer gains from owning
or using a product and the costs of obtaining the product.
• Value = Benefits / Costs = (Functional benefits + Emotional benefits) / (Monetary
costs + Time costs + Energy costs + Psychic costs)
• Satisfaction : it reflects a persons’ judgment of a products perceived performance
(outcome ) in relationship to expectation.
 Example: You do repeat purchase when you are satisfied.

Markets
 “A market consists of all actual and potential customers of a product
or service (Kotler)
 Traditionally, a "market" was a physical place where buyers and sellers
gathered to buy and sell goods.
 Economists describe a market as a collection of buyers and sellers who
transact over a particular product or product class.
14
2 December 2023 Marketing Fundamentals

Exchange
• An Exchange is the process of obtaining a desired product from someone by
offering something in return.
• It can be economic (monetary) as well as barter
• Conditions of exchange
a) There must be at least two parties.
b) Each party has something that might be of value to the other party.
c) Each party is free to accept or reject the exchange offer.
d) Each party believes it is appropriate or desirable to deal with the other party.
15
2 December 2023

Marketing Concepts/Philosophy
Production Concept:
• One of the oldest concepts in business
• It holds that consumers prefer products that are widely available and inexpensive.
• Managers of production-oriented businesses concentrate on achieving high
production efficiency, low costs, and mass distribution.
• Focus on producing great volumes at low cost, sell at low cost
• Focuses on internal capabilities of a firm rather than the desire and needs of market
place.
• Useful in some situations but it can lead to marketing myopia
• Company loose sight of real objectives- satisfying customer needs and building
customer relationships.

Marketing Philosophy
Product Concepts:
• Product excellence is supreme thing.
• Obsessed with quality and features of product more the consumers and their
needs.
• It holds the consumer will favor products that offer the most in quality,
performance and innovative features.
• Focus on making continuous product improvements.
• It can also lead to marketing myopia.
• Product should be properly priced, be customer oriented and properly marketed.

Selling Concept:
• It holds that consumers will not buy enough of the firm’s product unless it
undertakes a large scale selling and promotion efforts.
• This concept is typically practiced with unsought goods which buyers do not
normally think of buying, like insurance, umbrella, encyclopedias, fire extinguisher,
reference book etc.
• It focuses on creating sales transactions rather than building long term profitable
customer relationships.
• The aim is often to sell what company make rather than making what the market
wants.

Marketing Concepts:
• This concepts 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 paths to sales and profits.
• It is a customer centered sense and respond philosophy.
• The job is to find the right products for your customers.

Social Marketing
 Social Marketing concept holds that the organization should deliver the desired
satisfaction in a way that improves consumers’ and society’s well being.
 It balances between the interests of the firm, consumers and society.
 Examples:
 “ Say no to drugs” or “ Exercise more and eat better for good health”.
 Family planning campaign in India
 Stop smoking /Alcohol, Pulse Polio campaign, Preservation of environment, etc.
 Sunfeast promotion for girl child , CRY efforts for poor children.
22

Societal Marketing Concept
Delivering value to customers in a way that
maintains or improves both the consumer’s
and the society’s well-being

New Edition: HOLISTIC MARKETING
• Relationship Marketing
• Integrated marketing
• Internal marketing
• Performance marketing

Relationship Marketing
• The goal is to develop: deep, enduring relationships with people and organizations
that directly or indirectly affect the success of the firm’s marketing activities.
• Aims to build long-term relationships with key constituents/stakeholders/members in
order retain.
• Four key constituents for relationship marketing are customers, employees,
marketing partners, and members of the financial community.
• Marketers must create prosperity (wealth) among all these constituents and balance
the returns to all key stakeholders.

Integrated marketing
• Marketer devises marketing activities and assembles marketing programs: to create,
communicate, and deliver value for consumers such that : “the whole is greater than
the sum of its parts.”
• All company communications also must be integrated to reinforce and complement
one another.
• A marketer might selectively employ television, radio, and print advertising, public
relations events, and website communications etc., so that each contributes on its
own and improves the effectiveness of the others.
• Each must also deliver a consistent brand message at every contact.

Internal marketing
• It is based on the notion that everybody within organization is a
marketer.
• The task of hiring, training, and motivating employees who want to serve customers
well.
• It ensures that everyone in the organization embraces appropriate marketing
principles, especially senior management.
• Smart marketers recognize that marketing activities within the company can be as
important—or even more important— than those directed outside the company.
• It makes no sense to promise excellent service before the company’s staff is ready to
provide it.

Performance marketing
• Performance marketing requires understanding the financial and nonfinancial
returns to business and society from marketing activities and programs.
• Top marketers are increasingly going beyond sales revenue to examine the marketing
scorecard and interpret what is happening to market share, customer loss rate,
customer satisfaction, product quality, and other measures.
• They are also considering the legal, ethical, social, and environmental effects of
marketing activities and programs.

Lessons for Successful Marketing
 Focus on Consumer Value
(Consumer Value)
 Offer a Socially beneficial offer to customers
(Society’s interests)
 Develop long-term relationships with the customers
(Relationship Marketing)
 Harmonize your products, actions, communication and channel
(Integrated Marketing)
 Take along all the stakeholders in the process of marketing
(Internal Marketing)
 Be good in terms of performance indicators
(Performance Marketing)
 Be good for the company, customers, society, govt. & environment
(Holistic Marketing)

What is Sales ?
• Sales refers to the exchange of goods or services for an amount of money or its
equivalent in kind.

Sales Versus Marketing
M C Rashid Khan ..... Orientation Program 32

33
Sales Marketing
In selling emphasis is on sellers
needs
In marketing emphasis on
consumer needs and wants
Selling views business as a goods
producing process
Marketing views business as a
customer satisfying process
In selling profits are maximized
through sales maximization
In sales cost determines price
In marketing profits are maximized
through increased consumer
satisfaction
In marketing consumers/ market
determines price
Selling views the customers as the
last link in the business
Marketing views the customer as
the very purpose of the business

Marketing Myopia
• Focus more on the “wants” and lose sight of the “needs”
• It is a narrow short term thinking and a short sighted view of business.
• It is caused by an excessive emphasis by the firm on the product.
• Firm forget the existence of customers.
• Marketing shortsightedness – management’s failure to recognize the scope of its
business.
2 December 2023 34

What Is a Marketing Plan?
Plan: a detailed proposal for doing or achieving something. An
intention or decision about what one is going to do.
Planning – the process of anticipating future events and
determining strategies to achieve organizational objectives in the
future.
Marketing Planning – designing activities relating to marketing
objectives and the changing marketing environment.
Marketing Plan – a written document that acts as a guidebook of
marketing activities for the marketing manager.

Why Write a Marketing Plan?
Provides a basis for comparison of actual and expected
performance.
Provides clearly stated activities to work toward common goals.
Provides an examination of the marketing environment.
Serves as a reference for the success of future activities.
Allows entry into the marketplace with awareness of possibilities
and problems.

Importance of Marketing Planning
 How do companies go about strategic marketing planning?
 How do employees know to implement the long-term goals
of the firm?
 The answer is a marketing plan.
• It helps in
• Achieving objectives
• Avoiding future uncertainties
• Coordination and communication among departments
• Effective utilization and application of marketing intelligence
• Monitoring and Controlling marketing activities
• Customer getting complete satisfaction
37

Marketing Process Overview
Elements
of
a
Marketing
Plan
and
Marketing
planning
Process

Defining the Business Vision and Mission
 Business Vision
 Vision guides a business and its intentions for the future. A vision is where
a company expect to be in future.
 “Our vision is to create a better every-day life for many people.” IKEA
• A mission statement is a short statement of why an organization exists, what
its overall goal is, what kind of product or service it provides, its primary
customers or market, and its geographical region of operation.
39

Conducting a Situation Analysis
S
W
O
T
Strengths - things the company does well. Eg,
production cost, marketing skills, financial resources,
company or brand image, employee capability and
available technology.
Weaknesses - things the company
does not do well.
Opportunities - conditions in the external
environment that favor strengths.
Threats - conditions in the external
environment that do not relate to existing
strengths or favor areas of current
weakness.
Internal
External

Components of a SWOT Analysis
Examining internal strengths and weaknesses.
Focus on organizational resources:
• Production costs
• Marketing skills
• Financial resources
• Company or brand image
• Employee capabilities
• Technology

Environmental Scanning
Helps identify opportunities and threats.
Designing a marketing strategy is based on six major
environmental forces:
• Social
• Demographic
• Economic
• Technological
• Political/Legal
• Competitive
LO3
©
AP
IMAGES/PRNEWSFOTO/PEPSICO

Identifying and Evaluating opportunities
 Identify growth potential
 Evaluate opportunities for increasing sales and profit
 Determine which segments to target and positioning accordingly
• Example: Coke has Diet Coke, Cheery Coke, Minute Maid, Kinley,
Georgia Coffee etc.

Ansoff’s Matrix
• H. Igor Ansoff’s Growth matrix helps a business to understand
the marketing strategy that it should use to enable growth.
• It consider existing markets, or new markets in which to sell its
products or services , or existing products or services, or new
products or services to sell to customers.

Existing Product New Product
Existing Market Market Penetration
Amul selling milk to
existing customer base.
Product Development
Amul develops
flavoured yogurt.
New Market Market Development
Amul enters markets
such as Mauritius, UAE,
Australia and
Singapore.
Diversification
Amul enters pizza
and quick service
restaurant
businesses.
Ansoff’s Strategic Opportunity Matrix

Market Penetration Strategy
• This strategy seeks business growth through selling existing
products in existing market(s).
• For this reason it is a low risk strategy, as the firm is not risking
developing new products or venturing into new markets.
• The strategy works in a growing market, where simply
maintaining market share will result in growth.

Market Development Strategy
• In this strategy the business targets new markets, or new areas
of the market, by selling more of the same product to a new
customer audience.
• For example,
(a) selling in different geographical areas (new
countries/regions);
(b)selling through different sales channels (e.g. on-line);
(c) selling to different demographic groups (e.g. by age or
gender).

Product Development
• Another strategy is to develop or ‘acquire’ a new product to
sell in an existing market.
• The new product could be developed, or acquired through
acquisition of another company.
• This may be a good strategy for a company that already has a
strong market share of a particular market and wishes to
diversify its product range.

Diversification
• Developing new products for new markets is the most risky
strategy, as the company would be venturing into new areas
for both, product and market.
• It is advisable to carry this strategy out as a supplement to the
existing core business.
• Diversification may be related to the industry in which the
company is engaged or unrelated to it.
• Clearly, unrelated diversification normally carries more risk
than related diversification.

Selecting a Strategic Alternative (BCG
Matrix)
High Low
High
Low
Business/Market
growth
Rate
Relative Position ( Market Share)

Stars
• Star represent business units having large market share in a
fast growing industry.
• They may generate cash but because of fast growing markets,
stars require huge investment to maintain their lead.
• These business units are highly competitive in the industry.
• In the case of Samsung, Mobile phones, Tab, and
TV business fall in the Star Category of the BCG Matrix
of Samsung.

Cash Cows
• Characterized by high relative market share in low growth
industries.
• As the market matures the need for investment reduces.
• Cash Cows are the most profitable products in the portfolio
• Key source of cash for the organizations.
• Samsung Home appliances which include Samsung AC’s,
Refrigerators, Washing Machines and Cooking
Appliances are the Cash Cows for the company.

Question Mark
• Represent business units have low market share and located in
high growth industry.
• Require huge amount of cash to maintain or gain market share.
• Question marks are generally new goods and services which
have a good commercial prospective.
• Samsung Printer is one such product which can be
placed in the Question Mark quadrant of the BCG Matrix
of Samsung.

Dogs
• Having weak market shares in low growth market.
• Due to low market share, these business units face cost
disadvantages.
• Generally retrenchment strategies are adopted.
• With an aim to cater to the growing need of the digital
world, Samsung launched it’s Samsung Smartwatch but
the product failed to achieve the success that it was

Setting Marketing Plan Objective
• Before the details of a marketing plan can be developed, objectives for
the plan must be stated.
• Without objectives, there is no basis for measuring the success of
marketing plan activities. A marketing objective is a statement of what is
to be accomplished through marketing activities

Marketing Mix (E. J. McCarthy's 4 Ps)
(Proposed in 1960)

Marketing Mix Elements
• It is designed to meet the company's marketing objectives by
providing its customers with value.
1. Product: The goods and/or services offered by a company to its
customers.
2. Price: The amount of money paid by customers to purchase the
product.
3. Place (or distribution): The activities that make the product
available to consumers.
4. Promotion: The activities that communicate the product’s
features and benefits and persuade customers to purchase the
product

Marketing Mix: The “Four Ps”
• Product : tangible goods, ideas and service etc
 Example: Tanishq’s jewellery design were considered too western during initial year
. Later added Indian ethnicity to be popular.
• Price is what a buyer must give up to obtain a product.
• Promotion: includes personal selling, advertising, sales promotion, and public
relations.
• Example: Celebrity dramatically impact on consumer behavior
• Place: Ensure product availability where and when customers want them
• Example: you will buy Kiwi fruit at your local super market or you will fly to
Australia to pick up your own?
58

Criticism of the 4Ps Model
• Leads marketing and sales teams to focus too
much on a product’s features, technology and
quality.

7Ps for Services
In 1981, Bernard Booms and Mary Bitner proposed in 1981 a
model of 7 Ps, comprising the original 4 Ps plus process,
people and physical evidence, as being more applicable for
services marketing
People: The people are the employees, customers, and
other stakeholders who interact with a business. It is
important to create a positive and memorable experience
for these people.
Process: Refers to the procedures and steps involved in
delivering a product or service to the end-user.
Physical Evidence: Refers to the tangible aspects of a
product, including packaging, branding, and more.

The four Ps as the four Cs (R Lauterborn 1990)
(in a customer-driven approach)
• 4Ps can be reinterpreted as the four Cs (Robert F.
Lauterborn proposed in 1990). Putting the customer ahead
of the marketer (outside-in rather than inside-out approach)
1. Customer solutions, not products: Customers want to buy
value or a solution to their problems.
2. Customer cost, not price: Customers want to know the
total cost of acquiring, using and disposing of a product.
3. Convenience, not place: Customers want products and
services to be as convenient to purchase as possible.
4. Communication, not promotion: Customers want two-way
communication with the companies that make the product.

Implementation, Evaluation, and Control
• Implementation consists of the processes involved in readying the
company’s offering for sale. Implementation includes developing the
offering and deploying the offering in the target market.
• Evaluation entails gauging the extent to which marketing objectives
have been achieved during the specified time period.
• Control measures the success of the company’s activities over time by
monitoring the company’s performance and the changes in the market
environment in which the company operates.

Following Up on the Marketing Plan
• One of the keys to success overlooked by many businesses is to actively
follow up on the marketing plan.
• The time spent researching, developing, and writing a useful and
accurate marketing plan goes to waste if the plan is not used by the
organization.
• One of the best ways to get the most out of a marketing plan is to
correctly implement it. Once the first steps to implementation are
taken, evaluation and control will help guide the organization to success
as laid out by the marketing plan

2 December 2023 64

Marketing Fundammentals...................

Recommended

Recommended

More Related Content

Similar to Marketing Fundammentals...................

Similar to Marketing Fundammentals................... (20)

Recently uploaded

Recently uploaded (20)

Marketing Fundammentals...................