MARKETING MANAGEMENT

UNIT I NOTES

PRASANJEET BHATTACHARJEE
SSVIM

Unit I (8 Sessions)
Core Concepts of Marketing:
Concept, Meaning, definition, nature, scope and importance of marketing, Goods Services
Continuum, Product, Market, Approaches to Marketing Product Production - Sales
Marketing Societal Relational.
Concept of Marketing Myopia, Holistic Marketing Orientation, Customer Value, Adapting
marketing to new liberalised economy - Digitalisation, Customisation, Changing marketing
practices

THE MARKETING CONCEPT

Introduction
Company Orientations to the Marketplace
What philosophy should guide a company marketing and selling efforts? What relative weights should
be given to the interests of the organization, the customers, and society? These interest often clash,
however, an organizations marketing and selling activities should be carried out under a well-thoughtout philosophy of efficiency, effectiveness, and socially responsibility.
Five orientations (philosophical concepts to the marketplace have guided and continue to guide
organizational activities:
1.

The Production Concept

2.

The Product Concept

3.

The Selling Concept

4.

The Marketing Concept

5.

The Societal Marketing Concept

The Five Concepts Described

The Production Concept: This concept is the oldest of the concepts in business. It holds that
consumers will prefer products that are widely available and inexpensi ve. Managers focusing on this
concept concentrate on achieving high production efficiency, low costs, and mass distribution. They
assume that consumers are primarily interested in product availability and low prices. This orientation
makes sense in developing countries, where consumers are more interested in obtaining the product
than in its features.
The Product Concept: This orientation holds that consumers will favor those products that offer
the most quality, performance, or innovative features. Managers focusing on this concept concentrate
on making superior products and improving them over time. They assume that buyers admire well-made
products and can appraise quality and performance. However, these managers are sometimes caught
up in a love affair with their product and do not realize what the market needs. Management might
commit the better-mousetrap fallacy, believing that a better mousetrap will lead people to beat a
path to its door.
The Selling Concept: This is another common business orientation. It holds that consumers and
businesses, if left alone, will ordinarily not buy enough of the selling companys products. The
organization must, therefore, undertake an aggressive selling and promotion effort. This concept
assumes that consumers typically sho9w buyi8ng inertia or resistance and must be coaxed into buying.
It also assumes that the company has a whole battery of effective selling and promotional tools to
stimulate more buying. Most firms practice the selling concept when they have overcapacity. Their aim
is to sell what they make rather than make what the market wants.

The Marketing Concept: This is a business philosophy that challenges the above three business
orientations. Its central tenets crystallized in the 1950s. It holds that the key to achieving its
organizational goals (goals of the selling company) consists of the company being more effective than
competitors in creating, delivering, and communicating customer value to its selected target customers.
The marketing concept rests on four pillars: target market, customer needs, integrated marketing and
profitability.
Distinctions between the Sales Concept and the Marketing Concept:
1.
The Sales Concept focuses on the needs of the seller. The Marketing Concept focuses on the
needs of the buyer.
2.
The Sales Concept is preoccupied with the sellers need to convert his/her product into cash.
The Marketing Concept is preoccupied with the idea of satisfying the needs of the customer by means of
the product as a solution to the customers problem (needs).
The Marketing Concept represents the major change in todays company orientation that
provides the foundation to achieve competitive advantage. This philosophy is the foundation of
consultative selling.
The Marketing Concept has evolved into a fifth and more refined company orientation: The
Societal Marketing Concept. This concept is more theoretical and will undoubtedly influence future
forms of marketing and selling approaches.
The Societal Marketing Concept: This concept holds that the organizations task is to determine
the needs, wants, and interests of target markets and to deliver the desired satisfactions more
effectively and efficiently than competitors (this is the original Marketing Concept). Additionally, it
holds that this all must be done in a way that preserves or enhances the consumers and the societys
well-being.
This orientation arose as some questioned whether the Marketing Concept is an appropriate
philosophy in an age of environmental deterioration, resource shortages, explosive population growth,
world hunger and poverty, and neglected social services.
Are companies that do an excellent job of satisfying consumer wants necessarily acting in the best longrun interests of consumers and society?
The marketing concept possibly sidesteps the potential conflicts among consumer wants,
consumer interests, and long-run societal welfare. Just consider:
The fast-food hamburger industry offers tasty but unhealthy food. The hamburgers have a high fat
content, and the restaurants promote fries and pies, two products high in starch and fat. The products
are wrapped in convenient packaging, which leads to much waste. In satisfying consumer wants, these
restaurants may be hurting consumer health and causing environmental problems.
Meaning & Definition of Marketing
There are a lot of marketing definitions available but the right ones are focused upon the key to
marketing success i.e. customers. Following are some of the marketing definitions available.
American Marketing Association defines marketing as:

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. (Approved
October 2007)
The Chartered Institute of Marketing (CIM) says:
The management process responsible for identifying, anticipating and satisfying customer requirements
profitability.
Philip Kotler defines marketing as:
Marketing is the social process by which individuals and groups obtain what they need and want
through creating and exchanging products and value with others.
Palmers marketing definition is as:
Marketing is essentially about marshalling the resources of an organization so that they meet the
changing needs of the customer on whom the organization depends.
Dennis Adcock defines marketing as
The right product, in the right place, at the right time, at the right price.
The management process through which goods and services move from concept to the customer. It
includes the coordination of four elements called the 4 P's of marketing:
(1) Identification, selection and development of a product,
(2) Determination of its price,
(3) Selection of a distribution channel to reach the customer's place, and
(4) Development and implementation of a promotional strategy.
For example, new Apple products are developed to include improved applications and systems, are set
at different prices depending on how much capability the customer desires, and are sold in places where
other Apple products are sold. In order to promote the device, the company featured its debut at tech
events and is highly advertised on the web and on television.
Marketing is based on thinking about the business in terms of customer needs and thei r satisfaction.
Marketing differs from selling because (in the words of Harvard Business School's retired professor of
marketing Theodore C. Levitt) "Selling concerns itself with the tricks and techniques of getting people to
exchange their cash for your product. It is not concerned with the values that the exchange is all about.
And it does not, as marketing invariable does, view the entire business process as consisting of a tightly
integrated effort to discover, create, arouse and satisfy customer needs." In other words, marketing has
less to do with getting customers to pay for your product as it does developing a demand for that
product and fulfilling the customer's needs.
The activities of a company associated with buying and selling a product or servi ce. It includes
advertising, selling and delivering products to people. People who work in marketing departments of
companies try to get the attention of target audiences by using slogans, packaging design, celebrity

endorsements and general media exposure. The four 'Ps' of marketing are product, place, price and
promotion.
Many people believe that marketing is just about advertising or sales. However, marketing is everything
a company does to acquire customers and maintain a relationship with them. Even the small tasks like
writing thank-you letters, playing golf with a prospective client, returning calls promptly and meeting
with a past client for coffee can be thought of as marketing. The ultimate goal of marketing is to match a
company's products and services to the people who need and want them, thereby ensure profitability
Nature of Marketing:
1. Marketing is an Economic Function
Marketing embraces all the business activities involved in getting goods and services , from the hands of
producers into the hands of final consumers. The business steps through which goods progress on their
way to final consumers is the concern of marketing.
2. Marketing is a Legal Process by which Ownership Transfers
In the process of marketing the ownership of goods transfers from seller to the purchaser or from
producer to the end user.
3. Marketing is a System of Interacting Business Activities
Marketing is that process through which a business enterprise, institution, or organisation interacts with
the customers and stakeholders with the objective to earn profit, satisfy customers, and manage
relationship. It is the performance of business activities that direct the flow of goods and services from
producer to consumer or user.
4. Marketing is a Managerial function
According to managerial or systems approach - "Marketing is the combination of activities designed to
produce profit through ascertaining, creating, stimulating, and satisfying the needs and/or wants of a
selected segment of the market."
According to this approach the emphasis is on how the individual organisation processes marketing and
develops the strategic dimensions of marketing activities.
5. Marketing is a social process
Marketing is the delivery of a standard of living to society. According to Cunningham and Cunningham
(1981) societal marketing performs three essential functions:Knowing and understanding the consumer's changing needs and wants;
Efficiently and effectively managing the supply and demand of products and services; and
Efficient provision of distribution and payment processing systems.
6. Marketing is a philosophy based on consumer orientation and satisfaction
7. Marketing had dual objectives - profit making and consumer satisfaction

Scope of Marketing
1. Study of Consumer Wants and Needs
Goods are produced to satisfy consumer wants. Therefore study is done to identify consumer needs and
wants. These needs and wants motivates consumer to purchase.
2. Study of Consumer behaviour
Marketers perform study of consumer behaviour. Analysis of buyer behaviour helps marketer in market
segmentation and targeting.
3. Production planning and development
Product planning and development starts with the generation of product idea and ends with the product
development and commercialization. Product planning includes everything from branding and packaging
to product line expansion and contraction.
4. Pricing Policies
Marketer has to determine pricing policies for their products. Pricing policies differs from product to
product. It depends on the level of competition, product life cycle, marketing goals and objectives, etc.
5. Distribution
Study of distribution channel is important in marketing. For maximum sales and profit goods are
required to be distributed to the maximum consumers at minimum cost.
6. Promotion
Promotion includes personal selling, sales promotion, and advertising. Right promotion mix is crucial in
accomplishment of marketing goals.
7. Consumer Satisfaction
The product or service offered must satisfy consumer. Consumer satisfaction i s the major objective of
marketing.
8. Marketing Control
Marketing audit is done to control the marketing activities.
Service-goods continuum

"The dichotomy between physical goods and intangible services is an oversimplification; these are not
discrete categories. Most business theorists see a continuum with pure service at one endpoint and
pure commodity goods at the other endpoint. Most products fall between these two extremes. Goods
are normally structural and can be transferred in an instant while services are delivered over a period of
time. Goods can be returned while a service once delivered cannot. Goods are not always tangible and
may be virtual." [Goods and services.] The example "Service-goods continuum diagram" was created
using the Concept Draw PRO diagramming and vector drawing software extended with the Marketing
Diagrams solution from the Marketing area of Concept Draw Solution Park.

Service-goods continuum

Goods Service Continuum

A product is anything that can be offered to a market to satisfy a want or need, including physical goods,
services, experiences, events, persons, places, properties, organizations, information, and ideas.
The term product can refer to the full product profile (4Ps) part of the customer-company exchange
Company offers something (a flight), and the customer offers something in return (payment)
Exchange
Find profitable intersection between

What customers want

Utilize marketing research to find answers
Value, quality, specific features and benefits, etc.
What the firm is well-suited offer

Relationship Marketing
Successful exchanges can lead to loyalty and satisfaction Marketers benefit from turning short-term
exchanges into long-term customer relationships
Tangibility

Services are more intangible than goods

Pure goods are tangible
socks
Pure service are intangible
medical procedure
A mix has tangible and intangible components
rental cars

Search, Experience, Credence

Search Qualities
May be evaluated prior to purchase
socks
Experience Qualities
Require trial or consumption before evaluation
restaurants
Credence Qualities
Difficult to judge even post-consumption
medical procedures
Goods are dominated by search and experience qualities
Services are dominated by experience and credence qualities
Many services are mostly intangible; thus, marketers need to signal quality to customers
through marketing actions
Perishability & Inseparability
Services are simultaneously produced and consumed
Perishability: Services are more perishable than goods
Marketers must try to even out demand
Inseparability: Services are more impacted by the interaction between the service
provider and the customer than goods
Variability
Services are more variable than goods
Due to changing needs, abilities, etc. of the service provider and customer

Self-service and equipment can decrease variability

Try to reduce bad variability
Errors in the system
Try to improve good variability
Customization for customers unique needs

Goods & Services

Differences between goods and services influence business decisions
Advertising, branding, pricing, logistics, etc.
Thinking beyond traditional services
Professional services
Purchase experiences
On-line shopping
Market
In marketing, the term market refers to the group of consumers or organizations that is interested in the
product, has the resources to purchase the product and is permitted by law and other regulations to
acquire the product. The market definition begins with the total population and progressively narrows
as shown in the following diagram.

Beginning with the total population various terms are used to describe the market based on the level of
narrowing:
Total Population
Potential market those in the total population who have interest in acquiring the product.
Available market - those in the potential market who have enough money to buy the product.

Qualified available market those in the available market who legally are permitted to buy the product.
Target market the segment of the qualified available market that the firm has decided to serve (the
served market).
Penetrated market those in the target market who have purchased the product.
In the above listing, product refers to both physical products and services.
The size of the market is not necessarily fixed e.g. the size of the available market for a product can be
increased by decreasing the products price and the size of the qualified available market can be
increased through changes in legislation that result in fewer restrictions on who can buy the product.
Defining the market in the first step in analyzing it. Since the market is likely to be composed of
consumers whose needs differ, market segmentation is useful in order to better understand those
needs and to select the groups within the market that the firm will serve.
Approaches to Marketing
There are four different approaches to the study of marketing. These approaches explain clearly the
mechanism and concept of marketing. These approaches are Commodity Approach, Institutional
Approach, Functional Approach and Decision Making Approach.
(1) Commodity Approach or Product Approach:
This approach refers to the study of a product in detail. The marketing situation of each product chosen
for study is examined from such viewpoints as sources and conditions of supply, producer marketing
organisations, policies, different middlemen (wholesalers 6f retailers etc.) who take part in distributing
the product.
Problems with regard to a particular product are studied in detail under this approach. Products of any
nature e.g. agricultural products wheat, rice, maize, etc., industrial products like machine tools, lathemachines, generators, oil engines, etc., and any other products can be covered under this study. In
practice, this approach tends to be repetitive and time consuming.
(2) Institutional Approach:
This approach relates to various marketing institutions viz., wholesalers, retailers etc., engaged in
marketing. In applying this approach, a thorough study with regard to a particular middleman is
undertaken. For example, in retailing, nature and significance of retailing in terms of functions and
services performed and rendered by retail institutions like departmental stores, multiple shops, mail
order houses etc.
Besides wholesalers and retailers, other marketing institutions can be stock exchanges, produce
exchanges, banks, regulated markets, etc. In short, it can be said that this approach is applicable on
various types of marketing intermediaries.

(3) Functional Approach:

As the very name suggests this approach comprises of the study of various activities or functions
performed in the process of marketing of goods and services. It analyses each function in relation to the
importance of its performance.
Various marketing functions are buying, selling, financing, transportation, banking, risk bearing, market
information etc. By analyzing and studying every function in detail and problems confronted in the
performance of each function, it is possible to understand marketing properly.
(4) The Decision Making Approach:
This approach is of vital importance from the viewpoint of marketing management. Various decisions
are taken at every level of management. In successful marketing, decision making occupies an important
place. The marketing manager should be very expert and competent in his job so that he takes proper
decisions for marketing the goods and services.
The decision is based on two variables which can be classified as uncontrollable and controllable.
Uncontrollable variables relate to economic, sociological, psychological and political forces which are
the basic causes of market changes. On the other hand, controllable variables are within the control of
the organisation.
These refer to individual firms adjustments in prices, products, advertisement and selling policies etc.
Both these variables have marked influence on decision making. These variables should be properly
interpreted by the marketing manager before taking a decision.
Production Concept Firms that follow this philosophy focus on manufacturing products that are
relatively easy to produce; the firm does everything it can to improve production efficiency and thereby
lower the price of the product. The problem with this approach is that it does not focus on the needs of
the customer. Since the focus is on production efficiencies, this means the firm has to "sell" the product
after manufacturing it.
Selling Concept Firms that follow this philosophy focus on "pushing" the product using advertising
and promotion. Please note that marketing is not selling: selling is similar to pushing, and marketing, we
will see, is more like pulling. A firm that promotes a product heavily after it is manufactured is in danger
of creating a dissatisfied customer. People are very likely to be disappointed in the products
performance. Your textbook cites a study that shows that a dissatisfied customer is likely to complain to
ten others about a bad experience with a product.
Product Concept Focusing too much on ones product and trying to make it the best-performing
product in the market via improvements can also be dangerous. Marketing myopia is a term coined by
Theodore Levitt to describe firms that define themselves in terms of a product rather than in terms of
the need that the product satisfies. For example, the public does not want rail transportation; it wants
fast, inexpensive, and convenient transportation. The railroads made a great deal of money during the
latter part of the 19th Century. They made the mistake of thinking that the public wanted rail
transportation. Much of their business was taken away by newer modes of travel (planes stole much of
their passenger business; planes and trucks took away a great deal of their freight shipping business).
The railroads should not have focused on rail transportation but on transportation in general. The goal
is to do the best job of satisfying one's customers. Consumers want energy, not necessarily oil;

education, not necessarily in classrooms; communication, not necessarily by telephone; music, not
necessarily on cassettes; and entertainment, not necessarily films or television. A firm that defines itself
in terms of a product, e.g., a firm that insists that it is in the business of providing long-distance
telephone service, might become obsolete. It is dangerous to define one's business too narrowly the
way the railroads did.
Marketing Concept one of the most important terms that you will learn in this course is the
marketing concept. If a firm wants to achieve its goals it has to focus on satisfying the needs of its
customers. These goals do not necessarily have to relate to profit since any firm that is involved in a
transaction should follow the marketing concept. Libraries, politicians, colleges, hospitals, and many
other kinds of organizations should be marketing-oriented. If a firm focuses on satisfying the needs of its
customers, it does not have to "push" its product. The public will demand the product and "pull" it
through the channel of distribution. Note what happens in a college when a course or program is
offered that satisfies students needs for getting a good job. You do not have to beg students to take the
course or to major in that program.
As you can see from the above discussion, the two major concerns of marketing-oriented firms that
abide by the marketing concept are discovering consumer needs and then doing everything possible to
satisfy those needs. This, in a nutshell, is what marketing is all about.
What do we expect of organizations that abide by the marketing concept?
(1) They use marketing research to ensure that they are indeed performing well. Marketing research is
used to help develop new products and to determine whether the new product will actually satisfy the
needs of customers.
(2) They are innovative and constantly improving their products/services to maximize their customers
satisfaction.
(3) They understand that a market is not monolithic, i.e., not everyone has the same needs. Therefore,
they will practice market segmentation. For instance, the market for soap consists of such segments as:
those that want a "pure" soap (mothers for their babies), those that want an anti-bacterial soap
(teenagers), those that want an anti-deodorant soap (people worried about body odors), those that
want an inexpensive soap (bargain shoppers) , those that want a creamy soap (women who want soft
skin), those that want an abrasive soap (mechanics), and those that want a soap that makes one feel
fresh.
(4) They will have a target market. To come up with a marketing strategy, you must select a target
market and develop the best marketing mix to satisfy this target market Thus, a marketing strategy is a
target market + an optimum marketing mix to satisfy the target market. The marketing mix is the 4 Ps of
marketing: product, price, promotion, and place. Needless to say, selecting the right target market for a
product or service is very important in marketing. It is naive for a company to believe that it can satisfy
everybody; after all, we all have different needs. See the example below dealing with hospitality
marketing. Does every vacationer have the same needs? The idea of going on a vacation to gamble
makes no sense to me. My wife and I prefer a quiet vacation where we can rest in the sun with a good
book. We do not gamble and have no interest in partying. In fact, we want to stay at a quiet hotel that
serves stewed prunes and prune juice with every meal.

(5) They do not suffer from "marketing myopia." They define their business in terms of a need (which
they will satisfy) and not in terms of a particular product.
(6) They are concerned about improving the quality of their products. Defective products will not result
in customer satisfaction. Many firms have special procedures for dealing with customer complaints and
do everything possible to resolve problems.
Marketing Mix: The Four P's of Marketing
PRODUCT: What features/benefits to offer in order to satisfy the needs of one's target market. This
includes packaging, branding, and warranties.
PRICE: What price to charge? You have to do research to see how your target market/customers will
respond to your price. You may have a fabulous product but your target market may not buy it if they
believe it is overpriced.
PLACE: You have to get the product to the customer/target market when s/he needs it. A great product
is of no value to the customer if it arrives three months after it is needed (imagine buying a beautiful
wedding dress or tuxedo and it arrive after the wedding). We will be learning about channels of
distribution. Many of you are purchasing textbooks via the Internet while others are using the college
bookstore--two very different channels of distribution.
PROMOTION: Is concerned with communicated with customers/target market and convincing them that
your product/service offers real benefits. Includes advertising, publicity, sales promotions, and personal
selling.
The four Ps are are the controllable marketing mix factors, i.e., the organization can control and
manipulate them. An organization has little control over such factors as the economy, government
regulation (they may try to do some lobbying), or social. Forces over which an organization has little
control are known as environmental factors. For example, if the United States Government passes
legislation requiring all cars to be nonpolluting, this would be an example of government regulation, an
environmental factor. Of course, this would have a huge impact on automobile sales. Other
environmental factors include economic, regulatory (legal), competitive, social (this includes cultural),
technological, etc. Thus, the five major environmental factors are: social, technological, economic,
competitive, and regulatory (legal). Global warming is a controversial area and the government may
pass laws to reduce it-- this may have an impact on many industries. If you think regulation is not an
issue, restaurants in NYC may no longer use trans fats in their products. I am sure this had an impact on
many restaurants.
Societal marketing concept unfortunately, satisfying customers short-term needs may not be
compatible with societys needs. For instance, your customers may prefer large automobiles, disposable
diapers, hamburgers, no-deposit bottles, etc. Society is better off if we drive small cars, use cloth
diapers, and eat soy burgers. Should a firm worry about its customers short-term needs, or consider
what is best for society? Think about this. Social responsibility is the belief that organizations have a
responsibility to society as a whole. An organization must think of the effects its actions have on society.
Convincing the public to purchase products that are unhealthy and clog arteries are not in the best
interests of society. There is nothing wrong with making a profit but a firm must also care about society.
It is often possible to satisfy the needs of customers and at the same time provide for the needs of
society. We will be learning a little about green marketing in this course. Some companies have learned

how to make a profit while providing for society's well being and also making sure to satisfy customers'
needs. For example, Clorox introduced an environmentally-friendly, natural cleaning product called
Green Works. It was introduced in 2008 and did quite well with sales of $100 million. The Great
Recession changed that and sales have plummeted. People want eco-friendly products but are reluctant
to pay much more for them when money is so tight. A large number of consumers are still interested in
buying green products, but only if the price is right.
Relationship marketing is concerned with the long-term and not merely to sell a product or service to a
customer one time and that is it. The goal is to have a satisfied customer and establish an ongoing,
personal, and long-term relationship with him or her. This means that the organization will have to
understand the needs of the customer as they change over time. A firm that believes in relationship
marketing wants to establish a connection with the customer. It is important to communicate with the
customer and develop the relationship. Without two-way communications, it is difficult to develop a
relationship. What matters is the lifetime value of the customer, not how much money a firm makes
with one transaction. One goal of relationship marketing is customer retention, i.e., to keep an
organization's existing customers. The cost of keeping an existing customer is a fraction of the cost of
finding a new customer. It is therefore foolish for a firm to ignore existing customers and focus solely on
finding new ones. Of course, if a firm only expects to sell a product to a customer once, than relationship
marketing may not be an issue. Think of all those stores selling electronic appliances in mid -town to
tourists. They do not expect to ever see those customers again so they do not think of relationship
marketing. If a company expects to do business with a person for many years, there is no question that
it should be concerned about having a long-term relationship with customers, i.e., relationship
marketing.
Marketing Myopia: A short-sighted and inward looking approach to marketing that focuses on the
needs of the company instead of defining the company and its products in terms of the customers'
needs and wants. It results in the failure to see and adjust to the rapid changes in their markets.
The term marketing myopia was first expressed in a famous article of the same name written by
Theodore Levitt for the Harvard Business Review in 1960. In 'Marketing Myopia,' Levitt argued that
many companies incorrectly take a shortsighted approach to marketing, viewing it as merely a tool for
selling products. Instead, he argued that companies should look at marketing from the consumer's point
of view. For example, a company that sells hiking boots should not define its marketi ng in terms of sales
of hiking boots, but market itself as a company concerned with outdoor exploration and adventure.
Marketing myopia is an advertising strategy that does not focus on the needs and wants of consumers,
but the desires of a company to sell specific goods or services in the economic market. Classic economic
theory attempts to explain that consumers will tell companies the type of goods and services desired
through the economic behavior demonstrated by individual consumers. Companies can benefit from
this behavior by actively researching how consumers are spending their money and what goods are
services are currently popular in the economic market. Marketing myopia can distort the companys
view when managers focus more on what the company can produce rather than what consumers are
willing to buy.
A classic example is seen by Ford Motor Companys development of the Edsel. The Ford Edsel was a late
1950s passenger car built under the marketing strategy that it was going to revolutionize the
automotive industry. The car was designed with the intent of being a large, stylish vehicle that would
meet the driving needs for thousands of U.S. consumers and families. Although the Edsel was released

with much fanfare and publicity from marketing agencies and media outlets, it was an almost immediate
failure in the consumer market. While reviews at the time cited the vehicles poor workmanship and
styling, business experts have attributed the failure to the company's inability to understand consumer
desires. The name Edsel is now a business term synonymous with business or marketing failure.
Marketing myopia may also occur when a business focuses on developing advertising strategies for the
wrong target markets or demographic groups. Individuals in the economic market usually view
advertising strategies or techniques in different ways; their perceptions are built upon culture, race, age,
or other personal opinions. Companies that fail to understand the perceptions of consumers when
advertising goods or services usually wind up struggling.
Companies in todays business environment often spend a lot of money conducting marketing research
before releasing new products or services. This research or focus group activity may be related to the
utter failure of the Ford Edsel marketing campaign. Rather than spending huge sums of money on
national advertising or marketing campaigns, companies will use test markets to determine the strength
of consumer demand for goods or services prior to a national rollout of new produ cts. These test
markets may also help companies build specific marketing strategies based on the feedback they receive
from individual consumers.
Holistic Marketing
The holistic marketing concept looks at marketing as a complex activity and acknowledges th at
everything matters in marketing.
KEY POINTS
The four components that characterize holistic marketing are relationship marketing, internal
marketing, integrated marketing, and socially responsive marketing.
Relationship marketing emphasizes customer retention and satisfaction rather than a dominant focus on
sales transactions.
Internal marketing is a process that occurs within a company or organization whereby the functional
process aligns, motivates, and empowers employees at all management levels to deliver a satisfying
customer experience.
Integrated marketing is an approach to brand communications where the different modes work
together to create a seamless experience for the customer and are presented with a similar tone and
style that reinforces the brand's core message.
Socially responsible marketing is a marketing philosophy that states a company should take into
consideration what is in the best interest of society in the present and long term.
Holistic Marketing
The holistic marketing concept looks at marketing as a complex activity and acknowledges that
everything matters in marketing. The holistic viewpoint follows that systemsin this case marketing
somehow function as wholes and that their functioning cannot be fully understood solely in terms of
their component parts. Therefore, a broad and integrated perspective is necessary in developing,
designing, and implementing marketing programs and activities. The four components that characterize

holistic marketing are relationship marketing, internal marketing, integrated marketing, and socially
responsive marketing.
Relationship Marketing
Relationship marketing was first developed from direct response marketing campaigns. It is a form of
marketing that emphasizes customer retention and satisfaction rather than a dominant focus on sales
transactions. As a practice, relationship marketing differs from other forms of marketing in that it
recognizes the long term value of customer relationships and extends communication beyond intrusive
advertising and sales promotional messages.
Internal Marketing
Internal marketing is a process that occurs within a company or organization whereby the functional
process aligns, motivates, and empowers employees at all management levels to deliver a satisfying
customer experience. Over recent years internal marketing has been increasingly integrated with
employer branding and employer brand management, which strives to build stronger links between the
employee brand experience and customer brand experience. The challenge for internal marketing is not
only to get the right messages across, but to embed them in such a way that they both change and
reinforce employee behavior.
Integrated Marketing
Integrated marketing is an approach to brand communications where the different modes work
together to create a seamless experience for the customer and are presented with a similar tone and
style that reinforces the brand's core message. Its goal is to make all aspects of marketing
communication (advertising, sales promotion, public relations direct marketing, online communications,
and social media) work together as a unified force rather than permitting each to work in isolation,
which maximizes their cost effectiveness. Integrated marketing is becoming more significant in
marketing practice because of the reduced cost effectiveness of mass media and media fragmentation.
As consumers spend more time online and on mobile devices, all exposures of the brand need to tie
together so they are more likely to be remembered. Increasingly, the strategies of brands cannot be
understood by looking solely at their advertising. Instead, they can be understood by seeing how all
aspects of their communications system work togetherparticularly how communications are
personalized for each customerand react in real time, as in a conversation.
Mobile Advertising
A vital part of integrated marketing in today's business world is the use of mobile phone advertising.
Integrated marketing is one of the most controversial areas of marketing research. The concept marks a
constant progress from the simple coordinating of promotional tools to a complex strategic process.
Further to the evolution of modern marketing where integrated marketing has become a major way of
achieving the objectives of a company, there is a need to identify opportunities and increase impact on
consumer behavior.
Socially Responsive Marketing
Socially responsible marketing is a marketing philosophy that states a company should take into
consideration what is in the best interest of society in the present and long term. Socially responsible

companies should aspire to produce desirable products. Desirable products provide immediate
satisfaction and long term benefits. These products are sought by consumers for immediate gratification
and also benefit society and consumers in the long term.
An example of socially responsible marketing would be the advertising of alcoholic drinks when there
are no rules or regulations. A beer company that decided to use socially responsible marketing would
avoid advertising its products to minors. The company would focus its advertising around late night
television programming or adult magazines that minors are less likely to read.
A holistic marketing orientation can also provide insight into the process of capturing customer value.
One conception of holistic marketing views it as integrating the value exploration, value creation, and
value delivery activities with the purposes of building long-term, mutually satisfying relationships and
co-property among key stakeholders. According, to this view, holistic marketers succeed by managing a
superior value chain that delivers a high level of product quality, service, and speed. Holistic marketers
achieve profitable growth by expanding customer share, building customer loyalty, and capturing
customer lifetime value.
The holistic marketing framework is designed to address three key management questions:
1. Value exploration
How can a company identify new value opportunities?
2. Value creation
How can a company efficiently create more promising new value offerings?
3. Value delivery
How can a company use its capabilities and infrastructure to deliver the new value offerings more
efficiently?
VALUE EXPLORATION
Value flows within and across markets that are dynamic and competitive. Companies need a welldefined strategy for value exploration. Developing such a strategy requires an understanding of the
relationships and interactions among three spaces:
1. The customer cognitive space;
2. The company competence space;
3. The collaborator resource space.
The customer cognitive space reflects existing and latent needs and includes dimensions such as the
need for participation, stability, freedom, and change. The company competency space can be described
in terms of breadth broad versus focused scope of business; and depth physical versus knowledge based
capabilities. The collaborator resource space involves horizontal partnerships, where companies choose
partners based on their ability to exploit related market opportunities, and vertical partnerships, where
companies choose partners based on their ability to serve their value creation.

VALUE CREATION
To exploit a value opportunity, the company needs value-creation skills. Marketers need to identify new
customer benefits from the customer view, utilize core competencies from its business domain and
select and manage business partners from its collaborative networks. Marketers must understand what
the customer thinks about and wants to craft new customer benefits, Marketers must also observe who
the customer admires, who they interact with and who influences them.
Business realignment may be necessary to maximize core competencies. It involves three steps:
1. Defining the business concept
2. Shaping the business scope
3. Positioning the company brand identity
This is what Kodak is doing as sales from its traditional core businesses of film, camera, paper, and photo
development have sagged, and consumers have abandoned film cameras for increasingly cheaper digital
equipment, products, and services. Chairman and Chief Executive of Kodak stood in front of
shareholders about 2 years ago and unveiled the company new strategy. He announced that Kodak was
determined to win in these new digital markets. In order to do that the company plans to expand its line
of digital cameras, printers, and other equipment for consumers, who are now using the Internet to
transmit and display their digital images. Kodak also is stepping up efforts to deliver on-demand, color
printing products for business and wants to increase its market share of the lucrative medical images
and information services businesses.
VALUE DELIVERY
Delivery value often means substantial investment in infrastructure and capabilities. The company must
become proficient at customer relationship management, internal resources management, and business
partnership management. Customer relationship management allows the company to discover who its
customers are, how they behave, and what they need or want. It also enables the company to respond
appropriately, coherently, and quickly to different customer opportunities. To respond effectively, the
company requires internal resources management to integrate major business processes like order
processing, general ledger, payroll, and production within a single family of software modules. Finally,
business partnership management allows the company to handle complex relationships with all its
business associates.
ADAPTING MARKETING TO NEW LIBERALISED ECONOMY DIGITALISATION, CUSTOMISATION
Modern Complex Marketing System
Before the industrial revolution, single individual produces farmers, artisans, family based cottage or
small enterprises dominated the exchange process. They produced goods for nearby customers and
secured orders for making ornaments, furniture etc.
Further, producers and their customers were generally known to each other because they were all living
in the same village or town. Therefore, selling was not a problem for producers.
The situation began to change fast as industrial revolution broke out in the last quarter of the
eighteenth century. The invention of steam engine, electricity, telephone etc. propelled further

development of human society. Newly built factories came up and they produced goods at cheaper
costs in larger quantities. Factory production resulted in the emergence of towns and cities. People who
lived in the villages hitherto migrated to towns and their way of living underwent dramatic
transformation. They started buying factory made products. Companies and business enterprises came
in all shapes and sizes in the last quarter of the nineteenth century. For instance, most of the
multinational companies (MNCs) of today were born during the beginning of the 20th century. In India,
many companies were founded during the second and third quarters of the twentieth century.
For example, Birla group of companies came to exist during 1937-38 and they entered in many
businesses after 1947-48. The TATAs ventured into three major Industries Tata electric companies,
Tata Steel companies and Indian Institute of Science at the beginning of the last century.
Companies were organised as single proprietorships, partnerships, family owned companies and large
corporations. They were either owned privately or publicly and were operated for making profits or
providing service to the public. At the same time, companies also began to feel that the administration
of all phases of a business operation was beyond the capabilities of a few individuals in the company.
Therefore, authority was delegated to others and separate departments were created for different
functions of a business operation.
The sales department, for example, looked after sales and market expansion. Companies also shifted a
portion of their marketing functions to middlemen retailers, wholesales, agents and brokers came to
exist. The marketing activities conducted by the producers sales department grew in importance as
competition increased in the market and the task of sales department became increasingly complex.
Marketing research, planning of advertising campaign, personnel selling, sales promotion etc. became
inevitable functions of the sales and marketing division of a company. Companies also obtained
specialized services from agencies for advertisement planning or marketing research. In this way,
marketing research agencies, advertising agencies and media agencies came to exist.
Today, marketing is a complex activity. The single most reason that can be attributed for this complexity
is rapid advancements in science and technology. The revolution in telecommunication and computer
technology has changed the whole facet of the market exchange process. In order to generate and
maintain demand, companies employ novel and sophisticated communication techniques to reach the
target customers. In certain sectors, for example in the service sector, there is no face-to-face
interaction between the service providers and the customers. The Internet medium has created digital
relationships between customers and sellers. Online shopping is gaining momentum in recent times.
Shopping complexes, supermarket chains, franchise retail chain outlets are emerging as important
institutions in the marketing exchange process.
The model of the modern complex marketing system outlines that many institutions participate and
facilitate a firms marketing function. For example, institutions such as advertising agencies, marketing
research firms, retailing channels, banking and insurance companies, transport organisations and other
innumerable service providers all play vital roles in the marketing efforts of a firm.
In fact, todays marketing manager has to coordinate several jobs before putting his companys products
in the target market place. Let us consider a brief discussion on how the above said institutions make up
the complex marketing system.
Advertising Agencies
No product is sold without advertising backup. Advertising is a powerful tool in the hands of a marketer.
In developing the marketing communication strategy of a marketing firm, an advertising agency plays a
vital role. Marketing firms which are small and medium in size cannot afford to set up their own
advertising departments or divisions.

Moreover, advertising is increasingly becoming the job of specialistscopy writing, art- directing,
cinematography, film shooting, editing, sound effect, animation, media planning, scheduling etc. Hence,
marketing firms use the services of advertising agencies. Even large sized companies such as MNCs,
nowadays, use the services of advertising agencies for the advertising campaigns. As a result, advertising
has emerged as a major industry and at present, there are more than 430 agencies in India. As an
industry, advertising has grown and developed phenomenally since independence. In the 1960s, the
number of agencies had shot up to 280 with a total turnover of Rs 35 crores. The 1970s witnessed
the birth of Vividh Bharati, a commercial programme on the All India Radio, and, at the turn of the same
decade, Doordarshan came to exist. Television became a major medium for commercial advertisements.
At the end of 1980, the press medium had a 80 per cent share and Radio and Television had a share of
15 per cent in advertising. The 1990s saw further growth in the advertising industry. Many periodicals
and a lot of magazines made their appearance both in English and in many other regional languages.
Technology in advertising has brought sophistication in the field of creativity.
In order to retain clients, advertising agencies have dedicated service-cum-creative groups which are
made available to a marketing firm (client) at call and they fully participate in all aspects of the firms
product planning, product research, test marketing and advertising campaign planning.
Marketing Research Firms
Modern business is very complex. Managers require data for decision making on marketing issues or to
plan a marketing programme. Like the advertising agencies, marketing research agencies also provide
specialised services to marketing firms. Medium and small sized firms utilise the services of marketing
research agencies. Large sized firms, like Hindustan Lever, own their research divisions.
There are many marketing research agencies in India. Some of the leading ones are given below:
1. Operations Research Group (ORG). It was set up in 1960 at Baroda as an in-house research agency and
it is the oldest market research agency in India. ORGs retail audit covers 75 consumer products. It has
three major divisionsmarketing research, public system and social research system to deal with
different research areas.
2. Marketing and Research Group (MARG), Kolkata.
3. Marketing Research Centre and Advisory Services (MRAS).
4. Indian Market Research Bureau (IMRB), Mumbai.
In India, the marketing research industry has a short history and all research agencies have come to exist
only in the last four decades. However, they have improved their client services keeping abreast with
the changing environment and they serve up to the expectations of client companies. In a changed
environment, marketing research has become a part of the marketing function of many companies and
marketing research agencies play the role of consultant to many companies in India. The marketing
manager of a firm has to decide his marketing programme according to the consultants advice.
Retailing
As a result of growing competition, every firm is trying for greater visibility for its products in the market
place as well as premier shelf space at the showrooms or point-of-purchase (POP). So, retail
management is also becoming a complex task to a marketing manager because retailers are all engaged
in marketing their shelf-space. To avoid over dependence on retailers, some producers in the consumer
goods market have set up their own retail outlets.
Another significant trend in recent years is that many marketing service agencies have Marketing
Environment come up in the areas of financial services, marketing of consumer products etc. For
example, Adishwar Marketing, a Bangalore based marketing agency, markets more than 100 consumer
products under its own brand Worldstar. The agency has entered into agreements with 45 industries to
procure and market products in its own brand name. The agency is, at present, operating in the
southern states Andhra Pradesh, Karnataka, Kerala and Tamil Nadu.

Freight Transportation
Moving the products to the consumption point has made marketing a complex system. The marketing
manger has to cope with several issues. Generally, freight transportation in India is dependent on roads
and railways. In designing the distribution network of a firm, a marketing manager has to understand
the commercial transport environment to minimise the cost of transporting the cargo.
Direct Marketing
The development of direct marketing is another important feature of modern marketing. Many
companies, particularly MNCs, use mail, telephone, fax, e-mail (Internet) to communicate with their
target market directly. Tele shopping, on-line shopping and digital ATM services are all part of the direct
marketing system. Marketers solicit a direct response from target customers through telephone or
Internet (on-line shopping). Thus, telecommunication tools are used for direct marketing.
2.10.7 Public Relations Consultancy Firms Independent public relations consultancy firms have come up
in recent times. They offer packages for corporate communications. There is an International Public
Relations Association headquartered in London. In India, for example, Ritam Communication, (Kolkata),
a private PR consulting agency, offers a total package of solutions for corporate communications.
Ritams clients are beverage giant Pepsi, Air India and many other consumer goods manufacturers.
2.10.8 Event Management Firms Like any other organisation, event management firms are coming up in
India. They offer their clients services for organising corporate events. A marketing manager must be
aware of event management as a tool of corporate publicity. Event management is not like advertising.
Cathexis Pivotal, a Bhuvaneshwar based event management firm, differentiates between advertising
and event management. In advertising, we do not know what the customers feel about the publicity
package and the product at large. But, in event management there is a greater scope for immediate
feedback. Generally, a marketing firm organises corporate events to build up a corporate image and
public goodwill. When a marketing manager does not have expertise in organising a corporate event, he
may appoint a free-lancer, temporarily, to organise corporate events. We now understand that
marketing is essentially concerned with exchange and trade.
Exchange has existed ever since mankind came into existence. The early process of exchange resulted in
the setting up of village markets. Later, markets emerged in cities and towns to facilitate trading as a
result of industrialisation. The advancement in science and technology, in later days, has manipulated
the whole process of exchange and made it a complex system to manage.
Public Relations Consultancy Firms
Independent public relations consultancy firms have come up in recent times. They offer packages for
corporate communications. There is an International Public Relations Association headquartered in
London. In India, for example, Ritam Communication, (Kolkata), a private PR consulting agency, offers a
total package of solutions for corporate communications. Ritams clients are beverage giant Pepsi, Air
India and many other consumer goods manufacturers.
Event Management Firms
Like any other organisation, event management firms are coming up in India. They offer their clients
services for organising corporate events. A marketing manager must be aware of event management as
a tool of corporate publicity. Event management is not like advertising. Cathexis Piv otal, a
Bhuvaneshwar based event management firm, differentiates between advertising and event
management. In advertising, we do not know what the customers feel about the publicity package and
the product at large. But, in event management there is a greater scope for immediate feedback.
Generally, a marketing firm organises corporate events to build up a corporate image and public
goodwill. When a marketing manager does not have expertise in organising a corporate event, he may
appoint a free-lancer, temporarily, to organise corporate events.