Prof. S.K.

Roy IIMS,Bareilly

Defining Marketing
Marketing deals with consumers to make them Customers. Simplest definition of marketing can be put in as follows: Marketing is the

delivery of Customer satisfaction at a Profit . Marketing has two basic objectives. To attract new customers by promising superior value To keep Current Customers by delivering satisfaction.
Wal-mart became the worlds largest retailer by keeping one promise i.e

Always low prices-always

Coca-Cola delivers on its promise i.e Always Coca-Cola always thirst-

quenching, always good with food, always cool, always part of your life.
Bata, Nike, Colgate, Dove etc all have flourished on promises.

Marketing defined
Marketing is not just selling & advertising. Selling occurs only after a product is produced. Where as Marketing starts long

before a company has a product. Marketing is undertaking assessment of consumers needs, measure its extent & intensity with an attempt to explore the profit opportunity. If a marketer understands and assess consumers need correctly Develops products having capacity to satisfy that need makes appropriate pricing of the product makes proper distribution channel & Matching promotional campaign

Then the product sells easily Marketing continues till the life of the product.

Some Definitions
Philip Kotler has defined Marketing is a social & managerial process

whereby individuals and groups obtain what they need and want through creating and exchanging products.
We must understand basic difference between Desire, Need, Want, Demand

in order to understand marketing in a better way. Desire : Feeling a gap of something Need : A state where you feel deprived of something. These include physical need for food, clothing, safety, social etc. Want : Human needs take a shape of want under the effect of culture. An American wants junk food when hungry. An Indian wants oily & spicy food when hungry. Demand : People have unlimited want but limited resources. Want backed by Buying Power becomes demand.

Core concept of marketing

Needs, wants & Demands Products & Services Markets

Exchange, Transaction & Relationship

Value, Satisfaction & quality

contd
Desire, need, want and demand have been explained.
Products & Services have to be understood.

Products : People satisfy their wants with products & services. Anything that is placed in market for getting attention, for purchasing, using & consuming that might satisfy a want or a need is called a Product. We can also define Product as Anything capable of satisfying a need is called a product. Services: Any activity or benefit that one party can offer in a market which is intangible is called a service. Value ,Satisfaction & Quality: Customer value : Difference between value which a customer gets from using the product and cost of purchasing that product is called Customer value. Customer Satisfaction: Extent to which product performance meets buyer expectations. If Actual performance is short of expectation, consumer is dissatisfied. If actual performance is more than he is satisfied.

Contd.
Quality: Customer satisfaction is closely linked to TQM (Total quality

management). It can be defined as freedom from defects. Exchange, Transaction & Relationship: Exchange : The act of obtaining a desired object from someone by offering something.Exchange is one of many ways to obtain an object. Transaction :A trade between two parties that must have three things: Agreed upon conditions A time of agreement and A place of agreement Where as Exchange is the core concept of marketing, transaction is unit of measurement of marketing. A transaction can be a) pure monetary transaction or b) barter transaction
Marketing consists of actions taken to obtain a desired response from a target

market to obtain many transactions

Contd.
Relationship marketing: It is The process of creating, maintaining &

enhancing strong, value filled relationship with customers and other stakeholders. If you can make a strong relationship network with key stakeholders for a long period, profit will automatically follow. Markets: a)The set of all actual & potential buyers of a product or service is called a market b) A market is a place consisting of buyers and sellers where potential exchanges are actualized A Market must have following characteristics: Buyers share a particular need or want Wants or needs can be satisfied through exchanges & relationship.
Originally Market was a place consisting buyers and sellers but economists say

it to be group of sellers and buyers who gather for making transactions.

Contd.
Marketers generally term group of sellers as INDUSTRY whereas they term

Group of buyers as a MARKET. Relationship between Industry & Market can be shown as: Information

Industry (Collection of seller)

Products

Money

Market (A collection of buyers)

Information

Marketing defined.
Marketing means managing markets to bring about exchanges & relationships

for the purpose of crating value & satisfying needs & wants Figure given below gives main element of marketing:

ENVIORNMENT
Marketer (company) SUPPLIERS Competitors Marketing middlemen End User market

CONTD.
Figure reflects following findings:
Marketing involves serving a market of end users in the face of competitors.

Companies send their products to end users directly or through middlemen

e.g Eureka Forbes ,Amway etc

All involved elements are affected by environmental factors e.g Demographic,

psychological, social, political, economic etc

Each element adds value to the next level & are interdependent. Walmart , the

biggest retailer can not supply goods at a cheaper rate unless suppliers supply them at the cheapest rates. The companys success depends not only on its performance but how well others perform in the entire system.

Marketing Management defined

Marketing Management is defined as the analysis, planning, implementation

and control of programs designed to create, maintain & enhance beneficial exchanges with target customers for the purpose of achieving organizational objectives. Marketing Management deals with various types of Demands e.g It deals with No Demand It deals with adequate Demand It deals with irregular demand It deals with excessive demand Marketing Management attempts to find ways to deal with different demand states. So Marketing Management can also be called as Demand Management Managing Demand means managing customers. There are two aspects: Creating New customers & Retaining existing customers As cost of attracting new customers is rising, retaining existing customers with repeat purchases is becoming more important thus giving rise to Building profitable customer relationship.

STAGES OF MARKETING PRACTICES

Marketing Practices passes through three stages:

Entrepreneurial marketing: Individuals start business within limited resources with maximum burden on him Formulated marketing : As business grows, delegation, more promotional efforts & more involvement of people. Intrepreneurial marketing : This stage involves more creativity Effective marketing can take any form of stage. Effective marketing may pass all these stages. These stages can be divided in two parts: Creative aspect & formulated aspect There is always a tension between the two aspects of marketing mentioned above.

Marketing management philosophies

These philosophies guide how much weight is to be given to foll0wing

elements: There are FIVE philosophies that guide the marketing management to be practiced for getting target market satisfaction through exchanges . Products selling organization consumer & society Five philosophies have been made on the basis of weights. THE PRODUCTION CONCEPT: This philosophy believes that consumers prefer products and services at an affordable prices. Hence production & distribution efficiency along with benefits of Scale of economy gets prominence in this philosophy.
PRODUCT CONCEPT: Consumers will prefer those products which are best

in quality, performance & superior features . The product concept relies on this concept. Continuous changes, improvement in products and services are the key concept in this philosophy.

Contd.
THE SELLING CONCEPT: This concept believes that consumers do not buy

products and services of a company unless selling & promotional efforts are put in. In this concept, companies aim to sell what hey have not what consumers demand. This can be shown by following diagram: START FOCUS MEANS ENDS
Factory Existing Products Selling Profits through Sales volume

THE MARKETING CONCEPT: This philosophy says that organizational

objective can be achieved by knowing and producing products as per the wants & needs of consumers. A company will earn more and do well if it delivers and achieve consumers satisfaction more effectively than their competitors .

Contd.
Marketing management is just contrast of selling concept s is shown in

following diagram: Start

Focus

Means

Ends

Market

Customer needs & wants

Integrated marketing

Profits through customer satisfaction

Contd.
THE SOCIETAL MARKETING CONCEPT:

This philosophy believes in marketing concept but keeping societys wellbeing on the top. Companies according to this concept must achieve profits by knowing consumers needs but must keep society as a whole in mind and their wellbeing. This can be depicted by this diagram: SOCIETY (Human welfare)

(Consumers) Need satisfaction

(Company) Profit

Major challenges of future marketing

Following technological advancements are going to make future marketing a

very complex activity. Computers, telecommunications information technologies transportation technologies Marketers have to exploit these technologies to connect with their consumers and serve them in a better way. Marketers have to decide about how well they can connect with their consumers. Buyers to Buyers , Customers to Customers, Direct Door to Door marketing etc are few examples showing shifts in the process of connectivity with consumers.
Globalization, more uses of Non Profit & Non Government Organizations,

growing attention to Societal & environmental issues will further make the marketing a challenging task in time to come.

Likely Questions from Unit 1

What is marketing? Discuss core concept of marketing. Compare Five Marketing Philosophies that guide Marketing Management. Explain the basic difference between Selling Concept & marketing concept

How do you differentiate between Sales & Marketing?

What will be the scenario & nature of marketing in time to come.Analyze the

challenges of future marketing. What are the stages a company pass during the marketing process? What is relationship marketing .How is it beneficial for companies Name few companies & products that are following Marketing Philosophy but fail on Societal Marketing Philosophy. Differentiate between Marketing & Societal marketing philosophy.