UNIT 1 MARKETING: AN OVERVIEW

Objectives

This introductory unit is aimed to help the learner to understand:

● the meaning of marketing and concept of marketing

● the basic marketing concepts
● orientation of the firm towards its customers
● in developing a marketing mix for the firm and elements of marketing mix
● the framework in relations to 4Ps
● scope and misconceptions of marketing

Structure

1.1 Introduction
1.2 What does the term Marketing Mean?
1.3 Definition and Concept of Marketing
1.4 Needs wants and Demands
1.5 Basic marketing concepts
1.6 What is marketing?
1.7 Firm Orientation towards to its Customers
1.8 Concept of Marketing Mix
1.9 Developing A Marketing Mix
1.10 Elements of Marketing Mix (4ps)
1.11 4As Frame Work in Relation To 4Ps of Marketing Mix
1.12 Marketing Strategy
1.13 Marketing Strategy Process
1.14 Scope of Marketing
1.15 Misconception about Marketing
1.16 Summary
1.17 Key Words
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1.18 Self-Assessment Test
1.19 Further Readings

1.1 INTRODUCTION

We welcome you to this course. Different people with different objectives would opt to learn marketing.
However, marketing, as you will soon perceive and study its importance whether you are working in the
marketing department or any other department of an organisation.

Marketing is a very exciting and highly challenging field. It requires individual interest with a flair for
creativity for success. Congratulations! You have embarked on the study of an exciting subject, which
will boost your creativity and imagination in every given marketing situation in your career down the
line.

Marketing is everywhere most of the tasks we do and most of the things we handle are linked to
marketing. Marketing is an activity. Marketing activities and strategies result in making products
available that satisfy customers while making profits for the companies that offer the products. Your
morning tea, the newspaper, your breakfast, the dress you put on for the day, the vehicle you drive, the
mobile in your pocket, the quick lunch you have at the fast food joint, the PC at your desk, your internet
service provider, your e-mail ID almost everything that you use and everything that is around you, has
been touched by marketing. Marketing has its imprint on them all depending on the product and the
context/experience the imprint may be visible or subtle. But it is very much there. Marketing permeates
most of your daily activities. Marketing is an omnipresent entity.

The field of marketing cannot be studied in isolation as it combines with a range of other
areas/disciplines such as economics, psychology, sociology, political science, statistics, and information
technology etc. In the light of its alliance with the above disciplines you must be wondering to witness
the far-reaching changes that are taking place both within the firm and the Indian society at large. In
addition, you will also witness similar shifts in the global scenario and the likely impact on the
performance of your firm in terms of marketing activities and decision making.

This course has been designed primarily to develop your awareness of the marketing orientation. It is
assumed that such knowledge about marketing decisions and processes will not only improve your
personal competence but will also help in attaining your organizations’ goals.
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1.2 WHAT DOES THE TERM MARKETING MEAN?

Marketing refers to the process of ascertaining consumer needs, converting them into products and
services, and then moving the product or service to the final consumer segment with emphasis on
profitability and customer satisfaction, and ensuring the optimum use of the resources available to the
organization.

Marketing is the process of planning and executing the conception, pricing, promotion, and distribution
of ideas, goods, and services to create exchanges that satisfy individuals and organizational objectives.

According to Philip Kotler, marketing is a social and managerial process by which individuals and
groups obtain what they need and want through creating and exchanging products and value with others.
The author has considered marketing as a social process where interaction of people is an essential
component of it. Through this interaction the persuasion for selling the products or services begins.
Thus marketing is purely purchase decision of the customer but through continuous marketing
initiatives at different stages. Marketing starts before the production of the goods and continues even
after the selling of the products. Thus it is assumed marketing is a continuous process. While the
activities pertaining to identification of the needs, wants and demands of the customer, then designing
of a suitable product to meet the needs, giving name to the product and converting it to a brand by
communicating it to the customers.

1.3 DEFINATION AND CONCEPT OF MARKETING

The American Marketing Association defines marketing as follows:

“Marketing is the performance of business activities that directs the flow of goods and services from
producer to consumer or user”.

Activity 1
Do you agree with the above definition? If yes or no offer your reasons. Select any ten products and
service offerings of your choice that are being currently marketed.
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Later on the American Marketing Association revised its definition of marketing as

“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.” This
definition attempted to highlight the importance of exchange processes that occur between the seller and
the buyer. As we move on to discuss about the subject matter of marketing, we would understand the
meaning of this definition better

Exchange Process: Let’s first look into the meaning and importance in marketing management.

Primarily the term exchange means “giving or receiving something in return for something else” i.e. in
marketing parlance an individual or a customer will simply obtain the firms product or service offering
to satisfy his need or want in exchange of money thus leading to exchange process between two entities.

For example if a person hires a Uber service for his travel from destination x to y and the money paid
as fare in lieu of the trip is an exchange process. This exchange process can extend into strong
relationship marketing and we enter into exchange relationships all the time. Through relationship
marketing we build a long-term association with the customer. In the above example of Uber, if the
customer is satisfied by the service then we may plan to use the same services in future as well and
intend to become a loyal customer with Uber. While Uber by way of delivering value to customers, a
relationship with customers is developed. Thus marketing is earning profit by building relationship with

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customer through satisfying their needs and wants. The same explanation is applicable for a product as
well.

We can see that marketing, as per this definition, starts with a ‘Product’. This is very common idea
among many people, for example, in advertising agencies, as they normally are required to advertise to
sell a product, which already exists. Similarly, salesmen are also given ‘products’ and asked to sell
them. Therefore, to them marketing often, starts with a product. However, this is only a narrow view of
the concept of marketing.

On the contrary knowingly or unknowingly we as individuals and organisations involve in a variety of

activities which we call them as marketing.

• A TV anchor would try to impress upon the audience by ‘marketing’ her show.
• In college campus placements, the final semester students of a postgraduate programme in
business administration would try to be successful in ‘marketing’ their candidature to
prospective employers.
• Matrimonial firms trying to get a better response for the grooms ‘marketed’ by them from
potential brides is also considered an example of marketing.
• An officer of the Health and Family welfare department is trying to create awareness in a
remote district about the need for immunization.

Now let’s look at the definition of Marketing in the words of Philip Kotler. According to him,
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.

The definition focuses “superior customer value.” Customer Value primarily is the incremental benefit
which a customer derives from consuming a product after paying in return. The term value signifies the
benefit that a customer gets from a product. It is the difference between the benefits (sum of tangible
and intangible benefits) and the cost. Customer value is dependent on the three factors – Quality,
Service and Price. The value of a product increases with its quality and service, as the benefits increase.
On the other hand, the value decreases with increase in price because of the increase in costs increase in
this case.

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As “superior customer value” is the created when customers are willing to pay more for your product or
service than competitor or when they prefer your version of a product or service to all others because it
meets their needs better and maybe even exceeds their expectations.

As a marketer you should view marketing both from social and managerial dimensions. The social
aspect of marketing was put forth by Paul Mazur. He defined marketing as the creation and delivery of
a standard of living to society. The standard of living suggests the level of wealth, comfort, material
goods, and necessities available to a certain socio-economic class or geographical region. Thus the
products and services offered by organisations (both commercial, and non-commercial) have a direct or
indirect bearing on people’s standard of living. We are also aware of the fact how products/services
such as sanitary napkins, electric bulbs, telephone, cars, tractors, aero planes, cinema, antibiotics,
anesthesia, and birth control pill enriched human life over the period of time in terms of improved
standard of living.

Let us discuss about Jaipur Foot as a brief case study and how it has been transforming the lives of
hundred thousands of amputees all over the world by providing them with mobility and dignity.

Jaipur Foot was hailed by the Times magazine as among the greatest inventions of the 20th century.
C.K. Prahalad rated BMVSS (a non-profit organisation located in Jaipur, Rajasthan) in his classical
book, Fortune at the Bottom of the Pyramid as the world’s largest organisation for artificial limbs.

The Jaipur Center was founded by Devendra Raj Mehta in 1975. Since its inception, the organisation
has outfitted more than 1.50 million amputees (by 2016) around the world with a prosthetic that has
become known as the JaipurFoot. BMVSS held more than 50 on-the-spot, limb-fitment camps in 27
countries across the globe. The organisation has become so successful that it has forged agreements for
continuing R&D with Stanford University, the MIT, the ISRO, and the IIT, among others.

Now each year about 65,000 people all over the world benefit from the Jaipur Foot. It rehabilitated
amputee’s quality of life economically as well as socially.

Activity 2

Identify any five products or services introduced by Indian firms in the 21st century which have/had a
tremendous impact in improving the standard of living among the people of India?

Product/Service How Standard of Living Improved?

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a.____________ ______________________________________________

b.____________ ______________________________________________

c.____________ ______________________________________________

d.____________ ______________________________________________

e.____________ ______________________________________________

Philip Kotler whose seminal text Marketing Management was first published in 1967 beautifully
described the meaning of marketing in three words as “meeting needs profitably.”

Thus the most fundamental concept, which must be realised as being the basis of all marketing
activities, is the existence of human needs. It is these human needs which form the starting point for all
marketing activities.

Today, if you look around, Start-ups are the order of the day. The young and progressive entrepreneurs
are jumping on to this bandwagon by every passing day. You must remember that if you are an
entrepreneur who wants to start a new business, you should have a product or an idea in your mind. In
fact you have to decide what product/service you should manufacture and sell. How do you decide this?
The answer to this question lies with you i.e. the entrepreneur has to first decide what product he should
select. This is possible only if one can identify the needs, and wants which require satisfaction among
human beings. Once he has identified the need of a group of human beings (called market segment), he
can determine the product, which can help to satisfy that need. This is a part of the modern philosophy
of marketing or the marketing concept.

1.4 NEEDS WANTS AND DEMANDS

Lets us now try to understand Marketing Concepts that are a part of the definitions: Need(s), Want(s)
and Demand(s)

Need(s) Needs are the state of being deprived of something. Needs can be grouped into five categories
as detailed below. Needs are not invented by marketer rather the widely known academic model of

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needs was proposed by psychologist Abraham Maslow. Although this model is predominantly used in
motivational studies but is also applied for studying customers’ needs.

The Maslow’s theory of hierarchy categorises human needs into five levels. Abraham Maslow pursued
to explain why people are driven by particular need at a particular time. According to his theory, human
needs are arranged in a hierarchy from most to least pressing. These include physiological needs, safety
needs, social needs, esteem needs, and self-actualisation needs. Marketers need to know which specific
need their brand is targeted to. Let us illustrate with some of the brands that are targeting these five
levels of customer needs:

a) Physiological needs: Food, water, shelter – All food items from liquids to solids etc. Amul,
Aashirvaad atta, Britannia, Vimal, State housing board properties fall under the purview of this
category.
b) Safety needs: Security, protection - Insurance, Banking products, sanitizer, OTC products
Vaccination and Immunization programs by the state.
c) Social needs: Sense of belonging, love - Bharat Matrimony, Social media, Netflix India etc. fall
under this category.
d) Esteem needs: Self-esteem, recognition, status – Premium niche brands of all product categories
and services, Allen Solly, iPhone, Dior, Jaguar Cars, International travel and recreation.etc.
e) Self-actualisation: Self-development and realisation - Teach for India, Azim Premji Foundation
etc.
From the customer perspective consumer’s needs can be categorized as follows:

1. Stated needs: Here the customer explicitly states what they want. For example, Ms Divya wants
to open a bank account.
2. Real needs: This is more specific. Ms Divya wants to open a Savings Bank account with a
nearby public sector bank in her residential locality.
3. Unstated needs: Ms Divya anticipates the bank to give her an International Debit Card along
with a cheque book facility.
4. Delight needs: Ms Divya like the premises of the bank for its upkeep and neatness where the
employees and fellow customers exhibit the most appropriate and decent behaviors.
5. Secret needs: Ms Divya is reluctant to confess that she has a negative attitude towards
Netbanking facility.

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Activity 3
From your recent experience of a purchase, try to clarify your stated needs, real needs, unstated needs,
delight needs, and secret needs.

Product/Brand Name:

Stated needs:_____________________________________________________

Real needs:_______________________________________________________

Unstated needs:___________________________________________________

Delight needs:_____________________________________________________

Secret needs:____________________________________________________ 

Smart marketers should not just confine to knowing only the stated need of the customers. It is
important to get deeper information to know the other needs of customers.

Want(s)

Wants are the form taken by human needs as they are shaped by culture and individual personality.
These are essentially dependent upon needs. For example, a person in North India would satisfy his
hunger with rajma and chawal while a person from South India would like to have fish curry and rice.
This clearly explains their want(s) backed by culture and their social environment.

Demand(s)

You may want to watch the final IPL match being played abroad. The big question is do you have
money and time to travel abroad to watch the match? If yes, then it’s a demand. Wants backed by
willingness and purchasing power is known as demand.

By and large all marketing companies from FMCG, consumer durables, to service firms firstly do try
to recognize the needs and want of customers, conduct market research, obtain regular feedback and
market intelligence with the help of the sales force in ascertaining the unmet customer needs and then
only it will be possible to fulfill needs so identified. For example the floor managers at Big Bazaar
retail outlets do mingle and interact regularly with customers to try and keep them happy.

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Activity 4

The best way to understand the difference between needs and wants is to pause and reflect when you try
to make your next purchase by visiting a nearby departmental store or a mall for shopping. Ask yourself
the following questions while attempting to buy a specific product from the store:

a. Do I really need this?

b. What would happen if I didn’t buy this?

c. What would happen if I bought a cheaper version instead?

__________________________________________________________________________________ 

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1.5 BASIC MARKETING CONCEPTS

As a student of marketing you should have an overall and complete understanding of all the basic and
fundamental concepts in marketing. It’s very much essential to have a sound knowledge of these very
basic concepts for the success of the business. We have already discussed in the above section about
needs, wants and the demand aspects for your understanding.

Let’s now move ahead with the rest of the basic marketing concepts

Marketers:

A marketer seeks a positive response from the present and prospective customers. The response is not
necessarily in terms of a purchase of a good or service offered by a marketer; it might be paying
attention to the features of a product, bringing out an expected change in behaviour (for example

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wearing a mask during the current times due to pandemic, wearing a helmet while driving a two-
wheeler.

Customers: A firm’s offerings are intended for a well identified target segment of people or
organisations that we call as customers. However, there are many synonymous terms such as users,
buyers, consumers, clients, purchaser, shopper, patron etc. which are used interchangeably based on the
nature of the product and the service offering being adopted in marketing literature. User is a passive
word that means “a person who uses something.” Customer is a person who purchases something. Some
firms have users who are also customers for example we use electricity and we pay for it. While some
firms have users but not customers for example we use WhatsApp, but we do not pay any subscription
or fee for it. There are firms that have two separate groups of users and customers. To cite an example,
media firms like TV free channels which serve the audience (viewers) and advertisers (customers or
clients).

Now let’s see the difference between a consumer and a customer. A customer is the one who buys a
product. A consumer is someone who consumes a product or service. As a customer you buy
vegetables for your family till the time you buy it, you remain as a customer and the moment they are
cooked and consumed by you and your family then all of you individually or collectively are
consumers. Clients are persons or organisations who use services rendered by professional marketers
such as advocates and chartered accountants. Similarly other terms mentioned above are used in
different context and situations.

Customer Value:

When we buy a product, aren’t we thinking of the benefits that a product offers to us? Yes, certainly we
do imagine while buying an iPod, we buy an iPod because it not only gives good music output (benefit)
but also the cool fashion statement associated with it. So it’s not just the benefit it is rather the bundle of
benefits associated with the product in the form of product quality, after-sales services, warranty, repairs
costs, free home delivery, user friendliness etc. Customers are rational enough and would evaluate and
weigh the pros and cons of acquiring a product in terms of the price they are paying for those benefits.
Customer value is the difference between the value benefits the customer gains from owning a product
and cost of obtaining the product. The cost of product is not limited to price but also time and energy
spent on shopping. Customer value can be shown as an equation as below:

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Customer Value = Total Customer Benefits – Total Customer Costs

Thus the marketer’s role is to add more value to product in terms of benefits so that customer prefers the
product in relation to competitor’s product.

Customer Satisfaction:

Customer satisfaction is reflected in the difference between the actual performances of the product
perceived by a customer vs. the expectation of the customer. Hence it’s the match between customer
expectations of the product and the product’s actual performance.

Customer satisfaction differs from person to person it’s an experience which is different for different
individuals. A proper evaluation of a product or service can only be done by experiencing it. Therefore
customer satisfaction is a post- purchase phenomenon. Satisfaction can only be measured by comparing
pre-purchase expectation and post-purchase experience. Customer satisfaction is also the measure of
success of an organization.

The equation used to determine the level of a customer’s satisfaction is

Customer Satisfaction=Experience – Expectation

Markets: It’s a matter of common observation that people narrowly perceive the market as a physical
place where goods are purchased or sold. There is a difference between the views of an economist and a
marketer. Economists consider a market as a group of buyers and sellers who handle over a specific
product or product category (for instance, a paddy market or a cloth market). While Marketers view
markets as people with needs to satisfy, money to spend and their willingness to spend that money. In
other words, markets constitute people with the above-mentioned three characteristics.

1.6 WHAT IS A MARKET?

The term Market originates from Latin word ‘MARCUTUS’ which means a place where buyer and
sellers meet for business. Traditionally, buyer and seller gathered at a specific place called ‘haats’or
‘melas’. But with passage of time buyers and sellers need not meet face to face for transaction; they can
meet virtually through e-commerce platforms. On the basis of end use market can be of different types:
Consumer Markets (FMCG-Fast moving consumer goods, consumer durables, soft goods), industrial
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markets (finished goods, components and services), intermediate markets (wholesale and retail
markets), geographical location (local, national, global/international markets, rural and urban market),
and Non-profit and Governmental Markets (companies selling to non-profit organizations with limited
purchasing power need to be price careful).

Broadly, there are four types of markets: consumer markets, business markets, global markets, and non-
profit markets.

Consumer markets consist of customers of large-scale goods and services such as essential
commodities, toothpastes, detergents, clothes, furniture, smart phones, banking and insurance etc.

Business markets are composed of business customers who purchase goods and services to be resold or
used to make other items or services for sale.

Global markets deal with those products and services which have demand across the globe. Nike,
Coca-Cola, Apple, and Colgate, to cite a few examples, have a strong presence in many countries.

While the Non-profit markets consist of those organisations such as religious bodies, public libraries,
educational institutes and government agencies that demand a specific type of products and services.
The Union government’s policy of purchasing its requirements through the GeM (Government e-
Marketplace) portal gives an idea of the government market.

1.7 FIRM ORIENTATION TOWARD ITS CUSTOMERS

With changing times businesses have evolved significantly and markets have transformed in line with
businesses all over the world. The firms have also changed the way they deal with the market, evolving
through different phases of progress. The change in the attitude and perception of people, the rapidly
changing tastes and preferences and the way they live and work. In line with this change, the marketing
function has come into being.

Therefore the purpose of a marketing philosophy is to identify needs and fulfill them. Therefore a
marketing philosophy is a fundamental idea that guides a company’s efforts to satisfy customers and
achieve organizational goals. Each of these philosophies considers the interests of organizations,
customers, and society at large.

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Business firm’s conduct their marketing activity around five marketing philosophies is as follows:

1. Production Concept
2. Product Concept
3. Selling Concept
4. Marketing Concept
5. Holistic Marketing Concept

The Production Concept:

Production concept lays emphasis on affordability and availability of products. Affordability is possible
by reducing cost of production by producing large quantities and achieving mass production and mass
consumption by reducing the prices. Availability is possible by mass distribution by making the
product widely available. This philosophy states that any amount of goods produced will sell if it is
available and affordable to customers.

The production concept is almost extinct now with companies paying more and more attention to the
customer as the basic ideology here is customers will choose products and services that are widely
available and are of economical.

Let us recall for a moment the acute shortage of beds in hospitals in many countries when Coronavirus
was at its worst form. Though the production concept was considered one of the oldest and extinct
philosophies, we come across some firms that follow it even now. The hospitals found it extremely
difficult to meet the growing demand from COVID patients as the situation was characterized by
excessive demand for healthcare facilities and services.

Another instance in many developing nations, the demand for electricity, petrol, diesel and LPG gas
exceeds supply leading to shortages. So the marketers try to improve their production capacity and
distribution efficiency in order to meet the under-satisfied market demand. They also try to opt for mass
production which implies lowering production costs to make products or services affordable to the
customers. Therefore, the firms try to maximise their output, achieve a lower unit cost and sell at a
lower price. However, this concept is not the most appropriate business philosophy for an enterprise in
the long run.

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The Product Concept:

During production concept supply increased over demand. Therefore the low cost and availability
couldn’t ensure increase in sales and survival along with growth of the firm. The firm had to innovate
products and offer more choices to customers which lead to product concept. This concept is based on
the philosophy that consumers will prefer products that have better quality, performance and innovative
features.

However, firms having this approach suffer from short-sightedness and inward-looking as they fail to
understand their business in terms of the basic customer need in other words, such firms define their
business from the product angle. Theodore Levitt called it marketing myopia in his classic article
published in Harvard BusinessReview in 1960. Marketing myopia is a short-sighted and inward-
looking approach that focuses on sales than consumers needs. Such businesses often overestimate their
product features, and in the process, they fail to recognize or understand the needs of the customers.
Successful companies focus on customer needs rather than their own products and their features. Since
the focus of the companies is on producing quality products, they lose out on customers that seek
inexpensive products or are influenced by availability and usability of the product.

The following are some of the examples of the companies that suffered from marketing myopia:

1) Kodak lost much of its share to Sony cameras when digital cameras became popular

2) Nokia keypad phones affected due to iPhone and Samsung

3) Bollywood focused only on movies when the television market boomed

4) Google flourished and Yahoo declined

5) BSNL suffered as it was thinking of being in the land-phone business rather than in the
communication business.

Activity 5
Spot five businesses/brands which have lost or are in the process of losing their ground in the
marketplace due to their myopic view of the purpose of their existence in business.

Businesses/Brands Myopic View

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1--------------------------------------------------------------------

2--------------------------------------------------------------------

3--------------------------------------------------------------------

4--------------------------------------------------------------------

5--------------------------------------------------------------------

The Selling Concept:

The drastic environmental changes the rising competition with passage of time and offering innovative
product thus making it available to the customers is no longer working for the firm. There was
something more required then just a quality product for the survival and growth of the companies. A
large number of sellers forayed into the market and started manufacturing quality product. Something
more was required to persuade the customers now. Business philosophy has changed it was believed
that customer would not buy or would not buy enough until or unless they are convinced and influenced
to do so. Therefore, they rely heavily on selling and promotion of their offering to achieve marketing
success. This approach is mostly followed in the case of unsought goods such as insurance, dictionaries,
fire extinguishers and cemetery plots. Unsought goods are those the customers do not know about or do
not normally think of buying. The selling concept breeds the false impression that marketing is all about
selling. Just by aggressively promoting a product or with heavy price discounts, the companies may not
enjoy the best of customer patronage.

The Marketing Concept:

By now customers were fed up of too much influence and interference of the salesman during purchase
of products which led to unnecessary purchase that did meet customer’s needs and wants. The
marketing concept proposes that the success of the firm depends on how well it understands the needs
and wants of the customers and how successfully it converts these needs in to products and services that
will satisfy the customer’s requirements.

Marketing starts before the product; service or solution is ready and continues even after the sale has
been made. The company makes honest effort towards retaining the customers and also attracting new
ones. Customer satisfaction is the strongest pillar of marketing where company assures that customers
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are satisfied after buying a product or service. In marketing concept customer satisfaction is the focal
point and all decision making based is on this premise. Accordingly all the four elements of marketing
mix are intelligently developed, formulated and blended keeping the customer at the core of the
business. For example if customer is in need of a pen, pencil and eraser all in one Linc pens have met
that need of customers. If customers want triple door in refrigerators LG, Godrej, Hitachi companies
offered them to satisfy their needs and wants. These companies spend a lot on research to understand
and meet customers’ requirements.

In short Selling transforms the goods into cash, while marketing aids in the process of serving and
satisfying the customer needs. The differences between selling and marketing are summarised in Table
1

Table 1: Difference between Selling and Marketing

Selling Marketing

Emphasis is on the product Emphasis on consumer needs and wants

The company manufactures the product first The company first determines customers’
and then decides to sell it. needs and wants, and then decides on how
to deliver a product to satisfy these wants.

Management is sales volume-oriented. Management is profit-oriented.

Planning is short-run oriented in terms of Planning is long-run oriented in terms of

today’s products and markets. new products, tomorrow’s markets and
future growth.

Stresses on the needs of the seller. Stresses on the needs and wants of buyers.

Emphasis is on staying with existing Emphasis is on innovation in every sphere,

technology and reducing costs. on providing better value to the customer
by adopting superior technology.

Views business as a goods-producing Views business as consumer satisfying

process. process

Different departments work in highly All departments of the business operate in

separate watertight compartments. an integrated manner, the sole purpose
being the generation of consumer
satisfaction.

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Cost determines the price. The consumer determines price; price
determines the cost.

Selling views customers as the last link in Marketing views the customer as the very
business. purpose of business.

Source: Tapan K. Panda, Marketing Management: Text and Cases, Indian Context, second edition,
Excel Books, New Delhi, India, 2007.

The Holistic Marketing Concept:

The new marketing realities confronting the marketers at the turn of two decades of the 21st century are
diverse and challenging. The pace of technological changes, the impact of the global economy, ever-
growing economic inequalities, climate change, environmental deterioration, public unrest, and crony
capitalism became new realities of the world. The outbreak of COVID-19 at the beginning of 2020
compelled the organisations to look at the marketplace from a different perspective in an effort to
reorient their strategic thinking.

Against this backdrop the holistic marketing concept developed by Philip Kotler et al. assumed
significance. The holistic marketing concept is based on the development, design, and implementation
of marketing programmes, processes, and activities that acknowledge a broad and integrated

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perspective. Figure 1 provides an overview of four broad components of holistic marketing:
Relationship marketing, Integrated marketing, Internal marketing and performance marketing.

Source: Philip Kotler et al. Marketing Management, 15th edition, Pearson, Noida, India, p.19.

Relationship marketing: The purpose of Relationship marketing is to develop mutually satisfying

long-term relationships with the main stakeholders namely customers, employees, marketing partners
(such as suppliers, distributors, and agencies), and members of the financial community (such as
shareholders and investors). All such enduring relationships would create a distinctive asset for the
company known as a ‘marketing network’ consisting of the above-mentioned key stakeholders. It is
based on a simple operating principle: build an effective marketing network of long-term relationships
with key constituents, and profits will follow. For example, the Swedish furniture maker Ikea has a
worldwide base of loyal customers. When the company changed the font in their ubiquitous catalogue,
Ikea lovers took to the Internet to air their unhappiness. Rather than alienate their customers for a trivial
reason, Ikea changed the font back in the next catalogue.

Integrated marketing: Integrated marketing aims at mixing and matching marketing activities to
maximise their individual and collective efforts. David Packard of Hewlett-Packard (hp) once observed
that “Marketing is too important to be left to the marketing people.” Organisations, for-profit as well as
not-for-profit, achieve marketing success only when each of the departments works together to achieve
customer goals.
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It means designing the right product by R&D, providing the right amount of funding by the finance
department, procuring the right materials by purchases, making the right product by the operations
department, and measuring profitability in the right way by accounting people.

Peter Drucker long ago made a profound observation:

Because the purpose of business is to create a customer, the business enterprise has two – and only
two – basic functions: marketing and innovation. Marketing and innovation produce results; all the
rest are costs. Marketing is the distinguishing, unique function of the business.

Uber, the ridesharing app is, for example, redefining urban mobility across the world. When Uber
entered India it launched an integrated marketing campaign with the idea of Apnapan (means affinity)
as its core theme. The campaign aimed to build everyday brand relevance and reframe personal
mobility. Uber’s communication strategy was co-created with the help of amazing stories of heart-
warming experiences of riders and driver-partners that took place across the country.

Integrated marketing also involves developing an integrated channel strategy. Each channel option
should be assessed in terms of its impact on sales and brand equity.

Internal marketing: Marketing organisations pursue an internal marketing approach in an effort to put
their employees first. The better a company treats its employees, the better it will perform in providing
excellent service to customers. In this sense, the employees are treated as ‘internal customers’ of a
company. External marketing focuses the company’s strategy on the customer in marketplace; internal
marketing is aimed at the internal customer (that is, employees) within the company. Thus as an element
of holistic marketing, internal marketing is aimed at the task of hiring, training, and motivating able
employees who want to serve customers well.

Performance marketing: Companies need to understand the broader role played by their marketing
activities or strategy in generating financial and non-financial returns to business and society at large. In
addition to sales revenue, market share, customer satisfaction, quality leadership parameters of
performance, the company’s marketing performance is often measured from the perspective of the legal,
ethical, social, and environmental dimensions.

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 1.8 CONCEPT OF MARKETING MIX

Marketing is the process of identifying, anticipating, and satisfying customers' requirements with the
purpose of making profits. This process involves the marketer to consider various marketing decisions
to make the operations profitable. It is essential to identify that the required combination of marketing
policies and procedures so as to adopt and bring about desired behaviour of trade and consumers at a
minimal cost. They have to decide how elements of marketing, advertising, personal selling, pricing,
packaging, channels, warehousing etc. be combined to make marketing operations profitable.

More specifically, they have to decide a marketing mix - a decision making method in relation with the
product, price, promotion, and place.

Definitions of Marketing Mix

According to Philip Kotler, “ Marketing mix is the combination of four elements called the 4P’s-
Product, Price, Promotion and Place that every company has the option of adding, subtracting or
modifying in order to create a desired marketing strategy”.

According to Kotler and Armstrong, “Marketing mix is the set of tactical marketing tools that the firm
blends to produce the response it wants in the target market”.

According to W. J. Stanton, “Marketing mix is the term used to describe the combination of the four
inputs which constitute the core of a company’s marketing system: the product, the price structure, the
promotional activities and the distribution system”

1.9 DEVELOPING A MARKETING MIX

Intuition and creative thinking are key requirements in developing a marketing mix. But relying only
on these qualities is incorrect and can lead to inaccurate assumptions that may not provide the desired
mix. To ensure that marketing mix is based on research and combines facts with innovation, a manager
should go through the following steps:

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Step 1

The first step on the marketing manager’s list is to define the unique feature, the product offers, the
customer surveys or focus groups and identify the importance of unique feature to consumers and
whether they can increase the sales of the product.

Step 2

The second step is to understand the consumer that would purchase the product, what they need, what
value they associate. All the other elements of the marketing mix will be designed in accordance with
the customer. This understanding will enable the product offered be relevant and targeted.

Step 3

The next step is to understand the competition. The prices and related benefits such as discounts,
warranties and special offers need to be assessed. An understanding of the subjective value of the
product and a comparison with its actual manufacturing distribution cost will help set an ideal price
point.

Step 4

At this point the marketing manager needs to evaluate the options of place to understand where the
customer is most likely to make a purchase and the costs associated with using this channel. Multiple
channels may help target a wider customer base and ensure easy access. A product which serves a niche
market would concentrate distribution to a specific area or channel; hence value of the product is closely
related with availability of the product.

Step 5

Based on the target audience and the price identified the communication strategy can be developed. The
promotional methods need to appeal to the customers and ensure that the key features and benefits of
the product are clearly communicated and understood.

Step 6

A last step needs to be taken at this point to see how all the elements identified and planned relate to
each other. All marketing mix variables are interdependent and rely on each other for a strong strategy.

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It has to be seen whether the selling channels strengthen the perceived value of the product or the
promotional material supports the selected distribution channels.

1.10 ELEMENTS OF MARKETING MIX (4Ps)

McCarthy classified different marketing activities of a firm into four elements way back during the
sixties which are popularly known as the Four Ps of marketing-mix namely Product, Pricing, Placing,
and Promotion.

Product is the first and most important element of the marketing mix. The word product stands for
goods or services offered by the company. Once the needs are identified, it is necessary to plan the
product and after that keep analysing whether the product still satisfies the needs which were originally
planned for, and if not, to determine the necessary changes. You will learn this in greater detail when
we talk about product decisions. Product decisions involve making coordinated decisions on product
mixes, product lines, branding and packaging. Products are of different types namely Non-durable,
durable, and services. Companies often sell more than one brand. Brands can be differentiated on the
basis of product form, features, performance, style and design, and also service dimensions such as ease
of ordering, delivery, and after-sale service. The product life cycle concept enables marketers in
planning, controlling, forecasting, and responding to the challenges posed by different stages of the life
cycle.

Pricing is a critical element of marketing. Pricing decisions are complex and difficult decisions to
make. Marketers consider many factors while making pricing decisions: the company, the customers,
the competition, and the marketing environment. Pricing policy should be consistent with the firm’s
marketing strategy, target customers and brand positioning. Firms should follow a systematic procedure
in setting pricing policies. Firms should change their prices based on the need, and they must carefully
manage customer perceptions while doing so. They must predict price changes to be initiated by
competitors and prepare appropriate responses.

Placing involves ascertaining the right design and combination of marketing channels and managing
these integrated marketing channels. Most companies do not carry out direct marketing. Between
companies and final customers stand intermediaries or middlemen such as wholesalers and retailers.
Some of the important functions performed by intermediaries are information, promotion, negotiation,
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ordering, financing, risk-taking, physical possession, payment, and the title. While deciding the types of
channels to be used, the marketers analyse customer needs, establish channel objectives, and identify
and evaluate the major alternatives. The advent of E-commerce has grown in importance and many
companies nowadays adopted “brick-and-click” channel systems in addition to their brick and mortar
being in place so as to capitalise on the strengths of online and offline marketing.

Promotion deals with designing and formulating an integrated marketing communication model for the
business in order to communicate with present and potential stakeholders. The marketers integrate mass,
non-personal communications (advertising, sales promotion, events and experiences, and public
relations and publicity); and personal communications (direct and interactive marketing, word-of-mouth
marketing, and personal selling). Today, interactive marketing is growing at a faster pace through the
company’s Websites, search ads, and e-mails.

Promotion
Sales Promotion
Advertising
Sales Force
Public Relations
Direct Marketing

Product
Product variety Place
Quality Channels
Design Coverage
Features Assortments
Marketing Mix Locations
Brand name
Packaging Inventory
Sizes Transport
Services
Warranties
Returns

Price
List Price
Discounts
Allowances
Payment Period
Credit terms

Marketing variables under each P.

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1.11 4As FRAME WORK IN RELATION TO 4Ps OF MARKETING MIX

The authors Jagdish Sheth and Rajendra Sisodia developed 4As Framework that relates to the 4 Ps.
Marketers design the Product which mainly influences Acceptability, the Price which mainly influences
Affordability, the Place which mainly influences Accessibility, and Promotion which mainly influences
Awareness.

Acceptability is the extent to which a firm’s total product offering exceeds customer expectations.
Acceptability is the dominant component of the Framework. Customer acceptability can be enhanced by
boosting the functional aspects of product design, brand image, and positioning.

Affordability is the extent to which customers in the target market are able and willing to pay the
product’s price. It has two dimensions: economic (ability to pay) and psychological (willingness to pay).
Acceptability combined with affordability determines the product’s value proposition.

Accessibility is the extent to which customers are able to readily acquire the product. It has two
dimensions: availability and convenience. Successful marketers develop innovative ways to deliver
both, as a shoe company Bata does online as well as through their retail stores.

Awareness is the extent to which customers are informed regarding the product’s characteristics,
persuaded to try it, and reminded to repurchase. It has two dimensions: brand awareness and product
knowledge.)

1.12 MARKETING STRATEGY

Having now understood the importance of customer-orientation as well as the elements of the marketing
mix, it should be remembered that the marketing strategy involves directing a proper marketing mix
towards a target group of customers or market segment. Marketing strategy of a firm includes deciding
on its Segmentation, Targeting, and Positioning (known as STP). We have already discussed these three
important concepts at length in Unit 3 of this course you may kindly refer the same. However, we will
confine to know in brief at this juncture for better understanding.

Customers are different in terms of their residence, educational qualifications, occupations, incomes,
social class, personality, lifestyle, and their behavioural patterns. Marketers need to understand the
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specific needs of the vast number of customers based on the above variables so as to group them into
segments. For example, not everyone likes to pursue an MBA programme in a conventional university
on a regular mode. A large number would prefer it in distance mode while some want to study in a
virtual university in online mode; and still others like to study Executive MBA from any of the leading
Management Institutes of the country. In fact, each of these groups of potential students constitutes a
different market Segment. After identifying such segments, the marketers need to decide which
segments provide better opportunities. For such ‘Target markets’ firms develop a market offering and
try to ‘Position’ appropriately in the minds of prospective students to create a specific positive image
about the MBA program.

1.13 MARKETING STRATEGY PROCESS

According to David Cravens and Nigel Piercy, the strategy process goes through the following stages:

 strategic situation analysis

 designing marketing strategy

 implementation and managing strategy

Strategic situation analysis

This first stage includes product-market analysis, market segmentation, competition analysis, and
continuous learning about markets. Such analyses guide the choice of marketing strategy. Defining the
market determines the overall competitive arena. Market segmentation identifies possible customer
groups for targeting by the marketers. Competitor analysis leads to the evaluation of the strengths,
weaknesses, and strategies of main competitors. Continuous learning about markets provides
information for analysis and decision making.

Designing marketing strategy

This stage includes market targeting and positioning strategies, building marketing relationships, and
developing and introducing new products. We will try to understand it with the help of an example
discussed below.

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When we think of Fevicol, the two elephants pulling a ball together with a yellow background come
straight to our mind. The company’s marketing strategy travelled from Bollywood leading actress
dancing to the tunes of Fevicol se to the Prime Minister defining Indo - Japan friendship in his speech as
“fevicolse bhi mazboot jod.”

Founded by Balvant Parekh and Sushil Parekh in 1959, Pidilite Industries had successfully taken over
the adhesive industry. How did this journey begin? The Parekh brothers snatched a marketing
opportunity to develop synthetic glue in place of the natural glue which was used way back during the
fifties & sixties. Instead of selling the finished product through stores, they began approaching directly
to carpenters for sale. This daring step got them to build trust and outscore against competitors like
Movicol which was an international adhesive brand.

Pidilite Industries offers a good example of effective marketing strategy with many successful brands
and variants catering to both the domestic and as well as industrial segments. As part of implementing
its brilliant marketing strategy, the company used the print and TV advertising in positioning its brands
creatively with some iconic ads such as Dum Laga ke Haishaa; Moochwali etc.

The positioning strategy indicates how the firm will position itself against its key competitors in
meeting the needs of the buyers in the target market. Specific marketing-mix (marketing programme)
strategies for products, pricing, distribution, and promotion must be developed to implement the
positioning strategy. The objective is to achieve favourable positioning while allocating financial,
human, and production resources to markets, customers, and products as effectively and efficiently as
possible.

Implementing and managing market-driven strategy

These activities focus on the marketing organisational design and marketing strategy implementation
and control. This is the action phase of marketing strategy.

Thus strategic marketing is a market-driven process of strategy development taking into a constantly
changing business environment. The emphasis of strategic management is on organisational
performance rather than a primary concern about increasing sales. Marketing strategy seeks to deliver
superior customer value. Strategic marketing links the organisation with the environment; it views
marketing as a responsibility of the entire business rather than a specialised function.

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1.14 SCOPE OF MARKETING

Do you think that the firms while carrying out their marketing efforts involve in offering only the
physical products such as toothpaste or a detergent powder? In case your answer is ‘yes’ that would be a
narrow view of the ‘offerings’ or ‘entities’ being marketed by them. In fact, organisations offer a wide
range of ‘products’ or entities. They include goods, services, events, experiences, persons, places,
properties, organisations, information, and ideas. Let us have a quick glance at each these entities.

Goods: Physical goods include agricultural commodities, fish, eggs, newspapers, chocolates, laptops,
televisions and furniture.

Services: Services sector is the largest sector in the world and over 63% of the total global wealth
comes from the services sector. This sector accounts for over 53% of India’s GVA. Services include
tourism, travel, hospitality, healthcare, education, banking and insurance.

Events: Marketers promote time-based events ranging from local events (e.g. Hornbill Festival in
Nagaland, and Kerala Boat Festival) to national events (e.g. 150 Years of Celebrating the Mahatma) and
international events (e.g. India International Trade Fair, and the Tokyo Olympics 2021).

Experiences: A firm can market personalised or customised experiences such as Ramoji Film City Star
Experience, Climbing up the Mount Everest, and a weekend with stalwarts of cricket. Personalisation
can be a huge boon for retailers and consumers.

Persons: Many companies are using personal marketing for promoting their brands. Renowned
personalities market themselves as well as different products or services. Cristiano Ronaldo, the
renowned football player endorsing Clear Shampoo and Nike sports shoes; famous film personalities
Aishwarya Rai Bachchan endorsing L’Oreal Shampoo and Salman Khan serving as a brand ambassador
of Pepsi are a few examples. Self-branding became an emerging area.

Places: Nations, regions, states, and cities compete for investments, tourists, and companies. Some of
the place marketers are governments, real estate agents, and investors. Singapore’s New Asia, India’s
Incredible India, and Mumbai’s City of Dreams are a few examples of how branding is done with logo,
slogan and so on.

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Properties: They are either real estate or financial assets which are bought and sold. Godrej Properties
and Oberoi Realty in the real estate sector, and ICICI Direct and HDFC Securities among Demat service
providers are some examples.

Organisations: Museums (e.g. National Museum in New Delhi and Salar Jung Museum in Hyderabad),
non-profit organisations (e.g. HelpAge India and Smile Foundation), performing arts organisations (e.g.
Inspire India Programme by Shankar Mahadevan Academy, Music awards by Sangeet Natak Akademi),
and corporations (e.g. Tata Motors’ corporate brand promise – ‘Connecting Aspirations’) aim for
enhancing their organisational image through systematic marketing efforts.

Information: Google became part of everybody’s life as we depend on its Search for information.
Google’s mission is “to organize the world’s information and make it universally accessible and
useful.” There are many such marketers like publishers, educational institutions, and newspapers which
offer ‘information’ as their product.

Ideas: Social marketers are engaged in idea marketing. This is also known as social marketing. It is an
approach used to develop activities aimed at changing or maintaining people’s behaviour for the benefit
of individuals and society as a whole. Swachh Bharat Abhiyan or Clean India mission is a country-wide
initiative taken by the Government of India in 2014 to eliminate open defecation and improve solid
waste management. The governments and health organisations all over the world tried to convince the
people about wearing face masks appropriately, maintaining physical distance, and washing one’s hands
frequently to combat the Coronavirus is another example.

1.15 MISCONCEPTIONS ABOUT MARKETING

There are many fallacies or misunderstandings about marketing. You need to have clarity about it
before proceeding further.

People are of the opinion that marketing means selling. Interestingly, selling is not the most important
part of marketing or its sole purpose!

Many customers opine that advertising, the most visible part of marketing, a waste of money, thereby
increases the cost of production. In fact, advertising causes building mass consumption which would
ultimately lead to lowering the price of the product.

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There is a misconception that marketing will not happen without middlemen. The truth is that we have
many direct marketing companies now all over the world. For example, in India we have Amway,
AVON Beauty Products, and Eureka Forbes.

There is a perception that marketing means incurring of expenditure; however, the truth is that
marketing enables the firm to generate revenue whereas other departments in the company such as
Finance, Production, and HRM are cost factors.

People also assume that marketing is relevant only to for-profit organisations offering products and
services such as bath soaps, washing machines and insurance policies. Nowadays not-for-profit
organisations (e.g. the World Health Organization, and CRY – Child Rights and You) are equally
effective in following marketing policies.

1.16 SUMMARY

Marketing is a fascinating subject that combines multiple subjects such as economics, psychology,
sociology, and information technology. Marketing involves choosing target markets and getting,
keeping, and growing customers through creating, delivering, and communicating superior customer
value.

Marketers have been involved in marketing different entities: goods, services, events, experiences,
persons, places, properties, organisations, information, and ideas. Further, they operate in four different
marketplaces: consumer, business, global, and non-profit.

Organisations conduct their marketing activity around five competing concepts: the production concept,
the product concept, the selling concept, the marketing concept, and the holistic marketing concept. The
holistic marketing philosophy is based on the development, design, and implementation of marketing
programmes, processes, and activities that provide a broad perspective of four components. They are:
Relationship marketing, Integrated marketing, Internal marketing, and Performance marketing.

The Four Ps of marketing-mix namely Product, Pricing, Placing, and Promotion could be related to Four
As: Acceptability, Affordability, Accessibility, and Awareness. However, a more representative set that
encompasses modern marketing realities is: People, Processes, Programmes, and Performance. Strategic
marketing connects the organisation with the environment. It also considers marketing as a
responsibility of the whole organisation rather than a separate function.

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1.17 KEY WORDS

Acceptability: It is the extent to which a firm's total product offering exceeds customer expectations.

Accessibility: It is the extent to which customers are able to readily acquire the product.

Affordability: It is the extent to which customers in the target market are able and willing to pay the
product's price.

Awareness: It is the extent to which customers are informed regarding the product's characteristics,
persuaded to try it, and reminded to repurchase.

Clients: They are persons or organisations who use services rendered by professional marketers.

Consumer: A person who consumes a product or service.

Customer: A person who purchases something.

Customer satisfaction: It is the difference between the actual performance perceived by a customer and
the expectation of the customer.

Customer value: It is the difference between the total benefits expected from a product or service and
the total costs incurred to obtain the same.

Macro or external environment: It consists of components namely demographic, economic, socio-

cultural, natural, technological, and political-legal environment.

Marketer: A marketer seeks a positive response from the present and prospective customers.

Marketing environment: It consists of the task environment (also known as a firm's micro or internal
environment) and the broad environment (also known as a firm's macro or external environment).

Marketing management: The art and science of choosing target markets and getting, keeping, and
growing customers through creating, delivering, and communicating superior customer value.

Marketing myopia: It is a short-sighted and inward-looking approach that focuses on sales than
consumers' needs.

Marketing strategy: It consists of the analysis, strategy development, and implementation activities in
developing a vision about the market(s), of interest to the organisation, selecting market target
strategies, setting objectives, and developing, implementing, and managing marketing programme
positioning strategies designed to meet the value requirements of the customers in each market target.

Markets: They consist of people with needs to satisfy, money to spend and willingness to spend it.

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Micro or internal environment: It consists of the actors such as the company itself, suppliers of inputs,
distributors, dealers and target customers.

Needs: These are essential requirements for the survival of human beings.

Supply chain management: It involves procurement of inputs such as raw materials, components, and
capital equipment, converting them efficiently into finished products, and delivering them to the final
buyers.

Unsought goods: The customers do not know about or do not normally think of buying these goods.

User: A person who uses something.

1.18 SELF-ASSESSMENT TEST

The following questions are given for self-assessment to find out whether you have understood and
remembered the concepts presented in this unit. You are, therefore, advised to revise the unit quickly
and then, on separate sheets of paper or in a notebook, write your own answers for the following
questions and assess them yourself.

1. Companies are compelled to follow sales orientation because the incentives are based on easily
measurable results. Do you agree? Illustrate your answer with real-life examples.

2. Though it is said that the entire organisation is responsible for its marketing performance, do you
think this is not so in the case of many Indian firms? Discuss based on your experience.

3. Select any company of your choice, and discuss how the four components of holistic marketing
are being pursued at it. Illustrate your answer.

4. Apply marketing myopia concept to (a) movies, and (b) print media. Discuss the implications.

1.19 FURTHER READINGS

Philip Kotler and Kevin Lane Keller (2017). Marketing Management, 15th edition, Pearson, Noida, India.

Philip Kotler, Kevin Lane Keller, Abraham Koshy, and Mithileshwar Jha (2016). Marketing Management: A South Asian
Perspective, 14th edition, Pearson. Noida, India.

Ramaswamy and Namakumari (2018). Marketing Management: Indian Context Global Perspective, Sage Publications, New
Delhi, India.

Tapan K Panda (2012). Marketing Management: Text and Cases: Indian Context, 2nd edition, Excel Books, New Delhi,
India.

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