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Chapter One
Overview of Marketing and Marketing Management
Marketing and Its Core Concepts
Marketing refers to any actions a company takes to attract audience to the company's product
through high-quality messaging. Marketing aims to deliver standalone value for prospects and
consumers through content, with the long-term goal of demonstrating product value,
strengthening brand loyalty, and ultimately increasing sales. It is activity of meeting customers’
needs and wants profitably. It is the economic process by which goods and services are
exchanged between the producer/seller and the customers via getting people interested in company's
product and their values determined in terms of money prices. This happens through market
research, analysis, and understanding your ideal customer's interests. The purpose of marketing is to
research and analyse consumers all the time, conduct focus groups, send out surveys, study
shopping habits, and ask underlying questions: "Where, when, and how does our consumer want
to communicate with our business?"
Marketing pertains to all aspects of a business, including product development, distribution methods,
sales, and advertising. All of us engage in marketing in one or another way
 When we are searching job we are marketing ourselves.
 When we are trying to convince customers to buy our products and services, we are
marketing.
Marketing is a viewpoint, which looks at the entire business process as highly integrated effort to
discover, create, arouse and satisfy consumer needs. Many people think that marketing and
selling mean the same thing. Others think that marketing is the same as selling and advertising,
still others have a notion that marketing has got something to do with making products available
in the stores, arranging displays and maintaining inventories of products for future sales.
Actually marketing includes all these activities and many more. Marketing is a key function of
management. It brings success to business organization. A business organization performs two
key functions producing goods and services and making them available to potential customers
for use. An organization business success largely depends on how efficiently the products are
delivered to customers and how differently do the customers perceive the difference in delivery
in comparison to the competitors. This is true of all firms.
Modern marketing began in the 1950s when people started to use more than just print media to
endorse a product. As TV and soon, the internet entered households, marketers could conduct
entire campaigns across multiple platforms. Over the last 70 years, marketers have become
increasingly important to fine-tuning how business sells products to consumers to optimize
success. In fact, the fundamental purpose of marketing is to attract consumers to your brand
through persuasive messaging and maximum satisfaction that results profit.
Defining Marketing
Business in general relies on marketing tools to attract and satisfy customers, so too does the
business of social change. No business relies solely on marketing i.e., finance, production,
transport and warehousing, etc., are essential. But without marketing no company could survive.
No matter how good a product is, if consumers are not made aware of how it could meet their
needs, and if it is not readily available and affordable, the company will fail. In short, marketing
is necessary, but not sufficient factor for success. Therefore, central idea of marketing is

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matching between company’s capabilities and the want of customers in order to achieve the
objectives of both parties.

So what is marketing?
There are different definitions of marketing that have been forwarded by different authors,
scholars and institutions. To mention few:-
 Marketing is management process through which goods and services move from concept to
the customers via designing, which is the process of defining all aspects and features of
product characteristics to meet customers demand. According to this definition, marketing
includes the coordination of four elements called the 4P's of marketing which is
identification, selection and development of a product, determination of its price, selection of
distribution channel to reach the customer's place, and development and implementation of a
promotional strategy.
 American Marketing Association’s (AMA) definition is very broad and a state 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.
 “Marketing is the process by which companies create customer interest in products or
services. It generates the strategy that underlies sales techniques, business communication,
and business development. It is an integrated process through which companies build strong
customer relationships and create value for their customers and for themselves.”
 Marketing is the social and managerial process by which individuals and groups obtain what
they need and want through creating, offering and exchanging products and/or services of
value with others.” — Philip Kotler
 Marketing is any contact that your business has with anyone who isn’t a part
of your business. It is also the truth made fascinating, the art of getting people to change their
minds, opportunity for you to earn profits with your business, chance to cooperate with
other businesses in your community or your industry and process of building lasting
relationships.” Jay Conrad Levinson
 Marketing is the process of planning and executing the conception, pricing, promotion, and
distribution of ideas, goods, and services to create exchanges that satisfy individual and
organizational goals
 Marketing is management process responsible for identifying, anticipating and satisfying
customer requirements profitably.” The Chartered Institute of Marketing
In general, all marketing definitions focus on:
 Identifying customer needs and wants
 Translating customers’ needs to product and/or service to satisfying them
 Communicating effectively and efficiently
 Offering that in the way promised or as designed based on customers’ need analysis
For many people, ‘marketing’ is simply the tactics used by companies to sell their products and
services; that is, the first half of previous definition ‘the process of planning and executing the
conception, pricing, promotion, and distribution of ideas, goods and services’. However, the
second half of this definition – ‘to create exchanges that satisfy individual and organizational
goals’ – is the essence of marketing and the basis for what has been called the ‘ marketing
concept’ or ‘marketing philosophy’ approach to doing business. The key words here refer to
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‘satisfying exchanges’ – for both the buyer (the benefits derived from the product or service
meet the customer’s needs) and the seller (at a price that meets costs and returns a profit)
Core concepts of Marketing
Marketing has been defined in various ways. The definition that serves our purpose best is that,
“Marketing is a Social and Managerial process by which individuals and groups obtain what they
need and want through creating, offering, and exchanging products of value with others”. This
definition of marketing rests on the following core concepts: needs, wants, and demands;
products (goods, services, and ideas); value, cost and satisfaction, exchange and transactions;
markets, and marketers.
 Needs – The most basic concept underlying marketing is that of human needs. Marketing
starts with human needs and wants. A human need is a state of felt deprivation of some
basic satisfaction; people require food, clothing, shelter, safety, belonging, and esteem.
These needs are not created by society or by marketers. They exist in the very texture of
human biology and the human condition.
 Wants – Wants are desires for specific satisfiers of needs. Wants are shaped by society,
culture and individual personality. In different society, wants can be satisfied in different
ways. For e.g. an Ethiopian needs food and wants "Injera" & "wet", and an American
needs food and wants “hamburger”. Although people's needs are few, their wants are
many. Human wants are continually shaped and reshaped by social forces and institutions,
including churches, schools, families, and business corporations.
 Demands – are human wants for specific products that are backed by an ability and
willingness to buy them. Wants become demands when supported by purchasing power.
Many people want to have personal computer; only a few are able and willing to buy.
Companies must therefore measure not only how many would want a product but more
importantly would actually be willing and able to buy it.
 Product (Goods, Services, and Ideas): People satisfy their needs and wants with products.
A product is anything that can be offered to satisfy a need or want. It can be physical
goods, services, ideas or a combination of physical product along with services. For
example, a computer manufacturer is supplying goods (computer, monitor, and printer),
services (delivery, installation, training, maintenance and repair) and an idea
(computational power).
 Value and satisfaction: Consumers usually face broad array of products that might satisfy
a given need. Hence, consumers make buying choices based on their perceptions of the
value that various products deliver. Customer value is the difference between the value of
customer gains from owning and using a product and the costs of obtaining the product.
Customer Satisfaction depends on product’s perceived performance in delivering value
relative to buyer expectations. If a product's performance falls short of the customer's
expectations, the buyer is dissatisfied. If performance matches expectations, the buyer is
satisfied. If performance exceeds expectations, the buyer is delighted. Outstanding
marketing companies do out of their way to keep their customers satisfied because
satisfied customers make repeat purchases, and they tell others about their experience
which obviously provides the firm with competitive advantage (good word of mouth
communication), otherwise, if they are not satisfied, customers will not only be refrained
from buying a company’s products but also they are likely to talk negatively about the
firm to the very prospective customers who may possibly purchase the company’s
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products (bad word of mouth communication). Some companies even aim to delight
customers by promising only what they can deliver, then delivering more than they
promised.
 Exchange: Earlier when we defined marketing we said that it involves exchange of
products from one party to the other party to satisfy need. Hence, we can say that
marketing occurs when people decide to satisfy needs and wants through exchange.
Exchange is the act of obtaining a desired product from someone by offering something in
return. It is only one of the ways that people can obtain what they need. A person may get
what he needs by begging others, hunting, robbing etc. As a means of satisfying needs,
exchange has much in its favor. People do not have to prey on others or depend on
donations, nor do they must possess every necessity for themselves. They can concentrate
on making things that they are good at making and trading them for needed items made by
others. Thus, exchange allows a society to produce much more than it would with any
alternative system. Exchange must be seen as a process rather than as event. Two parties
are engaged in exchange if they are negotiating and moving toward an agreement. When
an agreement is reached, we say that a transaction takes place. A transaction consists of a
trade-off values between two parties. In conjunction to exchange, the marketer should be
able to offer something (product) valuable to the customer so that they will be initiated to
make the exchange. Generally transaction marketing is a means by which the so-called
marketer and prospect (customer) exchange values to each other, hence with this
relationship in between the marketer and the customer is to be created. Here, the
relationship might turn out to be for short-term transaction (relationship that lasts with the
completion of the exchange process) or long-term transaction (relationship that continues
after the transaction is completed.). Obviously the relationship that a marketer should
strive to build should be long-term relation with customers by promising and consistently
delivering high quality products, good service, and fair prices then profit will be gained
from customers on long term basis from repeated purchases.
 Markets: The concept of exchange leads to the concept of a market. A market consists of
all the potential and actual customers sharing a particular need or want who might be
willing and able to engage in exchange to satisfy that need or want. Thus the size of the
market depends on the number of people who exhibit the need or want, have resources
that interest others, and are willing and able to offer these resources in exchange for what
they want. Here, unlike the Economics approach that considers market as a collection of
buyers and sellers, we shall consider market as a collection of buyers only and the sellers
are considered as industry.
 Marketer: The concept of markets abounds us to the concept of marketing as marketing
means simply human activity that takes place in relation to markets to make an exchange
of values among individuals. Simply we can say that marketing means working with
markets to actualize potential exchanges for the purpose of satisfying human needs and
wants. If one of the two parties involved is more actively seeking an exchange than the
other party, obviously it should make some efforts to make the other party interested in
the exchange and hence, this party is referred to as marketer. This means marketer is a
party that seeks a resource from the other party and in return willing to offer something
valuable to the other party and the party with whom the marketer needs to make exchange
is known as prospect. In the event that both the parties actively seek an exchange, we say
that both of them are marketers and call the situation as reciprocal marketing.
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Marketing Management Philosophies

Marketing is the concept to know your customers’ needs and wants, providing products which
serve as a solution for customers’ problem. In short, Marketing is meeting needs and wants of
customers at profit. There is always the remaining logic behind each work. In modern world
organizations take care of their customers and maintaining long term relationship. In past
organizations not had similar thinking as it is today. This logic of meeting needs and wants of
customers at profit is said the philosophy of marketing management.
Marketing management philosophy is thinking and perceptions of organization to provide
products which serves as a solution for customers’ problem. It is “Organization mental picture
of marketing”. Marketing management philosophy is the key concept or ideas for the
management of marketing practices. Every company may have different idea regarding
philosophy of marketing. Some companies concentrate on the large scale production while some
concentrate only on the quality of the product etc. Although there are many marketing
management philosophies, the following five are most common concepts: These are
production concept, product concept, selling concept, marketing concept and societal marketing
concept.

1. The Production Concept

The production concept holds that consumers will favor products that are available and highly
affordable. Therefore, management should focus on improving production and distribution
efficiency. This concept is one of the oldest orientations that guide sellers.
The production concept is still a useful philosophy in two types of situations. The first occurs
when the demand for a product exceeds the supply. Here consumers are more interested in
obtaining the product than in its fine points (features), and suppliers taking this advantage will
concentrate on finding ways to increase production and distribution. The second situation occurs
when the product’s cost is too high and has to be decreased to expand the market through by
achieving economies of scale. It uses its lower costs to cut prices and attract more consumers and
hence expand the market size. Although useful in some situations, the production concept can
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lead to marketing their own operations and losing sight of the real objective – satisfying
customer needs and building customer relationships.
2. The Product Concept
The product concept holds that consumers will favour those products that offer the most quality,
performance or innovative best features. Managers in these organizations focus their energy on
making superior products and improving them over time at their best. They assume that buyers
admire well-made products and can appraise product 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.
Product oriented company’s often design their products with little or no customer input. They
trust that their engineers can design exceptional products. Very often they will not even examine
competitor's products. Even, whatever, quality product is produced without considering the
consumers’ needs, there will be no demand for the product in market. Consumers place orders to
purchase a product because there is certain problem with them. The solution to the problem is the
product. The consumers buy the product only when there is a problem and when they wish a
solution from the product. Otherwise, no need of buying the product even if the product is
quality and provides the best performance for some other purpose. This concept leads marketers
to marketing Myopia., mistake of paying more attention to specific products that company offers
than to the benefits and experiences produced by those these products.

3. The Selling Concept

The selling concept assumes that consumers and businesses will not buy enough of the firm’s
products unless it undertakes large-scale selling and promotion effort. This concept is typically
practiced with unsought goods – goods the consumer does not know about or knows about but
does not normally think of buying, such as insurance or blood donations. These industries must
be good at tracking down prospects and selling them on product benefits. Most firms practice the
selling concept when they have overcapacity.
The basis of this thinking is that the customers can be attracted. Keeping in view this concept
these companies concentrate their marketing efforts towards educating and attracting the
customers. In such a case their main thinking is ‘selling what you have’. The selling concept
basically reflects the possibility that customers won’t buy enough of the organization’s products
unless comprehensive promotional as well as selling endeavors are undertaken by it. This
concept offers the idea that by repeated efforts one can sell-anything to the customers. This may
be right for some time, but you cannot do it for a long-time. If you succeed in enticing the
customer once, he cannot be won over every time. On the contrary, he will work for damaging
your reputation. Therefore, it can be asserted that this philosophy offers only a short-term
advantage and is not for long-term gains. Nevertheless, marketing based on hard selling carries
high risks. It assumes that customers who are coaxed into buying a product will like it, and even
if they do not like it, they will not bad-mouth it or complain to consumer organizations and will
forget their disappointment and buy it again. These are indefensible assumptions because one
study showed that dissatisfied customers may bad-mouth the product to 10 or more
acquaintances; bad news travels fast.
4. The Marketing Concept
The marketing concept holds that achieving organizational goals depends on knowing the needs
and wants of target markets and delivering the desired satisfactions better than competitors do.
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The basis of this thinking is that the product should be made which the consumers
want. You should not sell what you can make but you should make what you can sell.
Under the marketing concept, customer focus and value are the paths to sales and profits.
Keeping in mind this idea or concept, the companies direct their marketing efforts to
achieve success. Instead of a product-centered “make and sell” philosophy, the marketing
concept is a customer-centered “sense and respond” philosophy. It views marketing not as
“hunting,” but as “gardening,” The job is not to find the right customers for your product, but to
find the right products for your customers. This marketing concept is a modern concept
and by adopting this concept profit can be earned on both a short or long-term basis.
Marketing concept compared with the Selling concept
Starting Focus Means Ends
Point
Selling Factory Existing Promoting Profit through sales
concept Products and Selling Volume
Marketing Market Customer Integrated Profit through Sales
concept Needs Marketing volume& customer
satisfaction
Selling concept takes an inside-out perspective. It starts with the factory, focuses on the
company’s existing products, and calls for heavy selling and promotion to obtain profitable sales.
It focuses primarily on customer conquest – getting short-term sales with little concern about
who buys or why. In contrast, the marketing concept takes an outside-in perspective.
Marketing concept starts with a well-defined market, focuses on customer needs, and integrates
all the marketing activities that affect customers. In turn, it yields profits by creating lasting
relationships with the right customers based on customer value and satisfaction.

5. The Societal Marketing Concept

The Societal marketing concept questions whether the pure marketing concept overlooks
possible conflicts between consumer short-run wants and consumer long-run welfare. Is a firm
that satisfies the immediate needs and wants of target markets always doing what’s best for
consumers in the long run? A socially responsible company must take into account the long-run
consumer and societal welfare. The drawback of marketing concept is that it ignores the long-run
societal welfare and focuses only on the short-run benefits. For example, a product, which gives
short-run consumer satisfaction, may have adverse effects in the long- run. Cigarette factories
and automobile companies which causes environmental problem are good examples for this. It
has, therefore, been felt that the marketing concept be revised incorporating the long-run societal
welfare. The societal marketing concept holds that marketing strategy should deliver value to
customers in a way that maintains or improves both the consumer’s and the society’s well-being.
This concept balances consumers’ wants satisfaction, company profits and societal/human
welfare productivity. Societal marketing uses companies that act in socially responsible ways in
the achievement of their profit goals (e.g., companies that voluntarily use biodegradable products
in production processes, recyclable packaging, etc.). This was considered an extension of the
original marketing concept from profit through identification and satisfaction of consumer needs,
to profit through identification and satisfaction of consumer needs ‘in a way that preserves or
improves the consumer’s and the society’s Wellbeing.
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In Commercial marketing, Societal Marketing emphasizes on social responsibilities and suggests

that to sustain long-term success, the company should develop a marketing strategy to provide
value to the customers to maintain and improve both the customers and society’s wellbeing
better than the competitors. Societal marketing concept holds that a company should make
good marketing decisions by considering consumer’s wants, the company’s requirements, and
society’s long-term interests. It puts Human welfare on top before profits and satisfying the
wants. Societal marketing concept questions whether the pure marketing concept overlooks
possible conflicts between consumer short-run wants and consumer long-run welfare.
Companies should balance three considerations in setting their marketing strategies: company
profits, the consumer wants, and society’s interests.
1. Consumers (Satisfaction)
Products and services should be satisfying the consumer’s needs.
2. Company (Profits)
Building long-term customer relationships, being socially responsible, and providing
satisfactory products are important for profit-making and wealth maximization .
3. Society (Human Welfare)
Companies must make sure the products, services, actions, investment innovations
servers society first.
Three Considerations of Societal Marketing Concept

6. Holistic Marketing Concept

Holistic Concept is the most recent concept of marketing concept which is based on the
development, design and implementation of marketing programs, processes and activities from a
broad integrated perspective. Holistic marketing is a marketing concept that believes all the

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business components are important in achieving defined objectives and says all components
should work together as one single entity to achieve a common goal. The holistic marketing
concept is based on the holism philosophy, which believes the whole is greater than one, and
which says business is just like our human body which has different parts that works together
like that business functions properly when all parts work together to achieves its objectives. As
per this, all the departments of the organization such as human resources, finance, accounting,
marketing, and others should work together to realize the common goal. This marketing
philosophy has significantly gained its popularity because of the competitive marketplace and
where businesses are eagerly involved in creating brand images.
According to Philip Kotler, holistic marketing concept recognizes the breadth and
interdependencies. It acknowledges that everything matters with marketing and that broad,
integrated, perspective is necessary to attain the best solution. It considers business as a single
unit and not an entity with different elements. It is based on the following five principles:
integration of internal marketing, integrated marketing, relationship marketing , performance
marketing concept and Social Marketing

1) Internal Marketing Principle

Internal marketing is based on the notion that every part of the organization is a marketer. It
mainly involves hiring, training, and motivating staff to serve the customers well. This Principle
holds the idea to satisfy the internal people or employees within the organization, so that they
work for the satisfaction of the customers. The first step to satisfy the customers is to satisfy the
internal people first or to motivate them first. Internal marketing treats employees as important
stakeholders in the company and its success, developing a holistic approach to marketing.
2) Relationship Marketing Principle
This principle refers Relationship marketing is a distinct strategy for creating more meaningful
customer relationships with the goal of ensuring satisfaction with your business and what you
offer, and creating brand loyalty, retention, and a boost in customer lifetime value. It involves the
process of developing true relationship with your customers in such a way that they want to stay
with you. It is thinking long-term about the success of your business and eliminating the sole
focus on individual sales and new customer acquisitions. It emphasizes on creating, maintaining
and developing a long term value laden or value based relationship with the target customers
benefits and costs.
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3) Performance marketing principle

Holistic marketing incorporates performance marketing and understanding the returns to the
business from marketing activities and programs as well as their legal, ethical, social, and
environmental effects. Driving the sales and revenue growth of an organization holistically by
reducing costs and increasing sales. The holistic performance marketing activities include
campaigns, promotions, and targeted direct marketing initiatives.
4) Integrated Marketing Principle
This principle refers to an approach where all the departments of the organization work in a
coordinated manner to support and serve the customers. Any single section cannot serve the
customers without the help of other sections. The customer’s satisfaction is achieved when all
the departments have the common goals and intention to serve the customers. Production and
marketing should work hand in hand toward to growth of the organization. Holistic marketing
recognizes the need for integrated perspective that takes into account all of the marketing pieces.
The main focus of this principle is effective and efficient utilization of all the available resources.
So the organization creates, communicates, and delivers excellent value to customers. Under this
principle, there must be a focus on,
 Development of quality products.
 Effective communication with customers.
 Efficient delivery of products through selecting a proper distribution channel.
5) Societal Marketing Principle
Socially responsible marketing Principle aims to address the needs of society as a whole. This
approach is rooted in the belief that a business is a constituent of society and must contribute to
it. Corporate social responsibility is example of this. The holistic marketing concept is based on
the societal marketing principle calls for socially responsible marketing by taking seriously
ethical, legal, environmental, customer equity, and social concerns of people and society. It calls
for marketers to balance the interests of organizations, customers, and society in performing
activities. It also works towards social welfare by sponsoring social and philanthropic events
Features of a Holistic Marketing
The holistic marketing concept comprises three main features or elements. These features are
1. Common Goal: Holistic marketing focuses on creating a shared goal that all stakeholders
can strive to meet. Everyone involved in the process must understand their part in achieving
a common objective.
2. Aligned Activities: All activities involved in a holistic marketing strategy should be aligned
towards the same goal. This includes things like messages, products, customer segments,
channels, and tactics.
3. Integrated Activities: Holistic marketing focuses on integrating all the activities involved in
a marketing strategy. This means that everything needs to be connected and working
together in harmony towards common goal.

Importance of Marketing
A consumer may pay more for an item just because of marketing, but without marketing he may
not be purchasing the item at all. Marketing has incredible benefits and our economy would
collapse without it. Marketing employ many people; it increases competition, and it leads to
better products. Marketing is an essential part of the capitalist society

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Marketing employs many people, directly and indirectly. Not only does it employ the people
who make advertisements and get the word out there, but it employs many people indirectly.
Advertisements and sponsorships pay for many athletes salaries. Advertisements help pay for
newspaper, television shows, internet websites, and many other items. The sustainability of
people’s jobs is like the food chain, if one small, but important, item is taken out then everything
and everyone is affected. If marketing is to cease its existence many people would lose their jobs,
which in turn causes them to lose their buying power, which causes less items to be sold, which
causes people to be laid off and then the cycle gets worse. A product may be cheaper without
marketing, but few people would be able to buy it because many people would be unemployed.
Marketing is also important as it allows competition. Competition is a crucial part of our
economy, it helps keep prices fair and keep businesses on the cutting edge. Marketing helps
inform the public about different companies’ version of the same basic product. Without
marketing, only the company that is well known will get business, while the other companies
don't stand a chance. Big corporations got where they are today by effectively marketing their
products, without any marketing these businesses never would have expanded so much. The
negative effects of one company dominating the business is that they can set any price and sell
any quality product they chose. If there are people to compete with, the business must keep its
prices low enough and its quality high enough in order to prevent its competition from getting its
customers. Marketing facilitates the competition that is so important to our society. Finally,
marketing is beneficial because it encourages the invention of new products. Creating a new
product is incredibly risky; a lot of time and money go into the project. In order to break even the
inventor must sell a considerable number of his products. Unfortunately, this would be virtually
impossible in a marketing-free society. Advertisements and promotions help get the word out
about a new product. Without marketing very few people would ever hear about the new
product; therefore, very few people would buy it. Getting a new product to sell without any
marketing is too huge of a risk for most business men. This large risk would lead to a stagnation
in the creation of new items and severely limit our ability to compete with other nations.
Marketing is essential to our economy and many problems would be encountered if we chose to
get rid of it. Without marketing there wouldn't be a market to buy and there won't be innovative
products to sell. The lack of money being spent and received will promptly lead to deflation and
a disintegration of society as we know it
Scope of Marketing
Scope of Marketing is seen as the task of creating, promoting & delivering goods & services to
consumers & businesses. Marketers are skilled in stimulating demand for company’s products;
they are responsible for demand management. Marketing managers seek to influent the level,
timing & composition of demand to meet the organization’s objectives. Marketing people are
involved in marketing 10 types of entities;
 Goods and services
 Experiences
 Events
 Persons and Places
 Properties
 Organizations
 Information and Ideas

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The goals of marketing System

Marketing is not a onetime activity it is a continuous process and affects different parties with
different interests such as, customers, suppliers, and the public etc. Most of the time the interest
of these different parties conflict each other. The marketing system generally has four goals.
1. Maximizing choices—marketing system provides varieties. As a result the consumer will
find products that fit to their exact test
2. Maximizing consumption- marketing stimulates maximum demand. Maximum
consumption inter maximize production, employment and wealth.
3. Maximizing Satisfaction-Owning one product gives sense when it maximized
satisfaction to customers. Marketing systems maximize satisfaction by creating and
providing –quality products --variety products etc.
4. Maximizing life quality—the participation of marketing system in environmental
protection maximize the quality of life of consumer. As a result of this the life style
consumers leads to quality of life achieved.

For setting strong goals in marketing

If your team is going to meet its marketing goals, you need to create a clear plan that outlines what you
want to achieve, why it is important, how to achieve it and how to measure success. Here are some tips
when setting marketing goals
 Determine who on the team is responsible for setting goals and tracking progress.
 Make sure your marketing goals match the company's broader strategic goals and Set
measurable goals, so you can determine whether your efforts have been successful.
 Use historical data to set current and future goals.
 Set short-term and small goals, in addition to long-term and major goals, to keep your
team motivated and feeling like they are constantly achieving objectives.
 Set key performance indicators (KPI) so you know which metrics to evaluate. Measure
marketing results weekly, monthly, quarterly and annually so you can track progress,
compare data over time and quickly make adjustments
To achieve this above stated primary marketing goals, marketing use unique approaches. This
basic marketing model is defined as the ADIA (awareness, desire, interest and action) marketing
model:
 Awareness: create awareness to target audience knows your brand and solution.
 Desire: create desire to target audience feels the pain your solution promises to resolve
and wants your solution to relieve that pain.
 Interest: create interest to target audience understands the outcomes they will achieve
only when they hire your solution.
 Action: take action that guarantees target audience follows through on their desire
and hires your solution to achieve the promised outcomes (preferably repeatedly long
term).
Demand and Demand Management
Demand is an economic concept that relates to a consumer's desire to purchase goods and
services and willingness to pay a specific price for them. In economics it may be explained as the
consumers’ willingness and ability to purchase or consume a given item/good. Market prices are
determined via demand and supply. If the demand for a product is more than the supply, the
prices seem to go up. If the supply of the product is more than the demand, the prices go down.
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Generally, the law of demand states that there is inverse or negative relation between demand
and price. That means, if all other factors remain equal, the higher the price of a good, the less
people will demand that good. In other words, the higher the price, the lower the quantity
demanded. As a result, people will naturally avoid buying a product that will force them to forgo
the consumption of something else they value more. Similarly, decrease in the cost or selling price
of a good will lead to an increase in the demanded quantity of the goods. Because of this the
demand curve is a downward-sloping curve. As the price goes up, the demand goes down.
Generally speaking, there is market demand and aggregate demand. Market demand is the total
quantity demanded by all consumers in a market for a given good. Aggregate demand is the
total demand for all goods and services in an economy. The market equilibrium is formed at the
point where the demand and supply curves intersect. The intersection price is the market price of
the product. Factors affecting demand and supply are ever-changing. Thus, the state of
equilibrium does not exist in real life, and the demand and supply keep changing

Demand nature with types of product

A. Substitute Goods
The cross elasticity of demand for substitute goods is always positive because the demand for
one good increases when the price for the substitute good increases. A positive cross elasticity
of demand means that the demand for Good A will increase as the price of Good B goes up.
Goods A and B are good substitutes. People are happy to switch to A if B gets more expensive.
The quantity demanded for tea, a substitute beverage, and increases as consumers switch to a
less expensive yet substitutable alternative if coffee prices increase.
B. Complementary Goods
The cross elasticity of demand for complementary goods is negative. An item closely associated
with that item and necessary for its consumption decreases as the price for one item increases
because the demand for the main good has also dropped. A negative cross elasticity of demand
indicates that the demand for Good A will decrease as the price of B goes up. This suggests that
A and B are complementary goods, such as a printer and printer toner. Demand for the printer
will drop if the price of printer toner goes up. Less toner will also be sold as a result of fewer
printers being sold. The quantity demanded for coffee stir sticks drops as consumers drink less
coffee and purchase fewer sticks because the price of coffee has increased. The numerator
(quantity demanded of stir sticks) is negative and the denominator (the price of coffee) is
positive. This results in a negative cross elasticity
C. Normal Goods
Depending on the values of the income elasticity of demand, goods can be broadly categorized
as inferior and normal goods. Normal goods have positive income elasticity of demand; as
incomes rise, more goods are demanded at each price level.
Normal goods whose income elasticity of demand is between zero and one are typically referred
to as necessity goods, which are products and services that consumers will buy regardless of
changes in their income levels. As income rises, the proportion of total consumer expenditures
on necessity goods typically declines.
D. Inferior Goods
Inferior goods have a negative income elasticity of demand; as consumers' income rises, they
buy fewer inferior goods. Furthermore, luxury goods are a type of normal good associated with
income elasticity’s of demand greater than one. Consumers will buy proportionately more of a

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particular good compared to a percentage change in their income. Consumer discretionary

products such as premium cars, boats, and jewelry represent luxury products that tend to be very
sensitive to changes in consumer income. When a business cycle turns downward, demand
for consumer discretionary goods tends to drop as workers become unemployed.

Demand management
Demand management is the process of managing customer demand. Demand management is
how you oversee and manage customer demand. It involves understanding what your
customers want, plus the necessary steps to fulfill those wants . With demand management,
we use past data and current trends to predict, manage, and plan for customer demand.
Essentially, demand management looks at the logistics of demand—what your customers
want, and how to get it to them. This boosts customer satisfaction, because buyers are
getting what they want before they even have to ask for it. Demand management is
very cross-functional, because you’re bridging the gap between consumer demand, supply
teams, inventory, marketing, and customer service. When you’re managing a business,
planning ahead for demand means you can plan for potential bottlenecks and volatility, so
you’re able to react more quickly and keep the supply chain in motion.
Demand generation is a marketing term that describes the practice of increasing demand for
a product. You can think of demand management as reactive (responding to customer
demand) and demand generation as proactive (creating customer demand).

Steps of the demand management process

The goal of your demand management process is to understand the market and the demand
chain first, and then develop an operational strategy to meet the market where it is. Once
you have your demand strategies, you can create project portfolios and use portfolio
management to execute them. Here are the steps and how the process works:
1. Review past data: Analyse past performance data to see what your customers were
excited about in recent months and years. Look at the wins—what products exceeded
your expectations, and what conditions were in place then? Then review what didn’t
perform as well and look for opportunities to improve those products scrap them
entirely.
2. Analyse the current market: Understand what’s happening right now by reviewing current
market conditions and trends. Look at your competitive advantage (or lack thereof) to see
how you stand up against similar products in the industry. Collect and analyze data on
your competitors, what’s happening in the world at large, and relevant trends so you can
make an informed decision about what to do next.
3. Estimate demand: Use the data you collected in the previous steps to estimate your
upcoming and future customer demand. This is demand forecasting, and it’s how you
can make informed decisions about what to produce, when, and for whom. These
estimations will then form the basis of your strategies.
4. Develop demand strategies: Use your forecasting and data to create a demand strategy
and action plan. This is where you brainstorm ways to use the knowledge you’ve
gathered, and then make a plan to incorporate it into day-to-day operations.
5. Incorporate into business planning:Demand management is meant to assist with the
project and portfolio planning process. It serves as a prioritizing guide, showing you
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what to focus on in your upcoming work. From demand management, you’ll create
initiatives and target outputs that will then impact customers in real-time.
6. Coordinate with supply planning: Once you understand what the demand is for a product,
you then need to plan how to get it. Here, work with your procurement team to see if you
can source the necessary supplies to meet projected demand. Because you’re planning
ahead, you can look for potential challenges or bottlenecks in your supply chain, and
create potential solutions before they become a problem.
7. Optimize your process: Once the demand management lifecycle is completed, start it
again. This time, focus on optimization—how can you better improve your demand
management process so that you have the most effective demand management system for
your business. Your demand management process isn’t static—it should change and
grow with your business needs.

Goals and Objectives of Demand Management

Demand management improves connections between operations and marketing. The result is
tighter coordination of strategy, capacity and customer needs. Demand management covers
multiple areas, including strengthening inventory levels and planning, trade and promotion
planning and customer service. The end goals of demand management are to boost sales growth
and deliver strong profit margins. Business leaders use the process as a central decision support
tool, contributing to strategic initiatives and tactical execution. Successful demand management
teams today are customer-centric — it’s all about the ability to predict and fulfill demand with
the right products, at right time with right condition within right time and at right price. Specific
areas of focus include improved customer service, more accurate forecasting and lower costs.
Specific objectives of customer-centric demand management include:
 Improved customer service: Understanding client needs and behaviors increases customer
satisfaction and improves service.
 Forecasting with greater accuracy: Predictive analytics efforts optimize decisions by
business leaders and improve supply chain management.
 Reduced costs: Improved forecasting optimizes inventory investments and can minimize
safety stock levels.
 Enhance existing products and excel at new product introductions: Create a line of
customer-appropriate new products and refine them based on feedback.
 More efficient planning: Strike the right balance of demand to supply and minimize
surpluses with reliable data.
Demand Management, Demand Planning and Capacity Management
Demand management, like demand planning, aims to keep supplies and demand in balance. The
difference is that demand management looks at consumer demand in the short term, while
demand planning covers more extended timeframes. Demand planning analyzes consumer trend,
historical sales and seasonality data to enhance a company’s ability to meet customer demand in
the most efficient way possible over the long. Demand planning is crucial because it minimizes
excess stock and the associated negative effect on cash flow while improving profits and
flexibility as a business adapts to customer demand.
Demand management identifies potential demand variations. Capacity management is a response
to demand. Capacity management aims to ensure resources are available, so business activities
and production can thrive under any circumstances. In general, demand fluctuates while near-
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term capacity remains constant. Demand management activities generate the information
capacity management teams need to manage the company’s resources — including technology
and equipment, manufacturing, labor and office and warehouse space — to best meet upcoming
needs.
The demand management process functions best as a team effort, with the goal of better
understanding supply issues. In larger firms, a demand manager oversees the process.
Participants should include new product development, sales and marketing and production
schedulers. The most effective way to handle demand management is to deploy integrated,
analytics-driven processes. Successful companies leverage predictive analytics, market
intelligence and best-in-class technologies to achieve revenue growth goals and objectives.
Demand management extends beyond forecasting and incorporates the demand sensing and
demand shaping techniques. Data sharing enables high supply chain visibility (SCV), another
crucial demand management approach. Supply chain visibility alerts schedulers and planners
when order fulfillment issues or low inventory levels threaten the ability to demand.
Benefits of Demand Management
Demand management delivers higher revenue, more control over product availability and the
ability to respond to change without undue disruption. Series of interconnected improvements
result from consistently practicing demand management principles. The followings are
advantages of proper demand management
 Accurate forecasting: The use of demand-sensing, point-of-sale (POS) data and big
data and data analytics hones near-term forecast precision.
 Improved product forecasting: Well-executed demand management assists supply
chain managers with more accurate production forecasting based on reliable data.
 More accurate supply chain scheduling and operations: More precise analysis and
forecasting mean companies can optimize production, shipping and warehouse
operations.
 Easier product delivery and solid foundation: Builds confidence in the sales force
about the company’s ability to deliver products and services; smoother product
introductions. It helps to create a foundation for merchandising, budgeting and
logistics processes.
 Easy monitoring with stronger relationships: It’s simple to review supplier
transactions and see growth or decline, respectively; plus, it provides the ability to
monitor all related expenditures. Hence, Reasonable pricing and targeted offers ensure
that customer connections are built to last
 Sales force confidence: Solid demand management gives sales team members
confidence in the company’s ability to deliver on products and services.
 Organizational agility: The ability to respond and adapt to change in the environment
and within the company helps you better manage when pivoting in challenging times.
 Better labor management: Successfully predicting peaks in demand allows businesses
to plan staffing levels more accurately.
 Enhanced competitive advantage: By successfully anticipating and planning demand
and integrating business processes, companies gain an advantage by eliminating waste
and increasing value in every area of the supply chain.

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Barriers to effective demand management

Challenges in demand management often involve consumer pull. Consumers want more, faster
— many expect instant responses and same-day delivery. Business leaders must adapt to cope
with more frequent peaks and valleys in consumer demand. Most demand management
disadvantages arise when companies lack systems to easily handle the process and/or suffer from
poor or insufficient data, risk-averse or rigid management and siloed teams. Businesses need to
remove a number of barriers or risk derailing the effort. The followings are major
 A lack of proper expertise: Demand management is not easy to master. It involves many
different components and requires people with the right skill sets. Success may require
hiring managers with applicable experience and training as well as new technology to
help simplify the process.
 Distanced customers: You must maintain the balancing act for sales and work with
retailers on demand modeling to pick the right timing, level and location for promotions.
Co-planning with customers particularly with those who make up the bulk of your
business helps mitigate demand volatility.
 Risk-averse or rigid management: Demand management as a methodology sounds like
a business superpower, and it can deliver big advantages. But it requires top-down buy-
in, with executives dedicated to universal adoption and committed to creating scalable,
agile processes supported by the right resources.
 Siloed teams: The company loses time and potential opportunities when it places great
emphasis on demand forecasts and less on collaborative effort. For example, goal and
expectation misalignment between demand-generation departments, such as marketing
and sales, and supply chain departments, such as sourcing, logistics and operations, can
result in duplication of efforts and losing sight of strategic objectives.
 Poor or inadequate demand data: Gathering accurate, up-to-date, trustworthy and
relevant data can be difficult. Many organizations rely solely on historical data to predict
demand, which is “old school” and problematic because market conditions shift
continually. Taking advantage of technology that serves up the most current information
removes the challenge of showing quantifiable demand changes.
 Lack of POS data: POS data is the closest many companies come to accurate, real-time
demand information, so it makes sense to receive, store and use this data in customer co-
planning efforts. It can provide early warning signals of upcoming shifts in demand and
help suppliers and their direct customers keep consumers happy.
 Single-source supply: Manufacturers may still depend on only one supplier for
components or materials. This approach has inherent risk because supplier failure is
likely to mean failure to meet customer demand.
 Fast pace of change: In an accelerating and complex business environment, companies
that want to lead need to improve their forecast accuracy — and be ready to pivot to still
manage demand when a forecast is incorrect

Chapter One: An Overview of Marketing Management

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