What is Marketing?

Marketing is an organizational function

and a set of processes for creating,
communicating, and delivering value
to customers and for managing
customer relationships
in ways that benefit the
organization and its stakeholders.
 What is Marketing Management?

Marketing management is the

art and science
of choosing target markets
and getting, keeping, and growing
customers through
creating, delivering, and communicating
superior customer value.
Selling is only the tip of the iceberg

“There will always be a need for

some selling. But the aim of marketing
is to make selling superfluous. The aim
of marketing is to know and understand
the customer so well that the product or
service fits him and sells itself. Ideally,
marketing should result in a customer
who is ready to buy. All that should be
needed is to make the product or
service available.”
Peter Drucker
What is Marketed?
Goods

Services
Events & Experiences

Persons

Places & Properties

Organizations
Information
Ideas
A Simple Marketing System
 Core Marketing Concepts

• Needs, wants, and • Value and

demands satisfaction
• Target markets, • Marketing channels
positioning, • Supply chain
segmentation • Competition
• Offerings and • Marketing
brands environment
 Positioning

Press ads of the

Scorpio focused on
the functional
features of the
vehicle and the
television ads
focused on emotional
benefits.
The marketplace isn’t what it used to be…

Information technology

Globalization
Deregulation

Privatization
Competition
Convergence
Consumer resistance
Retail transformation
 New Consumer Capabilities
• A substantial increase in buying power
• A greater variety of available goods and
services
• A great amount of information about
practically anything
• Greater ease in interacting and placing and
receiving orders
• An ability to compare notes on products and
services
• An amplified voice to influence public opinion
Holistic Marketing Dimensions
The Four P’s
 Marketing Objectives

• Develop market strategies and plans

• Capture marketing insights
• Connect with customers
• Build strong brands
• Shape market offerings
• Deliver value
• Communicate value
• Create long-term growth
 What is Holistic Marketing?

Holistic marketing sees itself as

integrating the value exploration,
value creation, and value delivery
activities with the purpose of building
long-term, mutually satisfying
relationships and coprosperity among
key stakeholders.
 Product Orientation vs. Market Orientation

Company Product Market

Xerox We make copying We improve office
equipment productivity
Columbia We make movies We entertain
Pictures people
Encyclopedia We sell encyclopedias We distribute
Britannica information
Carrier We make air conditioners We provide climate
and furnaces control inside
homes
 Nature of Marketing
Value Creation

Value Communication
Value Delivery

Relationship Oriented

Stakeholder Oriented

Art and Science

Dynamic
Set of Processes
 Nature of Marketing
Identifying Customer Needs

Anticipating Market Changes

Satisfying Customers

Profit Oriented
Specialized Business Function

Social and Managerial

Adapting to Environment

Universal
Importance of Marketing

Importance of Marketing to
the Society

Importance

Importance of Marketing to
the Individual Firms
 Importance of Marketing to the Society
•Marketing is the Connecting Link between the consumer and Producer.

•Marketing helps in Increasing the Standard of Living of People.

•Marketing helps to increase the nation’s income.

•Marketing increases employment opportunities.

•Marketing supports economic development.

•Marketing creates innovations.

•Marketing creates utilities-form, place, time, and possession.

•Marketing stabilizes price levels of products.

•Marketing helps to create awareness about products and services that could
fulfill the needs of the people.
 Importance of Marketing for Firms

•Marketing generates revenue to firms.

•Marketing facilitates management decision-making.

•Marketing facilitates innovations in products and processes

of firms.

•Marketing is the crucial link of firms with outside world.

•Marketing helps firms in keeping pace with the changes

taking place in the markets.
 Product

• A product is anything that can be

offered to a market to satisfy a want or
need, including physical goods,
services, experiences, events, persons,
places, properties, organizations,
information, and ideas.

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 Services

A type of economic activity that is

intangible, is not stored and does
not result in ownership. A service is
consumed at the point of sale.

Ex. Consulting

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 Goods-Services Continuum
• Most product offering is a combination
of goods and services.

• The Goods-Service continuum captures

the main focus of the business and
spans from firms that just produce
products to those that only provide
services.

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• Pure goods industries have become low-margin
commodity businesses, and in order to differentiate, they
are often adding some services. Some examples are
providing help with logistical aspects of stocking items,
maintaining extensive information databases, and
providing consulting advice.
• Core goods providers already provide a significant
service component as part of their businesses. For
example, automobile manufacturers provide extensive
spare parts distribution services to support repair centers
at dealers.
• Core service providers must integrate tangible goods. For
example, your cable television company must provide
cable hookup and repair services and also high-definition
cable boxes.
• Pure services, such as may be offered by a financial
consulting firm, may need little in the way of facilitating
goods
 Approaches to Marketing

Production Product

Selling Marketing

Societal Marketing Relational Marketing

 Production Concept
• This concept is the oldest of the concepts in
business.
• It holds that consumers will prefer products that are
widely available and inexpensive, and highly
affordable.
• Managers focusing on this concept concentrate on
achieving high production efficiency, low costs, and
mass distribution. They assume that consumers are
primarily interested in product availability and low
prices.
• This orientation makes sense in developing
countries, where consumers are more interested in
obtaining the product than in its features. For ex.
Lenovo
• However, although useful in some
situations, the production concept can
lead to marketing myopia.
• Companies adopting this approach run
the risk of focusing to narrowly on their
own operations and losing sight of the
real objective-satisfying customer
needs and building customer
relationships.
 Product Approach
• This orientation holds that consumers will
favor those products that offer the most
quality, performance, or innovative features.
• Managers focusing on this concept
concentrate on making superior products and
improving them over time.
• They assume that buyers admire well-made
products and can appraise quality and
performance.
• This orientation is obsessed with the product-the
quality and features of the product-more than with
customer and his needs.
• While the production concept seeks to win markets
and profits through high volume of production and
low unit cost, the product concept seeks to achieve
the same result through product excellence-
improved products, new products, and ideally
designed and engineered products. It also put
emphasis on quality assurance.
• Firms that subscribe to this concept assume that
consumers would automatically buy high quality
products.
• This approach fails to determine exact customer
needs.
 Selling Concept

• It holds that consumers and businesses, if

left alone, will ordinarily not buy enough of
the selling company’s products. The
organization must, therefore, undertake an
aggressive selling and promotion effort.
• High power personal selling, heavy
advertising, large scale sales promotion and
heavy price discounts are the tools of selling
concept.
 Marketing Concept

• This concept focusses on customer

needs and aim at fulfilling those needs
through firm’s products/offerings.
 Selling vs. Marketing, what is the difference?

Starting Point Focus Means End

The
Selling and Profit through
Selling Production Products sales volume
promotion
Concept

The Profit through

Target Customer Integrated
Marketing customer
market needs marketing satisfaction
Concept
 Marketing Vs Selling

Marketing Selling
• Marketing is a new • Selling is a classical
approach word
• Marketing is customer - • Selling is product-
oriented. oriented
• It include the entire • It includes only the
process of discovery and physical distribution of
satisfaction of consumer goods and services.
needs.
• Views business as a • Views business as a
‘customer satisfying ‘good producing process’
process’
• Consumer • Cost determines
determine the price; price.
price determines
costs.
• Marketing views • Selling views the
the customer as the customer as the last
very beginning. link in the business
• It stresses upon • It stresses upon the
maximization of maximization of
profits through profits through
maximum social maximization of
satisfaction sales
 Societal Approach to Marketing

• Beginning in the early eighties, there

emerged a school of thought that the
marketing concept was becoming
outdated. Academics and practitioner felt
that it really did not go far enough to take into
account dramatic social and cultural changes
that were emerging. Out of this concern
arose the societal marketing concept -- an
extension of the marketing concept that
challenges organizations to conduct their
operations in a socially responsible manner.
• In other words, the core of the societal
marketing concept asks firms to
consider the ethical consequences of
their actions and the collective needs of
society at the same time they work to
identify and satisfy customer needs. Of
course, it goes without saying, that
firms still need to remain profitable.
 What is social marketing?

• Use of marketing principles and

techniques to influence a target
audience to voluntarily accept, reject,
modify, or abandon a behaviour for the
benefit of individuals, groups, or society
as a whole.
Kotler et al., 2002
• The emphasis with the societal marketing
concept is still on profitably satisfying
customer wants and needs. However,
objectives shift just a little bit. The firms
following this approach are also concerned
with protecting societies long-term interests.
Marketing mix is tempered with societal
concern. Firms take a close look at each
element of the marketing mix and ensure
their consistency with the objective of
protecting society's interests.
• The societal marketing concept is an
enlightened marketing concept that
holds that a company should make
good marketing decisions by
considering consumers’ wants, the
company’s requirements, and society’s
long-term interests. It is closely linked
with the principles of corporate social
responsibility and of sustainable
development
• MARKETING CONCEPT: Holds that
achieving organizational goals depends
upon knowing the needs and wants of
target markets and delivering the
desired satisfactions better (more
effectively and efficiently) than do
competitors.
• SOCIETAL MARKETING CONCEPT:
….in a way that maintains or improves
both the consumer’s and the society’s
long-run well-being.
 Relationship Marketing

• With the marketing focus shifting away from

the producer to the consumer, the intangible
aspects such as customer relationship also
emerged as an important concept in
marketing. The term relationship marketing
(RM) was initially proposed by Berry in 1983
who described RM as: “attracting,
maintaining and - in multi-service
organizations - enhancing customer
relationships”
• The Concept of relationship marketing aims
at looking for long term relationships with
customers and rather than following a
unilateral approach looks for networked
relationships with key stakeholders such as
customers, suppliers, and channel partners
for co-creating the value for the advantage of
all the stakeholders.
• Transactional approach of exchange is
criticized in relationship concept and instead
of generating transaction this concept focus
on not only attracting and getting the
customers but also focuses on retaining them
and developing deep understanding of them.
• Main purpose of relationship marketing
is not only ensuring customer
satisfaction but to delight the customer,
retaining the customer and making
customer loyal.
• Further, customers should also have
their share. Relationship depends upon
cooperation, commitment, trust,
communication, shared values, non-
opportunistic behavior and inter-
dependence.
• Relationship marketing as an approach that
looks for attracting, developing, and retaining
customer relationships.
• Relationship marketing identifies with those
activities that are concerned with
establishing, developing, and maintaining
successful relational exchanges.
• Relationship marketing if done effectively
could lead to sustainable advantage over
competitors as it is cheaper to retain a
customer than to get a new one.
 Benefits of Relationship Marketing
• Relationship marketing helps in Customer retention
that offers advantages from a turnover perspective
as well as from a costs perspective.
• Besides maintaining the current turnover level,
retention may favor both cross-selling and an
increase in purchasing frequency.
• Furthermore, the customers become less sensitive to
price and are willing to accept price premiums in
exchange for a reduced risk.
• Long-term relationships also ensure a reduction of
costs by the experience effect: the operational costs
for an old customer are much smaller than those for
a new one.
 Concept of Marketing Myopia

• Marketing myopia is a term which was

first coined by Theodore Levitt in 1960
in Harvard Business Review.
• Marketing Myopia suggests that
businesses will do better in the end if
they concentrate on meeting
customers’ needs rather than on selling
products.
 Definition of Marketing Myopia
• Management gurus define marketing myopia
as a company's short-sighted, temporary or
narrow-minded approach while marketing
their product. Companies need to adapt
themselves to the changing market. When a
firm changes its marketing focus from
customer to its product or the company itself,
it is also called myopia.
• A classic example is Hindustan Motors,
which failed to change with the economy.
• Marketing Myopia is a name given to
the theory that some organizations
ignore the fact that to be successful ,
the wants of the customers must be
their central consideration.
• Marketing Myopic could pave the way
for a business to fail, due to the short-
sighted mindset and illusion that a firm
is in a so-called 'growth industry'. This
belief leads to complacency and a loss
of sight of what customers want.
 Symptoms of Marketing Myopia
• The belief of companies that growth is assured by an
expanding and more affluent population.

• The belief that there is no competitive substitute for

the industry's major product.

• Too much faith of companies in mass production and

in the advantages of rapidly declining unit
• costs as output rises.

• Preoccupation of company with the product that

makes them focus only on product excellence and
reduced cost.
• Belief of the companies that selling is
marketing or giving too much attention
on selling forgetting the other important
elements of exchanges with customers.
 Customer Value
• Customer Value is a function of the
sum total of benefits what customers
get from companies product/ offering
and the price (monetary and non
monetary) what customers pay for that.
• Customer perceived value is the
difference between the prospective
customer’s evaluation of all the benefits
and all the costs of an offering and the
perceived alternatives.
Figure 5.2 Determinants of
Customer Perceived Value

Total customer benefit Total customer cost

Product benefit Monetary cost

Services benefit Time cost

Personal benefit Energy cost

Image benefit Psychological cost

 Steps in a Customer Value Analysis

• Identify major attributes and benefits

that customers value
• Assess the qualitative importance of
different attributes and benefits
• Assess the company’s and competitor’s
performances on the different customer
values against rated importance
• Examine ratings of specific segments
• Monitor customer values over time
 Digitalization in Marketing

• Today in rapidly changing digital business

environment, adopting and utilizing digitalization in
marketing processes has become important.
Marketing in the Digital Age offers an evolutionary,
‘digital’ perspective, beginning with its origins in
customer relationship management to the application
of state-of-the-art digital technologies to analyse
active, real-time, consumer decision making.
• Digital marketing is marketing that
makes use of electronic devices such
as computers, tablets, smartphones,
cellphones, digital billboards, and game
consoles to engage with consumers
and other business partners. Internet
Marketing is a major component of
digital marketing.
• Digital marketing is a marketing process which leads
to the development of any organization or brand by
using a variety of digital channels such as email,
social networks etc.
• Digital Marketing helps in promoting of brands or
products and services using all forms of digital
advertising. Digital marketing uses Television, Radio,
Internet, mobile and any form of digital media to
reach customers in a timely, relevant, personal and
cost-effective manner.
• Digital marketing is now being enlarged in vast areas
to support the "servicing" and "engagement" of
customers.0
Digital Marketing Radar
 Customisation
• Customisation is micromarketing where
products and marketing programs are
tailored to the needs and preferences of
individual customers. It is also called as
individual marketing or one-to-one
marketing.

For ex. Dell creates customer –

configured computers.
• Today, companies are trying customize
their products and offerings. Ex. John
Deere manufactures seeding
equipment that can be configured in
more than two million versions to
individual customer specifications.
• Unlike mass production or marketing
which eliminates the need for human
interaction, customisation has made
relationships with customers more
important than ever.
• As the trend toward more interactive
dialogue and less marketing
monologue continues, marketers will
need to influence the buying process in
new ways. They will need to involve
customers in all phases of the product
development and buying processes,
increasing opportunities for buyers to
practice self-marketing.
 What is Customerization?

Customerization combines operationally

driven mass customization with customized
marketing in a way that empowers
consumers to design the product and service
offering of their choice.

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 United Bank
Ltd. of
Pakistan offers
customized
Galleria credit
cards to its
customers

Copyright © 2009 Dorling Kindersley (India) Pvt. Ltd. 8-69

 Changing Marketing Practices
• Relation Marketing
• Integrated Marketing Communications
• Digitalization
• Customization
• Service component in marketing
• Ethics and social responsibility
• Green Products
• Internal Marketing
• Attractive Packaging
• Leveraging the power of Organized Retailing