UNIT-I

Introduction to Marketing:-
What is a market?
A market consists of all the potential customers sharing a particular need or want who
might be willing and able to engage in exchange to satisfy that need or want (Philip
Kotler!
"arketing#$
Philip Kotler marketing as the science and art of exploring% creating% and deli&ering &alue to
satisfy the needs of a target market at a pro't! "arketing identi'es unful'lled needs and
desires! (t de'nes measures and )uanti'es the si*e of the identi'ed market and the pro't
potential! (t pinpoints which segments the company is capable of ser&ing best and it designs and
promotes the appropriate products and ser&ices!
American Marketing Association (AMA) +oard of ,irectors% "arketing is the acti&ity% set of
institutions% and processes for creating% communicating% deli&ering% and exchanging o-erings
that ha&e &alue for customers% clients% partners% and society at large!
Marketing is traditionally the means by which an organi*ation communicates to% connects with%
and engages its target audience to con&ey the &alue of and ultimately sell its products and
ser&ices! .owe&er% since the emergence of digital media% in particular social media and
technology inno&ations% it has increasingly become more about companies building deeper% more
meaningful and lasting relationships with the people that they want to buy their products and
ser&ices! /he e&er$increasingly fragmented world of media complicates marketers0 ability
connect and% at the same% time presents incredible opportunity to forge new territory! Julie
arile
Marketing Management Philosophies
1! Production: consumers will fa&or products that are a&ailable and highly a-ordable
2! Product: consumers fa&or products that o-er the most in )uality% performance% and
inno&ati&e features
3! !elling: consumers will not buy unless an organi*ation undertakes a large$scale selling
and promotional e-ort
4! Marketing: determining the needs and wants of target markets and deli&ering the desired
satisfactions more e-ecti&ely and e5ciently then the competitors
6! !ocietal marketing: generating customer satisfaction and long$run societal well$being
are the keys to both achie&ing the company0s goals and ful'lling its responsibilities
Understanding Marketing Management:-
"arketing is the company function charged with de'ning customer targets and the best way to
satisfy their needs and wants competiti&ely and pro'tably! 7ince consumers and business buyers
face an abundance of suppliers seeking to satisfy their e&ery need% companies cannot sur&i&e
today by simply doing a good 8ob! /hey must do an excellent 8ob if they are to remain in the
increasingly competiti&e global marketplace! 9ecent studies ha&e demonstrated that the key to
pro'table company performance is knowing and satisfying target customers with competiti&ely
superior o-ers! /his process takes place today in an increasingly global% technical and
competiti&e en&ironment
"arketing has its origins in the fact that humans ha&e needs and wants! :eeds and wants create
a state of discomfort in people% which is relie&ed through ac)uiring products to satisfy these
needs and wants! 7ince many products can satisfy a gi&en need% product choice is guided by the
concepts of &alue% cost% and satisfaction! /hese products are obtainable in se&eral ways# self$
production% coercion% begging and exchange! "ost modern societies work on the principle of
exchange% which means that people speciali*e in producing particular products and trade them
for the other things they need! /hey engage in transactions and relationship$building! A market is
a group of people who share a similar need! "arketing encompasses those acti&ities that
represent working with markets and attempting to actuali*e potential exchanges!
"arketing management is the conscious e-ort to achie&e desired exchange outcomes with
target markets! /he marketer;s basic skill lies in in<uencing the le&el% timing% and composition of
demand for a product% ser&ice% organi*ation% place% person% idea or some form of information!
/here are '&e alternati&e philosophies that can guide organi*ations in their e-orts to carry out
their marketing goal(s! /he production concept holds that consumers will fa&or products that are
a-ordable and a&ailable% and therefore management;s ma8or task is to impro&e production and
distribution e5ciency and bring down prices! /he product concept holds that consumers fa&or
)uality products that are reasonably priced% and therefore little promotional e-ort is re)uired!
/he selling concept holds that consumers will not buy enough of the company;s products unless
they are stimulated through a substantial selling and promotion e-ort!
.eading towards more enlightened &iews of the role of marketing% the marketing concept holds
that the main task of the company is to determine the needs% wants% and preferences of a target
group of customers and to deli&er the desired satisfactions! (ts four principles are target market%
customer needs% integrated marketing% and pro'tability! /he marketing concept places primary
focus on the needs and wants of customers who comprise the target market for a particular
product! 9ather than coax customers into purchasing a product they may not 'nd satisfying% the
emphasis is on determining the types of markets to be satis'ed% and creating the product that
achie&es this satisfaction ob8ecti&e! =hoosing target markets and identifying customer needs is
no small task> a marketer must dig beyond a customer0s stated needs! ?nce this is
accomplished% a marketer can o-er for sale the products that will lead to the highest satisfaction!
/his encourages customer retention and pro't% which is best achie&ed when all
areas@departments of a company become customer$focused!
"o&ing beyond the marketing concept% the societal marketing concept holds that the main task
of the company is to generate customer satisfaction and long$run consumer and societal well$
being as the key to satisfying organi*ational goals and responsibilities!
(! (ntroduction $$$ (mportance of "arketing in =ontemporary ?rgani*ations $ with rapid
changes come both challenges and opportunities% marketing allows organi*ations to take
ad&antage of these opportunities
((! "arketing /asks
A! 7cope of "arketing $$ (n&ol&es a broadened Aiew of "arketing $ to types of entities
(goods% ser&ices% and ideas
1! Products are anything o-ered for sale or exchange that satis'es a need or
want!
2! Products can be goods% ser&ices% ideas $$ and also people% places% acti&ities%
organi*ations and information!
+! A +roadened Aiew of "arketing /asks $ ,ecisions "arketers "ake $
1! =onsumer "arkets and +usiness "arkets $ Bach re)uires new tools and
capabilities to better understand and respond to the customer!
2! Clobal "arkets% :onpro't and Co&ernmental "arkets $ +ecoming more
sophisticated in recogni*ing and dealing with marketing challenges and
decisions!
(((! "arketing =oncepts and /ools
A! ,e'ning "arketing
1! "arketing ,e'ned $ a social and managerial process by which indi&iduals and
groups obtain what they need and want through creating% o-ering% and
exchanging products of &alue with others!
+! =ore "arketing =oncepts
1! /arget "arkets and 7egmentation $ B&ery product or ser&ice contains features
which a marketer must translate into bene'ts for a target market! (t is these
bene'ts the consumer percei&es to be a&ailable in a product and directly
impacts the percei&ed ability to meet the consumer need(s or want(s!
2! "arketers and Prospects $ a marketer is someone acti&ely seeking one or
more prospects for an exchange of &alues! A prospect has been identi'ed as
willing and able to engage in the exchange!
3! :eeds% Wants% and ,emands $ to need is to be in a state of felt depri&ation of
some basic satisfaction! Wants are desires for speci'c satis'ers of needs!
,emands are wants for speci'c products that are backed by an ability and
willingness to buy them!
4! Product or o-ering $ Anything o-ered for sale that satis'es a need or want!
Products consist of three primary components# goods% ser&ices and ideas!
/he physical product pro&ides the desired ser&ice or action!
6! Aalue and 7atisfaction $ Aalue is the consumer0s estimate of the product0s
o&erall capacity to satisfy his or her needs determined according to the
lowest possible cost of ac)uisition% ownership and use!
D! Bxchange and /ransactions $ exchange means obtaining a desired product by
o-ering something desirable in return! Ei&e conditions must be satis'ed
(p!11 A transaction is the trade of &alues (in&ol&es se&eral dimensions!
F! 9elationships and :etworks $ 9elationship marketing seeks long$term% win$
win transactions between marketers and key parties (suppliers% customers%
distributors /he ultimate outcome of relationship marketing is a uni)ue
company asset called a marketing network of mutually pro'table business
relationships!
G! "arketing =hannels $ 9eaching the target market is critical! /o do this the
marketer can use two$way communication channels (media$ newspapers
through the (nternet% &ersus more traditional means! /he marketer also
must decide on the distribution channel% trade channels and selling channels
(to e-ect transactions!
H! 7upply chain $ the long channel process that reaches from the raw materials
and components to the 'nal product @ buyers! Percei&ed as a &alue deli&ery
system!
1I! =ompetition $ (ncludes actual and potential ri&al o-erings and substitutes! A
broad &iew of competition assists the marketer to recogni*e the le&els of
competition% based on substitutability# brand% industry% form and generic!
11! "arketing Bn&ironment $ (ncludes the task (immediate actors in the
production% distribution and promotional en&ironments and the broad
en&ironments (demographic% economic% natural% technological% political$legal
and social$cultural!
12! "arketing "ix $ the set of marketing tools the 'rm uses to pursue marketing
ob8ecti&es with the target market! (n&ol&es recognition and use of the four Ps
and the four =s in the short run and the long run!
(A! =ompany ?rientations /oward the "arketplace
A! /he Production =oncept $ Assumes consumers will fa&or those products that are
widely a&ailable and low in cost!
+! /he Product =oncept $ Assumes consumers will fa&or those products that o-er the
best combination of )uality% performance% or inno&ati&e features!
=! /he 7elling =oncept $ Assumes organi*ations must undertake aggressi&e selling and
promotion e-orts to enact exchanges with otherwise passi&e consumers!
,! /he "arketing =oncept J$ Assumes#
1! /he key to achie&ing organi*ational goals consists of being more e-ecti&e
than competitors in integrating marketing acti&ities toward determining and
satisfying the needs and wants of target markets!
2! /arget "arket $ no company can operate in e&ery market and satisfy e&ery
need!
3! =ustomer :eeds $ it0s not enough to 8ust 'nd the market> marketers must
also understand their customer;s needs and wants! /his is not a simple task!
4! (ntegrated "arketing $ all of a company0s departments must work together to
ser&e the customer0s interests! /his begins among the &arious marketing
functions and carries out into other departments!
6! Pro'tability $ the ultimate purpose of marketing is to help organi*ations
achie&e pro'tability goals!
D! .urdles to Adopting a "arketing =oncept
a ?rgani*ed 9esistance $ some departments see marketing as a threat to
their power in the organi*ation
b 7low Kearning $ despite e-orts by management% learning comes slow
c East Eorgetting $ there is a strong tendency to forget marketing
principles
F! Pro'tability
B! /he 7ocietal "arketing =oncept
1! 7ocietal "arketing =oncept $ the organi*ation0s task is to determine the
needs% wants% and interests of target markets and to deli&er the desired
satisfactions more e-ecti&ely and e5ciently than competitors in a way that
preser&es or enhances the consumer0s and the society0s well$being!
A! .ow +usiness and "arketing are =hanging
A! =ompany 9esponses and Ad8ustments $ the focus here is on reengineering the 'rm%
outsourcing goods and ser&ices% e$commerce% benchmarking% alliances
(networking% partner$suppliers% market$centered (&ersus product centered% local
and global marketing (&ersus only local% and decentrali*ation to encourage
inno&ati&e thinking and marketing!
+! "arketer 9esponses and Ad8ustments $ Eocus on relationship marketing (&ersus
transactional marketing% creation of customer lifetime &alue orientation% focus on
customer share marketing &ersus only market share% target marketing (&ersus mass
marketing% indi&iduali*ation of marketing messages and o-erings% customer
databases for data$mining% integrated marketing communications for consistent
images% consideration of channel members as partners% recognition of e&ery
employee as a marketer% and model and fact$based decision making &ersus intuition
alone!
"e#eloping Marketing !trategies and Plans:-
A strategy is a theory about how to gain competiti&e ad&antages! A good strategy is a strategy
that actually generates such ad&antages$
7trategic management is the process of specifying organi*ations ob8ecti&es% de&eloping policies
and plans to achie&e these ob8ecti&es% and allocating resources so as to implement the plans!
B-ecti&e marketing starts with a considered% well$informed marketing strategy! A good
marketing strategy helps you de'ne your &ision% mission and business goals% and
outlines the steps you need to take to achie&e these goals!
Lour marketing strategy a-ects the way you run your entire business% so it should be
planned and de&eloped in consultation with your team! (t is a wide$reaching and
comprehensi&e strategic planning tool that#
describes your business and its products and ser&ices
explains the position and role of your products and ser&ices in the market
pro'les your customers and your competition
identi'es the marketing tactics you will use
Allows you to build a marketing plan and measure its e-ecti&eness!
A marketing strategy sets the o&erall direction and goals for your marketing% and is
therefore di-erent from a marketing plan% which outlines the speci'c actions you will
take to implement your marketing strategy! Lour marketing strategy could be de&eloped
for the next few years% while your marketing plan usually describes tactics to be
achie&ed in the current year!

Operational Goals/Plans Lower Management
7trategic Coals and Plans
Where the organi*ation wants to be in the future
Pertain to the organi*ation as a whole
7trategic Plans
Action 7teps used to attain strategic goals
+lueprint that de'nes the organi*ational acti&ities and resource allocations
/ends to be long term
Ke&els of a "arketing Plan
7trategic /actical
/arget marketing decisions Product features 7er&ice
Aalue proposition Promotion
Analysis of marketing
opportunities
"erchandising
Pricing
7ales channels
7er&ice
"e#eloping Marketing !trategies and Plans
Part %: Marketing &alue and 'ustomer &alue
1 /he &alue deli&ery process
2 /he &alue chain
3 =ore competencies
4 A holistic marketing orientation and customer &alue
6 /he central role of strategic planning
Part (: 'orporate and "i#ision !trategic Planning
1 ,e'ning the corporate mission
2 ,e'ning the business
3 Assessing growth opportunities
4 ?rgani*ation and organi*ational culture
"e#eloping Marketing !trategies and Plan
Part ): usiness Unit !trategic Planning
1 /he business "ission
2 7W?/ analysis
3 Coal Eormulation
4 7trategic Eormulation
6 Program Eormulation and (mplementation
D Eeedback and =ontrol
'ompan* +rientations to the Marketplace

What philosophy should guide a company marketing and selling e-orts? What
relati&e weights should be gi&en to the interests of the organi*ation% the customers% and
society? /hese interest often clash% howe&er% an organi*ation0s marketing and selling
acti&ities should be carried out under a well$thought$out philosophy of e5ciency%
e-ecti&eness% and socially responsibility!

Ei&e orientations (philosophical concepts to the marketplace ha&e guided and
continue to guide organi*ational acti&ities#

1! /he Production =oncept
2! /he Product =oncept
3! /he 7elling =oncept
4! /he "arketing =oncept
6! /he 7ocietal "arketing =oncept
/he Production =oncept! /his concept is the oldest of the concepts in business! (t holds
that consumers will prefer products that are widely a&ailable and inexpensi&e! "anagers
focusing on this concept concentrate on achie&ing high production e5ciency% low costs%
and mass distribution! /hey assume that consumers are primarily interested in product
a&ailability and low prices! /his orientation makes sense in de&eloping countries% where
consumers are more interested in obtaining the product than in its features!

/he Product =oncept$ /his orientation holds that consumers will fa&or those products
that o-er the most )uality% performance% or inno&ati&e features! "anagers focusing on
this concept concentrate on making superior products and impro&ing them o&er time!
/hey assume that buyers admire well$made products and can appraise )uality and
performance! .owe&er% these managers are sometimes caught up in a lo&e a-air with
their product and do not reali*e what the market needs! "anagement might commit the
better$mousetrap fallacy% belie&ing that a better mousetrap will lead people to beat a
path to its door!

/he 7elling =oncept! /his is another common business orientation! (t holds that
consumers and businesses% if left alone% will ordinarily not buy enough of the selling
company0s products! /he organi*ation must% therefore% undertake an aggressi&e selling
and promotion e-ort! /his concept assumes that consumers typically shoHw buyiGng
inertia or resistance and must be coaxed into buying! (t also assumes that the company
has a whole battery of e-ecti&e selling and promotional tools to stimulate more buying!
"ost 'rms practice the selling concept when they ha&e o&ercapacity! Their aim is
to sell what they make rather than make what the market wants.

/he "arketing =oncept! /his is a business philosophy that challenges the abo&e three
business orientations! (ts central tenets crystalli*ed in the 1H6Is! (t holds that the key
to achie&ing its organi*ational goals (goals of the selling company consists of the
company being more e-ecti&e than competitors in creating% deli&ering% and
communicating customer &alue to its selected target customers! /he marketing concept
rests on four pillars# target market% customer needs% integrated marketing and
pro'tability!

/he 7ocietal "arketing =oncept! /his concept holds that the organi*ation0s task is to
determine the needs% wants% and interests of target markets and to deli&er the desired
satisfactions more e-ecti&ely and e5ciently than competitors (this is the original
"arketing concept! Additionally% it holds that this all must be done in a way that
preser&es or enhances the consumer0s and the society0s well$being! /his orientation
arose as some )uestioned whether the "arketing =oncept is an appropriate philosophy
in an age of en&ironmental deterioration% resource shortages% explosi&e population
growth% world hunger and po&erty% and neglected social ser&ices!
Kimitations of "arketing =oncept#$
%$ 7ometimes critici*ed for high cost of certain products
($ Kack of skilled sales sta-
)$ (ne5cient management and operations
,$ "alpractices and other issues
-$ "arketing research
Marketing orientation and .usiness Per/ormance
Cathering the information and scanning the en&ironment
Marketing In/ormation !*stem (MI!)
A marketing information system consists of people% e)uipment% and procedures to
gather% sort% analy*e% e&aluate% and distribute needed% timely% and accurate information
to marketing decision makers
In/ormation Needs Pro.es
What decisions do you regularly make?
What information do you need to make these decisions?
What information do you regularly get?
What special studies do you periodically re)uest?
What information would you want that you are not getting now?
What are the four most helpful impro&ements that could be made in the present
marketing information system?
(nternal 9ecords and "arketing (ntelligence
?rder$to$Payment =ycle 7ales (nformation 7ystem
,atabases "arketing (ntelligence
7ystem
7teps to (mpro&e "arketing (ntelligence
1! /rain sales force to scan for new de&elopments
2! "oti&ate channel members to share intelligence
3! 7trengthen :etwork externally
4! Mtili*e a customer ad&isory panel
6! Mtili*e go&ernment data resources
D! Purchase information
F! =ollect customer feedback online
7ources of =ompetiti&e (nformation
(ndependent customer goods and ser&ice re&iew forums
,istributor or sales agent feedback sites
=ombination sites o-ering customer re&iews and expert opinions
=ustomer complaint sites
Public blogs