01. introduction to marketing (2019)

1
Introduction to
Marketing
Chapter 1
References:
• Principles of Marketing (Philip Kotler)
Resource Person: Furqan-ul-haq Siddiqui

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Contributions in making a business
successful
Strategy
 Dedicated Employees
 Resources
Feasible Environment
Excellent implementation of Strategy
Marketing

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What is Marketing?
 Marketing is telling & selling
 Marketing is advertising & selling
 Marketing deals with customers
 Art of selling product.

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 Marketing is managing profitable
customer relationships.
o The twofold goal of marketing is to attract new
customers by promising superior value and keep and
grow current customers by delivering satisfaction.
o For example, Walmart has become the world’s largest
retailer—and the world’s largest company—by
delivering on its promise, “Save money. Live better.”
o McDonald’s fulfills its “i’m lovin’ it” motto by being
“our customers’ favorite place an way to eat” the
world over, giving it a market share greater than that
of its nearest three competitors combined.

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• Marketing is the process of managing
profitable customer relationship. It seeks to
create & manage profitable customer
relationship by delivering superior value to
them.
• “Marketing is a societal & managerial
process by which individuals and groups
obtain what they need and want through
creating, offering, and freely exchanging
products and services of value with others.”
• Marketing is the process of determining
consumers demand for a product or service,
motivating its sale and distributing it to
ultimate consumer at a profit or minimal
loss.

Peter Drucker “The Father of Modern Management,”
 Goal of all organizations is to gain and retain customers.
Innovation and marketing are the only two ways to
achieve the goal

Costs
About 50% of total
product costs are
marketing costs
Contributions to
Individual Organizations
Critical to the success
of a firm
Careers
About 25 to 33% of
the work force hold
marketing positions.
Contributions to Society
Marketing decisions affect
the lives of individual
consumers and society as
a whole
Why Study
Marketing ?

9
Marketing Mix
(4Ps of Marketing)
Set of marketing
tools used by a
firm to pursue its
marketing objectives
in a target market.
Or
Combination of a
number of policies
to realize profit
through customer
satisfaction.

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Scope of Marketing
What is Marketed?
 Basically 10 types of entities are being marketed.
1. Goods Consumer goods, industrial goods
2. Services Intangible offerings of people or
organizations
3. Experiences Tourism, Recreation,
adventure
4. Events Anniversaries, shows, testimonials
5. Persons Marketing one's self e.g.
celebrities, politicians, artists etc.

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6. Places Cities, states, regions, historical
places, tourism
7. Properties Intangible rights of
ownership either real property (real
estates) or financial property ( stocks &
bonds).
8. Organizations Firms, Universities,
museums.
9. Information News, views like
encyclopedias news papers etc.
10. Ideas New ideas/research about
production, services, advertisement etc.

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 Marketer some one who is seeking a response (attention. A
purchase, a vote, a donation) from another party called
prospect.
 Prospects future potential buyer
 Need, Wants, and Demand
 Need Basic human requirement
 Want Need becomes want when it is directed to
specific object that satisfies need.
 Demand want for specific product backed by
purchasing power.
 Marketing Offer- Some combination of products, services,
information or experience offered to market to satisfy a
need or a want.

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 Value is ratio between what consumer gets & what he gives
(Value = Benefits / Costs or Value= Functional benefits +
Emotional benefits / Monetary costs + Time costs + Energy costs +
Psychic costs)
 Marketers can enhance the value of an offering to the customer
by:
 Raising benefits.
 Reducing costs.
 Raising benefits while lowering costs.
 Raising benefits by more than the increase in costs.
 Lowering benefits by less than the reduction in costs.
 Customer Satisfaction- Its related with how well the
product performance lives up to customers expectation.

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 A person can obtain a product by 4 ways
 Self Produce
 By Force
 Beg
 Exchange ( Core of Marketing)
 Exchange involves obtaining a desired product from someone by
offering something in return.
 5 conditions of exchange
 At least 2 parties
 Each party must have some thing value able to other party
 Parties are capable to communicate & deliver
 Parties are free to accept or reject exchange offers
 Willingness to deal with other party
 Transaction A trade of values between two or more parties,
involves at least two things of value, agreed-upon conditions, a
time of agreement, and a place of agreement.
 Transfer A gives something to B but doesn’t receive anything
tangible in return.

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Simple Marketing System
Producer/Seller Consumer
Communication
Product/Service
Money
Feedback

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 Product, Brand & Generic
 Product Any offering that can
satisfy a need or want ( usually 10
entities which are being marketed)
 Brand An offering from a known
source. (Lux, N95, Sprite, H&S)
 Generic unbranded product, from
unknown source.

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Competition
Competition includes all the actual and potential rival
offerings and substitutes that a buyer might consider.
(combat between individuals, groups, nations, animals, etc. for territory,
resources, products, services etc. It arises whenever two or more parties strive
for a goal which cannot be shared.)
 Usually 4 levels of competition exists
1. Brand Competition- Competition between companies,
offering a similar product and services to same customers
at similar prices.
 Pepsi Cola & Coca cola etc.
2. Industry Competition-Competition between all
companies making the same product or class of products
 Toyota would see itself as competing against all
automobile manufacturers.

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3. Form Competition- Competition between companies
manufacturing products that supply the same service.
 Toyota’s competitors would not only be automobile
manufacturers but also against manufacturers of
motorcycles, bicycles & trucks etc.
4. Generic Competition- Competition between all
companies that compete for the money (Rs.,$ etc) of
costumers.
 Toyota competing with banks, hotels, real estates etc.

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Demand States & Marketing Task
1. Negative Demand consumer dislike
product/firm and may even pay a price to
avoid it. The marketing task is to analyze
why the market dislike product and adopt the
strategy to change the attitude of consumer.
2. No Demand consumer may be unaware or
uninterested In product. The marketing task
is to find ways to connect the benefits of the
product with the person’s natural needs and
interests.
3. Latent Demand Want of consumers exist
but not marketing offer to satisfy need. The
marketing task is to measure the size of
potential market and develop good and
services to satisfy that want.
4. Declining Demand Consumers begin to buy
the product less frequently or not at all.
Marketing task is to reverse declining
demand through creative marketing.

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5. Irregular Demand- Variations in demand
on seasonal, daily or even hourly bases.
The marketing task called
Synchromarketing is to find the ways to
alter the pattern of demand through
flexible pricing, promotion and other
incentives.
6. Full Demand supply= demand. The
marketing task is to maintain the pattern
of demand.
7. Overfull Demand- Demand level is high
as compare to organizational production
capacity. Marketing task is called
demarketing is to find ways to reduce
demand temporarily or permanently.
8. Unwholesome Demand- Consumers
may be attracted to products that have
undesirable social consequences. The
marketing task is to organize activities eg.
Fear messages, price hikes or reduced
availability.

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Universal
Marketing
Functions
Information Buying
Risk Taking Selling
Financing Transporting
Standardizing
and Grading
Storing
Marketing
Functions

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Marketing Management Philosophies
Company Orientations toward the Marketplace
Competing concepts under which organizations conduct
marketing activities.
1. Production Concept holds that consumers will prefer products
that are widely available and inexpensive. Therefore,
management should focus on improving production and
distribution efficiency.
 Focused on high production efficiency, low cost and mass
distribution.
 Useful, if/in
 competition is weak . Demand exceeds supply
 Developing countries, where customers are more interested in
product rather then features.
 generic products competing on price
 Poor quality, no customer satisfaction, narrowly focused market.

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2. The Product Concept holds that consumers will favor products
that offer the most in quality, performance, and innovative
features. Thus, an organization should devote energy to make
continuous product improvements.
• A General Motors executive said years ago: “ How can the public
know what kind of car they want until they see what is
available?”
• but
• A new or improved product will not necessarily be successful
unless the product is priced, distributed, advertised and sold
properly
• Product oriented companies often design products with no or
very little consumer input. They give more importance to
products rather then consumers.
• This concept may lead organization towards myopia (inability to
consider or plan for future)

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3. The Selling Concept holds that consumers will not buy
enough of the firm’s products unless it uses a large-scale
selling and promotion effort. The concept is typically
practiced with unsought goods those that buyers do not
normally think of buying, such as insurance or blood
donations, encyclopedias, fund-raisers, college admissions
offices and by specially political parties etc.
 Coca-cola’s f.VP said “ The purpose of marketing is to
sell more stuff to more people more often for more
money in order to make more profit”.
• Their aim is to sell what they make rather than make what
the market wants
• This concept is also practiced by many political parties.

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4. 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. Under the marketing concept, customer focus and
value are the paths to sales and profits.
• 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 the right products for your customers
• The 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 long-term
customer relationships based on customer value and satisfaction.

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5. The Societal Marketing Concept holds that the organization
should determine the needs, wants, and interests of target
markets. It should then deliver superior value to customers in a
way that maintains or improves the consumer’s and the society’s
well-being.
 It questions whether the pure marketing concept overlooks
possible conflicts between consumer short-run wants and long-
run welfare of consumer and society.
 The fast food industry offers tasty but unhealthy food
with high fats, salts starch. The products are wrapped in
convenient packaging, but this leads to waste and
pollution. Thus, in satisfying short-term consumer
wants, the highly successful fast-food chains may be
harming consumer health and causing environmental
problems

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Marketing Management Philosophies

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6. Holistic Marketing Concept is based on development, design
and implementation of marketing programs, processes and
activities that recognizes their extent and interdependencies. It
holds that “everything matters" in marketing and a broad an
integrated perspective is often necessary.
• Four Components of Holistic marketing
a. Relationship Marketing has aim to build mutually satisfying
long-term relationship with key parties like customers, suppliers,
distributors etc. for making a strong marketing network.
b. Integrated Marketing Activities to create, communicate and
deliver value to customers through diversified set of integrated
activities eg. 4 P’s of Marketing, communication mix, offering
mix etc.

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c. Internal Marketing It ensures that every one in the organization
embraces appropriate marketing functions like sales force,
advertising, customer service, product management, marketing
research, hiring, pricing etc.
d. Performance Marketing requires understanding the financial
and nonfinancial returns to business and society from marketing
activities and programs.

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a. Marketing as an
equal function
b. Marketing as a more
important function
FinanceProduction
Marketing Human
resources
Finance
Human
resources
Marketing
Production

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c. Marketing as the
major function
d. The customer as the
controlling factor
Marketing
Production
Customer

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e. The customer as the controlling
function and marketing as the
integrative function
Customer
Marketing
Production

Updating the Four Ps
 Many years ago, McCarthy classified various marketing activities into
marketing-mix tools of four broad kinds, which he called the four Ps
of marketing.
39

 Given the breadth, complexity, and
richness of marketing, however—as
exemplified by holistic marketing—
clearly these four Ps are not the whole
story anymore. If we update them to
reflect the holistic marketing concept, we
arrive at a more representative set that
encompasses modern marketing realities.
1. People reflects, in part, internal marketing and the
fact that employees are critical to marketing
success. Marketing will only be as good as the
people inside the organization. It also reflects the
fact that marketers must view consumers as
people to understand their lives more broadly, and
not just as shoppers who consume products and
services. 40

2. Processes reflects all the creativity, discipline, and structure brought to
marketing management. Marketers must avoid ad hoc planning and
decision making and ensure that state-of-the-art marketing ideas and
concepts play an appropriate role in all they do, including creating
mutually beneficial long-term relationships and imaginatively
generating insights and breakthrough products, services, and marketing
activities.
3. Programs reflects all the firm’s consumer-directed activities. It
encompasses the old four Ps as well as a range of other marketing
activities that might not fit as neatly into the old view of marketing.
Regardless of whether they are online or offline, traditional or
nontraditional, these activities must be integrated such that their whole
is greater than the sum of their parts and they accomplish multiple
objectives for the firm.
4. Performance to capture the range of possible outcome measures that
have financial and nonfinancial implications (profitability as well as
brand and customer equity) and implications beyond the company itself
(social responsibility, legal, ethical, and the environment). 41

01. introduction to marketing (2019)

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