Unit 1 Inroduction

Chapter2 | Human Resource Planning | 41
C H A P T E R
Introduction
1
Learning Objectives
After completing this chapter, students will be able to:
Concept of Marketing and Marketing Management;
Customer Value and Satisfaction in Marketing;
Management Orientation Concept in Marketing;
Implementation of Marketing Management Orientation Concepts;
Process of Marketing Management Situation Analysis, Formulation of
Marketing Plan
42 | Foundations of Human Resource Management BBS 2nd Year
Concept of Marketing and Marketing Management

Concept of Marketing
Marketing is the business activities in order to create and promote
Marketing
Marketing is the business consumers demands and to direct the flows of the goods from the
activities in order to producers to the ultimate consumers. It includes various activities
create and promote
consumers demands and such as planning, organizing, distributing, promoting, controlling etc
to direct the flows of the which are related to product, price, place and promotion. All these
goods from the producers
to the ultimate activities of marketing are conducted to providing satisfaction to the
consumers. It includes consumers. In other word, Marketing is the process of determining the
various activities such as
planning, organizing, needs and wants of consumers and being able to deliver products
distributing, promoting, that satisfy those needs and wants. It is the way of getting the right
controlling etc. which are
related to product, price,
products or service in the right quantity to the right place at the right
place and promotion. time generating profit for organisation through integrated marketing
activities.
Marketing includes all of the activities necessary to move a product

from the producer to the consumer. It is a craft of linking the
producers of goods and services with the existing and potential
customers. It is a societal process by which individuals and groups
obtain what they need and want through creating, offering, and
exchanging products and services of value freely with others. Some of
the definitions given by experts related to marketing are given below:
According to American Marketing Association, 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.
According to William J. Stanton, Marketing as a total system of business activities
designed to plan, price, promote and distribute want satisfying goods and services to
the present and potential customers.
The Chartered Institute of Marketing (CIM) says: The management process
responsible for identifying, anticipating and satisfying customer requirements
profitability.
Philip Kotler defines marketing as: Marketing is the social process by which individuals
and groups obtain what they need and want through creating and exchanging products
and value with others.
Dennis Adcock defines marketing as: The right product, in the right place, at the right
time, at the right price.
The above definitions of marketing points out followings ideas on the

nature of marketing;
a) Marketing covers a variety of functions to be carried out in an
integrated manner
b) Marketing is directed to satisfy the needs/desires/wants of the
consumer.
c) Marketing is the act of designing product or services that suits the
customers' desires;
d) Marketing is the method of persuading customers to buy the firm's
offerings
e) Marketing is the process of storing, moving, and displaying goods
after they leave the production site.
Traditional or Narrow View of Marketing:
Traditionally, Marketing is related with the transfer of ownership of

goods and flow of goods from the producers to consumers. It ignores
consumers need and satisfaction. It does not include the after sales
service and total management process. It is limited up to buying and
selling.
According to prof. Pyle Marketing comprises both buying and selling

activities.
In the words of Converse, Huegy and Mitchell Marketing includes

activities involved in the flow of goods and services from production
to consumption
Thus, Traditional view of marketing is based on transferring of

ownership and flow of goods of finished goods from manufacturers to
its end users. The function of marketing begin after the production
and ends after sales of product. It is product oriented and
concentrates on selling. The objective is to maximize profit through
mass selling. It believes that whatever is produced is easily sold by
aggressive promotional activities. It does not take consider of
consumers need, want and their satisfaction. After sales services are
not given importance.
Modern or Broad view of Marketing
Modern concept of marketing is not limited up to sale or

distribution of products. It is related to the functions before production
to after sales services. It is focuses to produce the goods according to
the consumers requirements and offers services to satisfy the
customers. This view of marketing is consumer oriented where
consumers satisfaction is given high priority.
Conception Pre-Production Production After Sales
Product Anticipation of Service

Marketing
Planning & Product Price After
Research
Development Distribution Promotion Sales
Figure 1.1: Function of Marketing before production to after sales services.
In the wordIn the words of W.J. Stanton Marketing is a total

system of business activities designed to plan, price, promote and
distribute want-satisfying goods and services to present and
potential customers
According to The Chartered Institute of Marketing (UK):

Marketing is the management process that identifies, anticipates
and satisfies customer requirements profitable.
The above definition of marketing rightly emphasizes the focus of

marketing on the customer, while at the same time implying a need
to link to other business operations to achieve profitability. Lets
examine its four issues in definition:
Identifying Marketing tries to identify the needs and wants of
target consumers.
Anticipating Marketing tries to develop a product that can
satisfy the consumers need.
Satisfying Marketing provides after sales services and focus
on their satisfaction.
Profitably Modern Marketing thinks mutually beneficial for
both the firm and customers.
Thus, Modern marketing view is total management system which

begin with planning of products and ends with providing consumers
satisfaction.
Cross Reference: Core concept of Marketing

The basic/core concept on which marketing is based on is
explained below
Need, Wants and Demand:
Need: Marketing begins with human needs and wants. Needs are
feelings of deprivation of some satisfaction. A need is the state of mind
that reflects the lack-ness and restlessness situation. Marketing tries to
satisfy needs of consumers. Human needs are the state of felt
deprivation of some basic satisfaction. Note that needs are not created.
They are pre-existed in human being. Needs create physiological
tension that can be released by consuming/using products. Human
needs are of complex in nature. When one need is fulfilled another need
is felt. Human needs may be physical needs like food, shelter and
clothes, Security need such as free from fear, security of job etc., It may
be social needs like giving importance to society, involvement in social
activities, ego needs such as respected post, honour, praise etc.
similarly , it may be self-actualization need such as creativeness,
expectation of challenging task, etc.
WANTS: Wants are desire for satisfies of needs. Expectation of the

things for meeting the need is called want. There are various types of
wants of human being. Such wants are influenced by level of income of
consumers, family, educations, friends, and personality, religious,
cultural and social components. For example, A hungry Nepalese wants
to eat bitten rice, momo, curry and rice etc. whereas A hungry American
wants Hamburger, coke and French Fries etc.
DEMANDS: Wants which are backed by the purchasing power become

demand. The want with willingness and ability to pay is called demand.
If a poor man wants to buy a car, it is not a demand because he cannot
have ability to pay the price of the car even if he has willingness.
Similarly, if rich persons who has ability to pay the price of car but he
might not have willingness to buy a car. So, it is compulsory to be both
willingness and ability to pay the price to be a demand.
Products (Goods, Services and Ideas): A product is anything that

can be offered to satisfy a need or want Or demand of the consumers. It
is a set of tangible and intangible attributes. It is also known as what the
seller sells and what the buyer buys. It can be goods, services, idea,
experiences, event, place, properties, organization and information.
Product mix consists of:
i. Product variety: Product lines
ii. Product Quality: Standardization and grading
iii. Product design: Shape, colour , looks
iv. Product features: Size, style and functions
v. Branding: Name, mark, sign, symbol
vi. Packaging: Container or wrapper
vii. Services: Pre-sales, during sales and after sales services
viii. Warranties: Free repair and maintenance.
Value, Cost and Satisfaction:
Value: Value means the customer's estimate of the product's overall

capacity to satisfy his/her needs. Value to a customer refers to the
difference between the benefits he derives from the services and the
cost of acquiring the products. It is a guiding concept to choose the
product. Every product has varying degree of utility. As per level of
utility, products can be ranked from the most need-satisfying to the
least need-satisfying. Value is the consumers estimate of the products
overall capacity to satisfy his/her needs. Buyer purchases such a
product, which has more utility. Value is, thus, the strength of product to
satisfy a particular need.
Cost: Cost is the price which a customer pays for the products. Cost
means the price of product. It is an economic value of product. The
charges a customer has to pay to avail certain services can be said as
cost. The utility of product is compared with cost that buyer has to pay.
Buyer will select such a product that can offer more utility (value) for
certain price. Buyer tries to maximize value, that is, the utility of
product per rupee.
Satisfaction: Satisfaction means fulfilment of needs. Satisfaction is

possible when buyer perceives that product has more value compared
to the cost paid for. Satisfaction closely concerns with fulfilment of all
the expectations of buyer. Satisfaction releases the tension that has
aroused due to unmet need(s). In short, more utility/value with less cost
results into more satisfaction. Satisfaction is inner felling.
Exchange and Transaction: Exchange is the process of obtaining a

desired product from someone by offering something in return.
Exchange is a process, not event. It implies that people are negotiating
and moving toward the agreement. Obtaining sweet by paying money is
the example an exchange. Exchange is possible when following five
conditions are satisfied:
i. There should be at least two parties

ii. Each party has something that might be of value to the other
party
iii. Each party is capable of communication and delivery
iv. Each party is free to accept or reject the exchange offer
v. Each party believes it is desirable to deal with the other party
Transaction: Agreement, contract, exchange, understanding, or

transfer of cash or property that occurs between two or more parties
and establishes a legal obligation is known as transaction. When an
agreement is reached, it is transaction. Transaction is the decision
arrived or commitment made. For example, Mr X pays Rs. 25000 and
obtains a computer. There are various types of transactions, such as
barter transactions, monetary transactions, commercial transactions,
employment transactions, civic transactions, religious or charity
transactions. Transaction involves following conditions:
i. At least two things of value

ii. Agreed upon conditions
iii. A time of agreement
iv. A place of agreement
v. A law (legal system) of contract to avoid distrust
Relationship and Networks:
Relationship: Relationship marketing refers to the process of building

long-term satisfying relationship with customer, distributors and
suppliers. Marketing practice based on relation building can be said as
relationship marketing. It is the practice of building long-term profitable
or satisfying relations with key parties like customers, suppliers,
distributors, and others in order to retain their long-term preference in
business. Relationship marketing needs trust, commitment, cooperation,
and high degree of understanding.
Network: Network is the ultimate outcome of relationship marketing. A

marketing network consists of the company and its supporting
stakeholders like customers, employees, suppliers, distributors,
advertising agencies, financial institutions, insurance, and others. It is a
permanent setup of relations with stakeholders. A good network of
relationships with key stakeholders results into excelling the marketing
performance over time.
Market, Marketing, Marketer, and Prospect:
In marketing management, frequently used words are markets,

marketing, marketer, and prospects.
Market: A market consists of all potential customers sharing a

particular need or want who might be willing and able to engage in
exchange to satisfy this need or want.
Marketing: Marketing is social and managerial process by which

individuals and groups obtain what they need and want through
creating and exchanging product and value with others.
Marketer: Marketer is one who seeks one or more prospects (buyers) to

engage in an exchange. Here, seller can be marketer as he wants other
to engage in an exchange. Normally, company or business unit can be
said as marketer.
Prospect: Prospect is someone to whom the marketer identifies as

potentially willing and able to engage in the exchange. Generally,
consumer or customer who buys product from a company for satisfying
his needs or wants can be said as the prospect.
Marketing Environment:
The forces, factors, events and conditions which influence the

capabilities of the marketing activities of a business organisation are
known as marketing environment. It is the sum total of all the internal
and external forces surrounding and influencing business organization
development, performance and outcome. These factors or forces are
constantly changing and provide strengths, weakness, opportunities and
threats for marketing etc.
Concept of Marketing Management

Marketing Management is the composed of two terms Marketing and
Management and before explaining its concept lets consider both
terms. (The term marketing is already been discussed previously.)
P. Drucker, well-known management author, believe that marketing is
not merely a function of a business enterprise, but it is the business
and it is synonymous with the whole business unit or a view of the
entire business as the economic organ to provide goods and services.
The primary function of marketing is to create and maintain a
satisfied customer. In simple term, marketing is the business activities
in order to create and promote consumers demands and to direct the
flows of the goods from the producers to the ultimate consumers.
Lets consider about term management. Management is the force
within an organization which integrates and coordinates the activities
of its sub-systems to achieve organization goals. It is the task of
designing and controlling an industrial system.
In this sense, marketing management can be defined as the process
of management of marketing programs for accomplishing
organizational goals and objectives. It involves planning,
implementation and control of marketing programs or campaigns. It
represents all managerial efforts and functions to operate the
marketing concept. Marketing management represents an important
functional area of business management efforts for the flow of goods
and service from producer to the consumer. It looks after the
marketing system of the enterprise.
Marketing management is a process consisting in a continuous
analysis of surroundings and in making appropriate decisions as well
as in controlling their realization. Marketing management is the
process of analyzing, planning, implementing and supervising
programs which drive at creating, rebuilding and maintaining a
profitable exchange with target purchasers, and as a result meeting
organization goals.
Some of the definitions given by experts related to marketing
management are given below:
According to Philip Kotler, Marketing management is the analysis, planning,
implementation and control of programs designed to bring about desired exchanges with
target markets for the purpose of achieving organizational objectives.
In the opinion of Prf. Rustom S. Davar, The term marketing management means the
discovering of the consumers needs, converting them into the products or services and
the activity of transforming the product or service to the ultimate consumer, so that
needs of specific categories or groups of the customers could be so satisfied that by the
most favorable utilization of the resources, they could derive the maximum benefits.
In the opinion of Cundiff and Still, The marketing management is that branch of the
general management which is related to the direction of activities meant for the
achievement of the objects concerned with distribution
According to Kotler and Keller, "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' .
Thus, Marketing management is the organizational discipline which
focuses on the practical application of marketing orientation,
techniques and methods inside the organizations and on the
management of a firm's marketing resources and activities. It has to
plan and develop the product on the basis of known consumer
demand. It has to build up appropriate marketing plan or marketing
mix to fulfil the set goals of the business organization. It has to
formulate sound marketing policies and programs. It looks after their
implementation and control. It has to evaluate the effectiveness of
each part of marketing mix and introduce necessary modifications to
remove inconsistencies in the actual execution of plans, policies,
strategies, procedures and programs.
Customer Value and Satisfaction in Marketing

Customer Value
Customer value is the amount of benefit which customers get from
purchasing products and services. It can also defined as the difference
between the values customers gain from using a product and cost of
product. Customer value is high if the customer gains more benefits
as compared to the cost of product and services and customer value
is low if the customer gain less benefits as compared to products and
services cost. For examples; If Product A costs- Rs. 100 Benefits- 500
units and Product B costs- Rs. 150 Benefits- 750 units The customers
perceived value is more in the case of Product B. It can be expressed
as;
Total Customer Value =Customer Benefits (Economic+
Functional +psychological) Minus Customer Costs (cost of
evaluation +cost of obtaining +cost of using + cost of
disposing)
Where,
i. Customer Benefits = It is the bundle of benefits customer
expect from a given product or service. Total Customer
benefits is the summation of:
Product Value: It is an assessment of the worth of a good or
service. The product value assessed by a business when setting a
price for a particular product can depend on its production costs,
its overall market value and the value of the product as perceived
by a targeted group of consumers. Product value can be gained
from its features, its advantages and its benefits.
Services Value: It is customer value generated by various
support services that offered along with the product. It consists
of;
Before Sales Service: These are the services provided
by manufactures and sellers, prior to purchase of product.
It includes advisory, counselling, information, estimate of
installation, etc.
During Sales Service: These are the services provided
by manufactures or sellers to the buyers while purchasing
the products. It includes installation, delivery, guarantee,
warranty etc.
After Sales Service: These are the services provided by
manufactures or sellers to the buyers after the purchase
of product. It consists of free repair & maintenance,
guarantee, warranty, training etc.
Personnel Value: It is generated by salespersons. Salespersons
are the sales forces who use their professional selling techniques
and expertise to serve and satisfy the consumers. Such expertise,
experience and good behavior help to overcome customer
objection effectively to make a sales. It increase the customer
value as well. It can be gained by applying right process or
methods of personal selling for instance; drawing attention of
customers, reception and ascertaining needs, presentation,
meeting objection, selection of goods and finally seeing off with
praise as well as suggesting for additional sales.
Image Value: It is the brand prestige which enhances the status
and self- esteem of the customer. Image value is generated by
ownership and use of reputed brand which ultimately enhance
personal value.
ii. Customer Costs: It is the bundle of costs customers expect to
incur in evaluating, obtaining, and using the product or service.
Total Customer Cost is the summation of:
Monetary Cost -Time Cost -Energy Cost -Psychic Cost
Monetary Cost: It is the cost of product paid while purchasing. It
is the price for the product or service that customer buys.
Time Cost: It is the cost of time spent for searching, evaluating,
buying and other decision processes related to product or service.
Time cost may be differ according to high involvement and low
involvement. High involvement products have high time cost
compare to low involvement product.
Energy Cost: It is related to the degree of physical effort of the
customer for buying the product and taking it to home or office.
Psychic Cost: It is the cost related to the degree of frustration
and dissatisfaction of the customer with the product. In this
situation, the actual product performance may not match buyer
expectations.
Steps in Customer Value Analysis

Following are the steps in customer value analysis;
1. Identify the major attributes and benefits customers value
Customers are asked what attributes, benefits, and performance
levels they look for in choosing a product and vendors. Attributes
and benefits should be defined broadly to encompass all the
inputs to customers decisions.
2. Assess the quantitative importance of the different
attributes and benefits.
Customers are asked to rate the importance of different attributes
and benefits. If their ratings diverge too much, the marketer
should cluster them into different segments.
3. Assess the companys and competitors performances on
the different customer values against their rated
importance.
Customers describe where they see the companys and
competitors performances on each attribute and benefit.
4. Examine how customers in a specific segment rate the
companys performance against a specific major
competitor on an individual attribute or benefit basis.
If the companys offer exceeds the competitors offer on all
important attributes and benefits, the company can charge a
higher price(thereby earning higher profits), or it can charge the
same price and gain more market share.
5. Monitor customer values over time.
The company must periodically redo its studies of customer values
and competitors standings as the economy, technology, and
features change.
Customer Satisfaction
Customer always build some expectation in their mind about person,
place, product, services and etc. that the customers or buyers going to
buy. Satisfaction is a persons feelings of pleasure or disappointment that
result from comparing a products perceived performance (or outcome)
to expectations Customer satisfaction is an abstract concept and
involves such factors as the quality of the product, the quality of the
service provided, the atmosphere of the location where the product or
service is purchased, and the price of the product or service. In other
words, the extent to which a product's perceived performance matches a
buyer's expectations. Customer might be dissatisfied or satisfied.
If the product's performance falls short of expectations, the buyer is
dissatisfied.
If performance matches or exceeds expectations, the buyer is
satisfied or delighted.
Customer satisfaction depends on a product's perceived performance in
delivering value relative to a buyer's expectation. Smart companies aim
to delight customers by promising only what they can deliver, then
delivering more than they promise. .
Management Orientation Concept in Marketing

The system of The system of thinking and studying for the success of business is called
thinking and studying marketing concepts. It is the philosophy according to which a firm's goals
for the success of
can be best achieved through identification and satisfaction of the
business is called
marketing concepts. customers' stated and unstated needs and wants. The concept of
marketing is found to have developed from along with the development
of business principles and management thoughts. Many concepts of
marketing have been developed from long experiences, studies and
researches and are being applied in actual practice. They are as follows:
g Mark
Sellin eting
ct pt Conc
Produ Conce ept
ce pt
Con
Soc
ie
ction Con tal
Produ c ep
pt Mark t
Conce
eting
Con
cept Holistic
Concept
Figure 1.3 : Various Marketing Concept

The Production Concept
The production A production orientation business dominated the market from the
concept holds that beginning of Capitalism i.e. 1920's. During the era of the Production
consumers will prefer
products that are concept, Business concerned itself primarily with production,
widely available and manufacturing, and efficiency issues. If a product is made, somebody will
inexpensive.
want to buy it. The reason for the predominance of this orientation is
there was a shortage of manufactured goods (relative to demand) during
this period so
goods sold
easily.
The
production
concept holds
that
consumers
will prefer
products that
are widely
available and
inexpensive.
This concept
concentrates
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. Production Concept is based on following assumptions /
Features:
a) This concept places emphasis on mass production and mass selling.
b) This concept believes that high production efficiency can be achieved
through the use of modern technology, standardization and large-
scale production.
c) This concept believes that price of product should be cut down to
attract customers.
d) Arrangement for wide sales and distribution should be made to make
the products available everywhere.
Starting Point Focus Means Ends
Mass Low Price Profit through

Factory Mass Distribution
Production Product Efficiency
Figure 1.4 : The Production Concept
The Product Concept

The product concept The product concept holds that consumers will favour those products that
holds that consumers
will favour those
offer the most
products that offer the quality,
most quality, performance, or
performance, or innovative features.
innovative features. It
concentrates on It concentrates on
making superior making superior
products and products and
improving them over improving them
time.
over time. They
assume that buyers admire well-made products and can appraise quality
and performance which are available at reasonable prices. The marketers
are sometimes caught up in a love affair with their product and do not
realize what the consumers needs. Production Concept is based on
following assumptions / Features:
a) It is quality oriented philosophy that aims to produce quality goods in large
quantity.
b) It emphasizes quality product at reasonable price which need less
effort to sell.
c) It does not care consumers needs, wants or interest.
d) It attracts consumers through quality improvements over time.
Product High Quality Profit through Well-

Factory Innovation
Quality made Products
Performance Guarantee
Figure 1.5 : The Product Concept
The Selling Concept

The selling concept This is another common business
focuses on orientation which was popular
aggressively
promoting and between 1930's to 1950's. The
pushing its products. selling concept focuses on
This concept believes
that the customers can aggressively promoting and
attracted towards pushing its products. This concept
goods or services by
conducting
believes that the customers can
promotional activities
and mass selling.
attracted towards goods or services by conducting promotional activities
and mass selling. It believes that customers do not buy the product until
they are motivated through sales promotional effort. Promotional effort
and activities should be based on good faith, goodwill, business ethics
and marketing principals. It is based on the following assumptions:
a. Confidential, attractive, exciting sensitive promotion activities can
attract customers towards goods or service.
b. The customers do not buy goods or service unless attractive
promotional activities are conducted.
c. It does not care customers need and satisfaction.
d. It is sales oriented philosophy that aims at satisfying the need of
sellers.
Aggressive Selling Profit through High

Factory Products Heavy Promotion Sales Volume
Figure 1.6 : The Selling Concept
The (modern) Marketing Concept

The marketing The marketing concept holds that the organizations task is to determine
concept holds that the the needs, wants, and interests of target markets and to deliver the
organizations task is
to determine the desired
needs, wants, and
interests of target
markets and to deliver
the desired
satisfactions more
effectively and
efficiently than
competitors.
satisfactions more effectively and efficiently than competitors. It believes

that the key to achieve organizational objective is to deliver the goods
more effectively than competitors through integrating marketing
activities to fulfil the needs and wants of the target markets. It is
customer- oriented philosophy that aims at producing what can be sold.
The organizational goals are achieved through customer satisfaction.
The Fundamental Principles/ Features of the Marketing Concept:
a. Customer Orientation: The customer is the one who pays to
consume goods and services produced. The purpose of any business
is to create a customer. It is the customer who determines what a
business is? In modern marketing concept customers are regarded as
king and their satisfaction is given more priority. Customer
orientation is a business strategy that requires management and
employees to focus on the changing wants and needs of its
customers. It is an approach to sales and customer-relations in which
staff focus on helping customers to meet their long-term needs and
wants. Here, management and employees align their individual and
team objectives around satisfying and retaining customers.
b. Integrated Marketing: Integrated marketing is a strategy aimed at
unifying different marketing methods, tactics, channels, media and
activities that best support the desired end result of the defined
marketing activity. All the marketing activities are organizationally
coordinated under the marketing department. The marketing
department is coordinated and cooperated in such way that all the
marketing functions work together and develop team work. Various
marketing functions like research and development, pricing,
promotions, distributions etc. are tightly integrated with one another.
This is essential because every function has a bearing on the
consumers and the aim is to see that all the functions make a
favourable impact on the consumer.
c. Target market: A market which consist homogeneous need of

customers is called target market. It is a specific group of consumers
at which a company aims its products and services. Target customers
are those who are most likely to buy from the firm. Understanding
the target market helps to determine the potential customer base.
Unlike mass marketing, which offers one product to everyone, target
marketing aims a few products at a specific type of customer or
market. Focusing the target marketing takes time and effort, but it
increases the firms income in the long run. An organization can do
better if it can define the boundaries of its operation and follow a
tailored business strategy.
d. Objective Achievement: Objective is a specific result that any firm

aims to achieve within a time frame and with available resources. All
the activities of marketing are directed towards attaining desired
organizational goals or objectives. Business firms may have
objectives of profit maximization, market share maximization, sales
maximization etc. It treats consumer satisfaction as the pathway to
the attainment of goals of the organization. Whereas non-profit firms
may have service motive as their objectives.
In short the marketing concept essentially represents a shift in
orientation integrated marketing and profitability
Customer Integrated Profit through

Target Market
Needs Marketing Customer Satisfaction
Figure 1.7 : Marketing Concept
Cross Reference : Comparison between Marketing and Selling concept

Marketing Concept Selling Concept
Marketing concept is customer oriented Selling concept is product oriented
Selling concept holds on the believe that whatever
Under this concept manufacturer produces goods according to
manufacturer offers is the requirement of the
the requirement of ultimate consumer
customer
Marketing means understanding customer needs and fulfils that Selling involves procuring orders from customers
needs. and delivers the products to them
Consumer plays an important role in product innovation and Under this concept producer plays the entire role.
development Customers are generally neglected.
Marketing is long term process where customer is King Selling is short term profit making activity
After sale service, taking customer feedback, customer
relationship management are the basic components of Selling concepts lacks all these
Marketing
Profits earns through customer satisfaction and from loyal
Profits through sales volume
customer base
Selling is just repetitive activity which lacks
Marketing leads innovation and inventions
innovation and inventions
Societal Marketing Concept

The societal
marketing
concept is about
the balance of
three factors 1)
Customer
demand
satisfaction 2)
Public interest or
social awareness
and 3)
Profitability. This
new concept and
also known as
human or ecological concept. Marketing must be socially responsible.
Marketing should be accountable to society for its actions. The
environmental trends like public welfare, increasing concern for better
ecological or living environment on the earth or higher quality,
enrichment that all organisation would have to adopt socially responsible
market plan and programmes in order to assure social welfare in
additional to customer satisfaction.
Society
(Human Welfare)
Societal
Marketing
Concept
Consumer Company
(Need Satisfaction) (Profit)
Figure 1.8 : The Three Pillars of Societal Concept
This Concept is based on following assumptions / Features:

a. This concept starts from target market.
b. It aims at fulfilling social responsibility by improving environmental
quality, creating employment opportunity supporting social desirable
issues and meeting social need.
c. Profit through proper consideration to the interest of consumers and
society.
d. All organizational activities towards acquiring marketing activities are
integrated through marketing department.
Social Concern for Societal Profit through

Market Needs Ethical Issues Overall Customer and Social
Marketing Welfare
Figure 1.9 : Societal Marketing Concept
Cross Reference: Difference between Selling, marketing and societal concept:

Basis of difference Marketing concept: Societal concept:
1. Objective 1. To maximize consumer satisfaction. 1. To maximize long-term interest and
welfare of consumers and society.
2. Motive of buying 2. Consumes will buy If they are satisfied. 2. Consumers will buy if they are
satisfied with protection of long-term
interest.
3 Competition. 3. Throat-cut competition. 3. Throat-cut competition.
4. Communication 4. Normally two-way. 4. Actively two-way.
with consumers
5. Philosophy of 5. Produce what can be sold. 5. Produce what can sell but with
concept protecting long-term interest of
consumers and society.
6. Type of concept. 6. It is the modern concept. 6. It is the latest concept.
7. Scope of concept 7. Scope is wide. 7. Scope is wider or comprehensive.
8. Principle 8. Find out needs and wants of the target 8. Find out needs and wants of target
market and satisfy them more effectively market and satisfy them in a way
than competitors. that consumers and social interest
and welfare are protected.
9. Beneficiary 9. Probably two-way. Seller and probably 9. Three-way benefits. Consumers,
buyers are benefited. seller, and society are benefited.
10. Maximum profit. 10. Maximum profit with maximum consumer 10. Reasonable profit with protection of
satisfaction. consumers interest and social
welfare.
11. Justice. 11. Somewhat, but no guarantee. 11. There is guarantee for moral justice.
12. Starting point 12. It starts with market or consumers. 12. It stars with consumers and society
13. Approach. 13. It follows integrated approach. 13. It follows Integrated and relationship
approach.
Holistic Marketing Concept

The focus of holistic Holistic marketing concept is a part of the series on concepts of
concept is that marketing and it can be defined as a marketing strategy which considers
everything matters in
marketing. It
the business as a whole and not as an entity with various different parts.
integrates the new The focus of holistic concept is that everything matters in marketing. It
concept with the integrates the new concept with the societal marketing concept. A
societal marketing
concept. A holistic holistic marketing concept is based on the development, design, and
marketing concept is implementation of marketing programs, processes, and activities that
based on the
development, design,
recognize their scope and interdependencies. Holistic marketing
and implementation of recognizes that everything matters with marketing and that an
marketing programs, extensive, integrated perspective is necessary to attain the best
processes, and
activities that
recognize their scope
and
interdependencies.
solution. It includes four main components namely relationship
marketing, integrated marketing, internal marketing, and socially
responsible marketing. Relationship marketing is used to develop lifelong
relations with customers. Integrated marketing is used to meet customer
needs. Internal marketing is used to make all members of the
organization customer-oriented. Social responsibility is practiced to
promote consumer and societal welfare. Performance marketing is
practiced to ensure financial accountability in profit terms.
All Integrated Marketing

Target Marketing Relationship Market
Relationship Market Goal Achievement
Market Matters
Internal Marketing through Marketing
Societal Marketing Think
Performance Marketing
Figure 1.10 : The Holistic Marketing Concept

The holistic mar Holistic Marketing concept has following
features
The means for marketing are:
a. Integrated Marketing: It is practiced to efficiently and effectively

utilize available marketing resources. It includes coordinating all
marketing matters and establishing inter-department relation and
coordination. All the marketing activities, marketing resources and
channels are organizationally coordinated under the marketing
department. The marketing department is coordinated and
cooperated in such way that all the marketing functions work
together and develop team work.
b. Relationship Marketing: Relationship marketing is about forming

long-term relationships with customers, partners and stakeholders of
business rather than trying to encourage a one-time sale. The key
stakeholders are customers, employees, channel members and
financial institutions. It is practiced to develop mutually satisfying
long-term relationships with customers to retain them. Amicable
(good and friendly) relations are developed with all the stakeholders
to retain their business. A network of relationships is built.
c. Internal Marketing: Internal marketing is a process that occurs

within a company or organization whereby the functional process
aligns, motivates, and empowers employees at all management
levels to deliver a satisfying customer experience. Internal marketing
is based on the idea that customers attitudes toward a company are
based on their entire experience with that company, and not just
their experience with the companys products. Any time a customer
interacts with an employee, it affects their overall satisfaction.
Everyone from a lower level worker to the top level manager helps to
shape that customer's experience. Therefore, customer satisfaction is
deeply dependent on the performance of a company's staff. It is
practiced to make all managers and employees customer-oriented.
They are given training to become customer-oriented. Customer
think is promoted organization wide.
d. Societal Marketing: It is practiced to enhance business ethics,

consumer satisfaction and social welfare. Organizational objectives
can be achieved through consumer need satisfaction in ways that
protect the interest of consumers and safeguard the well- being of
society. Societal marketing can be conducted by improving
environmental quality, creating employment opportunities,
supporting social and business ethics etc.
e. Performance Marketing: It requires understanding the financial

and nonfinancial returns to business and society from marketing
activities and programs. It is practiced to ensure financial
accountability in profitability terms. It assesses the value of
marketing efforts. Driving the sales and revenue growth of an
organization holistically by reducing costs and increasing sales
through maintaining quality goods and quality performance. Smart
marketers go beyond sales revenue to examine the marketing record
and interpret what is happening to market share, customer loss rate,
customer satisfaction, product quality, and other measures. They
also consider the legal, ethical, social and environmental effects of
marketing activities and programs. The goals of the organization are
effectively achieved through marketing think.
Marketing Resource
Integrated
Coordination
Marketing
Performance
Channels
Marketing
Financial
Accountability
Quality The Holistic
Relationship
Marketing
Marketing
Concept
Customer
Partners
Societal
Marketing Other Stakeholders
Internal
Ethics Marketing
Consumer Satisfaction Management

Social Welfare Employees
Customer Oriented
Figure 1.11 : The Holistic Marketing

Cross Reference: Comparative Features of Marketing Concepts
Concept Starting Point Focus Means Objectives

Production Concept Factory Production -Mass production. Profit through
(Aims at selling what can be orientation - low price production
produced) -wide availability Efficiency.
Product Concept Factory Product quality -High quality Profit through well-
(Aims at improving the product) orientation - Innovation made product.
-Performance guarantee.
Selling Concept Factory Seller need -Aggressive selling Profit through high
(Aims at satisfying sellers needs) orientation - heavy Promotion sales volume.
Marketing Concept Market Customers needs -Integrated Marketing Profit through

(Aims at satisfying customers orientation customer
needs) satisfaction
Societal Marketing Concept Market Social responsibility -Integrated Marketing Profit through
(Aims at promoting social well- orientation -Protection of social well- customer and
being) being social well-being.
Holistic Concept Target market All marketing - Integrated Market Profit through
(Aims at all matters related to matters -Relationship marketing marketing think.
marketing) -Internal marketing
- Societal marketing
Implementation of Marketing Orientations

Implementation of marketing orientations is the process that turns
marketing strategies and plans into actions in order to accomplish
strategic marketing objectives.
Marketing needed to be brought out of the marketing department and

into a position where it is the concern of all employees and is a top
priority throughout the company. There is general agreement on the
components of market orientation but very little on how to
successfully develop it. Market orientation is the organization wide
generation of market intelligence pertaining to current and future
customer needs, dissemination of the intelligence across departments
and organization wide responsiveness to it. The market driven
organizations have superior market sensing, customer linking and
channel bonding capabilities. Let us now look at the components of
market
Orientation;
1 Market Sensing / Generation of Market Intelligence

In its narrowest sense market sensing involves obtaining
information from customers on their needs. However to be truly
market oriented a company needs to examine any factor that
might affect customers needs in the present or in the future. This
involves monitoring not just expressed customer needs but also
the competitive, technological, political, legal and economic
environments of the customer and company. The information
should be conducted by all functional areas on both a formal and
informal basis. This information should be held in company
memory e.g. via a database and should be easily accessible for
decision making throughout the organisation. In this way the
organisation will be able to anticipate customer needs as well as
satisfy current ones. While companies proclaim an external focus,
the reality is that most organisations are internally focused. Even
those exceptional firms which have an external focus are inclined
to concentrate on current issues - often technical in nature.
2. Dissemination of Intelligence
Unless market information is communicated throughout the
organisation it is of little use in decision making. A market-oriented
company makes information available at the point of contact with
the customer. It can also be achieved via cross-functional team-
working, flatter hierarchies and employee empowerment. This type
of organisational structure enables rapid dissemination of
information throughout the firm. Empirical studies have shown that
interdepartmental connectedness and decentralised decision
making are positively related to market orientation.
3. Market orientation varies with the number of marketing
personnel
One would expect that the more marketing personnel an
organisation employed, the greater the likelihood that firm would
be market oriented.
4. Interdepartmental conflict has a negative effect on
market orientation.
An empirical study found that the less conflict there was between
departments, the greater was the market orientation of the firm.
This finding supports the idea of integrated marketing deemed to
be so important in many marketing texts. Many scholars have put
forward the view that interdepartmental conflict may be
detrimental to the implementation of the marketing concept as it
inhibits communication between functional areas. Information
dissemination is a vital component of market orientation and it is
therefore important for firms to develop a degree of
interdepartmental connectedness to facilitate the dissemination
of and responsiveness to market intelligence.
5. Risk aversion has a negative effect on market orientation.
A market orientation requires response to market intelligence,
which often requires developing strategies for the introduction of
new products or for the use of innovative marketing techniques.
Therefore managers must be willing to take some risks in order to
be successful. Where managers are very risk averse, the market
orientation of the company is likely to be diminished. A positive
relationship was found between risk aversion and the degree of
market orientation.
6. Market oriented companies pursue aggressive growth
strategies.
If market oriented companies have a positive attitude toward
risk, then it is likely that they will also pursue more aggressive
marketing objectives.
7. Market orientation is positively related to superior
business performance.
The marketing literature has long espoused the relationship
between the applications of the marketing concept and superior
business performance. However since there was no real
measure of market orientation until recent years it was
impossible to empirically test this proposition. Firms with a
strong market orientation had higher return on investment than
companies with a weak market orientation. They also found that
strong firms were better at retaining customers and that they
were associated with the highest profitability. Market orientation
was a key determinant of business performance.
8. The role of senior management is critical in fostering a
market orientation.
Customer oriented values and beliefs are uniquely the
responsibility of top management. It asserts that the most
important ingredient of a market orientation is an appropriate
state of mind and that it is attainable only if the board of
directors appreciate the need to develop this marketing state of
mind. The need for top management to communicate the
message by deeds and time invested in marketing activities. If
the words are not consistent with actual behaviour the
organisation soon learns the real priorities of top management
and acts accordingly. Unfortunately many senior managers pay
lip service to marketing and then wonder why their
organisations are not market driven.
Process of Marketing Management

HR Strategy The marketing management concept constitutes one of many
Human resource strategy possible forms of company management. Marketing management is
helps management to
anticipates and manage a process consisting in a continuous analysis of surroundings and in
the rapidly increasing making appropriate decisions as well as in controlling their realization.
changes which links with
corporate strategy of the Marketing management is the process of analysing, planning,
organization. implementing and supervising programmes which drive at creating,
rebuilding and maintaining a profitable exchange with target
purchasers, and as a result meeting organization goals. Marketing
managements effciency is determined by the ability of managing the
processes directed from inside the company towards external
surroundings, as well as the
interfacing processes in a the company. The marketing management
is based on the assumption that the key to meet goals is to define
market needs andrequirements as well as to deliver the desired
products in a more favourable way.
Following are the steps of marketing management process;
Step 1 Situational Analysis
The first step of management process is a thorough analysis of
the situation in which the firm finds itself serves as the basis
for identifying opportunities to satisfy unfulfilled customer
needs. Situation analysis refers to a collection of methods that
managers use to analyze an organization's internal and
external environment to understand the organization's
capabilities, customers, and business environment.
The situational analysis should include past, present, and
future aspects. It should inculded a history outing how the
situation evolved to its present state, and an analysis of trends
in order to forecaste where it is going. Good forecasting can
reduce the chance of spending a year bringing a product to
market only to find that the need no longer exists.
If the situation analysis reveals gaps between what consumers
want and what currently is offered to them, then there may be
opportunities to introduce products to better satisfy those
consumers. Hence, the situational analysis should yield a
summary of problems and opportunities. From this summary,
the firm can match its own capabilities with the opportunities
in order to satisfy customer need better than competition.
There are several frameworks that can be used to add
structure to the situation analysis. Some are as follows;
5 C Analysis : They are used to analyze the five key

areas that are involved in marketing decisions for a
company and includes : Company, Customers,
Competitors, Collaborators, and Climate. The 5 Cs are
a good guideline to make the right decisions, and
construct a well-defined marketing plan and strategy.
PEST Analysis: PEST Analysis is a simple and widely

used tool that helps to analyze the Political, Economic,
Socio-Cultural, and Technological changes in the
business environment. It describes a framework of
macro-environmental factors used in the environmental
scanning component of marketing management.
SWOT Analysis : A study undertaken by an

organization to identify its internal strengths and
weaknesses, as well as its external opportunities and
threats is known as SWOT analysis. It involves the
collection and portrayal of information about internal
and external factors which have, or may have, an
impact on marketing. It is a framework that allows
managers to synthesize insights obtained from an
internal analysis of the companys strengths and
weaknesses with those from an analysis of external
opportunities and threats
Step 2 Formulation of Marketing Plan and Program
Once the best opportunity to satisfy unfullfilled customer
needs is identified, a straegic marketing plan and program for
pursuring the opportunities can be developed. Market research
will provide specific market information that will permit the
firm to select the target market segment and optimally
position the offering with in that segment. The result is value
proposition to the target market. It involves in developing
medium- term and short- term plans. Short term plans or
tactical plans to deal with day to day operational problems
where as medium- terms or strategic plan deals with effective
use of resources. It involves following;
Goal Formulation : Goals are the objectives, aims or

purposes which are to be achieved by an organisation
over varying periods of time. And goal formulation is
the process of developing specific goals for the
planning period. It helps to clarify the scope and
objectives of the marketing plan and program.
Interrelationships between different levels of

strategy: Marketing strategy should be aligned with
corporate and business level strategies. The marketing
program for an individual product must be consistent
with the strategic direction, competitive thrust and
resources allocations decided on at a higher
management level.
Market Opportunity Analysis:A major factor in the

success or failure of a strategy at any level is whether it
fits the realities of the firms external environment.
Thus, the major step is to monitor and analyze the
opportunities and threats posed by factors outside the
organization. It attempts to identify and predict the
impact of broad trends in the economic and social
environment. Customer analysis, segmentation,
targeting and positioning need to be done.
Formulating strategies for specific market

situations: The strategic marketing program for a
particular product/market entry should reflect market
demand and the competitive situation within the target
market. As demand and competitive conditions change
over time, the marketing strategy should be adjusted
accordingly.
Implementation: A final critical determinant of a

strategys success is the firms ability to implement it
effectively. This, in turn, depends on whether the
strategy is consistent with the firms resources,
organisational structure, coordination and control
systems, and skills and experience of its people.
Step 3 Program Implementation
Marketing management process is meaningless unless it is
carred out successfully. The implementation phase is a critical
part of the planning process. Implementation involves defining
tasks to be accomplished, assigning individual responsibilities
for those tasks, and managing individuals to ensure that the
tasks are approproately completed. It is the way of converting
the strategic plan into action to achieve marketing goals.
Implementation involves activities that actually execute the
functional area strategy. One of the more interesting aspects of
implementation is that all functional plans have at least two
target markets: an external market (i.e., customers, suppliers,
investors, potential employees, the society at large) and an
internal market (i.e., employees, managers, executives). This
occurs because functional plans, when executed, have
repercussions both inside and outside the firm. Even seemingly
disconnected events in finance or human resources can have
an effect on the firms ultimate customersthe individuals
and businesses that buy the firms products. In order for a
functional strategy to be implemented successfully, the
organization must rely on the commitment and knowledge of
its employeesits internal target market. After all, employees
have a responsibility to perform the activities that will
implement the strategy. For this reason, organizations often
execute internal marketing activities designed to gain
employee commitment and motivation to implement
functional plans. In short, implementation involves following
main activites;
Assigning tasks, targets, authority and responsibilities

to each marketing unit and personnel.
Preparation of organization structure, job assignments,

territory allocation.
Establishment of functional relationships within the

marketing department and between the marketing
department and other key departments within the
organization.
Designing effective coordination and cooperation with

the outside agencies.
Maintaining long term relationships with customers

and other key stakeholders and projecting favorable
public image about the company.
Step 4 Marketing Control
Marketing control phase of marketing management
process is to keep planned activities on target with
goals and objectives. There is no planning without
control. Marketing control is the process of monitoring
the proposed plans as they proceed and adjusting
where necessary. If an objective states where marketing
management want to be and the plan sets out a road
map to marketing firms destination, then control tells if
marketers are on the right route or not.
In fact, Control involves measurement, evaluation, and
monitoring. Resources are scarce and costly so it is
important to control marketing plans. Control involves
setting standards. The marketing manager will than
compare actual progress against the standards.
Corrective action (if any) is then taken. If corrective
action is taken, an investigation will also need to be
undertaken to establish precisely why the difference
occurred.
Case Analysis: Dominos Pizza
Dominos Pizza learned a valuable lesson about the power of
social media.
Dominos When two employees in Conover, North Carolina, posted a
YouTube video showing themselves preparing sandwiches while putting
cheese up their noses and violating other health-code standards,
Dominos learned an important lesson about PR and brand
communications in a modern era. Once it found the employeeswho
claimed the video was just a gag and the sandwiches were never
deliveredthe company fired them. In just a few days, however, there
had been more than a million downloads of the video and a wave of
negative publicity.When research showed that perception of quality for
the brand had turned from positive to negative in that short time, the
firm aggressively took action through social media such as Twitter,
YouTube, and others.
As Dominos learned, in an era of connectivity, it is important to respond
swiftly and decisively.While marketers were coming to grips with this
increasingly wired world, the economic recession of 20082009 brought
budget cuts and intense pressure from senior management to make
every marketing dollar count.More than ever, marketers need to
understand and adapt to the latest marketplace developments. At
greatest risk are firms that fail to carefully monitor their customers and
competitors, continuously improve their value offerings and marketing
strategies, or satisfy their employees, stockholders, suppliers, and
channel partners in the process. Skillful marketing is a never-ending
pursuit. Consider how some top firms drive business:
OfficeMax promoted a new line of products by professional organizer
Peter Walsh with Web videos and in-store events featuring local experts
demonstrating his OfficeMax-branded organizing system.
eBay promoted its Lets Make a Daily Deal holiday promotion by
recreating the famous 1970s TV game show Lets Make a Deal in Times
Square, adding an online component so people outside New York City
could play.
Johnson & Johnson launched BabyCenter.com to help new parents. Its

success is thought to have contributed to subscription slumps
experienced by parenting magazines.
Good marketers are always seeking new ways to satisfy customers and
beat competition.
Questions:
1. Point out the chellenge faced by the Dominos Pizza.
2. What are the new trands emerging in the field of
marketing management?
3. What strategies should company need to adopt ?
Source: adopted from Marketing Management, PHILIP KOTLER,
Northwestern University, KEVIN LANE KELLER, Dartmouth
College ,Prentice Hall,
CHAPTER SUMMARY
Concept of Marketing
Marketing is the business activities in order to create and promote
consumers demands and to direct the flows of the goods from the producers
to the ultimate consumers. It includes various activities such as planning,
organizing, distributing, promoting, controlling etc. which are related to
product, price, place and promotion
Characteristics of Human Resource Planning

Marketing management can be defined as the process of management of
marketing programs for accomplishing organizational goals and objectives. It
involves planning, implementation and control of marketing programs or
campaigns. It represents all managerial efforts and functions to operate the
marketing concept.
Customer Value and Satisfaction in Marketing

Customer value is the amount of benefit which customers get from purchasing products
and services. It can also defined as the difference between the values customers gain
from using a product and cost of product.
Customer satisfaction is an abstract concept and involves such factors as the quality of
the product, the quality of the service provided, the atmosphere of the location where
the product or service is purchased, and the price of the product or service. In other
words, the extent to which a product's perceived performance matches a buyer's
expectations
Management Orientation Concept in Marketing

The system of thinking and studying for the success of business is called
marketing concepts. It is the philosophy according to which a firm's goals can
be best achieved through identification and satisfaction of the customers'
stated and unstated needs and wants.
The production concept holds that consumers will prefer products that
are widely available and inexpensive.
The selling concept focuses on aggressively promoting and pushing
its products. This concept believes that the customers can attracted
towards goods or services by conducting promotional activities and
mass selling.
The marketing concept holds that the organizations task is to
determine the needs, wants, and interests of target markets and to
deliver the desired satisfactions more effectively and efficiently than
competitors.
The societal marketing concept is about the balance of three factors
1) Customer demand satisfaction 2) Public interest or social
awareness and 3) Profitability.
The focus of holistic concept is that everything matters in marketing.
It integrates the new concept with the societal marketing concept. A
holistic marketing concept is based on the development, design, and
implementation of marketing programs, processes, and activities that
recognize their scope and interdependencies.
Implementation of Marketing Orientations

Implementation of marketing orientations is the process that turns marketing
strategies and plans into actions in order to accomplish strategic marketing
objectives. The market driven organizations have superior market sensing,
customer linking and channel bonding capabilities. Let us now look at the
components of market Orientation;
Market Sensing / Generation of Market Intelligence
Dissemination of Intelligence
Market orientation varies with the number of marketing personnel
Interdepartmental conflict has a negative effect on market orientation.
Risk aversion has a negative effect on market orientation.
Market oriented companies pursue aggressive growth strategies.
Market orientation is positively related to superior business performance.
The role of senior management is critical in fostering a market
orientation.
Process of Marketing Management

Step 5 Situational Analysis
5 C.
PEST Analysis.
SWOT Analysis
Step 6 Formulation of Marketing Plan and Program
Goal Formulation.
Interrelationships between different levels of strategy:.
Market Opportunity Analysis:
Formulating strategies for specific market situations.
Implementation
Step 7 Program Implementation
Step 8 Marketing Control
Questions
Concept Based Short Answer Questions
1. What is marketing? Outline the process of marketing management.

2. What do you mean by marketing management?
3. Explain briefly about human resource inventory.
4. What is consumer delivered value and how is it related to customer Satisfaction?
5. Differentiate between consumer value and satisfaction?
6. What is production orientation concept?
7. What is selling orientation concept?
8. Write the principles of marketing concepts.
9. What is holistic marketing concepts?
10. What is situation analysis?
Problem Solving / Critical Analysis Questions
11. Explain the importance of understanding customer value and differentiate between sales
and marketing orientations.
12. Discuss the concept and the process of marketing management.
13. What is customer value? Explain the concepts of total customer value and total customer
cost.
14. What is new marketing concept? How it is different for societal marketing concept? Describe.
15. Describe the Holistic marketing and its components.
16. How implementation of marketing management orientation concepts are performed?
Case/ Situational Analysis Questions

Read the following situation prudently and answer the question that follow;
Ford's 'Drive One' Campaign: Can Alan Mulally Drive through the Trough?
Referred to as 'industry of industries' (Peter F. Drucker), the US automobile industry has
gone through a metamorphosis. Not a pleasant one though. Some view it as a self-inflicted
wound while others say, it just happens that way. But many others say, it is the beginning of
a long-drawn end. Henry Ford, father of automobile and founder of Ford Motors, states, "You
can get a Model 'T' in any colour you want as long as it's black". And this statement in a
sublime and subtle way spoke of the context. The company went on building its market
share through mass production enabled by assembly line manufacturing. Powered by critical
mass, Ford dominated US automobile industry during the first 3 decades of 20th century.
Ironically, it took no longer than two decades for its strengths to become its weaknesses.
General Motors captured the imagination of car customers by providing them with more
stylish cars in a variety of designs and Ford had to play catch-up for the rest of the century.
By the turn of the 21st century, Ford was braving insurmountable and inevitable odds in the
form of rising healthcare costs, falling customer loyalty and steady decline in market share
and profits. In 2007, its long held fortress, the second spot, was conquered by Toyota. Alan
Mulally, an outsider, brought in by Bill Ford to change the gears and set for Ford a new
direction, formulated a grand restructuring plan. At the heart of the plan, lies the 'Drive One'
campaign targeted at complete image make-over of the company. The case study can be
used to analyse the company's problems on three fronts the steady decline in market
share due to shift in consumer loyalty, out-of-control cost structure due to exorbitant legacy
costs and growing competition from the foreign companies. These are increasingly exposing
Ford's weaknesses in product management. Can Alan Mulally drive through the trough with
the help of his 'Drive One' campaign? Could the new medicine cure all the old ailments or at
least the symptoms?
Questions:
Analyse how the critical success factors in the US automobile industry have changed?
How will you analyse the business implications of the changing trends and industry
dynamics?
What do you think the reasons behind Fords declining profits and falling market share?
Discuss whether the new campaign could help Ford in emerging out of its troubles.

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Chapter2 | Human Resource Planning | 41

Concept of Marketing and Marketing Management

Marketing includes all of the activities necessary to move a product

According to American Marketing Association, Marketing is the activity, set of

The above definitions of marketing points out followings ideas on the

Traditional or Narrow View of Marketing:

Traditionally, Marketing is related with the transfer of ownership of

According to prof. Pyle Marketing comprises both buying and selling

In the words of Converse, Huegy and Mitchell Marketing includes

Thus, Traditional view of marketing is based on transferring of

Modern or Broad view of Marketing

Modern concept of marketing is not limited up to sale or

Conception Pre-Production Production After Sales

Product Anticipation of Service

Figure 1.1: Function of Marketing before production to after sales services.

In the wordIn the words of W.J. Stanton Marketing is a total

According to The Chartered Institute of Marketing (UK):

The above definition of marketing rightly emphasizes the focus of

Thus, Modern marketing view is total management system which

Cross Reference: Core concept of Marketing

Need, Wants and Demand:

WANTS: Wants are desire for satisfies of needs. Expectation of the

DEMANDS: Wants which are backed by the purchasing power become

Products (Goods, Services and Ideas): A product is anything that

Value: Value means the customer's estimate of the product's overall

Satisfaction: Satisfaction means fulfilment of needs. Satisfaction is

Exchange and Transaction: Exchange is the process of obtaining a

i. There should be at least two parties

Transaction: Agreement, contract, exchange, understanding, or

i. At least two things of value

Relationship: Relationship marketing refers to the process of building

Network: Network is the ultimate outcome of relationship marketing. A

Market, Marketing, Marketer, and Prospect:

In marketing management, frequently used words are markets,

Market: A market consists of all potential customers sharing a

Marketing: Marketing is social and managerial process by which

Marketer: Marketer is one who seeks one or more prospects (buyers) to

Prospect: Prospect is someone to whom the marketer identifies as

The forces, factors, events and conditions which influence the

Concept of Marketing Management

Customer Value and Satisfaction in Marketing

Steps in Customer Value Analysis

Management Orientation Concept in Marketing

Figure 1.3 : Various Marketing Concept

Starting Point Focus Means Ends

Mass Low Price Profit through

Figure 1.4 : The Production Concept

The Product Concept

Starting Point Focus Means Ends

Product High Quality Profit through Well-

Figure 1.5 : The Product Concept

The Selling Concept

Starting Point Focus Means Ends

Aggressive Selling Profit through High

Figure 1.6 : The Selling Concept

The (modern) Marketing Concept

satisfactions more effectively and efficiently than competitors. It believes

c. Target market: A market which consist homogeneous need of

d. Objective Achievement: Objective is a specific result that any firm

Starting Point Focus Means Ends

Customer Integrated Profit through

Figure 1.7 : Marketing Concept

Cross Reference : Comparison between Marketing and Selling concept

Societal Marketing Concept