What is Marketing…??

Selling?
Advertising?
Promotions?
Making products available in stores?
Maintaining inventories?

All of the above, plus much more!

Marketing is the fulfillment of

consumers’ aspirations.

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Characteristics of modern market
1. A substantially enhanced buying
power
2. A broader “bandwidth of available
products and services with greater
amount of information
3. A greater ease in trading through e-
commerce
4. An ability to easily benchmark and
compare products and services
globally
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Marketing = ?
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.
A societal 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. -
Kotler

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Marketing = ?

Marketing is the social and managerial process of

planning and executing the conception, pricing,
promotion, and distribution of ideas, goods, services to
create exchanges that satisfy individual and
organizational goals
American Marketing Association

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 Marketing = ?
 Marketing is the sum of all activities that take a consumer
to a sales outlet. After that sales takes over.
 Marketing is all about creating a pull, sales is all about
push.
 Marketing is all about managing the four P’s –
 product
 price
 place
 promotion

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 The 4 Ps & 4Cs

Marketing Convenience
Mix

Place
Product

Customer
Solution Price Promotion

Customer Communication
Cost
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4 A’s

•Affordability
•Accessibility
•Awareness
•Acceptability

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Basic Marketing model

Communicative Information

Market offering
SELLERS BUYERS
Money

FEEDBACK

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Scope – What do we market
 Goods
 Services
 Events
 Experiences
 Personalities
 Place
 Organizations
 Properties
 Information
 Ideas and concepts

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 Core Concepts of
Marketing

Based on :
 Needs, Wants, Desires / demand

 Products, Utility, Value & Satisfaction

 Exchange, Transactions & Relationships
 Markets, Marketing & Marketers.

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 Needs , Wants and Desires
Needs are the states of felt deprivation.
Wants are educated needs based on human needs
as shaped by culture and individual personality.
They are described in terms of objectives that
will satisfy needs.

Demands are empowered human wants i.e when

the consumers have the ability to satisfy their
wants. They must have willingness and the
purchasing power to buy a particular product.

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Maslow’s
Maslow’s Hierarchy
Hierarchy of
of
Needs
Needs
Self
Actualization
(Self-development)

Esteem Needs
(self-esteem, status)
Social Needs
(sense of belonging, love)

Safety Needs
(security, protection)

Physiological Needs
(hunger, thirst)

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 Utility
- that something which
makes a product capable of
satisfying wants

1. Form -leather takes the form of a shoe

2. Place – oven in kitchen
3. Time – newspaper in the early morning
4. Information – tv news providing
relevant information
5. Possession - owning a car and riding it.

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 Who is a Customer/ Consumer
??

CUSTOMER/ Consumer IS . . . . .

Anyone who is in the market looking at a product /

service for attention, acquisition, use or consumption
that satisfies a want or a need

Customers purchase the products but a consumer may actually use the
products.

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Customer –

CUSTOMER has needs, wants, demands and

desires
Understanding these needs is starting point of the
entire marketing
These needs, wants …… arise within a framework
or an ecosystem
Understanding both the needs and the ecosystem is
the starting point of a long term relationship

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Customers - Problem
Solution

As a priority , we must bring to our customers

“WHAT THEY NEED”
We must be in a position to UNDERSTAND their
problems
Or in a new situation to give them a chance to AVOID
the problems

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 Customer looks for Value
Value = Benefit / Cost
Benefit = Functional Benefit + Emotional
Benefit
Cost = Monetary Cost + Time Cost +
Energy Cost + Psychic Cost

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 Defining Customer Value

Aim is to create and retain customers.

Customer Perceived/Delivered
Value( CPV/CDV) – diff. b/w prospective
cust.’s evaluation of all benefits and costs
of an offering and the alternatives.
Total Cust. Value – perceived monetary
value of the bundle of eco., func. and
psycho. benefits that cust. expect from a
given mkt offering.

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Total Customer value

Product value – fuel efficiency, sitting

comfort, driving ease etc.,
Service value – quality of services
Personnel value – derived from the level of
knowledge, skill, responsiveness of the
emp. with whom the cust. Interact during
acquisition/ consumption of the product.
Image value – purely psych. Benefit derived
from product’s brand power, eg: using
luxurious products

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Total Customer Cost
Monetary Cost – financial expenses
Time cost – Monetary equiv. of the time spent
( B2B – time with CEO more than junior)
Energy Cost – Trouble / hassles
Psychic cost - Amount of risk and uncertainty
of the consumer experiences eg: medical
life saving drugs, insurance.
Customer delivered value = Total cust Value
– total Cust. Cost

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Attracting and retaining customers -
Decreasing Total Customer Cost
 Monetary cost
 Time cost
 Energy cost
 Psychic cost

Increasing Tot. cust. Value

 Product value
 Service value
 Personnel value
 Brand value

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 Defining satisfaction
S=P-E where s= satisfaction level
P = performance level of the company as
perceived by the consumer while consuming
the product
E= performance level of the company as already
expected by the consumer while purchasing
the product
If P<E , dissatis., P=E, satis., P>E , cust. Is
delighted. Levels of cust., satis- Cust. Satis.
Index.

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Delivering Customer Value & Value
chain

Value proposition – cluster of benefits the

company promises to deliver
Value delivery system – experiences the cust
will have on the way to obtaining and using
the product.
Value chain – primary value
activities( logistics,operations, mktg&sales,
services) , support activities ( procurement,
tech.,hr,infrastruc).

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Benchmarking
Finding ways to improve by analysing costs
and performance
 Mkt sensing process
 New offering realisation
 Cust. Acquisition process
 CRM process
 Fulfillment mgmt process
 Identifying core competency

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Core competency

Special areas/ distinctive capabilities

Unique to a part.org
Difficult for competitor to imitate
Source of competitive advantage –
makes a significant contribution.

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 Exchange and transaction

Exchange is a process by which an

individual gets a desired object from
someone by offering something of value
in return.

Transaction is a trade between two parties

that involves at least two things of
value, agreed-upon conditions, a time of
agreement and a place of agreement.
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Management of Demand

1.Negative Demand – When a major part of the

market dislikes the product and may even pay a
price to avoid it. Eg.: woolen garments for very
hot countries.
(Task of product redesigning, lower prices and more
+ve promotion)
2.No demand – When the target consumers are
unaware of or uninterested in the product. Eg.:
students in learning regional languages
(Tasks of relating product benefits with people’s
needs and interests)

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3.Latent Demand : When a strong need exits
in consumers’ minds but they cannot satisfy
it by any existing product. Eg: solar
products/battery-operated cars, harmless
cigarettes.
(Task of good mkt research and suitable
product development).
4.Declining Demand : When demand for a
part. Product declines over time, eg:
demand for typewriters.
( Task of changing product features or more
effective promotion to boost the demand).

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5.Irregular Demand : When demand varies on a
seasonal, daily or even hourly basis which
generally exists for services like tour and
travel, electricity and telephone services –
peak hours / peak season demand.Eg.: special
schemes for slack hours
(Task of synchromarketing – offer flexible
pricing, promotion + other incentives)
6.Full Demand: bus. Org. are at full demand &
pleased with their volume
(Task of facing cons. pref. and competition, by
optimising availability of products &
maximising returns by aggressive promotion
schemes)

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7.Overfull demand: Demand level higher than
what the company can handle.Eg: Some forms
of mass transformation system.
(Task of demarketing – reducing or discouraging
demand temporarily by rising prices, reducing
overheads by less promotion & services).
8.Unwholesome demand : A demand to be
discouraged – unhealthy for society. Eg:
Demand for drugs, alcohol
(Task of making it unavailable, steep price hike,
sending fear messages).

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Evolution Of Marketing

Production Concept / Production

orientation
1. Demand usually greater than
supply,
2. Companies found little problem in
finding customers
3. Focus mainly on improving
production and distribution efficiency

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 Marketing Myopia

Term by Theodore Levitt

The marketer has to see the buyer’s needs
rather than the product he sells,
otherwise he suffers from what is known
as “marketing myopia.”
Father of marketing management

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Selling Concept/ Sells
orientation

Consumers will buy enough of the org.’s

products only if they are convinced
through large-scale selling and
promotion efforts, because consumers
have the opportunity to choose from
many alternatives.
Selling whatever they have made
rather than making
goods which the market wants.
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 Marketing Concept/
Marketing orientation
Org. work at the level of customer segment - their needs
are identified and activities are tailored accordingly.

Customer Concept - Customers are the kings, shaping

separate offers, services and messages etc.,
individually

Societal Marketing Concept – The firms’ activities

directed towards meeting societal needs. eg,.:
environmental needs, health needs .

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 “What Business Are We In ?”
Company Production – Marketing –
oriented answer oriented answer
Xerox We make copy We automate
machines. offices.

Eastman KodakWe make We help

cameras and preserve
film. beautiful
memories.
Revlon We make We sell hope,
cosmetics, in in the stores.
the factory.

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Company Production – Marketing –
oriented answer oriented answer

AT&T We operate a We provide

long-distance multiple forms of
telephone reliable, efficient
company. inexpensive
telecomm.
services.

Indian Oil We produce oil We provide

and gasoline types of safe &
products. cost effective
energy.
Indian Railways We run a rail We offer a 36
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road. transportation &
Marketers and Markets
Marketers are focused on stimulating
exchanges with customers who make up
markets – B2C or B2B.
The market is comprised of people who play
a series of roles: decision makers,
consumers, purchasers, and
influencers.
It is absolutely essential that marketers
have a detailed understanding of
consumers, their needs and wants.
Much happens before and after the sale to
affect customer satisfaction

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Drivers of Customer Satisfaction
Many aspects of the firm’s value proposition contribute to
customer satisfaction:
 The core product or service offered
 Support services and systems
 The technical performance of the firm
 Interaction with the firm and it employees
 The emotional connection with customers

Ability to add value and to differentiate as a firm focuses more on

the top levels -- Emergence of Relationship Marketing.

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Myth 1 – The larger the range of products, the
more customer-centric I am.

Mythbuster – The range of products has

emerged from being
competition-centric.

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Myth 2 – Better technology leads to
better customer service.

Mythbuster – Technology
alone does not deliver,
helps people do.

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Myth 3 – Launch a product and the customer will start
using instantly.
- Give a customer a card and he will learn how to play
with it immediately

Mythbuster – Customers need

To be educated too…

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Myth 4 – The only way to get a customer is
from
competition.

Mythbuster – Customers
are not only present
where competition is.

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Myth 5 – Just advertise and - You will sell.

Mythbuster – Advertising will only sell,

Not retain customers.
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Myth 6 – No difference between marketing &
selling

Mythbuster – “Selling focuses on the needs of the

seller; marketing on the needs of the buyer.

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 Difference
Difference Between
Between -- Sales
Sales &
&
Marketing
Marketing ??

Sales
trying to get the customer to want what the
company produces
Marketing
trying to get the company produce what the
customer wants

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