Chapter 1

Introduction to
Marketing
References:
•Marketing (Philip Kotler)
•Internet
•VU

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Resource Person: Furqan-ul-haq Siddiqui
Contributions in making a business
successful
Strategy
 Dedicated Employees
 Resources
Feasible Environment
Excellent implementation of Strategy

Marketing
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 What is Marketing, anyway?
Ch Prom
Public re e at otion
lations i ng
s C us
ic e t om
S er v t e
g e m e n r s
e lli n v e r ti s s
f S A d t
Art o u n
L u c o p i n g
Dra ck i s S h o p
Innov w y D
ation s /G i
fts Spon
h s ors
rc
Pa c k e a s
aging e s o a r d r i c in g
R Bill b P 3
 What is Marketing?
 Marketing is telling & selling

 Marketing is advertising & selling

 Learningto make what you can sell & selling

what you can make.

 Marketing deals with customers 4

More simply:
Marketing is the delivery of
customer satisfaction at a profit.

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 Marketing Involves having the Right Product available in
the Right Place at the Right Time and making sure that the
customer is Aware of the Product.

 “Art of Selling product.”

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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.”
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 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.

 Marketing is total system of business activities

design to plan, price, promotion and distribution of
want satisfying and services to target market in order
to achieve organizational objective.

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 AMA Definition
Marketing is an organizational function and a set of
processes for creating, communication, and delivering to
customers and for managing customer relationships in a
way that benefit the organization and its stakeholders.

 Wikipedia Definition
Marketing is an integrated communications-based process
through which individuals and communities discover that
existing and newly-identified needs and wants may be
satisfied by the products and services of others.
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 Peter Drucker
"the father of modern management,”

 Goalof all organizations is to

gain and retain customers

 Innovationand marketing are the only

two ways to achieve the goal
 Costs Careers
About 50% of total About 25 to 33% of
product costs are the work force hold
marketing positions.
marketing costs

Why Study
Marketing ?

Contributions to Society
Contributions to Marketing decisions affect
Individual Organizations the lives of individual
Critical to the success consumers and society as
of a firm a whole
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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 Kinds of Markets
1. Consumer Market Consists of all individuals
or house holds who buy or acquire offerings
for personal usage.
2. Industrial/Business Market Consists of
buyers who purchase or acquire offerings for
resell or reproduction to earn profit
3. Global Market/International markets.
4. Non Profit & Government Markets

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 Market ( Market place) A physical place
where buyers and sellers gathered to
exchange goods.
 Market Space exchange of goods without
physical market (digital, Virtual) e.g.
eCommerce, internet etc.
 Target Market People/place for whom
seller designs his particular offering.
 Segmentation Division of market in small
groups keeping on any base (Purchasing
power, age, social values 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. 17
 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. 19
 Pr
ts , od
uc
a n s Se and ts
, w nd rvi
e ds ma ce
Ne d de
s

an

Core
Core

satisfaction,
Marketing

and quality
Marketing

Value,
Concepts
Concepts
M
ar

Exchange,
ke

transactions,
ts

and relationships

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21
 Simple Marketing System

Communication

Product/Service
Producer/Seller Consumer
Money

Feedback

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 “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.”

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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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25
How Does an Organization
Create a Customer?

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 Identifying customer needs
 Designing goods and services that meet those needs
 Communicating information about those goods and
services to prospective buyers
 Making the goods or services available at times and
places that meet customers’ needs
 Pricing goods and services to reflect costs,
competition, and customers’ ability to buy
 Providing for the necessary service and follow-up
to ensure customer satisfaction after the purchase
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Ex: Open a Book shop Adjacent to UoB.
 Is there a need?
 Who is my target market?
 What is my product?
 How can I produce and deliver a “product” better
than my competitors?
 How will I promote my product?
 How can I insure customer loyalty? 28
 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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 ? ?
g …
t i n
r ke
Ma

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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. 33
 Information Buying

Risk Taking Selling

Universal
Marketing
Marketing
Functions
Functions

Financing Transporting

Standardizing
and Grading
Storing 34
 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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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. Social Responsibility Marketing Understanding social,
ethical, environmental & legal concern of society.

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 Finance
Production
Production Finance
Human
resources
Marketing Human
resources Marketing

a. Marketing as an b. Marketing as a more

equal function important function
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 Production on
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Marketing Customer
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so m
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c. Marketing as the d. The customer as the

major function controlling factor

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 Production

Marketing

Customer
re
Hu ur
so
m ces

ce
an

an
n
Fi

e. The customer as the controlling

function and marketing as the
integrative function
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