CH 01 Defining Marketing 1

Marketing Management
Part : 01
Understanding
Marketing
Management
Chapter-01
Defining Marketing
Marketing Manageme 1
Marketing
 Marketing is everywhere.
 Formally or informally, people and organizations engage in a
vast number of activities that could be called marketing.
 Good marketing has become an increasingly vital ingredient
for business success, and marketing profoundly affects our
day-to-day lives.
 Marketing is embedded in everything we do-from clothes we
wear, to the Websites we click on, to the ads we see.
Marketing
 Definition
“A process to identify needs and wants of customers and then
to develop/produce products to meet their needs/wants at
profit.”
Marketing Management
 “Marketing management is a business discipline focused
on the practical application of marketing techniques and the
management of a firm's marketing resources and activities.”
 Note : From this perspective, the scope of marketing

management is quite broad. The implication of such a
definition is that any activity or resource the firm uses to
acquire customers and manage the company's relationships
with them is within the purview of marketing management.
Additionally, the Kotler and Keller definition encompasses
both the development of new products and services and their
delivery to customers.
The Marketing Process
The Marketing Process comprises four steps.
1. Analyzing Marketing Opportunities
2. Selecting Target Markets
3. Developing the Marketing Mix (4 Ps : Product, Price, Place,

Promotion) + Extended Marketing Mix (Physical Layout,
Provision of Customer Service, Processes)
4. Managing the Marketing Effort
The Marketing Process
Analyzing
Marketing
Opportunities
Managing Selecting
The Marketing
The Target
Process
Marketing Effort Markets
Developing
The
Marketing Mix
Exchange, Transactions and Transfer
 A person can obtain a product in one of four ways.
1. By Self-Produce or Self-Service
2. By using force
3. By begging
4. By exchange
Exchange
 Exchange : It is a core concept of Marketing, is the process of
obtaining a desired product from someone by offering
something in return.
Exchange
 For Exchange potential to exist, five conditions must be
satisfied.
1. There are at least two parties.
2. Each party has something that might be of value to the other
party.
3. Each party is capable of communication and delivery.
4. Each party is free to accept or reject the exchange offer.
5. Each party believes it is appropriate or desirable to deal with
the other party.
 Note : Exchange is a value-creating process because it

normally leaves both parties better off.
Transactions and Transfer
 Transaction : In Exchange process, when an agreement is
reached, then a Transaction takes place. A transaction is a
trade of values between two or more parties.
 Transfer : A transaction differs from a Transfer. In a Transfer,
A gives X to B, but does not receive anything tangible in
return. For example, Gifts, Subsidies and Charitable
contributions.
What is Marketed?
 Marketing people are involved in marketing 10 types of
entities.
1. Goods
2. Services
3. Events
4. Experiences
5. Persons
6. Places
7. Properties
8. Organizations
9. Information
10. Ideas
What is Marketed?
1. Goods : Physical and tangible products. Like food products,
cars, refrigerators, television sets, etc.
2. Services : A Service is any act or performance that one party
can offer to another that is essentially intangible and does
not result in the ownership of anything. Like work of airlines,
hotels, car rentals, barbers, etc.
3. Events : Marketers promote time-based events, such as
major trade shows, artistic performances, and company
anniversaries. Like Olympics, World Cup etc.
4. Experiences : By orchestrating several services and goods, a
firm can create, stage, market experiences. Like, Walt Disney
World’s Magic Kingdom represents experiential marketing in
which customers visit a fairy kingdom, a pirate ship, or a
haunted house.
What is Marketed?
5. Persons : Celebrity marketing is a major business. Today
every major film star has an agent, and a personal manager.
6. Places : Cities, states, regions, and whole nations compete
actively to attract tourists, factories, company headquarters,
and new residents.
7. Properties : Properties are intangible rights of ownership of
either real property (real estate) or financial property (stocks
and bonds). Properties are bought and sold which requires
marketing. Like real estate agents work for property owners
or sellers or buy residential or commercial real estate.
Investment companies and banks are involved in marketing
securities.
8. Organizations : Organizations actively work to build a strong,
favourable, and unique image in the minds of their target
publics. Companies spend money on corporate identity ads.
What is Marketed?
Disney Land Dubai

Experience Marketing Place Marketing
What is Marketed?
9. Information : Information can be produced and marketed as
a product. This is essentially what schools and universities
produce and distribute at a price to parents, students, and
communities. Encyclopedias and most nonfiction books
market information.
10. Ideas : Every market offering includes a basic idea. Charles

Revson of Revlon observed : “In the factory, we make
cosmetics; in the store we sell hope.”
Who Markets?
 A Marketer is someone who seeks a response (attention, a
purchase, a vote, a donation) from another party, called the
Prospect.
 Marketers are responsible for Demand Management.
 Eight demand states are possible.
i. Negative Demand
ii. Non-existent Demand
iii. Latent Demand
iv. Declining Demand
v. Irregular Demand
vi. Full Demand
vii. Overfull Demand
viii. Unwholesome Demand
Demand States
i. Negative Demand : Consumers dislike the product and may
even pay a price to avoid it.
ii. Non-existent Demand : Consumers may be unaware or
uninterested in the product.
iii. Latent Demand : Consumers may share a strong need that
cannot be satisfied by an existing product.
iv. Declining Demand : Consumers begin to buy the product less
frequently or not at all.
v. Irregular Demand : Consumer purchases on a seasonal basis.
vi. Full Demand : Consumers are adequately buying all products
put into the marketplace.
Demand States
vii. Overfull Demand : More consumers would like to buy the
product that can be satisfied.
viii. Unwholesome Demand : Consumers may be attracted to

products that have undesirable social consequences.
Customer Markets
 Traditionally, a “market” was a physical place where buyers
and sellers gathered to buy and sell goods.
 On the other hand, markets often use the term market to
cover various groupings of customers. They view the sellers
as constituting the industry and the buyers as constituting
the market.
 Key Customer Markets are as follows.
i. Consumer Markets
ii. Business Markets
iii. Global Markets
iv. Nonprofit and Governmental Markets
Customer Markets
i. Consumer Markets : They include companies selling goods
and services to end customers for their personal or family
consumption.
ii. Business Markets : They include companies selling goods and

services to the other organizations that acquire goods and
services used in the production of other products or services
that are sold, rented and supplied to others.
iii. Global Markets : They include companies selling goods and

services in the global marketplace and face additional
decisions and challenges.
Customer Markets
iv. Nonprofit and Governmental Markets : They include
companies selling their goods and services nonprofit
organizations such as churches, universities, charitable
organizations, or government agencies.
Marketplaces, Marketspaces and Metamarkets
 Marketplace : It is physical i.e. when we shop in a store.
 Marketspace : It is digital i.e. when we shop on the internet.
 Metamarket : Mohan Sawhney has proposed the concept of
a Metamarket. It is the cluster of complementary products
and services that are closely related in the minds of
consumers but are spread across a diverse set of industries.
 Example : The automobile Metamarket consists of
automobile manufacturers, new car and used car dealers,
financing companies, insurance companies, mechanics,
spare parts dealers, service shops, auto magazines,
classified auto ads in newspapers, and auto sites on the
internet. Its example is Edmund’s (www.edmunds.com).
A Retail Store Amazon.com

Marketplace Marketspace
www.edmunds.com
An Automobile Metamarket
Company Orientations/Philosophy towards the
Marketplace
 The competing concepts under which organizations have
conducted marketing activities include the following.
1. The Production Concept

2. The Product Concept
3. The Selling Concept
4. The Marketing Concept
5. The Holistic Marketing Concept
Company Orientations/Philosophy towards the Marketplace
1. The Production Concept
 ‘Production Concept’ is the oldest concept in business.
 It holds the consumers will prefer products that are widely
available and inexpensive.
 The managers of production-oriented businesses concentrate
on achieving high production efficiency, low costs and mass
distribution.
2. The Product Concept
 ‘Product Concept’ holds that consumers will favor those
products that offer the most quality, performance or
innovative features.
 The managers in these organizations focus on making
superior products and improving them over time.
3. The Selling Concept
 ‘Selling Concept’ holds that consumers and businesses, if
left alone, will ordinarily not buy enough of organization’s
products, therefore an organization must undertake an
aggressive selling ad promotion effort.
 The Selling Concept is practiced most aggressively with
unsought goods (the goods that buyers normally do not
think of buying, such as insurance, encyclopedias etc.)
 Most firms practice the selling concept when they are
overcapacity.
4. The Marketing Concept
 ‘Marketing Concept’ emerged in 1950s.
 Instead of production, product or selling centered, this
concept is “Customer Centered”.
 Under this concept, the job is not to find the right
customers for your products, but the right products for your
customers.
 The Marketing Concept holds that the target customers’
needs and wants are to be established first, them
products/services are offered to them to satisfy their
needs/wants at profit.
The Holistic Marketing Concept
 Moving ahead from “Marketing Concept”, the companies
are moving to ‘The Holistic Marketing Concept’ which is an
approach to marketing that attempts to recognize and
reconcile the scope and complexities of Marketing activities.
Holistic Marketing involves four components.
a. Relationship Marketing
b. Integrated Marketing
c. Internal Marketing
d. Social Responsibility Marketing
The Components of Holistic Marketing Concept
Relationship
Relationship
Marketing
Marketing
The
TheComponents
Components
Social Responsibility
Social Responsibility ofof Integrated
Integrated
Marketing
Marketing Holistic
HolisticMarketing
Marketing Marketing
Marketing
Internal
Internal
Marketing
Marketing
a. Relationship Marketing : Relationship Marketing has the aim
of building mutually satisfying long-term relationships with
key parties-consumers, suppliers, distributors, and other
marketing partners.
b. Integrated Marketing : The marketer’s task is to devise
marketing activities and assemble fully integrated
marketing programs to create, communicate, and deliver
value for consumers. Two key themes of Integrated
Marketing are
 Many different marketing activities are employed to
communicate and deliver value, and
 All marketing activities are coordinated to maximize their
joint effects.
c. Internal Marketing : Internal Marketing is the task of hiring,
training and motivating able employees who want to serve
customers well.
 Internal Marketing must take place on two levels. At one
level, the various marketing functions-sales force,
advertising, customer service, product management,
marketing research-must work together.
 At another level, marketing must be embraced by the other
departments; they must also ‘think customer’.
d. Social Responsibility Marketing : The cause and effects of
marketing clearly extend beyond the company and
consumer to society as a whole. It requires that marketers
carefully consider the role that they are playing and could
play in terms of social welfare.
Core Concepts of Marketing
Needs, Wants, Demands
 Needs : States of felt deprivation. Needs are basis human
requirements, like hunger, thirst etc.
 Wants : Human needs directed to specific objects that
might satisfy the need, like burgers, water etc.
 Demands : Human wants backed by buying power.
Core Concepts of Marketing
Target Market, Market Positioning, Market
Segmentation
 Target Market : A set of buyers sharing common needs or

characteristics that the company decides to serve.
 Market Positioning : Arranging for a product to occupy a
clear, distinctive and desirable place relative to competing
products in the minds of target consumers.
 Market Segmentation : Dividing a market into distinct
groups of buyers who have distinct needs, characteristics or
behavior and who might require separate products.
Marketing Environment
 The Marketing Environment consists of the task
environment and the broad environment.
i. Task Environment : It includes the immediate actors
involved in producing, distributing, and promoting the
offering. The main actors are the company suppliers,
distributors, and the target customers.
ii. Broad (Macro) Environment : These environments contain
forces that can have a major impact on the actors in the
task environment. It consists of six components.
Marketing Environment
The Components of Broad (Macro) Environment
 There are six components of Broad (Macro) Environment.
i. Demographic Environment
ii. Physical (Natural) Environment
iii. Political (Legal) Environment
iv. Economic Environment
v. Social (Cultural) Environment
vi. Technical Environment
Assignment : FMCGs and SMCGs
 Fast Moving Consumer Goods:
FMCG is an acronym for “Fast Moving Consumer Goods”. This is

usually an everyday low priced and low risk product that requires
very little thought when purchasing. FMCG is a classification that
refers to wide range of frequently purchased consumer products
including: toiletries, soaps, cosmetics, teeth cleaning products,
shaving products, detergents, other non-durables such as glassware,
bulbs, batteries, and plastic goods such as buckets. Fast Moving is in
opposition to consumer durables such as kitchen appliances that are
generally replaced less than once a year.
Assignment
 Define FMCG, SMCG, MNC, NGO and BPO

companies with examples.

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CH 01 Defining Marketing 1

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Marketing Management

 Note : From this perspective, the scope of marketing

1. Analyzing Marketing Opportunities

2. Selecting Target Markets

3. Developing the Marketing Mix (4 Ps : Product, Price, Place,

4. Managing the Marketing Effort

 Note : Exchange is a value-creating process because it

Disney Land Dubai

10. Ideas : Every market offering includes a basic idea. Charles

viii. Unwholesome Demand : Consumers may be attracted to

ii. Business Markets : They include companies selling goods and

iii. Global Markets : They include companies selling goods and

A Retail Store Amazon.com

1. The Production Concept

Holistic Marketing involves four components.

 Target Market : A set of buyers sharing common needs or

 Fast Moving Consumer Goods:

FMCG is an acronym for “Fast Moving Consumer Goods”. This is

 Define FMCG, SMCG, MNC, NGO and BPO

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