Chapter- 1

Marketing: The
Development of a
Concept
 What is Marketing?
It is defined as the process of planning and executing the
* conception
* pricing
* promotion
* distribution
of
* goods
* ideas
* services
to create exchanges that satisfy individual and
organizational goals.
( according to American Marketing Association )
 Condt.

Marketing is an organizational function

and a set of processes for creating,
communicating, and delivering value
to customers and for managing
customer relationships in ways that
benefit the organization and its
stakeholders.
 What is Marketed?
• Goods
• Services
• Events
• Experiences
• Persons
• Places
• Properties
• Organizations
• Information
• Ideas
Goods
Services
Events
Experiences
Persons
Places (Bamboo forest , Japan)
Wisteria Flower Tunnel, Japan
Hitachi Seaside Park, Japan
Black Forest , Germany
Canola Flower Fields , China
Tianzi Mountains, China
Zhangye Danxia , China
Salar De Uyuni, Bolivia
Mendenhall Ice Caves, Alaska
Mount Roraima , Venezuela
Naica Mine, Mexico
Lake Hillier, Australia
Tunnel Of Love, Ukraine
Place
Properties
Organizations
Information
Idea
What is Marketing Management?

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.

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Inc. Publishing as Prentice Hall
1-28
 Simple Marketing System
Communication

Goods/services
Industry Market
(a collection (a collection
of sellers) of Buyers)
Money

Information
29
The Basic Profit Equation

Profit =

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Inc. Publishing as Prentice Hall
1-30
 The Basic Profit Equation

Profit = Revenues – Costs

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Inc. Publishing as Prentice Hall
1-31
 Core Concepts of Marketing

Needs, wants Utility, Value &

Products
demands Satisfaction

Marketing & exchange, Transaction

Markets
Marketers Relationships

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 Concept of Exchange
 Exchange arises when one person gives
something of value, in return for
something of value from another person.
 Following are the conditions necessary for
exchange:
i) At least two parties must be
involved
ii) Each party must have something
that interests the other.
 Condt
iii) Parties must involve themselves
voluntarily & each party must consider the
other desirable or at least acceptable to
deal with.
iv) Each party must be in a position
to communicate & deliver the product
v) Each party must be free to
accept or reject any offer from the other
 Needs and Wants
 Needs – basic requirements for the
existence of life.
-states of felt deprivation including
physical needs for food, social needs for
belonging and individual needs for self-
expression.
i.e. I am thirsty.
 Condt.
Wants – it arises when the basic needs
are satisfied.
- form that a human need takes as
shaped by culture and individual personality.
i.e. I want a Coca-Cola.
Condt.
 condt.

Demands - human wants backed by

buying power.
i.e. I have money to buy a Coca-Cola.
 Marketer should understand whether his
product falls under the need or wants
category & devise the marketing
strategies.

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 Condt.

 Need – food ( is a must )

 Want – Pizza, Burger, French fry's
( translation of a need as per our experience )
 Demand – Burger ( translation of a want as
per our willingness and ability to buy )
 Desire – Have a Burger in a five star hotel

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 Economic Utility
 Utility can be defined as the extent to
which a product satisfies customers needs
and wants.
 Economic Utility can be defined as the
amount of satisfaction a customer derives
by consuming the product.
 Condt.
 Marketers provide four types of utility
i) Form Utility
ii) Time utility
iii) Place utility
iv) Possession utility
 Evolution of Marketing
 It evolved through four stages:
i) The Production Era
ii) The Sales Era
iii) The Marketing Era
iv) The Societal Marketing Era
 PRODUCTION ERA
 IT WAS BOUGHT ABOUT BY INDUSTRIAL
REVOLUTION IN THE 17TH CENTURY(1920)
 CONCEPT:”SUPPLY CREATES ITS OWN
DEMAND”
 MAINLY FOCUSED ON MANUFACTURING
PROCESS
 LOOKED FOR WAYS AND MEANS TO PRODUCE
GOODS FASTER, MORE EFFICIENTLY AND AT
LOW PRICES.
 THEY BELIEVED THAT CUSTOMERS FOCUSED
MAINLY ON AVAILABILITY OF PRODUCT AND
NOT ABOUT ITS FEATURES.
 SALES ERA
 PERIOD : LATE 1920’s TILL MID 1950’s
 MAINLY FOCUSED ON SELLING THE PRODUCTS
TO THE CUSTOMERS
 DUE TO ECONOMIC DEPRESSION PROVED
THAT PRODUCING GOODS WAS NOT
EVERYTHING BUT SELLING ALSO MATTERS.
 IT FOCUSED ON SELLING THE PRODUCTS TO
THE CUSTOMERS.
 REALISED THE NEED FOR PRODUCT
PROMOTION AND DISTRIBUTION.
 CREATED MERKET RESEARCH DEPARTMENT TO
COLLECT AND ANALYZE MARKET DATA.
 MARKETING ERA
 IT BEGAN IN THE MID 1950’s
 IT WAS KNOWN AS CUSTOMER-ORIENTATION
PERIOD.
 IT FOCUSED ON CUSTOMERS NEEDS AND
WANTS
 FOLLOWED THE CONCEPT OF COORDINATED
MARKETING MANAGEMENT,WHICH WAS
DIRECTED TOWARDS THE TWIN GOALS OF
“CUSTOMER ORIENTATION” AND
“PROFITABILITY”.
 Marketing Concept
 It aims at matching the companies
offerings with customers needs, to achieve
the desired level of customer satisfaction
& generate profit for the company.
 It is based on the belief that :
i) The company’s planning &
operations are customer-oriented.
 Condt
ii) The goals of the company
should be profitable sales volume and not
just volume.
iii) All marketing activities should
be coordinated effectively.
 IMPORTANT FEATURES OF
THE MARKETING CONCEPT
 CONSUMER ORIENTATION: Consumer is the
focal point for the business.
 LONG-TERM PROFITABILITY:
Understanding the needs of the customer and
create satisfying products to generate profits.
 FUNCTIONAL INTEGRATION: The marketing
department must be properly coordinated with
other functional groups like research and
development, finance, personnel and
manufacturing.
 SOCIETAL MARKETING
CONCEPT
 According to this concept apart from
determining the needs, wants and
interests of the target market and
providing quality products, organization
must help maintain and improve the
society’s well being.
 This concept calls for striking a balance
between the company’s profit, the
customer’s wants and society’s interest.
 Marketing Myopia
 It is defined as the failure and short-
sightedness of the management.
 It occurs when a marketer is extremely
preoccupied with product development,
manufacturing or selling & ignores
customers needs, wants & interests.
Condt.
Condt.
Condt.
Condt.
Condt.
Condt.
Condt.
Condt.
Condt.
Condt.
Condt.
 Four Conditions Responsible for
Business Obsolescence
1. If the market for a product expands
automatically, companies does not think
imaginatively about how to expand the market.
2. The belief that there are no substitutes for the
industries major products.
3. The belief that by producing large quantities, per
unit output cost can be significantly reduced,
forgetting the market, demand & supply aspects.
4. Preoccupation with the product that lends itself
to carefully controlled scientific experimentation,
improvement & manufacturing cost reduction.
Ways to overcome Marketing Myopia

1. Be customer led, not product oriented.

2. Market Orientation should permeate
throughout the organization.
3. Managers need to be proactive &
visionary.
 Marketing Dynamics
 Due to technological advancements
products & markets are constantly
changing so company & marketers should
respond & make adjustments.
 Marketing Dynamics
 Company Responses &  Marketer Responses &
Adjustments Adjustments
i. Reengineering i. Customization
ii. Outsourcing ii. Building a good
iii. E-commerce relationship with
iv. Benchmarking customers
v. Suppliers iii. Target Marketing
vi. Global & Local Markets iv. Customer Database
vii. Decentralization v. Integrated Marketing
Communication
Selling is only the tip of the iceberg

“There will always be a need for

some selling. But the aim of marketing
is to make selling superfluous. The aim
of marketing is to know and understand
the customer so well that the product
or service fits him and sells itself.
Ideally, marketing should result in a
customer who is ready to buy. All that
should be needed is to make the
product or service available.”
Peter Drucker
THANK YOU!!