Chapter 1 basic ofmarketing

AIMBA/106BOM/RBG/Chapter1-Intro to Marketing/Session:1Hrs*12/MBA 1st
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Chapter 1 Introduction to Marketing
Learning Objectives
• To understand the Marketing definition & the steps in Marketing Process
• To understand the Marketing functions
• Importance of understanding the customers & the marketplace and five core marketplace concepts
• Marketing Approaches
• Creating customer value is a key for implementing the marketing concepts in practice
Generally people says
Marketing is
-Market-In ( Get into the market & see )
-Marketing generally refers to shopping
-Telling & Selling
-Advertising
But its too narrower the understanding of Marketing.
Marketing is Broader than aforesaid understanding
Marketing
Definitions:
“Marketing is managing profitable customer relationship.”
“Marketing is a social & managerial process by which individuals and organizations obtain what they need & want through creating &
exchanging value with others.”
“Marketing is the process by which companies create value for customers and build strong customer relationships in
order to capture value from customers in return.”

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Functions of Marketing
Marketing facilitates promotion & consumption.Specilisation & division of labor result in heterogeneous supply capabilities
( Production sector) whereas there is a heterogeneous demand for form,task,time,plaace & possession utility to satisfy needs & wants
( consumption sector).The universal functions of marketing helps to overcome discrepancies and separations. The Major functions are
listed as below:
Buying: means looking for & evaluating goods & services
Selling: It involves promoting product. It includes use of personal selling, adverstising, and other direct & mass selling methods
Transporting: means movement of goods from one place to another
Storing: means holding goods until customers hold them
Standardization & grading: involves sorting products according to size & quality
Financing: provides necessary cash & credit to produce, transport, store, promote, sale & buy products
Risk Taking: involves bearing the uncertainties that are part of the marketing process
Marketing Information Function: It involves the collection, analysis & distribution of all the information needed to plan, carry out &
control marketing activities.
Producers, consumers and marketing specialists sometimes handle the some of the marketing functions. Some marketing specialists like
Ad agencies, market research firms, IT firms etc may develop to fill market needs, there is a responsibility for performing the marketing
functions can be shifted & shared in a variety of ways.

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Core Concepts of Marketing:
Need: Need describe basic human requirements. It’s state of felt deprivation.
Want: the need becomes wants when they are directed to specific objects that might satisfy the needs.
Deamnds: are wants for specific products backed by an ability to pay.
Product or offerings: A product is any offering that can satisfy need or wants. Bundle of attributes which is having want satisfying
capacity is called market offerings. Offerings may be goods or services.
Value: It is ratio between what the customer gets & what he gives.
Value = Benefits = Functional benefits +Emotional Benefits
Costs Monetary cost + time costs + energy costs + psychic costs
Excahnge: The act of obtaining a desired object from someone by offering something in return
Customer satisfaction: the customer’s satisfaction is a function of the closeness between the buyer’s expectations & the product’s
perceived performance.
3 situations :
1.If performance falls short of expectations, the customer is disappointed
2.If it meets expectations, the customer is satisfied
3.If it exceeds expectations, the customer is delighted

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Approaches to Marketing:
Marketing Management is taking conscious efforts to achieve desired exchange outcomes with target markets.
What philosophy should guide the company’s marketing efforts?
How the company orients themselves towards the marketplace?
decides their approach of conducting marketing activities in their firm
Production concept holds that consumers will prefer products that are widely available & inexpensive
Product concept holds that consumers will favor those products that offer the most quality, performance or innovative features
Selling concepts hold that consumers & businesses, if left alone, will ordinarily not buy enough of the organizations products. The
organization must, therefore, undertake an aggressive selling & promotion efforts.
Marketing concepts holds that the key to achieving the organizational goals consists of the companies being more effective than the
competitors in creating, delivering and communicating the customer value to it’s chosen target market.
The Societal Marketing concepts holds that the organization’s task is to determine the needs, wants & interests of target markets and
to deliver the desired satisfaction more effectively & efficiently then competitors in a way that preserves or enhances the consumers &
society’s welfare.
Relationship Marketing aims to build mutually satisfying long term relationships with key constituents in order to earn & retain their
business.
Integrated Marketing: The marketer’s task is to devise marketing activities and assemble fully integrated marketing programs to
create, communicate & deliver value for consumers. According to McCarthy these marketing activities can be classified in the form
from of 4P’s of marketing i.e. Price, Place, and Promotion & Product.
Internal Marketing ;ensures that everyone in the organization embraces appropriate marketing principles especially senior
management.Inetrnal Marketing is the task of hiring, training and motivating able employees who wants to serve customer well.
Performance marketing: helps to understand the returns to the business from marketing activities and programs, as well as addressing
broader concerns and their legal, ethical, social & environmental effects.
Socially responsible marketing: The effects of the marketing clearly extend beyond the company and the customer to society as a
whole. Marketers must carefully consider their role in broader terms, and the ethical,social,environmental & legal context of their
activities.

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HOLISTIC MARKETING DIMENSIONS:
The Holistic Marketing concept is based on the design, development, and implementation of marketing programs, processes and
activities that recognizes their breadth and interdependencies.
It recognizes that “Everything Matters” in marketing and that a broad, integrated perspective is often necessary
Internal
Marketing
Relationship
Marketing
Integrated
Marketing
Performance
Marketing
Holistic
Marketi
ng

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Marketing Myopia is shortsightedness about the market conditions. This may be treated as painted marketing situations, which may be
perceived by the the marketing man a s a favorable factors for his business. The actual field situation or market situation, may be quite
different from that has been perceived by the company. The lack of understanding about the market realities i.e. about the
needs/demands of the customers and his choices, creates the situation which is nothing but marketing myopia. In common man’s
language it can be called as “Building Castles in the airs”
Selling vs Marketing
Sr
.
Selling Marketing
1. Focus on needs of seller Focus on needs of buyer
2. Inside out approach Outside in approach
3. Narrow term Broader & comprehensive terms
4. Selling starts with seller
and is always preoccupied
with the needs of the
seller
Marketing starts with buyer & focuses
constantly on the needs of buyer
5. Emphasize on the
saleable surplus available
within the corporation
Seeks to convert customer needs into
products
6. Views business as a
“Goods creating Process”
“Views business as a customer satisfying
7. Cost determines the price Consumers determine the price
8. Emphasize on somehow”
selling”
Emphasize on” Integrated Marketing”
9. Production is central
function
Marketing is central function which revolves
around customer needs

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Customer Value:
Customer delivered value is the difference between total customer value & total customer cost. Total customer value is the benefit
customer expect from a given product or service.” Total customer costs customer expect to incur in evaluating,obtaining,using &
disposing of the product or service.”
The concept of Value: Value is a ratio of benefits to cost. The concept is guided as per utility theory in economics. Utility means want
satisfying capacity of a products. The consumers decision to buy any goods or services depends upon the utility of products & benefits
derived from it by parting certain money & there costs. Hence business firm has to achieve the best possible linkage between the
benefit-value-cost-satisfaction. The configuration that appeals most to the consumer.
Value providing/creation involves ‘4’ steps
• Value selection
• Value creation/value delivery
• Value communication
• Value enhancement
Build Relationship with Customer Value:

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Superior
Customer
Value
Customer
Retention
Profitable
Relationship
with Customer
Customer
Satisfaction
Customer
Acquisition
Total
Company
efforts to
satisfy
customer

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[Satisfying customers with superior customer value to build profitable relationship ]

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Understand the
Marketing Place
& Customer
needs and wants
Design a
Customer
Driven
Marketing
Strategy
Construct an
Integrated
Marketing
program that
delivers superior
customer
customer value
Understand the
Marketing Place
& Customer
needs and wants
Understand the
Marketing Place
& Customer
needs and wants

Chapter 1 basic ofmarketing

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Chapter 1 basic ofmarketing