FUNDAMENTALS OF
MARKETING BBM 5TH
SEMESTER
CHAPTER 1: INTRODUCTION LH 6

CONCEPT OF MARKETING
• Simply marketing means satisfying customers needs profitably:
Deliver customer satisfaction at a profit.
Marketing is engaging customers and managing profitable customer
relationships. The twofold goal of marketing is to attract new customers
by promising superior value and to keep and grow current customers by
delivering satisfaction.
• More broadly we can say that marketing is the business activities that
are designed to identify and satisfy customers’ needs in a way that
help to achieve company objectives. Actually marketing starts before
production.
• That means understanding the customer needs through market
Research.
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DEFINITION OF MARKETING
According to Philip Kotler & Gary Armstrong:
“Marketing is the process by which companies create value for customers and build strong customer
relationships in order to capture value from customer in return.”
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. –(The American Marketing Association)
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MARKETING CONCEPT:
Marketing is a social and managerial process by which companies identify customer needs and wants,
satisfy customer needs and build strong customer relationship in order to accomplish the company
objectives.
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CONCEPT MARKETING MANAGEMENT
To know about Marketing Management we should know about two term Marketing and Management.
Marketing: ………………………………………..
Management
Management is a distinct process consisting of activities of planning, organizing, actuating, motivating,
coordinating, and controlling to achieve the organizational goals.
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DEFINITION OF MARKETING MANAGEMENT
According to Philip Kotler:
“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”.
According to Steven J. Skinner:
“Marketing management is the process of planning, organizing, implementing and controlling marketing
strategies”.
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CORE MARKETING CONCEPT
1. Needs, wants, and demands
Needs
– States of felt deprivation, part of human makeup
– Physical and social needs
Wants
– The form needs take (e.g. food => hamburger)
– Shaped by culture and personality
Demands
– When wants are backed by buying power
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CORE MARKETING CONCEPT
2. Products and Services
Products
• – Anything that can be offered to satisfy a need or a want
• – Physical products, services, experiences, persons, places, organizations,
• information, ideas
• – Example: “smoking is bad” idea can be a product, a person can be a product in an election
• – Aka: satisfier, resource, marketing offer
Services
• – Just one kind of a product

CORE MARKETING CONCEPT
3. Value, Satisfaction and Quality
(Customer) Value
– Difference between “value gained by owning and using a product” and “cost of obtaining the product”
– Value gained not necessarily monetary
– Similarly cost of obtaining not necessarily monetary
– Customers act on perceived value [and perceived cost]
(Customer) Satisfaction
– Perceived performance relative to expectations
Quality
– Closely related to satisfaction
– Narrow definition: no defects
– Broad definition: ability to satisfy customer needs [circular definition!]

CORE MARKETING CONCEPT
4. Exchange, Transaction, Relationship
Exchange
• – Obtaining a desired object from someone by offering something in return
• – Offerings could be money, product, service, ...
Transaction
– A trade of values between two parties; marketing's unit of measurement!
– Monetary transactions and barter transactions
Relationship (Marketing)
– Going beyond short term transactions
– Long-term relationships with valued customers, partners, etc
– Marketing network – company and all its supporting stakeholders

CORE MARKETING CONCEPT
5. Markets
Market – Economist's definition
– Place (virtual or physical) where buyers and sellers meet Market – Marketer's definition
– The set of actual and potential buyers of a product
– The sellers of a product are labeled as the “industry” Industry – Marketer's definition
– The sellers of a product

CORE MARKETING CONCEPT
6.Segmentation, Target Markets and Positioning
7.Marketing Channel
8.Supply chain
9.Competition
10.Marketing Environment
11. Marketing Planning

THINGS TO REMEMBER
• 1. Define marketing and outline the steps in the marketing process.
• 2. Explain core concepts of marketing.

MARKETING ORIENTATIONS/ PHILOSOPHIES
• The Production Concept (1860-1920)
• The Product Concept (1920- 1930)
• The Selling Concept (1930-1950)
• The Marketing Concept (1955-1990)
• The Societal Marketing Concept (1970 to present)
• The Holistic Marketing Concept (Latest)
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1. The Production Concept (1860-1920)
Oldest concept of marketing
This philosophy assumes that consumer will buy those product
which are widely available and are affordable cost.
According to this concept management should focus on improving
the production and distribution efficiency.
This is called manufacturing oriented philosophy.
• Drawback: Customers do not always prefer inexpensive and easily
available products. Moreover, the availability and low price of the
product do not ensure increased sales and survival and growth of
the firm.
• Example-Standard Raw Materials and components, CD, LCD, etc.
MARKETING ORIENTATIONS/ PHILOSOPHIES

2. Product Concept
The product concept believes that consumers will favor those products that
offers most quality performance or innovative features.
• Product improvement is the key to profit maximization under the product
concept.
• Managers in these organizations assume that buyers admire well-made
products and give more attention to quality and performance.
• The quality and design of a product are more important than customer
input.
Drawback: Customers may not buy a product just because it is of higher
quality unless they need it.
Example- Many computer companies use the product concept to
consistently improve the hardware and software components to
outperform the competitors.
MARKETING ORIENTATIONS/ PHILOSOPHIES

3. The Selling Concept
The selling concept believes that consumer if left alone, will ordinarily not
buy enough of the organization’s product. The organizations must therefore
undertake an aggressive selling and promotion effort.
• Due to increased competition, only the quality and availability of the
product do not ensure the survival and growth of the firm.
• This concept assumes customers will not buy the products unless they are
adequately convinced and motivated to do so.
• Most of the selling-oriented companies believe that customers can be
persuaded and manipulated to buy the products.
Drawback: Customers once wrongly persuaded can spoil the firm’s image.
So the selling concept can succeed in the short run but not in the long run.
MARKETING ORIENTATIONS/ PHILOSOPHIES

4. Marketing Concept
• The marketing concept emphasizes that firms can achieve the
objective of profit maximization by finding out the needs and
requirements of customers and effectively satisfying them.
• In this concept, all decisions are taken from the viewpoint of
customers, such as what product will be produced, with what
features, at what price, etc.
• The marketing concept aims to make what customers want to buy
and not what a marketer wants to sell. This basic role of a firm
under marketing concept is-‘Identify a need and satisfy it better
than competitors’.
• Under this concept products are bought because they satisfy the
specific need of a customer which can be expressed in colorful
ways such as:
• ‘’Open Happiness’’ Coca-Cola
MARKETING ORIENTATIONS/ PHILOSOPHIES

5. Societal Marketing Concept
• The societal marketing concept emphasizes that
along with customer satisfaction due importance
should be given to the welfare of the customer and
the society.
• This concept brings a balance between customer
satisfaction, social welfare, and profitability. It
clears that a marketer should not offer a product to
consumers if it is not in the best interest of
consumers.
• Eg. Ban on tobacco advertisements, a ban on
smoking in public places. Safety warning is required
in the case of hazardous goods or poisonous
material,
MARKETING ORIENTATIONS/ PHILOSOPHIES

6. Holistic Marketing Concept
A holistic amrketing concept is
based on development,
design, and implementation of
marketing programs,
processes and activities that
recognize the breadth and
interdepencies.
MARKETING ORIENTATIONS/ PHILOSOPHIES

MARKETING CONCEPTS: SUMMARY

THINGS TO REMEMBER
1. Define marketing and outline the steps in the marketing process.
2. Explain core concepts of marketing.
3. Briefly describe marketing philosophies.

MARKETING MIX
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Marketing Mix Four Ps:
• Product
• Place
• Promotion
• Price
Modern Marketing
Management Four Ps:
• People
• Processes
• Programs
• Performance

WHAT IS MARKETED?/ SCOPE OF
MARKETING
● Goods (tangible)
● Services (intangible)
● Events (time based— trade shows) and
● Experiences (Walt Disney World’s Magic kingdom)
● Persons (Artists, Musicians, CEO, Physicians)
● Places (Cities, States, Regions, Nations) and
● Properties (Intangible rights of ownership of real
estate or financial properties)
● Organizations (Universities, Museums)
● Information (Books, Schools, Magazines)
● Ideas (Revlon sell hope)
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MARKETING MANAGEMENT TASKS
● Developing marketing strategies (strategic fit)
● Capturing marketing insights (obtaining information)
● Connecting with customers (relationships)
● Building strong brands (understand strengths and weaknesses)
● Shaping market offerings
● Delivering value
● Communicating value
● Creating longterm growth (positioning and new-product development)
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HOW MARKETING AND BUSINESS ARE CHANGING? THE
MARKETPLACE ISN’T WHAT IT USED TO BE…/ MAJOR SOCIETAL
FORCES/ NEW MARKETING REALITIES
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• Network information technology
• Globalization
• Deregulation
• Heightened Competition
• Industry Convergence
• Disintermediation
• Consumer Buying power
• Consumer information
• Consumer participation
• Consumer Resistance
• Retail Transformation

RELATIONSHIP MARKETING
• According to the Association of National Advertisers (ANA), relationship marketing refers to strategies and tactics
for segmenting consumers to build loyalty.
• Relationship marketing leverages database marketing, behavioral advertising and analytics to target consumers
precisely and create loyalty programs.
• Database marketing is an approach in which computer database technologies are used to design, create, and
manage customer data lists containing information about each customer‘s characteristics and history of
interactions with the company.
• In online marketing, behavioral targeting is the practice of targeting and serving ads to groups of people who
exhibit similarities not only in their location, gender or age, but also in how they act and react in their online
environment.
• Marketing analytics involves the discovery and communication of meaningful patterns in data
from metrics like traffic, leads, sales, advertising, promotions, web activity, social media, and any other
relevant marketing activity or financial data.
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EXAMPLES OF RELATIONSHIP MARKETING
• Provide exceptional customer service, as customers who are consistently impressed by a brand’s customer
service are more likely to remain loyal to the brand.
• Thank customers through a social media post or with a surprise gift card.
• Seek customer feedback through surveys, polls and phone calls, which can create a positive impression that
customer opinions are valued and help to create better products and services.
• Launch a loyalty program that rewards customers for their continued patronage.
• Hold customer events to connect with customers and build a community.
• Create customer advocacy or brand advocacy programs to reward customers who provide word-of-mouth
advertising on a brand’s behalf.
• Offer discounts or bonuses to long-time or repeat customers.
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GREEN MARKETING
• According to the American Marketing Association, green marketing is the marketing of products that are presumed to be environmentally
safe.
• It incorporates a broad range of activities, including product modification, changes to the production process, packaging changes, as well
as modifying advertising.
• terms used are Environmental Marketing and Ecological Marketing.
• "Green Marketing" refers to holistic marketing concept wherein the production, marketing consumption an disposal of products and
services happen in a manner that is less detrimental to the environment with growing awareness about the implications of global
warming, non-biodegradable solid waste, harmful impact of pollutants etc., both marketers and consumers are becoming increasingly
sensitive to the need for switch in to green products and services. While the shift to "green" may appear to be expensive in the short
term, it will definitely prove to be indispensable and advantageous, cost-wise too, in the long run. 30

EXAMPLES OF GREEN MARKETING
• Products those are originally grown,
• Products those are recyclable, reusable and biodegradable,
• Products with natural ingredients,
• Products containing recycled contents, non-toxic chemical,
• Products contents under approved chemical,
• Products that do not harm or pollute the environment,
• Products that will not be tested on animals,
• Products that have eco-friendly packaging i.e. reusable, refillable containers etc.
Examples: Digital Tickets, No Polythene carry bags for free, Lead Free Paints from Kansai Nerolac.
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E-MARKETING
• Also termed as Web marketing, digital marketing, internet marketing or online marketing, Emails and
wireless marketing.
• The uses of electronic communication technologies, such as the Internet, mobile phones and digital
televisions, to accomplish marketing objectives.
• Examples: Web Sites, Microsite, Search ads, Display ads, Sponsorships, Online communities, Email,
Mobile marketing, YouTube Video Marketing.
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EXPANDED MARKETING PROCESS

END OF CHAPTER ONE
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