basic concepts of marketing

1. MARKETING MANAGEMENT
• Subject Code: 18MBA15
By: Mr. Jeevan Lawrence
Assistant professor, SJEC,
Mangaluru

2. COURSE OBJECTIVES
1. Make students have an understanding of the fundamental concepts of marketing &
the environment in which marketing system operates.
2. To analyze the motives influencing buying behavior & Describe major bases for
segment marketing, target marketing, and market positioning.
3. Identify a Conceptual framework, covering basic elements of the marketing mix.
4. To understand fundamental premise underlying market driven strategies.

3. MODULE 1
Introduction to Marketing

4. MODULE OVERVIEW
• Unit 1:
• Introduction to Marketing: Introduction, Definitions of market and marketing,
Selling Vs marketing
• The Exchange Process
• Elements of Marketing Concept, Functions of Marketing, Old Concept or Product-
oriented Concept, New or Modern or Customer- oriented Concept, Marketing
Myopia
• Marketing Environment analysis, (Micro and Macro), Marketing in the 21st century
opportunities, challenges & Ethics.

5. NEEDS AND WANTS
• Needs are the basic human requirements
• Food
• Shelter
• Water
• Air
• Wants are things you’d like to have, it is not a
basic requirement
• One needs clothes, but one may not need
designer clothes.
Needs become Wants when they are
directed to specific objects that might
satisfy the need.

6. NEEDS
AND
WANTS

7. NEEDS AND WANTS

8. DEMAND
• Demands are wants for specific products
backed by an ability to pay.
• Determinants of Demand are tastes, income,
prices of related goods, expectations, and
number of buyers
Wants + Purchasing power = Demand

9. WHO IS A CUSTOMER?
• Potential buyer
• The one who buys the product/service

10. WHO IS A CONSUMER?
• A person who (buy and or )use the goods or services produced by
other people (producers).
Situation 1

11. Situation 2
Consumer
Customer (Consumer )
Consumer
Consumer

12. MARKET
What is Market ?
• A market is a medium that allows buyers and sellers of a specific
good or service to interact in order to facilitate an exchange.
• A place where goods are bought and sold

13. DEFINITION OF MARKETING

14. MARKETING MANAGEMENT
• Producer • Consumer
Marketing

15. • Marketing means creating & communicating the value of a product or service to
the customers and inducing them to buy the same.

16. VALUE CREATION
V/s
V/s

17. VALUE CREATION

18. VALUE CREATION
• https://youtu.be/UvR57lwJptk

19. VALUE CREATION
• https://youtu.be/SGPjFFMD3c0

20. IMPORTANCE OF MARKETING
• Marketing Builds Company
Reputation

21. IMPORTANCE OF MARKETING
• Marketing Promotes Product
Awareness to the Public

22. • Marketing Helps
Boost Product
Sales
IMPORTANCE OF MARKETING

23. MARKETING MANAGEMENT
• Marketing management is marketing concept in action
• Refers to managing all the marketing activities
• According to American Marketing Association, “Marketing
management is the process of planning and executing the
conception, pricing, promotion and distribution of ideas, goods
and services to create exchanges that satisfy individual and
organizational objectives.”

24. MARKETING MANAGEMENT
Consumer
research
Production Sales Consumption

25. NATURE OF MARKETING
• Marketing is Consumer oriented – Consumer is the king
• Begins and ends with the customer
• Precedes and succeeds production
• Guiding element of business
• Builds goodwill and reputation for the company and its products
• Helps in achieving profit maximization objective

26. IMPORTANCE OF MARKETING
1. Creates awareness
2. Creates demand for new product
3. Helps to retain demand for the existing product
4. Helps to expand the market share
5. Helps to maximize profit
6. Helps to promote the product and brand
7. Helps to withstand the competition
8. Helps to achieve market leadership
9. Helps to attract the customers towards the product or service and induce them to
purchase it
10. Customer satisfaction – through giving them what they want

27. 4 P’S OF MARKETING

28. 4 P’S OF MARKETING

29. WHAT CAN BE MARKETED?
• Physical Products:
• Smart phone, motor cycle,
Car, refrigerator, footwear,
television, clothes etc.

30. WHAT CAN BE MARKETED?
• Services:
• Insurance, health
care, business
process
outsourcing,
security, easy bill
service, financial
services(investments
), online trading
etc.

31. WHAT CAN BE MARKETED?
•Ideas:
• Advertising
• Inventions/ Research labs

32. WHAT CAN BE MARKETED?
• Persons:
• For election of
candidates for
certain posts.

34. WHAT CAN BE MARKETED?
• Place
• Tourism, Malaysia truly Asia, Incredible India, carnivals etc

35. WHAT CAN BE MARKETED?
• Experience
• Customized
experiences as
dinner with a
sportsperson,
lunch with a
celebrity,
mountaineering
etc.
• Sky diving

37. WHAT CAN BE MARKETED?
• Events
• Sports events (Olympics, football series, cricket matches), fashion
shows, music concerts, races, film festivals etc.

38. WHAT CAN BE MARKETED?
• Information
• Production packaging and distribution of information by organizations
such as by universities, research organizations,
• providing information as market information(marketing research
agencies)
•

39. EVOLUTION OF MARKETING
3 main reasons for the
development of
markets and marketing
Scarcity of raw
materials
Specialization of labour
Consumption
satisfaction

40. EVOLUTION OF MARKETING
Production era
1860’s-1920’s
Sales era
1920’s-1940’s
Marketing era
1940’s-1990’s
Relationship era
1990’s-
Good products at affordable
price will sell by itself
Find customers for inventories
that went unsold
Identify the customer needs
and wants prior to producing the product
Customer oriented marketing
Customer retention and creating long term
relationships
Simple trade era
Pre-industrial revolution
The simple trade era was a time when
everything was hand made and only
available in a limited supply.

41. TYPES OF MARKETING
CONCEPTS

42. MARKETING ORIENTATIONS
• The production orientation
• Holds that consumers will favor products that are available and
highly affordable.
• Focus on improving production and distribution efficiency
• One of the oldest concept

44. FOR SELF STUDY
• Case study- Ford Model T Volkswagen - Beatle

45. MARKETING ORIENTATIONS
• The product orientation
• Consumers will favor products and that offer the most in quality,
performance, and features
• Focus on continuous product improvements

47. MARKETING ORIENTATIONS
• The selling orientation
• Consumers will not buy enough of the firm’s products unless it
undertakes a large scale selling and promotion efforts

49. MARKETING ORIENTATIONS
• The marketing orientation
• Achieving organizational goals depends on knowing the needs
and wants of markets and delivering the desired satisfactions
better than competitors do
• Offer them variety of products
• Give them the best service
• Ensure that they are happy

50. Sports Cruiser Commuter

53. P & G PRODUCT LINES

54. MARKETING ORIENTATIONS
• The societal orientation
• A company should make good marketing decisions by considering
consumers wants, the company’s, requirements, consumers, long-
run interest, and society long run interests
• Consumer satisfaction + Sales + Well being of the society
• Moral & Ethical Values
• Value based marketing

55. • Keep city clean
• Bring bags from home
• Wear helmet, seat belts
• Encouraging employees to use bycycle
• Withdrawing harmful products from the market
• Manufacturing customer & environmental friendly products.

56. AQUAFINA

58. TOP 5 CORPORATE BICYCLE-TO-WORK
INCENTIVES IN THE U.S.
• https://www.triplepundit.com/2014/05/3p-weekend-top-5-corporate-bike-work-
incentives-u-s/

59. CASE STUDY
TYLENOL JOHNSON & JOHNSON
• https://www.ou.edu/deptcomm/dodjcc/groups/02C2/Johnson%20&%20Johnson.h
tm

60. MARKETING MYOPIA
• 'Marketing myopia' is a term coined by Theodore Levitt.
• A business suffers from marketing myopia when a company
views marketing strictly from the standpoint of selling a specific product rather
than from the standpoint of fulfilling customer needs.
• A short-sighted and inward looking approach to marketing that focuses on the
needs of the company instead of defining the company and its products in terms of
the customers' needs and wants
https://hbr.org/2004/07/marketing-myopia

64. FOR SELF STUDY
• https://www.newyorker.com/business/currency/where-nokia-went-wrong
https://youtu.be/T0Z73Zbtlyg

66. Traditional Marketing Concepts
 Exchange concept – Under exchange marketing concept the exchange of a
product between buyer and seller was the central idea of marketing.
 Production concept – It was believed that consumers will prefer products
that are widely available and inexpensive. The production concept aims at
achieving profit through high production efficiency at low cost and wide
distribution.
 Product concept – This marketing concept holds the belief that consumers
will prefer those products that are high in quality, performance and are
innovative. This marketing concept involves matching of products with
markets. Marketers focus on making superior products and improving them.
 Selling concept – It focuses on aggressive selling and promotion activities to
push the product. Marketers focus on selling what is made rather than
what can be sold.

67. Modern Marketing Concepts
• Consumer is central to all marketing activities.
• Every business enterprise has dual objectives i.e. profit maximization and customer satisfaction.
• Identification of needs and wants and their conversion into products
• Target marketing
• Integrated marketing
 Marketing concept – The primary task of any business is to study the needs, desires & preferences of potential
customers and produce goods which are actually needed by the customers. Hence, all marketing activities
be directed towards satisfaction of consumer needs and wants.
 Social concept – It is concerned with well-being and welfare of the society. It believes that the primary task of
any business is to determine the needs, wants and interests of target markets and to deliver the desired
satisfaction more effectively and efficiently than competitors in a way that it preserves or enhances the
consumer’s and society’s well-being.
 Holistic Marketing concept – It focuses on integrated marketing efforts within a firm. Holistic marketing
concept is based on the development, design and implementation of marketing programs, processes and
activities that recognize their breadth and inter dependence. It believes everything matters and suggests that
marketing must be looked from broad and integrated perspective.
Components of Holistic Marketing
• Relationship marketing
• Integrated marketing
• Internal marketing
• Social responsibility

68. Or

70. The
Exchange
Process

71. SELLING V/S MARKETING
Marketing is about customer satisfaction. It starts with customer needs and demand
and ends with customer satisfaction. It is a customer oriented approach. Sales, on
the other hand, is about selling what the company produces. It doesn’t care about
the need of the customer but about the profits.
Marketing is about providing quality products and consumer satisfaction. Selling is
about generating by maximizing sales and is a money oriented approach.
In marketing, emphasis is given on the wants of the consumer. Whereas in selling,
emphasis is on the company’s products.
Marketing is different from selling because here the company first determines
customers’ needs and wants and then decides how to deliver a product to satisfy
these wants. In selling, it is the other way round.
In marketing the emphasis is on innovation in existing technology and providing
better value to the customer by adopting a superior technology. Selling emphasizes
on staying with existing technology and reducing costs.

72. SELLING V/S MARKETING
Marketing views the customer as the very purpose of the business. Selling views
customer as a last link in business.
Planning in marketing is long-term-oriented in today’s products and in terms of new
products, tomorrow’s markets and future growth. Planning in selling is short-term-
oriented in terms of today’s products and markets.
Marketing follows customer oriented approach and selling uses production oriented
approach.
Consumer determines price and price determines cost of marketing. In selling, cost
determines price.
Marketing makes use of long-term strategies to get sales – examples, value-added
service, customer education, meeting objectives. Selling makes use of short-term
tactics to get sales – examples are free gifts, discounts, rebates, bribes, etc.
Marketing is an indirect activity whereas sales is a direct activity.

74. MARKETING PROCESS
Situation Analysis
•First, identify and understand the company’s mission. A mission statement explains why a company is in business and how it can benefit consumers., you can’t plan a marketing strategy
without knowing clearly what business you are in and why.
•An analysis of the external environment and an internal analysis of the firm itself
Mission
Formulating Strategic Plan
•Plan for pursuing the opportunity can be developed
•Firm to select the target market segment and optimally position the offering within that segment
Marketing Mix Decisions
•Detailed tactical decisions are made for the controllable parameters of the marketing mix
Implementation and Review
•Continual monitoring and adaptation is needed to fulfil customer needs consistently over the long-term

76. I. Mission
First, identify and understand the company’s mission. Maybe it’s written down and promoted
throughout the organization. If not, talk to stakeholders to find out why your company exists. A
mission statement explains why a company is in business and how it can benefit consumers.
Sometimes, the mission statement is aspirational, motivating staff and inspiring customers. You
can’t plan a marketing strategy without knowing clearly what business you are in and why.
Ex: Apple is dedicated to making innovative, high-quality products. Patanjali – Himalaya –
Products

77. II. Situation Analysis
A thorough analysis of the situation in which the firm finds itself serves as the basis for identifying
opportunities to satisfy unfulfilled customer needs. In addition to identifying the customer needs, the
must understand its own capabilities and the environment in which it is operating.
The situation analysis thus can be viewed in terms an analysis of the external environment and an
analysis of the firm itself.
There are several frameworks that can be used to add structure to the situation analysis:
5 C Analysis - company, customers, competitors, collaborators, climate. Company represents the internal
situation; the other four cover aspects of the external situation
PEST analysis - for macro-environmental political, economic, societal, and technological factors. A PEST
analysis can be used as the "climate" portion of the 5 C framework.
SWOT analysis - strengths, weaknesses, opportunities, and threats - for the internal and external
A SWOT analysis can be used to condense the situation analysis into a listing of the most relevant
problems and opportunities and to assess how well the firm is equipped to deal with them.

78. III. Marketing Strategy
Once the best opportunity to satisfy unfulfilled customer needs is identified, a strategic plan for pursuing
opportunity can be developed. Market research will provide specific market information that will permit
firm to select the target market segment and optimally position the offering within that segment. The
is a value proposition to the target market.
The marketing strategy then involves:
• Segmentation
• Targeting (target market selection)
• Positioning the product within the target market
• Value proposition to the target market

79. IV. Marketing Mix Decisions
Detailed tactical decisions then are made for the controllable parameters of the marketing
mix.
The action items include:
• Product development - specifying, designing, and producing the first units of the
• Pricing decisions
• Distribution contracts
• Promotional campaign development

80. V. Implementation and Control
At this point in the process, the marketing plan has been developed and the product has
launched. Given that few environments are static, the results of the marketing effort should
monitored closely. As the market changes, the marketing mix can be adjusted to
the changes. Often, small changes in consumer wants can addressed by changing the
advertising message. As the changes become more significant, a product redesign or an
entirely new product may be needed.

81. More reading: http://www.netmba.com/marketing/process/
https://www.smartsheet.com/strategic-marketing-processes-and-
planning

82. UNDERSTANDING THE MARKETING
ENVIRONMENT
The marketing environment is made up of the internal and external
environment of the business. While internal environment can be controlled,
the business has very less or no control over the external environment.

83. MARKETING ENVIRONMENT
Broadly classified into 2
groups
Micro environment-
(Controllable)
Macro environment-
(Uncontrollable)
Definition: The Marketing Environment includes the Internal factors (employees,
customers, shareholders, suppliers & distributors, etc.) and the External factors(
political, legal, social, technological, economic) that surround the business and
influence its marketing operation

84. COMPANY’S MICRO ENVIRONMENT
Micro
Environment
Company
Customers
Suppliers
Public
Marketing
intermediaries
Competitor
Employees
Shareholders

85. COMPANY• Top management
• Finance
• Research and
development
• Purchasing
• Production/Operations
• Accounting

86. SUPPLIERS
• Suppliers -important role in the company’s customer value delivery system
• Suppliers are the persons from whom the material is purchased to make a
finished good
• Marketing mangers should take care of all supply related issues

87. CUSTOMERS
• Every business revolves around fulfilling the customer’s needs and wants. Thus,
each marketing strategy is customer oriented that focuses on understanding the
need of the customers and offering the best product that fulfills their needs.
• No customer – No business

88. MARKETING INTERMEDIARIES
• Firms that help the company to sell, and distribute its
goods to final buyers
• The channel partners play an imperative role in
determining the success of marketing operations. Being
in direct touch with customers they can give
suggestions about customer’s desires regarding a
product and its services.
• Include
• Resellers
• Physical distribution firms-(like ware house)
• Marketing service agencies-marketing research
firms , advertising agencies, media firms, and
marketing consulting firms)

89. COMPETITORS
• Provide greater customer value and satisfaction than
its competitor do
• Adapt to the needs of the customers in the market
 Keeping a close watch on competitors enables a
company to design its marketing strategy according to
the trend prevailing in the market.
 Competition is a serious threat in modern business that it
has led to collapse of many well established firms

91. PUBLIC
• General Public
Any group that has an actual or potential interests in or
impact on an organization's ability to achieve its objectives
• Financial publics
• Influence the company’s ability to obtain funds
• Media publics
• Carry news, features and editorial opinion
• Government publics
• Change in government and rules and regulations

92. PUBLIC (CONTINUED…)
• Citizen-action publics
• Consumer organizations
• Local publics
• Include neighborhood residents and community organizations

95. THE COMPANY’S MACRO ENVIRONMENT
Macro
Environment
Demographic
Natural forces
Technological
Political
Socio-Cultural
Economic
Legal

96. DEMOGRAPHIC ENVIRONMENT
• The study of human populations in terms of
• Size
• Density
• Location
• Age
• gender
• Race
• Occupation
• And other statistics

97. ECONOMIC ENVIRONMENT
• Factors that affect
consumer buying
power and spending
patterns
• Change in income
• Includes change in
GDP and GNP
• Changing consumer
spending patterns
• For food, housing,
cloth, health care…

98. NATURAL
ENVIRONMENT
• Natural resources that are needed as
inputs by marketers or that are affected by
marketing activities like
Shortage of raw materials
 (Renewable and non-renewable
resources)
Increased government intervention
Environmentally suitable strategies

102. TECHNOLOGICAL
ENVIRONMENT
• Forces that create new
technologies
• It’s a serious threat if you don’t
move with the technology
• Creating new product and market
opportunities
• One of the most dramatic force
shaping the destiny like
• Antibiotics
• Smart phones
• Organ replants
• Internet
• AI
• Machine learning

109. AP Photo/Damian Dovarganes
"Screw the Nano. What the hell does the Nano do? Who listens to 1,000
songs?" said Motorola CEO Ed Zander at a conference in 2006 in
response to a question about Apple's iPod Nano.
Motorola's competing ROKR held 100 songs at the time. The company
later said Zander was joking
Thomson Reuters
"We don't consider customers cargo," said Jaguar's head of R&D,
Wolfgang Epple, in 2015. "We don't want to build a robot that delivers the
cargo from A to B."
Jaguar Land Rover has since invested $25 million in Lyft to cash in on the
autonomous trend.

110. AP Photo/Peter Southwick
"There is no reason anyone would want a computer in their home," said Ken Olsen, founder of Digital Equipment Corp.,
1977.
His comment came the year after Apple introduced the personal computer.
1903: “The horse is here to stay but the automobile
is only a novelty – a fad.” — President of the
Michigan Savings Bank advising Henry Ford’s
lawyer, Horace Rackham, not to invest in the Ford
Motor Company.

111. • 1876: "The Americans have need of the telephone, but we do not. We have plenty of
messenger boys." — William Preece, British Post Office.
• 1936. “A rocket will never be able to leave the Earth’s atmosphere.” — New York Times,
• 1946: "Television won't be able to hold on to any market it captures after the first six
months. People will soon get tired of staring at a plywood box every night." — Darryl
Zanuck, 20th Century Fox.
• 1966: "Remote shopping, while entirely feasible, will flop.” — Time Magazine.
• 1981: “Cellular phones will absolutely not replace local wire systems.” — Marty Cooper,
inventor.
• 1995: "I predict the Internet will soon go spectacularly supernova and in 1996
catastrophically collapse." — Robert Metcalfe, founder of 3Com.
• 2005: "There's just not that many videos I want to watch." — Steve Chen, CTO and co-
founder of YouTube expressing concerns about his company’s long term viability.
• 2007: “There’s no chance that the iPhone is going to get any significant market
share.” — Steve Ballmer, Microsoft CEO.

112. POLITICAL & LEGAL ENVIRONMENT
• Laws
• regulating business and increasing legislation
• Government agencies
• changing government agency
• Political Parties
• Pressure groups
• that influence and limit various organizations and individuals in a given
society
Increased emphasis on ethics and socially
responsible actions

117. SOCIO- CULTURAL ENVIRONMENT
• Persistence of cultural values
• Language & Religion
• People’s view of themselves
• People’s view of others
• People’s view of organizations
• People’s view of society
• People’s view of nature
• Institutions and other forces that affect society’s basic
values, perceptions, preferences, and behaviors
• Lifestyle, Spending habits

122. • https://youtu.be/lK3oqU2WNY0
• https://youtu.be/Yo2xGjYCYjU

123. • https://www.feedough.com/marketing-environment/
https://businessjargons.com/marketing-environment.html

124. GLOBAL MARKETING

125. GLOBAL MARKETING
• Refers to the marketing activities that direct the flow of goods and
services to the customers or users in more than one nation.

126. MARKETING CHALLENGES IN GLOBAL ECONOMIC SCENARIO
• 1. Threat of the new entrants – it is the ratio of the new entrants in the industry;
and greater the ratio is, greater will be intensity of competition.
• 2 Bargaining Power of Buyers – When the competition gets intense and the
number of manufacturers are greater, the buyer have more options for product
switching over, this will increase the buying power of buyer.
• 3. Threat of Substitute – As obvious from the term greater the threat of new
entrants, results in greater competition and so the number of substitutes increases.
• 4. Bargaining Power of Suppliers – Greater the bargaining power of the suppliers,
companies will be dependent on the suppliers and can influence the whole
industry.
• 5. Rivalry Among Competing Firms in Industry – the large number of the
manufacturers and similarly the greater number of the product variety increases
the rivalry amongst the competitors.

127. MARKETING IN 21ST CENTURY
1) Marketing and new technologies
• The information and communication technology revolution, with the global diffusion of the internet and the proliferation of advanced
interaction technologies (e.g. mobile devices such as laptops, smartphones, tablets, etc.), has deeply changed every sphere of life. The
advancement of new technology, particularly the Web 2.0, is redefining interactions among individuals as well as relationships between
producers and consumers. The digital revolution has deeply changed marketing processes: e.g. by integrating traditional market research
with big data analytics and innovating the process of value-creation through co-creation, i.e. consumers are directly involved in the
production and distribution of value using social media websites. Following are some of the important areas of marketing-technology
orientation:
• digital and social media marketing;
• internet and mobile marketing;
• consumer behavior and new technology;
• marketing and innovation;
• marketing and smart-life
• e-commerce.

128. 2) Marketing and international competition
• The globalization of markets has changed the rules of competition. The loosening of
barriers to trade may
• present threats to the firm, since domestic markets are opening up to foreign
competition, but may also offer huge growth opportunities on global, traditional or
emerging markets. In the new competitive environment even the smallest firm is
global. Internationalization has become a condition of survival and
• growth. Firms are asked to develop marketing processes that are globally integrated
and locally responsive. Following are some of the Important areas of study under
international marketing:
• International market analysis and selection
• Demand analysis, segmenting and positioning in international markets
• International marketing
• Cultural differences in International Marketing
• International Marketing and the country-of-origin effect
• Marketing strategies of Born Globals.

129. 3) Marketing and society
Marketing is evolving towards a new view of service delivery that has been inspired by the need to create
economic and social value for the customer. The new paradigm has gained a place in the management of
kind of organization, including cultural and public services. The typical today’s consumer is better
critically-minded and cares about the environment. He looks for authentic offers, he is health-conscious
looks for products that offer material and intellectual well-being and a better quality of life. He is a
responsible consumer, caring for sustainability and waste reduction.
Therefore companies are more and more developing public engagement strategies and embracing
social responsibility to achieve economic success and social progress.
This new orientation includes the following aspects:
• Green marketing and responsible consumption
• Ethic and philanthropic marketing
• Social marketing and sharing economy
• Marketing and value co-creation
• Public goods marketing
• heritage marketing
• storytelling to communicate corporate values.

130. END OF MODULE 1