1. INTRODUCTION TO MARKETING
Prof. Kunal Gaurav
Dhruva College of Management
Hyderabad
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2. MARKETING - DEFINITION
• AMA's 2004 Definition - "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.“
• AMA's 2007 Revised Definition - “Marketing is the activity,
conducted by organizations and individuals, that operates
through a set of institutions and processes for creating,
communicating, delivering, and exchanging market offerings
that have value for customers, clients, marketers, and society at
large.”
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3. MARKETING – SOCIAL DEFINITION
Marketing is a societal
process by which individuals
and groups obtain what they
need and want through
creating, offering and freely
exchanging products and
services of value with others.
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4. 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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5. SCOPE: WHAT IS MARKETED?
Goods
Services
Events & Experiences
Persons
Places & Properties
Organizations
Information
Ideas
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7. NEED, WANT & DEMAND
• Needs describe basic human requirements such
as food, air, water, clothing, and shelter. TYPES –
Stated Need, Real Need, Unstated Need, Delight
Need & Secret Need.
• These needs become wants when they are
directed to specific objects that might satisfy the
need.
• Demands are wants for specific products backed
by an ability to pay, willingness to purchase &
availability of products in the market.
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8. MARKET DEMAND STATES
Negative Nonexistent Latent
Declining Irregular
Full Overfull Unwholesome
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9. CONCEPT OF EXCHANGE
• There are several ways to obtain a desired
product;
– Self Production
– Coercion
– Begging/ Borrowing
– Exchange (Core of Marketing)
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10. CONCEPT OF EXCHANGE
Exchange, the core of marketing, involves obtaining a desired
product from someone by offering something in return. 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.
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11. SERVICE
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. Its
production may or may not be tied to a physical
product. Examples – Financial service, Beauty
service, Health service etc.
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12. Categories of Service Mix
1. Pure tangible good: The offering is a tangible good such as soap; no services
accompany the product.
2. Tangible good with accompanying services: The offering consists of a tangible
good accompanied by one or more services. General Motors, for example, offers
repairs, maintenance, warranty fulfillment, and other services along with its cars
and trucks.
3. Hybrid: The offering consists of equal parts of goods and services. For example,
people patronize restaurants for both food and service.
4. Major service with accompanying minor goods and services: The offering
consists of a major service along with additional services or supporting goods.
For example, airline passengers are buying transportation service, but they get
food and drinks, as well.
5. Pure service: The offering consists primarily of a service; examples include baby-
sitting and psychotherapy.
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13. COMPANY ORIENTATIONS
Production Product
Societal
Selling Marketing
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14. EVOLUTION OF MARKETING
• The Production Concept, one of the oldest in
business, holds that consumers prefer products that
are widely available and inexpensive.
• The Product Concept holds that consumers favor
those products that offer the most quality,
performance, or innovative features.
• The Selling Concept holds that consumers and
businesses, if left alone, will ordinarily not buy
enough of the organization’s products. The
organization must, therefore, undertake an
aggressive selling and promotion effort.
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15. EVOLUTION OF MARKETING
• The Marketing Concept holds that the key to achieving
organizational goals consists of the company being more
effective than its competitors in creating, delivering, and
communicating customer value to its chosen target
markets.
• The Societal Marketing Concept, which holds that the
organization’s task is to determine the needs, wants, and
interests of target markets and to deliver the desired
satisfactions more effectively and efficiently than
competitors in a way that preserves or enhances the
consumer’s and the society’s well-being.
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16. Competition
• Gause’s Principle of Competitive Exclusion: No two
species can co-exist that make their living in the identical
way.
• Competition, a critical factor in marketing management,
includes all of the actual and potential rival offerings and
substitutes that a buyer might consider.
• Competition is a combat between individuals, groups,
nations, animals, etc. for territory, a niche, or allocation of
resources. It arises whenever two or more parties strive for a
goal which cannot be shared.
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17. LEVELS OF COMPETITION
• Generic competition: A company sees its competitors as all
companies that compete for the same consumer dollars. e.g.- BMW
would see itself competing with companies that sell major consumer
durables, FMCG, foreign vacations, and new homes.
• Form competition: A company sees its competitors as all companies
that manufacture products that supply the same service. e.g.-BMW
would see itself competing against manufacturers of all vehicles, such
as motorcycles, bicycles, and trucks.
• Industry competition: A company sees its competitors as all
companies that make the same product or class of products. e.g.
– BMW, Hyundai Santro, Maruti Alto etc.
• Brand competition: A company sees its competitors as other
companies that offer similar products and services to the same
customers at similar prices. e.g.- BMW and Mercedes Benz
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18. What is Myopia
• Nearsightedness--not inherited. It can be
prevented.
• Short sighted and inward looking
approach to marketing that focuses on the
needs of the firm instead of defining the
firm and its products in terms of the
customers' needs and wants.
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19. “There is no such
thing as a growth
industry, what we
have is growth
opportunities.”
-Theodore Levitt
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20. Marketing Myopia: Four Myths
• Myth 1: An ever-expanding and more
affluent population will ensure our growth.
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21. Marketing Myopia: Four Myths
• Myth 1: An ever-expanding and more
affluent population will ensure our growth.
• When markets are expanding, we often
assume we don’t have to think
imaginatively about our businesses, but
instead seek to outdo rivals simply by
improving what we are already doing.
• Consequence: increased efficiency
making products rather than boosting the
value those products deliver to customers.
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22. Marketing Myopia: Four Myths
• Myth 2: there is no competitive substitute
for our industry’s major product.
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23. Marketing Myopia: Four Myths
• Myth 2: there is no competitive substitute
for our industry’s major product.
• Believing that our products have no rivals
makes our companies vulnerable to
dramatic innovations –often by smaller
newer companies that focus on customer
needs rather than the products
themselves
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24. Marketing Myopia: Four Myths
• Myth 3: We can protect ourselves through
mass production.
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25. Marketing Myopia: Four Myths
• Myth 3: We can protect ourselves through
mass production.
• While the declining unit costs that come
with increased production are alluring,
focusing on mass production emphasizes
our company’s needs when we should be
emphasizing our customers’.
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26. Marketing Myopia: Four Myths
• Myth 4: Technical R&D will ensure our
growth
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27. Marketing Myopia: Four Myths
• Myth 4: Technical R&D will ensure our
growth
• When R&D produces breakthrough
products, it is critical to remain focused on
customer needs…ideally, new products
are both breakthrough and meet customer
needs
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28. Henry Ford
Brilliant Marketer Senseless Marketer
• Created a product • Refused to make cars in
customer’s needed any other color but black
• Created a product
customer’s could afford
• Created production
system to fit market
needs
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29. Levitt has also devised ways to overcome
marketing myopia. Some of the
recommendations are
• Be customer led, not product oriented.
• Market orientation should permeate throughout
the organization.
• Managers need to be proactive and visionary
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30. Conclusion
• “Organizations must learn to think of itself
not as producing goods or services but as
buying customers, as doing the things that
will make people want to do business with
it.”
Theodore Levitt
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31. THANK YOU!
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