The Marketing Concept

Evolving Perspectives

Who makes what?

List A. Products 1. Air Conditioners 2. Hamam soap 3. Washing machines 4. Power generators 5. Sunsilk shampoo 6. Lux Soap 7. Safety Locks 8. Dove 9. Refrigerators 10.Laptops 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. Biscuits Cement Office furniture Shoes Bicycles Computer Software Computer Hardware Cooking Oil Tooth Paste Detergent Powder

List B. Companies ITC, Godrej, BHEL, Videocon, Voltas, HP, Britannia, L&T, Atlas, Bata, HLL, Wipro, Microsoft, P&G

SECTION 2.1

The Marketing Concept

The Basic Concept

The marketing concept states that businesses must satisfy customers' needs and wants in order to make a profit.

SECTION 2.1

The Marketing Concept

Customers vs. Consumers

Customers buy a product. Consumers use the product. Example: Parents who buy video games from retailers are customers. The kids who play the video games are the consumers.

SECTION 2.1

The Marketing Concept

What is a Market?
A market is all potential customers who share common needs and wants and who have the ability and willingness to buy the product.

What is a Market?

The set of actual and potential buyers of a product.

These people share a need or want that can be satisfied through exchange relationships.

What Is Marketing?
Simple Definition: Marketing is managing profitable customer relationships. Goals: 1. Attract new customers by promising superior value. 2. Keep and grow current customers by delivering satisfaction.

What is Marketing?
American Marketing Association Definition: 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 goals.

Evolving Views of Marketings Role

Production Marketing
Customer

e. The customer as the controlling function and marketing as the integrative function

What does a Marketer Do?

What does a Marketer Do?

Why Bike (Analyze Needs) Which people? (Segment) Bike Type (Product Plan) What Quantity? (Demand Forecasting)

Where to Sell? (Distribution)

What & how to inform? (Promotion)

What to Charge? (Price)

Who all will compete (Analyze Competitors) What if problem? (Warranty)

Marketing, Defined
Business activities designed to
Plan Price Promote Distribute (Place) Want-satisfying products to target markets to achieve organizational objectives

Exchange at the heart of Marketing

Exchange the essence of Marketing

Between Organizations and/or Individuals

Marketers and Markets

Tangible/ Intangible goods, Services, Ideas, places, people

Conditions of Exchange

2 or More parties

Voluntary participation

Each has something of value for the other party

Parties must communicate

Stages of the Evolution of Marketing

Product-Orientation Stage Increase Supply Produce Efficiently

Sales-Orientation Stage

Promote through Sales and Advertising

Market-Orientation Stage

Long-Run Customer Satisfaction

Four Eras in the History of Marketing

Production Era
Prior to 1920s Production orientation Business success often defined solely in terms of production victories

Sales Era
Prior to 1950s Customers resist nonessential goods and services Personal selling and advertisings task is to convince them to buy

Marketing Era
Since 1950s Marketing Concept Emerges Shift from sellers to buyers market Consumer orientation

Marketing Concept
Companywide consumer orientation Objective of achieving longrun success

Marketing Concept
A business philosophy that makes Customer Satisfaction as focal point of all the activities of the business

Marketing Management Philosophies

Societal Marketing Concept

Marketing Concept
Selling Concept Product Concept Production Concept

The Production Concept

The idea that consumer will favour products that are available and highly affordable and that the

organisation should therefore focus on improving

production and distribution efficiency.

The Product concept

The idea that consumers will favour products that offer the most quality, performance, and features and

that the organisation should therefore devote its energy

to making product improvement.

Marketing and Sales Concepts Contrasted

Societal Marketing Concept

This Is a Need
Needs - state of felt deprivation including physical, social, and individual needs.

Maslows Hierarchy of Needs

This Is a Want
Wants - form that a human need takes, as shaped by culture and individual personality.

Need / Want Fulfillment

Needs and Wants Fulfilled through a Marketing Offer :

Some combination of products, services, information, or experiences offered to a market to satisfy a need or want.

What Satisfies Consumers Needs and Wants?

Anything that can be Offered to a Market to Satisfy a Need or Want

Products

Persons

Places

Organizations

Information

Ideas

Activity or Benefit Offered for Sale That is Essentially Intangible and Does Not Result in the Ownership of Anything

Services

Marketing Myopia

Sellers pay more attention to the specific products they offer than to the benefits and experiences produced by the products. They focus on the wants and lose sight of the needs.

This Is Demand
Wants Buying Power

Demand

Segmentation and Target Marketing

#1
Market Segmentation:
Divide the market into segments of customers

#2

Target Marketing:
Select the segment to cultivate

Customer Satisfaction

Dependent on the products perceived performance relative to a buyers expectations.

Value and Satisfaction

Expectation
8

Performance
10

Expectation
10

Performance
8

If performance is lower than expectations, satisfaction is low. If performance is higher than expectations, satisfaction is high.

Loyalty and Retention

Financial Benefits Social Benefits

Structural Ties

Customer Relationship Management

The process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.

Customer Loyalty & Retention

Customer Lifetime Value

The entire stream of purchases that the customer would make over a lifetime of patronage.

Share of Customer

The share a company gets of the customers purchasing in their product categories.

Simple Marketing System

Communication

(a collection of sellers)

Industry

Goods/services

Money

(a collection of Buyers)

Market

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Information

Difference Between - Sales & Marketing ?

Sales
trying to get the customer to want what the company produces

Marketing
trying to get the company produce what the customer wants

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