Unit 1

Introduction
Marketing and Marketing Management
What is Marketing??
• Is it same as selling, Advertising?
• Simplistic term, Marketing is to identify and meet the needs of the
customer.
• As a marketer, you need to identify and fulfill customer needs.
• Customer needs: Met needs and Unmeet needs
• Good companies try to meet the needs of the customer, which are
already met,
• While great companies try to fulfill both met as well as unmet needs.
Marketing by Philip Kotler
• Philip Kotler; Marketing Guru

CCDVTP
• C- Creating
• C-communicating
• D-Delivery
• V-Value
• T-Target Market
• P-Profit
American Marketing Association
“Marketing is the activity, set of institutions, and processes for creating,
communicating, delivering, exchanging offerings that have value for
customers, clients, partners, and society in a large”
Marketing Management
• Marketing Management means management of all activities related
to marketing.
• It is planning, organizing, directing, controlling these all the steps are
performed to achieved marketing objective.
• Marketing Management involves three points:
1. Choosing a target market ( e.g. Age, Sex, Income level)
2. Creating and groom customers in the target market.
3. Creating superior customer value
Objective of Marketing Management
• Creating New Customers.
• Satisfying the Needs of Customers.
• Enhancing the Profitability of Business.
• Raising the standards of living People.
• Determining the Marketing Mix.
Customer Value and satisfaction
• Company’s first task is to –Create customers and not to create
products. --- Peter F Drucker.
• Customers think before they buy--- ----- Which product will give them
more value. -----They are value maximizers for less cost.
• It means the customers’ evaluation of the difference between all the
benefits and all the costs of the product.
• Total Customer Value =Customer Benefits(Economic+ Functional +
psychological) Minus Customer Costs (cost of evaluation + cost of
obtaining +cost of using + cost of disposing)
Steps in a Customer Value Analysis
1. Identify major attributes and benefits that customers value
2. Assess the qualitative importance of different attributes and
benefits
3. Assess the company’s and competitor’s performances on the
different customer values against rated importance
4. Examine ratings of specific segments
5. Monitor customer values over time
Why Superior Customer Value?
• Designing and delivering superior customer value propels
organizations to market leadership positions in highly competitive
global markets
• The Importance of Superior Customer Value Continuous creation of
business experiences to exceed customer expectations
Benefits of Customer Value
• Delighted Customers
• Benchmarking against the competitors.
• Identifying the right things.
• Enhanced Market Share
• Gaining Competitive Edge
Customer Satisfaction
“It is a person’s feelings of pleasure or disappointment resulting from
comparing a product’s perceived performance in relation to his or her
expectations”.

Customer Satisfaction Expectations are Based on Customer’s Past

Buying Experiences, the Opinions of Friends, Marketer and Competitor
Information and Product Exceeds Promises.
MEASURING CUSTOMER SATISFACTION
1. Getting the feedback right
2. Drawing the right conclusions on customer loyalty from feedback
(satisfaction does not mean loyalty)
3. Building customer satisfaction index
 20 – 80 – 30 Rule
• 20 -20% of your customers
• 80 -Generate 80% of your profit
• 30-Half of your profit is lost serving the bottom 30% of your customer
base
Management Orientation Concepts of Marketing
• There are five alternative concepts under which organization design
and carry out their marketing strategies:
1. The production concept
2. Product concept
3. Selling concept
4. Marketing concept
5. Societal concept
• Production Concept : is of the view that consumers will favour products
that are available and highly affordable.
• Therefore management focuses on improving production and
distribution efficiency. Thus produce products in great volume at a low
unit cost.
• Pricing is of importance. Management assumes that the lower cost will
automatically bring all customers to their doors.
• It aims at selling what it can produce.

• Management is of the view that marketing can be managed by managing

production.
• Product Concept : is of the view that consumers will favour products that
offer most quality, performance and features.

Therefore management spends time on making continuous product

improvements / innovations.

The management is totally engrossed with the product & almost

forget the consumers for whom the product is actually meant.

Management gives excessive attention to the product; disregarding

consumer preference.

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Production Concept seeks to win market & profit via high
volume of production & low unit cost.

Product Concept seeks to achieve the same result via

product excellence, improved products, new products &
ideally designed & engineered products.

It lays emphasis on quality assurance.

In short product concept tries to achieve marketing

success through product attributes.
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• Selling Concept : is of the view that consumers will not buy
enough of the firms products unless it undertakes a large selling
and promotion effort.

Company gets involved in aggressive selling and promotion

to attract consumers, thus pushing the products in the market for
high sales volume.

Selling is synonymous to Marketing.

Most firms practice Selling Concept when there is over

capacity.

This leads to / creates sales transactions rather than long term

profitable customer relationship. 8
• Marketing Concept : This philosophy holds that
achieving organizational goals depends on determining
the needs and wants of the target markets and
delivering the desired satisfactions more effectively and
efficiently than competitors do.

“Customer Focus and Values” are the paths to sales

and profits.

All departments “think customer” & “act customer”.

The concept puts the consumer at both the beginning

& at the end of the business cycle. 9
 Marketing Management Concepts (MMC)

Difference between Selling Concept and Marketing Concept.

Starting Focus Means Ends

Point

Existing Selling & Profits thru’

Factory Products Promoting Sales Volume

Selling Concept

Consumer Integrated Profits thru’

Market Needs Marketing Consumer
Satisfaction

Marketing Concept
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• Societal Marketing Concept : This philosophy holds that the organization
should determine the needs, wants and interests of the target markets and
deliver the desired satisfaction more effectively and efficiently than do
competitors in a way that maintains or improves the consumers and
society's’ well being.

Society
(Human Welfare)

SMC

Consumers Company
(Want Satisfaction) (Profits)
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 Marketing Management Philosophies

•Consumers favor products that are

Production Concept available and highly affordable.
•Improve production and distribution.

•Consumers favor products that offer

Product Concept the most quality, performance, and
innovative features.

Selling Concept •Consumers will buy products only if

the company promotes/ sells these
products.
Marketing Concept •Focuses on needs/ wants of target
markets & delivering satisfaction
better than competitors.
Societal Marketing Concept •Focuses on needs/ wants of target
markets & delivering superior value.