Unit 1 Introduction to Marketing

Meaning and Definition

Meaning: to as the place or geographical area where buyers and sellers assemble and
exchange goods or where a commodity is concentrated for sale.
Market is a place where sellers and buyers of a commodity meet to trade
Definition: Market is a medium that allow buyers and sellers of a specific good and service
to interact in order to facilitate an exchange.
According to Philip Kotler: An area of atmosphere for a potential exchange
Marketing:
Marketing is the business process by which products are matched with market and through
which transfers of ownership are affected.”
Marketing is the process of and physical exchange of merchandise that involves two distinct
aspects namely, mental and physical.
As per AMA, “Marketing 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 goals”.
Marketing has been also been defined in the following manner:
◉ According to the American Marketing Association (AMA), “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.”
◉ In the words of Peter Drucker, “The aim of marketing is to know and understand the
customer so well that the product or service fits him and sells itself.”
◉ Philip Kotler has defined marketing as, “Marketing Management is the analysis, planning,
implementation and control of programs designed to bring about desired exchanges with
target audiences for the purpose of personal and of mutual gain. It relies heavily on the
adoption and coordination of product, price, promotion, and place for achieving
responses.”

NATURE OF MARKETING:
Marketing is a never ending task. Marketing concerns itself with a arranging all the resources
in a way that meets the needs of the customers. The following points will bring forth the
nature of marketing.
1. Marketing is customer oriented: Marketing begins and ends with the customer.
Marketing concerns itself not only with the satisfaction of the customer but also objects to
delight him/her. All the organizational activities must be targeted and focused towards the
customer. Customers must be allowed to decree product specifications and standards
regarding quality.
2. Marketing is the delivery of value: When a customer is satisfied from a particular
product based on its overall performance, then the satisfaction that he has received is known
as customer value. Customers consider the product’s value and price before making a
decision and make a trade-off between cost and benefit of the product. They will choose a
product that gives them more value per rupee.
3. Marketing is network of relationships: The focal point of all marketing activities is the
customer. The term relationships marketing came into light in1990’s.
4. Marketing is business: All activities start from marketing i.e. through knowing
customer’s needs and wants and ends on the customer i.e. providing after sales service and
knowing customer dissonance.
5. Marketing is dynamic: The word dynamic means ever changing. The needs and wants of
the customer are changing constantly. Since the goal of marketing is to meet customer’s
needs and wants by furnishing them with the products they want to buy, therefore, marketing
must also change constantly to meet those needs and wants.

SCOPE OF MARKETING:
1. Marketing Research: Market Research is a tool used for decision making about the
marketing mix’s elements. Research has to be carried out in order to identify the customer’s
needs, their tastes and preferences, their interests, economic position, their paying capacity
and effectiveness of certain advertisements.
2. Pricing: Pricing is extremely important since it directly affects an organization’s sales and
profits. While deciding the price of the product a number of factors have to be kept in mind
like the cost of production, paying capacity of the customer, industry demand, competitor’s
prices and the target profit margin.
3. Advertising and Sales Promotion: In this era of tough competition, the sales promotion
and advertisements have become almost an inbuilt part of the marketing. It helps to make the
customer aware about the product, makes him curious about the product and thus promotes
sales.
4. Channels of Distribution: Bringing together the buyer and seller and facilitating their
exchange is the essence of marketing. Distribution channels are an integral part of a complex
system that has evolved from cultural and social patterns in order to facilitate exchange
transactions..
5. Financing:
It is difficult to perform various marketing activities without the availability of adequate and
cheap finance. It has been rightly remarked “Money or Credit is the lubricant that facilitates
the operation of the marketing machine as modern marketing requires vast resources.”
6. After-Sales Service: The furnishing of after sales service is very critical for the
satisfaction of the customers. The free repairs, the return or exchange of the product during
the guarantee period if the product proves defective or worthless, etc. are included in after
sales service.

IMPORTANCE OF MARKETING
Successful marketing strategies help in not only understanding the customer and his needs
but also in the following ways:
1. It promotes awareness among the public – Marketing enables the customers to become
aware about the various products that are available in the market. A firm’s product must be
known to the potential buyers for it to succeed. If there were no marketing or advertising, the
customers would not know about the products.
2. It helps in boosting sales- Once the prospects become aware about the company’s
products or services it boosts up the chances that customers will make a purchase. New
customers also start to spread the word, informing their friends and family about the
company’s product and consequently company’s sales starts to increase rapidly.
3. It builds company reputation – Marketing helps to build brand name recognition or
product recall and hence enables the customers to relate the brand name with the images,
logos and captions that they see or hear in advertisements.
4. It helps in fostering healthy competition – Marketing promotes a climate of healthy
competition in the marketplace. It helps to position the company as being superior to its rivals
so that the customers will prefer its products rather than buying from other firms that sell
similar products and services.

PHILOSOPHY OF MARKETING:
1. PRODUCTION CONCEPT: Managers of production oriented organizations concentrate
on achieving high production efficiency and wide distribution coverage.
2. PRODUCT CONCEPT: The product concept holds that consumers will favour those
products that offer the best quality, performance or innovative features.
3. THE SELLING CONCEPT: The selling concept holds that consumers, if left alone, will
ordinarily not buy enough of the organisation’s products.
4. THE MARKETING CONCEPT: This is a customer oriented approach which points out
that the primary task of a basis of latest and accurate knowledge of market demand, the
enterprise must produce and offer the products which will give the desired satisfaction and
services to the customer

It involves the following orientation

(a) Customer orientation.
(B) Integrated approach.-
(C) Marketing information system
(D) Profitability.
(E) Societal marketing concept

TRADITIONAL CONCEPTS OF MARKETING

It is the process by which goods are made available to ultimate consumers from their place
of origin. The traditional concept of marketing corresponds to the general notion
of marketing, which means selling goods and services after they have been produced. The
following are the different managerial orientations evolved at different times due to changes
in environment for the understanding of the concepts in the study of marketing
1. The Production Concept. This concept is the oldest of the concepts in business. It
holds that consumers will prefer products that are widely available and
inexpensive. Managers focusing on this concept concentrate on achieving high
production efficiency, low costs, and mass distribution. They assume that consumers are
primarily interested in product availability and low prices. This orientation makes sense
in developing countries, where consumers are more interested in obtaining the product
than in its features.
2. The Product Concept. This orientation holds that consumers will favor those products
that offer the most quality, performance, or innovative features. Managers focusing on
 this concept concentrate on making superior products and improving them over time.
They assume that buyers admire well-made products and can appraise quality and
performance. However, these managers are sometimes caught up in a love affair with
their product and do not realize what the market needs. Management might commit the
“better-mousetrap” fallacy, believing that a better mousetrap will lead people to beat a
path to its door.
3. The Selling Concept. This is another common business orientation. It holds that
consumers and businesses, if left alone, will ordinarily not buy enough of the selling
company’s products. The organization must, therefore, undertake an aggressive selling
and promotion effort. This concept assumes that consumers typically sho9w buyi8ng
inertia or resistance and must be coaxed into buying. It also assumes that the company
has a whole battery of effective selling and promotional tools to stimulate more buying.
Most firms practice the selling concept when they have overcapacity. Their aim is
to sell what they make rather than make what the market wants.

Modern concept of marketing:

Philip kotler expresses the same idea in other words” the market concept is customer
orientation backed by integrated marketing aimed at generating customer satisfaction as the
key to satisfy organization goals”
The marketing concept holds that the key to achieve its organizational goals consists of the
company being more effective than competitors in creating, delivering and communicating
customer value to its chosen target markets. The marketing concept has been expresses as
follow:
“Meeting needs profitability”
“Find wants and fill them”

Components of Modern Marketing concept

1. Customer orientation
2. Integrated marketing
 3. Profitable sales through customer’s satisfaction
4. Customer welfare

1. Customer orientation
It is defined as an approach to sales and customer-relations in which staff focus on
helping customers to meet their long-term needs and wants. Here, management and
employees align their individual and team objectives around satisfying and
retaining customers.
2. Integrated marketing:
It is an approach to creating a unified and seamless experience for consumers to interact
with the brand/enterprise; it attempts to meld all aspects of marketing communication
such as advertising, sales promotion, public relations, direct marketing, and social
media, through their respective mix of tactics, methods, channels, media, and activities,
so that all work together as a unified force. It is a process designed to ensure that all
messaging and communications strategies are consistent across all channels and are
centered on the customer.
3. Profitable sales through customer’s satisfaction
The main aim of every business is earning and maximizing its profits. Manufacturer
cannot ignore the wants and expectations of the customers. The customer is the
supreme and he determines the products to be produced by the manufacturer.
4. Customer welfare
It refers to the individual benefits derived from the consumption of goods and services.
In theory, individual welfare is defined by an individual's own assessment of his/her
satisfaction, given prices and income
a. Customer is always right if he/she thinks they are right
b. We are more interested in pleasing a customer than in marketing a sales

Distinguish between Traditional and Modern marketing

Traditional Modern marketing

Focus on selling product Focus on customer satisfaction

 Customer needs and wants wasn’t Customer needs and wants are very important
important

Promoting the product to attain sales at Promoting the product to attain customer
profit satisfaction and sales at profit

The existing products are imposed on Products are designed at per customer needs
customers

No internet facilities Use of internet marketing

Fewer choices of customers More choice of customer

Inefficient distribution of channel efficient distribution of channel

Complex buying process Simple buying process

Less focus on customer relationship More focus on customer relationship

Less focus on branding More focus on branding

No social media Social media plays a vital role

No web banner ad Web banner plays an important role

Less focus towards customer value Enhance focus towards creating customer
value

Less importance for packing Attractive packing plays a vital role

Customer service is less Enhances customer services

Characteristics of modern marketing concept

◉ Consumer is king-needs and wants
◉ Process- understanding and satisfying
◉ Maximizes profits
◉ Creates and delivers the standard of living
Modern concept marketing
◉ Customer orientation
◉ Integrated marketing
◉ Profitable sales through Customer's satisfaction
◉ Customers welfare
Implementing the marketing concept
1. Consumer focus : the firms should focus all its attention on the consumer. It should
ascertain consumer needs
2. The profit focus: the consumer focus should be accompanied by the profit focus in
all marketing decision.
3. Broadened functional base: the functional base of marketing is to be broadened
towards marketing research and product planning and post-transaction research
4. Integration of marketing functions: all the functions are to be closely synchronised
to maximise influence on the market place and on the consumer
5. Research based decisions: marketing research must be given an adequate role in the
overall marketing decisions.
6. Innovation: concepts insists upon constant innovations, it is purposeful, organized,
risk-taking change introduced for the purpose of maximization economic opportunity
Approaches to Marketing
◉ Commodity:
◉ Functional Approach
◉ Institutional Approach
◉ Managerial or Decision Making Approach
◉ The Systems Approach
◉ other approach
◉ Legal approach,
◉ Societal approach, and
◉ Economic approach.
Approaches to Marketing
1. Commodity:
Under the commodity approach, we study the flow of a certain commodity and its journey
from the original producer right up to the final customer. In such a study, we can locate
the centre of production, people engaged in buying and selling of the product, mode of
transportation, problems of selling and advertising the product, problems of financing it,
problem arising out of its storage and so on.
2. Functional Approach
Under the functional approach, we concentrate our attention on the specialised services or
functions or activities performed by marketers. The study of marketing functions (like,
buying, selling, storage, risk bearing, transport financing and providing information)
represents the functional approach to the marketing system.
3. Institutional Approach
Under the institutional approach, our main interest centres round the marketing
institutions or agencies such as wholesalers, retailers, transport undertakings, banks,
insurance companies etc., who participate in discharging their marketing responsibilities
during the movement of distribution of goods. We try to find out how these various
business institutions and agencies work together to form a total marketing system.
4. Managerial or Decision Making Approach
This approach which is of recent origin combines certain features of the commodity,
institutional and functional approaches. In this approach, the focus of marketing study is
on the decision making process. The study encompasses discussion of the different
underlying concepts, decision influencing factors, alternative strategies and techniques
and methods of problem solving.
5. The Systems Approach
A system is a set of interacting or interdependent groups co-ordinated to form a unified
whole and organised to accomplish a set of objectives. In the model of systems approach
we have- (i) Objective, (ii) Inputs, (iii) Processor, (iv) Outputs, and (v) Feedback. The
objectives direct the process. Control monitors the process.
7. Other approach
Besides these five approaches which are said time and again, we can add some other
approaches like:
(i) Legal approach,
(ii) Societal approach, and
(iii) Economic approach.
Legal approach
Focuses its attention on the legal transfer of ownership of goods to the buyer. It highlights
the various legislations that are in force to support marketing system. Acts like Sale of
Goods Act, Carrier Act, Construct Act etc., at national level and Act like Regulated
Market Act at state level provide legal aspects of marketing.
Societal approach
States that society identifies its own consumption needs and satisfy it accordingly.
Modern aspect of marketing — consumer to consumer — is the theme of societal
approach. Consumers in the society project their desires; producers produce the products
 accordingly and sell them to consumers. This is a recent thinking on marketing concept.
Societal concept projects the idea that “society meets its own consumption needs.”
Economic approach
It considers market forces like demand, supply, price etc. The market behaviour, the types
of markets etc. are considered in this approach.

Evolution of Marketing Orientation:

◉ Production Orientation
◉ Product Orientation
◉ Selling orientation
◉ Marketing Orientation
◉ Holistic Marketing Orientation
Production Orientation
The production orientation was based on Say’s Law which states that the “production of
commodities creates, and is the one and universal cause which creates, a market for the
commodities produced".
The main attributes of this orientation are
o It is company focused
o Lays stress on mass production and mass distribution
o Objective is to attain economies of scale
o Based on the concept “Supply creates its own demand”
o Ignores the needs and wants of consumers.
Product Orientation:
The organizations employing product orientation are chiefly concerned with quality of
products. They assume that consumers prefer high quality products. Emphasis is laid on
making superior products and then improving them overtime. The organization stresses on
R&D, innovation and performance of the product. Continuous evolution during the life cycles
of the product to maintain the attention of the potential customers is the main focus of such
organizations. Organizations following this orientation lay inadequate consciousness to what
customers really need and want.
The main attributes of this orientation are
◉ It is product focused
◉ Assumes that consumers are interested in product quality.
 ◉ Based on the belief that consumers choose amongst different products on the
basis of best quality for the price paid.
Selling orientation:
This orientation is practiced most aggressively by organisations that have overcapacity or
deal in unsought goods i.e. goods that consumers do not think of buying such as
encyclopaedias and insurance policies. The aim of these organisations is to sell what they
have made rather than make what the target market wants.
The main features of this orientation are
o It is company focussed
o Lays prominence on sales volume
o Based on the belief that if customers are left alone they do not buy enough of
organizations product.
o Lays stress on aggressive selling tactics
o Used when organizations have over capacity or sell unsought good
Marketing Orientation
It is a consumer centered orientation that is based on the “sense-and-respond” philosophy.
The aim of organization following this orientation is to find right products for their customers
rather than right customers for their products. It is a coordinated campaign between a
company and its customers wherein the company tailors the product to meet the needs of the
customers. The organizations believe that organizational goals can be achieved by being
more efficacious than the rivals in consolidating and coordinating their marketing activities in
ascertaining and satisfying the needs and wants of the target market.
The main attributes of this orientation are
 It is consumer oriented
 Prominence is on attracting and maintaining customers by offering them those products
that satisfy their need and meet wants.
 Integrate all marketing activities in identifying and satisfying the needs of the consumers.
 Prominence is on selling satisfaction and not merely selling goods.
Holistic Marketing Orientation
The organizations following holistic marketing orientation look at marketing as a complex
activity and recognize that “everything matters” in marketing and that a broad consolidated
perspective is essential in developing, designing and implementing marketing programs and
activities.
The main characteristics of holistic marketing are:
 In marketing everything matters
 Lays importance on long term mutually satisfying rapport with all the stakeholders
 Employees at all levels in the organisations should aim to satisfy the customers
 All the marketing mix elements should reinforce the brands core message
 Due consideration should be given to society’s long term interest.

SELLING vs. MARKETING

Recent trends in marketing.

 Digital marketing
Digital marketing is the marketing of products or services using digital technologies,
mainly on the Internet, but also including mobile phones, advertising on websites or
apps or social media through banners or other ad formats made of text, images,
flash, video, and audio
 Mobile marketing
Mobile marketing is any advertising activity that promotes products and services via
mobile devices, such as tablets and smartphones. Mobile marketing makes use of
features of modern mobile technology, including location services, to tailor
marketing campaigns based on an individual's location. Mobile marketing is a way
in which technology can be used to create personalized promotion of goods or
services to a user who is constantly connected to a network.
 Telemarketing
 Telemarketing involves using the phone to contact potential customers and promote
products or services. It can be divided into two main types: inbound and outbound.
Inbound telemarketing is when customers call in to inquire about a product or
service, while outbound telemarketing involves calling potential customers to pitch
an offer
 Green marketing
Green marketing refers to the practice of promoting products or services based on
their environmental benefits. This can include anything from using sustainable
materials and eco-friendly production processes to supporting environmental causes
and reducing carbon footprints
 Relationship marketing

Relationship marketing focuses on building long-term relationships with customers

rather than just aiming for one-time sales. It’s about fostering customer loyalty, trust,
and engagement over time.

 Social media marketing

Social media marketing involves using social media platforms to promote products,
services, or brands and engage with a target audience. It’s a crucial component of
digital marketing strategies due to its broad reach and the ability to interact with
consumers in real-time
 E-tailing.
E-tailing, or electronic retailing, refers to the sale of goods and services via the
internet. It’s a subset of e-commerce specifically focused on retail transactions
conducted online. E-tailing encompasses a range of activities and strategies aimed at
selling products directly to consumers through online platforms.