INTRODUCTION TO
PRINCIPLES OF MARKETING
Part-1
UNDERSTANDING MARKETING AND
MARKETING PROCESS
CHAPTER-1
MARKETING – “Managing profitable
customer relationships”.
Definition of Marketing
Needs, Wants and Demands
Marketing offers- Products, Services and
Experiences
Market is the set of all actual and potential
buyers of a product or service.
What is Marketing?
Process by which individuals and
groups obtain what they need and
want through creating and
exchanging products and value with
others.
More simply: Marketing is the
delivery of customer satisfaction at a
profit.
Originally the term Market stood for the place
where buyers and sellers gathered to exchange
their goods, such as a village square. Marketers
work to understand the needs and wants of
specific markets and to select the markets that
they can serve best. In turn they develop
products and services that create value and
satisfaction for customers in these markets. The
result is profitable long-term customer
relationships.
Define marketing?
Marketing is defined as a social and
managerial process by which individuals and
groups obtain what they need and want
through creating and exchanging products of
value with others.
Many people think of Marketing only as selling
and advertising. And no wonder- every day we
are bombarded with television commercials,
newspaper ads, direct mail offers, sales calls
etc. However, selling and advertising is only the
tip of the marketing iceberg. Although they are
important, they are only two of many marketing
functions.
Today, Marketing must be understood not in the
old sense of making a sale- but in the new sense
of Satisfying customer needs.
To explain the above definition we will examine
the following important core marketing
concepts.
NEEDS: The most basic concept underlying
marketing is that of human need. ‘Human
needs are states of felt deprivation’. They
include basic physical needs for food, clothing,
warmth and safety.
WANTS: Are the form human needs take as
they are shaped by culture and individual
personality. Example: If an American needs
food wants big Mac Donald, French fries etc. if
a person in Mauritius needs food wants a
mango, rice, lentils and beans etc. ‘Wants are
shaped by one’s society and are described in
terms of objects that will satisfy needs’.
DEMANDS: Given there wants and resources,
people demand products with benefits that add
up to the most value and satisfaction. ‘When
back by buying power wants become
demand’.
What are marketing offers?
MARKETING OFFERS- ‘Products, Services
and Experiences’
Marketing offers are some combination of
products, services, information, or experiences
offered to a market to satisfy a need or want.
Marketing offers are not limited to physical
products. In addition to tangible products,
marketing offers include services, activities or
benefits offered for sale that are essentially
intangible and do not result in the ownership of
anything. Examples include banking, airline,
hotel, tax preparation, and home repair services.
‘Marketing occurs when people decide to satisfy
needs and wants through exchange’.
Exchange is the act of obtaining a desired
object by offering something in return.
Transaction consists of a trade of value
between two parties.
CUSTOMER VALUE AND SATISFACTION
Consumers usually face a broad range of
products and services offered to them that
might satisfy a given need.
How do they make their choice among the
given Marketing offers?
Consumers make choices based on their
perception of the value and satisfaction that
various products and services deliver.
Customer Value is the difference between the
values the customer gains from owning and
using a product and the costs of obtaining the
product.
Customer Satisfaction with a purchase depends
on how well the product’s performance lives up
to the customer’s expectations. Customer
satisfaction is a key influence on future buying
behavior.
Satisfied customers buy again and tell others
about their good experiences. Dissatisfied
customers often switch to competitors and
discourage the products to others.
CUSTOMER RELATIONSHIP MANAGEMENT
Customer relationship management is the overall
process of building and maintaining profitable
customer relationships by delivering superior
customer value and satisfaction.
Thus, today’s companies are going beyond
designing strategies to attract new customers
and create transactions with them. They are
using customer relationship management to
retain current customers and build profitable,
long term relationships with them. The new
view is that ‘Marketing is the science and art
of finding, retaining and growing profitable
customers’.
MARKETING MANAGEMENT
‘The Art and Science of choosing target markets and
building profitable relationships with them’.
This involves getting, keeping and growing customers
through creating, delivering and communicating
superior customer value. Thus, marketing management
involves managing demand, which in turn involves
managing customer relationships.
How
How DoDo Consumers
Consumers Choose
Choose
Choose
Choose Among
Among Products
Products and
and
Services?
Services?
Customer Value - benefit that the customer
gains from owning and using a product
compared to the cost of obtaining the
product.
Customer Satisfaction - depends on the
product’s perceived performance in
delivering value relative to a buyer’s
expectations. Linked to Quality and Total
Quality Management (TQM).
How
How do
do Consumers
Consumers Obtain
Obtain
Products
Products and
and Services?
Services?
Exchanges - act of obtaining a desired object from
someone by offering something in return.
Transactions - trade of values between parties.
Usually involves money and a response.
Relationships - building long-term relationships with
consumers, distributors, dealers, and suppliers.
Who
Who Purchases
Purchases Products
Products
and
and Services?
Services?
Actual
Actual
Market
Market--buyers
buyers Buyers
who Buyers
whoshare
shareaa
particular
particularneed
need
or
orwant
wantthat
thatcan
can
be
besatisfied
satisfiedby
byaa
company’s
company’sproducts
products Potential
Potential
or
orservices.
services. Buyers
Buyers
Marketing
Marketing Management
Management
Marketing Management
Implementing programs to create exchanges
with target buyers to achieve organizational
goals
Demand Management
Finding and increasing demand, also
changing or reducing demand
Profitable Customer Relationships
Attracting new customers and
retaining current customers
Customer equity
