Chapter 1: Defining Marketing for New Realities

Part-1: Marketing and Marketing Management

What is Marketing: Marketing is not equal to Branding, selling, or advertising; Marketing is
also not equal to combination of all these three. All of them are functions of marketing.
Managers sometimes think of marketing as “the art of selling products,” but many people are
surprised when they hear that selling is not the most important part of marketing! Selling is
only the tip of the marketing iceberg.
Peter Drucker, a leading management theorist, puts it this way: “There will always, one can
assume, be need for some selling. But the aim of marketing is to make selling superfluous. The
aim of marketing is to know and understand the customer so well that the product or service fits
him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that
should be needed then is to make the product or service available.”
Marketing is about meeting needs profitably. Simply put, marketing is managing profitable
customer relationships, by attracting new customers by superior value and keeping current
customers by delivering satisfaction. Marketing can be defined as the process by which
companies create value for customers and build strong customer relationships to capture value
from customers in return.
According to The American Marketing Association: Marketing is the activity, set of institutions,
and processes for creating, communicating, delivering, and exchanging offerings that have value
for customers, clients, partners, and society at large.
Marketing Management: the art and science of choosing target markets and getting, keeping,
and growing customers through creating, delivering, and communicating superior customer
value.
Part-2: What can be Marketed
The answer is everything. However, we are listing 10 of them.
1. Goods: Physical goods constitute the bulk of most countries’ production and marketing
efforts. Examples: cars, refrigerators, televisions, and machines etc.
2. Services: Services include the work of airlines, hotels, car rental firms, barbers and
beauticians, maintenance and repair people, accountants, bankers, and lawyers etc.
3. Events: Time-based events, such as major trade shows, and company anniversaries.
Global sporting events such as the Olympics and the World Cup.
4. Experiences: By orchestrating several services and goods, a firm can create, stage, and
market experiences. Example: Walt Disney World’s Magic Kingdom. or climb up Mount
Everest.
 5. Persons: Artists, musicians, CEOs, physicians. Example: David Beckham, Leolane
Messi.
6. Places: Cities, states, regions, and whole nations compete to attract tourists, residents,
factories, and company headquarters. Place marketers include economic development
specialists and real estate agents. Example: The Las Vegas, Switzerland, Kashmir,
Bombay etc.
7. Properties: Properties can be real property (real estate) or financial property (stocks and
bonds).
8. Organizations: Organizations work to build a strong, favorable, and unique image in the
minds of their target publics. Examples: Universities, museums, performing arts
organizations,
9. Information: Information is essentially what books, schools, and universities produce,
market, and distribute at a price to parents, students, and communities. Examples of
different Journals.
10. Ideas: Every market offering includes a basic idea. Charles Revson of Revlon once
observed: “In the factory we make cosmetics; in the drugstore we sell hope.” Examples:
Social Business, Microfinance idea by prof. Yunus.

Part-3: Needs, Wants, and Demand

Needs: States of felt deprivation. Needs can include physical, social and individual needs.
Examples: I am feeling deprived of water. Hence, I am thirsty. I am feeling deprived of food,
Hence I am hungry. Humans also have strong needs for recreation, education, and
entertainment. Needs preexist marketers. Marketers cannot create needs; they can make customer
aware about their needs. Based on the priority of needs, there is a hierarchy of needs proposed by
Abraham Maslow:
 Figure 1: Maslow’s Hierarchy of Needs

How to understand the needs of customers: Some customers have needs of which they are not
fully conscious or that they cannot articulate. Suppose a customer wants an inexpensive car.
What does that mean:
The customer is stating that he wants an inexpensive car. It is called stated needs.
He really wants a car whose operating cost, not the initial price, is low. This is his real need.
He also expects good service from the dealer. It is his unstated need.
If there was an onboard GPS Navigation system, he would be delighted. This is his delight need.
The customer secretly wants his friends to see him or her as a savvy consumer. This is his secret
need.
Wants: Wants are the form human needs take as they are shaped by culture and individual
personality. That means, want= need + individual characteristics/ personality or culture. For
example, if a person is thirsty, he will drink water in Bangladesh, if a person is hungry, he will
eat bread in Afghanistan, rice in Bangladesh, Barger in USA.

Demand: Demands are human wants that are backed by buying power. Demand= want+ buying
power (ability to pay and willingness to pay). In demand 3 things must be present: there will be
some form of need, the need must be influenced by personality or culture, the customer will have
the ability and willingness to pay to fulfill his need. Marketers always want to stimulate the
demand for their products. They want to influence the level, timing, and composition of demand.
Hence, Marketing Management is often called demand management. There are 8 different types
of demand:
Demand Situations and Relative Marketing Management Tasks: Demand-related tasks are
contingent upon different demand situations. Philip Kotler has identified eight types of demand
situations and relative marketing management tasks. There may be more demand situations, too.
Negative Demand: Negative demand exists because of negative attitudes of the buyers for the
product. Major segments of potential market dislike the product. They want to remain away from
the product. They have a strong prejudice toward the product. The market holds a strong
objection against production, distribution, and use of the product.
Here, whether the product is beneficial or harmful is not the question, but for any reason,
customers want to avoid the product. Even, they are ready pay price to avoid the product. This
type of situation is labeled as negative demand.
Examples of such demand may include, demand of non-vegetarian products for vegetarians,
demand of vasectomies or family planning techniques in some castes and religions, compulsory
military training for those who don’t like it, transfer in awkward or disliking territories, etc.
When there is negative demand, the task of marketing management is known as Conversion
Marketing. Conversion marketing consists of finding the reasons for negative demand and
convincing the people regarding uses and benefits of products.
Thus, conversion marketing involves converting negative demand into positive. The manager
should put forth scientific reasons to change beliefs, attitudes, and customs of buyers.
Conversion marketing involves effective advertising, capable salesmanship, and attractive
publicity.
No Demand: Some products have no demand. No demand simply means customers are not
buying the product. They are not buying because they do not know about the product, its
availability, and benefits it offers, or they lack interest in the product; they are indifferent toward
the product. Thus, they do not buy either because they are not aware of or because they are not
interested in the product. This situation is called as no demand. Product may be useful, but
customers do not perceive its benefits or usefulness.
No demand situation exits when:
i. Product has no utility value. For example, Five Star Hotel in tribal area.
ii. Product has utility value, but in certain areas it is not useful. For example, boat in the
desert, camel in ice-land, or electric appliances in area without facility of electricity.
iii. Unfamiliar or newly innovated product to which people do not know. For example, a
completely new educational course.
iv. Costly or inaccessible product. For example, highly costly car in economically poor
regions.
When there is no demand, the task of marketing management is known as Creative Marketing or
Stimulating Marketing. Stimulating marketing involves finding the ways to connect the uses and
benefits of the product with person’s natural needs and interest. He takes aggressive promotional
steps to inform and convince customers regarding benefits of the product. Exhibition,
demonstration, free trial of product, free samples, and use of advertising by powerful media can
help in creating demand. For a new product, this type of demand situation is natural.
Latent Demand: Latent demand means hidden or invisible demand. Demand exists but cannot
be seen. There exists a strong need for the product that can satisfy certain expectations of the
market. But such product is not available. Exiting products lack desirable attributes, uses,
qualities, and performance. They are not capable to meet these expectations. So, people expect
superior product to satisfy their expectations.
This situation can be called as latent demand. Examples of the products include harmless
cigarettes, highly fuel-efficient and pollution-free vehicles, exam-free education, tension- free
job/work, sugarless sweets (for diabetic patients), speedy and safe journey with minimum fare,
free membership of the prestigious club, painless injections, tasty pills, etc. All people want such
products that can serve maximum welfare and satisfaction.
When latent demand situation exists, the task of marketing management is known as
Development Marketing. Development marketing refers to developing products as per the
expectations (expected attributes, qualities, and performance) of customers.
Marketing manager has to estimate total latent demand and costs of production along with
perceived value of market. If feasible, he should produce and market such products. Under the
development marketing, the latent demand is converted into physical product; expectations are
converted into tangible forms. But, in many cases, latent demand remains latent as expectations
are too high, far away from the reality.
Declining or Falling Demand: Declining or falling demand is also known as faltering demand.
When demand for goods and services, compared to the past sales volume and the current supply
level, is less, and is falling continuously, is known as declining demand or falling demand.
This is obvious phenomenon as product passes through different stages of its life cycle. Sooner
or later, most of products experience such demand situation. This is due to change in fashion,
taste, technology, customer behaviour, or innovation.
Examples of products with falling demand include radio, black and white television set, certain
professional courses related to IT, old model motor cycles and cars, ink pen, oily soaps, Gujarati
(in Gujarat state) medium colleges in commerce stream, certain television serials, regional films,
traditional dresses, and so on.
In relation to falling demand, the task of marketing management is known as Re-marketing.
Remarketing involves making minor or major changes in the existing product to restore demand
level. Changes include improving qualities, changing attributes, and/or excelling performance.
By making needed changes, downfall can be stopped, even demand can be increased. Along with
product modification, marketing manager should also change pricing, promotional, and
distribution strategies to stop downfall in demand and/or increase demand.
Full Demand: Full demand is the demand situation in which demand is adequate or at desired
level. Company is satisfied with volume of sales or the level of demand and its position in
market. In real practice, this situation hardly prevails. It is an ideal demand state. Full demand
has two indications – one is, demand is equal to its production capacity or supply, and the second
is, the company can fulfill its marketing goals.
Demand is at satisfactory level doesn’t mean that manager has to do nothing. If suitable actions
are not taken, such level will not continue for a longer period. The task of marketing
management is known as Maintenance Marketing. Maintenance marketing calls for monitoring
or maintaining demand.
Manager has to keep watch on changing fashion, attitudes, interest, and wants of customers. As
per projected changes in consumers’ behaviour, required changes should be made in entire
marketing programme (4’P’s) to cope with the future changes in advance.
Irregular Demand: Irregular demand is the state of demand in which demand for the product
experiences variations (ups and downs) continuously. For any reason, demand is fluctuating.
There are many products, which have irregular demand. For examples, seasonal products like
fan, heater, refrigerator, air conditioners, cold drinks and ice creams, and so on.
Even, railways and airways reservation and demand of hotels in different seasons have irregular
demand. Firecrackers, flowers, and other products used during marriage seasons have also
irregular demand. Irregular demand is not advisable as the company has excess capacity in slack
seasons, and it cannot cope with demand during peak seasons.
Marketing management task related to irregular demand is known as Synchro marketing. It
involves the task of balancing demand levels. Marketing manager should formulate appropriate
marketing strategies to regulate or balance demand fluctuations. It may involve altering price,
changing intensity of promotional efforts, matching distribution network, or even balancing
supply level.
Overfull Demand: Overfull demand is the demand situation in which level of demand is more
than firm’s capacity to cope or handle. It is not possible for the company to meet demand of the
product either because of short supply, or because of difficulty in distribution. In short, demand
for the product is much higher than the supply.
This situation occurs when:
i. There is a temporary or permanent shortage of products.
ii. There is a sudden increase in popularity and use of products.
ADVERTISEMENTS:
iii. Production is restricted.
iv. Rumours or fear of scarcity, and desire for hoarding the products.
v. Wars, diseases, or natural calamities take place.
vi. Disturbance in supply or distribution occurs, etc.
There are many products which have got overfull demand. Examples of products with overfull
demand are admission in medical and engineering colleges, job opportunities in developing and
underdeveloped countries, petroleum products like kerosene, petrol, diesel, LPG, etc.
Note that the manager doesn’t want to destroy or eliminate demand, but to reduce it. The task of
marketing management is known as De-marketing. Here, the task to marketing manager is to
reduce demand (when supply cannot be, for any reason, increased) or strengthen supply side of
the products. Care should be taken to prevent adverse impact on use and popularity of the
products.
De-marketing involves one or more of following actions: i. Price rise or quality reduction ii.
Improving supply side of such products iii. Educating people to reduce use or wastage of the
products iv. Setting standards to discourage over demand v. Restricting distribution and rationing
of products
Unwholesome Demand: When production, distribution, and consumption of the product are not
desirable for customers or society at large, demand of such products can be said as unwholesome
demand. It is the state of the unhealthy demand. Here, there is demand, but product is, for any of
the ways, harmful for consumers and society.
The use of products has adverse effect on welfare of consumers. There are some products, which
have unwholesome demand such as brawn sugar, morphine, heroine, explosive material like
RDX, fatal weapons, tobacco-based products, x-rated and horror movies, erotic and exciting
speech (idea or talk) leading to provocation of communal sentiments, and many other such
products.
Marketing management tasks relevant to this demand situation can be called as Counter
Marketing. Counter marketing consists of curbing or restricting production, distribution, and
consumption of such products.
Counter marketing tries to eliminate production and use of products. Counter marketing tasks are
performed more by others (like voluntary associations, social workers, government, and other
national/international organisations like the WHO, Red- cross Society, UNESCO etc.,) than the
companies dealing with the products.
Counter marketing involves one or more of following actions:
i. Reducing or restricting its production
ii. Imposing a complete legal ban on availability and distribution of such products
iii. Considerable price hike
iv. Educating and convincing people by effective promotional means to reduce or stop
the use of the products. Increasing awareness by government, social organisations,
woman’s associations, etc.
v. Linking severe punishment and penalties with activities related to such products