LESSON - 1

MARKETING CONCEPTS

Marketing has been deferent by different authors differently. A popular definition is that “marketing
is the performance of business activities that direct the flow of goods and services from producer to
consumer or user”. Another notable definition is that “marketing is getting the right goods and
services to the right people at the right place at the right time at the right price with the right
communication and promotion”. Yet another definition is that ‘marketing is a social process by which
individuals and groups obtain what they need and want through creating and exchanging products
and values with others’. This definition of marketing rests on the following concepts:
1. Needs, wants and demands;
2. Products;
3. Value and satisfaction;
4. Exchange
5. Markets

NEEDS, WANTS AND DEMANDS

A human need is a state of felt deprivation of some basic satisfaction. People require foods, clothing,
shelter, safety, belonging, esteem etc. these needs exist in the very nature of human beings.
Human wants are desires for specific satisfiers of these needs. For example, cloth is a needs but
Raymonds suiting may be want. While people’s needs are few, their wants are many.
Demands are wants for specific products that are backed up by an ability and willingness to buy
them. Wants become demands when backed up by purchasing power.
Products
Products are defined as anything that can be offered to someone to satisfy a need or want.
Value and Satisfaction
Consumers choose among the products, a particular product that give them maximum value and
satisfaction.
Value is the consumer’s estimate of the product’s capacity to satisfy their requirements.
Exchange and Transactions
Exchange is the act of obtaining a desired product from someone by offering something in return. A
transaction involves at least two thing of value, conditions that are agreed to, a time of agreement
and a place of agreement.

Market
A market consist of all the existing and potential consumers sharing a particular need or want who
might be willing and able to engage in exchange to satisfy that need or want.
Thus, all the above concepts finally brings us full circle to the concept of marketing.

IMPORTANCE OF MARKETING
1. Marketing process brings goods and services to satisfy the needs and wants of the people.
2. It helps to bring new varieties and quality goods to consumers.
3. By making goods available at al places, it brings equipment distribution.
4. Marketing converts latent demand into effective demand.
5. It gives wide employment opportunities.
6. It creates time, place and possession utilities to the products.
7. Efficient marketing results in lower cost of marketing and ultimately lower prices to consumers.
8. It is vital link between production and consumption and primarily responsible to keep the wheel of
production and consumption constantly moving.
9. It creates to keep the standard of living of the society.

MARKETING MANAGEMENT
 Marketing management is defined as “the analysis, planning, implementation and control of
programmes designed to create build and purpose of achieving organizational objectives”.
Marketing manages have to carry marketing research, marketing planning, marketing
implementation and marketing control. Within marketing planning, marketer must make decisions
on target markets, market postponing product development, pricing channels of distribution,
physical distribution, communication and promotion. Thus, the marketing managers must acquire
several skills to be effective in market place.

CONCEPTS OF MARKETING
There are five distinct concepts under which business organisation can conduct their marketing
activity.
· Production Concept
· Product Concept
· Selling Concept
· Marketing Concept
· Societal Marketing Concept

PRODUCTION CONCEPT
In this approach, a firm is considered as the central point and all goods and commodities produced
were sold in the market. The major emphasis was on the production process and control on the
technical perfections while producing the goods.
The production concept holds that consumers will favour those products that are widely available
and low in cost. Management in production-oriented organisation concentrates on achieving high
production efficiency and wide distribution coverage.
Marketing is a native form in this orientation and it was assumed that a good product sells by itself.
Only distribution and selling were considered to be ‘marketing’. The technologists’ thoughts that
amenability and low cost of the products due to the large scales of production would be the right
‘Marketing Mix’ for the consumers.
But, they do not the best of customer patronage. Customers are in fact motivated by a variety of
considerations in their purchase. As a result, the production concept fails to serve as the right
marketing philosophy for the enterprise.

PRODUCT CONCEPT
The product concept is somewhat different from the production concept.
The product concept holds that consumers will favour those products that offer the most quality,
performance and features. Management in these product-oriented organizations focus their energy
on making good products and improving them over time.
Yet, in many cases, these organizations fail in the market. They do not bother to study the market
and the consumer in-depth. They get totally engrossed with the product and almost forget the
consumer for whom the product is actually meant; they fail to find our what the consumers actually
need and what they would accept.

Marketing Myopia
At this stage, it would be appropriate to explain the phenomenon of ‘marketing myopia’. The
term ‘marketing myopia’ is to be credited to Professor Theodore Levitt. In one of his classic articles
bearing the same title, in the Harvard Business Review, Professor Levitt has explained ‘marketing
myopia’ as a coloured or crooked perception of marketing and a short-sightedness about business.
Excessive attention to production or product or selling aspects at the cost of the customer and his
actual needs, creates this myopia. It leads to a wrong or inadequate understanding of the market and
hence failure in the market place. The myopia even leads to a wrong or inadequate understanding of
the very nature of the business in which a given organisation is engaged and thereby affects the
future of the business. He further explained that while business keep changing with the times, there
is some fundamental characteristic in each business that maintains itself through the changing times,
which invariably relates to the basic human need which the business seeks to serve and satisfy
through its products. A wise marketer should understand this important fact and define his business
in terms of this fundamental characteristic of the business rather than in terms of the products and
services manufactured and marketed by him. For instance, the Airways should define their business
as transportation the Movie makers should define their business as entertainment, etc.

SALES CONCEPT
The sales concept maintains that a company cannot expect its products to get picked up
automatically by the customers. The company has to consciously push its products. Aggressive
advertising, high-power personal selling, large scale sales promotion, heavy price discounts and
strong publicity and public relations are the normal tools used by organisation that rely on this
concept. In actual practice, these organizations too do not enjoy the best of customer patronage.
The selling concept is thus undertaken most aggressively with ‘unsought goods’, i.e. those goods that
buyers normally do not think of buying, such as insurance, encyclopaedias. These industries have
perfected various techniques to locate prospects and with great difficulty sell them as the benefits of
their products.
Evidently, the sales concept too suffers from marketing myopia.

Difference between Selling and Marketing

The marketing and selling are considered synonymously. But there is great of difference between the
two. Theodore Levitt in his sensational articles ‘Marketing Myopia’ draws the following contrast
between marketing and selling.
Selling focuses on the needs of the seller; marketing on the needs of the buyer. Selling is preoccupied
with the seller’s need to convert his product into cash; marketing with the idea of satisfying the
needs of the customer by mean of the product and the whole cluster of things associated with
creating delivering and finally consuming it.
Selling Marketing
Selling starts with the seller; Selling focuses
Marketing starts with the buyers. Marketing
on the needs of the seller. Seller is the
focuses on the needs of the buyer. Buyer is
centre of the business universe. Activities
the centre of the business universe. Activities
start with the seller's existing products.
follow the buyer and his needs.
Selling emphasizes on profit. It seeks to
Marketing emphasizes on identification of a
quickly convert ‘products’ into ‘cash’;
market opportunity. It seeks to convert
concerns itself with the tricks and customer ‘needs’ into ‘products’ and
techniques of pushing the product to the
emphasizes on fulfilling the needs of the
buyers. customers.
Selling views business as a ‘goods Marketing views business as a ‘customer
producing processes’. satisfying process’.
It over emphasizes the ‘exchange’ aspect
It concerns primarily with the ‘vale
without caring for the ‘value satisfactions’
satisfactions’ that should flow to the
to the buyers. customer from the exchange
Seller’s convenience dominates the Buyer determines the shape of the
formulation of the ‘marketing mix’. ‘marketing mix’.
The firm makes the product first the then
The customer determines what is to be
decides how to sell it and make profit.
offered as a ‘product’ and the firm makes a
‘total product offering’ that would match the
needs of the customers.
Emphasizes accepting the existing Emphasis on innovation of adopting the most
technology and reducing the cost of innovative technology.
production.
Seller’s motives dominate marketing Marketing communications acts as the tool
communications. for communicating the benefits/ satisfactions
of the product to the consumers
 Costs determine price. Consumer determines the price.
Transportation, storage and other They are seen as vital services to provide
distribution functions are perceived as mere convenience to customers.
extensions of the production function.
There is no coordination among the Emphasis is on integrated marketing
different functions of the total marketing approach.
task.
Different departments of the business All departments of the business operate in a
operate separately. highly integrated manner with view to satisfy
consumers.
The firms which practice ‘selling concept’, The firms which practice ‘marketing
production is the central function. concept’, marketing is the central function.
‘Selling’ views the customer as the last link ‘Marketing’ views the customer as the very
in the business. purpose of the business.

MARKETING CONCEPT
The Marketing concept was born out of the awareness that marketing starts with the
determination of consumer wants and ends with the satisfaction of those wants. The concept puts
the consumer both at the beginning and at the end of the business cycle. The business firms
recognize that “there is only one valid definition of business purpose: to create a customer”. It
proclaims that “the entire business has to be seen from the point of view of the customer”. In a
company practicing this concept, all departments will recognize that their actions have a profound
impact on the companies to create and retain a customer. Every department and every worker and
manager will ‘think customer’ and ‘act customer’.
The marketing concept holds that the key to achieving organizational goals consists in determining
the needs and wants of the target markets and delivering the desired satisfactions efficiently, then
competitors. In other words, marketing concept is a integrated marketing effort aimed at generating
customer satisfaction as the key to satisfying organizational goals.
It is obvious that the marketing concept represents a radically new approach to business and is the
most advanced of all ideas on marketing that have emerged through the years. Only the marketing
concept is capable of keeping the organisation free from ‘marketing myopia’.
The salient features of the marketing concept are:
1. Consumer orientation 3. Consumer satisfaction
2. Integrated marketing 4. Realization of organizational goals

1. Consumer Orientation
The most distinguishing feature of the marketing concept is the importance assigned to the
consumer. The determination of what is to be produced should not be in the hands of the firms but
in the hands of the consumers. The firms should produce what consumers want. All activities of the
marketer such as identifying needs and wants, developing appropriate products and pricing,
distributing and promoting then should be consumer oriented. If these things are done effectively,
products will be automatically bought by the consumers.

2. Integrated Marketing
The second feature of the marketing concept is integrated marketing i.e. integrated management
action. Marketing can never be an isolated management function. Every activity on the marketing
side will have some bearing on the other functional areas of management such as production,
personnel or finance. Similarly, any action in a particular area of operation in production on finance
will certainly have an impact on marketing and ultimately in consumer. Therefore, in an integrated
marketing set-up, the various functional areas of management get integrated with the marketing
function. Integrated marketing presupposes a proper communication among the different
management areas, with marketing influencing the corporate decision-making process. Thus, when
the firm’s objective is to make profit – by providing consumer satisfaction, naturally it follows that
 the different departments of the company are fairly integrated with each other and their efforts are
channelized through the principal marketing department towards the objectives of consumer
satisfaction.

3. Consumer Satisfaction
Third feature of the marketing is consumer satisfaction. The marketing concept emphasizes that it is
not enough if a firm has consumer orientation; it is essential that such an orientation leads to
consumer satisfaction.
For example, when a consumer buys a tin of coffee, he expects a purpose to be served, a need to be
satisfied. If the coffee does not provide him the expected flavour, the taste and the refreshments his
purchase has not served the purpose; or more precisely, the marketer who sold the coffee has failed
to satisfy his consumer. Thus, ‘satisfaction’ is the proper foundation on which alone any business can
build its future.

4. Realization of Organizational Goals including Profit

If a firm has succeeded in generating consumer satisfaction, is implies that the firm has given a
quality product, offered competitive price and prompt service and has succeeded in creating good
image. It is quite obvious that for achieving these results, the firm would have tried its maximum to
control costs and simultaneously ensure quality, optimize productivity and maintain a good
organizational climate. And in this process, the organizational goals including profit are automatically
realized. The marketing concept never suggests that profit is unimportant to the firm. The concept is
against profiteering only, but not against profits.
Benefits of Marketing Concept: The concept benefits the organisation that practices it, the
consumer at whom it is aimed and the society at the society at large.
1. Benefits to the organisation: In the first place, of the practice of the concept brings substantial
benefits to the organisation that practices it. For example, the concept enables the organisation to
keep abreast of changes. An organisation précising the concept keeps feeling the pulse of the market
through continuous marketing audit, market research and consumer testing. It is quick to respond to
changes in buyer behaviour, it rectifies any drawback in its these products, it gives great importance
to planning, research and innovation. All these responses, in the long run, prove extremely beneficial
to the firm. Another major benefit is that profits become more and certain, as it is no longer
obtained at the cost of the consumer but only through satisfying him. The base of consumer
satisfaction guarantees long – term financial success.
2. Benefits to Consumers: The consumers are in fact the major beneficiary of the marketing concept.
The attempts of various competing firms to satisfy the consumer put him an enviable position. The
concept prompts to produces to constantly improve their products and to launch new products. All
these results in benefits to the consumer such as: low price, better quality, improved/new products
and ready stock at convenient locations. The consumer can choose, he can bargain, he can complain
and his complaint will also be attended to. He can even return the goods if not satisfied. In short,
when organizations adopt marketing concept, as natural corollary, their business practices change in
favour of the consumer.
3. Benefits to the society: The benefit from the marketing concept is not limited to the individual
consumer of products. When more and more organizations resort to the marketing concept, the
society in Toto benefits. The concept guarantees that only products that are required by the
consumers are produced; thereby it ensures that the society’s economic resources are channelized in
the right direction. It also creates entrepreneurs and managers in the given society. Moreover, it acts
as a ‘change agent’ and a ‘value adder’; improves the standard of living of the people; and
accelerates the pace of economic development of the society as a whole. It also makes economic
planning more meaningful and more relevant to the life of the people.
In fact, the practice of consumer-oriented marketing benefits society in yet another way by enabling
business organizations to appreciate the societal content inherent in any business. When the
organisations move closer to the customers, they see clearly the validity of the following observation
of Drucker, “The purpose of any business lies outside the business – in society.” And this awareness
of the societal content of business often enthuses organizations to make a notable contribution to
the enrichment of society.

Societal Marketing Concept

Now the question is whether the marketing concept is an appropriate organizational goal in an age of
environmental deterioration, resource shortages, explosive population growth etc. and whether the
firm is necessarily acting in the best long run interests of consumers and society. For example, many
modern disposable packing materials create problem of environmental degradation Situations like
this, call for a new concept, which is called ‘Social Marketing Concept’.
The societal marketing concept holds that the organization’s task is to determine the needs, wants
and interests of target markets and to deliver the desired satisfaction more effectively and efficiently
than competitors in a way that preserves or enhances the consumer’s and the society’s wellbeing.
A-few magazines such as Kalki, Ananda Vikadan, do not accept any advertisements for Cigarettes or
alcoholic liquors though it is loss of revenue for them. This is a typical example of societal marketing
concept.
The societal marketing concept calls upon marketers to balance three considerations in setting their
marketing policies namely firm’s profits, consumer want satisfaction and society interest.

META – MARKETING
Like societal marketing, the concept of meta-marketing is also of recent origin. It has
considerably helped to develop new insight into this exciting field of learning. The literal meaning of
the term ‘meta’ is “more comprehensive” and is “used with the name of a discipline to designate a
new but related discipline designed to deal critically with the original one”. In marketing, this term
was originally coined by Kelly while discussing the issues of ethics and science of marketing. Kotler
gave the broadened application of marketing nations to non-business organizations, persons, causes
etc. In broadening the concept of marketing, marketing was assigned a more comprehensive role. He
used the term meta-marketing to describe the processes involved in attempting to develop or
maintain exchange relations involving products/ services organizations, persons, places or causes.
The examples of non-business marketing or meta-marketing may include Family Welfare
Programmes and the idea of prohibition.

DEMARKETING
The demarketing concept is also of recent origin. It is a concept which is of great relevance to
developing economies where demands for products/ services exceed supplies.
Demarketing has been defined as “that aspect of marketing that deals with discouraging customer, in
general, or a certain class of customers in particular on either a temporary or permanent basis. The
demarketing concept espouses that management of excess demand is as much a marketing problem
as that of excess supply and can be achieved by the use of similar marketing technology as used in
the case of managing excess supply. It may be employed by a company to reduce the level of total
demand without alienating loyal customers (General Demarketing), to discourage the demand
coming from certain segments of the market that are either unprofitable or possess the potential of
injuring loyal buyers (Selective Demarketing), to appear to want less demand for the sake of actually
increasing it (Ostensible Demarketing). Whatever may be the objective, there is always a danger of
damaging customer relations in any demarketing strategy. Therefore, to be creative, every company
has to ensure that its long-run customer relations remain undamaged.