Marketing

Unit 1 : Overview of Marketing

 Concept of Market
• Market refers to a place where transactions take place between
buyers and sellers with respect to exchange of goods and
services.
• Markets are bifurcated on the basis of the type of product. For
instance, cotton market, grains market and flower market.
Sometimes, they are also bifurcated on the basis of quantity.
For example, wholesale market and retail market.
• The market may be physical entity or may be virtual, it may be
local or global
• However, in modern times, the term market has a wider
meaning. It now includes all potential buyers of goods or/and
services.
 Concept of Marketing
• Marketing refers to the process of interaction between buyers
and sellers with the objective of exchange of goods and
services.
• Marketing is a much wider concept which comprises various
activities involved in the process of exchange of goods and
services between buyers and sellers.
• The activities which are part of marketing are basically the
various functions which are performed under marketing such
as planning. designing the product, packaging and labelling of
the product, standardizing, branding, warehousing, transport,
advertising, pricing and distribution. In addition, it includes
after sales activities such as customer care and feedback.
 Marketing Management
• Marketing management means management of all the
activities related to marketing or in other words we can say,
it refers to planning, organizing, directing and controlling
the activities which result in exchange of goods and
services.
• The main focus of marketing is on exchange of goods and
services.
• Philip Kotler defined marketing management as "The art
and science of choosing target markets and getting, keeping
and growing customers through creating delivering and
communicating superior customer values of management".
Marketing Management Philosophies
 The Production Concept
• During the earlier days of industrial revolution, the demand for industrial
goods started picking up but the number of producers were limited.
• As a result, the demand exceeded the supply. Selling was no problem.
Anybody who could produce the goods was able to sell.
• The focus of business activities was, therefore, on production of goods.
• It was believed that Customers prefer to buy easily available and
inexpensive product and profits could be maximized by producing at large
scale, thereby reducing the average cost of production.
• The Product Concept assumes that consumers will favor products that
offer the highest quality, superior performance, or innovative features.
This approach emphasizes creating and continuously improving products
to ensure they stand out in the market.
• Focus: The primary focus is on designing and delivering superior
products while enhancing them over time to meet or exceed consumer
expectations.
• Example:
• Mobile Phones: Companies constantly upgrade features like camera
quality, processing speed, and battery life to stay competitive.
• Clothing: Brands innovate with new fabrics, designs, and sustainable
production methods to cater to evolving consumer preferences.
 Selling Concept
• The product quality and availability did not ensure
the survival and growth of firms because of the large
number of sellers selling quality products.
• This led to greater importance to attracting and
influence customers to buy the product.
• The business philosophy changed. It was assumed
that the customers would not buy, or not buy
enough, unless they are adequately convinced and
motivated to do so
• Example: Insurance, Encyclopedia
• Therefore, firms must undertake aggressive selling
and promotional efforts to make customers buy
their products.
• The use of promotional techniques such as
advertising. personal selling and sales promotion
were considered essential for selling of products.
 The Marketing Concept
• Marketing orientation implies that focus on satisfaction of customer's needs
is the key to the success of any organization in the market.
• It assumes that in the long run an organization can achieve its objective of
maximization of profit by identifying the needs of its present and prospective
buyers and satisfying them in an effective way.
• All the decisions in a firm are taken from the point of view of the customers.
• For example, what product will be produced, with what features and at what
price shall it be sold, or where shall it be made available for sale will depend
on what do the customers want. If the customers want features like double
door in a refrigerator or a separate provision for water cooler in it, the
organization would produce a refrigerator with these features. would price it
at a level which the customers are willing to pay and so on.
• Dell offers customized computers

“Our goal is to lead customers where they want to go before they know where
they want to go”
 The Societal Marketing Concept
• The marketing concept, cannot be considered as adequate if we look at
the challenges posed by social problems like environmental pollution,
deforestation, shortage of resources, population explosion and inflation.
• It is so because any activity which satisfies human needs but is harmful to
the interests of the society at large cannot be justified. The business
orientation should, therefore, not be short-sighted to serve only
consumers' needs. It should also consider large issues of long-term social
welfare.
• HP- Reduce and Recycle electronic waste
 The holistic marketing concept
• The holistic marketing concept is a comprehensive approach to marketing
that views all aspects of marketing as interconnected and essential to
delivering value to customers. It integrates various components of
marketing to ensure they work together harmoniously, focusing on
building strong relationships with all stakeholders, including customers,
employees, suppliers, partners, and society at large.
 Key Components of Holistic
Marketing

1. Integrated Marketing:
1. Ensures that all marketing
activities (advertising, sales
promotion, public relations, etc.)
communicate a consistent
message.
2. Example: Coca-Cola's "Open
Happiness" campaign integrated
advertising, packaging, social
media, and experiential
marketing (such as vending
machines dispensing free Coke
and smiles) to deliver a unified
message of happiness and
sharing.
2. Internal Marketing:
1. Focuses on aligning and motivating employees at all levels of the organization to
deliver on the company’s marketing promises.
2. Example: Zappos trains its employees extensively to prioritize customer
satisfaction. Employees are empowered to make decisions that enhance the
customer experience, ensuring the company delivers on its promise of excellent
service.

3. Relationship Marketing:
3. Builds long-term relationships with customers, suppliers, channels, employees
and other stakeholders to ensure loyalty and satisfaction.
4. Example: Amazon uses personalized recommendations, quick delivery options,
and excellent customer service to foster long-term customer relationships. Prime
membership enhances this by offering exclusive benefits, encouraging loyalty.

4. Societal Marketing:
5. Considers societal well-being by promoting ethical practices and sustainable
business strategies.
6. Example: The Body Shop incorporates societal marketing by promoting cruelty-
free and environmentally friendly products, aligning its brand with social causes
like sustainability and ethical consumerism.
 Marketing Myopia
Marketing Myopia happens when a company focuses too much on
selling its product and ignores what customers need. It’s like being
short-sighted—only seeing the product and not the bigger picture,
like customer preferences, market trends, or future opportunities.

Key Characteristics of Marketing Myopia:

1. Product-oriented rather than customer-oriented: Businesses
focus on what they produce rather than what customers need.
2. Lack of foresight: Companies fail to adapt to market changes or
innovations.
3. Assumption of continued demand: Businesses assume their
products will always be in demand.
4. Neglect of alternatives: Competitors or substitute products are
overlooked.
 Examples Of Marketing Myopia
• Google Glass was launched in 2014. It
was exposed to a lot of negative reviews
from consumers. They had concerns
about privacy and safety. Most people
weren’t interested in high-tech glasses
that gave information at a glance of
people or objects.--Google concentrated
so much on selling this high-tech device
that they overlooked the usefulness of it.
 Case
Kodak:
1. What happened? Kodak was a market leader in photographic film
but failed to adapt to the digital photography revolution.
2. Why? Kodak focused on selling film products rather than
understanding the customer's need for capturing and sharing
memories conveniently.
3. Result: Competitors like Sony and Canon, who embraced digital
cameras, gained market dominance, and Kodak faced bankruptcy.

Blockbuster vs. Netflix:

4. What happened? Blockbuster, a video rental giant, ignored the trend
toward online streaming and subscription models.
5. Why? Blockbuster focused on physical DVD rentals instead of
addressing customers' evolving preference for digital convenience.
6. Result: Netflix capitalized on this shift, and Blockbuster went out of
business.
Nokia:
1. What happened? Nokia was a leader in mobile phones but failed to
adapt to the smartphone revolution led by Apple and Android
devices.
2. Why? Nokia focused on its existing product lines and underestimated
the need for user-friendly interfaces and app ecosystems.
3. Result: Nokia lost significant market share and was eventually
acquired by Microsoft.
Example of Avoidance:
Apple Inc.:
Apple consistently avoids marketing myopia by focusing on customer
experience and innovation. For example:
• Instead of just selling phones, Apple focuses on creating an ecosystem
(iOS, App Store, iCloud) that addresses broader customer needs for
connectivity, convenience, and style.
• This approach allows Apple to adapt to changes and remain competitive
in a dynamic market.
The Marketing Process
 Step-1-Understanding the Marketplace
and Customer Needs

• Customer needs, wants, and demands

• Market offerings
• Value and satisfaction
• Exchanges and relationships
• Markets
 Understanding the Marketplace
and Customer Needs
• States of deprivation

Needs
• Physical—food, clothing, warmth, safety
• Social—belonging and affection
• Individual—knowledge and self-expression
• ------Food--------

Wants
• Form that needs take as they are shaped by culture and individual
personality
• --------what customer prefer-chicken, Burger--------

Demands
• Wants backed by buying power
• ------- only burger is within my budget-----------
In the above example, responding to only stated need ie., “I need a phone or Car” doesn’t help in
arriving at a right product proposition. As a marketer, it is important to dig deeper and uncover not only
the real, but also his other needs: unstated need, delight need and secret needs.
 Market Offerings

• Market offerings are some combination, mixture, or blend of

physical products, services, information, ideas, or experiences
offered to a market to satisfy a need or a want.
• Eg: Coke’s Open Happiness
 Value and Satisfaction
• Satisfied customers will
buy again and tell others
about their good
experiences, on the
other hand, dissatisfied
customers will eventually
switch to competitors
and surely disparage the
product to others.
• Eg: Pizza Hut Bell
 Exchanges and Relationship
• Exchange is the act of obtaining a
desired object from someone by offering
something in return.​
• The goal is to retain customers and
grow their business and build strong
relationship by consistently delivering
superior customer value.​
 Step-2-Designing a Customer-Driven Marketing
Strategy
To design a winning marketing strategy, the marketing manager must answer
two important questions:
• What customers will we serve ( what’s our target market)? -Dividing the
market into segments and selecting which segment it will go
• How can we serve these customers best ( what’s our value proposition)?---
A company’s value proposition is the set of benefits or values
it promises to deliver to consumers to satisfy their needs
BMW promises “the ultimate driving machine”
Apple iPhone – The Experience IS the Product
Uber – The Smartest Way to Get Around
Red Bull– Gives you Wiiings
• It answer the customer’s question: Why should I buy your brand rather
than a competitor's?
Step-3-Preparing an Integrated Marketing Plan and Program

Integrated Marketing:
1. Ensures that all marketing efforts across different channels convey a
consistent and cohesive message to the target audience.
• Example:
Nike’s "Just Do It" Campaign
• Advertising: TV commercials featuring athletes like Serena Williams and
Michael Jordan showcasing determination and overcoming challenges.
• Social Media: Hashtag campaigns (#JustDoIt) encouraging user-generated
content where customers share their fitness journeys.
• Retail and Packaging: Storefronts, product designs, and packaging all
reinforce the "Just Do It" mantra with motivational themes.
• Experiential Marketing: Events like Nike Run Club and training camps to
engage customers and create a real-life connection with the brand's message.
• Digital Platforms: Personalized workout apps and online ads that inspire users
to stay active, tying back to the "Just Do It" philosophy.
 Step-4 Building Customer Relationship
Customer Relationship Management is the
overall process of building and maintaining
profitable customer relationships by delivering
superior customer value( perceived) and
satisfaction.
It deals with all the aspects of acquiring,
keeping, and growing customers
• Communicate
• Ask for feedback
• Show appreciation
• Delight customers-by delivering more than
promise
• Frequency marketing programs- reward
customer who buy frequently-point system
 Different states of satisfaction

• Expected/Perceived= 1---------Satisfied
• Expected/Perceived less than 1---------Unsatisfied
• Expected/Perceived more than 1--------- Delighted
• Customer often do not judge values and cost accurately or objectively,
they act on perceived value
• One customer notes that, for him premium dress establish his identity
and separate him from others- many people have money but only a
few have class-Raymond
 Step-5 Capturing Customer Value
Capturing value refers to ensuring that the benefits created for customers
translate into measurable returns for the business, such as sales, market
share, profits, and long-term growth.
• Creating Customer Loyalty and Retention-customer life time value
Apple creates customer loyalty through its ecosystem of products. A
customer who buys an iPhone is likely to purchase related products like
AirPods, Apple Watch, or iCloud services. The seamless integration
ensures they stay loyal to the brand.
• Growing Share of Customer
Amazon grows its share of customer spending by offering a wide range of
products and services like Amazon Prime, Kindle, Amazon Fresh, and Echo
devices, encouraging customers to meet multiple needs within ecosystem.
• Building Customer Equity- The total combined customer life time values of
all the company’s customers
• Building the Right Relationships with the Right Customer
Building the right relationships with the right customers

Customer Relationship Groups based on two key dimensions: Profitability

and Projected Loyalty.
1. Butterflies
Customers who are a good fit for the company's
offerings and needs, but their loyalty is short-term. They
provide high profit but are not likely to become long-
term customers.
Example:
• A customer who frequently shops for trendy clothing
at a boutique but moves to another brand when new
trends emerge.
• A person who likes android in general but buys apple
iPhone because it is on sale
Business Implication: Focus on maximizing profits during
their engagement but don’t overspend on retention.
2. True Friends
These are the ideal customers with a good fit between the
company's offerings and customer needs. They are loyal
and highly profitable.
Example:
• A loyal Netflix subscriber who not only pays for their
subscription year after year but also recommends it to
friends and family.
• Apple loyalist who buys every product the company
releases just because it is from apple
Business Implication: Invest in building deeper
relationships and delighting these customers to increase
their lifetime value.
3. Strangers
Customers who have little fit with the company's offerings,
low profitability, and low projected loyalty.
Example:
• A customer who signs up for a free trial of a subscription
service but never engages further or makes a purchase.
• A by passer come to Starbucks to by a bottle of drinking
water
Business Implication:
• Minimize resources spent on this group and avoid
targeting them extensively.
4. Barnacles
Customers who are loyal but not very profitable due to a limited
fit between their needs and the company's offerings.
Example:
• A savings account holder at a bank who uses basic services
without opting for higher-margin products like loans or credit
cards.
• A person who buys only one coffee and stay a long time to use
the Wi-Fi on your shop
Business Implication:
• Explore ways to grow profitability with Barnacles or manage
them efficiently. (e.g., cross-selling)
• Company might be able to improve their profitability by selling
them more, raising their fees or reducing services to them
 Relationship Marketing
• Relationship marketing refers to marketing efforts that focuses on
developing long-term relationship with customers.
• It is a part of Customer relationship management (CRM) which
aims to achieve long-term engagement of clients with business for
maintaining its profitability. Relationship marketing is distinct from
other types of traditional marketing.
• It carries out activities for achievement of long-term goals like
customer loyalty. Whereas traditional marketing works towards
getting short-term goals like customer acquisition and one-time
sales. Traditional marketing does not pay any attention on building
relationships. Relationship marketing instead of sales transactions
emphasizes on customer retention and their satisfaction level.
Types/Tools of Relationship marketing
 Relationship Marketing Examples
• Coca-Cola
• Amazon
• Desigual
• Emirates
• Starbucks
 The Changing Marketing Landscape

• Marketing Automation
• Artificial Intelligence
• Experiential Marketing
• Executive Branding