Basics of Marketing

Unit-1

INTRODUCTION TO MARKETING: Nature, Scope and Importance of Marketing,

Evolution of Marketing; Core marketing concepts: Production concept, Product concept, Selling
concept, Marketing concept, Societal Marketing concept.

***Definition of Marketing:

1) “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.”

--American Marketing Association

2) Marketing is defined as a social process by which individuals and groups obtain what they
need and want through creating and exchanging products and value with others.”

---Philip Kotler

3) “The Process by which Companies Create value for customers and Build Strong Customer
Relationships in order to Capture Value from customers in return.”

***What is Marketed?

1) Goods
2) Services
3) Events
4) Experiences
5) Persons
6) Places
7) Properties
8) Organizations
9) Information
10) Ideas

***Nature of Marketing:

1. Human activity: Originally, the term marketing is a human activity under which human
needs are satisfied by human efforts. It’s a human action for human satisfaction.
2. Consumer-oriented: A business exist to satisfy human needs, hence business must find
out what the desire of customer (or consumer) and thereby produce goods & services as

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 per the needs of the customer. Thus, only those goods should be produce that satisfy
consumer needs and at a reasonable profit to the manufacturer (or producer).
3. Art as well as science: In the technological arena, marketing is the art and science of
choosing target markets and satisfying customers through creating, delivering, and
communicating superior customer value. It is a technique of making the goods available
at right time, right place, into right hands, right quality, in the right form and at right
price.
4. Exchange Process: All marketing activities revolve around commercial exchange
process. The exchange process implies transactions between buyer and seller. It also
involves exchange of technology, exchange of information and exchange of ideas.
5. Starts and ends with customers: Marketing is consumer oriented and it is crucial to
know what the actual demand of consumer is. This is possible only when required
information related to the goods and services is collected from the customer. Thus, it is
the starting of marketing and the marketing end as soon as those goods and services reach
into the safe hands of the customer.
6. Creation of Utilities: Marketing creates four components of utilities viz. time, place,
possession and form. The form utility refers to the product or service a company offers to
their customers. The place utility refers to the availability of a product or service in a
location i.e. Easier for customers. By time utility, a company can ensure that products and
services are available when customers need them. The possession utility gives customers
ownership of a product or service and enables them to derive benefits in their own
business.
7. Goal oriented: Marketing seeks to achieve benefits for both buyers and sellers by
satisfying human needs. The ultimate goal of marketing is to generate profits through the
satisfaction of the customer.
8. Guiding element of business: Modern Marketing is the heart of industrial activity that
tells what, when, how to produce. It is capable of guiding and controlling business.
9. System of Interacting Business Activities: Marketing is the system through which a
business enterprise, institution or organization interacts with the customers with the
objective to earn profit, satisfy customers and manage relationship. It is the performance
of business activities that direct the flow of goods and services from producer to
consumer or user.
10. Marketing is a dynamic process: series of interrelated functions: Marketing is a
complex, continuous and interrelated process. It involves continuous planning,
implementation and control.

***Basic Objective of Marketing:

To attract new customers by promising and offering superior value and to retain and grow
current customers by delivering satisfaction.

*** Scope of Marketing:

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Marketing has a very wide scope it covers all the activities from conception of ideas to
realization of profits. Some of them are discussed below:

1) Study of Consumer Wants and Needs: Goods are produced to satisfy consumer wants.
Therefore study is done to identify consumer needs and wants. These needs and wants
motivates consumer to purchase.
2) Study of Consumer behaviour: Marketers performs study of consumer behaviour.
Analysis of buyer behaviour helps marketer in market segmentation and targeting.
3) Product planning and development: It includes the activities of product research,
marketing research, market segmentation, product development, determination of the
attributes, quantity and quality of the products.
4) Branding: Branding of products is adopted is adopted by many reputes enterprises to
make their products popular among their customers and for many other benefits.
Marketing manager has to take a decision regarding the branding policy, procedures and
implementation programs.
5) Packaging: Packaging is to provide a container or wrapper to product for safety,
attraction and ease of use and transportation of the product.
6) Channels of Distribution: Decision regarding selection of most appropriate channel of
distribution like Wholesaling, distribution and retailing is taken by the marketing
manager and sales manager.
7) Pricing Policies: Marketer has to determine pricing policies for their products. Pricing
policies differs from product to product. It depends on the level of competition, product
life cycle, marketing goals and objectives, etc.
8) Sales Management: Selling is a part of marketing. Marketing is concerned about all the
selling activities like customer identification, finding customer needs, persuading
customer to buy products, customer service, etc.
9) Promotion: Promotion includes personal selling, Sales Promotion and advertising, Right
Promotion mix is crucial in accomplishment of marketing goals.
10) Finance: Marketing is also concerned about the finance, s for every marketing activity be
it packaging, advertising, sales force budget is fixed and all the activities have to be
completed with in the limit of that budget.
11) After Sales Services: Marketing covers after sales services given to the customers,
maintaining good relationships with customers, attending their queries and solving their
problems.

***Importance of Marketing:

Do you know what your customers want? Do you think your customers trust your products?
When was the last time you saw a customer tweeting about your product or service? Was it a
complaint or compliment?

The answers to all these questions lie in marketing.

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How you market your business determines if the enterprise will be successful or not. Marketing
is a tool used to create and maintain demand, relevance, reputation, competition and more.
Without it, your business is likely to close down due to lack of sales.

So why is marketing important? Check out these 9 reasons why you really do need it.

1. Marketing Is an Effective Way of Engaging Customers

It’s important for your business to engage its customers. Marketing is a tool to keep the
conversation going.

Engaging customers is different from pushing your offers. Engaging involves furnishing your
customers with relevant information about your products and your business as well. It’s all about
creating fresh content.

Tell your customers what they don’t know. Let it be interesting and worth their time.

Social media is one of the best platforms where you can engage your customers. Some
organizations use short videos and other humor-laden tricks to engage their customer base.

By engaging your customers, marketing gives them a sense of belonging.

2. Marketing Helps to Build and Maintain the Company’s Reputation

The growth and life span of your business is positively correlated to your business’s reputation.
Hence, it’s fair to say your reputation determines your brand equity.

A majority of marketing activities are geared towards building the brand equity of the company.

Your business’s reputation is built when it effectively meets the expectations of its customers.
Such a business is considered a responsible member of the community. The customers become
proud to be associated with your products.

Marketers use effective communication, branding, PR and CSR strategies to ensure that a
business’s reputation is maintained.

3. Marketing Helps to Build a Relationship Between a Business and Its Customers

Businesses need to build a relationship of trust and understanding with their customers. How
does marketing establish this relationship?

Marketing research segments should be based on demographics, psychographics, and consumer

behavior.

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Segmentation helps the business meet the needs of its customers hence gaining their trust. The
product team ensures the business delivers what’s promised at the right time. This makes the
customers brand loyal.

Loyal customers will have the confidence to buy more products from you. The trust and
understanding between the business and its customers make your commercial activities more
fruitful.

4. Marketing Is a Communication Channel Used to Inform Customers

Marketing informs your customers about the products or services you’re offering them.

Through marketing, the customers get to know about the value of the products, their usage and
additional info that might be helpful to the customers. It creates brand awareness and makes the
business stand out.

There’s stiff competition in the market and you need to be a constant voice to convince the
customers. Inform your customers of discounts and other competitive tricks you intend to use.

Through communication, marketing helps your business become a market leader.

5. Marketing Helps to Boosts Sales

Marketing utilizes different ways to promote your products or services. Once a product has been
advertised, it’s already on the radar and this increases your chances of selling it.

Customers may want to try your products or services and this will trigger a purchase decision.

When customers are happy about your products or services, they become your brand
ambassadors without your knowledge. They will spread the word and your sales will start to
increase.

Ensure you offer high-quality products and services to complement your marketing efforts.

6. Marketing Aids in Providing Insights About Your Business

Every marketer understands the need for targeting the right audience. However, you must have
the right content to share with such an audience. Your marketing strategies can help you
establish what business messaging will convince the target audience.

At this point, you have to test different messages and see what works.
Once you have tested different sets of messaging on the target audience, you will find a viable
baseline for your marketing efforts.

It acts as a metric and provides the insight needed to make you avoid guesswork.

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7. Marketing Helps Your Business to Maintain Relevance

Every marketer understands the need for disrupting a potential consumer’s opinion about other
products. But don’t make a mistake of taking this chance for granted.

Most businesses assume that they will always remain the client’s favorite brand because up to
now the client has never complained. This is the wrong mindset. You need to find ways to
remain at the top of the client’s mind.

Every relationship needs to be maintained. Marketing helps your business to maintain a good
relationship with customers by making you remain relevant.

Don’t focus on gaining new customers before addressing the need to retain the present ones.

8. Marketing Creates Revenue Options

During the startup phase, your options are sparse since you’re mostly cash-strapped. This limits
your options.

As your marketing strategies generate more customers and revenue opportunities, you’ll begin
having options. Having options is comparable to having a nice war chest.

Having options will give you the courage you need to penetrate new markets. You will have the
freedom to start letting go of customers who are too demanding to your sanity and well-being.

Without marketing, you will be forced to continue working with clients who you have outgrown
and are paying you peanuts.

9. Marketing Helps the Management Team to Make Informed Decisions

Every business is confronted with problems such as to what, when, for whom and how much to
produce. A complex and tedious process determine your business’s survival. As a result,
businesses heavily rely on marketing mechanisms to make these decisions.

Why should you rely on marketing mechanisms? These mechanisms serve as a reliable link
between your business and society. They cultivate people’s mind, educate the public and
convince them to buy.

***Evolution of Marketing

Marketing is as old as civilization itself. From Ancient Greece to our modern days, culture has
based its trading and selling upon communication in order to move products faster than the man
next to him. I've always seen it as a concept much like Darwin's "survival of the fittest" - or what

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we will call in this case - "the act of persuasion." Man is undeniably always trying to outshine
others, and when it comes to selling, the concept is not far from it.

Nevertheless, much of the philosophies we know today are rooted in techniques and
developments from the Industrial Revolution. Mass production coupled with advancements in
transportation and technology meant that businessmen needed a better strategy when it came to
the movement of goods. With nations applying laws against monopoly, how exactly does one
sell something when one's competitor is producing the exact same thing? Ahh, enter the
marketer. This is when our profession is officially and truly born.

Corporations became aware of the need of individuals that would study markets and consumers -
it's behavior patterns and steps to be ahead of the game. What started out as a resource that
determined what an organization would produce, has transformed into a science that coordinates
why, when and how much of a good will be manufactured and where it will be sold. Companies
went from inward to outward thinking, and our contribution has never been as clear as it is today.

There have been major stages in the history of marketing, which are:

The Simple Trade Era: This is also considered as Pre-Industrial Revolution Era. Production
consisted in handmade goods that were limited and generally traded through exploration.

The Production Era (1860’s to 1920’s): Enter the industrial age. Since goods were scarce,
businesses focused mainly in manufacturing. As long as someone was producing, someone else
would want to buy it. This orientation rose to popularity due to shortages in the market, hence
creating the foundation of Jean-Baptiste Say's famous remark: "Supply creates its own demand."

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The Sales Era (1920’s to 1940’s): After the Industrial Revolution, competition grew and focus
turned to selling. Marketing, branding and sales became an important pillar as outputs surpassed
demand, and companies competed for customers.

The Marketing Orientation Era (Marketing Department Era (1940’s to 1960’s)

+Marketing Company Era (1960’s to 1990’s)): From the second half of the 20th century
onward, the saturation of markets led companies to bestow upon marketers the opportunity to
perform on a more strategic level. Through a profound knowledge on the customer, these
professionals were involved in what the company would produce, its distribution channels and
pricing strategy. Employees within an organization were also motivated to acquire marketing
knowledge, which set the grounds to clients obtaining a general brand experience.
But wait, there's more... According to recent publications, two new eras have been added to the
list:

The Relationship Marketing Era (1990’s to 2010’s): The focus of companies shifts towards
building customer loyalty and developing relationships with clients. Authors such as Don
Peppers, Martha Rogers and Philip Kotler were instigators of the importance of creating bonds,
considering that "the cost of attracting a new customer is estimated to be five times the cost of
keeping a current customer happy." (Kotler, 1997)

The Social/Marketing Era (2010’s to till): Concentrates on social interaction and a real-time
connection with clients. Businesses are connected to current and potential customers 24/7 and
engagement is a critical success factor.
Consider how much marketing has changed in the last century and will continue to shift as
channels of communication, production levels and a society alter. As markets expand and new
marketing platforms emerge, the science and practice of this profession is being transformed by
the minute. What we consider today to be the fastest way to reach our customers might be
obsolete tomorrow. Therein lies the beauty of this profession...

***Core Marketing Concepts:

They consist of needs, wants and demands; marketing offers (products, services, and
experiences); value and satisfaction; exchanges, transactions, and relationships; and markets. All
these core marketing concepts are linked to one another, with each concept building on the one
before it.

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Needs: The concept of human needs is the fundamental concept underlying all marketing
activities. Human needs are states of felt deprivation. They are biogenic in origin and include
physiological needs for food, clothing, warmth, shelter and safety. Social needs are craving for
belonging and affection. Knowledge and self-expression are the other individual needs of human
beings. All these needs are basic requirements of any individual, and are not a creation by
marketing people.

Types of Needs:

Need, in terms of marketing can be divided into the following five types:

• Stated.
• Real.
• Unstated.
• Delight.
• Secret.

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Wants: Wants are the forms human needs take as they are shaped by culture and individual
personality characteristics. When an American needs food, he may want a McDonald burger, or
steak, French fries and a Coke; whereas, if an Indian needs food, he may want a dosa, chapattis
or rice, and coffee or tea. Wants are shaped by the society in which one lives and are described in
terms of products that will satisfy needs. The only other difference between needs and wants is
that while human needs are limited, wants are unlimited.

Demand: When human wants are backed by purchasing power and willingness to buy, they
become demands. Based on their needs, wants and buying capacity, consumers ask for or
demand products which they feel will give them maximum value and satisfaction. Most of the
marketing companies take pains to study and understand their customers’ needs, wants and
demands, based on which they plan their strategies for products and promotions. Consumer
behaviour studies and consumer research are primarily for identifying and analyzing consumer
needs, wants and the related buying behaviour.
Example: Need, Want and Demand of an MBA Student
Need: Transportation – The MBA student has to reach college in time. Buses are not dependable.

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Want: The student wants a motorcycle, which looks grand, has many latest features and is
dependable. E.g. Bajaj or Honda.
Demand: Purchasing power is provided by the boy’s father, who also has the willingness to buy
the bike, which his son wants.

Marketing Offers: Marketing offers are combinations of products, services, information, or

experiences offered to a market to satisfy a need or want. It is also called ‘a value proposition’,
which is a set of benefits that marketing people promise to the consumers to satisfy their needs.
The largest share of marketing offers consists of physical (tangible) products which include non-
durable goods (fast moving consumer goods or FMCG) and consumer durables. Some examples
are given below:

Non-durables: Cosmetics (face cream, lipstick, hair dye, nail polish, etc.)

Toiletries (toothpaste, soap, powder, shampoo, etc.)

Packaged food (biscuits, chocolates, coffee, tea, Horlicks, atta,ketchup, soft

drinks, etc.)

Others (books, petrol, gas, shoes, textiles, vegetables, fruits, fish,etc.)

Durables: Automobiles (cars, vans, jeeps, etc.)

Two-wheelers (scooters, bikes, mopeds, etc.)

Household appliances (fridge, TV, washing machine, microwave ovens, steel

almarah, furniture, etc.)

Marketing offers are not limited to physical products only. 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. Banking, airline, hotel, transportation,
tourism and travel, consultancy, etc., are examples of such services. In addition, marketing offers
also include other entities, such as persons, places, organizations, information and ideas.

Examples: Persons: Celebrities, film stars, fashion models, cricketers and even leading
businessmen market themselves.

Politicians (MPs, MLAs) market themselves at the time of elections.

Places: Countries and states market themselves to attract tourists. E.g.: Singapore, Switzerland,
Malaysia, Goa.

Organizations: Just before a public issue of shares, most organizations market themselves. Even
as a routine public image building process, companies indulge in organization marketing. E.g.:
Reliance Industries, Wipro, Infosys, etc.

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Information: The TV news channels like CNN, CNBC, BBC and NDTV, research firms like
ORG-MARG, encyclopedias like Encarta, etc., are involved in information marketing.

Ideas: Ideas could be seen embedded in any marketing offer. If could be enhancing sociability
after using Colgate toothpaste or Cinthol soap, or becoming beautiful after using Fair & Lovely
cream. There are also special ideas that are marketed like awareness about family planning,
AIDS/HIV, drug and alcohol abuse and religious beliefs.

Experiences and Events: Marketing offers can also be in the form of experiences and events. A
visit to a theme park like Silver Storm, Black Thunder, Veegaland, Wonder la, etc. is an
experience for the consumer. People need and want recreation and enjoyment, which they get in
the form of experience when they visit the parks with their family or friends. Examples of events
are rock shows, exhibitions, trade shows and fashion shows.

Customer Value:

Consumers have a wide choice of products and services which promise satisfaction of a
particular need. They normally decide on their choices based on their perceptions of the value
and satisfaction that different products and services deliver, or offer. Customer value is the
difference between the value the customer gains from buying and using a product and the cost of
buying the product. They normally form expectations about the value of different marketing
offers and buy accordingly. This involves the customers’ mental process of judging the value of
the product and is called customer perceived value. Customer expectations are based on past
buying experiences, and the opinions of friends and family members.

The promises offered by marketers and the information about similar product offers of
competitors also influence expectations.

The main task of marketing, therefore, becomes value-creation and value delivery. Marketing
offers are value propositions promising benefits and value.

Customer Satisfaction:

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 the future buying
behaviour of the people. Satisfied customers will buy the product again and tell the others about
their good buying experiences. Dissatisfied customers, on the other hand, switch to a
competitor’s products and also discourage others from buying the product. Marketers must be
careful to set the right level of expectations. If they set expectations too low, they may satisfy
those who buy but fail to attract enough customers.
If they raise expectations too high, customers will be disappointed. Customer value and customer
satisfaction are key building blocks for developing and managing customer relationships.

Exchanges:

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Exchange is another core concept of marketing. It is the act of obtaining an object which one
needs from another by offering some other thing in return. In the exchange process, two or more
individuals are involved, each side possessing something that is considered to be of value to the
other. Both will have the ability to discuss and agree or disagree on the terms of exchange and
deliver the object after an agreement is reached. This stage of offering something and discussing
the mutually beneficial and acceptable terms is the exchange process. Marketing occurs when
individuals decide to satisfy needs and wants through exchange.

Exchange is in the center of marketing. Marketing management tries to arrive at the desired
exchange. People can satisfy their needs and wants in one of the four ways – self-production,
coercion/snatching, begging, or exchanging.

Marketing emerges only when people want to satisfy their needs and wants through exchange.
Exchange is an act of obtaining a desired product from someone by offering something in return.
Obtaining sweet by paying money is the example an exchange.

Exchange is possible when following five conditions are satisfied:

i. There should be at least two parties

ii. Each party has something that might be of value to the other party

iii. Each party is capable of communication and delivery

iv. Each party is free to accept or reject the exchange offer

v. Each party believes it is desirable to deal with the other party

Transactions:

As a consequence of the exchange process, when the two parties reach an agreement on the
terms of exchange, it becomes transaction. A transaction will consist of an exchange of values
between the two or more parties involved, and ownership also changes hands between the seller
and the buyer.

It implies that people are negotiating and moving toward the agreement. When an agreement is
reached, it is transaction. Transaction is the decision arrived or commitment made.

Transaction involves following conditions:

i. At least two things of value

ii. Agreed upon conditions

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iii. A time of agreement

iv. A place of agreement

v. A law (legal system) of contract to avoid distrust

For example, Mr. X pays Rs. 25000 and obtains a computer. There are various types of
transactions, such as barter transactions, monetary transactions, commercial transactions,
employment transactions, civic transactions, religious or charity transactions.

For example, a customer pays Rs. 4 lakh to a Hyundai dealer and buys a Santro. Similarly, a
physician treats a patient and the patient pays him Rs. 100 as his fees. Transactions can be
monetary as in the above examples or can also be non-monetary. In the barter system,
transactions take place without the involvement of money as only the goods or services are
exchanged. For example, the butcher offers meat to the baker in exchange for a loaf of bread.

Exchange is a process, not event.

Transfer:
Transfer involves obtaining something without any offer or offering anything without any return.
For example, Mr. X gives gift to Mr. Y. Transfer is a one-way process. But, pure transfer is
hardly found in practice. One transfers something with some unexpressed expectations. Offer of
money to beggar is to get the favour of God.

Donor gives donations and receives honour, appreciation, and special invitation, or even special
influence in administration. Gift is rewarded in terms of gratitude, a good behaviour, saying,
“thank you” or with the expectation that the receiver of the gift will offer the same in the future.
Almost all transfers are same as transactions. Transfer and transaction both are important for
marketer.

Relationships:

Marketing does not stop with a single transaction between the marketer and the customer. The
marketer wants the customer to be fully satisfied with the transaction so that a long-term
relationship can be built up in the form of customer loyalty.

Marketing consists of actions taken to build and maintain desirable exchange relationships with
target audiences involving a product, service, idea or other object. Beyond simply attracting new
customers and creating transactions, the goal is to retain customers and grow their business with
the company.

Today’s marketing practice gives more importance to relation building. Marketing practice based
on relation building can be said as relationship marketing. Relationship marketing is the practice
of building long-term profitable or satisfying relations with key parties like customers, suppliers,
distributors, and others in order to retain their long-term preference in business.

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A smart marketer tries to build up long-term, trusting, and ‘win-win’ relations with valued
customers, distributors, and suppliers. Relationship marketing needs trust, commitment,
cooperation, and high degree of understanding.

Relationship marketing results into economical, technical, social, and cultural tie among the
parties. Marketing manager is responsible for establishing and maintaining long-term relations
with the parties involved in business.

Network is the ultimate outcome of relationship marketing. A marketing network consists of the
company and its supporting stakeholders – customers, employees, suppliers, distributors,
advertising agencies, colleges and universities, and others – whose role is considered to be
essential for success of business. It is a permanent setup of relations with stakeholders. A good
network of relationships with key stakeholders results into excelling the marketing performance
over time.

Market:

In common parlance, a market is a place where buyers and sellers meet to buy or sell products, as
in the case of a fish market, vegetable market or grain market. But in marketing, a market refers
to the different groups of consumers for a product or service. Market need not be a place as in the
traditional sense. Here, the sellers or marketers are treated as the industry and the buyers as the
market. Examples are the general consumer market, business market, global market and specific
markets like teenagers’ market, children’s market, working women’s market, insurance market,
healthcare market and education market.

A market is the set of actual and potential buyers of a product. Such buyers or customers share a
particular need or want that can be satisfied through exchange relationships. The size of the
market will depend on the number of people who exhibit the need, have the buying power, and
are willing to exchange their resources for what they want. 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.

***Modern Concepts of Marketing or Marketing Orientations or Marketing Philosophies

Modern concepts of marketing are broad concepts. It means finding out the consumer and make
the goods as per their needs rather than to provide them what the seller has made. Thus it is very
essential for the seller to get the answer of the question what are the things which the consumer
want? And how these things can be made available to them? Only then he can survive in the
market and earn profit. There are 6 modern concepts of marketing which are very important from
the point of view of marketer.

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a) Production concept: – The companies which use the production concept generally focus too
narrowly on their own activities because according to this concept the companies think that
consumer will buy the product which comes in the market.

The production concept, though useful in some situations, could result in “Marketing Myopia”.

This concept works on an assumption that consumers prefer a product which is inexpensive and
widely available. This viewpoint was encapsulated in Says Law which states ‘Supply creates its
own demand’. Hence companies focus on producing more of the product and making sure that it
is available to the customer everywhere easily.

Increase in the production of the product makes the companies get the advantage of economies
of scale. This decreased production cost makes the product inexpensive and more attractive to
the customer.

A low price may attract new customers, but the focus is just on production and not on product
quality. This may result in a decrease in sales if the product is not up to the standards.

This philosophy only works when the demand is more than the supply. Moreover, a customer not
always prefers an inexpensive product over others. There are many other factors which influence
his purchase decision.

More Product Quanity = More Customers

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Who prefers Production Concept of Marketing Management Philosophies

• Companies whose product market is spread all over the world may use this approach.
• Companies having an advantage of monopoly.
• Any other company whose product’s demand is more than its supply.

b) Product concept: – As per this concept companies give importance to the features or the
quality of the product because in long run the product exists only with the quality it is giving to
the consumer.

This concept works on the assumption that customers prefer products of ‘greater quality’ and
‘price and availability’ doesn’t influence their purchase decision. Hence the company devotes
most of its time in developing a product of greater quality which usually turns out to be
expensive.

Since the main focus of the marketers is the product quality, they often lose or fail to appeal to
customers whose demands are driven by other factors like price, availability, usability, etc.

Good Product Quality= More Customers

Who prefers Product Concept of Marketing Management Philosophies?

• Companies in the technology industry.

• Companies having an advantage of monopoly.

c) Selling concept: – it is not sufficient for the manufacturer to made the goods and wait for the
customers. Thus, according to this concept it is very important to inform the consumer about the
product which can be done through different ways of promotion.

Production and product concept both focus on production but selling concept focuses on making
an actual sale of the product. Selling Concept focuses on making every possible sale of the
product, regardless of the quality of the product or the need of the customer. The main focus is to
make money. This philosophy doesn’t include building relations with customers. Hence repeated
sales are very less. Companies following this concept may even try to deceive the customers to
make them buy their product.

Companies which follow this philosophy have a short-sighted approach as they ‘try to sell what
they make rather than what market wants’.

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 More Sales = Better Business

Who prefers Selling Concept of Marketing Management Philosophies?

• Companies with short-sighted profit goals. This often leads to marketing myopia.
• Fraudulent companies.

d) Marketing concept: – consumer now a day is treated as “GOD”. So it is very important for
the manufacturer to produce the product which the consumer wants, so that consumer get
satisfaction and manufacturer earns profit.

Selling Concept cannot let a company last long in the market. It’s a consumers market after all.
To succeed in the 21st century, one has to produce a product to fulfill the needs of their
customers. Hence, emerged the marketing concept. This concept works on an assumption that
consumers buy products which fulfil their needs. Businesses following the marketing concept
conduct researches to know about customers’ needs and wants and come out with products to
fulfil the same better than the competitors. By doing so, the business establishes a relationship
with the customer and generate profits in the long run.

However, this isn’t the only philosophy that should be followed by all the businesses. Many
businesses still follow other concepts and make profits. It totally depends on the demand and
supply and the needs of the parties involved.

I Create what they need = Better Business

Who prefer Marketing Concept of Marketing Management Philosophies?

• Companies in perfect competition.

• Companies who want to stay in the market for a long time.

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 e) Consumer or Customer concept:- now not only marketing concept is sufficient rather the
companies are using consumer concept which means to give attention to individual consumer it
can be done through one to one marketing.

The Customer concept is a 4 stage model which shows how the organization can achieve growth
by capturing and retaining its customers. The customer concept model can be used to determine
where the organization stands in terms of serving its customers. This model can be used in
product market as well as the service market. Here are the four stages of the customer concept.

1) Starting point

Over here the customer is just an individual who falls in a Target group. Thus the first thing
which the organization needs is to know the Segmentation, Targeting and positioning. Once the
customer has been defined its time to move to the next phase.

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2) Focus

In this stage, the organization needs to focus on the customers needs and wants as well as the
value it provides for the customer. What is it that the customer exactly wants? . It is very
important that the organization stays in sync with the continuous changes in the business world.
Thus it needs time to time gap analysis as well as market surveys and research to focus on
customers needs and wants.

3) Means

What are the means available for the organization to deliver value to the customer? In this stage,
it is very important for the organization to connect each and every function of the organization so
as to form a Value Chain. The services should be connected to sales which in turn should be in
sync with the manufacturing so on and so forth. You can refer the value chain to understand how
customer value can be created in an organization. Along with this, integration of multiple sales
channels is also important.

4) Ends

Customer share, customer loyalty and customer lifetime value are three concepts which can
define the customer equity of the organization. Thus this is the last stage of the customer concept
wherein the organization has to ensure that it has kept its customers satisfied, that the
organizations customers have become “repeat customers” and finally that they remain a customer
for a lifetime.

f) Societal marketing concept: – this concept means that company should not only work for the
consumer but also for the society. So the company should make balance between company’s
profits, consumer wants and society welfare.

Adding to the marketing concept, this philosophy focuses on society’s well-being as well. The
business focuses on how to fulfill the needs of the customer without affecting the environment,
natural resources and focusing on society’s well-being. This philosophy believes that the
business is a part of the society and hence should take part in social services like the elimination
of poverty, illiteracy, and controlling explosive population growth etc.

Many of the big companies have included corporate social responsibility as a part of their
marketing activities.

Their Needs + Society first = Better Business

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