UNIT I INTRODUCTION

TO MARKETING
FUNDAMENTALS
Dr Shivani Thapliyal
Definition of Marketing
• Philip Kotler defines marketing as “the science and art of
exploring, creating, and delivering value to satisfy the
needs of a target market at a profit.

• Marketing can be defined as the process of identifying,

anticipating, and satisfying customer needs and wants
through the creation, communication, and delivery of
value. It involves market research, product development,
branding, pricing, promotion, and distribution to ensure
that the right products or services reach the right
customers at the right time.

• https://www.youtube.com/watch?v=NEtH4B4vBWU
Key aspects of marketing:
• Customer-centric – Understanding and fulfilling
customer needs.
• Value creation – Offering value through products or
services.
• Communication – Engaging and informing the target
audience.
• Exchange process – Facilitating the buying and selling of
goods and services.
• Relationship-building – Fostering long-term connections
with customers.
Marketing plays a critical role in ensuring the success and
sustainability of any business.
Scope of Marketing
1. Market Research and Consumer Analysis
• Market Research: Gathering and analyzing data about
market conditions, competitors, and customer needs.
• Consumer Behavior: Studying how consumers make
purchasing decisions, what influences their behaviour,
and how they respond to marketing strategies.
2. Product Development and Management
• New Product Development: Identifying customer needs
and creating new products or services that satisfy those
needs.
• Product Life Cycle Management: Managing products at
various stages—introduction, growth, maturity, and
decline—to maximize profitability.
3. Branding and Positioning
• Branding: Creating a unique identity for a product or
service, including name, logo, and overall image.
• Positioning: Defining how a product is perceived in the
minds of consumers compared to competitors.
4. Pricing Strategies
• Cost-based Pricing: Setting a price based on production
costs plus a markup.
• Value-based Pricing: Setting a price based on perceived
value to the customer.
• Competitive Pricing: Setting prices based on competitor
pricing strategies.
5. Promotional Activities
• Advertising: Communicating messages through various
media (TV, online, print) to inform and persuade potential
customers.
• Sales Promotions: Offering discounts, coupons, or other
incentives to encourage immediate purchases.
• Public Relations (PR): Managing the company’s image
and fostering good relationships with stakeholders.
6. Sales and Distribution
• Sales Channels: Selecting and managing direct or
indirect distribution channels to make the product
available to customers.
• Retail and Wholesale Management: Managing
relationships with retail and wholesale partners.
Evolution of Marketing
1. The Production Concept
• Focus: Efficiency in production and distribution.
• Philosophy: "If you make it, they will buy it." Companies
believed that customers would prefer products that were widely
available and affordable.
• Characteristics:
• Mass production techniques were developed during the Industrial
Revolution.
• Companies emphasized producing goods at lower costs to make them
accessible to more people.
• Little attention was given to customer needs or preferences.
• Example: Henry Ford’s Model T, which was produced in large
volumes using assembly-line methods and was available in
only one color and model to maximize efficiency.
2. The Product Concept
• Focus: Product quality and innovation.
• Philosophy: "If we make a better product, people will buy
it." Companies believed that customers would naturally
seek out superior products.
• Characteristics: Emphasis on innovation, quality, and
features.
• Companies focused on making the best product rather
than understanding what the customer wanted.
• Example: Companies like Kodak improved camera at that
time but did not necessarily study consumer preferences
or trends.
3. The Selling Concept
• Focus: Aggressive sales techniques to push products.
• Philosophy: "Sell what we make." Companies shifted
their focus to selling more products, often using heavy
promotion and persuasion techniques.
• Characteristics:Emerged in response to the Great
Depression, when businesses had to work harder to
convince people to buy products.
• Focused on sales tactics, advertising, and door-to-door
selling.
• Little emphasis on building long-term relationships or
meeting customer needs.
• Example: Car dealerships and insurance companies used
aggressive sales tactics to increase demand.
4. The Marketing Concept
• Focus: Customer needs and wants.
• Philosophy: "Make what the customer wants." Companies
shifted toward understanding and satisfying customer needs
and desires.
• Characteristics:Market research became essential to
understand consumer preferences.
• Companies emphasized creating value for customers, meeting
their needs, and fostering long-term relationships.
• The 4Ps of marketing (Product, Price, Place, Promotion) were
developed and became a cornerstone of marketing strategy.
• Example: Procter & Gamble introduced various household
products based on customer feedback, focusing on meeting
specific customer demands.
5. The Holistic Marketing Concept
• Holistic Marketing evolves from these earlier stages by
recognizing that marketing cannot operate in silos and that all
aspects of a business must work together to create value.
The holistic approach stresses:
• Relationship Marketing: Developing long-term, meaningful
relationships with all stakeholders (customers, employees,
suppliers, partners).
• Integrated Marketing: Ensuring all marketing activities
(advertising, sales, customer service) deliver a consistent,
unified message.
• Internal Marketing: Recognizing the role of employees in
delivering customer value and ensuring that everyone in the
company understands the marketing strategy.
• Social Responsibility Marketing: Incorporating societal
welfare and sustainability into the company’s marketing and
operational decisions.
Core Marketing Concepts
• 1. Needs, Wants, and Demands
• Needs: These are the basic requirements that people
need to survive, such as food, water, shelter, and safety.
Needs are inherent and cannot be created by marketers.
• Wants: These are specific ways in which people choose
to fulfil their needs, shaped by culture, society, and
individual personality. For example, a person may need
food (need) but want sushi (want).
• Demands: When people have the ability and willingness
to buy a product or service, their wants become demands.
Demands are determined by the purchasing power of
customers and the perceived value of the offering.
• 2. Market Offerings (Products, Services, and
Experiences)
• Market Offerings refer to the combination of products,
services, and experiences that are offered to satisfy
customer needs and wants.
• Products: Tangible items such as cars, smartphones, or clothing.
• Services: Intangible offerings like banking, consulting, or
healthcare.
• Experiences: Immersive engagements that provide value, such as
a vacation or attending a concert.
• Marketers must develop offerings that not only meet
customer needs but also differentiate them from
competitors.
• 3. Value and Satisfaction
• Value: This is the customer’s perception of the benefit
they receive from a product or service compared to its
cost. Value is the balance between what a customer gets
(benefits) and what they give up (costs).
• Customer-Perceived Value: The customer evaluates a product
based on the value they expect to receive relative to alternatives.
• Satisfaction: Satisfaction occurs when the product or
service meets or exceeds customer expectations. High
satisfaction leads to customer loyalty and positive
word-of-mouth, while dissatisfaction can lead to
complaints and switching to competitors.
• 4. Exchange and Transactions
• Exchange: This is the fundamental concept of
marketing—people give something of value (money, time,
effort) to receive something in return (products, services,
or experiences).
• Conditions for Exchange: For exchange to take place, there must
be at least two parties, each with something of value, and both
parties must be able to communicate and deliver.
• Transaction: A transaction is a completed exchange. It
involves the transfer of value between two parties, such
as the purchase of a product by a customer.
• 5. Markets
• A market is the set of all potential buyers for a product or
service. Markets can be segmented based on
demographics, geography, behaviour, and
psychographics. Businesses operate in various types of
markets, including:
• Consumer Markets: Where businesses sell goods or services to
individual customers for personal use.
• Business Markets: Where businesses sell to other organizations
for use in production, resale, or operational needs.
• Global Markets: Where businesses engage with consumers and
companies across different countries and cultures.
• Government and Nonprofit Markets: Where products and
services are sold to governments and nonprofit organizations.
• 6. Marketing Mix (The 4 Ps)
• The Marketing Mix consists of the set of tools that businesses use
to implement their marketing strategies. Traditionally, it includes the
4 Ps:
• Product: The goods or services offered to satisfy customer needs.
• Price: The amount of money customers are willing to pay for a
product.
• Place (Distribution): How the product is delivered to the customer,
including channels and locations.
• Promotion: The communication strategies used to inform,
persuade, and remind customers about the product.
• In service-based industries, the mix is often expanded to include the
7 Ps:
• People: The staff or representatives who interact with customers.
• Process: The procedures and flow of activities that deliver the
product or service.
• Physical Evidence: The environment or tangible elements that help
convey the value of the service.
• 7. Customer Relationships
• Customer Relationships focus on building and
maintaining long-term connections with customers to
ensure loyalty, repeat business, and advocacy. This
includes:
• Customer Relationship Management (CRM): Systems and
processes used by companies to manage interactions with current
and potential customers, track customer behaviour, and
personalize communications.
• Customer Lifetime Value (CLV): The total value a customer brings
to a business over the entire relationship period. Companies focus
on maximizing CLV through loyalty programs, personalized
experiences, and exceptional customer service.
• 8. Branding
• Branding is the process of creating a unique identity for a
product, service, or company that differentiates it from
competitors and resonates with customers. A strong brand
helps build loyalty, trust, and recognition.
• Branding includes elements such as:
• Brand Name: The name that identifies the product or company.
• Logo: A visual symbol that represents the brand.
• Brand Positioning: The place a brand occupies in the minds of
customers relative to competitors, based on attributes like quality,
price, or image.
• Brand Equity: The value and strength of a brand based on its
recognition, loyalty, and customer perception.
• 9. Segmentation, Targeting, and Positioning (STP)
• Segmentation: The process of dividing a market into
distinct groups of buyers with similar needs or behaviors.
• Targeting: After segmentation, businesses select which
segments to serve based on factors like size, profitability,
and strategic fit.
• Positioning: The process of designing the company’s
offering and image to occupy a distinctive place in the
minds of the target market.
• 10. Marketing Environment
• The Marketing Environment consists of all the external
and internal factors that influence marketing decisions.
These include:
• Microenvironment: Factors close to the company, such as
customers, suppliers, competitors, and intermediaries.
• Macroenvironment: Broader societal forces like demographic
trends, economic conditions, technological developments, cultural
shifts, political/legal factors, and natural forces (e.g., climate
change).