UNIT-I

Introduction to Marketing
Assistant Professor
Doon Business School
What is marketing?

Meeting needs profitably.

•Selling?
•Advertising?
•Art?
•Science?
Key ideas in the definition
•Process involving strategy and tactics
•4 Ps
•More than goods
•Exchange is central
•Satisfy consumer and organizational needs
Marketing Management
As the art and science of choosing target markets and getting
, keeping, and growing customers through creating, delivering
and communicating superior customer value.
What can we market?

[Link] 2. Goods
[Link] 4. Services
[Link] 6. Experiences
[Link] 8. Properties
[Link] 10. Information
–profit
–nonprofit
WHO MARKETS?
A marketer is someone who seeks a response - attention, a purchase, a vote, a
donation- from another party, called the prospect.

8 demand sets are possible;-

1. Negative Demand - Customer dislike the product & may even pay to avoid
it.(e.g Painful medical treatment- dental, or bariatric surgery etc.)
2. Nonexistent Demand - Consumers may be unaware of or uninterested in the
product.
3. Latent Demand - Consumer may share a strong need that cannot be
satisfied by an existing product.
4. Declining Demand - Consumers begin to buy the product less frequently or
not at all.
5. Irregular demand - Consumer purchases vary on a seasonal , monthly, weekly,
daily or even hourly basis.

6. Full Demand - Consumers are adequately buying all products put into the
marketplace.

7. Overfull demand - More consumers would like to buy the product than can be
satisfied.

8. Unwholesome demand - Consumers may be attracted to products that have

undesirable social consequences.
What do marketers do?
•Identify needs and wants
•Choose which/whose needs to focus on
•Create and manage products
•Communicate about products
•Price products
•Distribute products
•Follow up
Importance of Marketing
● Marketing is important because it helps you sell your products,services,
Ideas, People, events etc. The bottom line of any business is to make money
and marketing is an essential channel to reach that end goal. Without
marketing many businesses wouldn't exist because marketing is ultimately
what drives sales.
● Marketing helps businesses to keep pace with the changing tastes, fashions
and preferences of the customers.
● Marketing plays an important role in the development of the economy. Various
functions of marketing like selling, advertising, packaging, transportation etc,
generates employment for a large number of people and accelerates growth
of economy.
● Marketing helps in promoting businesses, meeting competition, promoting
product/service awareness among public.
Nature of Marketing
1. Marketing is an Economic Function
Marketing embraces all the business activities involved in getting goods and services ,
from the hands of producers into the hands of final consumers. The business steps
through which goods progress on their way to final consumers is the concern of
marketing.

2. Marketing is a Legal Process by which Ownership Transfers

In the process of marketing the ownership of goods transfers from seller to the purchaser
or from producer to the end user.

3. Marketing is a System of Interacting Business Activities

Marketing is that process through which a business enterprise, institution, or organisation
interacts with the customers and stakeholders 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.
Nature of Marketing
4. Marketing is a Managerial function According to this approach the emphasis is on
how the individual organisation processes marketing and develops the strategic
dimensions of marketing activities.

5. Marketing is a social process

Marketing is the delivery of a standard of living to society. According to Cunningham and
Cunningham (1981) societal marketing performs three essential functions:-

1. Knowing and understanding the consumer's changing needs and wants;

2. Efficiently and effectively managing the supply and demand of products and services;
and
3. Efficient provision of distribution and payment processing systems.

6. Marketing is a philosophy based on consumer orientation and satisfaction

7. Marketing had dual objectives - profit making and consumer satisfaction

Scope of Marketing
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. Production planning and development

Product planning and development starts with the generation of product idea and ends with the
product development and commercialisation. Product planning includes everything from branding and
packaging to product line expansion and contraction.

4. Pricing Policies
Marketer has to determine pricing policies for their products. Pricing policies differs form product to
product. It depends on the level of competition, product life cycle, marketing goals and objectives, etc.
Scope of Marketing
5. Distribution
Study of distribution channel is important in marketing. For maximum sales and profit goods are
required to be distributed to the maximum consumers at minimum cost.

6. Promotion
Promotion includes personal selling, sales promotion, and advertising. Right promotion mix is crucial
in accomplishment of marketing goals.

7. Consumer Satisfaction
The product or service offered must satisfy consumer. Consumer satisfaction is the major objective of
marketing.

8. Marketing Control
Marketing audit is done to control the marketing activities.
Marketing Management Process
The Marketing Process of a company typically involves identifying the viable
and potential marketing opportunities in the environment, developing strategies
to effective utilise the opportunities, evolving suitable marketing strategies, and
supervising the implementation of these marketing efforts.

Marketing process involves ways that value can be created for the customers to
satisfy their needs. Marketing process is a continual series of actions and
reactions between the customers and the organisations which are making
attempt to create value for and satisfy needs of customers. In marketing process
the situation is analysed to identify opportunities, the strategy is formulated for a
value proposition, tactical decisions are taken, plan is implemented, and results
are monitored.
Steps in Marketing Process
1. Situation Analysis
Analysis of situation in which the organisation finds itself serves as the basis for
identifying opportunities to satisfy unfulfilled customer needs. Situational and
environmental analysis is done to identify the marketing opportunities, to understand firms
own capabilities, and to understand the environment in which the firm is operating.

2. Marketing Strategy
After identifying the marketing opportunities a strategic plan is developed to pursue the
identified opportunities.

3. Marketing Mix Decisions

At this step detailed tactical decisions are made for the controllable parameters of the
marketing mix. It includes - product development decisions, product pricing decisions,
product distribution decisions, and product promotional decisions.
4. Implementation and Control
Finally, the marketing plan is implemented and the results of marketing efforts are
monitored to adjust the marketing mix according to the market changes.
1. Needs:

Existence of unmet needs is precondition to undertake marketing activities.

Marketing tries to satisfy needs of consumers. Human needs are the state of felt
deprivation of some basic satisfaction. A need is the state of mind that reflects the
lack-ness and restlessness situation.

Needs are physiological in nature. People require food, shelter, clothing, esteem,
belonging, and likewise. Note that needs are not created. They are pre-existed in
human being. Needs create physiological tension that can be released by
consuming/using products.
2. Wants:
Wants are the options to satisfy a specific need. They are desire for specific
satisfiers to meet specific need. For example, food is a need that can be satisfied by
variety of ways, such as sweet, bread, rice, sapati, puff, etc. These options are
known as wants. In fact, every need can be satisfied by using different options.

Maximum satisfaction of consumer need depends upon availability of better

options. Needs are limited, but wants are many; for every need, there are many
wants. Marketer can influence wants, not needs. He concentrates on creating and
satisfying wants.
3. Demand:
Demand is the want for specific products that are backed by the ability and
willingness (may be readiness) to buy them. It is always expressed in relation to
time. All wants are not transmitted in demand. Such wants which are supported by
ability and willingness to buy can turn as demand.

Marketer tries to influence demand by making the product attractive, affordable,

and easily available. Marketing management concerns with managing quantum
and timing of demand. Marketing management is called as demand management.
5. Utility (value), Cost, and Satisfaction:
Utility means overall capacity of product to satisfy need and want. It is a guiding
concept to choose the product. Every product has varying degree of utility. As per level
of utility, products can be ranked from the most need-satisfying to the least
need-satisfying. Utility is the consumer’s estimate of the product’s overall capacity to
satisfy his/her needs. Buyer purchases such a product, which has more utility. Utility is,
thus, the strength of product to satisfy a particular need. Cost means the price of
product. It is an economic value of product. The charges a customer has to pay to avail
certain services can be said as cost. The utility of product is compared with cost that he
has to pay. He will select such a product that can offer more utility (value) for certain
price. He tries to maximize value, that is, the utility of product per rupee.
4. Product:
Product can also be referred as a bundle of satisfaction, physical and psychological
both. Product includes core product (basic contents or utility), product-related
features (colour, branding, packaging, labeling, varieties, etc.), and
product-related services (after-sales services, guarantee and warranty, free home
delivery, free repairing, and so on). So, tangible product is a package of services or
benefits. Marketer should consider product benefits and services, instead of
product itself.

Marketer can satisfy needs and wants of the target consumers by product. It can be
broadly defined as anything that can be offered to someone to satisfy a need or
want. Product includes both good and service. Normally, product is taken as
tangible object, for example, pen, television set, bread, book, etc.
Satisfaction means fulfillment of needs. Satisfaction is possible when buyer
perceives that product has more value compared to the cost paid for. Satisfaction
closely concerns with fulfillment of all the expectations of buyer. Satisfaction
releases the tension that has aroused due to unmet need(s). In short, more
utility/value with less cost results into more satisfaction.
6. Exchange, Transaction, and Transfer:
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

Transaction involves following conditions:

i. At least two things of value

ii. Agreed upon conditions

iii. A time of agreement

iv. A place of agreement

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

7. Relationships and Network:
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.

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.
8. Market, Marketing, Marketer, and Prospect:
In marketing management, frequently used words are markets, marketing, marketer,
and prospects. A market consists of all potential customers sharing a particular need or
want who might be willing and able to engage in exchange to satisfy this need or want.

Marketing is social and managerial process by which individuals and groups obtain
what they need and want through creating and exchanging product and value with
others.

Marketer is one who seeks one or more prospects (buyers) to engage in an exchange.
Here, seller can be marketer as he wants other to engage in an exchange. Normally,
company or business unit can be said as marketer.
Prospect is someone to whom the marketer identifies as potentially willing and
able to engage in the exchange. (In case of exchange between two companies, both
can be said as prospects as well as marketers). Generally, consumer or customer
who buys product from a company for satisfying his needs or wants can be said as
the prospect.
Marketing Environment
Marketing Environment is the combination of external and internal factors and forces
which affect the company’s ability to establish a relationship and serve its customers.

“A company’s marketing environment consists of the actors and forces outside of

marketing that affect marketing management ability to build and maintain successful
relationships with target customers”. – Philip Kotler

The internal environment is company-specific and includes owners, workers, machines,

materials etc. The external environment is further divided into two components: micro
& macro. The micro or the task environment is also specific to the business but
external. It consists of factors engaged in producing, distributing, and promoting the
offering. The macro or the broad environment includes larger societal forces which
affect society as a whole. The broad environment is made up of six components:
demographic, economic, physical, technological, political-legal, and social-cultural
environment.
Components of Marketing Environment
Internal Environment
The internal environment of the business includes all the forces and factors inside
the organisation which affect its marketing operations. These components can be
grouped under the Five Ms of the business, which are:

● Men
● Money
● Machinery
● Materials
● Markets
The internal environment is under the control of the marketer and can be changed
with the changing external environment. Nevertheless, the internal marketing
environment is as important for the business as the external marketing
environment. This environment includes the sales department, marketing
department, the manufacturing unit, the human resource department, etc.
External Environment
The external environment constitutes factors and forces which are external to the business and on which
the marketer has little or no control. The external environment is of two types:

Micro Environment

The micro-component of the external environment is also known as the task environment. It comprises of
external forces and factors that are directly related to the business. These include suppliers, market
intermediaries, customers, partners, competitors and the public

● Suppliers include all the parties which provide resources needed by the organisation.
● Market intermediaries include parties involved in distributing the product or service of the
organisation.
● Partners are all the separate entities like advertising agencies, market research organisations,
banking and insurance companies, transportation companies, brokers, etc. which conduct
business with the organisation.
 ● Customers comprise of the target group of the organisation.
● Competitors are the players in the same market who targets similar
customers as that of the organisation.
● Public is made up of any other group that has an actual or potential
interest or affects the company’s ability to serve its customers.

Macro Environment

The macro component of the marketing environment is also known as the broad
environment. It constitutes the external factors and forces which affect the
industry as a whole but don’t have a direct effect on the business. The
macro-environment can be divided into 6 parts.
Demographic Environment

The demographic environment is made up of the people who constitute the

market. It is characterised as the factual investigation and segregation of the
population according to their size, density, location, age, gender, race, and
occupation.

Economic Environment

The economic environment constitutes factors which influence customers’

purchasing power and spending patterns. These factors include the GDP, GNP,
interest rates, inflation, income distribution, government funding and subsidies,
and other major economic variables.
Physical Environment

The physical environment includes the natural environment in which the business
operates. This includes the climatic conditions, environmental change,
accessibility to water and raw materials, natural disasters, pollution etc.

Technological Environment

The technological environment constitutes innovation, research and development

in technology, technological alternatives, innovation inducements also
technological barriers to smooth operation. Technology is one of the biggest
sources of threats and opportunities for the organisation and it is very dynamic.
Political-Legal Environment

The political & Legal environment includes laws and government’s policies
prevailing in the country. It also includes other pressure groups and agencies
which influence or limit the working of the industry and/or the business in the
society.

Social-Cultural Environment

The social-cultural aspect of the macro-environment is made up of the lifestyle,

values, culture, prejudice and beliefs of the people. This differs in different regions.
Importance of Marketing Environment
Essential for planning

An understanding of the external and internal environment is essential for

planning for the future. A marketer needs to be fully aware of the current scenario,
dynamism, and future predictions of the marketing environment if he wants his
plans to succeed.

Understanding Customers

Thorough knowledge of the marketing environment helps marketers acknowledge

and predict what the customer actually wants. In-depth analysis of the marketing
environment reduces (and even removes) the noise between the marketer and
customers and helps the marketer to understand consumer behaviour better.
Threats and Opportunities

Sound knowledge of the market environment often gives a first-mover advantage

to the marketer as he makes sure that his business is safe from future threats and
taps the future opportunities.

Understanding the Competitors

Every niche has different players fighting for the same spot. A better
understanding of the marketing environment allows the marketer to understand
more about the competitions and about what advantages do the competitors have
over his business and vice versa.
Importance of Marketing for the Economic Development of a Country
i) Delivery of standard of living to the society:

Marketing discovers needs and wants of society, produces the goods and services
according to these needs creates demand for these goods and services. They go ahead
and promote the goods making people aware about them and creating a demand for the
goods, encouraging customers to use them. Thus, it improves the standard of living of
the society.

ii) Decrease in distribution cost:

Second important liability of marketing is control the cost of distribution. Through

effective marketing the companies can reduce their distribution costs to a great extent.
Decrease in cost of distribution directly affects the prices of products because the cost
of distribution is an important part of the total price of the product.
iii) Increasing employment opportunities:

Marketing comprises of advertising, sales, distribution, branding and many more

activities. So the development of marketing automatically gives rise to a need for people
to work in several areas of marketing. Thus the employment opportunities are born.
Also successful operation marketing activities requires the services of different
enterprises and organisation such as wholesalers, retailers, transportation, storage,
finance, insurance and advertising. These services provide employment to a number of
people.

iv) Protection against business slump:

Business slump cause unemployment, slackness in the success of business and great
loss to economy. Marketing helps in protecting society against all these problems.
v) Increase in national income:

Successful operation of marketing activities creates, maintains and increases the

demand for goods and services in society. To meet this increased demand the
companies need to increase the level of production in turn raising their income. This
increase, in turn, increases the national income. Further effective marketing leads to
exports adding to the national income. This is beneficial to the whole society.