Course Code- 0411AIS: 2105

Course Title: Principles of Marketing

Chapter One: Introduction

➢ Question No-01: Core Marketing Concept:

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1. Need:

Need is the feelings to get something. Another way, need refers the basic requirements.
Need is a strong feelings of deprivation. Human have many complex need such as basic need,
social need, individual need etc.
2. Want:
Want is a specific object of need which is shaped by ones culture and personality. Want
depend on the culture as well as the environment.

3. Demand:

Want is a specific object of need which is shaped by ones culture and personality In
demand a person must want something, he will have ability to pay for that and must have
the mentality to pay for the product or service.
4. Market Offerings:

Market offerings is some combination of products, services, information or experiences

offered to a market to satisfy a need or want. It provides knowledge about a product.

i. Product: A product is anything that can be offered to a market for attention,

acquisition, use or consumption that might satisfy a want or need of human being.
ii. Services: Services is any activity or benefit that one party can offer to another that
is essentially intangible and does not result in the ownership of anything.
iii. Experience: Experience is knowledge or skill which is obtain from doing, seeing or
feelings things.
5. Value & Satisfaction:

i. Value: Customer value is the difference between the values the customer’s gains from
owing and using a product and the costs of obtaining the product.
ii. Satisfaction: Satisfaction is a person feelings of pleasure of disappointment resulting
from comparing a products perceived performance in relation to his or her
expectations.
6. Exchange & Relationship:

i. Exchange: Exchange is the act of obtaining a desired object from someone by

offering something in return.
ii. Relationship marketing: Relationship marketing is the process of creating,
maintaining and exchange strong value leader relationship with customers and
other stockholders.
7. Market:

A market is the set of all actual and potential buyers and seller of a product or services.

➢ Question No-02: Define marketing.

Marketing comprises all activities involved in determination and satisfaction of consumer

needs at profit.

According to Philip Kotler, “Marketing is a social and managerial process by which

individuals and groups obtain what they need and want through creating and exchanging
products and value with others.”

➢ Question No-03: Concepts or philosophies of marketing:

There are five concept under which organization conduct their marketing activities. These
are discussed below:

1. Production concept: This is the oldest concept of marketing. The production concept
holds that consumers will favor products that are available and highly affordable.
Management should focus on improving production and distribution efficiency.
Assumption of production concept:

• Demand is higher than supply. So consumers are always interest to buy the
product.
• Production cost is high and may be minimized.
• Consumer emphasized competitor price only.

Action in production concept:

• Management will produce large scale of production.
• Management will control reduce cost of production.
• Ensure effective distribution system.
Limitation of production concept:

• It can be used too narrowly.

• Management ignore customers need, want and satisfaction.
2. Product concept: Product concept holds that consumer will favor products that offer
the most quality, performance and innovative features.

Some assumption of product concept:

• Consumers are interested to buy the high quality product not the low quality
product.
• Consumers are informed the product by name or brand.
Action of product concept:

• An organization should devote energy to make continuous product improvement.

Limitations of product concept:

• Organization emphasize only the quality of a product but not customer want.
• The design, packaging and price may not attractive and may not follow effective
distribution.

3. Selling Concept: Selling concept holds that consumer will not buy enough of the
organization product unless the organization undertakes a large scale selling and
promotional efforts.

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Assumption of selling concept:

• Buyers do not normally think of buying. It depends on promotional activities.

• It is possible to convince the consumer to purchase or use this product.

Action of selling concept:

• Find out the prospect to sell skillfully.

• Take large scale promotional and effort.
Limitation of selling concept:

• Company do not worried about customer’s satisfaction after sell.

4. Marketing concept: The marketing concept holds that achieving organizational goals
depends on knowing the needs and wants of target markets and delivering the desired
satisfactions better than competitors do.
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Assumption of marketing concept:

• Consumers are interested to buy the product according to his needs and wants.
• If the consumers are satisfied then they will again purchase the product.
Action of marketing concept:

• All plans of the organization should be consumer oriented.

• The object of the organization should be profit base sales.

Limitations of marketing concept:

• Only consumer’s interest are considered but the society interest are ignored.

❖ Why marketing concept is more better than selling concept ?

Ans: Fig, main them both, disadvantages of selling concept, advantages of
marketing concept.

5. Societal marketing concept: Societal marketing concept is based of the principle of

societies interest or societal well-being based on the society. All kinds of activities relating
to societal walfare activity. It holds that the organization should determine the needs,
wants and interests of target market.

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➢ Question No-04: Scope of Marketing:

Here are the scope of marketing:

1. Study of consumers needs and want: Goods are produced to satisfy consumers needs
and wants. Therefore study is done to identify consumer needs and wants. These needs
and wants motivates consumers to purchase the products.
2. Study of consumer behavior: Marketers performs study of consumer behavior.
Analysis of buyer behavior helps marketer in market segmentation and targeting.

3. Production planning and development: Production planning and development start

with the generation of product idea and ends with the product development and
commercialization.

4. Pricing policy: Marketer has to determine pricing policies for this products on the basis
of cost plus pricing or value added price. Pricing may be depends of two factor:
i. Value base pricing;
ii. Cost base pricing.
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. Promotional activities: Promotion includes personal selling, sales promotion and

advertise. These are the promotional activities.
7. Consumer satisfaction: The product or service offered must satisfy consumer.
Consumer satisfaction is the major objective of marketing.

➢ Question No-05: Nature of marketing.

1. Marketing is a process of communication: Marketing is a process of communicating with
consumers and stakeholders is the objective of earning profit measuring consumer relationship
and managing stakeholders expectation.
2. Marketing is a managerial function: Marketing is a managerial function because it involves
planning, organizing, directing, and controlling activities related to the creation, promotion,
pricing, and distribution of products or services.
3. Marketing is a social process: Marketing is the delivery of a standard of living to society.
Marketing always considered the societies interest. So, marketing is a social process.
4. Marketing is a philosophy: Marketing is a philosophy because it focuses on understanding and
satisfying customer needs as the key to achieving business success. It’s a psychological game
through the proper marketing it is possible to influence the customer on the basis of their
psychology.
5. Marketing is a legal process: In the process of marketing the ownership of goods transfers
from seller to the purchaser or from producer to the end user.
6. Marketing is an economic function: Marketing is an economic function through different
marketing strategy that consumers are encouraged take economic action. Without economic
activities it is not possible to take any marketing activities.

7. Marketing is a consumer satisfaction & profit making: Marketing is about meeting

consumer needs and wants to ensure their satisfaction while also generating profit for the
business. It balances delivering value to customers with achieving the company’s financial
goals.
 ➢ Question No-06: Importance of marketing.

1. Creating awareness: Through the proper marketing system it is possible to aware the
customer about the product or service. It is possible that the product is introduce to the
market and the proper marketing activities is also make to create the awareness about the
product to the customer.
2. Generating revenue: Through the proper marketing system it is possible to increase
the sales of a product or service and it creates the revenue. More sales more revenue.

3. Building brand equity: Brand equity refers to the intangible value associate with a
brand. Marketing helps to create the brand equity. Brand equity create the value associate
with the product.

4. Fostering customer relationships: To sustain the market long run to build a good
relationships with their customers and it is possible through the proper marketing system.
5. Market research and analysis: Through proper market and analysis research it is
possible to know customer preferences and market trend.

6. Product development and innovation: Marketing is most promoting the existing

product as well as developed the new product on the basis of the customer demand and
also new features added with their new product, otherwise the product is not sustain long
run in the market.

➢ Question No-07: Different form of demand management.

1. Negative demand: When a major part of the market dislike the product than the
demand of the market is called negative demand. For example, dental works(service) etc.

2. No demand: When the target consumers may be uninterested to buy the product but
do not dislike the product is called no demand. For example, farmers do not interested in
new Jarming method but do not dislike the method.

3. Latent demand: Many consumers may have a strong need that cannot be satisfied by
existing product is called latent demand
4. Falling demand: Every organization 'sooner or later' face falling demand for one or
more of its product when then sell of a product reduce then the market certain falling
demand.

5. Irregular demand: Many organizations face demand that varies on seasonal, daily or
event hourly basis that demand is called irregular demand. Say, the demand of warm cloth
arise in winter season. Thus demand is called irregular demand.
6. Full demand: Organization also faces full demand. When demand and supply is equal
then it called full demand. Say, Lux soap is on full demand at present time.

7. Overfull demand: When demand is higher than supply that is called overfull demand.
These are the various form of demand management.

➢ Question No-08: Steps in marketing process(serial maintain):

1. Understand the market price and your customers: To properly start the marketing
activities at first know the market place which place is more suitable for the products and
know the customer need, want and demand.

2. Developed a customer-driven marketing strategy: Marketing strategy refers a

business overall game plan to focus it’s limited resources to reach prospective customer
and term them into paying customer’s hopefully for the long run.

3. Deliver high customer value: Customer value is a ratio between the perceive benefit
and cost income by the customer in acquiring the product or service. Here some different
types of value that consider as a organization to sell the product:
i. Functional value;
ii. Monetary or economic value;
iii. Social value;
iv. Phycological value.

4. Grow profitable customer relations: The vocabulary is that profitable customer

relationship are the secret sauce of the business. The system is the marketing process
where marketers acquire, keep and grow customer relations. When customers have a
positive relationship with a company or it’s product they will again purchase the product
or services.

5. Capture value from customers: The goal of successful customer relationship

management is creating high customer equity. The potential profits of a company earn
from it’s current and potential customers.

➢ Question No-09: Steps in strategic plan.

1. Corporate mission;

2. Strategic business unit identification;

3. Corporate portfolio evaluation and strategy;
 4. Corporate new business plan.

1. Corporate mission: Corporate mission is usually clear at the beginning of the

organization. The mission may be depend or change situation of a environment. The
companies mission is shaped by 5 elements. These are:

i. History;
ii. Current performance;
iii. Marketing environment;
iv. Organizational resources;
v. Distinctive competences.

2. Strategic business unit identification: Strategic business unit is a unit that can be
considered a separate entity more planning purposes. It may be single product, product
line , division or entire company.
3. Corporate portfolio evaluation and strategy: To evaluate the portfolio of a business
unit Boston performing group to develop a growth share matrix.

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i. Stars: Stars are the product with dominate share of the market and good prospect
for the growth i.e. high market share and high growth. Example, in the BRB group
BRB cables are the star products.
ii. Cash cows: Cash cows are the product has the dominate share of the market but
the low prospect for the growth i.e. high market share and low market growth rate.
iii. Question marks: Question marks are the companies low relative market share but
prospect of growth is high.
iv. Dogs: Dogs are the product with low market share and low prospect of growth.
4. Corporate new business plan: This is the last steps of strategic planning. The company
can identify some opportunity on the basis of some elements.

i. Intensive growth;
ii. Integrative growth;
iii. Diversification growth.