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Dr. Pretty Bhalla, Lovely Professional University Unit 01: Introduction

Unit 01: Introduction

CONTENTS
Objective
Introduction
1.1 Market Vs Marketing
1.2 Exchange Process
1.3 Selling
1.4 Marketing
1.5 Selling Vs Marketing
1.6 Types of Marketing Entities
1.7 Nature of Marketing
1.8 Scope of Marketing
1.9 Need and Want
1.10 Maslow Need Hierarchy Theory:
1.11 Need want and Demand
1.12 Marketing Concepts
1.13 Functions of Marketing
Keywords
Summary
Self Assessment
Answers for Self Assessment
Review Question
Further Readings

Objective
understand about market and marketing
basic concepts of marketing.
nature and scope of marketing.
Understand exchange process
Marketing concepts
analyze detailed functions of marketing

Introduction
Far-reaching changes have been taking place in the Indian economy during the recent past,
consequent to the opening up of our economy through globalization and liberalization policies. The
floodgates have been thrown open to allow international competition for manufactured goods as
well as services, making it a question of survival of the fittest in any industry. In the present highly

power. He can make or wreck a company.

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Food for thought

Why Sachets Ruled over the Indian Markets?

SACHETS ARE CHEAPER
MORE Convenient

No wonder that the collective battle cry from sales and marketing people, retailers, wholesalers

marketing people of Japan. When consumer expectations become higher and higher, superior
market driven strategies or customer driven strategies and their execution in the market are
important. Companies have to be fully customer oriented to succeed in the present competitive

There are various standard definitions of marketing. While the words used may be different, it is
obvious that all marketing activity is about the customer, focused at acquiring them and retaining
them.
Marketing is a business function and set of processes involved in creating, delivering and
communicating value to customers, followed by managing customer relationships, resulting in
mutual benefit for the business and its stakeholders.
Marketing is also the science of selecting target markets via market analysis and segmentation, with
a comprehensive knowledge of buying behavior, aiming to provide the best customer value.

leverage technology align with and complement each other, and the business as a whole.

Marketing is an organizational function and a set of processes forcreating,

communicating, and delivering value to customers and for managing customer
relationships in ways that benefit the organization and its (The
American Marketing Association)

and distribute want- satisfying products to target markets to achieve organizational

(William J. Stanton, Michael J. Etzel, and Bruce J. Walker)
Marketing is the creation, communication and delivery of value, as well as the
management customer relationships for a lifetime. (Luman Learning)
tter of perspective.
For example, brands like Toyota, Nissan and Nestle must rely on marketing to grow and keep their
customer base. For regulated industries like utilities and medical care and small businesses with
unique products, marketing may be low key and confined to flyers.

1.1 Market Vs Marketing

In the business world, you have heard about the terms market and marketing, end number of
times. but have you ever wondered, as, they are same or different? Market refers to a place where

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buyer and sellers can come in contact with each other either directly or indirectly, so as to trade
goods and services for value. Its main function is to determine the price of the commodity, with the
help of demand and supply factors.
The term marketing is derived from the term market, and implies a process that involves some
activities which creates value for customers, clients and society as a whole. It encompasses the
promotion of business or its products/services so as to increase sales and thus the profit.

1.2 Exchange Process

A marketing exchange is what happens any time two or more people trade goods or services. In
marketing theory, every exchange is supposed to produce "utility," which means the value of
what you trade is less than the value of what you receive from the trade. Of course, all exchanges
in the real world are much more complicated.
How Exchanges Work?
Marketing theorists consider exchange to be the central concept without which there would be
no such thing as marketing. For an exchange to happen, both parties have to have something of
value for each other. For instance, a man visiting a coffee shop might have enough money to buy
a cup of coffee while the cafe has the coffee. Both parties must be able to communicate with each
other, and both must want to exchange something and be able to do so.
If the customer in the coffee shop can't make himself understood, or if he decides he doesn't want
a cup of coffee, or if he turns out not to have quite enough money, then there will be no
exchange. If all of the needed conditions are met, there will be an exchange of money for coffee.

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1.3 Selling
The selling theory believes that if companies and customers are dropped and detached, then the
customers are not going to purchase enough commodities produced by the enterprise.
The notion can be employed argumentatively, in the case of commodities that are not solicited, i.e.

functioning at more than 100% capacity, the company intends at selling what they manufacture, but
not what the market requires.
In the sales process, a salesperson sells whatever products the production department has

for granted.

1.4 Marketing

more efficient than the opponents, in manufacturing, producing and imparting exceptional
consumer value to the target marketplace.
Marketing is a comprehensive and important activity of a company. The task generally comprises

In between, activities such as production, packaging, pricing, promotion, distribution and then the
selling will take place. Consumer needs are of high priority and act as a driving force behind all
these actions. Their main focus is a long run of business ending up with profits.
It depends upon 4 elements, i.e. integrated marketing, target market, profitability customer and
needs. The idea starts with the particular market, emphasises consumer requirements, regulates
activities that impact consumers and draws gain by serving consumers.

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1.5 Selling Vs Marketing

1.6 Types of Marketing Entities

Anything which is sellable needs marketing. Based on the above statement, the following is the list
of entities to which marketing is a necessary function:

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Goods: Any product manufactured in mass quantity, requires proper marketing to make it
available to its consumers located in different places of the country or world.
For example; Mobile phones manufactured in China and sold all over the world
Services: demand, needs, promotion
[Link] example; Ola cabs providing for local taxi services
Events: Various trade fairs, live shows, local events and other promotional events need advertising
and [Link] example; Indian Fashion Expo is the event where leading fashion houses
participate in displaying exhibit their creation needs marketing to reach customers, manufacturers
and traders.
Experiences: It even organizes and customizes the impression made by certain goods and services

[Link]
Persons: A person who wants to promote his skills, profession, art, expertise to acquire customers,
take the help of marketing functions.

For Example; A chartered accountant updates his profile over [Link] to publicise his
skills and talent to reach clients.
Places: Marketing of tourist places, cities, states and countries helps to attract visitors from all over

campaign

Properties: It provides for selling of tangible and intangible properties like real estate, stocks,
securities, debentures, [Link] example; Real estate agents publicise the residential plots to investors
Organizations: Several corporations and non-profit organisations like schools, colleges,
universities, art institutes, etc. create and maintain a public impression through marketing. For

Information: Certain information related to healthcare, technology, science, media, law, tax,
market, finance, accounting, etc. have to demand among the corporate decision-makers who are
marketed by some leading information [Link] example; Bloomberg provides all current
financial, business and market data

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Ideas: Brands market their products or services through advertisements spreading a social

messa

1.7 Nature of Marketing

1. Marketing is Customer Oriented: Marketing begins and ends with the customer. The job of
the marketing is not only to satisfy the consumer but even to delight him/her. All the activities of
an organization must be directed and focused towards the consumer.
The organizations cannot ignore emerging technologies, materials, instruments and new ways of
organizing the things but with the considerations of consumers. Therefore, marketers must allow
their customers to dictate product specifications and standards regarding quality. The job can only
be performed if needs are continuously monitored.

2. Marketing is the Delivery of Value: When a consumer derives satisfaction from a particular
product on the basis of overall capacity and performance is known as value in
perception. The consumers today make a trade-off between cost and benefit of the
product and they consider the value and price before making a decision.
At times they will have to give up a particular product to obtain the other one since first one
involves a big cost. Thus, he will choose the product that gives him more value per rupee.
According to De Rose, is the satisfaction of customer requirements at the lowest possible
cost of acquisition, ownership, and Thus, the strategies must be aimed at
delivering greater customer value than that of their competitors.

3. Marketing is a Network of Relationships: The customer is at the centre-stage and focus of

all marketing activities. From 1990s onwards the focus is not only to identify the needs and delivers
it to customers but is shifting towards relationships marketing. The marketers who are smart
enough maintain their relationships by delivering high quality products in time, better services and
fair prices in comparison with their counterparts.
4. Marketing as a Separate Discipline: There used to be the days when marketing was treated as a
part of economics. But now it is recognized as a full-fledged separate discipline. With the
emergence of marketing concept, the issues of green marketing and environmental protection have
come up and regarding that various laws have been framed.
When we talk of knowing consumer behavior, it leads us to entirely a new world of human
behavior and for that matter; a marketer must possess the knowledge of psychology. Therefore,
marketing has emerged as separate discipline and got its strengths from the related areas like law,
psychology, anthropology, sociology and statistics etc.
5. Marketing is Business: When it is said that marketing is business, the contention is that the all
activities starts from marketing i.e.; through knowing consumer and end up on the consumers i.e.;
knowing consumer dissonance. It means the entire business revolves round the marketing.
According to Peter F Drucker, is so basic that it cannot be considered as a separate
function. It is the whole business seen from the point of view of its final result, that is, from the
point of view. Business success is not determined by the producer but by the
So, business seeks customers because they are the business providers and ultimately marketing is
business.

1.8 Scope of Marketing

Nature of marketing can be studied under the following terms which will explain it in a better
manner:
1. Marketing is a Science as Well as an Art: A science is something that is done in a systematic
manner following certain standard processes. Science is a systematic body of knowledge regarding
a particular subject. Marketing too has a very systematic approach and practices. Right from
developing a new product or service, understanding needs and wants through research,
segmentation, targeting, positioning, pricing etc. or taking feedback from customers, everything is
done in a systematic manner.

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Marketing is a never ending process. At every stage of the process a marketer undertakes research
to offer excellent products to customers, thus proving that marketing is based on scientific
practices.
Art is the expression of human imagination and skill, it has an emotional connect. In Marketing we
see this aspect in areas of customer relationship, product positioning, advertising, packaging,
pricing etc. The process of segmentation, targeting and positioning is done in a systematic manner,
but it also possesses creativity in communicating the message to the customer.
This creativity and emotional connect makes marketing an art. How effectively the marketer
segments, targets and places the product in the minds of customers depends on the systematic
process adopted and the creative skills applied. Either it is packaging of a product or placing
products on the shelves, everywhere, we can see the application of science and art.
2. Marketing is Customer Oriented: The key objective of marketing is to provide goods and
services as per the needs of the customers. Before developing and providing a product, marketers
try to find out, what exactly customers are looking for? Based on the findings, the product is
created and provided to customers.
Once customer consumes or experiences the product or service, the marketer again does research
about the performance of the product and service. So Marketing is totally customer oriented, which
starts with customers and ends with customer.
3. Marketing Involves Human Actions: Humans are an integral part of all marketing activities.
Right from marketing research, product development, delivery consumption, post consumption
etc. Humans help to satisfy other human beings needs and wants. Without proper human actions
marketing would be impossible.
4. Marketing is an Exchange Process: By exchange we mean transfer of something for one party to
another. Every stage of marketing is an exchange and therefore we can rightly say that marketing is
an exchange process. There is exchange between buyers and sellers, sellers offer products and
buyers give money in exchange for the products. There is exchange of ideas and views between
Company and Customer, Marketer offers some benefits in exchange for customer feedback.
Advertising agencies offer their services in return for money. There is an exchange of ideas,
communication, money, products, experiences, technology etc. between all stakeholders and the
Marketer.
5. Marketing is Strategy: Strategy is a plan of action to achieve long term or overall goals.
Marketing involve short term and long term goals. Every function of marketing needs a systematic
plan of action. Questions such as, to to to to
Sell etc. is answered only thorough strategy of the Organization.
6. Goal Oriented: The main goal of marketing is customer satisfaction, all activities or functions of
marketing are undertaken for achievement of one major goal that is customer satisfaction. To
achieve the major goals many smaller goals need to be addressed by marketing. Therefore it is
rightly said that Marketing is Goal Oriented.

1.9 Need and Want

A need is anything which is essential for survival. Everything else than need falls into the category
of want which is inessential for basic survival but is usually required for the fulfillment of desires.

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Need and want are different from each other. A need is defined by the things which are essential
for basic survival. However, want include all the things that one desires or wishes to have. Need is
important for a person as one cannot survive without fulfilling of these basic needs like food and
water.
Some of the common needs include shelter, food, water, clothing, etc. Heat and electricity are also
included in the category of needs. One should focus on fulfillment of needs than fulfillment of
wishes, as need is of prime importance. Need is described by a term called as a necessity.
hierarchy of needs depict five needs ranging from physiological, safety, belonging, esteem and
finally self-actualization.
On the other hand, want is related to desire not with the necessity. It is not essential for life, but still
a person tends to consider his or her wants as of immense importance. It is important to mention
that need and want may differ from one person to another. One cannot categorize concretely that
what will be considered as a need or as a want. For example a car may be a want for someone,
and a need for another one who has no other means of transportation nearby.
Many times a person fails to understand the difference between want and need. Therefore, it is very
important to prioritize need over wants after recognizing them. Want is never satisfied. It tends to
take a monstrous form before one actually starts thinking about overspending in wants thinking
them as needs. One should be practical enough and should spend on needs first and then on wants.
Want is something associated with emotions rather than practical approach.
It is very important to find a balancing equation between the two, through which all basic needs
must be treated first, and then some of the wants may also be achieved without being in trouble
financially or in any other way.
Need or want ?

1.10 Maslow Need Hierarchy Theory:

Further, he subsequently extended the concept by including the observation on

human behaviour.

became very popular in many areas of subjects like science, management, sociology research, and
psychology.
hierarchy of needs is displayed like a pyramid with the most fundamental need at the
bottom, while the highest on the top. According to the theory, Maslow explains that there are four
needs like

I. Physiological needs.
II. Esteem.
III. Love.
IV. Deficiency needs.
All these four needs are required to match the fundamental requirement of a human being. This
theory further states that the most basic level of need strengthens the desire in human personality.
-stage models, and it is briefly explained below.

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Air, Water, Food, Warmth, Shelter, Sleep and Sex.

Freedom from Fear, Protection from Natural Elements, Law and Order, Security and Stability.

Love, Friendship, Affection, Trust and Acceptance, Intimacy, Receiving and Giving, Affiliating and
being part of a Family or Friends or Work.

Self-Esteem, Independence, Mastery, Dominance, Achievement, Prestige, Status Self-Respect

Self-Fulfilment, Seeking Personal Growth and Realizing Personal Potential.

However, in the 1960s and 1970s, the five-stage model has been changed during the development
of the theory and marked it to eight-stage model.

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Types of needs:

1.11 Need want and Demand

NEED
Need is a term that used for describing those requirements that exist naturally, for example: we
need foods, water, safety, clothing, home, etc. Needs can be classified to different categories:
Physical Needs: basic requirements of life (foods, air, home, safety)
Social Needs: basic requirements of human beings (family, friends) for different of relation-ships.
Individual needs: education, knowledge, expression, creativity, ego-needs (self-esteem).
WANT
Wants are indirect requirements that we like to get them, wants can be conditional and un-
conditional, for example: we want to buy a computer if price is cheap; there are infinite wants of
human beings. Wants can be created by providing different products that affecting individuals
thinking.
Wants of human beings are related to human intelligence that chooses what their mind decides
according to their preferences and behavior.
DEMAND
Demands can be used for paying money for (Needs and Wants). This term if very important in
business because finally, demands of products and services are the final decisions that taken to
consideration for business activities. Usually, demand is a monetary term that transfers requests
from buyer to seller; this process is a core of each business that marketing playing a big role in it.

1.12 Marketing Concepts

There are 5 different concepts of marketing, each of which vary in the function that they deal with.
For example production concept deals with production and selling concept deals with selling.
Each of the concept was developed as per the need of the market. As the market changed, so did
the concepts of marketing. And today, we have an opportunity to look at all 5 concepts of
marketing and what they represent.

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Productionconcept
Product concept
Sellingconcept
Marketing concept
Societalmarketing concept

1) Production Concept: Consumers prefer products that are widely available and inexpensive.
The production concept is more operations oriented than any other concept.

2) Product Concept: Consumers favor products that offer the most quality, performance, or
innovative features. The product concept believes in the consumer and it says the consumers are
more likely to be loyal if they have more options of products or they get more benefits from the
product of the company.

3) Selling Concept: Consumers will buy products only if the company aggressively promotes or
sells these products. Off course, in this era of marketing, we know that selling is not the only tactic
to sell your product. You have to focus on marketing as well.

4) Marketing Concept: Focuses on needs/wants of target markets & delivering value better than
competitors. The marketing concept believes in the pull strategy and says that you need to make
your brand so strong that customers themselves prefer your brand over every other competitor.
This can be achieved through marketing.

1.13 Functions of Marketing

Marketing is the process that comprises of all the activities involved from the concept of
the product all the way till it reaches the final consumer. So there are a lot of activities in this
process, which we call the functions of marketing.

1. Identify consumer Needs: One of the first steps the company needs to take is to identify the
needs and wants of the consumers in the market. To do so they must gather information and
analyse this information. Once you understand your customer thoroughly you can base
your product design on this information.

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2. Planning: The next logical step would be to make a marketing plan. Firstly you must be very
clear about the objectives of the company and what it wishes to achieve. Then you figure out
a timeline to achieve these objectives. And finally, you plan the marketing strategy of your
company accordingly.
3. Product Development: As per your consumer research, we then develop the product that
suits the needs of the consumer. The design of the product is also an important factor in
many products. Like for example when buying a car, the design will play a huge factor.
There are other factors to be considered like cost, durability etc
4. Standardization and Grading: Standardisation means ensuring uniformity in the product.
All customers must get the same product of the same design and quality. And these
standards need to be maintained throughout.
Grading is the process of classification of products according to similar characteristics and/or
quality. If the product does not have any predetermined quality or other specifications like
say agricultural products. Grading will ensure the consumer knows your goods are of the
highest quality.
5. Packing and Labelling: The package and the label are the first impressions your product
makes on the consumer so they are of essential importance. They are not only to protect and
identify the goods but are great marketing tools. There is proof that an attractive package
and label can go a long way in making a product a success.
6. Branding: One important decision the company has to make is whether they want the
product to have an individual identity in the market or they want it to be recognized by the
brand name.
Certain brands enjoy incredible goodwill in the market and it can benefit the product. But you
may also want the product to have a separate identity so it can flourish on its own attributes.
7. Setting up Customer Support Services: Depending on your product there may be a variety
of customer services that the company has to set up. Pre-sales service, consumer helpline,
maintenance services, technical support are just some of the services that your product may
require. These are important functions of marketing.
8. Pricing: This may be one of the most important functions of marketing. The price of a
product will largely determine its success or failure. Factors like demand, market conditions,
competition prices etc will be considered to come up with the correct pricing strategy.
One other thing the company must remember that prices of the products should not be changed
too frequently. This leads to confusion in the market.
9. Promotion: This is where you inform the customers of your product and persuade them to
buy it. There are four major promotion methods advertising, personal selling, sales
promotion and publicity. The company must decide on its best promotion mix, a
combination involving all or some of these four methods.
10 Distribution: Here the company must ensure the correct distribution channel for its product.
It will depend on a variety of factors such as the concentration of the market, shelf life of the
. Inventory management is another important
factor the company must look into.
11. Transportation: The physical movement of the goods from its place of production to its
place of consumption is transportation. It is a very important function of marketing. The
company must analyse the geographical boundaries of its market. This will help them
choose the correct modes of transportation.
And in the global economy where we live in, there are almost no barriers to international
[Link] if a company wishes to go global transportation will be a key factor in
their marketing mix.
12. Warehousing: As we have know there is always a lag time between the production and the
consumption of most goods. Sometimes the products are seasonal or the supply is irregular
or there are production difficulties. But companies like to maintain a smooth flow of goods.
So storage and warehousing of goods are necessary.

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Keywords
Market , marketing , Value , satisfaction , need , want , demand , transportation , warehousing and
Pricing

Summary
Marketing is dynamic and all pervasive subject in business that makes the whole organization
ready to serve the customers. The emphasis is on optimum utilization of resources and converted
effort on the part of marketing manager to deliver higher value to customers and greater profit to
the organization. while selling is more about product push , marketing is about identification and
satisfaction of customer needs.
The exchange process can range from simple , economy based exchange process to complex ones.
Marketing Management is a process of identifying consumer needs, selecting target segments,
developing products and services and implementing the marketing program for generating higher
customer satisfaction and profit for the organization .

Self Assessment

1. ________________ brings out new ideas and get several opportunities in Marketing.

A. Production
B. Marketing
C. Creativity
D. Consumer

2. The main objective of marketing is__________.

A. Increasing profit
B. Increasing sales
C. Increasing prices
D. Decreasing cost of production

3. Effective Marketing requires

A. Proper pricing
B. Customized products
C. Effective procedures
D. All the above

4. Concept which deals with good and quality products providing to the consumers is:

A. Marketing concept
B. Product Concept
C. Exchange Concept
D. Production Concept

5. Function of Marketing deals with the development of goods with respect to their Color,

Design, Shape and other characteristics is called______________________

A. Production
B. Product Planning and Development
C. Packaging and Pricing
D. Standardization and Grading

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6. The Marketing Function deals with cost of the product and the capacity of consumer to pay

is called:

A. Packaging
B. Branding
C. Pricing
D. Marketing

7. The process of collecting and analyzing the information regarding consumer need and

nature of competition prevailing prices effectiveness of advertising media etc is called:

A. Product Research
B. Marketing research
C. Price Research
D. Selling Research

8. Marketing is based on the rule of buying and selling. According to this concept Marketing is

an art of:

A. Buying more
B. Selling More
C. Fulfilling consumers need
D. All the above

9. Customer deals with the same Organization for a long time is called________________

A. Customization
B. Customer Equity
C. Customers Need
D. Customer Retention

10. A person who purchase any product or service is known as_____________________

A. Customer
B. Consumer
C. Marketing staff
D. Salesperson

11. Many people want BMW, only a few are able to

A. Need
B. Want
C. Demand
D. Status

12. _____ makes a service different from a product.

A. Pricing
B. Intangibility
C. Ubiquity
D. Liquidity

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13. Marketing Management is the _________ of choosing target markets and getting, keeping

and growing customers through creating, delivering and communicating superior customer

value.

A. Art
B. Science
C. Art and Science
D. None of the above

14. Marketing people market following entities:

A. Goods
B. Services
C. Experiences
D. All the above

15. At a fast-food restaurant, what is marketed?

A. Pizza
B. Goods
C. Services
D. Goods and services

Answers for Self Assessment

1. C 2. A 3. D 4. B 5. D

6. C 7. B 8. C 9. D 10. A

11. C 12. B 13. C 14. D 15. D

Review Question
1. Define marketing? what is importance of marketing to customers and organizations?
2. Why modern marketing is acknowledged over traditional one?
3. Discuss Scope and Nature of Marketing ?
4. Marketing is considered as Lifeline for the organizations, Discuss the prerequisites
required for the same.
5. Are customers and Consumers same , Discuss ?

Further Readings
1. Stanton, Etzel and Walker- Fundamentals of marketing (TMH)
2. Philip Kotler- Marketing Management (PHI)
3. Philip Kotler and Armstrong- Principles of marketing (PHI)
4. Ramaswamy and Namakumari- Marketing management (Macmillan

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Dr. Pretty Bhalla, Lovely Professional University Unit 02: Marketing Orientation

Unit 02: Marketing Orientation

CONTENTS
Objective
Introduction
2.1 SMART Marketing Goals
2.2 Evolution of Marketing Concept
2.3 Evolution of Marketing Concept
2.4 What can be marketed?
2.5 Holistic Marketing
2.6 But how does a business achieve this?
2.7 Marketing Vs Selling
Summary
Keywords
Self Assessment
Answers for Self Assessment
Review Questions
Further Readings

Objective
Evolution of modern marketing concept
Elaborate holistic marketing concept
Understand importance and relevance of holistic marketing.
Analyze new marketing orientations.

Introduction
Marketing goals are the specified aims that any company wants to achieve via its marketing
strategy and efforts. Examples of these goals include creating brand awareness, establishing
thought leadership, generating marketing qualified leads, improving brand engagement, increasing
the quality and quantity of leads, etc.
Marketing goals are defined as numerous objectives and growth-driven benchmarks that a
company aims to achieve by making marketing strategies. A marketing goal is also understood as a
marketing objective that provides clarity to a marketer to focus on what is essential and what is
unnecessary.
For example, a digital marketing campaign can have marketing goals like increasing website traffic,
growing email lists, gaining more social media followers, converting target audiences, etc. Setting

set goals are 376% more successful than those who did not have set goals.
Goals are an essential part of the marketing plan. Marketers often opt to set SMART goals. SMART
mnemonic acts as a guide for setting smart goals.

2.1 SMART Marketing Goals

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S for Specific
The goal should be specified and defined. It eliminates confusion and increases accountability and
responsibility.
M for Measurable
Measurable goals make it easy for a company to track its progress. Marketing goals for a business
should be measurable to check if it is offering the expected results or not.

A for Attainable/Achievable
Realistic goals are always achievable. It is pointless to set unattainable goals as it demoralizes
workers as efforts do not result in rewards.

R for Relevant
Relevant goals have a real benefit attached to them. It should be in line with the vision and
objective of the company. Goals that matter to the organization are relevant to its growth
and development.

T for Time-Bound
Setting time-bound goals with clear deadlines put a clock on it. A company must achieve these
goals within a certain period. Otherwise, setting goals does not amount to much.
These SMART goals give a marketer a framework for how to plan their marketing strategies. It
allows them to maximize their successes. Without goals,people in an organization would work
aimlessly. Here is a list of different types of SMART marketing goals-

1. Increasing sales
2. Generating leads (or opportunities)
3. Acquiring new customers
4. Reducing churn (or retain customers)
5. Up-selling and cross-selling
6. Improving awareness
7. Increasing customer satisfaction
8. Launching a new product or solution
9. Re-branding or re-positioning
10. Increasing web traffic
11. Refining go-to-market strategy
12. Launching a new initiative, etc
Examples are:

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AMA
, set of
institutions and processes for creating , communicating , delivering and exchanging

2.2 Evolution of Marketing Concept

Marketing is an act of influencing people to buy a product or service. We have been witnessing this
act of marketing since we have started commercialization and with the passage of time, we have
witnessed the evolution of [Link] and unless you have clearly understood the entire
concept of marketing and how its evolution took place, it is difficult for you to understand the
modern-day marketing techniques and strategies.
We can never ignore the importance of marketing in any business as it is undoubtedly the backbone
of any business.
Business will cripple down if marketing team is not able to function properly. Use the right
marketing techniques and put them at the sweet spot to get the maximum out of your campaigns.
Well, when we are talking about the marketing concept, it has always been changing for many
years and there are still some changes that are going on right now. From classical times to the
modern contemporary word, the evolution of marketing has gone through a lot of changes and
here we are going to discuss all it for sure.

The Era of Trade And Production

These are the times when things were pretty simple for sure. The main importance of marketing
and the focus was simply the exploration of the resources and trading them as well. During the mid
19th century, there is no doubt that commodities with the commercial sector where just the staple
of the economy for sure.
Everything that was created was done with the hands for sure. So, there is no doubt that making
products for trading was the main concept of marketing. However, with the industrial revolution,
trade era came to an end and gave birth to a completely new era for sure.
This was the production era where the main focus of the marketing was on the production of more
goods and hence mass production as a very important factor in here for sure. The manufacturing
was done in the most efficient and effective manner which was the main concern for the business as
well. So, the marketing conception became a lot simpler.
The Era of Sales
The competition began to arise with the sales era and there is no doubt that the businesses were not
easily able to sell the products that were mass-produced.
Hence, the companies found it more and more difficult to sell the products to the customers. So, the
concept of marketing in this era started to focus on the promotion of the products to sell them in the
best way. This is something that we do until this date.

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The Relationship Era

The sales era also gave way to the relationship era where the long term relationships were made
between companies and consumers. The businesses started to focus on the needs and requirements
of the customers more so that they could build better relationships with them.

The Era Of Social Marketing

There is no doubt that this era was the basic game changer for the businesses for sure. With the help
of the internet and social media, the evolution of digital marketing came to exist in the best way for
sure.
People could easily reach out in the best way to the companies and they could stay fully in contact
with each other as well. Different types of social media and communication are the main
components of this era and there is no doubt that there are a lot of amazing things to come in the
evolution of marketing with the change of times as well.
Let us now understand how our modern-day marketing has evolved from an ancient marketing
concept

2.3 Evolution of Marketing Concept

The evolution of marketing started during the Industrial Revolution that took place in the 18th and
19th century. We can trace the entire evolution of marketing in four different phases-
1. Production Orientation
2. Product Orientation
3. Sales Orientation
4. Customer Orientation
5. Social Orientation and so on.

1. Production Orientation:
Under this people believed that when a quality is good enough it require any
additional efforts in promotion as people will anyhow purchase it. This was the widely used
approach during the industrial revolution.
People focused on more production under low cost so that it can fetch better returns. Before the
revolution maximum products were handmade and this entire process made the production cost of
the product go high.
Due to a high production cost, producers had no option than to sell it at higher prices.
After the introduction of machinery, this production cost came comparatively down and the
products were being sold at 1/10th of the original price.

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Customers were ready to buy this product with happiness as it was cheaper for them than ever. In
this case, there was hardly any requirement of marketing and the products were being sold with
ease.
Though when we are going through this philosophy of production orientation, we need to know
that a few assumptions were taken while framing this philosophy like; everything that was being
produced with the machinery could be sold, the production cost was kept to a minimum only and
so on.
Manufacturers during this phase of the evolution of marketing concept were eyeing for more
efficient production which is coming out of low-cost as to attain the maximum profit.
This concept dominated the business landscape in the 1900s, where organizations focused heavily
on the mass production of products. Emphasis was on streamlining the production process and
concentrating on improving efficiencies, with little focus on consumers or anything else.
The assumption was that customers valued price. For this reason, this approach focused on
ice needs. This
business strategy dedicated its resources towards its products, and its marketing point was the
price.
Advantages of Production Orientation:
Mass production
Maximum efficiency at the lowest costs
Distribution of products inexpensively
Disadvantages of Production Orientation
This approach lacked the fundamental drive that controls the consumer market, that is, customer
needs.

s.

Highlights:

Oldest concept

Believed that customers favor products that are easily available and highly
affordable.

Focus on improving production and mass distribution

This orientation makes sense in developing countries.

Efforts on reducing costs to provide inexpensive goods.

large number of automobiles in the market, more people bought its vehicles.

2. Product Orientation
Here, a more competitive approach was taken during the production process in order to produce
the most ideal product they can.
An assumption was made during this phase if the people are already having a product of certain
quality they will only expect you to produce a product of better quality than that.

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If they are already benefited from the core features of a product then if you want to sell your
product, you will have to create something different and better.
What was happening in this phase was, every production process was setting a standard before
itself.
Since customers were seeking for a product with more and more unique features, manufacturers
were also aiming towards producing a better and better product. They were doing their best to
solve the problem of the diverse needs of customers.
But there was a downside during this approach of production the prices of the product were
going up at a high rate.
Since every time the product contained more and more features, this leads the manufacturers to
increase the price of the product and sometimes even the customer themselves were not in a
position to pay the prices for what they seek were seeking from the product.
Highlights:
Focus is on making Superior Goods.
Believed that customers prefer goods with best quality & Innovative Features
Importance is given to improving the product
Goods sell themselves.
This approach, which was popular during the 1950s and 1960s, mainly focused on the product that
a company intends to market. Unlike in quantity-oriented organizations where the price was the
focal point, product orientation placed emphasis on quality.
While all resources were directed towards the quality of a product (hence the production of
premium products
Advantages of Product Orientation
Mass production of products at lower costs
Focus on quality
Improved sales due to the high quality of products
Better market research
Disadvantages of Product Orientation
Narrow branding:

High risks of running out of business: Without a clear message explaining to customers the benefits
of using their products, a competitor with a better message can run you out of business.

deliver.
Your business solely depends on the strength of your product. Customers expect nothing but top-
notch quality.
Making a profit on premium products may require you to set a higher price tag than the market can
accept.
The costs of developing top-quality products are steep.

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Apple: Apple is one of the largest tech companies and it falls under the category
of top 5 tech companies of the world. iPhone, TV, Store, Music, Videos, and iPad are some
of the main products of Apple. The company also follows the product concept by the focus
on delivering a quality product. The customer market of Apple care about the
price.
Gucci: Gucci is one of the leading luxury fashion brands. The company offers
quality makeup, handbags, ready-to-wear clothes, shoes, fragrance, home decoration, and
many other accessories. The brand also follows the product concept by offering the latest
fashionable products to the customers. The customers are willing to pay a higher price for
the Gucci products.
Louis Vuitton: Louis Vuitton is also a French fashion brand. Luxury ready-to-wear
watches, shoes, clothes, jewelry, sunglasses, accessories, leather goods, and books are
some of the main products of Louis Vuitton. The company also provides quality products
to its customers, and willing to anything to get the Louis Vuitton product. Factors
like quality, luxury, fashion, and status are more important to the customers of the brand
than price.
3. Sales Orientation
With the passage of time people started to recognize the importance of the promotion process and
why they should introduce marketing to their business.
Producers started to realize that mere production of quality products is not enough for their
growth rather they will also have to invest in the promotion process.
They realized that it was extremely difficult for them to move the product out of their firm without
a proper promotion or advertising.
What we know today about marketing was realized at that period of time. They started to feel that
no matter how much quality their products contain, people buy it if they are kept to mum.
During this phase, the manufacturers were only eyeing on two things producing the best quality
product they can and convincing the people at their best to buy the products that they have
produced.
They started using different tactics to influence people to buy their products. Even high-pressure
tactics were being introduced to boost up sales.
This philosophy is being followed since the 1940s and the marketing which we are following
currently is entirely based on the same philosophy.

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Market Management

A sales-oriented approach can be especially effective for a business competing for customers in a
saturated market. It can also be a valuable tool for a firm that holds dead stock and wants to
reintroduce them to the market.
The extra effort that the sales and marketing team devotes towards selling a product may tip a

Advantages of Sales Orientation

It generates immediate short-term sales.
the best in the market, selling it should be easy.

Broad customer reach for unsought goods. Companies can introduce products or services that
eed and use aggressive sales techniques to boost sales.

Disadvantages of Sales Orientation

d it can lead to losses if

consumers resist the product or service.
The approach is not sustainable in the long term.

4. Societal Orientation

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emerged. Organizations are formulating marketing strategies and production processes that
recognize the impact on the environment, within and without.
Businesses that implement this idea incline towards the ethical approach in their wider marketing
and research strategies. A good example is the pharmaceutical industry and life science sectors,
which have come under scrutiny for their unethical marketing strategies.
Advantages of Societal Orientation
Promotes ethical practices
Helps build a better image for the organization

Economic resources are adequately utilized

Raises the standard of living of people in society
Disadvantages of Societal Orientation
The marketing message can be misleading
Budget limitations

5. Marketing Orientation
Market-oriented businesses focus on analyzing the target audience to determine their needs and
design a product to fit those needs. This business model centers everything around what the
customer wants rather than on promotions. Market orientation revolves around customer
satisfaction and reacting to the demands of the customer.
Marketing oriented organizations approach their operations from a consumer perspective and
focus on the current and future needs of customer needs. The entire firm appreciates the

The marketing orientation concept is built around three pillars:

Customer focus The customer is at the heart of corporate marketing strategies. They are
considered the most important stakeholders, and companies base their philosophies on serving the
customer to ensure his needs and wants are met.
Coordinated marketing
a company-wide responsibility, and everyone must work together to achieve a common goal.
Profitability In a fiercely competitive global economy, businesses are constantly under pressure
to prove their financial standing every quarter. Within the framework of marketing orientation,
com -financial
(behavioral patterns, attitude, and awareness) measures.
Each company strives to develop an orientation towards one of these pillars, depending on its
internal structure and culture.
The widespread adoption of Internet technology has contributed to the shift toward marketing
orientation. Customers have grown increasingly discerning, and social media has become one of
the primary sources of customer outreach.
In a market o

audience. It also involves rigorous marketing efforts to convince potential customers to make a
purchase decision.
Advantages of Market Orientation
The consumer-centric approach helps an organization to know what the customers really want,
hence avoiding wastage of resources.
It builds a strong customer relationship. In turn, customers help the company grow and thrive.
It increases customer satisfaction, confidence, and loyalty.

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It increases sales, which also leads to higher volume and market share of a business entity.
Listening to the needs of the consumers helps a business create and develop a brand that customers
can identify with.
Businesses using this concept are more resilient to change than their competitors.
The customer-focused approach fosters product innovation.
Customer satisfaction encourages buyer feedback, which in turn improves effectiveness and
efficiency.
Disadvantages of Market Orientation
Businesses must learn to quickly change direction to keep up with the constantly changing
demands of their customers.
It takes heavy investment in research to understand the ever-changing needs of consumers.

consumers than creating new products.

2.4 What can be marketed?

Services:
These are intangible products that involve performing some service for the customers. This may be

grooming , As economies advance more efforts are devoted to production of Services For instance
in U.S the economy consists of a 70 30 services to goods mix which include hotels, car rental,
banking

Events:
Time based shows such as New Year celebration, trade shows artistic performance and company
anniversaries are promoted by marketers aggressively to both companies and consumers due to
huge financial rewards earned through sales.
Experiences:
By orchestrating several services and goods, a firm can create stage and market experiences. (Kotler
& Keller 2009) Walt Disney world magic kingdom represents experiential marketing whereby
Customers visit a fairy kingdom, a haunted house or a pirate ship and experience how it feels like.
For example the HARD ROCK café offer an experience whereby they can enjoy their meal or see a
band in a live stage.
Persons:
Involves marketing of a celebrity or of a candidate in a public election. People such as Madonna,
Michael Jordan, Oprah Winfrey and the Rolling Stones have been really successful in their careers
mainly because of how well they have marketed themselves. Management consultant guru Tom

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Places:
Cities, states, regions and nations, compete actively to attract tourists and investment through
factories, company headquarters and new resident. (Kotler & Keller 2009) Place marketers include
economic development specialist, real estate agents, and national tourism agencies.
Properties:
This could be physical properties like real estate or intangible rights of ownership of financial
property such as stocks and bond. Properties are bought and sold on regular basis and this requires
marketing.
Organizations:
This basically refers to building positive image of organizations, such as companies, universities,
and charitable organizations to attract customers. For example Philips the Dutch electronics

products are easy and simple to use.

Information:
Information can be produced and marketed as products Books are the most common means of
selling information, but there are many other type of information marketed. For example
educational institutions produce and distribute information at a price students and communities.
Ideas:
Every market offering includes a basic idea. (Kotler & Keller 2009) In addition ideas may be

Example: Apple Air Pods

2.5 Holistic Marketing

Aristotle
Holistic marketing revolves around this philosophy of holism where the business and its parts are
considered as one interconnected entity and where all its activities are directed towards one
specified goal.
Holistic marketing is a business marketing philosophy which considers business and all its parts as
one single entity and gives a shared purpose to every activity and person related to that business.
The process of holistic marketing takes into account the considerations of stakeholders, customers,
employees, suppliers, and the community as a whole when creating and implementing marketing
strategies. Businesses realize that they can set themselves apart through a holistic marketing
approach, while at the same time creating synergy among departments in the organization.

According to Kotler identified the following 10 types of entities which may be marketed. According
to Kotler marketing management is the art and science of choosing target markets and getting,
keeping and growing customers through creating, delivering, and communicating superior
customer value
Physical goods that may be manufactured produced in farms or mined. These account for the bulk
of the marketing efforts in most of the countries. Each year companies globally market billions of
fresh canned, packed, and frozen food products and millions of automobiles and electronics. Due to
the internet individuals can also effectively market their goods.
Example: That goal involves creating a great customer experience and building a
positive brand image.
If a business behaved one way on social media and presented themselves in ads
differently, this would send a mixed message to the customers, which is something you

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Market Management

If a business implements the holistic marketing concept correctly, it greatly contributes to four very
important things:
1. Brand building
2. Consistency
3. Efficiency
4. Effectiveness

2.6 But how does a business achieve this?

There are 4 components, or marketing forms, to this process:
relationship marketing
integrated marketing
internal marketing
and socially responsible marketing

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1. Relationship Marketing:
The relationship marketing aspect of holistic marketing philosophy focuses on a long-term
customer relationship and engagement rather than short-term goals like customer acquisition and
individual sales.
This strategy focuses on targeting marketing activities on existing customers to create a strong,
emotional, and everlasting customer connection. These connections further help the business in
getting repeated sales, free word of mouth marketing and more leads.

Example: Do us a Flavor

Frito-
chips flavors. To shortlist the flavors, customers can vote on it through social media and shortlisted

The company did this to achieve the goals of engaging its customers and creating a long-term
relationship.

People love relationships, and brands should focus on that in the first place. The Zappos
Call center staff spends more than average time with its customers. The goal of longer
conversation is not making a sale but building strong relationships. What is the result?
75% of the total repurchase rate comes through its call centers.
Most businesses spend their money on advertising, but Zappos philosophy is that money
should be invested in customer service so that it will encourage the customers to do word
of mouth marketing for Zappos.

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Market Management

2. Integrated marketing
This form of marketing is the second component of the holistic marketing concept and is related to
the aforementioned unified message that the business sends to its customers.
This strategy ensures that all marketing parts of a business work together, which includes
departments and employees who deal with paid media, earned media, and owned media.

Paid media involves marketing you pay f o r , s u c h as pay-per-click marketing and influencer
marketing.
Earned media, as the namesuggests, are the things you earn from your customers, such as reviews
and comments.
Owned media presents the media you own: like your website and social media profiles.
.Example:

AnyWare
ordering wherever a customer may be. The key to making it work was the Pizza Profile, established
to save customer information and expedite ordering. With this data, people could order online, by
text, via tweet, or even using a smartwatch. Getting the word out about AnyWare involved an
integrated marketing strategy encompassing press releases and television as well as digital and
social advertising, with a goal of one-half of all orders being made digitally (which they reached
handily).

3. Internal marketing
So far, we spoke about the relationship between the customer and the business and the unified
message the business needs to send to their customers, but what about the people who make this
happen?
Internal marketing is all about the employees and the reason for it is good customer experience.

products.
It is also influenced by all the interactions they have with the business, which are mostly employee-
customer interactions, hence the importance of internal marketing.
So, by providing intensive training to employees, a business ensures that they know everything
they need to when a customer has a question or needs help with something.

Apple a great example of internal marketing

to their store and their highly capable employees with solving them.

twice before purchasing another product of theirs.

How companies adopt the same:

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Educating employees on the company goals and values

Encouraging employee input on corporate policies and leadership, allowing open
dialogue and accepting any criticisms
Nurturing communication and collaboration among employees
Ensuring employees know that their contributions matter and are essential to the success
of the company.
Opening up the product or services to employees to use and get involved in

4. Socially responsible marketing

marketing type.
Socially responsible marketing aims to attract customers who want to make a difference with their
purchases. Think of products where a part of the proceeds goes to a good cause or products that are
made responsibly.
There are 4 marketing-related concepts that are involved in this specific type of marketing: social
marketing, environmental marketing, cause-related marketing, as well as socially responsible
buying all concepts that are related to the environment and well-being of the society.

Objectives of Societal Marketing:

Changing attitude, beliefs, and expectations of the people; so that people should care
about the environment,
Companies should adopt such marketing strategies that would make people change their
behavior.
Societal marketers should change the traditional marketing mix (product, price, place, and
promotion) and use it in their marketing campaign, which would increase the impact of it.

in which companies are operating their businesses.

societal marketing campaign messages should be so effective that people and businesses
start taking responsibility about the environment.
The marketing share and consumer base should increase with the societal marketing
campaign

Advantages of Societal Marketing:

Societal marketing helps companies and businesses to send a good message that they care
about the environment.
An eco-friendly approach would provide you a competitive edge over competitors.
If a company provides eco-friendly products and services to its customers, then it would
increase the customer retention ratio.
When customers are loyal to a certain brand, then the sale of products and services would
also increase.
When the sale increases, then businesses would have the opportunity to expand and grow
their operations.
Societal marketing system would properly use the economic resources of the company.
The usage of economic resources would generate employment opportunities and the
living standard of the people would also rise.

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Market Management

2.7 Marketing Vs Selling

Selling :The selling theory believes that if companies and customers are dropped and detached,
then the customers are not going to purchase enough commodities produced by the enterprise.
The notion can be employed argumentatively, in the case of commodities that are not solicited, i.e.

functioning at more than 100% capacity, the company intends at selling what they manufacture, but
not what the market requires.
In the sales process, a salesperson sells whatever products the production department has

for granted.

Marketing:
in growing more efficient than the opponents, in manufacturing, producing and imparting
exceptional consumer value to the target marketplace.
Marketing is a comprehensive and important activity of a company. The task generally comprises

In between, activities such as production, packaging, pricing, promotion, distribution and then the
selling will take place. Consumer needs are of high priority and act as a driving force behind all
these actions. Their main focus is a long run of business ending up with profits.
It depends upon 4 elements, i.e. integrated marketing, target market, profitability customer and
needs. The idea starts with the particular market, emphasises consumer requirements, regulates
activities that impact consumers and draws gain by serving consumers.

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Summary
As stated in an earlier section, the process of marketing involves creating a market offering, to
satisfy the needs and wants of the present and potential buyers. The real question is how to create a
market offering. We can say a profitable business opportunity is seen by some firm in the field of
producing soft drinks.
To develop and market a new brand of soft drinks, a number of important decisions will have to be
taken for example whether to go for any collaboration with a foreign manufacturer of soft drinks,
whether to produce for the local market or for a wider market, what will be the features of the new
product, and so on. There are large number of factors affecting marketing decisions. These can
broadly be divided into two categories: (i) controllable factors, and (ii) non-controllable factors.
Controllable factors are those factors which can be influenced at the level of the firm. In the
previous illustration, for example, whether the drink will be packed in glass bottles or plastic cans;
what will be the name (brand name) of the drink; at what price it will be sold, (at par with the price
at which other competitive brands are sold or below it or above it); what distribution network will
be used to make the product available (e.g., hotels, restaurants, groceries shops, kiosks selling
cigarette, paan, etc.) to the buyers whether the new soft drink will be promoted by putting up
advertisements in newspaper or magazine or on radio or television; or say if newspaper, whether in
a local newspaper or a national daily; whether in a paper of regional language or an English daily,
etc. is decided at the level of marketing manager of the firm.

Keywords
Marketing, Selling, Promotion, strategies, Environment, Relationship Marketing, integrated
marketing, Societal marketing.

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Self Assessment

1. Marketing is managing profitable customer relationships, so the goal of marketing is to :

A. Generate profit
B. Attract new customers
C. Keep and Grow current customers
D. Both B and C

2.
institutions and processes for creating , _____________,delivering and exchanging offerings

A. Communicating and customers

B. Profit and customers
C. Sales and Employees
D. Attracting and customers

3. _________concept focussed on improving production and mass distribution

A. Production Concept
B. Product Concept
C. Selling Concept
D. Marketing Concept

4. __________ concept is

(Unsought Goods) Such as insurance.

A. Production Concept
B. Product Concept
C. Selling Concept
D. Marketing Concept

5. __________ concept is useful when demand of product exceeds the supply.

A. Production Concept
B. Product Concept
C. Selling Concept
D. Marketing Concept

6. _________ concept focus in on creating , communicating and delivering customer value.

A. Production Concept
B. Product Concept
C. Selling Concept
D. Marketing Concept

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7. If the business environment is competitive, then you should follow the marketing concept

because it would be favorable in such an environment

A. Production Concept
B. Product Concept
C. Selling Concept
D. Marketing Concept

8. Marketing means ________ consumer needs while making profit

A. Fulfilling
B. Completing
C. Creating
D. Occupying

9. What can be marketed?

A. Goods and services

B. Events and Experience
C. People and properties
D. All the above

10. The process of holistic marketing takes into account the considerations of stakeholders,

customers, employees, suppliers, and the community as a whole when creating and

implementing marketing strategies.

A. stakeholders
B. customers
C. employees
D. all the above

11. If a business implements the holistic marketing concept correctly, it greatly contributes to

four very important things which are Consistency, _______, _________and Efficiency.

A. Need and demand

B. Brand building and consistency
C. Efficiency and Effectiveness
D. Both B and C

12. The four components of Holistic marketing are : relationship marketing, integrated

marketing, internal marketing

A. Socially responsible marketing

B. Demand based marketing
C. Price sensitive marketing
D. International marketing

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Market Management

13. ____________ marketing, targets activities on existing customers to create a strong,

emotional, and everlasting customer connections.

A. relationship marketing
B. integrated marketing
C. internal marketing
D. Socially responsible marketing

14. Activities within ____________including advertising, public relations, direct marketing,

online communications, and social media marketing, work in sync with one another to

ensure the company's customers and business partners have the same experience with and

perception of the company.

A. relationship marketing
B. integrated marketing
C. internal marketing
D. Socially responsible marketing

15. ____________is aimed at catering to the specific needs of the business's own employees and

ensures that employees are satisfied with the work they perform each day as well as the

philosophy and direction of the organization as a whole.

A. relationship marketing
B. integrated marketing
C. internal marketing
D. Socially responsible marketing

Answers for Self Assessment

1. D 2. A 3. A 4. C 5. A

6. D 7. D 8. A 9. D 10. D

11. D 12. A 13. A 14. B 15. C

Review Questions
1. Briefly explain what is marketing mix? What is the importance of marketing mix?
2. Give examples of each of the seven elements of the marketing mix
3. What promotional strategies are used by organization to promote their products?
Explain in brief any two pricing techniques?
4. What is relationship marketing, and how it is beneficial to the organisation?

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Unit 02: Marketing Orientation

5. What do you mean by Holistic Marketing? Giving example discuss its relevance.

Further Readings
Cespedes, F. V. (1991). Organizing and implementing the marketing effort: Text and
cases. Boston: Addison-
curse? Incumbency, size, and radical product innovation. Journal of Marketing, 64(3), 1
17.
Choi, S. C., & Coughlan, A. T. (2006). Private label positioning: Quality versus feature
differentiation from the national brand. Journal of Retailing, 82(2), 79 93.
Kumar, V., Sharma, A., & Gupta, S. (2017). Accessing the influence of strategic marketing
research on generating impact: Moderating roles of models, journals, and estimation
approaches. Journal of the Academy of Marketing Science, 45(2), 164 185.
Kyriakopoulos, K., & Moorman, C. (2004). Tradeoffs in marketing exploitation and
exploration strategies: The overlooked role of market orientation. International Journal of
Research in Marketing, 21(3), 219 240.
Lee, J. Y., Sridhar, S., Henderson, C. M., &Palmatier, R. W. (2014). Effect of customer-
centric structure on long-term financial performance. Marketing Science, 34(2), 250 268.
Lewis, M. (2004).

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Dr. Pretty Bhalla, Lovely Professional University Unit 03: Marketing Mix

Unit 03: Marketing Mix

CONTENTS
Objectives
Introduction
3.1
3.2 Product in 7 of Marketing
3.3 Price in 7 of Marketing
3.4 Place in 7 of Marketing Mix
3.5 Promotion in 7 of Marketing
3.6 People in 7 of Marketing
3.7 Purposes Served by the Marketing Organization
3.8 Customer Value
3.9 Customer Value Drivers
3.10 Measuring Customer Value
3.11 Tips For Increasing Customer Value
Summary:
Keywords
Self Assessment
Answers for Self Assessment
Review Questions
Further Readings

Objectives

Analyze importance of Customer value

Introduction
Marketing is the process of getting the right goods or services or ideas to the right people at the
right place, time, and price, using the right promotion techniques and utilizing the appropriate
people to provide the customer service associated with those goods, services, or ideas. This concept
is referred to as the and is the basis of all marketing strategy. We can say
that marketing is finding out the needs and wants of potential buyers (whether organizations or
consumers) and then providing goods and services that meet or exceed the expectations of those
buyers. Marketing is about creating exchanges. An exchange takes place when two parties give
something of value to each other to satisfy their respective needs or wants. In a typical exchange, a
consumer trades money for a good or service. In some exchanges, nonmonetary things are
exchanged, such as when a person who volunteers for the company charity receives a T-shirt in
exchange for time spent. One common misconception is that some people see no difference

stomers,
while marketing is the process of communicating the value of a product or service to customers so
that the product or service sells.

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Avon representative
ght lipstick for a potential customer when the customer wants it, at the right
price, the potential customer will not exchange money for a new lipstick from Avon. Think about
the last exchange (purchase) you made: What if the price had been 30 percent higher? What if the

principle tells us that marketers control many factors that determine marketing success.
Most successful organizations have adopted the marketing concept. The marketing concept is based

and wants of customers in order to develop marketing strategies that not only satisfy the needs of
the customers but also the accomplish the goals of the organization. An organization uses the

oriented toward
pleasing customers (be those customers organizations or consumers) by offering value. Specifically,
the marketing concept involves the following:
Focusing on the needs and wants of the customers so the organization can distinguish its product(s)

wants and needs

Achieving long-term goals for the organization by satisfying customer wants and needs legally and
responsibly
Today, companies of every size in all industries are applying the marketing concept. Enterprise
Rent-A-Car
began Disney found that some of its
patrons really disliked waiting in lines. In response, Disney began offering FastPass at a premium
price, which allows patrons to avoid standing in long lines waiting for attractions. One important
key to understanding the marketing concept is to know that using the marketing concept means the
product is created after market research is used to identify the needs and wants of the customers.
Products are not just created by production departments and then marketing departments are
expected to identify ways to sell them based on the research. An organization that truly utilizes the
marketing concept uses the data about potential customers from the very inception of the product
to create the best good, service, or idea possible, as well as other marketing strategies to support it.
Food For Thought:

The marketing function is the study of market forces, factors and the development of a company's
position to optimize its benefits from them. It is all about getting the right product or services to the
customers at right price, in the place , at the right time.

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Successful Marketing depend upon :

What a company is going to produce
How much it is going to charge
How it is going to deliver its products or services to the customers
How it is going to tell its customers about its product and services.

mix.
Marketing is most successful when the philosophy, tasks and manner of implementing available
technology are coordinated and complementary is the main motive
of marketing.

3.1
When it comes to the ideal framework for planning any marketing campaig
of marketing play a key role in sketching out Marketing Campaign
It entails a variety of strategies to promote, advertise, and market the products and services of the
company in a way that attracts the viewers and changes them into viable customers.
Marketing is an evolving principle, just like everything else in the world.
As the world advances, the methods to improve marketing in the organization also improve.
Different tactics and paths are taken up by the marketers and marketing officials.
They take into consideration the external factors and internal factors of the company to develop a
strategy. There may be a multi-fold strategy to attack different aspects. The end goal is the same,
that is, to increase the awareness of the brand and improve productivity.
It is a continually maturing discipline. Companies have to update to this constantly; otherwise, they
will be left behind in a competitive environment.
The most fundamental change that has occurred in the marketing world was the refurbishment of

In recent years, the importance of marketing has grown manifold.

Every company or organization has a particular marketing strategy to either target a specific
audience or to gain more traffic. Thus, marketing strategy solely depends on the type of
organization, the budget, the products that need to be marketed, and many more.
Apart from creating an effective marketing strategy, it is also essential to continuously monitor and
evaluate the effect. And this brings us to the 7 Ps of marketing.
These 7 Ps include the various fundamental factors that need to be looked into from time-to-time to
understand the full effect of your marketing strategy.

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(a) 1960

used tool for businesses to understand the prod

Product, Place, Price, Promotion.
(b) 1981
Due to a full acknowledgment, it was accepted that the marketing mix should be updated from

s of service marketing included People, Processes, and Physical Evidence.

These 3 are a beacon to show that marketers are involving changes in communication such as social
networking sites, new avenues for selling the products and services, and the expectations of
customers in a constantly evolving commercial environment.

Why use the of Marketing?

After understanding each of the seven important components of marketing, it is crucial to know
why these aspects are essential. Each element of marketing has a role to play. And all these
summed up together construct a successful marketing policy for any firm or business.
There are numerous reasons why the of marketing are essential for every company. Some of
the rights are listed below-
1) Rise in the living standards-
The seven elements mentioned above also play a role in the standard of living, not only a
employees but also the entire company. Through the recurrent selling and marketing of
goods at an affordable rate, there is a considerable increase in the standard of living of the whole
human community.

2) Increase in employment opportunities-

Marketing, in general, is a compact phenomenon involving various processes. By implementing the
in your marketing policies, the sales of the products increase. Hence, their demand increases,
which leads to employing more people. This is one of the few ways through which employment is
generated.

3) A drastic influx of income-

Marketing has become part and parcel of every company. A successful marketing policy brings in a
lot of revenue and income. This excess profit can be saved for future utilities or investments. As
mentioned above, a successful marketing policy depends entirely on how well a company
implements the seven elements. The more established a company is in implementing those the
more profit it incurs from the business.

4) Progress in the exchange of goods and services-

As mentioned earlier, each of the seven factors helps to shape a successful marketing policy. And
invariably, a successful marketing policy significantly increases the sales of a company. And hence,
there is progress in the sales of goods and services.

They are affected by internal and external environmental factors. Now, we will be covering the key
-

3.2 Product in 7 of Marketing

The product refers to what the company is selling and includes the features, gains, and benefits
given to the customers.
When they purchase goods and services, they will enjoy the perks. Product marketing focuses on
the key features and benefits, which include quality, accessories, style, repairs, and updates. It is a
core part of what the business offers to the customers.
If the product is not up to the mark, the marketing will not work. The attributes provided along
with the product helps to establish the competitive scenario for Digital Marketing
strategy formulation.

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The company must evaluate whether the product is suitable for the current population, whether the
product or service offered is a necessity, is it providing more than the contemporaries, and whether
the company is superior to its competitors in at least one aspect. All such factors will help you
understand the product more.

3.3 Price in 7 of Marketing

It is the amount people pay and the avenue for revenue inflow into the organization.
The pricing strategy identifies the price customers are ready to pay, the mark-up for overheads,
profit margins, and other costs. It also determines the payment method.
To maintain a competitive advantage, the customers can be attracted with the help of discounts and
seasonal pricing.

price satisfies the customer more. Many people consider it to be a proxy for quality.
To monetize products is more comfortable than to monetize services because they are intangible.
Price is essential for service consumption after service recognition.
A company needs to analyze whether the price range of the product is justified or not. Sometimes,
the production and the resources required to manufacture the product are too costly, but the selling
price is too low. Sometimes, a company can spread the costs over months and bring in special
discounts and offers to enhance the selling of the product.

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Types of Pricing:

1) Premium pricing
It is a type of pricing which involves establishing a price higher than your competitors to achieve a
premium positioning. You can use this kind of pricing when your product or service presents
some unique features or core advantages, or when the company has a unique competitive
advantage compared to its rivals. For example, Audi and Mercedes are premium brands of cars
because they are far above the rest in their product design as well as in their marketing
communications.

2) Penetration pricing
It is a commonly used pricing method amongst the various types of pricing is designed to
capture market share by entering the market with a low price as compared to the competition.
The penetration pricing strategy is used in order to attract more customers and to make the
customer switch from current brands existing in the market. The main target group is price
sensitive customers. Once a market share is captured, the prices are increased by the company.
However, this is a sensitive strategy to apply as the market might be penetrated by yet another new
entrant. Or the margins are so low that the company does not survive. And finally,
this strategy never creates long term brand loyalty in the mind of customers. This strategy is used
mainly to increase brand awareness and start with a small market share.

3) Economy pricing
This type of pricing takes a very low-cost approach. Just the bare minimum to keep prices low and
attract a specific segment of the market that is highly price sensitive. Examples of companies
focusing on this type of pricing include Walmart, Lidl and Aldi.

4) Skimming price
Skimming is a type of pricing used by companies that have a significant competitive advantage and
which can gain maximum revenue advantage before other competitors begin offering similar
products or substitutes. It can be the case for innovative electronics entering the marketing before
the products are copied by close competitors or Chinese manufacturers.
After being copied, the product loses its premium value and hence the price has to be dropped
immediately. Thus, to get maximum margins from their products, innovative companies keep
launching new variants so that customers are always in the discovery phase and paying the
required premium.

5) Psychological pricing
It is a type of pricing which can be translated into a small incentive that can make a huge impact
psychologically on customers. Customers are more willing to buy the necessary products at $4,99
than products costing $5. The difference in price is actually completely irrelevant. However, it
makes a great difference in the mind of the customers. This strategy can frequently be seen in the
supermarkets and small shops.

3.4 Place in 7 of Marketing Mix

It is where the goods, products, services, assistance, etc. are showcased, sold, and distributed.
Unless the consumers have access to what the business deals in, they cannot purchase or rent it. It is
a crucial point to ensure that the customers find the goods and services. Marketing strategies for
this include unique designs for retail spaces and different visual merchandising techniques.
Finding the right location for the business is an essential aspect of spreading the market. The utility
is a high priority while choosing a place for the company.
If it is closer to the customer, there is a higher chance of being bought.
The organization must always be in the habit of reviewing the exact location where a product is
sold. Sometimes, a change of location can significantly increase the sales of the product. There are
many different ways of selling a product, but they all depend on the type of product that a
company is manufacturing.

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3.5 Promotion in 7 of Marketing

Promotion is the process of finding a target audience, recognition of the brand, establishing the
quality of services being offered to the customers.
There has to be perfect or close to perfect between promotion and positioning. Different
promotional events are used by organizations to increase awareness of the goods and services
offered.
The tools often used are digital advertising, endorsements, and exhibitions, special events, sales
tactics, direct marketing, etc.
The promotional activities make the customers aware of the goods and services the company deals
with.
The promotion of a product includes how a company chooses to promote, market, or advertise the
product to the customers. While evaluating your marketing strategy, a firm needs to make small
changes in their advertising strategies and bring in new marketing methods.

3.6 People in 7 of Marketing

People refer to those who help is making all the marketing strategies come to life.
They carry out all the procedures and ensure that the plan is actually implemented and executed
well.
When customer service offered by a company is positive, it leaves the customers feeling satisfied
and happy, and there is a higher chance that they will come back. It is a marketing technique, and
different companies have different approaches for interacting with customers.

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The customers spread the word about their positive experience and lead to brand awareness. The
customers also win referrals.
The people make the organization what it is. They are the foundation and hiring the right people,
appropriate selection and recruitment, correct training, imbibing the necessary marketing skills,
and retaining of the staff create a growing environment. It improves the chances of business
development.
The people are the crux of service delivery.
One of the most important habits of a company will always be to analyze the requirements of the
people inside and outside the firm. In simple terms, a company must always safeguard the interests
of the clients as well as the employees while devising a marketing strategy.

Processes in 7 of Marketing Mix

The processes are what help to deliver the service with a certain quality.
It refers to the mechanism which is put into place to deliver the goods and services to the
customers. A standard process determined by the company ensures that the customer will receive
the same standard of quality services repeatedly.
It increases the efficiency of the organization and helps in saving time and money.
A set way of working encourages the customers of the assured benchmark set the first time.
The process mapping ensures that the target audience can be dependable on the services being
discerned.

Physical Evidence in 7 of Marketing Mix

Physical evidence, as the word suggests, is what the customers see. The actions and words put
across by the company should match what they can see when they interact with the business.
It entails a few parameters such as the physical environment where the goods and services are
provided, the layout of the business, interior design, the branding, packaging, the office, staff, and
how they dress and act.
People believe what they see, and it should be convincing enough for them to invest their time and
money in it.
It affects customer satisfaction.

we will understand this with their respective examples, so you can comprehend the associated
concept adeptly.

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3.7 Purposes Served by the Marketing Organization

A marketing organization is definitely created to serve certain purposes for the company. It helps
the firm serving quite a few purposes. Among the purposes served by the marketing organization
of a company, three are noteworthy. Let us now look at them in brief:

1. Marketing Organization Facilitates Effective Response to Market Needs

A firm needs to identify the changes taking place in the market and a competitive environment and
respond accordingly.

should decide which of the available alternatives to identifying and responding to changes should
be followed. For example, a firm may identify changes using its marketing intelligence system or by
conducting marketing research or so.

launching a new product or modifying its existing product. The option that a firm will select by the
type of its marketing organization and people in it.

2. Marketing Organization Helps to Carry Out Activities with Optimum Efficiency

Specialization, along with coordination and control, helps the firm achieve internal efficiency.
Many specialization options are available to a firm, such as customer, geographic, and product
specialization. We shall discuss them in detail later in this lesson. Coordination becomes more
important as a firm becomes more flexible in its organizational structure.
Control here is related to authority and responsibility structures. If it is found that progress does
not conform to the standards set, the responsible executive must be made aware of this, and he
must have the authority to take necessary action. It is also his responsibility to monitor the progress
of his subordinates closely.

The importance of customers takes a new meaning in the firm if the management takes a marketing

For ensuring customer needs and problems receiving proper representation inside the corporate
domain, some parts of the organization must take this as one of the fundamental responsibilities.
Customer orientation is provided in some firms by charging every employee from the president
down to the very junior staff to maintain a customer perspective in all functions and
responsibilities.
On the contrary, other firms respond to customer interests more tangibly, but somewhat passively,
via complaint departments or attitude surveys carried out by marketing research personnel.
But when carried to its fullest, this responsibility goes beyond research or complaints departments
and includes an in
independence.
The overall purpose of a marketing organization is to help attain marketing objectives. The

varied work to achieve a unified and successful result.

Role of Marketing Organization

A production-oriented company concentrates either on improving production efficiency or on

producing high-quality, technically improved products.
Here, objectives and planning are determined by the executives in the production and engineering
departments. The company emphasizes simplified and mass production and tries to keep the unit
cost low. Marketing plays no role in the true sense in such a situation.

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Price is dictated by production and finance departments, and the function of the sales department is
Thus, there is a notable absence of consumer consciousness.
With the expansion of the market, manufacturers recognized the importance of other marketing
functions and started changing their company structures.
In a sales-oriented organization, there is a general belief that personal selling and advertising are
the primary tools used to generate profits and that most products
can be sold if the right quantity and quality of personal selling and advertising are employed.

production, personnel, and finance managers, and all participate in top-level management.
Higher-level sales and advertising executives and other executives at the same level are involved

The marketing concept suggests that marketing starts with the customers and works back
to producing desired products in the right amounts and with the right specifications. As the figure
below shows, the marketing manager is in a position equal to that of the personnel, production, and
finance managers in a marketing-oriented organization.

This structure allows the marketing manager to participate in top-level decision making. Note, too,
that the marketing manager is responsible for various activities (not shown in this figure), several of
which are under the jurisdiction of other functional managers in production or sales-oriented firms.
Relationships between marketing and other functional areas such as personnel, production, finance,
t heavily depend on its basic orientation.
Marketing encompasses the greatest number of business functions in a marketing-oriented firm,
and it occupies an important position in the organization.
Relations That Exist Between Marketing and Other Departments When a Firm is
Marketing Led:
In a marketing-oriented company, the marketing department coordinates intra-department
activities and coordinates with the activities of other departments to get a synergistic result.
Becoming marketing-oriented means carrying out both internal and external marketing.
By internal marketing, we mean successfully hiring, training, and motivating employees to serve
the customers well and satisfy them. Internal marketing is to be carried out first because unless a
company is not ready to provide customer satisfaction, it cannot go for external marketing.
In a marketing-
responsible for marketing is named marketing manager, marketing director, or marketing vice
president.

3.8 Customer Value

Customer value is the satisfaction the customer experiences (or expects to experience) by taking a
given action relative to the cost of that action.

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The given action is traditionally a purchase, but could be a sign-up, a vote or a visit, while the cost
refers to anything a customer must forfeit in order to receive the desired benefit, such as money,
data, time, knowledge.
Think about the following definition of marketing:
Marketing creates, communicates, and delivers value to customers.
The internal chain of sourcing, operations, processes, sales, marketing, and customer service all
contribute to the creation of value. So do your support operations such as HR and accounting. All
of these components affect your customers directly or indirectly in some way, informing their
perception of you.
And this leads to the fundamental point: The results of your efforts to create value are measured in

People do not buy things because you like them. They buy them because they like them or need
them.
More importantly, in this world of choice:
Customers compare their perceived value of similar products when making a decision.
Whether you are deciding on a restaurant to visit, your next car, or which digital marketing agency
you want to use, there are choices available, and many factors play a part in forming that decision.

In a nutshell, customer value means:

A product or worth in the eye.

A comparison of cost and benefits of a product or service.
The level of satisfaction a customer gets after using a product or service.

Why Is Customer Value Important? 3 Major Reasons

Obviously, customer value is crucial because you can only retain customers if you give them the
value they want or paid for. Apart from that, here are other top 3 reasons why is customer value
important:

1. Generate More Resources. If you give more and more value to your customer, you
will generate more financial resources. Then, you can use these resources for further
customer acquisition and ultimately lead to sustainable growth.
2. Better Product Assortment. Once you know who your ideal customers are, you will be
able to evaluate your best-selling products. This way, you can assort your product
ences.
3. Access to Capital. The bigger the customer value, the better the lifetime value of a
customer acquisition cost ratio is.

Components of customer value:

a
combination of four components:

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3.9 Customer Value Drivers

The bitter truth about customer value is you cannot control it. However, there are specific ways to
influence it. Here are some customer value drivers that can help you in making your product or
service more valuable.

Price. It is a monetary element, is one of the main factors that a customer considers before

Function Of the Product or Service. A customer buys an offering as a solution to a

will have more perceived value.

Positioning.
includes the sentiments, emotions, feelings, traits, etc., attached to your offering.
Quality. The extent or degree to which your product or service meets the expectations and
needs of your customers. If your offering exceeds customer expectations, you are selling a
high-quality product or service.
Service. Service means how do you facilitate your customer during the purchasing process. It
includes the pre-purchase and post-purchase phases as well.
Current And Previous Customer Relationship .
also a major driving factor when it comes to creating value. If your customer had a pleasing
experience, the intensity of perceived value would be higher and vice versa.
Branding And Marketing.

problem-solving marketing campaigns get better results.

Personal Attributes/Preferences.

consumption of alcohol, he/she will devalue it.

3.10 Measuring Customer Value

There are many equations and models for measuring customer value. The simplest is this:

Perceived Value = Perceived Benefits / Cost

In other words, for a given set of benefits, as the cost rises, the perceived value drops.
Total Customer value=Customer Benefits (Economic + Functional + psychological )
Minus
Customer Costs(Cost of evaluation + cost of obtaining +cost of using + cost of disposing)

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This is an important point. Value does not refer to price. It refers to the perceived benefits stood to
be gained in the context of price. Cost is only part of the equation. Literally.
Two identical products with identical exposure can only compete on cost. Two differentiated
products do not have to compete on cost. Products are not just differentiated by their features. They

reliable because one of its key brand features is reliability. If another carmaker releases a near-
identical car, they may struggle to compete because they do not share the same customer
perceptions.
The same applies to content marketing. For example:
The Web Marketers Guide to Reddit earning / Time

reading the content (e.g. learning) relative to the time it took for them to gain that benefit.
The Drivers of Value
Take this list:
Product function
Points of differentiation
Quality
Service
Marketing
Branding
Price
Existing relationships or experience
Personal bias from experience and upbringing

Total customer benefits is the summation of:

These are drivers that impact a

cannot. For any individual customer they will rank differently in importance. Some people love
brands. Some people only buy cheap. Some favor short form content. Some people treasure
personal relationships.
segmentation. The fragmentation of customer value is one of
the primary reasons for segmentation. By identifying groups of people with shared values you can
start to create products and messages that resonate.

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Customer Cost:
It is the bundle of costs customers expect to incur in evaluating ,obtaining and using the product or
service
Total Customer cost is the summation of:
Monetary cost
Time Cost
Energy cost
Psychic cost

Value:
Perceived product or services attributes
Perceived substitute or service attribute
Perceived product or service price
Perceived substitute product or service price value= Perceived benefits/perceived price

3.11 Tips For Increasing Customer Value

As mentioned earlier, you have no control over customer value, but you can make things better.
Here is how:

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[Link] the Customer Experience

If you want to better the customer value, the first thing to work on is your customer experience.
You can make a customer journey map that covers all the steps from buying your product to the
point of friction/conflict. This way, you can better the process and add value to your offerings.
[Link] Your Focus on Other Things Rather Than Just Price
Yes, prices are a vital factor when you are competing in a competitive market. Sometimes, a
business cannot lower its product prices due to static costs of production. However, you always
have the option to add some value to your product. There are non-monetary benefits that can add
value to what you are offering.

[Link] Loyal to Your Loyal Customers

loyal customers feel special, you may end up losing them. Yes, you are already serving them with
your valuable products, but you can reward their loyalty with additional steps.
For instance, you can start a customer loyalty program or greet them with gifts and warm wishes
on special occasions. This approach can help you in certain ways. A loyal customer is your most
robust marketing tool because word-of-mouth is still one of the most influential marketing
channels.
Statistically, 93 percent of consumers make their purchase decisions based on the reviews given
to a certain product or brand. So, please your customers and get new ones smoothly.

Summary:
In the past, management accounting concentrated on internal information. It put excessive
emphasis on control of production costs. The modern business idea presumes that cost reduction
must be found in the "value-added" process; that is, selling price less the cost of raw material or the
cost of work-in-process items. There are other inputs such as engineering, maintenance,
distribution and service, so purely following a value-added approach can be misleading. The
traditional value-added approach starts too late as it ignores linkages with suppliers, but it also
stops too early as it ignores linkages with customers. The modern value chain approach
incorporates external and internal data, applies appropriate cost drivers for all major value-creating
processes, exploits linkages throughout the value chain and offers continuous monitoring of a
company's strategic competitive advantage. It involves the inputs of other strategic partners, such
as material suppliers, finished goods wholesalers, and final customers. The goal is to perform value
chain activities more efficiently, and ultimately surpass industrial competitors.

Keywords
Channel , Value, Satisfaction , Loyalty, Intensity , Promotion , product value , service value

Self Assessment

1. According to nature of contact, information , process for purchasing and delivery ,

marketing is of three types Mass marketing, Direct Marketing and ______.

a. Internet marketing
b. Demand Marketing
c. Price sensitive Marketing
d. Distributive Marketing

2. According to geographic area, extent of distribution, network, marketing variation

commitment to country, marketing types are:

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a. Local and regional

b. National and International
c. Global
d. All the above

3. The perfect __________must provide value for the customer.

a. Cost
b. Demand
c. Product
d. Price

4. ___________is the way a company communicates what it does and what it can offer

customers. It includes activities such as branding , advertising , PR, corporate identity, sales

management, special offers and exhibitions.

a. Promotion
b. Marketing
c. Selling
d. Advertising

5. represent the business

a. Price
b. People
c. Product
d. Promotion

6. _____________

and all the costs of the product.

a. Customer perceived value

b. Value
c. Price
d. Demand

7. Total Customer value=Customer Benefits (Economic + Functional +_____)Minus Customer

Costs(Cost of evaluation + ______+cost of using + cost of disposing)

a. Psychological and cost of obtaining

b. Demographic and cost of product
c. Demographic and cost of replacing
d. Economic and cost of owing

8. Organizations should be strong in both __________and process.

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a. Product
b. Price
c. Market share
d. Purpose

9. ______________ is the match between customer expectations of the product and the products

actual performance.

a. Customer Satisfaction
b. Performance
c. Loyalty
d. Price war

10. _____________is the activity that a selling organization undertake in order to reduce

customer dissatisfaction

a. Advertising
b. Customer Retention
c. Gift Coupons
d. Promotion

11.

by ________.

a. Henry Ford
b. Michael Porter
c. Phillip Kotler
d. Henry Ford

12. There are two types of competitive advantages i.e. cost advantage and ____________.

a. Differentiation Advantage
b. Decorative Advantage
c. Industrial Advantage
d. Customer Advantage

13. ___________have an immediate effect on the production, maintenance, sales and support of

the products or services to be supplied.

a. Primary Activities
b. Secondary activities
c. Alternate activities
d. Main activities

14. ________-Logistics are all processes that are involved in the receiving, storing, and internal

distribution of the raw materials or basic ingredients of a product or service.

a. Inbound
b. Outbound
c. External

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d. Internal

15. __________logistics are all activities that are related to delivering the products and services

to the customer. These include, for instance, storage, distribution (systems) and transport.

a. Inbound
b. Outbound
c. External
d. Internal

Answers for Self Assessment

1. A 2. D 3. C 4. A 5. B

6. A 7. A 8. D 9. A 10. B

11. A 12. A 13. A 14. A 15. B

Review Questions
1. You are shopping for food at the supermarket and go to the fruit section. While there, you
are looking at both apples and oranges. You notice that each apple that you would
purchase would be "worth" $1.00 to you while each orange would be worth $1.25 to you
(Note that what something is "worth" to you is synonymous with the value you receive
from it for purposes of this question). You then look at the prices and see that the prices of
apples and oranges are $0.50 and $0.60 each, respectively. Given this information, would
you be more likely to purchase apples or oranges? Your answer should discuss the
"customer value" that you would get from each apple and orange.
2. List and describe the three ways that a company can establish customer value to its
customer base? For each of the way, provide a real-world example of where this method
was applied and explain how it was applied. Your answer should discuss why you believe
the example you provided matches with the respective method.
3. Consider a situation where you are opening a new ice cream shop. Explain the importance
of customer value in setting the prices of the ice cream that you plan to sell.
4.
5.

Further Readings
Hoque, Z. (2003) Strategic Management Accounting, 2nd edition, Pearson Prentice Hall.
Porter, M.E. (1985) "Technology and Competitive Advantage", Journal of Business
Strategy, Vol. 5, No. 3, pp.60 78

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