HEC Group of Institutions, HARIDWAR

Online Notes for the Subject – Marketing Management

Philip Kotler and Gary Armstrong – “Marketing as a social and mana-

gerial process by which individuals and group obtain what they need
and want through creating and exchanging products and value with
others”.

Thus, in broader sense, “the value proposition is fulfilled through

marketing offers. The value proposition is a set of benefits that
promise to consumers to satisfy their needs. So, the marketing of-
fers consist of some combination of products, services, information
or experiences offered to a market to satisfy a need or want. Mar-
keting offers include both tangible and intangible things i.e., goods
and services”.

Some of the important characteristics of marketing are de-

scribed below:

i. Modern concept of marketing is customer-oriented.

ii. Marketing is the bridge which fills gap between producer and con-
sumer.

iii. That is, First Ascertain What Consumer Wants and then Produce.

iv. Emphasis is upon Customer Satisfaction.

v. Here, Marketing begins and ends with customers.

vi. Accordingly, according to this concept –

a. A producer must produce what consumer needs that is emphasis is

on customer’s needs.

b. Price be fixed what customer can afford.

c. Production must be in quantity that customer requires, that is,
customer’s demand determines production.

d. Goods must be distributed through channels suited to consumers.

e. Ultimate object is customer satisfaction.

f. Customers enjoy supreme importance (as against product).

vii. Marketing aims at earning profits through consumer satisfaction

The marketing process deals with identifying customers need and

want and delivering satisfaction to customers more than their
competitors do, by delivering them desired product. The marketing
process revolves around buyers, sellers, product or services,
advertisement, promotion, market and the distribution system and
most importantly customer satisfaction and customer relation.

The broad objectives of marketing are as follows:

Objective # 1. Customer Satisfaction:

The marketing manager must study the demands of customers be-

fore offering them any goods or services. Selling the goods or ser-
vices is not that important as the satisfaction of the customers’
needs. Modern marketing is customer-oriented.

Objective # 2. Generation of Profits:

The marketing department is the only department which generates

revenue for the business. Sufficient profits must be earned as a
result of sale of want-satisfying products. If the firm is not earning
profits, it will not be able to survive in the market. Moreover,
profits are also needed for the growth and diversification of the
firm.

3. Increase of Market Share:

Every business aims at increasing its market share, i.e., the ratio of
its sale to the total sales in the economy. For instance, both Pepsi
and Coke compete with each other to increase their market share.
For this, they have adopted innovative advertising, innovative pack-
aging, sales promotion activities, etc.

4. Creation of Goodwill and Public Image:

To build up the public image of a firm over a period is another ob-

jective of marketing. The marketing department provides quality
products to customers at reasonable prices and thus creates its im-
pact on the customers. The marketing manager attempts to raise
the goodwill of the business by initiating image-building activities
such as sales promotion, publicity and advertisement, high quality,
reasonable price, convenient distribution outlets, etc.

The natures of marketing are discussed below:

1. Mixture of Art and Science:

The basis of marketing lies in understanding the human behaviour.

Marketing begins with understanding the needs and wants of tar-
geted customer and continues even after selling the desired product
and services to the customer, when satisfaction of the consumer,
post consumption is analysed. All marketing decisions and actions
hinges upon consumer psychology and consumer behaviour. In other
way it is a study of consumer behaviour towards marketing actions
of the firm.

Hence it can be termed as a science of studying consumer psycho-

logy and behaviour. The best the firm and the marketer understands
the consumer behaviour the more successful it will be. This involves
art and skill and ability to foresee the future. Marketing require sci-
entific skill for measuring and analysing the effectiveness and ac-
ceptance of the marketing actions.
Marketing is an art as it requires a lot of skill, creativity to per-
suade and attract customers, to develop a product and brand, to
design the product, to conceive the promotional ideas. Thus market-
ing is the mixture of art and science. Phillip Kotler says that often
marketing has been described as “the art of selling products.”

2. Process of Exchange:

Marketing is based on the concept of exchange that is “act of ob-

taining a desired object from someone by offering something in re-
turn.” The needs and wants of the customers are satisfied by the
products or services offered by the marker in exchange of price
paid by the customer for the product or services.

3. Management Process:

Marketing is a managerial process where the management functions

of planning, organising, coordinating and controlling are judiciously
practiced by the marketer to accomplish the functions of marketing.
Marketing process involves product planning, pricing decision making,
planning of promotional and distribution activities.

All activities related to product development, manufacturing, promo-

tion and distribution should be well organised and coordinated to
make appropriate products available to customers at right time and
at convenient location. Forecasting plays an important role in identi-
fying marketing opportunities, threats and challenges so that mar-
keter is prepared beforehand to handle such situation.

4. Dynamic Process:

Identification of consumer’s need and want is the primary function

of marketing. Human needs and wants are influenced by their cul-
ture, personality, social class, and demographic parameters which
are dynamic. Apart from this the business environment comprising of
demographic, economic and market conditions are ever changing.
Hence marketing concepts, decisions, functions and activities are dy-
namic in nature to deal with the changing circumstances.

5. Basic Function:

According to Peter Drucker, an Austrian-born American management

consultant, educator, and author – “A business has two, and only two,
basic functions – marketing and innovation.” Marketing is the basic
function around which all the activities of production, selling, distri-
bution revolve. The business aims at achieving profit through sale of
goods or services and the entire process of marketing gives shape
and assists to achieve this objective.

6. Creation of Consumer’s Demand and Consumer:

Consumer’s need is inherent. Marketing converts the needs to want

and demand. Marketing provide different ways of how a consumer’s
need can be satiated. Marketing creates goods and services that
best satisfies consumer’s need. Marketing creates customer, con-
verts the prospective customer to actual customer.

7. Customer Satisfaction:

The principal objective of marketing is achieving sales and profitab-

ility through customer satisfaction. Delivering customer satisfaction
is considered as pivotal task of the management, which will ensure
longer sustenance of the firm. All marketing decisions and actions
are directed towards delivering customer satisfaction. A satisfied
customer makes repeat purchase and also tells others about their
good experience with the product. Therefore customer satisfaction
is the key to success.

8. Marketing Mix:

The marketing process propel with the integration of 4Ps-product,

price, promotion and place and 4Cs-customer, cost, convenience and
communication. The product, price, promotion and place are control-
lable marketing tools that form the essential ingredients of market-
ing. All the factors combined in appropriate proportion are ad-
dressed to the target market to get best results. All these factors
are interrelated and form the part of marketing decision and
strategy.

Evolution of marketing concept

Good marketing makes the company look smart. Great marketing

makes the customer feel smart.

The marketing idea is a way of life in which all of an organization’s

resources are mobilized to generate, stimulate, and please the cus-
tomer for a profit. It reflects a distinct corporate perspective that
views marketing as more than physical activity. Marketing evolution
refers to the slow and steady growth of marketing over time.

Science and technology advancements, particularly the advancement

of information technology, have profoundly transformed the way
people live, do business, and sell and purchase. The following is a
brief overview of the different stages of marketing evolution.

Production Concept

Addressing marketing from this concept entails concentrating ef-

fort on increasing manufacturing efficiency and guaranteeing the
company’s goods and services everywhere possible via its distribu-
tion system. Customers believe low prices and product availability
are the main factors for them to perceive goods and services as hav-
ing higher value.

At this point, the demand for products typically outstripped the

supply, and businesses had little trouble finding consumers. As a res-
ult, they concentrated primarily on increasing production and distri-
bution efficiency.

Product Concept

The primary focus at this phase is on product quality. It implies that

customer value is inextricably connected to the availability of high-
quality, high-performance goods. As a result, the marketing function
was to deliver goods that the firm thought was of the “best value”
to the consumer.

This method focuses on product research and development, as well

as continual change throughout their life cycles, in order to keep po-
tential consumers’ attention. Under the product concept, manage-
ment concentrates on developing high-quality goods that can be sold
at a reasonable price while paying low attention to what customers
truly need and desire.

Selling Concept

Firms that use the selling concept believe that the organization’s
success is a result of different strong promotional methods inten-
ded at influencing consumers to choose the firm’s product or brand
over rivals’ products. As a result, no matter how wonderful a product
is, consumers will not be able to contemplate purchasing it if they
are not made aware of it.

When examined closely, it is obvious that this strategy is not about

achieving customer pleasure or developing a positive and long-term
connection with the client. It is about allowing the company to earn
as many sales as possible from the transactions. This is the main dis-
advantage of this concept.

Marketing Concept

A marketing concept is a business approach that focuses on produ-

cing goods that are designed to meet the wants, needs, and expecta-
tions of customers, as well as product functionality and production
efficiency.

Logically, in order to satisfy target consumers, the firm must first

determine their requirements and desires and then build the mar-
keting mix elements to suit those needs and desires more efficiently
and effectively than rivals.

Businesses research and analyze their market to understand their

customers. Thereby gathering information that will be handy in their
marketing strategy.

Societal Marketing Concept

Much as the marketing idea appears to be beneficial to both custom-

ers and the firm, it falls short of perfection if it fails to address
social issues. The primary determinant of value in this marketing
strategy is sustainability.

This ideology is concerned not just with customer happiness, but also
with consumer welfare or societal welfare. Such social welfare
speaks of a clean environment and a high quality of life.
As a result, a company producing a pack of cigarettes for consumers
must provide not just the greatest cigarettes but also pollution-free
smokes; a car must be not only fuel-efficient but also less polluting.

As a result, it is not surprising that, in addition to providing

products or services in the exact form that customers will appreci-
ate, using appropriate pricing, distribution, and promotion strategies,
most businesses now emphasize their level of environmental friendli-
ness in order to attract customers.

Holistic Marketing

Holistic marketing is described as a marketing approach that exam-

ines the entire organization rather than an interconnected entity,
and in which all other corporate divisions collaborate to generate a
positive and cohesive business image in the eyes of customers.

Other marketing concepts such as production, product, selling, and

marketing concept mingled and found a new concept known as holistic
marketing.

Holistic marketing connects the market around shared goals and vis-
ions, resulting in a strategy that is inclusive, relationship-oriented,
and socially responsible. Relationship marketing, integrated market-
ing, internal marketing, and socially responsible marketing are all ex-
amples of this.

The 4 Ps of Marketing: Understanding the Marketing Mix

The marketing mix is a tool used to help brands understand what

elements must be combined in order to meet their marketing goals
and objectives. Ultimately, this includes the 4 Ps of marketing:
product, price, place and promotion.

The 4 Ps of Marketing
The 4 Ps of marketing include product, price, place, and promotion.
These are the key elements that must be united to effectively
foster and promote a brand’s unique value, and help it stand out from
the competition.

Product

A product refers to any item that intends to satisfy the needs and
wants of a target customer. It can be a tangible good, such a cloth-
ing item or piece of software, or intangible, like a service or experi-
ence (think legal services or a cruise).

Marketers must always have a clear concept of what their products

stand for, and what differentiates them from the competition, be-
fore they can be marketed successfully. Today, the internet can be
considered either the medium for purchase, via e-commerce, or the
product itself, such as a social media service. Because of this, it’s vi-
tal that marketers fully understand the product they are selling,
how it meets the needs of their target customer, and what makes
their product stand above the competition.

Some key questions that marketers need to answer include:

 What do customers want from your product/service? Does it

satisfy their needs?
 What features of your product/service work to meet your cus-
tomer’s needs? Have you missed out on any features?
 How and where will the customer use it?
 How will the customers experience it?

Price

First comes the product, and immediately after comes a determina-

tion of its value among target audiences. Pricing strategy is an art
and a science, in that it involves both market data and careful calcu-
lations, as well as skillfully balancing between pricing that is too high
or too low, and understanding how skewing either way might damage
the brand.

Price not only refers to the monetary value of a product, but also
the time or effort the customer is willing to expend to acquire it.
Determining this will be a critical factor in revenue for the brand as
it will impact profit, supply, demand, and how much marketers should
spend on a promotion or marketing strategy. This, in and of itself, is
why this ‘P’ is one of the most important. If a product is priced too
high or too low, the product – and brand – could fail.

Some key questions that marketers need to answer include:

 What is the value of the product or service to the buyer?

 How will your price compare to competitors?
 Are there any possible established price points for the
product/service in this area?

Place

The internet age has introduced new challenges when it comes to

reaching your customers. Place refers to providing customers access
to the product, and it also calls into play convenience for the cus-
tomer. Marketing, through digital means or otherwise, is about put-
ting the right product, in the right place, at the right price, at the
right time, in front of the customer.

Some key questions that marketers need to answer include:

 Where are target customers shopping?

 Are they using desktops or mobile devices?
 Are they shopping for similar products online, or in brick-and-
mortar stores?
 Where are they engaging on social media?

Even though transactions with your company may take place exclus-
ively in-store or online, customers likely interact with your brand or
your specific products in a variety of places. It’s important to con-
sider how each of these places influences the overall customer ex-
perience.

Promotion

Now, how to make an audience aware of the product? Within the

framework of the four Ps, promotion refers primarily to marketing
communications.

These communications use channels such as public relations, advert-

ising, direct marketing, email marketing, social media marketing, or
sales promotions; think of it as any way marketers disseminate rel-
evant product information to their target customers.

Promotion is the area that has arguably seen the greatest growth
and change as a result of the digital age. With the exceptional ac-
cess offered by B2C marketing solutions, marketers can now pro-
mote products easier, more effectively, and with more personaliza-
tion than ever before, thus leading to greater outcomes and ever-in-
creasing expectations.

Some key questions that marketers need to answer include:

 How will you reach your target audience?

 Where will you send your marketing messages to your target
audience?
 How does your competition promote their product? Does that
influence your own promotional activity?
 When is the best time to promote?

Using the 4 Ps of Marketing

The four elements of the marketing mix can be used to help you de-
cide how to take a new offer to market or can be leveraged to help
test your current marketing strategy. Follow these steps to define
or improve your marketing mix:

1. Identify the product or service you want to analyze.

2. Review and answer the 4Ps questions listed above.
3. Once you define your ideal marketing mix, try testing the over-
all offer from a customer’s perspective. Here are some ques-
tions that can guide you:
1. Does it satisfy their needs?
2. Will they consider the price to be reasonable?
3. Where will they find this product/service?
4. Has your audience been targeted appropriately and
reached by your marketing communications?
4. Continue to optimize your marketing mix by asking questions
and making changes.
5. Review your marketing mix on a regular basis to adapt to the
constantly evolving market.