MARKETING

• The purpose of any business is to create and keep

customers´ – PETER F. DRUCKER.
• “A customer is the most important visitor on our
premises. He is not an interruption in our work he is
the purpose of it. He is not the outsider on our
business. He is a part of it. We are not doing him a
favor by serving him. He is doing a favor by giving us
an opportunity to do so.” ---- Mahatma Gandhi.
• Marketing is so basic that it cannot be considered as
a separate business function.
• Customers are value maximizers.
• Marketing is a process of creation, communication
and delivery of customer value.
• Marketing encompasses all the activities aimed at
enhancing customer satisfaction by offering
unique and superior value proposition. Marketing
is managing profitable customer relationships.
• Marketing is the process by which companies
create value for customers and build strong
customer relationships in order to capture value
from customers in return.
BASICS OF MARKETING
• WHY ORGANIZATIONS NEED MARKETING?
• WHAT IS MARKETING?
• HOW MARKETING IS PRACTISED?

MODERN BUSINESS ORGANIZATIONS ARE

CUSTOMER FOCUSED AND USE CUSTOMER
CENTRED MARKETING STRATEGIES
MARKETING MANAGEMENT
Analysis, planning, implementation and control
of marketing programs. It is the art and science
of choosing target markets, and getting keeping
and growing customers through creating,
delivering, and communicating superior
customer value. Management of level, timing
and composition of demand
I’ve had never been to any CCD before. In fact I just felt CCDs, Barista, Starbucks and
all are just way too overrated and still feel the same. So I went to one of the CCDs,
alone, without my cellphone and ordered Latte. It definitely felt weird waiting for my
coffee to arrive as I had nothing to pass that never ending time. It felt as if the clock
slowed down.
I decided to observe the people around and see what they are doing in CCD. Here’s
what I found:
Two people sitting next to each other busy in their cellphones.
Some of them doing work on their laptop.
A group of four friends busy taking selfies.
Some of them taking photos of the cute art made on their coffee and probably
posting them on Facebook.
And then there was this girl, in that coffee shop sitting at a table, not on her phone,
not on a laptop, just drinking coffee, like a psychopath. :)
We have become a slave of ‘cellphone era’. Now we can’t even imagine to spend a
day without cellphones or laptops. We’ve forgotten how it feels to spend some time
with ourselves. Is this what they say ‘Robots’ are like?
That was my first unique yet awesome CCD experience with the psychopath in me.
Priya J
What was the product in above story?
Students Responses:
• Ambiance ,
• personal space,
• standard,
• Name (Brand)
• Quality,
• coffee (Basic product),
• meeting place,
• service,
• Wi-Fi,
• modern art,
• needs satisfied, etc.
Assignment 1 Due on 13/8/18 (Monday)

1. What are those everyone needs to know

about marketing?
2. Distinguish between market and marketing in
your words with suitable illustrations.
3. Write a brief note on evolution of marketing.
4. Explain basic concepts of Marketing i.e,
Need, Want, Demand, Marketing offer ,
Exchange, Market,
MARKETING PROCESS
Understand the marketplace and customer needs and wants

Design a customer driven marketing strategy

Construct a marketing program that delivers superior value

Build profitable relationships and create customer delight

Capture value from customers to create profits and customer quality

MARKETING IS A PROCESS OF
• DELIVERING RIGHT PRODUCT
• TO THE RIGHT PEOPLE
• AT RIGHT PRICE
• AT RIGHT TIME
• AT RIGHT PLACE
• WITH RIGHT PROMOTION.
MARKETING AIMS AT
• SENSING
• SERVING AND
• SATISFYING THE CUSTOMERS.
CORE CONCEPTS
• NEEDS – states of felt deprivation They include
physical needs for food, clothing, warmth and
safety; social needs for belongingness and
affection; and individual needs for knowledge
and self-expression
• WANTS – the forms which human needs take as
shaped by culture and individual personality.
• DEMANDS – human wants that are backed by
purchasing power
CONTD..
• MARKETING OFFER – some combination of
products, services, information or experiences
offered to a market to satisfy a need or want. It
is also known as Value Proposition.
• EXCHANGE – the act of obtaining a desired
object from someone by offering something in
return.
• MARKET - the set of actual and potential buyers
of a product or service.
CONTD..
• CUSTOMER VALUE – the customer’s evaluation
of the difference between all the benefits and
all the costs of a marketing offer relative to
those of competing offers.
• CUSTOMER SATISFACTION – the extent to which
a product’s perceived performance matches a
customer’s expectations. Pleasurable state of
mind.
Marketing concepts / Evolution
Production Concept ‡ Consumers favor products that are
available and highly affordable ‡Improve
production and distribution
Product Concept ‡ Consumers favor products that offer the
most quality, performance, and innovative
features
Selling Concept Consumers will buy products only if the
company promotes/ sells these product
Marketing Concept Focuses on needs/ wants of target markets &
delivering satisfaction better than competitor
Societal Marketing Focuses on needs/ wants of target markets &
Concept delivering superior value which improves
customers and society’s well-being
Holistic marketing Every thing matters
concept
PRODUCTION PRODUCT SALES MARKETING SOCIETAL
SELLING V/S MARKETING
• MARKETING CONCEPT
• SELLING CONCEPT
SELLING MARKETING

Starting
• Factory Starting
Market
Point Point

• Existing Products
Focus Focus Customer Needs

• Selling and Promoting

Means Means Integrated Marketing

• Profits through Sales Profits through Customer

Ends Volume Ends Satisfaction
Demand Management
• Demand refers to a set of wants or desires for
some product or service backed up by ability and
willingness to buy it.
• Managing demands refers to identifying,
describing and developing strategies to cope up the
challenges of various types of demands.
• It calls for regulating the level, timing and
character of demand.
DEMAND STATES
1. NEGATIVE DEMAND
2. NO DEMAND
3. LATENT DEMAND
4. DECLINING DEMAND
5. IRREGULAR DEMAND
6. FULL DEMAND
7. OVERFULL DEMAND
8. UNWHOLESOME DEMAND
1. NEGATIVE DEMAND: Majority of the consumers dislike or
have negative attitude towards the product or services.
Task is to identify the reasons and develop a program to overcome
myths, misconceptions, unawareness
Focus on research and educational campaign.
Conversational marketing. E.g. Social welfare programs –
vaccination, family planning, education for girl child, negative image
of any product.

2. NO DEMAND: Majority of the consumers are unaware or

indifferent towards the product or services.
Task is to aggressively promote and provide incentive to buy the
product or services.
Focus on sales and promotional activities.
Stimulational marketing. E.g. Demand for insurance services,
encyclopedias, high tech electronic equipments, IT products
3. LATENT DEMAND: Majority of the consumers share strong need or
want that cannot be satisfied with existing products or services.
Task is to conduct marketing research to find out consumer needs and
wants, and design marketing mix to fulfill them.
Focus on research and designing marketing mix.
Developmental marketing. E.g. Demand for new products. From
shaving cakes to cream, cream to gel, gel to foam. mosquito nets to
cream, cream to mats, mats to liquid mosquito repellents
4. DECLINING DEMAND: Majority of the consumers begin to buy the
products or services less frequently or stop buying.
Task is to conduct marketing research to find out the reasons for low or
no purchase – it may be due to better products or low prices by
competitors.
Focus on research and taking corrective action.
Remarketing. E.g. It may happen to any product or service at any point
of time.
5. IRREGULAR DEMAND Consumer purchases vary on seasonal,
monthly, weekly, or daily or even hourly basis.
Task is to use pricing and sales promotion to regularize the level of
demand. Bring it back to uniform level
Focus on pricing and promotion.
Synchro-marketing. E.g. Low prices and incentives in case of low
demand. High prices and no incentives in case of high demand.
Demand for tourism, entertainment, hotel, travel, telecom, retailing
services.
6. FULL DEMAND Consumer purchase products or services in
adequate quantities as offered by any organization.
Task is to monitor environmental changes and incorporate them in
marketing strategy. Track competitors.
Focus on research and adapting marketing mix.
Maintenance-marketing. E.g. Whatever the company is able to
produce is sold at the marketplace
7. OVERFULL DEMAND Consumer purchase products or services in more
than adequate quantities as offered by any organization. Demand exceeds
supply.
Task is to shift, reduce or destroy the demand on temporary basis till the
supply is restored.
Focus on pricing, regulating distribution, reducing promotion, educating
consumers to consume reasonably.
De-marketing. E.g. Overfull demand in hotels, restaurants, tourist places
during vacation, popular events, fairs, exhibitions, traffic during peak hours,
petroleum products during shortages etc.
8. UNWHOLESOME DEMAND: Consumer are attracted to those product or
services which have undesirable social consequences associated with them.
Task is to destroy the demand permanently.
Focus on regulatory or legal measures, educating consumers not to consume
such products / services.
Counter-marketing. E.g. Efforts taken up by Government agencies or NGOs to
stop consumption of tobacco related products, alcohol, drugs, pornographic
material, x-rated movies etc.
MARKETING ENVIRONMENT
• ‡Why Marketing Environment?
• What Is Marketing Environment? ‡
• How Does It Influence Marketing Decisions? ‡
• How Companies Can React To The Marketing
Environment?
Why to study marketing environment
• All the business organizations operate in an
environment which is continuously changing and
influencing their performance.
• It presents uncertainties and risks.
• It helps in understanding emerging opportunities
and potential threats.
• It also allows the organization to review their
strengths and weaknesses to compete in the market
• Marketers need to understand the changes and
respond accordingly.
What is marketing environment
• It consists of all the actors and forces outside
marketing that affects organizations’ ability to
manage their marketing operations.
• Marketing decisions are based on
environmental analysis.
• A diagnosis of all related factors helps in
designing sound marketing strategy.
Demog
raphic

Natural
The Marketing Environment
Two set of factors
• Micro Environment: the factors that are close to the
company and affect their ability to serve the customers
– the company, suppliers, and marketing
intermediaries, customer segments, competitors and
publics.
• Macro Environment: the larger social forces that
affect the micro environment – demographic,
economic, natural, technological, political-legal and
socio-cultural forces.
Micro Environment

• The company
• Suppliers
• Marketing intermediaries
• Customers
• Competitors
• Publics
Micro Environment
1.The Company: – Considers other company groups into
account such as top management, finance, research and
development, purchasing, operations, and accounting.
Top management : sets company’s mission, objectives,
strategies and policies.
Finance : deals with funds required to carry out the
marketing plan.
R&D : deals with designing innovative, safe and utility
based products and services for the customers.
Purchasing : deals with arranging supplies and material.
Operations: deals with producing and distributing the
desired quality and quantity of goods and services.
Micro Environment

2. Suppliers – Important link of the customer

value delivery chain.
The availability of right material, at right time, in
the right quantity, at right price, at place with
right terms of trade is needed.
They regulate the supply of vital resources,
material and services required for production of
goods and services for customers.
Marketing Environment
3. Marketing Intermediaries: They include those firms
and individuals that help the company in promoting,
selling and distributing the products and services to
final buyers.
–They are resellers, physical distribution firms,
marketing service agencies and financial intermediaries.
–Resellers include wholesalers and retailers who find
the customers and make the sales (transaction. –
Physical distribution firms help the firms to stock and
move the goods from point of origin to final destination.
They include warehouse and transportation firms.
Marketing Environment
Marketing service agencies
include market research firms, advertising agencies, media
houses, and marketing consulting firms that help companies
to target and promote the products to right markets.
– Financial intermediaries include banks, credit companies,
insurance companies and other businesses that help finance
transactions or insure against risks with selling or buying of
goods.
– These intermediaries help in optimizing performance.
– Need for identifying and developing effective partnerships
with such firms.
Marketing Environment
4.Customers: have needs, wants, expectations
a) Consumer markets – individuals and households that buy
goods and services for personal consumption.
b) Business markets – for further processing or for use in their
production process or for facilitating business operations.
c) Resellers – to resell at a profit.
d) Government – agencies involved in producing public
service.
e) International market – buyers in others including
consumers, producers, resellers and government.
Marketing Environment

5.Competitors – other players or substitutes

• Co. should provide different and superior value
and satisfaction.
• Adapt to the needs of the customers.
• Positioning against competitors.
• Cos. of different sizes adopt different
strategies.
Marketing Environment
6.Public– any group that has an actual or potential interest
in or impact on organization’s ability to achieve its
objectives:
• Financial publics: influence the ability to obtain and
manage funds.
• Media publics: carry news, features and editorial opinion.
• Government: developments and laws
• Citizen-action groups: consumer organizations,
environmental, minority or other groups.
• General public : attitude and image.
• Internal public: directors, managers, workers,
Macro Environment
• It include all other actors or forces present in
the external environment that shape
opportunities or pose threats.
Macro Environment
• 1. Demographic forces
• 2. Economic forces
• 3. Natural forces
• 4. Technological forces
• 5. Political-Legal forces
• 6. Socio-Cultural forces
1. DEMOGRAPHIC Environment
• • Major variable for segmenting the market.
• • Demography is the study of vital and social statistics.
• • It studies the population in terms of their age, gender,
race, ethnicity, religion, family size and life cycle stage,
growth rate, literacy levels, occupation etc.
• • Demographic factors significantly influence the buying
behaviour.
• • People with a unique set of demographic
characteristics require a different set of market offerings.
• • Marketers have to understand their specific
requirements and segment the market.
DEMOGRAPHIC Environment
•With over 1.25 billion people, India has the second
largest population in the world and offers a large
market for all types of products and services.
• It also has the largest youth population with
greater purchasing power which is potential market
for all types of lifestyle products.
• Marketing to kids, teenagers, youth, adults, older
people calls for different type of marketing
strategies.
Demographic Environment
• Changing composition of workforce involves
increased number of working women.
• Growing literacy levels demand for better
customer education and has strong implications
on marketing communications.
• Population shifts, rapid pace of urbanization,
increasing density of population, life expectancy,
house hold patterns etc. also have significant
influence on marketing decisions.
2. Economic Environment
• It consists of all the factors that affect consumer
purchasing power and spending patterns.
• Major factor governing demand and supply.
• GDP, Inflation rate, Interest rate, exchange rate etc
influence flow of goods and services in the nation.
• India is presently witnessing a high growth rate in
all sectors of economy – agriculture, industry and
service sector.
Economic Environment
• Income is the key economic factor.
• Distribution of income in different classes of society
determine their purchasing patterns.
• LIG is found to be highly price sensitive, and buy low price
goods and services.
• Whereas, MIG is value sensitive and spend money very
carefully.
• HIG spends more money on premium quality and Luxury
products and services.
• The proportion of money spend varies across classes and
cultures.
3. Natural Environment
• It involves all the natural resources that are
needed by marketers as inputs or that are affected
by marketing activities.
• Shortage of raw material is a serious problem
before marketer.
• Natural resource are precious.
• Non renewable resources such as coal, oil and
various minerals are fast depleting.
• Renewable resources like food and forest also
need to be wisely used.
Natural Environment

• • Environmental pollution is become a serious

issue world wide. • Air and water pollution are
reaching a dangerous levels. • Disposal of
dangerous chemical and nuclear waste and
quantity of chemical pollutants in the soil and
food supply poses serious health problems for all.
• Littering of the environment with non
biodegradable packages such as plastics is a
serious problem because of packaging revolution.
Natural Environment
• Government and Non Government Organizations are
intervening in managing environment.
• Legal and social measures are taken for promoting a clean
environment.
• Use of pollution control devices, processing of disposables etc
is becoming mandatory in Industries.
• Plastics are prohibited as packaging material and a large
number of chemical based products are declared as unsafe for
use by many nations.
• Efforts are being made to educate citizens about
environmental hazards and their role in preventing environment.
4. Technological Environment
• It includes forces that create new technologies, new
products and services and new market opportunities.
• It is one of the most powerful factor bringing radical
changes in business.
• Advancements in science and technology have changed
human life.
• Our forefathers may not have seen or thought of super
sonic aircrafts, spaceships, high speed automobiles,
telecommunication devices, IT products and services,
television and many more wonder products of our
generation.
Technological Environment
• Medical advancements have made Organ transplants a
reality.
• At the same time deadly nuclear weapons can destroy
the whole nation or even world.
• Growing research and development across the world is
bringing innovative products to make human life better.
• Marketers are continuously using new technologies to
satisfy the ever increasing desires of customers.
• It is influencing every dimension of human life.
• It is major factor in achieving competitive advantage
and leadership position in the industry.
5. Political – Legal Environment
• Political-legal environment consists of laws,
government agencies, and pressure groups that
influence or limit various organizations and
individuals in a given society.
• Marketing decisions are greatly influenced by the
political structure, stability, government intervention,
legal framework, constitutional provisions etc.
• Government attitude and policy towards business
plays a critical role in deciding the direction of
business.
Political – Legal Environment
• It regulates the limits of business.
• It protect companies from each other by defining
and preventing unfair competition.
• Government regulation also protects consumers
from unfair business practices – putting checks on
quality, prices, false claims, promotion and packaging
etc.
• It also protect the interests of society against
unrestrained business behaviour – promoting a better
quality of life and corporate social responsibility.
• It promotes ethical practices in business.
6. Socio-Cultural Environment
Social and cultural forces play a critical role in marketing
process.
• It consists of basic values, beliefs, customs, morals, costumes,
food habits, celebrations etc which shape the perceptions,
preferences, behaviour and lifestyle of an Individual.
• The cultural values are expressed in:
– People’s views of themselves
– People’s views of others
– People’s views of organization
– People’s views of Society
– People’s views of Nature
– People’s views of Universe
Cultural Environment
• Values and beliefs are passed on from one
generation to another and are reinforced by social
institutions like family, schools, religious
institutions, business organizations and
government.
• They shape the attitude and behaviour related
to consumption of goods and services.
• Differences in scio-cultural forces are observed
with respect to nations, regions, states, cities,
social classes or even rural – urban places.
Cultural Environment
• While marketing to consumers of a specific group,
marketers need to understand their background very
well.
• The kind of products and services consumed,
prices at which they are bought, the places from
where they are bought and the way they are
communicated to the consumers, is greatly
influenced by the social and cultural forces.
• Marketing decisions are adapted to match the
social cultural requirements of any market.
Implications
• Marketing environment is largely uncontrollable
element.
• It presents both opportunities and threats.
• Organizations have to understand them and adapt
themselves to avoid threats or exploit opportunities.
• Marketers can also adopt proactive approach by
attempting to change or influence the environment.
Exchange
• There are at least two parties.
• Each party has something that might be of
value to the other party.
• Each party is capable of communication and
delivery.
• Each party is free to reject the exchange offer.
• Each party believes it is appropriate or
desirable to deal with the other party.

1-54
Customer satisfaction:
Satisfaction as “person's feeling of pleasure or
disappointment which resulted from comparing
a product's perceived performance or outcome
against his/ her expectations” (Kotler and Keller,
2006
“Satisfaction” is an attitude — it’s how I feel, and
as such it’s distinctly subjective. I have an
attitude that I’m satisfied, or I have a perception
of myself as being satisfied.
Loyalty
• “loyalty” describes behavior. I may behave in
loyal ways. When I become a regular, repeat
customer and I recommend your product to
my friends or family members, I’m behaving in
a loyal way. If I’m really loyal, I’ll willingly pay a
premium in order to purchase a product with
your brand on it. That, again, is a loyalty
behavior. It’s objective.
Difference Between Market And Marketing

• A market is any space within which trade takes place

between buyers and sellers for a well defined
product. This space can be a produce market, a shop,
internationally between countries or over the internet.
• Marketing is all those activities that facilitate trade.
These include activities that identify consumers’ needs
such as market research and those activities that satisfy
consumers needs e.g., packaging and distribution.
Marketing activities therefore support the marketing of
goods and services.
Marketing Activities

• Market research – the process of gathering information about

potential customers.
• Packaging – creating a suitable package for product usage and
for advertising
• Branding - differentiating the product of a company from other
brands and establishing loyal customers.
• Pricing - identifying the right price that will encourage sales
• Advertising – methods used such as the media to inform and
encourage the purchase of goods and services
• Sales promotion – short-term methods used to encourage
consumers to buy during a specified period
• Distribution - methods used to make the product available to
consumers. For example wholesale, retail or internet.
Competition
Competition is the rivalry between companies selling
similar products and services with the goal of achieving
revenue, profit, and market-share growth.
Market competition motivates companies to increase sales
volume by utilizing the four components of the marketing
mix,
The market is divided into mainly three types of
competition
1. Direct competitors
2. Indirect competitors
3. Phantom competitors
1. Direct competitors :within the same sector,
offering the same products compete with each
other. Competition on the basis
of geography covered and price given to
customers .In case relationship management plays a
major role in wooing customers and taking away
market share.
2. Indirect competitor – by offering a product which
does not exist in your portfolio.
example, a movie theatre will consider cable television
and DVD’s as its indirect competitors. This is
because people might not be visiting theatres when
they can watch the same movie at home.
your strategy should be to give offers and
conduct promotions so that the customer does not
ignore you. the movie theatre can give promotional
offers of free popcorn, show classic movies, or do
some promotional activity to attract customers to the
movie theatre. Such activities help in tackling the
indirect type of competition.
3. Phantom competitors – This phenomenon is observed
when instead of buying your service or your product,
customer chooses to purchase something else altogether.
Tackling such competitors is very difficult because it is
completely in the hand of the customers.
For example – In the above movie theatre example, customer
does watch movie in the theatre or at home, he simply
chooses to read books, go trekking or visit friends instead of
wasting his time on the movie. Similarly, in the savings
account example, someone who is poor or someone else who
trades with black money (possible, isn’t it), is not going to use
any financial options the bank or any other financial
institution gives. These guys are simply not in the frame of
mind to purchase anything from your industry.
Customer markets can be broadly classified into five types. 
1. consumer market, “which consists of individuals and
households that buy goods and services for personal
consumption”. Within this category several sub-types
exist. 
A-Fast-moving Consumer Goods (FMCG)
B- Consumer durables : (white goods and brown goods.)   
Refrigerators, pressure cookers, Electronic items such as personal
dishwashers, washing machines, computers, video game consoles,
microwave ovens, etc. multi-media players, etc

Consumer Market is characterized by aggressive marketing

campaigns, for consumers tend to be disloyal to brands and can easily
switch from one to another.  Also, competing companies are focused
on innovating and improvising their products and production models
to garner greater market share.
A Simple Marketing System
COMMUNICATION

GOODS & SERVICES

INDUSTRY MARKET
(A collection (A collection
of sellers) of buyers)
MONEY

INFORMATION
Structure of Flows in a Modern Exchange
Economy
RESOURCES RESOURCES
RESOURCE
MARKETS
MONEY MONEY
TAXES & SERVICES
GOODS & MONEY
SERVICES
GOVERNMENT
MANUFACTURER CONSUMER
MARKETS
MARKETS S&M MARKETS
TAXES
TAXES &
S&M T&G
GOODS
MONEY
MONEY
INTERMEDIARY
MARKETS
GOODS & SERVICES GOODS & SERVICES
2. Business Markets “buy goods and services for further
processing or for use in their production process. The metals
industry is a good example of Business Market.  Here, raw
metals (sometimes in the form of ores) are bought by private
companies from government agencies.  The former then go on
to process and add value to the metal before selling it to other
industries or end consumers.
3. Reseller Markets buy goods and services to sell at a profit.”
  This market is a by-product of modern urban lifestyles, where
people do not have time to travel long distances for procuring
commodities.  The key to the retail market is accessibility, and
affordability. 
If the customers receive enough value for money, only then
they will be loyal to the brands and will make repeated
purchase.” 
4. Government Market, which “are made up of
government agencies that buy goods and services
to produce public services or transfer the goods and
services to others who need them”. A good
example of a government agency that performs
these functions is the Postal Services.
5. International Market, “which consists of these
buyers in other countries, including consumers,
producers, resellers, and governments.” Each of the
five market types discussed above have special
characteristics and the seller has to carefully study
them before making an offer.
Market places Vs Market spaces
• Marketplaces are physical markets or shops or stores
while Marketspaces are Digital Shops or Shopping
websites.
one is a personal transaction (the buyer very impersonal (purchases often occur
and seller usually talk prior to the without a direct conversation).
transaction
 people often step inside without a buyers commonly do targeted searches
specific purchase motive in mind. when using an eMarketspace. They know
exactly what they want
 price haggling is more common —  often have an auction-style format for
sellers can’t always gauge demand for high-demand products where supply is
the products short but interested buyers are plentiful.
Intensity of need and offer are the  buyers tend to have more concerns about
major concern . information privacy and the safety of
making payments to unknown sellers.
Metamarkets
• Metamarkets are closely related markets from
the customer point of view but are different
set of industries. For example, in the
automobile meta market different industries
are Automobile Manufacturers, Insurance
Providers, Service Centers, Spares, Driving
Academy, Finance Companies etc.
Marketing Mix
• E. Jerome McCarthy (McCarthy, J. 1960), was
the first person to suggest the four P's of
marketing – price, promotion, product and
place (distribution) – which constitute the
most common variables used in constructing a
marketing mix.
Evolution of Marketing Mix 
“An executive is a mixer of ingredients, who sometimes follows
a recipe as he goes along, sometimes adapts a recipe to the
ingredients immediately available, and sometimes experiments
with or invents ingredients no one else has tried." (Culliton, J.
1948)
The term Marketing Mix was developed by Neil Borden
(1949.), "When building a marketing program to fit the needs
of his firm, the marketing manager has to weigh the behavioral
forces and then juggle marketing elements in his mix with a
keen eye on the resources with which he has to work."
.
E. Jerome McCarthy (McCarthy, J. 1960), 4Ps

• E. Jerome McCarthy (McCarthy, J. 1960), was the first

person to suggest the four P's of marketing – price,
promotion, product and place (distribution) – which
constitute the most common variables used in
constructing a marketing mix. According to McCarthy the
marketers essentially have these four variables which they
can use while crafting a marketing strategy and writing
a marketing plan. In the long term, all four of the mix
variables can be changed, but in the short term it is
difficult to modify the product or the distribution channel
Marketing Mix and the Customer

Four Ps Four Cs
• Product • Customer
• Price solution
• Place • Customer cost
• Promotion • Convenience
• Communication

1-73
Contd..
Another set of marketing mix variables were developed by Albert Frey
(Frey, A. 1961) the offering, and process variables.
The "offering" consists of the product, service, packaging, brand, and
price.
The "process" or "method" variables included advertising, promotion,
sales promotion, personal selling, publicity, distribution
channels, marketing research, strategy formation, and new product
development.
Recently, Bernard Booms and Mary Bitner (1981) built a model
consisting of seven P's They added "People" to recognize the
importance of the human element in all aspects of marketing.
"process" to reflect the fact that services, unlike physical products, are
experienced as a process at the time that they are purchased. Desktop
modeling tools such as Micro TSP have made this kind of statistical
analysis part of the mainstream now. Most advertising agencies and
strategy consulting firms offer MMM services to their clients.
Marketing Mix
The promotional message should Follow AIDA Model

Grab Attention

Stimulate Interest

Create Desire

Promote Action
How do people consume services?
What processes do they have to go through to acquire the
services?
Where do they find the availability
of the service?
Contact
Reminders
Registration
Subscription
Form filling
Degree of technology
The ambience, mood or physical presentation of the environment
Packaging.
Internet/web pages.
Paperwork (such as invoices, tickets,…..).
Brochures.
Furnishings.
Uniforms.
Business cards.
The building itself (such as prestigious offices or scenic headquarters).
Mailboxes and many others . . . . . .
The ambience, mood
or physical
presentation of the
environment
Smart/shabby?
Trendy/modern/old
fashioned?
Light/dark/bright/?
Romantic/loud?
Clean/dirty/neat?
Music?
Smell?
Word-
Stages in Consumer Decision Process
of- Mouth

Awareness
Advertising

Interest
Channel

Decision

Product /
Service
Action

Price
Satisfaction
Marketing Mix for event
• The venue is Parking lawn , a large space located on the Top of hill
with high aesthetics value
• The Festival will operate over two days, running 10.00am to 10.00pm
on the Saturday and 10.00am to 6.00pm on the Sunday. The
highlight of the event will be live bands and a major fireworks display
in the Saturday night.
• The main target market is residents of the STES, however the SIOM
want the reach to be as broad as possible, and aiming for 10000
people per day.
• Attractions at the Festival include:
• Amusement Rides
• Inflatable Amusements
• Show-Style Carnival Games
• 20Food Stalls,
• 20 Commercial Stalls
Assignment
• Propose Marketing mix to ensure to
fill the number of stalls
• create a marketing plan to ensure
targeted numbers of audience
• create a social media plan for your
target market
Starbucks Coffee’s Marketing Mix (4Ps)
A Starbucks café in Warsaw, Poland. Starbucks Coffee’s marketing mix (4Ps)
equally emphasizes product, place, promotion and price to support the
company’s brand image and competitive advantage
Starbucks Coffee’s Products
• Starbucks continues to innovate its product mix to capture more of the
market.
• Coffee
• Tea
• Pastries
• Frappuccino beverages
• Smoothies
• Merchandise (mugs, instant coffee, etc.)
This product mix is a result of years of business innovation. For instance,
Starbucks added the Frappuccino line after it acquired The Coffee
Connection in 1994.
Place in Starbucks Coffee’s Marketing Mix
The company offers most of its products through Starbucks cafés. This
component of the marketing mix determines the venues at which
customers can access the products. In Starbucks Coffee’s case, the
following are the main places used for the distribution of products:
• Cafés
• Online Store
• Starbucks App
• Retailers
• Originally, the firm sold its products through Starbucks cafés.
Through the Internet, the company now offers some of its products
through the online Starbucks Store. Also, the firm now sells some
merchandise through retailers. In addition, the company uses the
Starbucks App to allow customers to place their orders. This part of
Starbucks’ marketing mix shows how the firm adapts to changing
times, technologies, and market conditions.
Starbucks Coffee’s Promotions
This component of the marketing mix refers to the
communication strategies used to disseminate
information Starbucks’ follows:
• Advertising
• Public relations
• Sales promotions
• The company advertises its products through
television, print media and the Internet.
• Starbucks’ Race Together public relations campaign
was widely criticized.
• The firm uses sales promotions, such as the Starbucks
Card.
Starbucks Coffee’s Prices and Pricing Strategy
• Starbucks uses a premium pricing strategy.
• the perceived correlation between high price and
high value.
• Through this pricing strategy, the company
maintains its high-end specialty image.
• This part of Starbucks Coffee’s marketing mix
directly relates with the firm’s generic strategy,
thereby helping the business maintain its premium
brand image.
The New Marketing Realities
Major Societal Forces
• Network information technology. The digital revolution has created
an Information Age that promises to lead to more accurate levels of
production, more targeted communications, and more relevant pricing.

• Globalization. Technological advances in transportation, shipping,

and communication have made it easier for companies to market in,
and consumers to buy from, almost any country in the world.

• Deregulation. Many countries have deregulated industries to create

greater competition and growth opportunities. In the United States,
laws restricting financial services, telecommunications, and electric
utilities have all been loosened in the spirit of greater competition.
Contd..
Privatization: Many countries have converted public companies
to private ownership and management to increase their efficiency.
Heightened competition. Intense competition among
domestic and foreign brands raises marketing costs and shrinks
profit margins.
Industry convergence. Industry boundaries are blurring as
companies recognize new opportunities at the intersection of two or
more industries. for example, as Apple, Sony, and Samsung release a
stream of entertainment devices from MP3 players to plasma TVs
and camcorders. Digital
technology fuels this massive convergence.
Retail transformation. Store-based retailers face competition
from catalog houses; direct- mail firms; newspaper, magazine, and
TV direct-to-customer ads; home shopping TV.                                        
Contd…

• Disintermediation. The amazing success of early dot-

coms such as AOL, Amazon.com, Yahoo!, eBay, E*TRADE,
and others created  disintermediation .
• Consumer buying power. due to disintermediation via
the Internet, consumers have substantially increased
their buying power. From the home, office, or mobile
phone, they can compare product prices and features
and order goods online from anywhere in the world
• Social networking sites—such Whatsapp, FB, there are
amny specific groups for example :Dogster for dog
lovers, TripAdvisor for ardent travelers, and Moterus for
bikers—
Contd..
Consumer information: Consumers can collect
information in as much breadth and depth as they
want about practically anything. They can access
online encyclopedias, dictionaries, medical
information, movie ratings, consumer reports,
newspapers, etc.
Consumer participation: Consumers have found an
amplified voice to influence peer and public opinion.
Marketing Debate

Does Marketing Create or Satisfy Needs?

1-96
Study Question 1
The identification and profiling of distinct
groups of buyers who might prefer or
require varying product and service mixes
is known as ________. 
A.  segmentation
B.  integration
C.  disintermediation
D.  targeting
E.  partner relationship management
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Study Question 2
Companies address needs by putting
forth a(n) ________, a set of benefits that
they offer to customers to satisfy their
needs.  
A.  brand
B.  value proposition
C.  offering
D.  target market
E.  demand 1-98
Study Question 3
If a marketer decides to use warehouses,
transportation companies, banks, and insurance
companies to facilitate transactions with
potential buyers, the marketer is using what is
called a ________.  

A.  service channel

B.  distribution channel
C.  brand channel
D.  relationship channel
E.  intermediary channel
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Study Question 4
Managers of ________-oriented businesses
concentrate on achieving high production
efficiency, low costs, and mass distribution.  

A.  selling
B.  product
C.  production
D.  marketing
E.  consumer

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Study Question 5

________ activities include those the company

undertakes to make the product accessible and
available to target customers.  
A.  Consumer behavior
B.  Market segmentation
C.  Marketing research
D.  Channel
E.  New-product development

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