PRINCIPLES OF MARKETING

UNIT - I
Introduction
Main objective of any business organization is to satisfy
the needs and wants of the society
Production or purchase is of no meaning if a firm is
unable to market its goods and services
Marketing is the focal point of all business activities.
Good marketing has become an increasingly vital
ingredient for business success.
It is embedded in everything we do- from the clothes
we wear, to the web sites we click on, to the ads we see.
Markets

 Traditionally a market was a physical place where

buyers and sellers gathered to buy and sell goods.

 Economist describes a market as a collection of buyers

and sellers who transact over a particular product.

 Five basic markets are: manufacturer markets, resource

markets, intermediaries markets, consumers market,

government markets.
Marketing Defined

The term Marketing has been derived from the word

Market
Market is a place or geographical area where buyers and
sellers meet and enter into transactions involving transfer
of ownership of goods and services
Marketing Defined

 Traditional View

Performance of business activities that direct the flow of

goods and services from producers to consumers or users
 Modern View

A business process through which products are matched

with the markets and through which transfer of
ownerships are effected
What is marketing?

 Marketing is the activity, set of institutions, and processes for

creating, communicating, delivering and exchanging offerings
that have value for customers, clients, partners and society at
large.
- American Marketing Association

Dr. Philip Kotler defines marketing as “the science and art of

exploring, creating, and delivering value to satisfy the needs of
a target market at a profit. Marketing identifies unfulfilled
needs and desires. It defines, measures and quantifies the
size of the identified market and the profit potential. It pinpoints
which segments the company is capable of serving best and it
designs and promotes the appropriate products and services.”
Nature of Marketing

 Exchange is the essence of marketing.

 Marketing is customer/ consumer oriented.

 Marketing starts and ends with customers/ consumers.

 Modern marketing precedes and succeeds production.

 Marketing is goal oriented and the goal being profit maximization

through satisfaction of human needs.

 Marketing is the guiding element of business (It tells what, when,

how to produce; Marketing is capable of guiding and controlling

business.
 Marketing is a process, i.e., series of interrelated functions.
Input Process Output
Scope of Marketing

Marketing has a very wide scope it covers all the activities from conception of ideas
to realization of profits. Some of them as discussed as below:
 Study of Consumer needs and wants: Goods are produced to satisfy consumer

wants. Therefore study is done to identify consumer needs and wants. These needs
and wants motivates consumer to purchase.
 Study of Consumer behaviour: Marketers performs study of consumer behaviour.

Analysis of buyer behaviour helps marketer in market segmentation and targeting.

 Product Planning and development : It includes the activities of product research,

marketing research, market segmentation, product development, determination of

the attributes, quantity and quality of the products.
Scope of Marketing

 Branding: Branding of products is adopted by many reputed enterprises to make their

products popular among their customer and for many other benefits. Marketing manager has
to take decision regarding the branding policy, procedures and implementation programs.
 Packaging: Packaging is to provide a container or wrapper to the product for safety,

attraction and ease of use and transportation of the product.

 Channels of Distribution: Decision regarding selection of most appropriate channel of

distribution like wholesaling, distribution and retailing is taken by the marketing manager
and sales manager.
 Pricing Policies: Marketer has to determine pricing policies for their products. Pricing

policies differs form product to product. It depends on the level of competition, product life
cycle, marketing goals and objectives, etc.
Scope of Marketing

 Sales Management: Selling is a part of marketing. Marketing is concerned

about all the selling activities like customer identification, finding customer
needs, persuading customer to buy products, customer service, etc.
 Promotion: Promotion includes personal selling, sales promotion, and
advertising. Right promotion mix is crucial in accomplishment of marketing
goals.
 Finance: Marketing is also concerned about the finance, as for every
marketing activity be it packaging, advertising, sales force budget is fixed
and all the activities have to be completed with in the limit of that budget.
 After Sales services: Marketing covers after sales services given to
customers, maintaining good relationships with customers, attending their
queries and solving their problems.
Importance of marketing

 1. Marketing is an effective way of engaging customers

 2. Marketing helps to build and maintain the company’s
reputation
 3. Marketing helps to build a relationship between a business and
its customers
 4. Marketing is a communication channel used to inform customers
 5. Marketing helps to boosts sales
 6. Marketing aids in providing insights about your business
 7. Marketing helps your business to maintain relevance
 8. Marketing creates revenue options
 9. Marketing helps the management team to make informed
decisions
Key customer markets

Consumer markets
Business markets
Global markets
Nonprofit and governmental markets
Who markets?

 A marketer is someone who seeks a response-attention,

a purchase, a vote, a donation-from another party called
the prospects.
 Marketers are responsible for demand management.
Eight demand states are possible:
 Negative, nonexistent, latent, declining, irregular, full
demand, overfull demand and unwholesome demand.
Evolution of Marketing

 1. Barter System:
 The goods are exchanged against goods, without any other medium of exchange, like money.
 2. Production Orientation:
 This was a stage where producers, instead of being concerned with the consumer preferences,
concentrated on the mass production of goods for the purpose of profit. They cared very little about
the customers.
 3. Sales Orientation:
 The stage witnessed major changes in all the spheres of economic life. The selling activity becomes the
dominant factor, without any efforts for the satisfaction of the consumer needs.
 4. Marketing Orientation:
 Customers’ importance was realized but only as a means of disposing of goods produced. Competition
became more stiff. Aggressive advertising, personal selling, large scale sales promotion etc., are used
as tools to boost sales.
 5. Consumer Orientation:
 Under this stage only such products are brought forward to the market which are capable of satisfying
the tastes, preferences and expectations of the consumers- consumer satisfaction.
 6. Management Orientation:
 The marketing function assumes a managerial role to co-ordinate all interacting business activities
with the objective of planning, promoting and distributing want-satisfying products and services to
the present and potential customers.
MARKETING CONCEPT/company orientation

The marketing concept is the strategy that firms

implement to satisfy customers’ needs, increase
sales, maximize profit, and beat the competition.
There are 5 marketing concepts that organizations
adopt and execute. These are;
(1) production concept,
(2) product concept,
(3) selling concept,
(4) marketing concept, and
(5) societal marketing concept.
Marketing concept
1. Production concept

 The idea of production concept – “Consumers will favor products

that are available and highly affordable.” This concept is one of the
oldest Marketing management orientations that guide sellers.
 Companies adopting this orientation run a major risk of focusing
too narrowly on their operations and losing sight of the real
objective.
 Management focuses on improving production and distribution
efficiency. Although, in some situations, the production concept is
still a useful philosophy.
 If a firm decides to operate based on this concept, it will try to
minimize production costs by making the production process
efficient. Moreover, for its products to be favored by the consumers,
it will try to make its distribution as extensive as possible.
2. PRODUCT CONCEPT

 The product concept holds that consumers will favor products that offer
the most quality, performance, and innovative features. Marketing
strategies are focused on making continuous product improvements.
 Product quality and improvement are important parts of marketing
strategies, sometimes the only part. Targeting only on the company’s
products could also lead to marketing myopia.
 During the first three decades of the twentieth century, more and more
industries were adopting mass production techniques. The supply of
manufactured goods was exceeding demand by the early 1930s.
 Manufacturers were facing excess production capacity and competition
for customers. They started realizing that buyers will favor well-made
products and are willing to pay more for product extras, and the product
concept started taking place in the minds of many producers.
3. SELLING CONEPT

 The selling concept holds the idea- “consumers will not buy enough of
the firm’s products unless it undertakes a large-scale selling and
promotion effort.”
 Here the management focuses on creating sales transactions rather
than on building long-term, profitable customer relationships.
 In other words, the aim is to sell what the company makes rather than
making what the market wants. Such an aggressive selling program
carries very high risks.
 In selling concept, the marketer assumes that customers will be coaxed
into buying the product will like it; if they don’t like it, they will possibly
forget their disappointment and buy it again later. This is usually a very
poor and costly assumption.
 The selling concept also developed at the same time, and the product
concept developed and still predominant in many industries.
4. MARKETING CONCEPT

The marketing concept holds- “achieving organizational goals

depends on knowing the needs and wants of target markets and
delivering the desired satisfactions better than competitors do.”
Here marketing management takes a “customer first” approach.
Under the marketing concept, customer focus and value are the
routes to achieve sales and profits.
The marketing concept is a customer-centered “sense and
responds” philosophy. The job is not to find the right customers
for your product but to find your customers’ right products.
The marketing concept and the selling concepts are two
extreme concepts and different from each other.
5. SOCIETAL CONCEPT

 Societal marketing concept questions whether the pure marketing

concept overlooks possible conflicts between consumer short-run wants
and consumer long-run welfare.
 It calls for sustainable marketing, socially and environmentally
responsible marketing that meets consumers’ and businesses’ present
needs while also preserving or enhancing future generations’ ability to
meet their needs.
 The Societal Marketing Concept puts human welfare on top before
profits and satisfying the wants.
 This is basically a management orientation that holds that the key task of
the firm is to determine the needs and wants of target markets and to
adapt the organization to delivering the desired satisfactions more
efficiently and effectively than its competitors in a way that preserves
and enhances the well-being of the consumers in particular and the
society in general.
Holistic marketing concept

 Holistic marketing concept is a part of the series on concepts of marketing and it can be defined as a marketing

strategy which considers the business as a whole and not as an entity with various different parts.

 According to holistic marketing concept, even if a business is made of various departments, the departments have to

come together to project a positive & united business image in the minds of the customer. Holistic marketing

concept involves interconnected marketing activities to ensure that the customer is likely to purchase

their product rather than competition.

 Example of Holistic marketing concept

 An organization will have different departments like sales and marketing, accounting and finance, R&D and

product development and finally HR and operations. Thus, if you want to implement a holistic marketing concept in

your organization, you need to ensure that R&D and product development take the feedback from marketing and

sales to launch the product which is most likely to attract customers.

 On the other hand they need to work closely with accounting and finance to find out the exact budget for the project.

Sales and marketing need to communicate to the HR the right kind of people that they need, and finally, admin and

operations need to devise a plan to retain these people.