Chapter 1

1
2
 [Link] Kotler: Principles Marketing, Prentice Hall of
India.
 [Link] Kotler, Keller, Kosy, Jha: Principles Marketing-

A south Asian Perspective, Prentice Hall of India.

 3. Marketing Management | CN Sontakki - Kalyani

Publication

3
Marketing is about identifying and meeting
human and social needs.
In short “meeting needs profitably”.

4
 “Marketing is an organizational function and
a set of processes for creating ,
communicating and delivering value to
customers and for managing customer
relationships in a ways that benefit the
organization and its stakeholders.”
 By- The American Marketing Association

5
 Marketing management is an art and
science of choosing target markets and
getting, keeping and growing customers
through creating, delivering and
communicating superior customer value.

6
 Goods
 Services
 Events
 Experiences
 Persons
 Places
 Properties
 Organizations
 Information & ideas

7
To attract new customer by promising
superior value, and to keep current
customers by delivering satisfaction.

8
Needs:
 The most basic concept underlying marketing is that of human
needs.
 Human needs are states of felt deprivation.
 Human have many complex needs:

◦ Physical needs for food, clothing, warmth, and safety

◦ Social needs or belonging and affection
◦ Individual needs for knowledge and self – expression
Wants:
 Want are the form taken by human needs as they are shaped by
culture and individual personality.
 People have almost unlimited wants but limited resources.
 They want to choose products that provide the most value and
satisfaction for their money.
Demands:
 When backed by buying power, wants become demands.
 Consumers view products as bundles of benefits and choose
products that give them the best bundle for their money.

9
Product:
 Anything that can be offered to a market to
satisfy a need or want.
 The concept of product is not limited to
physical objects – anything capable of
satisfying a need can be called a product.
Services:
 In addition to tangible goods, products also
include services, which are activities or
benefits offered for sale that are essentially
intangible and do not result in the
ownership of anything.

10
Values:
 Customer value is the difference between the values the customer
gains from owning and using a product and the costs of obtaining
the products.
 Customers often do not judge product value and costs accurately or
objectively. They act on perceived value.
Satisfaction:
 Customer satisfaction depends on a product’s perceived
performance in delivering value relative to a buyer’s expectation.
 If the product’s performance falls short of the customer’s
expectations, the buyer is dissatisfied.
Quality:
 Customer satisfaction is closely linked to quality.
 Quality has a direct impact on product performance.
 Quality can be defined as “freedom from defects”.
 TQM programs designed to constantly improve the quality of
products, services, and marketing processes.

11
Exchange :
 The act of obtaining a desired object from
someone by offering something in return
Transaction :
 A trade between two parties that involves at least
two things of value, agreed – upon conditions a
time of agreement, and a place of agreement.
Relationship marketing :
 The process of creating, maintaining, and
enhancing strong, value – laden relationships
with customers and other stakeholders

12
The set of all actual and potential buyers
of a product or service

Communication

Products / Services
Industry Market (a
(a collection collection of
of sellers) buyers)
Money

Information

A simple marketing system

13
Main actors and forces in a modern marketing system

Competitors

Marketing
intermediaries End user market
Suppliers
Company
(marketer)

14
The analysis, planning, implementation, and
control of programs designed to create,
build, and maintain beneficial exchanges
with target buyers for the purpose of
achieving organizational objectives.

15
1. Marketing is an Economic Function
Marketing embraces all the business activities involved in getting
goods and services , from the hands of producers into the hands of
final consumers. The business steps through which goods progress
on their way to final consumers is the concern of marketing.

 2. Marketing is a Legal Process by which Ownership

Transfers
In the process of marketing the ownership of goods transfers from
seller to the purchaser or from producer to the end user.

3. Marketing is a System of Interacting Business Activities

Marketing is that process through which a business enterprise,
institution, or organisation interacts with the customers and
stakeholders with the objective to earn profit, satisfy customers,
and manage relationship. It is the performance of business
activities that direct the flow of goods and services from producer
to consumer or user.
16
4. Marketing is a Managerial function
According to managerial or systems approach - "Marketing is the combination
of activities designed to produce profit through ascertaining, creating,
stimulating, and satisfying the needs and/or wants of a selected segment of
the market."
According to this approach the emphasis is on how the individual
organisation processes marketing and develops the strategic dimensions of
marketing activities.

5. Marketing is a social process

Marketing is the delivery of a standard of living to society. According
to Cunningham and Cunningham (1981) societal marketing performs
three essential functions:-
Knowing and understanding the consumer's changing needs and wants;

Efficiently and effectively managing the supply and demand of products and

services; and
Efficient provision of distribution and payment processing systems.

6. Marketing is a philosophy based on consumer orientation and

satisfaction

7. Marketing had dual objectives - profit making and consumer

satisfaction

17
1. Study of Consumer Wants and Needs
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.

2. Study of Consumer behavior

Marketers performs study of consumer behavior. Analysis of buyer behavior
helps marketer in market segmentation and targeting.

3. Production planning and development

Product planning and development starts with the generation of product idea
and ends with the product development and commercialization. Product
planning includes everything from branding and packaging to product line
expansion and contraction.

18
4. 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.

5. Distribution
Study of distribution channel is important in marketing. For maximum
sales and profit goods are required to be distributed to the maximum
consumers at minimum cost.

6. Promotion
Promotion includes personal selling, sales promotion, and advertising.
Right promotion mix is crucial in accomplishment of marketing goals.

7. Consumer Satisfaction
The product or service offered must satisfy consumer. Consumer
satisfaction is the major objective of marketing.

8. Marketing Control
Marketing audit is done to control the marketing activities.
19
The role that marketing plays within a company
varies according to the overall strategy and
philosophy of each firm.
There are five alternative concepts under which
organizations conduct their marketing activities:
◦ Production concept
◦ Product concept
◦ Selling concept
◦ Marketing concept
◦ Societal marketing concepts

20
21
This concept is the oldest of the concepts in
business. It holds that consumers will prefer
products that are widely available and
inexpensive. Managers focusing on this concept
concentrate on achieving high production efficiency,
low costs, and mass distribution. They assume that
consumers are primarily interested in product
availability and low prices. This orientation makes
sense in developing countries, where consumers are
more interested in obtaining the product than in its
features.

22
The product concept proposes that
consumers favor products that offer the most
quality, performance, or innovative features.
Managers in these organization focus on
making superior products and improving them
over time.
A new or improved product will not
necessarily be successful unless it’s priced ,
distributed, advertised and sold properly.

23
The idea that consumers will not buy
enough of the organization’s products
unless the organization undertakes a large –
scale selling and promotion effort.

24
The marketing management philosophy that
holds that achieving organizational goals
depends on determining the needs and
wants of target markets and delivering the
desired satisfactions more effectively and
efficiently than competitors do.

25
The idea that the organization should
determine the needs, wants, and interests
of target markets and deliver the desired
satisfactions more effectively and efficiently
than competitors in a way that maintains or
improves the consumer’s and society’s well
– being.

26
 The holistic marketing concept is based
on the development, design and
implementation of marketing programs,
processes and activities that recognizes
their breadth and interdependencies.
Holistic marketing recognizes that
“everything matters” in marketing and
that a broad, integrated perspective is
often necessary.

27
 Marketing Environment refers to all the factors and forces that
affect the business organizations ability to build and maintain
successful relationships with its target customers. In other words,
it includes all factors that have an effect on the strategies, policies
and decisions of the organization.

 According to Barry M. Richman and Melvgn Copen “Environment

consists of factors that are largely if not totally, external and
beyond the control of individual industrial enterprise and their
managements. These are essentially the ‘givers’ within which
firms and their management must operate in a specific country
and they vary, often greatly, from country to country”

28
29
 The Internal Marketing Environment includes all
the factors that are within the organization and
affects the overall business operations. These
factors include labor, inventory, company
policy, logistics, budget, capital assets, etc.
which are a part of the organization and affects
the marketing decision and its relationship with
the customers. These factors can be controlled
by the firm.

30
 The Micro Marketing Environment includes all those factors that are closely
associated with the operations of the business and influences its functioning.
The microenvironment factors include customers, employees, suppliers,
retailers & distributors, shareholders, Competitors, Government and General
Public. These factors are controllable to some extent.

31
• Customers– Every business revolves around fulfilling
the customer’s needs and wants. Thus, each marketing strategy is
customer oriented that focuses on understanding the need of the
customers and offering the best product that fulfills their needs.
• Employees– Employees are the main component of a business who
contributes significantly to its success. The quality of employees
depends on the training and motivation sessions given to them.
Thus, Training & Development is crucial to impart marketing skills
in an individual.
• Suppliers– Suppliers are the persons from whom the material is
purchased to make a finished good and hence are very important
for the organization. It is crucial to identify the suppliers existing in
the market and choose the best that fulfills the firm’s requirement

32
•Retailers& Distributors– The channel partners play an imperative
role in determining the success of marketing operations. Being in
direct touch with customers they can give suggestions about
customer’s desires regarding a product and its services.

•Competitors– Keeping a close watch on competitors enables a

company to design its marketing strategy according to the trend
prevailing in the market.

•Shareholders– Shareholders are the owners of the company, and

every firm has an objective of maximizing its shareholder’s wealth.
Thus, marketing activities should be undertaken keeping in mind the
returns to shareholders.

33
• Government– The Government departments make several
policies viz. Pricing policy, credit policy, education policy,
housing policy, etc. that do have an influence on the
marketing strategies. A company has to keep track on these
policies and make the marketing programs accordingly.

• General public– The business has some social responsibility

towards the society in which it is operating. Thus, all the
marketing activities should be designed that result in
increased welfare of the society as a whole.

34
 Macro Marketing Environment includes all those factors that
exist outside the organization and can not be controlled.
These factors majorly include Social, Economic, Technological
Forces, Political and Legal Influences. These are also called
as PESTLE framework.

35
 Political & Legal Factors– With the change in political parties,
several changes are seen in the market in terms of trade, taxes,
and duties, codes and practices, market regulations, etc. So the
firm has to comply with all these changes and the violation of
which could penalize its business operations.

 Economic Factors– Every business operates in the economy and

is affected by the different phases it is undergoing. In the case of
recession, the marketing practices should be different as what
are followed during the inflation period.

 Social Factors– since business operates in a society and has some

responsibility towards it must follow the marketing practices that
do not harm the sentiments of people. Also, the companies are
required to invest in the welfare of general people by
constructing public conveniences, parks, sponsoring education,
etc.
36
 Technological Factors– As technology is
advancing day by day, the firms have to keep
themselves updated so that customers needs
can be met with more precision.

37
 A consumer can be defined as a person or
group of persons who purchase or consume a
products or services. They basically identify a
need or desire, search for a product to satisfy
their need, buy the product and consume it
to satisfy the need. They are the actors in
the marketplace. They buy the products for
personal use and not for resale or
manufacturing. A consumer could be an
individual, a group of individuals, a business,
an organization or an industrial undertaking.

38
 Consumer behavior can be defined as the study of how consumers
(which includes individuals, groups and organizations) select, buy,
use and dispose of goods, services, ideas or experiences to satisfy
their needs and wants. The objective of consumer behavior is to
understand the decision making process of consumers, individually
as well as in groups and analyze how emotions have an effect on
their decision to buy.
 Schiffman and Kunuk have defined consumer behavior as “The
behavior that consumers display in searching for, purchasing, using,
evaluating and disposing of products and services that they expect
will satisfy their needs.”

39
40
 Cultural factors are the primary determinant of a person’s
needs and wants. Culture encompasses values, beliefs,
ideologies, law, customs, languages and morals of a particular
community or group of individuals. It is shared socially,
learned, prescriptive, enduring dynamic and cumulative.

41
 Culture is the most basic source of consumer’s wants and behavior. It
reflects the way consumer views the world. It is mostly a learned behavior
that an individual acquires from the society he/she grows in. For e.g. a
child growing in United States is exposed to values like achievement,
practicality, success, efficiency, individualism, freedom whereas a child
growing in India is exposed to values like respect and care for elders hard
work honestly, integrity, social harmony sacrifice.

 Sub-Culture Each culture consists of small distinct identifiable groups that

have unique characteristics. These sub cultures provide more specific
identification for their members. Sub culture includes religions,
nationalities, racial groups and geographic regions. Consumer’s
preferences are influenced by the sub culture they belong to. For instance
Hindu brides wear red, maroon or some bright color Lehenga on their
wedding whereas Muslim brides wear green and Christian brides wear
white. Similarly, Hindus consider eating beef a sin whereas Muslims and
Christians relish it.

42
 Social Class Some form of social stratification takes place in
almost all societies. The most frequent form is social class.
Social Classes are hierarchical homogenous divisions in the
society which are representative of a cluster of variables like
occupation, income, wealth, education etc. The members of a
particular social class share similar set of values, interests and
pattern of behavior. Social classes differ on the basis of
speech patterns, recreation preferences, clothing and so on.
Under the social class system individuals are perceived to
occupy superior or inferior positions. It is possible for an
individual during his lifetime to move up or down on the
social class ladder.

43
 Human beings are social animals. They need people to communicate and share their
ideas and views. Just like cultural factors, social factors play a significant role in the
consumer’s decision making process.
 A. Reference groups A group comes into existence when two or more persons
interact to realize a common goal. A person’s reference groups consist of all those
groups that have direct or indirect influence on their attitude and behavior.
 The groups that have a direct influence on an individual’s behavior are referred to as
Membership Group.
 The groups with which individual’s interacts continuously and informally are referred
to as Primary Groups and consists of the family, friends, neighbors and co-workers.
 The groups with which individuals do not interact continuously and interact formally
are known as Secondary Groups and consist of professional, religious and trade union
groups. Consumers also tend to get influenced by groups to which they do not belong.
 A group that an individual aspires to join is known as Aspirational Group and the
groups whose behavior and attitude are rejected by an individual are called
Dissociative Groups.

44
 Family is defined as a group of two or more persons residing
together who are related by birth, marriage or adoption. In
the life of an individual, family can be distinguished into two
types: the family of orientation and the family of procreation.
Parents and siblings make the consumer’s family of
orientation and have the maximum amount of influence.
They influence the consumer’s orientation towards politics,
religion, economics and has an impact on the consumers self
worth and ambition. Family of procreation consists of the
consumer’s spouse and children. They have a direct influence
on everyday buying behaviour of consumers.

45
 An individual is a part of many groups- family, clubs, and
organizations. Role refers to the activities an individual is required
to perform as part of the group/groups to which he belongs. Each
role that an individual performs has an effect on the status he
enjoys in the society. Moreover, each individual plays a dual role in
the society depending on the group to which they belong. The vice
president of marketing in a reputed firm also plays the role of a
father and husband at home. Consumers buy products according to
the status they enjoy in the society and the role they are playing.
Consumers buy Ferrari or Porsche not just for the superior quality
but also because these cars represent social success. It is important
for marketers to be aware of the status symbol potential of
products.

46
 The personal characteristics of an individual such as age and life cycle
stage, occupation, personality and life style have a direct impact on the
consumer’s decision to purchase a product.
 A. Age and Life cycle stage Over the life span of an individual they
generally buy different kinds of products. The products that they buy at
20 years of age will be very different from the products that they buy
when they are 70. As the age of an individual grows an evolution takes
place in his values, lifestyle, hobbies and habits which have an effect on
the type of products he consumes. For instance an individual, as he grows
in age, may change his diet from unhealthy products (like fast food, soft
drinks) to healthy products( like fruits, Organic food, green tea) to avoid
health issues. Often the consumer’s preferences in food, clothing,
furniture and recreation modify according to their age.

47
 An individual’s decision to buy or not to buy a particular product largely
depends on his occupation and income. A blue collar worker would buy
clothes required for work, comfortable shoes whereas the president of a
company would buy designer clothes, country club membership, air travel
etc. Software companies design different products for lawyers,
accountants, engineers, physicians etc. Economic circumstances refer to
an individual’s level of income, stability of income, time pattern of
income, the assets owned by him, his savings, the proportion of assets
that are liquid, borrowing power, debts and his attitude towards
borrowing and spending. These factors that together represent the
economic circumstances greatly impact the product choices made by
consumers as they influence the consumer’s capability to buy.

48
 Personality refers to a combination of characteristics or qualities
that are relatively consistent and form an individual’s distinctive
character. They are inner psychological characteristics of an
individual that are manifested in outer behavior. Personality is
relatively enduring but may change with time and abrupt events.
It is often defined in terms of traits such as self confidence,
sociability, dominance, defensiveness and adaptability. Each
individual’s personality has an effect on the type of products they
consume. Brands like consumers also have personality and
consumers are likely to choose those brands whose personality
matches their own. Marketers need to understand that to attract
more consumers brands need to develop a personality of traits
and values which is in sync with that of consumers they are
targeting. 49
 Lifestyle is the way in which a person lives. A lifestyle is a
means of forging a sense of self and to create cultural
symbols that resonate with personal identity. It is an
individual’s pattern of living and is expressed through his
activities, interests, opinions and desires. Individuals
belonging to the same culture, social class, occupation even
family may lead very different lifestyles. It is imperative for
marketers to search for relationships between their products
and lifestyle groups. The types of products that are consumed
by the consumer depend on the lifestyle they follow

50
 Psychological Factors Consumer responses
are influenced by 4 psychological
processes-motivation, perception, learning
and attitude.

51
 The term motivation is derived from the word motive which refers to the
needs, drives, urges, wants or impulses within an individual. They are the
starting point in the motivation process. Motivation is an activated internal
need state leading to goal-directed behavior to satisfy that need.
 Motives are relatively enduring, strong, and persistent internal stimuli that
arouse and direct behavior toward certain goals. Recognition of need is the
starting point of the consumer buying process.
 Need can be defined as the lack of something useful. Some needs are biogenic
while some are psychogenic. Biogenic needs arise from psychological states of
tension such as thirst, hunger, discomfort whereas psychogenic needs arise
from psychological state of tension such as the need for recognition, esteem
or belonging aroused to a sufficient level of intensity to drive an individual to
act.

52
 Perception is the process by which an individual selects,
organises and interprets information input to create a
meaningful picture of the world. Perception depends not only
the physical stimuli but also on the relationship of the stimuli
with the surrounding field and on conditions within each
individual. For e.g. a salesperson talking fast may be
perceived by some people as aggressive while some may
perceive him to be intelligent.

53
 Learning induces changes in an individual’s behavior and arises
from their past experiences. every circumstance an individual’s
perception is conditioned by their prior experiences, for
 it is this which constitutes their preparatory set or expectations
and the framework into which they seek to place and organize
new stimuli. In other words, a consumer learns from their
 prior experience and tries to maintain a balance by relating and
interpreting new stimuli in terms of past or learned stimuli.
 Most human behavior is learned, although much learning is
incidental. Learning takes place due to interplay of drives,
stimuli, cues, responses and reinforcements. Marketers can
build demand for their products by associating the product
with strong drives, using motivating cues and providing positive
reinforcement.
54
 Attitude and beliefs are acquired by an individual through
experience and learning.
 A belief is a descriptive thought that an individual holds about
something.
 Attitude can be defined as a feeling, an assessment of an
object or idea and the predisposition to act in a certain way
toward that object. Attitudes allow the individual to develop
a coherent behavior against a class of similar objects or ideas.
 Beliefs as well as attitudes are generally part of an
individual’s personality and are difficult to change.

55
 MC Carthy developed this 4p’s concept to enable organizations to take business
decisions and develop strategies; this concept is widely accepted and successful
frameworks to maximize sales. Entering into the markets and developing new and
innovative products is different from strategies playing for become successful in the
competitive environment.

56
The product is either a tangible good or an intangible service
that is seem to meet a specific customer need or demand. All
products follow a logical product life cycle and it is vital for
marketers to understand and plan for the various stages and
their unique challenges. It is key to understand those problems
that the product is attempting to solve. The benefits offered by
the product and all its features need to be understood and the
unique selling proposition of the product need to be studied. In
addition, the potential buyers of the product need to be
identified and understood.

57
Price covers the actual amount the end user is expected to pay for a
product. How a product is priced will directly affect how it sells. This
is linked to what the perceived value of the product is to the
customer rather than an objective costing of the product on offer. If
a product is priced higher or lower than its perceived value, then it
will not sell. This is why it is imperative to understand how a
customer sees what you are selling. If there is a positive customer
value, than a product may be successfully priced higher than its
objective monetary value. Conversely, if a product has little value in
the eyes of the consumer, then it may need to be underpriced to
sell. Price may also be affected by distribution plans, value chain
costs and markups and how competitors price a rival product.

58
The marketing communication strategies and
techniques all fall under the promotion heading.
These may include advertising, sales promotions,
special offers and public relations. Whatever the
channel used, it is necessary for it to be suitable
for the product, the price and the end user it is
being marketed to. It is important to differentiate
between marketing and promotion. Promotion is
just the communication aspect of the entire
marketing function.

59
Place or placement has to do with how the
product will be provided to the customer.
Distribution is a key element of placement.
The placement strategy will help assess what
channel is the most suited to a product. How
a product is accessed by the end user also
needs to compliment the rest of the product
strategy.

60
 Product:
Reliance Jio is a leading telecom operator in India, which has disrupted
the Indian market with its services. Jio has rolled out a number of
products & services in its marketing mix for the benefit of the Indian
population including the roll out of Internet services to promote
Internet penetration within the country and promote the digitization
initiatives followed.. Peripheral services like messaging and music are
offered by the 4G internet services that Jio offers along with the
various data and voice over services. Apart from this, Jio also
produces the LYF smartphones. Even though in the initial months of
its launch agreement with Intex, Jio was supposed to purchase the
smartphones manufactured by Intex, Jio decided on making its own
handsets compatible with the 4G VoLTE technology. Reliance Jio, prior
to its launch of 4G services within the country, also started providing
free hotspots of Wi-Fi in a number of cities within the country.

61
At the outset, in an attempt to promote Internet usage within the
country and to make the availability of Internet to people from all
walks of life, Reliance Jio undertook the initiative of providing SIMs
free of cost to any individual against their Aadhar number and
unique mobile number identity. It was estimated that Jio was
successful in selling up to 14 lakh SIM cards to individuals within the
first few days of its launch. Following the stint of rolling out services
free of charge for the users, Jio has rolled out reasonable pricing
plans wherein consumers are charged reasonably for the data
consumption that they undertake. Voice calling however, is still free
for its users who mainly pay for the data usage. Reliance Jio Phones
including the LYF series were priced affordably with a security
deposit of Rs 1500 that could be withdrawn by the user after usage
of the phone for three years. LYF devices start at prices as low as
Rs.2999 and JioFi is priced at ranges as low as Rs1999.

62
Place:
Reliance Jio has a strong presence in the Indian
subcontinent because of the extremely well
developed infrastructure that the firm offers. The
network is available across all the twenty two
telecom sectors in the country which include
regions all across India. All states and major
cities are covered. It has a reach in about 18000
cities and across more than two lakh villages
within the country.

63
Jio has partnered with a number of organizations and
agencies like The BT group, Millicom, Orange S.A. In
September 2016, it even signed a pact with BSNL for intra-
circle roaming services to be offered in partnership with one
another. Jio has also signed up for a partnership with
Samsung for rolling out LTE Advanced Pro and 5G in the
country. Reliance Jio was responsible for launching the much
talked about Augmented Reality game called Pokémon Go,
which excited the youth and revolutionized the way games
were thought as. Jio promotes itself extensively through
campaigns on Television, Social Media, print Media, outdoor
media publishing activities and so on. The brand
ambassadors for the brand promotion are the most iconic
stars of the Bollywood film fraternity: Shahrukh Khan and
Amitabh Bachchan.

64