Sunday 20 January 2019

Basic marketing concepts

What is marketing?

Any interpersonal and inter-organizational relationship involving an exchange is marketing

The essence of Marketing is a transaction - an exchange- intended to satisfy human needs and wants.There are three elements in the marketing process :


Marketing is a social process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others


NEED : A state of felt deprivation of some basic satisfaction ( Food, Clothing, Shelter, Belonging etc. )
WANTS : Wants are desires for specific satisfies of the deeper needs. Needs are few and wants are many .
DEMANDS : are wants backed by ------Ability to buy and Willingness to buy


  • Anything that can be offered to someone to satisfy a need or want is a product .

  • Product refers to physical object

  • Services refer to intangible object


  • Value is the customers’ estimate of the Product’s capacity to satisfy a set of goals
    Value is the ratio between what the customer gets and what he gives (V=B/C)

Customer gets benefits & assume costs

  • WHEN :Customer Expectance=Performance (satisfied)
    Customer Expectance>Performance (dis-satisfied)
    Customer Expectance<Performance (Highly satisfied)


Exchange is the act of obtaining a desired product by offering something in return .
Exchange takes place when 5 conditions are satisfied:

(a) Two parties should be there
(b) Each party must have something of value to the other
(c) Each party is capable of communication & delivery
(d) Each party is free to accept or reject the offer
(e) Each party believes that it is appropriate to deal with the other party

Exchange is a process rather than event. It is a value creating process because it normally leaves both parties better off.

A transaction is a trade of values between two or more parties ( A BARTER TRANSACTION OR A MONETARY TRANSACTION ).


A market consists of all the potential customers sharing a particular need or want who might be willing and able to engage in exchange to satisfy that need or want.

Marketing is the management process which identifies, anticipates, and supplies customer requirements efficiently and profitably.
In other words, it is the process of understanding, creating, and delivering profitable value to targeted customers better than the competition.
Its aim is to establish, maintain, enhance long term relationship with customers at a profit so that the objectives of the parties involved are met.
In short marketing consists of attracting, developing, and retaining profitable customers.

Marketing can not be considered as a separate function , it is the whole business, seen from the point of view of its final results.................that is profit,through customer satisfaction


What is marketing management?

The marketing Management is the analysis, planning, implementation and control of programs designed to create, build and maintain beneficial exchanges and relationships with target markets for the purpose of achieving Organisational objectives.

Marketing management is demand management or it involves the task of influencing the level, timing and composition of demand. At times the actual demand level may be below, equal to, or above the desired demand level and the major task of marketing management is to regulate the level of demand.


  • State of demand

  • Negative Demand

  • No Demand

  • Latent Demand

  • Falling Demand

  • Irregular Demand

  • Full Demand

  • Overfull Demand

  • Un-wholesome Demand

Marketing task

  • Conversational marketing

  • Stimulation marketing

  • Developmental marketing

  • Re marketing

  • Synchro-marketing

  • Maintenance marketing

  • Demarketing

  • Counter-marketing


The marketing management has evolved through following stages :

  1. Production Orientation Stage

  2. Sales Orientation Stage

  3. Marketing Orientation Stage

  4. Social Responsibility & Human

Marketing Management can be defined as the effort to achieve desired EXCHANGE outcomes with TARGET MARKETS.

Now the question arises :

(1) What philosophy should guide the marketing activities?

(2) What weights should be given to the interests of the organisation,the customers and the society?

There are FIVE competing concepts under which organizations conduct their marketing activities:

  • A Production Concept

  • The Product Concept

  • A Selling Concept

  • The Marketing Concept

  • A Societal Marketing Concept

The production concept

  • Consumers will favor those products that are widely available and low in cost.

  • Therefore increase production and cut down costs.

  • And build profit through volume.

  • Consumers will favor those products that offer the most quality, performance, or innovative features.

  • Therefore, improve quality, performance and features.

  • This would lead to increased sales and profits.

Selling Concept

  • Consumers , if left alone , will not buy enough of company’s products.

  • Therefore, promote sales aggressively.

  • And,build profit through quick turnover.

The marketing concept

The key to achieving organizational goals consist in determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors.
And build profit through customer satisfaction and loyalty.

It is Marketing Concept (+) Society’s well being.

Balancing of following three considerations while setting marketing policies :

  • Customer’s want satisfaction

  • Society’s well being

  • Company’s profits

The societal marketing concept holds that the organization’s task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors in a way that preserves or enhances the consumer’s and the society’s well being. - It addresses conflicts between consumer’s and firm’s short run wants and long term welfare.

Value map


The essence of marketing can be summarized in three great principles. The first identifies the purpose and task of marketing, the second the competitive reality of marketing and third the principal means for achieving the first two.

(1) The Customer Value and Value

Equation :
V=B/P Where; V=Value
B= Perceived Benefits
P= Price
(Value is increased by increasing the numerator and/or reducing the denominator)

(2) Competitive or Differential Advantage : 

The total offer must be more attractive than that of the competition in order to create a competitive advantage.

(3) Focus or the Concentration of

Attention : The task of creating
Customer Value at a Competitive advantage.


It is the form of marketing when some company defines an existing clear need and prepare an affordable solution.
(Recognizing that women wanted to spend less time for cooking and cleaning, led to the invention of modern washing machine, microwave oven etc.)


It is a form of marketing when a company recognize an emergent or latent need, and come out with an affordable solution. Evian, Perrier anticipated growing market for bottled drinking water as the quality of water deteriorated in many places.

The anticipation marketing is more risky than responsive marketing;companies may come into market too early or too late,or may even be totally wrong about thinking that such a market would develop.(eg. Dish washers in India)


The broadest level of marketing occurs when a company introduces product that nobody asked for and often could not even conceive of. e.g. Sony Walkman, Sony Compact Disc )

Late Akio Morita, founder and chairman of Sony, who introduced these and many other new products, summarized his marketing philosophy in these words: “ I don’t serve markets. I create them.”


The market-driven companies focus on researching current customers to identify their problems, gather new ideas, develop products that result in incremental improvements, not radical innovations.
Market-driving companies generate significantly new products, services, business formats and raise our sights and our civilization. These companies are much more than customer-led. They lead customer where they want to go, but don’t know yet.

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