Course Code: 20AU0024

Title of the Course: Principles of

Marketing Management
 Unit 1

Introduction
 Introduction
• The 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
 Introduction Contd…
• Marketing is and ancient art and is everywhere.
• Formally or informally, people and organisations engage in a vast
number of activities that can be called marketing
• Goods marketing has become an increasingly vital ingredient for
business success
• It is embedded in everything we do- from the clothes we wear, to the
websites we click on, to the advertisements we see
 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
 Marketing Defined Contd…
• The American Marketing Association has defined marketing as “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.”
 Marketing Defined Contd…
• The process by which companies create value for customers and build
strong customer relationships in order to capture value from
customers in return
• According to Philip Kotler, Marketing is a social process by which
individuals and groups obtain what they need and want through
creating, offering, freely exchanging products and services of value
with others.
What is Marketed?
 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 a science as well as an art
• Marketing is the guiding element of business (it tells what, when, how to produce)
• Marketing is a system (Input  Process  Output)
• Marketing is a process i.e a series of interrelated functions
 Scope of Marketing
Marketing has a very wide scope. It covers all the activities from conception of ideas to realisation of profits.
 Study of Consumer needs and wants
Study of Consumer behaviour
Product Planning and development
Branding
Packaging
Channels of distribution
Pricing Policies
Sales Management
Promotion
Finance
After sales services
Core Concepts/ Philosophies of Marketing

Traditional Concepts Modern Concepts

• Exchange Concept • Marketing Concept
• Production Concept • Societal Concept
• Product Concept • Holistic Marketing
• Selling Concept Concept
Core Concepts/ Philosophies of Marketing
Exchange Concept
• Holds that the exchange of a product between seller and buyer is the
central idea of marketing. Exchange is an important part of marketing,
but marketing is a much wider concept
Core Concepts/ Philosophies of Marketing
Production Concept
• it is one of the oldest concepts in business.
• It holds that consumers will prefer products that are widely available
and inexpensive.
• Manager of production oriented business concentrate on achieving
high production efficiency low cost and mass distribution
Core Concepts/ Philosophies of Marketing
Product Concept
• Holds that consumers will prefer those products that are high in
quality, performance or innovative features.
• Managers in there organisation focus on making superior products
and improving them over time.
Core Concepts/ Philosophies of Marketing
Selling Concept
• Holds that consumers, if left alone, will ordinarily not buy enough of
the organisations product and thus the organisation must undertake
an aggressive selling promotion effort for pushing its products
• It implies selling what is made rather than making what can sell
• Marketing based on hard selling is risky
• Example- Insurance, cemetery plots, etc
Core Concepts/ Philosophies of Marketing
The Marketing Concept
• emerged in the mid 1950’s.
• The job is not to find the right customers for your product, but to find
right products for your customers.
• The marketing concept holds that the key to achieving organisational
goals consists in determining the needs and wants of target markets
and delivering the desired satisfaction more effectively and efficiently
than competitors.
• Every department and every worker should think customers and act
customer
 Selling vs Marketing Concept

Existing products and Profits through sales

Factory Selling and Promotion
services volume

Starting Point Focus Means Ends

Profits through
Market Customer Needs Integrated Marketing
customer satisfaction
Core Concepts/ Philosophies of Marketing
Social or Societal Marketing Concept
• holds that the organisations task is to determine the needs, wants
and interests of target markets and to deliver the desired satisfaction
more effectively and efficiently than competitors in a way that
preserves or enhances the customers and society's wellbeing
• It involves understanding broader concerns and the ethical,
environmental and legal and social context of marketing activities and
programs.
Core Concepts/ Philosophies of Marketing
Holistic Marketing Concept
• Based on the development, design and implementation of marketing
programs, processes and activities that recognise their breadth and
inter dependencies
• It is a philosophy which believes that everything matters and that a
business cannot exist and excel in vacuum
• This is an approach which proposes that marketing should be looked
from a broad and integrated perspective and not as an isolated
management function
Components Characterising Holistic
Marketing
Differences between Marketing and Selling
Marketing Sales
• Focuses on customers' needs • Focuses on Sellers needs
• Customer enjoys supreme importance • Product enjoys supreme importance
• Converts customers' needs into • Converts products into cash
products • Profits through sales volume
• Profits through customer satisfaction • Cost determines the price
• Customer determines the price; price • High pressure selling to sell goods
determines costs already produced
• Product planning and development to • It Assumes “Let the buyer beware”
match products with markets
• It assumes: “Let the seller Beware”
 Marketing Environment
• Businesses do not operate in isolation in the market place.
• There are various factors and forces that directly or indirectly
influence the organisations business activities
• All these factors and forces form the marketing environment of an
organisation
• The company operates in a complex marketing environment
consisting of uncontrollable forces to which the company must adapt
 Marketing Environment
The key elements of marketing environment are as follows:
• Internal environment
• Micro environment and
• Macro environment
 Internal Environment
• Internal environment refers to the forces and factors that are within the
organisation
• A company's marketing system is influenced by its capabilities regarding
production, financial and other factors.
• It includes marketing managers, sales representatives, marketing budget,
marketing plans, procedures, inventory, logistics and anything within the
organisation which affects marketing decisions and relationship with its
customers
• The research and development department, Personnel department,
Accounting Department also have an impact on the Marketing Department.
 Micro Environment
• The micro environment refers to the forces that are close to the
marketing organisation and directly impact the customer experience.
• It includes the organisation itself, its suppliers, marketing
intermediaries, customers, markets or segments, competitors and
publics
• Happenings in micro environment is relatively controllable for the
marketing organisation
 Some Factors in Micro Environment
• Suppliers- people who provide necessary resources needed to
produce goods and services
• Consumers
• Competitors
• Public
 Macro Environment
• Macro environment refers to all forces that are part of the larger
society and affects the micro environment
• It includes demography, economy, policies, culture, technology, and
natural forces.
• These are the factors/ forces on which the company has no control.
• Hence it has to frame its policies within the limits set by these forces
 Some Factors in Macro Environment
• Demography- a company should study the population, its distribution, age
composition, status, etc before deciding the marketing strategies
• Economic Environment- the economic environment affects a consumers
purchasing behaviour either by increasing his disposable income or by reducing it.
• Physical Environment or natural forces- a company has to adopt its policies
within the limits set by nature. Eg: power, water, petroleum, etc
• Technological Factors-ever new invention builds a new market and a new group
of customers
• Social and cultural factors
• Political factors- includes all laws, government agencies and individuals within a
society.