Module 1

Introduction to marketing

1.1 Nature, Scope, and Importance of Marketing, what is a Market

1.2 Core marketing concepts: Needs, wants & demands, Products, services &
experiences, Customer Value & Satisfaction, Exchanges & Relationships.

1.3 Marketing Orientations: Production concept, Product concept, Selling concept,

Marketing concept, Societal marketing concept.

1.4 Marketing Environment: Micro & Macro Environment, Demographic, Economic,

Political, Legal, Socio Cultural, Competitor, Supplier, Public Group, Technological
environment,

1.5 Marketing Concepts - Push v/s Market Pull

 Module 1 Introduction to marketing
WHAT IS A MARKET

Market

The market actually refers to a set up where potential buyers and sellers can meet to
exchange goods or services. It is basically a medium that facilitates these transactions
in an economy. It allows for the exchange of goods, services, information under
the protection of the law and generally in exchange for consideration.

Traditionally a market is a physical location or place, like a bazaar or a shopping

mall. The kind of market it is will depend on a lot of factors. Some of the ways in
which we can characterize markets are,

• According to the products being sold. Example: cotton market, iron market,
share market

• Based on geographical locations, like a local market or international market

• By the types of buyers involved, example: consumer market, industrial

market etc

• The quantity of goods transacted between parties like a wholesale market or a

retail market

However, in the modern world, we currently live in has a somewhat wider

definition of a market. In the world of e-commerce and start-ups, a market is no
more just a meeting point for buyers and sellers. It actually represents a set of all the
potential buyers in an environment.

So if you are launching a new product, your market will be every potential buyer of
the said product, wherever they are. It is not restricted to a geographical location, or
to the meeting of buyers and sellers.

Marketing

Marketing is a very wide term. It includes all the activities involved right from the
production of the goods, until their consumption. Every activity in between, like
designing, pricing, promotion, distribution, transportation, warehousing etc are
activities of marketing.

Marketing is often taken to be a post-production activity, which is incorrect. Some

activities of marketing start even before the production begins. One of its main aims
is to satisfy customer needs, which requires understanding of these needs. And the
product design will follow the leads of this study.
In modern terms, economists such as Philip Kotler have termed marketing as a
“social process”. Here the wants and needs of the consumer are heard, and
accordingly, products and services are offered to them. People interact with each
other to exchange goods and services they require in exchange for money. There is
no force or coercion, people will choose these products.

IMPORTANT FEATURES OF MARKETING

• Satisfy Needs and Wants: The main focus of all marketing activities is consumer
satisfaction. When a group of individuals (potential customers) express their
needs, the companies strive to satisfy these needs via marketing activities.

• Creating a Market Offering: Then the companies must dedicate their efforts to
create an ideal market offering based on their study of potential customers.
This product/service offered must try to fulfil all of the requirements of the
potential customer in a given market.

• Customer Value: The customers buying decisions will be greatly dependant on

the price of the product. It must satisfy their needs at the cost that they think
is fair. So the sellers must add value to the product and price it accordingly,
so the customer is willing and gets value for his price,

• Exchange Mechanism: Marketing is not a one-way process. The seller must

satisfy the needs of the buyer. And the buyer in an exchange must provide
consideration for the goods/services, which can be money or something else.
It must be an exchange mechanism

INTRODUCTION TO MARKETING

Introduction to Marketing Introduction The term Marketing is derived from the

Latin word ‘Mercatus’ which refersto“aplacewhere business is conducted”.
Marketing is a form of communication between a business house
anditscustomerswith the goal of selling its products or services to them. Goods
arenot completeproducts until they are in the hands of customers. Marketing is that
managementprocess through which goods and services move fromconcept
tothecustomer.Marketing has less to do with getting customers to pay for a product
asit doeswithdeveloping a demand for that product and fulfilling the customer’s
needs. Definitions of Marketing According to Jevons, Market is “any body or
persons who are in intimatebusinessrelation and carry on any extension transactions
in any commodity”. Dr. Philip Kotler defines marketing as “the science and art of
exploring, creatinganddelivering value to satisfy the needs of a target market at a
profit. Marketingidentifiesunfulfilled needs and desires. It defines, measures and
quantifies thesizeoftheidentified market and the profit potential. It pinpoints which
segmentsthecompanyiscapable of serving best and it designs and promotes the
appropriateproductsandservices.” Thus, marketing refers to all the activities
involved in the creationofplace,time, possession and awareness utilities and beyond.
Meaning of Marketing. The activity or business of promoting and selling products or
services, includingmarket research and advertising. Marketing is the process of
exploring, creating, and delivering value tomeet theneedsof a target market in terms
of goods and services;

NATURE OF MARKETING

1. Marketing is an economic function: marketing embraces all thebusinessactivities

involved in getting goods and services, fromthe handsof producersinto the hands of
final consumers. The Business steps throughwhichgoodsprogress on their way to
final consumers is the concern of marketing.

2. Marketing is a Legal process by which Ownership transfers: Intheprocessof

marketing the ownership of goods transfers formseller to the purchasertotheend
user.

3. Marketing is a Managerial function: According to managerial or systemapproach-

“marketing is the combination of activities designedtoproduceprofitthrough
ascertaining, creating, stimulating, and satisfying theneedsand/orwants of a selected
segment of the market.

4. Marketing is system of Interacting Business Activities:

Marketingistheprocessthrough which a business enterprise, institution, or
organizationinteractswiththe customers and stakeholders with the objective to
earnprofit, satisfycustomers, and manage relationship. It is the performance of
businessactivitiesthat direct the flow of goods and services from producers to
consumer oruser.

5. Marketing is a social process: Marketing is the delivery of a

standardoflivingtosociety. Societal marketing performs three essential functions: a.
Knowing and understanding the consumer’s changing needs andwantsb. Efficiently
and effectively managing the supply and demandof productsandservices c. 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.

 SCOPE OF MARKETING:

1. Study of consumer wants and needs: Goods are produced

tosatisfyconsumerwants. Therefore study is done to identify consumer needs
andwants. Theseneeds and wants motivates consumer purchase.

2. Study of consumer behavior: Marketers performs study of consumer

behavior.Analysis of buyer behavior helps marketer in market
segmentationandtargeting.

3. Production planning and development: Product planning and

developmentstartswith the generation of product idea and ends with the product
developmentandcommercialization. Product planning includes everything
frombrandingandpackaging to product line expansion and contraction.

4. Pricing policies: Marketer has to determine pricing policies for their

products.Pricing policies differs form product to product. It depends
onthelevelofcompetition, product life cycle, marketing goals and objectives etc.

5. Distribution: Study of distribution channel is important inmarketing.Formaximum

sales and profit goods are required to be distributedtothemaximumconsumer at
minimum cost.

6. Promotion: Promotion includes personal selling, sales promotion, andadvertising.

Right promotion mix is crucial in accomplishment of marketinggoals.

7. Consumer satisfaction: The product or service offered

mustsatisfyconsumer.Consumer satisfaction is the major objective of marketing.

8. Marketing Goal: Marketing audit is done to control the marketingactivities.

IMPORTANCE OF MARKETING IN BUSINESS

1. Helps in business planning and decision making: Marketing

helpsinbusinessplanning as it helps to shape the product from its production toit
reachingthecustomers. The 4Ps of marketing help the business to
makesurewhatalternatives are better for the growth of the business and help
tomakedecisionsthat prove beneficial for the customers.

2. Product development: The product part of the 4Ps provides

alternativesfordeveloping the product regarding its branding, labelling, packaging,
andhowitshould be brought into the market. Moreover, customer
feedbackandmarketresearch provide a blueprint of how the product has to be
further modifiedtosuitthe needs of the consumers.
3. Ef ective consumer engagement: with the use of various
platformsonlineandoffline, the company can gain consumer engagement in some
formor another.Inpersonal selling, for example, salesmen interact with the
customersandgettoknow their needs.

4. Builds relationships among customers: marketing always triestoestablishacordial

relationship with the customers. Modern marketingdealswiththecustomers as they
are the king. Hence continuous efforts makecustomerssatisfied. And this helps them
stay with the brand or company for alongtime.

5. Marketing creates revenue options: When marketing techniquesconverttheleads to

actual sales. It ultimately increases revenue. Hence, marketingiscrucialto generating
and increasing revenue by communicating theproductswithpotential customers.

6. Set bet er goals for your business: Marketing helps the

businessknowaboutthecustomers' demands and needs. They could set their goals
accordingtothese.

7. Build a reputation for your brand: effective marketing tendstoimpactthecustomers'

minds. Hence, they build brand awareness among them.

INTRODUCTION TO MARKETING MANAGEMENT

Marketing management is ‘the art and science of choosing target markets and
getting, keeping, and growing customers through creating, delivering, and
communicating superior customer value’. It relies heavily on designing the
organizations offering in terms of the target markets needs and desires and using
effective pricing, communication and distribution to inform, motivate and service
the market. Marketing management is concerned with the chalking out of a definite
programme, after careful analysis and forecasting of the market situations and the
ultimate execution of these plans to achieve the objectives of the organisation.

With the rise in incomes of the people in general, the overall demand for all types of
goods has gone up. This has led to an increase in production of various types of
consumer goods. With the relaxation of licensing regulations and import controls
and the entry of multinationals in many fields, there has been a sea change in the
competitive environment among the firms. A marketing manager has to formulate
marketing strategic plans in order to sustain in such a competitive market. Thus, the
success or failure of a business now depends upon how effectively the marketing
functions are performed.
 CORE MARKETING CONCEPTS: NEEDS, WANTS & DEMANDS

The marketing concept means whenever a company plans

andimplementstomaximize profit by boosting sales, meeting customer’s needs,
andsurpassingcompetitors. The goal is to devise a situation that serves both parties;
thecustomer and the company. The idea behind the marketing concept is to predict
and satisfy the needsandwantsofcustomers better than the competitors. T

he marketing concepts werefirst derivedfrom the book of Adam Smith, Wealth of

Nations. However, it remainedunexploredtothe world till the 21st century. To fully
appreciate the marketing concept, first, we to understand needs, wants,
anddemands;

• Needs – it is something inevitable for the existence of life; many

adversethingscanoccur without it. The worst-case situation would be death. Needs
cover manythings,like food, shelter, self-development, security, social belonging,
self-esteem, andrespect. essential for survival

• Wants – wants are our desires and wishes in life; our social
setupandculturemoldour wants.

• Demands – when our desires, needs, and wants are backed by our abilitytopay,
theybecome demands. Since we have learned the basics of marketing, it’s time to
understandfivemarketingconcepts.

Understanding Needs, Wants and Demands in Marketing world

Needs, wants and demands are 3 important terms in marketing. No matter how
similar they might seem, there are more differences in these terms that you might
think. There are many layers within them and they play a vital role in arriving at
segmenting the TG, targeting a particular target group and most importantly
defining a sharp positioning for a brand.

Needs

“Needs” is the basic human requirements like shelter, clothes, food, water, etc.
which are essential for human beings to survive. If we extend this further, other
needs are education, healthcare or even a social thing, for example, belonging to a
certain society or self-expression. One can say that the products which fall under
the needs category of products do not require a push. Instead the customer buys it
themselves. But it’s actually not true. in today’s world with thousands of brands
competing in the same categories with identical offerings satisfying the same needs,

The passage explains that while "needs" like healthcare, education, and housing are essential for survival, they still
require marketing in today's competitive market. Although consumers may naturally seek these products, the
overwhelming number of similar offerings from various brands means that even essential products need to be promoted
to stand out. Marketing, or "pushing," plays a key role in influencing consumer choices, even for products that fulfill basic
needs.
even the “needs category product” has to be pushed in the consumers’ mind.
Example of needs category products / sectors – Agriculture sector, Real Estate,
Healthcare etc.

We all know about Maslow’s hierarchy of needs which categorizes needs into 5
levels starting from physiological needs at the bottom and going up to self-
actualization needs. But what’s important as a marketer to know which level of need
is your brand targeted to. Let’s look at some of the examples of brands which are
targeting different levels of needs

1. Physiological Needs – Food companies (Nestle, Pepsi, Coca Cola)

2. Safety Needs – Insurance companies (ICICI Prudential, Tata AIG, HDFC Life)

3. Social Needs – Social networking sites (Facebook, Twitter, Instagram)

4. Esteem Needs – Luxury brands (iPhone, Mercedes, Estee Lauder)

5. Self-actualization needs – Non-Profit organizations and NGOs (UNICEF, Teach

for India)

In marketing, there is another way to categorize needs. There are basically five types
of consumers’ needs:

1. Stated Needs – As the name suggests, in this case, the consumer explicitly states
what he wants. For eg. “I need a phone”.

2. Real needs – This is more specific. So when the consumer wants a phone to
remain connected to his friends, family and colleagues, the actual need be a phone
with high battery backup and not high camera resolution.

3. Unstated needs – The consumer also expects warranty and other sorts of after
sales service when buying a phone which he might not say explicitly.

4. Delight needs – The consumer would like the phone manufacturer or the dealer
to give him some free gift or a promotional item (phone case, tempered glass, free
SIM etc.), but he doesn’t clearly express that he wants something with the phone.

5. Secret Needs – These are the needs which the consumer feels reluctant to admit;
for example the consumer wants the phone for his status symbol but he feels
uncomfortable to admit that status is important to him.

In the above example, responding to only stated need ie., “I need a phone” doesn’t
help in arriving at a right product proposition. As a marketer, it is important to dig
deeper and uncover not only the real, but also his other needs: unstated need,
delight need and secret needs.
Wants

"Wants" are a step ahead of needs Wants aren’t essential for humans to survive, but
it’s associated with needsSimply put, A want is a product desired by a customer that
is not required for us to survive. So, want is the complete opposite of need, which is
essential for our survival. Wants aren’t permanent and it regularly changes. As time
passes, people and location change, wants change accordingly.

Wants are directed by our surrounding towards reaching certain needs. Therefore,
human’s wants can be varied depending on each individual’s perception,
environment, culture, and society. For example, an Indian needs food but he may
want a Dosa or Paratha while an American may want Burger or Sandwich. Example
of wants category products / sectors – Hospitality industry, Electronics, FMCG,
Consumer Durables etc.

Demands

Wants turn to be Demands when a customer is willing and having the ability to
buy that needs or wants. The basic difference between wants and demands
is desire. A customer may desire something but he may not be able to fulfill his
desire. Consequently, for people, who can afford a desirable product are
transforming their wants into demands. In other words, if a customer is willing and
able to buy a need or a want, it means that they have a demand for that need or a
want. You might want a BMW for a car or an iPhone for a phone. But can you
actually buy a BMW or an Iphone? You can, provided you have the ability to buy
them. Example of demands –Luxury cars, 5 star hotels etc.

Many people want a BMW, but only a few can buy one. So, it’s very crucial that one
must measure not only how many people want their product, but also how many are
willing and have the ability to buy it.

So, its not only important to discover different consumer needs, but also to figure out what
consumer actually wants and how much is he able to pay ie. how much demand can be
created for the product or service.

PRODUCTS, SERVICES & EXPERIENCES

Products and Services Defined

When a customer makes a purchase, they expect value from that exchange. Think
about what you ate for breakfast today. You paid money to receive a product that
satisfied your hunger. Is that all the value you received? Perhaps not. If you ate eggs,
bacon, and coffee at a restaurant, you had both a product and a service experience.
Maybe someone at the restaurant handed you a menu, took your order, brought
your food, refilled your coffee, cleaned up dishes, and collected payment for your
meal. The eggs, bacon, and coffee were the product, while the acts of the restaurant
staff were a service. And the summation of it all was the product–service experience.

Products are tangible items that are part of an exchange between a buyer and seller.
Products can be seen, touched, owned, and stored. For example, the computer or
tablet you’re using to read this textbook is a product. You may have visited a store to
see and touch the product before purchasing to ensure it met your needs. Post-
purchase, the computer or tablet is yours to own and store for later use as you
please. The tangible nature of the product allows the consumer to possess it.

Services are intangible solutions that are also an exchange between buyer and seller.
Unlike products, services cannot be touched, owned, or stored for later use. For
example, a college course on marketing is a service. Students cannot own the course;
they cannot store it for later, nor will they have a tangible object representing the
course. Another defining feature of a service is the customer is typically a part of the
service experience. Imagine buying tickets to your favorite band in concert. You will
have to attend the concert to realize the full benefit of the service experience.

While a computer is a true product and a marketing class is a true service, many
exchanges between buyer and seller fall somewhere in the middle of the product–
service continuum (see Figure 9.2). Think back to the restaurant breakfast at the top
of this section; restaurants are a prime example of an exchange that includes
products and services. Marketers are typically working with an offering that falls on
the product–service continuum. This means that they need to understand how to
influence consumer behavior in the search for products and services.

Figure 9.2 The Product–Service Continuum (attribution: Copyright Rice University,

OpenStax, under CC BY 4.0 license)

Customer Experience

Customer experience (CX) is the overarching impression that customers have of a

brand. Therefore, each touchpoint with a product or service becomes a part of the
customer experience. A strong customer experience integrates technology,
marketing, sales, and customer service to deliver a strong brand perception.

For example, if you have ever visited an Apple Store, you probably have
experienced one of the most lauded customer experiences there is. From the moment
you walk in, you are surrounded by products and transported into a world of
technology. Each touchpoint, from the check-in on an iPad to the latest products that
are available for use, reinforces the brand through customer experience. Brands with
strong customer experience tend to have more loyal customers who become brand
advocates.

Marketing in Practice

Netflix

Netflix has perfected the customer experience (see Figure 9.3). Using technology as a
driver, Netflix predicts its customers’ viewing preferences using an algorithm,
removing friction from the user experience and making the brand an essential part
of its customers’ lives. Netflix’s use of personalization is common among companies
that excel in customer experience. The customer is at the center of the experience that
is entirely tailored to them.
Figure 9.3 The Netflix brand is known for perfecting the streaming business by
optimizing usage data to create an individualized and customized user experience.
(credit: “Netflix Logo on the PC Monitor, Photographed through a Magnifying
Glass” by Marco Verch/flickr, CC BY 2.0)

Once users enter the Netflix website, they see an experience that makes their
viewing opportunity seamless and flexible. Netflix lets the user know right away
that it streams thousands of movies and television shows on various devices. The
sign-up involves three easy steps, and then the customer is brought into a viewing
world built around them.

The Netflix algorithm analyzes viewing habits based on a variety of factors,

including:

• Viewing history

• Genre or category

• Time of day watched

• How long the user watched

• Devices currently streaming

• Rating history for similar content

• Other Netflix users with similar preferences on the platform3

As the algorithm learns more about the viewer, the customer experience improves,
becoming essential to customers’ lives and building brand loyalty.

CUSTOMER VALUE & SATISFACTION

What are customer value and satisfaction?

It’s proven that defining and delivering customer value and satisfaction can bring
you enormous benefits. Before that, let’s get to know the general notion of what they
are all about.

Customer value is present when a customer perceives that they will get a certain
value from a product or service that they intend to buy. Mathematically, the value is
calculated by subtracting the cost involved to purchase the product/service from the
total benefit the customer receives.

The cost before making a purchase includes the cost of the product, time and effort
spent to understand the product, emotional stress, etc to name a few. Total benefits
here imply the customer experience, product quality, customer service -- everything
a customer benefits from this purchase.

Customer satisfaction, on the other hand, gauges the level of satisfaction a customer
feels after buying a product or using a service.

Each customer has different expectations so it’s really hard to define customer value
and satisfaction.

Building customer satisfaction and value is also another tough task, however, by
understanding their nature, you can have a clearer picture of how to do improve
them.

4 Differences between customer value and customer satisfaction

If you are wondering if there is any difference between customer value and customer
satisfaction, the answer is, yes, they are quite different concepts. And here is how:

#1 Meaning

Customer value is the benefits a customer gets after subtracting all the cost and effort
involved to buy the products/services.

Customer satisfaction emphasizes how satisfied a customer is compared to what

they expected.

#2 Buying process

Customer value is incurred in the perception of customers before making purchase

decisions. If they find they will get more benefit than the cost, time, effort they spent,
then they will buy it. Otherwise, very unlikely that they would make a move.

Customer satisfaction is only present after customers have bought something. The
degree of satisfaction depends on various things during their purchase from page
load speed, customer service to after-sales service, or return policy.

>> Read more: 10 Key Factors Affecting Customer Satisfaction in Ecommerce

#3 How they are calculated

Customer value is a quantitative concept as you can measure the cost and put it in
monetary terms. As for customer satisfaction, it’s subjective to each customer and
can’t be monetized. It’s a qualitative element so you can only ask your customer how
they feel about their purchase to understand how your services are delivered.

#4 How they are used

Consumer value and satisfaction are used for different purposes.

Customer value helps you define what cost and effort are spent to acquire your
products and information related to those products such as communication systems,
pricing, reviews, etc. Thus you can look further and improve these factors.

Customer satisfaction is more likely defined by customer service, customer

interaction, loyalty program, reward point program, guarantee or return policy, etc.
So if you are looking to improve customer satisfaction, these are what you should
look into.

To improve how you perform, it’s essential to understand customer value and
satisfaction expectations then make sure what you provide is up to par.

Customer value and satisfaction example

Example of customer value

Grab - the leading taxi-hailing service in South East Asia is a good example of
delivering customer value. The value or benefits customers receive are clear:

• You get to know the price beforehand

• You get away from the cash payment

• Your location is exactly defined

• You are offered a great reward point program to gain different tier benefits
and many discounts

With little cost (probably some mobile data) and effort, you get access to a super
convenient service.

Customer value and satisfaction example - Grab

Example of customer satisfaction

Transferwire - a payment platform where you can keep, send, receive money from
different currencies. As a newcomer to this platform, there are a lot of unknowns to
their service. However, the website is simple to navigate, instructions are clear and
divided into specific steps. You just need to follow it. The verification process is
quick and you get responses after uploading your documents in real-time. That’s
super easy and quick!

Customer value and satisfaction example - Transferwire

The relationship between customer value and satisfaction

There is a relationship between customer value and satisfaction. They are highly
related to each other and both help your business to grow.

Customer value leads to customer satisfaction. Once a customer perceives they will
gain benefit from a product, they will make a purchase. With customer service and
after service perfectly delivered, customer satisfaction will be achieved. You can’t
just get customers satisfied if they don’t buy in the first place. So customer value is
the key to lure customers to your door and start their buying journey.

Customer satisfaction increases customer value. Say, a customer bought a product

from your store, and thanks to the exceptional service, he/she is convinced to repeat
the purchase. As (s)he has gone through the whole buying process with
you, (s)he knows (s)he will gain great benefit and convenience, so the cost/effort
involved is less and the customer value increases.
Therefore, it’s crucial to understand the relationship between customer satisfaction
and customer value and differentiate their nature to apply it wisely into your
business.

Conclusion - delivering customer value and satisfaction

Creating customer value and satisfaction is key to keep a customer stay with you in
a long run. Before setting out to improve these metrics, you need to explain the
relationship between customer satisfaction and customer value to better improve
your system and service. You can also use customer value and satisfaction in
marketing as testimonials to spread good images of your business to the public!

EXCHANGES & RELATIONSHIPS.

Exchange, Transactions and Relationships

Marketing occurs when people decide to satisfy needs and wants through exchange.
Exchange is the act of obtaining a desired object from someone by offering
something in return. Thought it is only one of the many ways people can obtain a
desired object, it allows a society to produce much more than it would with any
alternative system. For an exchange to take place, several conditions must be
satisfied. Of course, at least two parties must participate, and each must have
something of value to the other. Each party also must want to deal with the other
party and each must be free to accept or reject the other’s offer. Finally, each party
must be able to communicate and deliver. These conditions simply make exchange
possible. Whether the exchange actually takes place depends on the parties’ coming
to an agreement. If they agree, we must conclude that the act of exchange has left
both of them better off or at least not worse off. After all, each was free to reject or
accept the offer. In this sense, exchange creates value just as production creates
value. It gives customers more consumption possibilities.

A transaction is marketing’s unit of measurement. It consists of a trade of values

between two parties. A monetary transaction involves trading goods and services in
return for money whereas a barter transaction involves trading goods and services
for other goods and services. Transaction marketing is part of the larger idea of
relationship marketing. Marketing is shifting from trying to maximize the profit on
each individual transaction to maximizing mutually beneficial relationships with
consumers and other parties. This is based on the assumption that if good
relationships are built, profitable transactions will simply follow.
Marketing as an Exchange Process

At the beginning of any marketing course or programme it is important to

appreciate how exchange processes work. An exchange process is simply when an
individual or an organisation decides to satisfy a need or want by offering some
money or goods or services in exchange. It’s that simple, and you enter into
exchange relationships all the time.

The exchange process extends into relationship marketing. With

relationship marketing we purposefully look at the long-term relationship with our
target audience, and aim to grow our business. By delivering value to our customers
we consistently nurture the relationship with customers. Later in your studies you
will come across relationship marketing and customer relationship management,
which encompass the traits of a basic marketing exchange process and take it much
further.

Exchange is the act of obtaining a desired object from someone by offering

something in return.

(Armstrong et al 2009)

For example you go into a restaurant and order your favourite meal. You eat the
food and then you pay for it with your credit card. That’s a basic exchange
relationship.

You use your Android or iPhone to download an app and you pay for it using
PayPal. Again you have gone through and completed an exchange
process.

You see a newspaper advertisement asking you to donate blood and you return a
coupon to become a blood donor.

You watch the news on TV and listen to the views of a political candidate, and on
polling day you vote for that person.

Can you think of any more examples of marketing as an exchange process? Write
down three more examples in addition to those above.

Marketing managers attempt to engender a response from a marketing stimulus.

This is the exchange process as it begins. Let’s remember that marketing extends
further than goods or services. It could be that a government is trying to persuade its
population to stop smoking, or speeding. So marketing is a series of actions and
plans that are designed to recruit, retain and extend goods and services to a target
audience. This is the basic exchange process in marketing.
 MARKETING ORIENTATIONS:

PRODUCTION CONCEPT, PRODUCT CONCEPT, SELLING CONCEPT,

MARKETING CONCEPT, SOCIETAL MARKETING CONCEPT.

Marketing is the process of “creating, communicating, delivering, and exchanging

offerings that have value for customers, clients, partners, and society at large,”
according to the American Marketing Association. This process is done in a number
of different ways; marketing professionals use one or more of the five concepts of
marketing in order to earn consumer confidence and create profitable, long-term
relationships with consumers. But not all the concepts are equally effective.

Robert Katai, an experienced marketing strategist, provides the definition of a

marketing concept: “A strategy that companies and marketing agencies design and
implement in order to satisfy customers’ needs, maximize profits, satisfy customer
needs, and beat the competitors or outperform them.” The main five include the
production, product, selling, marketing, and societal concepts, and they have been
evolving for decades. Not every concept is beneficial to every business, so here is a
timely and convenient opportunity to learn more about each one.

The Production Concept

The production concept is focused on operations and is based on the assumption

that customers will be more attracted to products that are readily available and can
be purchased for less than competing products of the same kind. This concept came
about as a result of the rise of early capitalism in the 1950s, at which time, companies
were focused on efficiency in manufacturing to ensure maximum profits and
scalability.

This philosophy can be useful when a company markets in an industry experiencing

tremendous growth, but it also carries a risk. Businesses that are overly focused on
cheap production can easily lose touch with the needs of the customer and
ultimately lose business despite its cheap and accessible goods.

The Product Concept

The product concept is the opposite of the production concept in that it assumes that
availability and price don’t have a role in customer buying habits and that people
generally prefer quality, innovation, and performance over low cost. Thus, this
marketing strategy focuses on continuous product improvement and innovation.
Apple Inc. is a prime example of this concept in action. Its target audience always
eagerly anticipates the company’s new releases. Even though there are off-brand
products that perform many of the same functions for a lower price, many folks will
not compromise just to save money.

Working on this principle alone, however, a marketer could fail to attract those who
are also motivated by availability and price.

The Selling Concept

Marketing on the selling concept entails a focus on getting the consumer to the
actual transaction without regard for the customer’s needs or the product quality —
a costly tactic. This concept frequently excludes customer satisfaction efforts and
doesn’t usually lead to repeat purchases.

The selling concept is centered on the belief that you must convince a customer to
buy a product through aggressive marketing of the benefits of the product or service
because it isn’t a necessity. An example is soda pop. Ever wonder why you continue
to see ads for Coca Cola despite the prevalence of the brand? Everyone knows what
Coke has to offer, but it’s widely known that soda lacks nutrients and is bad for your
health. Coca Cola knows this, and that’s why they spend astonishing amounts of
money pushing their product.

The Marketing Concept

The marketing concept is based on increasing a company’s ability to compete and

achieve maximum profits by marketing the ways in which it offers better value to
customers than its competitors. It’s all about knowing the target market, sensing its
needs, and meeting them most effectively. Many refer to this as the “customer-first
approach.”

Glossier is a recognizable example of this marketing concept. The company

understands that many women are unhappy with the way that makeup affects the
health of their skin. They also noticed that women are fed up with being told what
makeup products to use. With this in mind, Glossier introduced a line of skincare
and makeup products that not only nourish the skin but are also easy to use and
promote individualism and personal expression with makeup.

The Societal Concept

The societal marketing concept is an emerging one that emphasizes the welfare of
society. It’s based on the idea that marketers have a moral responsibility to market
conscientiously to promote what’s good for people over what people may want,
regardless of a company’s sales goals. Employees of a company live in the societies
they market to, and they should advertise with the best interests of their local
community in mind.

The fast-food industry is an example of what the societal concept aims to address.
There’s a high societal demand for fast food, but this food is high in fat and sugar
and contributes to excess waste. Even though the industry is answering the desires
of the modern consumer, it’s hurting our health and detracting from our society’s
goal of environmental sustainability.

How to Choose the Right Marketing Concept

While not all of the above concepts are effective (or perhaps as effective as they once
were), you can utilize aspects from multiple concepts in designing and strategizing a
marketing plan. As you plan, you need to ask yourself some questions before
deciding which marketing concept(s) to base it on. Consider the following:

• Who is your target audience? Which demographics are interested in your

products or services? Where are they looking for you and what you have to
offer? What attracts this demographic to your company? How can you use
that to turn these people into customers?

• What are your goals besides making money? For example, are you trying to
establish a loyal customer base? Are you trying to fill a hole in the industry
you’re selling in?

• What makes your brand unique? What education do they need to be enticed
to buy?

MARKETING ENVIRONMENT:

Marketing Environment: Meaning, Features, Types, and Importance

1. Meaning of Marketing Environment

The marketing environment refers to all internal and external factors, which directly
or indirectly influence the organization’s decisions related to marketing activities.
Internal factors are within the control of an organization; whereas, external factors
do not fall within its control. The external factors include government, technological,
economic, social, and competitive forces; whereas, organization’s strengths,
weaknesses, and competencies form part of the internal factors. Marketers try to
predict the changes, which might take place in the future, by monitoring the
marketing environment. These changes may create threats and opportunities for the
business. With these changes, marketers continue to modify their strategies and
plans.

2. Features of Marketing Environment

The marketing environment today has several key characteristics, including:

1 Specific and General Forces

• Specific forces include those forces, which directly affect the activities of the
organization. Examples of specific forces are customers and investors.

• General forces are those forces, which indirectly affect the organization.
Examples of general forces are social, political, legal, and technological
factors.

2 Complexity

• A marketing environment includes a number of factors, conditions, and

influences. The interaction among all these elements makes the marketing
environment complex in nature.

3 Vibrancy

• Vibrancy refers to the dynamic nature of the marketing environment. Many

forces shape the marketing environment, which does not remain stable and
changes over time. Marketers may have the ability to control some of these
forces; however, they cannot control all forces. Understanding the vibrant
nature of the marketing environment gives marketers an opportunity to gain
an edge over competitors.

4 Uncertainty

• Market forces are unpredictable in nature. Every marketer tries to predict

these forces to make strategies and update their plans. It may be difficult to
predict some of the changes, which occur frequently. For example, customer
tastes for clothes change frequently, creating uncertainty in the fashion
industry.

5 Relativity

• This explains the reasons for differences in demand in different countries.

Product demand may vary depending upon the country, region, or culture.
For example, sarees are a traditional dress in India, and thus are always in
 demand there, while in other Western countries, demand for sarees may be
zero.

3. Types of Marketing Environment

The sale of an organization depends on its marketing activities, which in turn

depend on the marketing environment. The marketing environment consists of
forces beyond the organization’s control but which influence its marketing activities.
The marketing environment is dynamic in nature. Therefore, an organization needs
to keep itself updated to modify its marketing activities as per the marketing
environment’s requirements. Any change in the marketing environment brings
threats and opportunities for the organization. An analysis of these changes is
essential for the survival of the organization in the long run. A marketing
environment mostly comprises the following types of environment:

Micro Environment

Micro environment refers to the environment closely linked to the organization and
directly affecting its activities. It can be divided into supply-side and demand-side
environments. The supply-side environment includes suppliers, marketing
intermediaries, and competitors who offer raw materials or supply products, while
the demand side includes customers who consume products. Key micro-
environmental forces include:

• 1 Suppliers: Provide raw materials for producing goods and services.

Suppliers influence an organization’s profit since raw material costs affect
product pricing. Organizations need to monitor suppliers to track supply
shortages and price changes.

• 2 Marketing Intermediaries: Assist organizations in reaching customers,

promoting, selling, and distributing products. Types of intermediaries
include:

o Resellers: Buy products from organizations to sell to customers (e.g.,

wholesalers and retailers).

o Distribution Centers: Help organizations store goods (e.g.,

warehouses).

o Marketing Agencies: Promote products by making customers aware of

their benefits (e.g., advertising agencies).

o Financial Intermediaries: Provide finance for business transactions

(e.g., banks, credit organizations, and insurance organizations).
 • 3 Customers: Buy the organization’s products for final consumption.
Customer satisfaction is the organization’s main goal, and research and
development efforts are directed toward analyzing and meeting customer
needs.

• 4 Competitors: Organizations offering similar products, competing to gain

market share by using different strategies. This competition helps an
organization differentiate its products and maintain a strong market position.

• 5 Public Group: Various groups that can impact an organization’s ability to

achieve its objectives. Public groups include the general public, media,
financial analysts, or government bodies. These groups can influence
perceptions, affect public opinion, and sometimes directly impact an
organization's activities. Organizations often monitor public opinion and
respond to inquiries to maintain a positive image and relationship with the
public.

Macro Environment

The macro environment involves factors beyond an organization’s control that

influence its activities significantly. The macro environment is constantly changing,
bringing opportunities and threats to an organization. Key factors in the macro
environment include:

• 1 Demographic Environment: The scientific study of human populations,

examining aspects like age, gender, education, occupation, income, and
location. Demographic variables affect the variation in customer tastes,
preferences, and purchasing patterns, influencing marketing strategies.

• 2 Economic Environment: Factors affecting an organization’s cost structure

and customer purchasing power. Elements include:

o Inflation: Affects customer demand; for example, high petrol prices

may reduce car demand.

o Interest Rates: Influence borrowing activities within organizations.

o Unemployment: Leads to no income and affects individuals'

purchasing power.

o Customer Income: Regulates customer buying behavior.

o Monetary and Fiscal Policy: Government policies regulating interest

rates, spending, and taxation affect all organizations.

• 3 Natural Environment: Comprises natural resources necessary for

production. Factors include:
 o Natural Resources: Essential raw materials for production.

o Weather: Creates seasonal demand; for example, high demand for air
conditioners in summer.

o Pollution: Marketing activities sometimes promote eco-friendly

products to mitigate environmental impacts.

• 4 Socio-Cultural Environment: Encompasses societal values, attitudes,

perceptions, and behaviors. These factors determine customer preferences
and purchasing behavior, and provide insights into opportunities and threats.

• 5 Technological Environment: Technology is crucial for economic growth,

constantly evolving to create new market opportunities. Trends include:

o Pace of Technological Change: Leads to product obsolescence.

o Research and Development: Innovation through dedicated R&D

efforts expands growth opportunities.

o Increased Regulation: Organizations must comply with safety and

regulatory standards, especially in industries like pharmaceuticals.

• 6 Political Environment: Refers to the influence of government agencies and

policies on organizational activities. For example, political decisions in certain
regions can impact market accessibility, such as when political issues led to
the closure of Reliance Fresh stores in parts of Uttar Pradesh.

• 7 Legal Environment: Includes regulations that limit or influence

organizational and individual activities. Compliance with legal standards is
essential, as violations can lead to legal consequences. For instance,
pharmaceutical companies need to adhere to standards set by regulatory
bodies like the Drugs Controller of India.

MARKETING CONCEPTS - PUSH V/S MARKET PULL

I recently bought a new laptop. Before deciding which one was right for me, I read
through a number of online reviews to ensure I was making an informed decision.
Once I narrowed my search down to a couple of models, I visited the store to
examine specs in person before committing.

To phrase the above scenario slightly differently, I was “pulled” into consider certain
brands due to their laptop marketing. Then, I was "pushed” into selecting the right
one for me by going to the store to read the marketing materials and see the laptops
in person.
This is just one example of how push and pull marketing are at work both separately
and together.

WHAT IS PUSH MARKETING?

Push marketing is a strategy focused on "pushing” products to a specific audience.

Push Marketing

The goal of push marketing is to bring what you offer to customers through your
marketing. For instance, you can push your products via marketing content on social
media.

Also known as direct marketing, push marketing is a form of general advertising.

When I grocery shop, I look for the signs that notate sales and gravitate towards
them — picking up limes I never knew I needed. This is an example of push
marketing.

Push Marketing Strategy

To understand a push marketing strategy, let’s consider Suzie.

Suzie’s marketing company is ready for its big debut. But the local businesses she's
trying to work with have no idea her company exists. This is a job for push
marketing.

So, Suzie reaches out to businesses in her area via email marketing, puts ads in local
shops, and creates a social media business page to expand her reach.

Because Suzie’s goal is to introduce her company to local businesses as she launches
her new service, push marketing is an effective way to get the word out about what
she does and what she offers.

For a business that’s been around for a while but still wants to execute a push
strategy, another option is running a limited-time offer for your product. Use a
channel your target market is closely tied to, such as a social media platform, or use
landing pages to your advantage by including a CTA at the end.

Push Strategy Examples

1. Display Ads

Display ads appear in areas that are specifically dedicated to paid ads and may be
formatted in a variety of ways, such as a banner ad. There are also display ads on
social media platforms, such as Instagram, that you can create and share.

2. Billboards
Billboards are an effective way of building brand awareness and broadcasting your
business, product, service, or campaign to as many people as possible. They're
strategically placed in high-traffic areas to get as many eyes on them (and hopefully,
members of your target audience).

3. Direct Marketing

Direct marketing and direct advertising are also forms of push marketing — this can
happen in a showroom, at a trade show, or in a brick-and-mortar store. It might also
entail someone at a grocery store, like Trader Joes, offering free samples to shoppers.

WHAT IS PULL MARKETING?

Now, let's talk about pull marketing.

Pull Marketing

Pull marketing is best for when you want to draw consumers to your product. The
goal is to create loyal customers by providing marketing materials that showcase
what they’re looking for.

For instance, if someone is looking for a new babysitter, they might visit Care.com.
They can select a babysitter based on a list of preferences that are specifically shown
to fit their needs.

In the age of consumers educating themselves on products and services, pull

marketing has become vital to markets with heavy saturation, like new apps or
clothing companies. Pull marketing shows how you are unique as a brand.

Pull Marketing Strategy

To put this in the context of another business, let’s take a look at Luis.

When businesses are looking for a point-of-sale (POS) system, Luis wants his POS to
be the one they choose.

Pull marketing channels are exactly what Luis needs to achieve this. To pull his
target market, Luis starts a blog on his website, runs specialized and high-traffic
social media campaigns, and focuses on differentiating his brand from his
competitors.

To amp up his pull marketing strategy, Luis focuses on SEO for his online marketing
to make his system discoverable to his target market. Google reviews, and word-of-
mouth reviews on sites like Yelp are his best friends throughout his campaign.
Since Luis has already developed a following from his app’s debut, he can focus on
credibility and reliability rather than marketing to make the next sale. After a while,
this will pull customers to his business. Pull marketing strategies generally take
longer than push marketing to drive results, but this strategy ensures long-term
customers and growth.

Now you may be wondering about the best ways to ensure you're selecting the right
type of marketing for your business — to help with just that, lets more thoroughly
compare the two strategies.

Push vs. Pull Marketing

Push marketing, or outbound marketing, can lead to quicker sales and is powered by
what you push out to your audience via your marketing. Pull marketing, or inbound
marketing, starts internally and is focused on building and perfecting a marketable
brand to new and existing customers.

Pull Strategy Examples

1. Social Media Marketing

Disregarding social media paid ads, as mentioned in the push strategy section
above, there are a number of ways you can use social media marketing as a form of
pull marketing. This includes how-to videos, influencer content (e.g. an influencer
sharing a demo on how they use your product), beautiful images and videos of your
product, and co-marketing campaigns on social media.

2. SEO

Search engine optimization (SEO) is a strategy that allows you to get your content,
web pages, and more in front of the people who are searching for relevant
keywords, phrases, and terms.

When you optimize your web pages and other content for those search terms your
target audience is actively looking for, your marketing materials and web pages will
appear in front of them organically. This is a great way to naturally get in front of
your target audience and buyer perosnas without feeling pushy while also
increasing brand awareness.

3. Blogs

Blogging is an effective way of educating your target audience and providing them
with the knowledge they need to make informed buying decisions, understand how
to use and apply your product or service, or gain insight into changes in an industry,
product updates, etc.
When you search engine optimize your blog content, it appears in front of your
target audience organically on search engines like Google, automatically increasing
the number of people who see and interact with your content as well as improving
brand awareness and more.

Is push or pull marketing more effective?

To decide which method best fits your business, think about how you want to
approach consumers.

If you are trying to get the word out about your business, push will most likely be
the way to go. If you’re a marketer building brand buzz in your market — perhaps
about a specific product or service — pull would probably be best.

There are a few cons to push marketing — mainly splitting costs and keeping long-
term customers. If your company is working with a supplier to implement a push
marketing strategy, you’d have to split profits with the supplier at the end of the
day, which means less revenue for you. Since push marketing focuses on short-term
sales, building brand loyalty is difficult with an outbound strategy.

Meanwhile, a downside to pull marketing is that you might not cater to the right
target audience. In order to connect to your consumers, you need to know who they
are and what they’re looking for. For instance, an athlete shopping for running shoes
might not be interested in advertisements for heels.

An effective way to make sure you're covering all bases with your marketing
strategy is by implementing a push and pull marketing strategy — you can marry
the best parts of both strategies in a way that's complementary to your business,
audience, and goals.

Push and Pull Marketing Strategy

Push and pull marketing strategies can work together. Customers need a push for
demand to be created and a pull to satisfy that demand. For those who haven’t heard
of your company, a push is needed. For those a little further along in their buyer’s
journey, you can pull them in.

The way you incorporate both strategies at your company will depend on your
unique push and pull goals — to help you determine what your push and pull
strategy will look like, lets review some examples of push marketing followed by
examples of pull marketing. Then, you'll have a stronger understanding of what
your strategy will end up looking like.
Push vs Pull Marketing: Which Is More Effective and When?

Push Marketing

Push marketing is aggressive and a lot more deliberate than pull marketing. It is
generally used when businesses want to take advantage of a short-time period. Here
are some instances when push marketing can be helpful:

• Launching a new business

• Releasing new products and services

• Expanding to a new niche

• Clearing out product stock before the end of the season

• Promoting brand recognition against a dominant competitor

• Generating cash flow or sales quickly

• During holidays and seasonal events

• Temporary promotional campaigns

Pull Marketing

Pull marketing involves letting your customers come to you by making it easier for
them to find you. Here are some instances when pull marketing can be helpful:

• Maintaining dominance in a specific niche

• Ensuring long-term business growth

• Improving customer loyalty

• Improving sales and revenue without an expensive ad budget

• Increasing social media traffic

• Engaging with customers and being at the top of their shopping funnel
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