1 – Marketing: Scope and Concepts

Introduction

Marketing has existed since the dawn of time. Though marketing is studied and discussed in business terms today, its origins may be traced back to ancient civilizations when man used symbols, signs, and material items to transact and communicate with others. Modern marketing centres around notions that have been around for a long time. The earliest signs developed by man to communicate with others gave rise to the concept of marketing. Marketing became an organised field to study; otherwise, marketing existed in the ancient past.

In the past, marketing was frequently employed as a synonym for the skill of selling. Even today, there is a lot of confusion between marketing and selling among management students and practitioners regarding the two primary modalities of commerce and exchange. This lesson attempts to dispel any misconceptions about marketing and how it has grown to become the current marketing concept. You will also learn the true meaning of customer orientation, customer focus, and other ideas that allow marketing to outperform selling.

1.1 Defining Marketing-related Factors

Customers are at the heart of marketing, from start to finish. At the heart of modern marketing is creating outstanding customer value and high customer satisfaction. Recognizing the critical components of marketing success is a question of common sense. If a company truly tries to understand customer needs, carefully studies competition, develops and offers superior value at a reasonable price, makes these products available in convenient locations for customers, and communicates with them effectively and efficiently, such products have every reason to be in demand and sell consistently.

Successful businesses have one characteristic. They are all very customer-focused in their approach. Corporate success includes strong strategy, dedicated and competent human resources, dependable and rapid information systems, and effective execution and control. However, in the end, these organisations’ emphasis and dedication is to truly understand their customers’ requirements and desires as much as possible to produce satisfied customers in their target markets.

If you ask a group of people what they think marketing is, you’ll probably get various answers. Advertising and personal selling are likely to be the first two elements described as marketing because they are the most apparent aspects of marketing to most people. However, marketing encompasses far more tasks than most people realise. Marketing can be defined as serving consumer wants in a socially responsible manner while making a profit. Authors of marketing books have described marketing in several ways. A handful of these definitions are listed below.

The American Marketing Association defines marketing as: “Marketing is an organisational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organisation and its stakeholders.”

Philip Kotler says, “Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others”.

Pride and Ferrel’s definition says,

“We define marketing as creating, distributing, promoting, and pricing goods, services, and ideas to facilitate exchange relationships in a dynamic environment”.

“Marketing is a total system of business activities designed to plan, price, promote, and distribute want-satisfying products to target markets to achieve organisational objectives”.

(William J. Stanton, Michael J. Etzel, and Bruce J. Walker, Fundamentals of Marketing,

McGraw-Hill, 1994.)

“It (marketing) is the whole business seen from the point of view of its final result, that is, from the customer’s point of view”.

(Peter F. Drucker, Practice of Management (1954).

The essence of all of these marketing concepts is meeting the needs and desires of customers. This primary goal appears to be straightforward, yet it is not. According to research, many clients either have inhibitions about communicating their actual needs or desires or do not know who they are. The subconscious is said to be the actual repository of deep-seated motivations. To the greatest extent possible, marketers do consumer research to learn about their target customers’ needs and desires and then build appropriate marketing programmes to satisfy those needs and wishes.

1.1.1 Concept of Exchange

The principle of exchange lies at the heart of marketing thought. There is no marketing until there is an actual or potential exchange. People can obtain what they need or want by engaging in socially acceptable or non-socially acceptable behaviours. Self-production and exchanging what a person needs or desires are two socially acceptable methods of gaining things. Begging, the third approach, is considered a less-than-polite means of gaining items in some communities. The fourth strategy may entail behaviours such as shoplifting, burglary, or employing potentially threatening force, among other things, to obtain items, which are entirely unacceptable in all civilised cultures and are punishable by law. In a marketing setting, exchange is a highly appreciated technique to gain what a person needs or wants. In exchange, both parties contribute something of value that is freely acceptable to each other. Understandably, parties participating in an exchange must first agree to the terms and conditions given out by each side for the trade to take place.

Concept of Exchange

1.1.2 The Barter System

People used barter to swap things for other goods. It is the exchange of things without a set price. Some places use currencies to trade, whereas others exclusively utilise products. The old trading posts were frequently based on barter, with minimal cash.

When money was not established, trading was conducted on a barter basis. This was only conceivable in a primitive economy, but as economies developed, directly exchanging things without using money was not without flaws. This method had several flaws. These were as follows:

1. Wants that are incompatible
2. Lack of a Standard Value
3. Commodity Indivisibility
4. The absence of a store of value

In today’s economy, the barter system is doomed to fail. Money is required for large-scale production. Money performs the same functions that were flaws in the barter system.

1.1.3 Needs, Wants and Demand

The presence of human beings denotes the presence of needs, and marketing thought begins with this critical realisation. It is incorrect to suppose that anyone can create needs. Needs are woven into the very fabric of human life. A need is a sense of being deprived of some essential fulfilment. This suggests that unless the individual is deprived of some crucial gratification, the need does not exist, at least for this individual. Humans have a wide range of demands, some of which are simple and others of which are complicated. Individuals are born with basic requirements, which are physiological or biogenic in origin. These demands, such as the need for oxygen, water, food, shelter, clothes, and sex, are critical to human survival. These fundamental demands are also known as primary needs. Other demands that people develop due to growing up in a culture and society include the need to belong, acquire information, self-expression, self-esteem, prestige, power, achievement, and so on. Secondary wants, also known as acquired needs, are thought to be the product of an individual’s subjective psychological composition and relationships with others.

Example: To distinguish between need and want, suppose four people are hungry; their need is food. They go to McDonald’s, assuming they have the resources to get involved in getting food to fulfil hunger. The first orders a vegetable burger, the second a puff, the third a chicken burger, and the fourth a giant ice cream. To quench their hunger, they are all consuming some food. The precise satisfier that a person seeks defines the desire. As a result, wishes are specific satisfiers of particular needs.

Individual desires are influenced by society, lifestyle, and personality.

For example, a person may purchase a Mercedes as a status symbol, yet a tribal leader in a distant section of the Amazon rain forests may wear an eagle feather in his headpiece as a status symbol.

Different persons may express various wants to satisfy any given need, and the total number of wants for all needs appears limitless. It is not enough for people to have needs and desires to influence trade. Because everyone’s resources for acquiring things are limited, people want to buy products that they believe will deliver the most value and enjoyment for their money. When a want is backed by purchasing power, it is referred to as demand, and marketers are more interested in demand than needs or wants.

Marketing seeks to discover human and social needs and to meet them through creating, communicating, and delivering goods and services. According to Kotler, marketers are active in marketing ten various entities: tangible things, services, events, information, ideas, locations, people, experiences, properties, and organisations to achieve the goal of delivering consumer happiness.

People acquire items solely because they regard them as a means to meet specific needs or desires. The term “product” refers to anything that can satisfy a need, whether a physical product, a service, an idea, a person, a place, or an organisation. Marketers clearly distinguish between commodities and services to position them in the proper context. Physical goods are tangible, whereas services are intangible. People acquire items or purchase services not so much to be the owner or customer as to reap the benefits they bring. Who would buy food only for the sake of looking at it? No one would likely buy a refrigerator to own it, but to prevent food from going stale and keep it fresh. A large family with more excellent finances will almost certainly purchase a larger two-door refrigerator. In contrast, a nuclear two- or three-member family with limited resources may prefer a smaller-capacity refrigerator.

1.1.4 Marketing Elements

Marketing is an efficient method of producing reactions, ideally predictable. Marketing consists of the following elements:

1. Ongoing review, business augmentation, marketing strategies: Continuously assessing the strengths and weaknesses of the business and its marketing tactics to improve strategies continuously.
2. Market Research: Estimate the size and potential of your consumer market and comprehend the industry and economic factors related to your competitors’ strengths and shortcomings.
3. Customer Perspective: Recognize the customer’s point of view. This is frequently where the seed of innovation germinates as we learn more about the client perspective and uncover new, emerging customer demands.
4. Differentiating: You can stand out from your competitors in terms of pricing or value or create a niche market in which you dominate.
5. Increasing Visibility: Make your company visible to your target client groups. If not, what steps must you take to improve your visibility among each client segment you serve? For example, developing a marketing communications strategy and branding tactics will assist you in accomplishing this.
6. Creating Channels for Product/Service Distribution: Create deep and broad channels for distributing your product and/or services.
7. Establishing a Marketing Budget: Budgeting for the expense of every promotional activity, such as salesperson salaries/commissions, advertising, sales promotions, trade show promotions, print/media packages, and so on.
8. Trial and Error: Finance your marketing initiatives with trial and error to identify what performs best.
9. Keeping Track of Results: Keep track of your marketing results to see what works best.
10. Following Through: Keep your promises to your customers regarding customer service and operations, such as providing on-time, high-quality products.

1.1.5 Marketing Tasks

In a word, marketing is demand management, and demand for products and services frequently needs to be managed in various ways for various reasons. There may be other instances where demand management necessitates a different approach.

For example, during a harsh winter, demand for hotel accommodations in Mussoorie falls. In two separate articles, Philip Kotler and Sidney J. Levy identified eight central demand states:

1. Negative Demand occurs when a large portion of the target market dislikes the product and is willing to pay a premium to avoid it. The marketing role is to discover and analyse the causes of this state and determine whether a product redesign or a change in marketing mix elements might help. Unpleasant and unpleasant medical therapy, for example, has a low demand.
2. No Demand: Customers may be uninformed of or uninterested in the goods. The solution is to raise product awareness and relate product benefits to customers’ needs and desires. Small brands, for example, are frequently faced with a lack of demand.
3. Dormant Demand occurs when currently available products fail to meet customers’ vital wants. If the market size is favourable, the marketing task is to effectively produce a product or service to meet latent demand. Cigarettes with no negative consequences, for example.
4. Falling Demand: Companies will encounter this problem sooner or later with their products or services. The aim is to reverse this trend, and marketing should investigate the causes and take immediate corrective action. New markets, product feature changes, or more targeted and successful promotions could all hold the solution. Desktops, for example, are in short supply these days.
5. Fluctuating Demand: Many businesses face this trend, with demand fluctuating according to the season, festivals, etc. The aim is to coordinate marketing activities to change demand through flexible pricing and sales promotion strategies. For example, air conditioners, refrigerators, and other appliances have varying needs.
6. Full Demand: This is a position all businesses aspire to and strive for. The objective is to maintain demand while keeping up with changing client preferences, increasing competition, and assessing customer satisfaction. Consider a circumstance in which the number of shirts produced by the producers satisfies the amount of demand.
7. Excess Demand: At this level of demand, the company cannot supply the demand. Typically, the only choice is to develop ways to temporarily or permanently reduce demand. In general, marketing aims to decrease overall demand by demarketing, which can be accomplished by raising prices or eliminating advertising and services. Selective demarketing entails lowering demand from less profitable markets. For example, popular automobile models such as the Maruti Suzuki Swift are in high demand.
8. Unwholesome Demand: This refers to managing demand for dangerous products. The marketing task is to make the public aware of the dangers and ill effects caused by the abuse or overuse of such products through suitable fear appeals, price increases, or limited availability. Cigarettes and other nicotine products are an example.

1.2 Marketing Concepts

Since the late 1800s, marketing has continuously evolved through several marketing approaches. These stages of marketing evolution give a broad picture, and many businesses have adopted the most recent marketing approach or philosophy.

A marketing orientation (also known as the marketing concept or consumer focus) is one in which the wants and needs of consumers and potential customers drive all strategic decisions made by the company. The company’s corporate culture is systematically committed to delivering customer value. A company frequently requires marketing research to determine what its customers want. The marketer believes that if this procedure is carried out correctly, it will offer the organisation a long-term competitive advantage.

This consumer emphasis can be thought of as a three-step process. First, client desires are explored, then the information is communicated throughout the company, products are manufactured, customer satisfaction is assessed, and adjustments are made as needed.

Marketing orientation was created in the late 1960s and early 1970s at Harvard University and a few forward-thinking businesses. It supplanted the preceding sales orientation, which predominated between the mid-1950s and the early 1970s, and the production orientation before the mid-1950s.

1.2.1 Production Concept

This notion, regarded as one of the earliest administrative orientations, typically aimed at obtaining the highest potential productivity. This theory assumed that people would be more interested in acquiring things that were easily accessible, moderately priced, and well-made. It was a sound strategy in light of market behaviour when customers had few options. Managers, who typically had skills in manufacturing and engineering, were focused on boosting production efficiency, lowering production costs, and expanding distribution. Even today, this strategy appears fairly sensible in relatively poor and growing nations, where customers are more concerned with possessing a thing and less bothered with finer features and aesthetic appeal. Generally, one essential condition appears favourable to adopting production orientation: demand considerably outstrips supply when the masses seek a lower-cost product.

In India, for example, The National Textile Corporation (NTC) and its subsidiaries adhere to this principle while producing textiles for the country’s vast, impoverished population. Their concept and positioning are expressed in their advertisement, “National Clothes at Reasonable Prices.” In the worldwide context, Intel Corporation has spent nearly three decades focusing on raising the production output of its succeeding generations of CPUs to lower the prices of each enhanced iteration.

The production model is unlikely to be abandoned for a long time because there will always be products and populations of such a character that certain enterprises will feel at ease with this philosophy.

1.2.2 Product Concept

According to the Product Concept, consumers will prefer items with traits such as quality, performance, and other unique aspects. Managers concentrate on creating superior products and upgrading existing product lines over time. Scientific laboratory innovations are commercialised, and customers can learn about and use these items. This is known as the “Technology Push Model.” The issue with this approach is that managers fail to read their customers’ minds and instead launch items based on their technology research and scientific advances. It is common for inventions to enter the market before they are ready. Innovative items are introduced without first informing customers about them and the potential benefits or value the client would receive from using the new products.

For example, the television major Onida introduced the Golden Eye Technology to the Indian market, but the market did not recognise the advantages of this edge. As buyers became more aware of the numerous brands and technologies associated with televisions, LG introduced new technology and enjoyed marketing success.

1.2.3 Selling Concept

The sales approach appears founded on a nagging fear that buyers will not purchase the product in sufficient quantities unless forcefully pressed. During the 1920s and 1950s, selling was the primary technique of generating sales and earnings in developed countries. Businesses considered personal selling, advertising, and distribution the most significant marketing efforts. Instead of identifying and addressing consumer wants, the selling strategy centres around transforming existing product(s) into revenue. The sales idea is frequently witnessed when firms rely heavily on their promotional powers based on a “hard sell” strategy. It is evident that if a company’s products do not meet changing client tastes and requirements, managers may be tempted to engage in aggressive promotional attempts to sell sufficient quantities.

Example: Sergio Zyman states in his book, The End of Marketing as We Know It, that marketing aims to sell more products to more people more often for more money to create more profit. This has recently occurred in the case of several credit cards in our country.

In general, “hard sell” is frequently encountered when consumers acquire things or services without much thought, such as non-essential commodities, and tend to put off such purchases. With ever-increasing competition, items are becoming increasingly standardised without significant uniqueness, i.e., commoditization, and solid promotional activities in all feasible ways are bound to continue to capture a larger share of the consumers’ purse. The effects of “hard sell” may affect the consumer base to the point that they may even bad-mouth the product if it fails to meet their expectations.

1.2.4 Marketing Concept

After WWII, the variety of items increased, and individuals had more disposable cash, allowing them to be choosier and purchase only those products that more accurately fit their evolving requirements and desires. These requirements, however, were not immediately apparent. Around the mid-1950s, American businesspeople began to recognise that efficient production and substantial promotion, including hard-selling, could not guarantee that customers would buy products. Customers became increasingly hesitant to be convinced as time passed, and they gained more information and expertise. Rather than generating items first and then persuading people to buy, more and more organisations discovered that discovering what customers wanted was necessary before making a product. The essential questions became:

1. What exactly do customers want?
2. Can we build it while they are still interested?
3. How can we keep our customers happy?

As a result, the marketing concept period began. The marketing concept implies that an organisation should focus on the needs and desires of its customers, coordinate its activities, and strive to achieve organisational goals. According to Nike’s CEO Geraldine E Williams, “For many years, we thought of ourselves as a production-oriented corporation, putting all of our effort into product creation and manufacture. But we’ve realised that marketing the product is the most crucial thing we can do.” The primary goal of all organisational actions should be to meet customers’ needs. This necessitates paying close attention to consumers in the same way that a student does to a teacher. According to Stanley F Slater and John C Narver, there is a positive association between market orientation and performance.

Philosophies that appear reasonable and appealing on paper might be challenging to implement into practice. To adopt the marketing concept as the guiding philosophy, the company must accept specific general requirements and deal with particular issues. According to Alan Grant and Leonard Schlesinger, market orientation necessitates organizational-wide development of market knowledge across departments and organizational-wide responsiveness to it. It entails developing a dependable information system to understand consumers’ demands and design the appropriate need-satisfying solutions. Setting up an information system is typically an expensive endeavour that necessitates investing money and effort in its development and upkeep. In the event of one or more departments, company-wide coordination may necessitate reorganising internal processes and ultimate objectives. Recognizing the importance of marketing, the head of marketing must be a senior management team member. Acceptance and implementation of a marketing concept necessitates the assistance of senior management and other managers and employees. To instil a customer-oriented culture, personnel at all levels of the organisation must grasp the value of the customer and the necessity of customer satisfaction. Internal consumers (business personnel at all levels) must be satisfied and driven to foster an organizational-wide culture that places a high value on creating a satisfied customer. To do so, the organisation must provide an acceptable work environment and address their legitimate demands. According to Benson P. Shapiro, a corporation is customer-focused if the following four crucial questions are answered “yes”:

1. Is it simple for customers to do business with us?
2. Do we follow through on our commitments?
3. Do we live up to the expectations we’ve set for ourselves?
4. Are we attentive to the needs of our customers?

Three main principles are emphasised in the marketing concept:

Customer-oriented Planning and Implementations

The main goal of all employees, regardless of department or functional area, should be to meet customers’ needs. This would necessitate carefully segmenting the market based on the appropriate criteria, targeting the relevant segment(s), learning about customer needs and desires, analysing and finding the correct opportunities, and aligning them with the company’s capabilities.

Coordination of all Organisational Activities

Product planning, pricing, distribution, and promotion should all be rationally and consistently combined, and the marketing director should be part of top-level management.

Coordinated Marketing is Critically Important to achieve Organisational Goals

The reward for performing a good job is increased sales and profits because, without money, the company cannot survive or improve its offerings.

Example: Marketing concept differs significantly from production concept and selling concept. Not long ago, Indian automakers such as Hindustan Motors, Premier Automobiles, and Bajaj Auto showed little regard for customers, mass-producing outmoded models (demand exceeded the supply). Even though prices continued to rise, little was done to improve the models. Customers preferred Bajaj as the only manufacturer of scooters, and to own one, they had to deposit money in advance and wait for five to ten years before becoming proud owners. With Japanese participation, things began to change only after the advent of Maruti automobiles. Premier Auto and Hindustan Motors suffered huge setbacks, sales fell, and there were few willing purchasers. Maruti initially struggled to satisfy demand, and purchasers eagerly reserved the vehicle and awaited delivery. Bajaj Auto was in a similar scenario because customers had many two-wheeler options. Almost every automaker now appears to be frantically attempting to please customers. Customers strongly prefer specific characteristics and pricing ranges. Maruti has also begun selling used, reconditioned, and trustworthy automobiles from its outlets to clients searching for bargains to increase its market share.

Typical Organisational Pyramid and its Inverted Position

According to the marketing concept, the usual pyramid showing an organisation must be inverted to pursue the marketing concept. In an inverted arrangement, the client occupies the highest pedestal, and the top management occupies the lowest. The consumer initiates the communication flow, and staff and executives look up to discover what the customer wants and then respond to the inputs. This is the best way to provide the desired value, increase customer pleasure, and increase client retention.

1.3 Holistic Marketing Approach

Over the previous decade, there have been significant changes in every aspect of human activity, implying that this necessitates new marketing thinking, a new strategy for business, and a holistic marketing approach. Marketing research establishes market categories, sizes, and needs in this new way. To more thoroughly meet those objectives, marketers must take a more comprehensive and unified approach to internal marketing, targeted marketing, relationship marketing, be socially responsible, and make decisions about the marketing mix’s controllable aspects.

1.3.1 The Marketing Mix

Marketing mix is a significant concept in modern marketing. It involves practically everything a marketing company can use to influence consumer perceptions favourably towards its products or services to attain consumer and organisational objectives. A marketing mix is a model of crafting and implementing a marketing strategy. Prof. Neil H. Borden first used the term “marketing mix” in 1949 to include factors such as distribution, advertising, personal selling, and pricing in the marketing process. Borden claims that the phrase came to him while reading James Culliton’s description of the activities of a business executive: (An executive) “a mixer of ingredients, who sometimes follows a recipe as he goes along, sometimes adapts a recipe to the ingredients immediately available, and sometimes experiments with or invents ingredients no one else has tried.”

[Wikipedia: James Culliton, The Management of Marketing Costs, Research Division, Harvard University (1948)].

There are dozens of marketing mix tools available. Prof. E. Jerome McCarthy, on the other hand, categorised the “Marketing Mix Variables” into four Ps: Product, Price, Place (distribution), and Promotion. These four Ps indicate tactically controlled characteristics that differ depending on the product and target market. This classification is widely used in marketing circles throughout the world.

Marketing Mix Elements (4Ps)

Product Decisions	Price Decisions	Place Decisions	Promotion Decisions
Brand name	Pricing strategy	Distribution channels	(push, pull, etc.)
Functionality	Suggested retail price
Styling	Wholesale price	Market coverage	Advertising
Quality	Various discounts	– intensive	Sales promotion
Safety	Seasonal pricing	– selective	Personal selling
Packaging	Bundling	–   exclusive	PR/publicity
Repairs & support	Price flexibility	Inventory	Promotional budget
Warranty Accessories and Services	Price discrimination	Warehousing Order Processing Transportation

Other marketing mix classifications worth noting include those of

(1) Albert Frey,

(2) William Lazer and Eugene J. Kelly, and

(3) Mary Bitner and Bernard Booms.

(1) The Offering: product, packaging, brand, pricing, and service, according to Frey’s two-factor classification.

(2) Examples of methods and tools are Distribution channels, personal selling, advertising, sales promotion, and publicity.

Lazer and Kelly’s second classification comprises three factors: Bitner and Boom’s model incorporates seven Ps:

(1) Goods and Services Mix,

(2) Distribution Mix, and

(3) Communications Mix. However, regarding marketing mix, the 4Ps are the most prevalent categorisation.

Marketing management attempts to create the best combination of marketing mix variables for each product to meet the target market’s needs. Elements of the marketing mix are changed to fit changing market conditions and competing companies’ marketing tactics.

4Ps and 4Cs of Marketing

Product (Customer Benefit)

The product or service is the most significant component of the marketing mix. An ancient marketing adage goes, “Without a good product, you have nothing.” The product is directly tied to meeting the demands and desires of the target market’s customers. Customers buy things because they are believed to be the best way to meet their requirements and desires.

“A product,” according to Philip Kotler, “is anything that may be presented to a market for attention, acquisition, usage, or consumption that may satisfy a need or want.” This concept includes tangible items, services, people, locations, organisations, and ideas. Various product features, such as quality, variety, design, brand, packaging, services, and warranties, among others, can be modified to meet the target market’s needs. This may eventually impact the product quality, which can be kept high or poor. Other product elements marketers develop include service, packaging, labelling, instruction manuals, warranties, and after-sales service. Customers are constantly looking for new and improved products, so marketers should improve existing items, develop new ones, and phase out old ones that customers no longer need or desire.

HUL’s products include shampoo, soap, hair oil, cream, detergent, drinks, etc. Banking businesses’ products include savings accounts, current accounts, fixed deposits, credit cards, etc. Consulting services, India as a tourist destination, and Avatar (the film).

Promotion (Marketing Communications)

Promotion is an essential component of any marketing programme because it is concerned with effectively and efficiently communicating marketing strategy decisions to positively influence target customers’ perceptions and facilitate exchange between the marketer and the customer that may satisfy the objectives of both customers and the company. In reality, everything a firm does has the potential to communicate with its target clients. For example, a product’s price can speak a specific image of the product to target customers.

Low-priced designer clothing, for example, is unlikely to attract high-profit, well-heeled target clients, whereas less affluent shoppers may find the designs too avant-garde for comfort.

Advertising, personal selling, sales promotion, direct marketing, and publicity are the main components of the promotion mix. The only controllable way for a corporation to raise public awareness about itself, its products and services, and its features and positively affect their opinions is through its promotional efforts. Marketing managers must build a good marketing mix since any weak ingredient that does not complement others can harm a product’s chances of success in the market. To effectively communicate with the target market, all aspects of the marketing mix should complement one another. The best products and the most vital advertising efforts will not sell if unavailable at distribution points.

Place (Customer Convenience)

Decisions regarding distribution channels are made to make the product available in sufficient quantities at locations where customers are generally anticipated to buy to meet their needs. The management aims to keep physical distribution expenses (including inventory, shipping, and storage) as low as feasible. Depending on the nature of the product, marketing management selects whether to establish an exclusive, selective, or extensive distribution network and which dealers or wholesalers to use. The perfect combination of these characteristics might give a company a competitive advantage.

For example, a low-cost product eaten regularly should be sold at as many locations as feasible (intense distribution), or consumers will buy a more convenient substitute. Customers, on the other hand, are quite willing to visit exclusive dealerships, even if there are only one or two in the city, when purchasing products such as CTV, washing machines, computers, or other similar durable items (selective distribution), and for high-end, very expensive items such as Mercedes Benz cars, expensive and exclusive jewellery status watches and accessories, etc., customers are quite willing to visit exclusive dealerships, even if there are only one or two in the city (exclusive distribution).

Price (Customer Cost)

Pricing decisions are usually made virtually with marketing management in mind. Price is the only component in the marketing mix that can change quickly. Price variables such as dealer price, retail price, discounts, allowances, credit terms, and so on directly impact the formulation of marketing strategy because price is a primary component determining customers’ perception of value acquired. Price can be kept as high or low as desired or at any level. Too high would imply that no meaningful sales are feasible since the target clients will not accept the product, and too low would mean that the company would incur losses rather than profits. Price is considered an essential competitive weapon, and intensive price competition between rival enterprises frequently results in a price war in which the combatants generally gain nothing. On the other hand, customers profit from reduced prices until good reason prevails among competitors and prices return to normal. In the case of certain products, pricing becomes an indicator of product quality and contributes to the product’s image.

For example, Coca-Cola charges a set price for its soft drinks, salons charge a fee for services, teachers charge a fee for lessons, and so on.

1.3.2 The Marketing Mix Dynamics and Coherence

The coherency of the marketing mix refers to how well the various aspects of the mix work together to achieve the desired impact.

For example, selling an expensive luxury item in a discount or budget store would demonstrate a lack of coherence between distribution and product offering.

The dynamics of marketing mix focus on how the mix must be altered to meet changing business environments, company resources, and product life cycle phases.

1.4 Creating and Capturing Customer Value

In both established and developing economies, consumers have various items or brands from which to meet a specific demand or set of wants. Much is determined by consumers’ views of the value that multiple items or services are expected to provide. Experience with products, friends, family members, neighbours, associates, consumer reports, and marketing communications are all sources that shape customer expectations. Consumer value is the ratio of perceived advantages to expenditures incurred by the customer in acquiring that product or service. The emphasis here is on client perceptions rather than correct, objective evaluations of value and cost, as customers frequently misjudge value and cost. Value denotes that a particular product or service is seen to provide the types and amounts of advantages (economic, functional, and emotional) that buyers expect from that product or service at a given price (monetary costs, time costs, psychic, and energy costs). Thus, value is defined primarily by quality, service, and cost. The value to the client can be improved by raising the overall benefits at the exact cost, maintaining the same benefit level while decreasing the cost, or growing both the benefits and the costs, but with the proportion of benefits increasing more than the proportion of costs rising.

Satisfaction Depend on Customers’ Perceived Total Costs and Value

Customers are generally satisfied when performance levels meet or exceed the minimal performance expectation levels. Similarly, if the performance level surpasses the expected level, the customer will not just be content but likely delighted. As a result, rewarding customers for their experience with a particular product or service motivates them to repeat the same behaviour in the future (buying the same brand). A satisfied consumer is more likely to be committed and enthusiastic about a specific brand, is less likely to be influenced by a competitor’s actions, and is an advantage to the marketer since they are more likely to distribute positive word-of-mouth information or ideas.

Example: Assume a consumer visits a restaurant and is treated to superb food, atmosphere, and service. Such a consumer will likely return to the same restaurant and recommend it to his friends.

When a customer’s perceived performance level falls short of expectations, it creates discontent, and the brand (product or service) is unlikely to be purchased again. In severe circumstances of discontent, the client may even depart the company and disparage its products or services, a process over which the marketer has no control. Marketing, in its purest form, begins and ends with the client.

Relationship of Expectations and Satisfaction

Delivering more value to please customers than competitors is the key to instilling brand loyalty among customers. Satisfaction is essentially a feeling of pleasure, and marketers should be aware of the amount of satisfaction provided by competitors and strive to outperform them to delight customers. Delivering more excellent value can lead to satisfying customers, which is the most critical component in establishing loyalty, mainly if the brand produces emotional attachment. This emotional attachment is not merely a choice based on rational content but is primarily based on feelings.

1.4.1 Value Chain

To establish high customer loyalty, create a competitively superior value proposition directed at a specific market segment and supported by a superior value-delivery system.

The value proposition encapsulates the entire set of benefits that the company claims to provide and is essentially a statement about the consequent experience customers will have due to the company’s market offering. The brand must make a promise that can only be kept if the company manages its value-delivery system effectively. The value-delivery system incorporates the customer’s experiences when acquiring and utilising the service.

In today’s hyper-competitive economy, a company’s success is determined by its ability to produce and provide superior value. To accomplish this, the organisation must develop the five competencies listed below:

1. Recognizing the importance of the client
2. Adding Value to Customers
3. Providing value to customers
4. Retaining customer value
5. Keeping customer value high

To prosper, the organisation must employ value and a value-delivery network.

Michael Porter created the value chain as a tool for exploring methods to increase customer value. The value chain examines nine strategically significant operations among a firm’s numerous activities; they generate value and cost in a specific business.

The Generic Value Chain

Apart from support activities such as procurement, technology development, human resource management, and firm infrastructure, the primary value activities represent the sequence of bringing materials into the business, converting them into final products, shipping out the final products, marketing them, and servicing them.

Primary Value Activities

Material handling and warehousing are examples of inbound logistics.

Operations: the process of converting inputs into outputs.

Order processing and distribution are examples of outbound logistics.

Communication, price, and channel management are all aspects of marketing and sales. Installation, repair, and parts supply are all part of the service.

Support Activities

Specific departments manage support operations. Procedures and information systems for procurement

Technology development is improving a product, process, or system. Human resource management includes hiring, training, and remuneration.

The firm’s infrastructure comprises general management, finance, accounting, government relations, and quality management.

As an example, consider a small value chain (Production of Electricity)

1.5 Partnering to Build Customer Relationships

Companies in developed countries, as well as many firms in emerging countries, strive to meet the demands of their customers and establish long-term connections. The problem is dependability and trust between the consumer and the organisation. As a result of this customer focus, a brand-new subject, customer relationship management, is now being taught in marketing classes. The term ‘relationship marketing,’ according to Jagdish N. Sheth and Rajendra Sisodia, refers to long-term and mutually beneficial arrangements in which both buyer and supplier focus on value enhancement by producing more pleasant exchanges. This method seeks to go beyond the simple buy exchange procedure with clients to develop more meaningful and prosperous relationships by giving a more holistic, personalised purchase, use, or consuming experience to forge stronger ties.

Experiential, permission and one-to-one marketing are all innovative marketing tactics that can be used to build closer relationships with customers. The emphasis is on forming long-term relationships with customers by making them feel good about how the company interacts or does business with them by providing them with some personal connection to the organisation. A proper relationship marketing campaign entails much more than using database marketing to target customers more precisely. Its goal is for each consumer to feel as if she or he has received something in exchange for becoming a member of the partnership. Firms have discovered that the Internet is a less expensive, more efficient, and more productive way to expand a firm’s client services. Before sending out customised e-mail adverts, promotions, or communications, businesses can ask their customers if they want them to. Relationship marketing strategies are employed by several airlines, hotel chains, credit card companies, and large shops, among others, by granting points to loyal consumers that may be used to get additional goods or services from the concerned organisation.

In other words, relationship marketing is about establishing trust between a firm and its customers and following through on commitments. These elements increase the customer’s reliance on the organisation, improving the customer’s confidence while the company better understands the client and her/his requirements and desires. Finally, this strengthens the bond and encourages cooperative problem-solving.

Relationship marketing is founded on the premise that current customers are essential to long-term business success. According to Frederick F. Reichheld, the significance of client retention can be gauged by examining some of the following benefits:

1. Obtaining new clients might be five times more expensive than delighting and retaining existing customers.
2. The average business loses 10% of its consumers each year.
3. Depending on the business, A 5% reduction in customer defection can enhance profitability by 25% to 85%.
4. The customer profit rate tends to rise throughout a customer’s lifetime.

According to Jagdish N. Sheth and Atul Parvatiyar, it is advantageous for a company to develop long-term connections with current consumers since it is easier and less expensive to make an additional sale to an existing client than to make a new sale to a new customer.

For example, local grocery store owners routinely reassure their regular customers that if dissatisfied with a consumable product, they may return it, even after some use, and receive a full refund. Relationship marketing is a conventional marketing approach in India.

According to Steve Schriver, research shows that consumers are less loyal today than they were in the past for the following reasons:

1. An abundance of options.
2. Information accessibility.
3. Customers inquire, “What have you done for me recently?”
4. Most products/services look to be the same – nothing stands out.
5. Financial difficulties of customers weaken loyalty.
6. Time constraint (not enough time to be loyal).

These pressures result in consumer dissatisfaction, complaints, cynicism, decreased affiliation, increased price sensitivity, and a proclivity to file litigation.

The primary distinctions between the selling concept and the marketing concept are as follows:

1. The seller-oriented selling idea begins with the seller and focuses on existing products. The company firmly believes in aggressive selling and other forms of promotion. The seller is unconcerned about customer value or satisfaction. The company creates the things first, then determines how to sell them and profit from them. Different firm departments work independently of one another.
2. Marketing orientation begins with the client, and the organisation seeks to learn the needs and desires of the consumer before developing relevant products or services to please the customer. Business is regarded as a customer-satisfying endeavour. The actions of all departments are coordinated, and the emphasis is on the customers’ demands. Profits are the result of the corporation doing a good job. It necessitates and maintains a dependable company-wide information system. All departments are open to receiving new information. Everyone recognises marketing’s vital function, as evidenced by the fact that the head of marketing is a member of top management.

Societal Marketing Concept

The marketing concept was extensively accepted by businesses in industrialised and some emerging countries, and it has continued to evolve and take on new meanings. Not long after, questioning about the nature of its social duty began. The focus turned to how marketing influenced society in an era of decreasing and increasingly scarce resources, environmental degradation, etc. It was adequate for producing what customers required or desired, as well as fulfilling organisational goals. Still, in other situations, the concept could be in opposition to customers and society’s most significant long-term interests. Societal marketing is a management philosophy that considers the well-being of humanity, the organisation, and its customers.

Adopting this approach necessitates making ethical and socially responsible marketing decisions. Companies must consider not only their consumers’ short-term requirements but also their long-term well-being. This includes, for example, excessive fat content in ready-to-eat foods, toxic waste, and environmental concerns.

It is necessary to balance the interests of customers, the company, and the society where operations occur. Some environmentally conscious businesses have begun to use recyclable packaging materials and environmentally friendly products. Demarketing is one of the marketing responsibilities that illustrates the societal marketing concept.

Many businesses face numerous challenges while implementing the marketing approach. Understanding the underlying principle is too tricky for other companies, and they fail to execute it. Other organisations confront a conflict between short-term and long-term goals and do not want to compromise short-term benefits for customer happiness simply because the client is not top management’s primary concern.

TATA Steel, for example, has taken the Societal marketing route in its recent promotions, in which the company is attempting to make society believe in it and its efforts to improve society, as well as providing people from society with a chance to realise their dreams and gain status in society, and thus gaining acceptance from the society. Examples include Bachendri Pal, the first Indian woman to scale Mount Everest (Head of TATA Steel Adventure Foundation), Commonwealth Games Archery Gold medallist – Deepika Kumari, of their Tejasvini Project, in which women have been empowered by providing them jobs in works primarily thought in society to be suited to men, and the advertisement showing their Chief of R&D Mark Denys sharing his experiences about how R&D is the success mantra at.