Introduction to Marketing
Introduction
In today's competitive business world, producing goods or services is just one part of the story. Equally, if not more important, is ensuring that these goods or services reach the target customers and satisfy their needs. This entire process is the domain of Marketing.
Marketing is a dynamic and pervasive function that is crucial for the success of any business. It is the process that creates, communicates, and delivers value to customers and manages customer relationships in ways that benefit the organisation and its stakeholders.
It starts even before the product is produced, by understanding customer needs, and continues even after the sale, through after-sales service and building relationships.
Meaning
Marketing is a social 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.
From a business perspective, marketing is the process of identifying potential customers' needs and wants, satisfying them efficiently and profitably. It involves activities like market research, product development, pricing, promotion, and distribution.
While selling is only a part of marketing, marketing is a much broader concept. Selling is just transferring title and possession of goods. Marketing starts with the customer and ends with the customer's satisfaction.
Understanding Market
Traditionally, the term 'market' referred to the place where buyers and sellers met to conduct transactions. However, in modern marketing, the term 'market' has a broader meaning.
A Market is a set of actual and potential buyers of a product or service. It is defined by the needs of the potential customers for a specific product or service.
Example: The market for mobile phones consists of all individuals and organisations who are potential buyers of mobile phones. This market can be further segmented based on factors like income, age, or geographic location.
The size of the market depends on the number of people who have the need, have the ability to pay, and are willing to buy the product or service.
Marketing Management
Marketing Management is the process of planning, organising, staffing, directing, and controlling the marketing activities of an organisation. It is the process of managing the marketing functions to achieve the marketing objectives of the firm.
It involves choosing target markets and building profitable relationships with them. Marketing management focuses on efficiently and effectively carrying out the activities related to marketing.
The key tasks of a marketing manager include:
1. Identifying the needs and wants of target customers.
2. Developing products and services that satisfy these needs.
3. Pricing them appropriately.
4. Promoting them effectively.
5. Making them available through convenient distribution channels.
6. Building and maintaining customer relationships.Marketing Management Philosophies
Over time, organisations have adopted different approaches or philosophies towards marketing. These philosophies represent the thinking or orientation of management regarding marketing activities.
The main marketing management philosophies are:
1. The Production Concept
2. The Product Concept
3. The Selling Concept
4. The Marketing Concept
5. The Societal Marketing Concept
The Production Concept
This concept is based on the belief that customers prefer products that are widely available and inexpensive. Therefore, management should focus on improving production efficiency and distribution.
Orientation: Towards Production.
Focus: Quantity of output and availability.
Means: Mass production and wide distribution.
End: Profit through volume of production.
This concept was popular during the early stages of industrialisation when demand exceeded supply.
Drawback: It ignores customer needs and preferences, assuming customers will buy whatever is produced if it's cheap and available.
Example 1. A manufacturer of affordable ball pens in India focuses solely on increasing the number of pens produced per day and ensuring they are available at every small stationery shop and kiosk across the country. They do not spend much effort on improving pen design or quality, assuming people will buy them because they are cheap and easy to find. Which marketing philosophy are they following?
Answer:
They are following The Production Concept, focusing on mass production and wide distribution assuming affordability and availability drive sales.
The Product Concept
This concept assumes that customers favour products that offer the most in quality, performance, and features. Therefore, management should focus on making superior products and improving them over time.
Orientation: Towards Product.
Focus: Product quality, features, and performance.
Means: Product improvement and innovation.
End: Profit through product quality.
Drawback: It can lead to 'marketing myopia' (near-sightedness), where management focuses on product excellence without considering whether the product is actually needed or wanted by the customers. A better mousetrap is useless if customers are looking for pest control services.
Example 2. An electronics company invests heavily in R&D to develop the most technologically advanced music player with numerous features, believing customers will buy it because it is superior. However, they fail to recognise that most customers now prefer streaming music on their smartphones. Which marketing philosophy are they following, and what is the potential issue?
Answer:
They are following The Product Concept. The potential issue is 'marketing myopia' – focusing on product superiority without understanding the changing customer needs and market trends.
The Selling Concept
This concept holds that customers will not buy enough of the firm's products unless it undertakes a large-scale selling and promotion effort. This concept is typically followed for 'unsought goods' (like insurance) or in situations where demand is low.
Orientation: Towards Selling.
Focus: Existing products.
Means: Selling and promotion (aggressive selling techniques).
End: Profit through sales volume.
Drawback: It focuses on creating sales transactions rather than building long-term relationships with customers. It is often transactional and ignores post-sale satisfaction, which can lead to dissatisfied customers and negative word-of-mouth.
Example 3. A company selling water purifiers employs a large sales force trained to aggressively push their product, focusing on persuading customers to buy immediately through persuasive techniques and ignoring potential long-term customer needs or relationships. Which marketing philosophy are they following?
Answer:
They are following The Selling Concept, focusing on aggressive sales tactics to push the product.
The Marketing Concept
This concept holds that achieving organisational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors. It is a customer-centric approach.
Orientation: Towards Customer Needs.
Focus: Target market needs and wants.
Means: Integrated marketing (all departments work together to satisfy customers).
End: Profit through customer satisfaction.
This is a modern approach, focusing on building long-term, profitable relationships by delivering superior customer value and satisfaction.
Key principle: "Find wants and fill them" rather than "make and sell".
Example 4. An automobile company conducts extensive market research to understand what features customers in urban India desire in a compact SUV. Based on the findings, they design a vehicle with specific features related to safety, fuel efficiency, and smart connectivity. Their marketing and sales teams focus on communicating how these features meet customer needs. Which marketing philosophy are they following?
Answer:
They are following The Marketing Concept, starting with understanding customer needs and designing the product and marketing efforts around satisfying those needs.
The Societal Marketing Concept
This concept is an extension of the marketing concept. It holds that the organisation should determine the needs, wants, and interests of target markets and deliver the desired satisfactions more effectively and efficiently than competitors in a way that maintains or improves the consumer's and society's well-being.
It balances three considerations: Company profits, Customer wants, and Society's interests.
Orientation: Towards Customer Needs and Society's Well-being.
Focus: Target market needs and society's long-term welfare.
Means: Integrated marketing + Social responsibility.
End: Profit through customer satisfaction and social welfare.
This concept encourages sustainable marketing, ethical practices, and corporate social responsibility.
Example 5. A consumer goods company produces packaged drinking water. While focusing on customer satisfaction and profitability, they also invest in rainwater harvesting projects in rural areas and use recyclable materials for their packaging, promoting environmental sustainability. Which marketing philosophy are they following?
Answer:
They are following The Societal Marketing Concept, balancing company profits, customer satisfaction, and society's environmental well-being.