Marketing Concepts: Insights into Scope and Implementation

Market

Market is the set of all actual and potential buyers of a product or service. Originally the term Market stood for the place where buyers and sellers gathered to exchange their goods, such as a village square. Marketers work to understand the needs and wants of specific markets and to select the markets that they can serve best. In turn they develop products and services that create value and satisfaction for customers in these markets. The result is profitable long-term customer relationships.

What is Marketing?

Students should understand the meaning of the term Marketing. Simply stated the meaning of the term Marketing is performance of business activities that direct the flow of goods from producers to consumers or Marketing is the delivery of customer satisfaction at a profit. It may be said that marketing includes all those activities which effect changes in the ownership and possession of goods and services. The goal of marketing is to attract new customer by promising superior value, and to keep current customers by delivering satisfaction.

So, marketing is defined as

1. Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others.
2. Marketing is the science of choosing target markets through market analysis and market segmentation, as well as understanding consumer buying behavior and providing superior customer value.
3. The process by which companies create value for customers and build strong customer relationships in order to capture value from customer in return.  

Marketing Concept 

Marketing Concept is also known as Marketing orientation starts with the customer and the company strives to learn customer needs and wants, develops appropriate products or services to satisfy the customer. With the passage of time, more knowledge, and experience, customers increasingly seemed unwilling to be persuaded. More and more companies found that determining what customers wanted was a must before making a product, rather than producing products first and then persuading them to buy. 

The key questions became: 

1. what do customers really want? 
2. Can we develop it while they still want? 
3. How can we keep our customers satisfied?

According to Philip Kotler, Marketing is the task of creating, promoting, and delivering goods and services to consumers and businesses; it is defined as 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.

Many people think of Marketing only as selling and advertising. And no wonder- every day we are bombarded with television commercials, newspaper ads, direct mail offers, sales calls etc. However, selling and advertising is only the tip of the marketing iceberg. Although they are important, they are only two of many marketing functions. Today, Marketing must be understood not in the old sense of making a sale but in the new sense of Satisfying customer needs.

Marketing Concepts – Traditional and Modern

1. Traditional Concepts – According to this concept, marketing consists of those activities which are concerned with the transfer of ownership of goods from producers to consumers. Here, the role of physical distribution and marketing channels is over emphasized. It refers to marketing as the process by which goods are made available to ultimate consumers from their place of origin. The emphasis of marketing is on sale of goods and services. Consumer satisfaction is overlooked. 
2. Modern Concepts – According to this concept, marketing is concerned with the creation of consumers. According to the modern thinker Peter Drucker, Marketing is so basic that it cannot be considered as a separate function. It is the whole business seen from the customers’ point of view…business success is not determined by the producer but the customer.

Thus, the modern concept lays greater emphasis on customers and considers them as kings. Marketing is not merely a physical process but is something beyond that. It is the managerial philosophy which centres around the wants and desires of customers.

Traditional Vs Modern Concept

1. Traditional marketing starts from production and ends with sale but modern marketing includes planning, product, price, promotion, place, people, after sale service etc. 
2. Traditional marketing concentrate on favorable products, but modern marketing concentrates on customer needs, wants and satisfaction. 
3. In traditional marketing, only those products are sold which the producer produces. No focus is laid on consumer preference. On the other hand, modern marketing indulge in production only after analyzing consumer demands. 
4. Traditional marketing is product and production oriented while modern marketing is consumer oriented. 
5. The target of traditional marketers was to earn maximum profit by maximizing sales. But, the main motive of modern marketers is to earn profits through satisfaction of consumer needs. 
6. The principle of traditional market was “caveat emptor” i.e., “let the buyer beware”. Whereas, the principle followed by modern market is “caveat vendor” i.e., “let the vendor beware”. 

Core Concept of Marketing

To explain the above definition, we will examine the following important core marketing concepts.

1. Needs: The most basic concept underlying marketing is that of human need. ‘Human needs are states of felt deprivation’. They include basic 
• physical needs for food, clothing, warmth and safety, 
• Social needs or belonging and affection
• Individual needs for knowledge and self – expression
2. Wants: Are the form human needs take as they are shaped by culture and individual personality. Example: If an American needs food wants big Mac Donald, French fries etc. if a person in Mauritius needs food wants a mango, rice, lentils and beans etc. Wants are shaped by one’s society and are described in terms of objects that will satisfy needs.
3. Demands: Given there wants and resources, people demand products with benefits that add up to the most value and satisfaction. ‘When back by buying power wants become demand’.

What is marketing offers?

Marketing offers are some combination of products, services, information, or experiences offered to a market to satisfy a need or want. Marketing offers are not limited to physical products. In addition to tangible products, marketing offers include services, activities or benefits offered for sale that are essentially intangible and do not result in the ownership of anything. Examples include banking, airline, hotel, tax preparation, and home repair services.

‘Marketing occurs when people decide to satisfy needs and wants through exchange’. 

1. Exchange is the act of obtaining a desired object by offering something in return. 
2. Transaction consists of a trade of value between two parties.

Customer Value and satisfaction

Consumers usually face a broad range of products and services offered to them that might satisfy a given need.   How do they make their choice among the given Marketing offers? Consumers make choices based on their perception of the value and satisfaction that various products and services deliver.  

1. Customer Value is the difference between the values the customer gains from owning and using a product and the costs of obtaining the product. 
2. Customer Satisfaction with a purchase depends on how well the product’s performance lives up to the customer’s expectations. Customer satisfaction is a key influence on future buying behavior.

Customer relationship management   

Customer relationship management is the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. Thus, today’s companies are going beyond designing strategies to attract new customers and create transactions with them. They are using customer relationship management to retain current customers and build profitable, long-term relationships with them. The new view is that ‘Marketing is the science and art of finding, retaining and growing profitable customers.

Marketing Management 

It is the analysis, planning, implementation and control of programmes designed to bring about desired exchanges with target audiences for the purpose of personal and of mutual gain. It relies heavily on the

adoption and coordination of product, price, promotion and place for achieving responses

‘The Art and Science of choosing target markets and building profitable relationships with them’. 

This involves getting, keeping and growing customers through creating, delivering and communicating superior customer value. Thus, marketing management involves managing demand, which in turn involves managing customer relationships.

1. Demand Management: The organization has a desired level of demand for its products. At any point in time, there may be no demand, adequate demand, irregular demand, or too much demand, and marketing management must find ways to deal with these different demand states.
2. Building Profitable Customer Relationships: Beyond designing strategies to attract new customers and create transactions with them, companies now are striving to retain current customers and build lasting customer relationships.

The role that marketing plays within a company varies according to the overall strategy and philosophy of each firm. There are 5 alternative concepts under which organizations design and carry out their marketing strategies:

1. Production Concept - The philosophy that consumers will favour products that are available and highly affordable and that management should therefore focus on improving production and distribution efficiency. In simple terms, the idea that consumers will favor products that are available and that the organization should therefore focus on improving production and distribution efficiency.
2. Product Concept – The philosophy that consumers will favour products that offer the most quality, performance, and innovative features. In simple terms, the idea that consumers will favor products that offer the most quality, performance, and features and that the organization should therefore devote its energy to making continuous product improvements.
3. Selling Concept – The idea that consumers will not buy enough of the firm’s products unless it undertakes a large-scale selling and promotion effort.
4. Marketing Concept - The marketing management philosophy that holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do.
5. Societal Marketing Concept – The idea that a company’s marketing decisions should consider consumers’ wants, the company’s requirements, consumers’ long-run interests, and society’s long-run interests.

Nature and role of marketing  

Marketing is the management process responsible for identifying, anticipating and satisfying consumer requirements profitably. Some organizations are very close to their consumers - for example, a post office in a small town. For other organizations consumers may be thousands of miles away - for example, Cadbury Schweppes selling confectionery and soft drinks around the world. The principle that the 'Consumer is King and Queen' is just as relevant to the organisation.

1. Identifying - This will involve answering questions such as 'How do we find out what the consumer's requirements are?' and 'How do we keep in touch with their thoughts and feelings and perceptions about our good or service. This is a key purpose of market research.
2. Anticipating - Consumer requirements change all the time. For example, as people become richer, they may seek a greater variety of goods and services. Anticipation involves looking at the future as well as at the present. What will be the Next Best Thing (NBT) that people will require tomorrow?
3. Satisfying - Consumers want their requirements to be met. They seek particular benefits. They want the right goods, at the right price, at the right time in the right place.
4. Profitability - Marketing also involves making a margin of profit. An organisation that fails to make a profit will have nothing to plough back into the future. Without the resources to put into ongoing marketing activities, it will not be able to identify, anticipate or satisfy consumer requirements.

Function of Marketing

1. Buying - people have the opportunity to buy products that they want.
2. Selling - producers function within a free market to sell products to consumers.
3. Financing - banks and other financial institutions provide money for the production and marketing of products.
4. Storage - products must be stored and protected until they are needed. This function is especially important for perishable products such as fruits and vegetables.
5. Transportation - products must be physically relocated to the locations where consumers can buy them. This is a very important function. Transportation includes rail road, ship, airplane, truck, and telecommunications for non-tangible products such as market information.
6. Processing - processing involves turning a raw product, like wheat; into something the consumer can use – for example, bread.
7. Risk-Taking - insurance companies provide coverage to protect producers and marketers from loss due to fire, theft, or natural disasters.
8. Market Information - information from around the world about market conditions, weather, price movements, and political changes, can affect the marketing process. Market information is provided by all forms of telecommunication, such as television, the internet, and phone.
9. Grading and Standardizing - Many products are graded in order to conform to previously determined standards of quality. For example, when you purchase US No. 1 Potatoes, you know you are buying the best potatoes on the market.

Selling vs Marketing

It is a common error committed when people say they are going for marketing when they actually go to the market to purchase goods/ services. Well, it is simply buying from consumers’ end and selling from the sellers’ end. Marketing is a wider term than selling. Let us now see how selling differs from marketing.

FAQs

Define marketing?

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

What is Marketing?

Marketing is the process of communicating the value of a product or service to customers, for the purpose of selling the product or service. It is a critical business function for attracting customers. Marketing satisfies these needs and wants through exchange processes and building long term relationships. It is the process of communicating the value of a product or service through positioning to customers. It can be looked at as an organizational function and a set of processes for creating, delivering and communicating value to customers, and managing customer relationships in ways that also benefit the organization and its shareholders.

Marketing Concept

The marketing management philosophy that holds that achieving organizational goals depends on determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors do.

Societal Marketing Concept

The idea that the organization 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.