Chapter 22 : The evolution of marketing concept
“the right product or service to the right customer, at the right price, at the right time and right place”
Marketing Department: Functions (Research, Demand, Design, Selling)
Marketing Environment: PESTEL (Political, Economical, Social, Technological, Ecological, Legal)
Chapter 1- Introduction
Managerial definition: Managing profitable customer relationships, by delivering superior value to customers.
Social definition: ―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.‖
Core Marketing concepts:
A market is the set of actual and potential buyers of a product.
Needs, wants and demands:
Needs are fulfilled : a state of felt deprivation.
Wants are satisfied : the form taken by a human need as shaped by culture and individual personality.
Demands are extinguished : Human wants that are backed by buying power.
Combination of good-service offered to market to satisfy need or want.
Value and Satisfaction
Customer’s perceived value is the difference between the values that the customer gains from owning and using a product and
the costs of obtaining the product.
Satisfaction is whether performance meets or exceeds expectations.
Exchange, Transaction and relationship:
Exchange is an act of obtaining a desired object from someone by offering something in return.
Transaction is a trade of value between two parties.
Elements of Marketing:
Supplier Market Intermediaries End user
Customer’s life time value:
Value of entire stream of purchases by customer over his lifetime.
Total lifetime value of all of company‘s customers.
Marketing management has four functions: Analysis, Planning, Implementation and control.
Demarketing’s aim is to reduce demand temporarily or permanently. It is done when product is not feasible from supplier or
customers‘ point of view. i.e intentional and non-intentional reduction in demand.
Marketing Management Orientations
The production concept holds that consumers will favor products that are available and highly affordable and that management
should, therefore, focus on improving production and distribution efficiency.
The product concept states 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.
The selling concept is the idea that consumers will not buy enough of the organization‘s products unless the organization
undertakes a large-scale selling and promotion effort.
The marketing concept 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. The societal marketing concept holds that the organization should determine the needs, wants, and interests of target markets. It
should then deliver the desired satisfactions more effectively and efficiently than competitors in a way that maintains or improves
the consumer‘s and the society‘s well-being.
CONCEPT CUSTOMER WANTS COMPANY SHOULD
Production concept Availability and affordability Improve production, distribution
Product concept Quality, performance, features Continues product improvement
Selling concept No feelings to purchase Large scale selling, promotion
Marketing concept Needs & wants of target market Effective & efficient than competitor
Two Steps of marketing:
Determine Need, Wants And Interest Of Target Market
Then Satisfy Them Effectively And Efficiently
Marketing Vs. Selling:
Starting point Focus Means Ends
Selling concept Factory Existing products How to increase Profits through sales volume
Marketing concept Market Customer needs How to satisfy Profits through customer
Despite adoption of market oriented approach; there is need for sales force:
To create awareness
To convince to buy from company, not from competitors
To reassess benefits to customers
To convince that average customers‘ requirements are met
Problems in introducing the marketing approach:
Understand what marketing orientation actually means
Organizational, structural and cultural changes are required.
Assessment of Product, logistic, level of services and marketing techniques
Organization wide dedication
Working together as whole Types of Marketing
Strategic Marketing Tactical Marketing
Tied with corporate strategy Short term, and focuses
Scope of Marketing = Marketing Planning e.g which product of market to choose on place, promotion,
Marketing Vs. R&D department: price
Marketing has commercial and competitive atmosphere whereas R&D has University atmosphere with open-end work and
consumption of substantial resources.
Customers‘ needs and change in product specification tighten them.
Consumerism is a term describing importance and power of consumers.
Customer Relationship Management:
Defined narrowly as a customer database management activity.
―CRM is managing detailed information about individual customers and carefully managing customer touch points to maximize
Companies look for touch points. These includes customer purchases, sales force contact, service, and support calls, Web site
visits, satisfaction surveys, credit and payment interactions, market research studies, etc.
To be effective in CRM, the marketer must forego short-term profit maximization on individual transactions.
Elements of Marketing Mix: How to Get Customer Touch Points:
- Purchasing trend
Controllable: - Payment trend
Product - Service obtaining trend
- Family trend
- Support calls