Unit I

Introduction to Marketing

Principles of Marketing
MBA
Dr. Md Rizwan Alam
Professor-Marketing
rizwan2040@gmail.com
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• Understand meaning of marketing
• Core concepts of marketing
• Various marketing management philosophies /
orientation
• Discuss the concept of relationship marketing
• Understanding marketing mix
• Case analysis of Ford Motor, Starbucks, Apple
• Story of marketing success of Starbucks

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 Knowing the students and helping and fine-tuning
accordingly
 Lecture
 Interactive Class
 Flip Class
 Self-Learning
 Task-based learning
 Story
 Case Study
 Presentation
 Revision
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 “The management process for identifying,
anticipating and satisfying customer requirements
profitably.”
- Chartered Institute of Marketing

 “Marketing is the human activity directed at

satisfying human needs and wants through an
exchange process”.

- Philip Kotler
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• “There will always, one can assume, be need for
some selling. But the aim of marketing is to make
selling superfluous. The aim of marketing is to
know and understand the consumer so well that
that the product or service fits him and sells itself.
Ideally marketing should result in a customer who
is ready to buy. All that should be needed then is
to make the product or service available”
– Peter Drucker.

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• An airline travel agent is into marketing when it
markets and sells the seats of an airline company.
In this case, airline travel agency is a marketer and
the airline company is service manufacturer.
• Wal-Mart is a apart of marketing activity for
several manufacturing or supplying companies
such as P&G, Uniliver, Mars, Craft foods, etc.

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According to etymologists, the term 'marketing'
first appeared in dictionaries in the sixteenth
century where it referred to the process of buying
and selling at a market. The contemporary
definition of 'marketing' as a process of moving
goods from producer to consumer with an
emphasis on sales and advertising first appeared in
dictionaries in 1897. The term, marketing, is a
derivation of the Latin word, mercatus meaning
market-place or merchant.

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• The practice of marketing may have been carried out for
millennia, but the modern concept of marketing as a
professional practice appears to have emerged the post
industrial corporate world
• From as early as 200 BCE, Chinese packaging and branding
was used to signal family, place names and product quality,
and the use of government imposed product branding was
used between 600 and 900 AD.
• Scholars have identified specific instances of marketing
practices in England and Europe in the seventeenth and
eighteenth centuries.
• Eighteenth century advertising showed a high level of
sophistication in its execution and ability to reach mass
audiences 8
• Kotler: Marketing Management is a social and
managerial process by which individuals or firms
obtain what they need or want through creating,
offering, exchanging products of value with each
others.
As per AMA ( American marketing Association)
• It defines marketing management as the process
of planning & executing the conception of pricing,
promotion, distribution of goods, services, ideas to
create exchanges that satisfy individual and
organizational goals.
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Pricing the product is more of a science and positioning it is
an art. Communication is science and advertising the offering
is an art. Distributing the offering is a science and selling is an
art. Marketing is certainly more of an art than science with a
caveat that the artist needs to comfortable with handling data
and computer savvy.

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• Managerial process
• Consumer centric
• Research analysis
• Planning and development
• Building Marketing framework
• Organizational objective
• Promotional and communication process
• Controlling activities

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• Need: It is state of deprivation of some basic
satisfaction. E.g.- food, clothing, safety, shelter.
• Want: Desire for specific satisfier of need. eg.-
soap, toothpaste
• Demand: Want for a specific product backed up by
ability and willingness to buy. eg.- Need –
transportation. Want – Car (say, Mercedes)……but
able to buy only Maruti. Therefore, demand is for
Maruti.

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Products- Goods/ Services/ Place.
Product is anything that can satisfy need/ want.
• Product component-
• Physical Good.
• Service.
• Idea

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Value/ Cost/ Satisfaction:
• Value is products capacity to satisfy needs/ wants
as per consumer’s perception or estimation.
• Each product would have a cost/ price elements
attached to it.

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• E.g. – Travel from city A to city B.
• Need – to reach B ( from A)
• Method/ Products- Rail/ air/ road or train/ plane.
• Satisfaction – Estimated in terms of time lead &
travel comfort.
• Value- Products capacity to satisfy.
• Cost- Price of each products.

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https://www.jdpower.com/business/press-releases/2019-india-customer-service-index-mass-market-study 16
Exchange/ Transaction:
• There must be at least two parties.
• Each party has something of value for other party.
• Each party is capable of communication & delivery
• Each party is free to accept/ reject the exchange
offer.
• Each party believes it is appropriate to deal with
the other party.

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Transaction: – Event that happens at the end of an
exchange. Exchange is a process towards an
agreement. When agreement is reached, we say a
transaction has taken place.
• At least two things of value.
• Condition agreed upon.
• Time of agreement.
• Place of agreement.
• May have legal system for compliance.
• Proof of transaction is BILL/ INVOICE.
Transfer: – It is one way. Hence, differ from
Transaction. 18
Relationship/ Networking:
• Relationship marketing:- It’s a pattern of building
long term satisfying relationship with customers,
suppliers, distributors in order to retain their long
term performances and business.
• Achieved through promise and delivery of
• high quality
• good service
• fair pricing, over a period of time.
• Outcome of Relationship Marketing is a
MARKETING NETWORK.
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• Relationship marketing refers to those marketing
activities that are aimed at developing and
managing long-term relationships with the
customers.
• The details about the customer, his buying
patterns, contacts, etc. are maintained in a sales
database and an account executive is assigned to
fulfill the needs of the customers and maintain the
relationships successfully.

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• The 5 R’s of Starbucks Relationship Marketing
• Recognize – an email inbox is typically a very busy and crowded space so your
subject line, and from line have to work in tandem to draw attention. In
addition, status or relationship is important you’ll see that at work below.
• Relevant Offer – All too often marketers have tried-and-true offers; there is
certainly nothing wrong with using what works. But think about the customer
experience; what kind of offers will be useful? This may require some
experimentation.
• Reveal – I mentioned earlier that inboxes are crowded and attention spans are
short. The creative has to quickly communicate the message and the offer; use
images, color, and text to do the heavy lifting.
• Redeem – A clear and relevant offer will be worthless if the recipient doesn’t
know how to take advantage of it. Here is a hint: offer several options that
allow customers to choose what is most convenient for them.
• Reward – This may seem a bit obvious but…. Sometimes a little incentive goes
a long way.
https://www.business2community.com/marketing/starbucks-relationship-
marketing-5-rs-best-practice-approach-0552351
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Market:
• A market consists of all potential customers
sharing particular need/ want who may be willing
and able to engage in exchange to satisfy need/
want.
• Types of Markets:
• Resource Market,
• Manufacturing Market,
• Intermediary Market,
• Consumer Market,
• Government market. 22
Marketers/ Prospects:
• Working with markets to actualize potential
exchanges for the purpose of satisfying needs and
wants.
• One party seeks the exchange more actively, called
as “ Marketer”, and the other party is called
“Prospect”.
• Prospect is someone whom marketer identifies as
potentially willing and able to engage in exchange.
• Marketer may be seller or buyer. Most of time,
marketer is seller.
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Question: What is marketing myopia? Give example.
Answer: Marketing Myopia, first expressed in an
article by Theodore Levitt in Harvard Business Review
(1960), is a short-sighted and inward looking
approach to marketing which focuses on fulfillment
of immediate needs of the company rather than
focusing on marketing from consumers’ point of
view.

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• Kodak only focuses on creating an old camera and camera
rolls not to focus on creating the digital camera.
• Nokia falls the grade of their products compare to Android
and ios.
• Detroit Automobile Industry doesn’t focus on competitors’
strategy.
• Yahoo ($100 billion dollars company in 2000), or Bing didn’t
fulfill customer satisfaction but the other hand Google builds
better relations with its services. For this reason, Yahoo or
Bing audiences are shifted on Google.
• Oil and Gas Companies have provided non- renewable
energy in the early days but after some years there are some
alternative sources of energy like solar energy, and nuclear
energy, etc. 25
 Saleable Examples
• Goods - Burberry, Soap
• Services- airline, Palace on Wheel
• Events- IPL, Grand Prix
• Experiences- Virgin Galactic, Google Glass
• Persons- Opra Winfray, Michael Jordan

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• Places- Honolulu, Dubai
• Properties- Machineries, Assets
• Organizations- Range Rover, Yardley
London
• Information- Superbowl shows, CNN
• Ideas- Incredible!India, Cancer
Fund

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• Choose, individually or in group, any company
from the following list and prepare the 4 P’s of
marketing mix in a tabular form:
-Nestle
-Dabur
-Toyota
-iPhone
-Colgate Toothpaste, etc.

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Production Product Selling Marketing Societal
concept concept concept concept concept

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 Period: 1860-1930
 "one of the oldest philosophies that guides sellers"
and "is still useful in some situations"
Key characteristics:
• Focus on production, manufacturing, and efficiency
• Attainment of economies of scale, economies of
scope, experience effects or all three
• Assumption that demand exceeds supply
• Mindset that is encapsulated by Say's Law; "Supply
creates its own demand" or "if somebody makes a
product, somebody else will want to buy it"
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• Limited research that is largely limited to technical-
product research rather than customer research
• Rose to prominence in an environment which had
a shortage of manufactured goods relative to
demand, so goods sold easily.
• Minimal promotion and advertising, marketing
communications limited to raising awareness of
the product's existence.

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http://oplaunch.com/blog/2015/04/30/the-truth-about-any-color-so-long-as-it-is-
black/ 34
 Product
• Focus is on the quality and quantity of output
while assuming that customers would seek out
and buy reasonably priced, well-made products.
• "If you really have a good thing, it will advertise
itself." - Henry Ford
• Ex. Gillett

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• The product concept proposes that consumers favor products that offer the
most quality, performance, or innovative features. Managers in these
organizations focus on making superior products and improving them over
time. However, these managers are sometimes caught up in a love affair
with their products. They might commit the ‘better-mousetrap’ fallacy,
believing that a better mousetrap will lead people to beat a path to their
door. A new or improved product will not necessarily be successful unless
it’s priced, distributed, advertised, and sold properly.
• The Model T was Ford's first automobile mass-produced on moving
assembly lines with completely interchangeable parts, marketed to
the middle class. Henry Ford said of the vehicle:
• I will build a motor car for the great multitude. It will be large enough for
the family, but small enough for the individual to run and care for. It will be
constructed of the best materials, by the best men to be hired, after the
simplest designs that modern engineering can devise. But it will be so low
in price that no man making a good salary will be unable to own one – and
enjoy with his family the blessing of hours of pleasure in God's great open
spaces. 36
• The selling orientation is thought to have begun during
the Great Depression and continued well into the 1950s
although examples of this orientation can still be found
today. Kotler et al. note that the selling concept "is typically
practised with unsought goods".
Key Characteristics:
• Aggressive selling to push products, often involving door-
to-door selling
• Accepting every possible sale or booking, regardless of its
suitability for the business
• Strong transactional focus (ignores potential relationships)
• Ex. Insurance products, unsought goods
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Thoughts:
• This orientation is practised by sellers at the
railway stations and places of tourist attraction.
Their survival does not depend on repeat business
from the same customer.

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• The marketing orientation or the marketing concept emerged
in the 1950s.
Characteristics:
• Thorough understanding of the customer's needs, wants and
behaviors should be the focal point of all marketing decisions
• Marketing efforts (sales, advertising, product management,
pricing) should be integrated and in tune with the customer
• New product concepts should flow from extensive market
analysis and product testing
• Philip Knight, CEO of Nike says that after long, we understand
that the most important thing we do is to market the product.
• Ex. Dell, Starbucks

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• Societal marketing can be defined as a "marketing with a
social dimension or marketing that includes non-
economic criteria".
• Societal marketing "concerns for society's long term
interests". It is about "the direct benefits for the
organization and secondary benefit for the community".
• Societal marketing distinguishes between the
consumer's immediate satisfaction and longer term
consumer and social benefits.
• Accordingly, Andreas Kaplan defines societal
management as "management that takes into account
society's overall welfare in addition to mere profitability
considerations.“

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• Avon breast cancer awareness
• The Body Shop against animal testing
• P and G through Ariel
• Shahnaz Hussain Herbal
• KFC and PepsiCo donate to diabetes research in
exchange for your soda purchase

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• Some of the products that have attracted criticism for their
undesirable social effects include:
• fast food (e.g., hamburgers and fries) and high calories laden
drinks for causing poor health;
• alcohol drinks, and cigarette for causing addiction;
• plastic containers and bottles for causing environmental
degradation;
• high pollution and gas guzzling SUVs for causing pollution;
• fur and rare animal skin as well as exotic meat for threatening
animal welfare;
• mining for causing ecological disturbance;
• blood diamonds for human rights violation;
• gambling services for causing addiction and insolvency; and
prostitution for causing exploitation.

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 Leading firms in CSR Index in relation to
societal marketing concept
• Walt Disney Company
• Microsoft
• Google
• Honda
• Johnson & Johnson
• PepsiCo
• General Mills
• Kraft Foods
• Campbell Soup Company
• FedEx

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 Key Terms

• Needs • Selling
• Wants • Marketing
• Exchange • Societal marketing
• Satisfaction • Marketing Myopia
• Demand • Relationship marketing
• Marketing Mix • CSR (Corporate Social
• Service Responsibility)

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• Define marketing, outline key elements, and briefly explain
them.
• Discuss the different definitions of marketing.
• “While companies are selling a product, consumers are buying a
solution or value “ (Kotler, 1999). Explain in your words.
• Discuss the need of marketing for a consumer and a company.
• Is relationship marketing applicable to all firms equally? Discuss
in detail.
• Can selling and marketing concepts function separately?
• Examine the use of marketing at manufacturing and distributor
level.
• Discuss the importance of marketing for a. grocery, b.
manufacturing company.

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The case was handed out to the students and
instructed to prepared and present in the
class.

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Customer Value
• https://www.youtube.com/watch?v=_0FsHPVOw_Q
Economic Forum
• http://www.pepsico.com/Purpose/Environmental-Sustainability.html
This is Samsung's big plan to take on Apple and OnePlus
• https://www.gadgetsnow.com/tech-news/this-is-samsungs-big-plan-
to-take-on-apple-and-oneplus/articleshow/74055521.cms,
Consumer Insight
• https://www.hansaresearch.com
Case study of Dabbawala-world’s largest food delivery
• https://adventure.com/dabbawalas-mumbai-india/
Digital Marketing Strategies
• https://data-flair.training/blogs/digital-marketing-strategies/
Career as Marketing manager
• https://www.youtube.com/watch?v=OPhhfeNfvjA
• https://www.youtube.com/watch?v=hump1iWGdD8
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Societal Marketing Concepts
• Indra Nooyi, Co-Chair, World Economic Forum.flv
• http://www.pepsico.com/Purpose/Environmental-Sustainability.html
• http://www.pepsico.com/Download/PepsiCo_Water_Report_FNL.pd

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