Marketing Management

Unit-I
Marketing: An Introduction
Most of the people define marketing as selling or advertising. It is true that these are parts of the
marketing. But marketing is much more than advertising and selling. In fact marketing comprises
of a number of activities which are interlinked and the decision in one area affects the decision in
other areas..
The variety of styles and features complicates the production and sale of bicycles. The following
list shows some of the many things a firm like Atlas Cycles or Hero Cycles should do before and
after it decides to produce a bicycle.
1. Analyze the needs of people who might buy a bicycle and decide if they want more or
different models.
2. Predict what types of bicycles like handle bar styles, type of wheels, weights and materials
different customers will want and decide to which firm will try to satisfy their need.
3. Estimate how many of these people will be riding bicycles over the next several years and how
many bicycles they’ll buy.
4. Predict exactly when these people will want to buy bicycles.
5. Determine where in the India these bicyclists will be and how to get the company’s bicycles to
them.
6. Estimate the price they are willing to pay for their bicycles and if the firm can make a profit
selling at that price.
7. Decide which kinds of promotion should be used to tell potential customers about the
company’s bicycles.
8. Estimate how many competing companies will be making bicycles, how many bicycles they’ll
produce, what kind, and at what prices.
9. Figure out how to provide warranty service if a customer has a problem after buying the
bicycle.
The above activities are not the part of production. Actually making goods or performing
services. Rather, they are part of a larger process. Called marketing. That provide needed
direction for production and helps make sure that the right goods and services are produced and
find their way to consumers. In order to understand the concept of marketing, firstly you must
understand what .market is. ?
Marketing:
Numerous definitions were offered for marketing by different authors. Some of the definitions
are as follows:
1. Marketing is the process that seeks to influence voluntary exchange transactions between a
customer and a marketer. By:William G. Zikmund and Michael D’Amico
2. Marketing is the business process by which products are matched with markets and through
which transfer of ownership are affected. .Edward W. Cundiff.
3. Marketing consists of the performance of business activities that direct the flow of goods and
services from producers or suppliers to consumers or end-users. .American Marketing
Association
4. “Marketing is a societal and managerial 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.” .Philip Kotler
*More than just persuading customers
* Begins with customer needs
*Does not do it alone
* Builds a relationship with the customer.
Scope of Marketing:
Marketing is typically seen as the task of creating, promoting and delivering goods and services
to consumers and businesses. In fact, marketing people are involved in marketing 10 types of
entities: goods, services, experiences, events, persons, places, properties, organizations,
information and ideas. Marketing concepts can be used effectively to market these entities.
1. Goods. Good is defined as something tangible that can be offered to market to satisfy a need
or want. Physical goods constitute the bulk of most countries production and marketing effort. In
a developing country like India fast moving consumer goods (shampoo, bread, ketchup,
cigarettes, newspapers etc.) and consumer durables (television, gas appliances, fans etc.) are
produced and consumed in large quantities every year.
2. Services. As economies advance, the share of service in gross domestic product increases. For
example, in USA, service jobs account for 79% of all jobs and 74% of GDP. A service can be
defined as any performance that one party can offer to another that is essentially intangible and
does not result in the ownership of anything.
3. Experiences. By mixing several services and goods, one can create, stage and Market
experiences. For example water parks, zoos, museums etc. provide the experiences which are not
the part of routine life.
4. Events. Marketers promote time Based, theme-based or special events such as Olympics,
company anniversaries, sports events (Samsung Cup, India Pakistan Cricket Series), artistic
performances (Lata Mangeshkar live concert, Jagjit Singh live concert), trade shows
(International Book Fair at Pragati Maidan, Automobile fair), award ceremonies (Film fare
awards, Screen awards), beauty contests (Miss World, Miss Universe, Miss India, Miss
Chandigarh), model hunts (Gladrags Mega Model).
5. Persons. Celebrity marketing has become a major business. Years ago, someone seeking fame
would hire a press agent to plant stories in newspapers and magazines. Today most of cricket
players like Sachin Tendulkar, Saurav Ganguly, Rahul Dravid etc are drawing help from
celebrity marketers to get the maximum benefit.
6. Places. Cities, states, regions and whole nations compete actively to attract tourists, factories,
company headquarters and new residents. India and China are competing actively to attract
foreign companies to make their production hub. Cities like Bangalore, Hyderabad and Gurgaon
are promoted as center for development of software
7. Properties. Properties are intangible rights of ownership of either real property (real estate) or
financial property (share and debt. instruments). Properties are bought and sold, and this requires
marketing effort. Property dealers in India work for property owners or seekers to sell or buy
plots, residential or commercial real estate. In India some builders like Ansal, Sahara Group,
both build and market their residential and commercial real estates. Brokers and sub-brokers buy
and sell securities on behalf of individual and institutional buyers.
8. Organizations. Organizations actively work to build a strong, favourable image in the mind
of their publics. We see ads of Reliance Infocomm which is trying to provide communication at
lower rates, Dhirubhai Ambani Entrepreneur programme to promote entrepreneurship among the
Indians. Companies can gain immensely by associating themselves with the social causes. 9.
9.Information. Information can be produced and marketed as a product. This is essentially what
schools, colleges and universities produce and distribute at a price to parents, students and
communities. Encyclopedias and most non-fiction books market information. Magazines such as
Fitness and Muscle provide information about staying healthy, Business India, Business Today
and Business World provide information about business activities that are taking place in various
organizations.
10. Ideas. Film makers, marketing executives and advertising continuously look for a creative
spark or an idea that can immortalize them and their work. Idea here means the social cause or an
issue that can change the life of many. Narmada Bachao Andolan was triggered to bring the
plight of displaced people and to get

Nature of Marketing
1. Marketing is both consumer oriented and competitor oriented. The consumer and competitor
orientations can be easily understood by the following diagram.

1.

(a) Self-centered companies does not give any concern to the consumers and competitors. This
type of company can exist in the situation of monopoly. In the competitive economy, these
companies cannot remain in the business for long.
(b) Competitor oriented companies mainly focus on competitor’s activities, what the competitors
are doing and what they are likely to do in the near future are the major areas of concern. The
companies can be either reactive or proactive. The reactive company will follow the moves of
competitors. For example, if the competitor reduce price of its product or service then the
reactive competitor oriented company will also reduce its prices. Whereas the proactive
competitor oriented company will try to identify what its major competitor is going to do.
(c) Customer oriented companies believes in satisfying the customers at any cost. These
companies obtain inputs from the customers and then develop their product or service as per
customers’ requirements and then earn profit through-customer satisfaction. The biggest problem
is that they don’t. consider what their competitors are doing and in the long run it might prove
counter-productive.
(d) Market driven companies are concerned about customers as well as competitors. These
companies regularly interact with the customers to know about their satisfaction levels and their
future requirements and then try to develop the product or service which is better than their
competitors. In the era of cut throat competition, these companies one more likely to be
Successful than the other companies.
2. Marketing is a dynamic activity because a number of variables keep changing. For example
marketing environment, customer’s requirements, competitor’s actions etc. keep changing
thereby necessitating the changes in the company’s offer. The companies may have to modify
product, price, place or promotion due to changes in any of the numerous variables. For example,
Indian manufacturer’s either have to improve the quality or reduce the cost to meet the
competition from foreign Companies.
3. Long term objective of marketing is profit maximization through customer satisfaction. This
is so because a satisfied customer will come back again for the same or different need to the
company. Apart from this, the satisfied customer is the company’s best advertisement because
word of mouth communication by the customer has more credibility than any other form of
marketing communication and he’ll recommend the company’s products/services to his friends
and relatives.
4. Marketing is an integrated function and all the marketing decisions are linked with each
other. One decision will automatically lead to another decision. For example if a company has
decided to launch a product for limited number of customers then its price will be high and that
product will be available through exclusive distribution system and the promotion strategy will
depend on the media preferred by the target market. So, if a company decides the first step then
decisions regarding the remaining steps will follow automatically.
5. Marketing is the core functional area of modern day organizations and is the driving force
behind every organization. Marketing provides the vital input for corporate planning which in
turn dictates the plans for other functional areas.
6. Marketing is interlinked with other functional areas of the organization. Marketing people
collects the information regarding (customer’s requirements and pass it to) the research and
development and engineering people who’ll turn the customer requirements into the product or
service features. The finance and accounts people help in obtaining the money for the
development of new product and also helps in arriving at the final price decision. The human
resource department provides the necessary manpower for carrying out various activities not
only in the marketing area but also in the other functional areas.
Importance of Marketing
(A) To the Society
1. It is instrumental in improving the living standards. Marketing continuously identifies the
needs and wants satisfying products or services which can propel the people to do an extra to
earn money which can be exchanged for the desired products or services.
2. Marketing generates gainful employment opportunities both directly and indirectly. Directly,
marketing provides employment to the people in various areas like in advertising agency, in the
company sales force, in the distributor’s sales force, in public relation firms etc.
3. Marketing helps in stabilizing economic condition in the sense that marketing helps in selling
the products or services, which keeps the various organizations functioning and gainful
employment is available to the people
(B) To the firms/companies
1. Marketing sustains the company by bringing in profits. Marketing is the only activity that
brings revenue to the firm, whereas other activities incur expenditure is the driving force behind
a successful company.
2. Marketing is the source of new ideas. New product or service ideas usually comes from the
research laboratories, employees or from marketplace. It’s the marketing people who are in
continuous touch with the consumers and marketing intermediaries. Interaction with them helps
in identifying strong and weak points of company’s product or services as well as competitor’s
products or services.
3. Marketing provides direction for the future course. The marketing oriented company
continuously brings out new product and service ideas which provide the direction for corporate
strategic planning for longer time horizon.
(C) To the Consumers
1. Meeting the unmet needs or wants. Marketing identifies those needs or wants which were not
satisfied and helps in developing the product or service which can satisfy those unmet needs or
wants of the people
2. Reducing the price of products or services. Marketing helps in popularizing the product or
service which attracts the customers as well as competitors towards that product or service
categories. Due to increase in demand, the manufacturing capacity increase which brings down
per unit fixed costs of the product or service.
Market:
The term market. Originates from the Latin word Marcatus. Which means .a place where
business is conducted. A layman regards market as a place where buyers and sellers personally
interact and finalise deals.
According to Perrault and McCarthy, Market is defined as a group of potential customers
with similar needs or wants who are willing to exchange something of value with sellers offering
various goods and/or services to satisfy those needs or wants. Of course, some negotiation will
be needed. This can be done face-to-face at some physical location (for example, a farmer’s
market). Or it can be done indirectly through a complex network that links middlemen, buyers
and sellers living far apart. Depending upon what is involved, there are different types of markets
which deals with products and/or services such as:
1) Consumer Market: In this market the consumers obtain what they need or want for their
personal or family consumption. This market can be subdivided into two parts. Fast moving
consumer goods market from where the consumers buy the products like toothpaste, biscuits,
facial cream etc. and services like internet, transportation etc. Another is durables market from
where, the consumers buy the products of longer life like motorcycles, cars, washing machines
etc. and services like insurance cover, fixed deposits in the banks and non-banking financial
companies etc.
(2) Industrial/Business Market: In this market, the industrial or business buyers purchase
products like raw materials (iron ore, coke, crude oil etc.), components (wind-screen, tyres,
picture tubes, micro-processors etc), finished products (packaging machine, generators etc.),
office supplies (computers, pens, paper etc.) and maintenance and repair items (grease,
lubricating oil, broom etc.). Apart from products, now-a-days due to outsourcing the industrial
buyers also require a number of services like accounting services, security services, advertising,
legal services etc. from the providers of these services.
(3) Government Market: In most of the countries central/federal, state or local governing bodies
are the largest buyers requiring and number of products and services. Government is also the
biggest provider of services to the people, especially in a developing country like India where
army, railways, post and telegraph etc. services are provided by the Central Government and
State Govt. and local municipality provides services like roadways and police and sewage and
disposal and water supply respectively.
(4) Global Market: The world is rapidly moving towards borderless society thanks to
information revolution and the efforts of WTO to lower the tariff and nontariff barriers. The
product manufacturers and service providers are moving in different countries to sustain and
increase their sales and profits. Although the global companies from the developed countries are
more in number (AT & T, McDonald’s, Ford Motors, IBM, Sony, Citi Bank etc.); the companies
from developing countries are also making their presence felt in foreign countries
Core Concepts of Marketing:
Marketing can be further understood by defining several of its core concepts.

*Needs, Wants and Demands

The marketer must try to understand the target market’s needs, wants, and demands. Needs
describe basic human requirements. People need food, air, water, clothing and shelter to survive.
People also have strong needs for recreation, education, and entertainment. These needs become
wants when they are directed to specific object that might satisfy the need. An Indian needs food
but wants a rice, chapattis, vegetable and dal. A person in Mauritius needs food but wants a
mango, rice, lentils and beans. Wants are shaped by one’s society.
Demands are wants for specific products backed by an ability to pay. Many people want a big &
beautiful house; only a few are able and willing to buy one. Companies must measure not only
how many people want their product but also how many would actually be willing and able to
buy it.
*Product or Offering
People satisfy their needs and wants with products. “A product is any offering that can satisfy a
need or want of consumers.” We mentioned earlier the major types of basic offerings: goods,
services, experiences, events, persons, places, properties, organizations, information, and ideas.
A brand is an offering from a known source. A brand name such as McDonald’s carries many
associations in the minds of people: hamburgers, fun, children, fast food, Golden Arches. These
associations make up the brand image. All companies strive to build brand strength. That is, a
strong, favorable brand image.
*Value and Satisfaction
The product or offering will be successful if it delivers value and satisfaction to the target buyer.
The buyer chooses between different offerings on the basis of which is perceived to deliver the
most value. We define value as a ratio between what the customer gets and what he gives. The
customer gets benefits and assumes costs. The benefits include functional benefits and emotional
benefits. The costs include monetary costs, time costs, energy costs, and psychic costs. Thus
value is given by :

The marketer can increase the value of the customer offering in several ways:
1) Raise benefits
2) Reduce costs
3) Raise benefits and reduce costs
4) Raise benefits by more than the raise in costs
5) Lower benefits by less than the reduction in costs
The customer who is choosing between two value offerings, V1 and V2, will examine the ratio
V1/V2. She/He will favour V1 if the ratio is larger than one; she/He will favour V2 if ratio is
smaller than one; she/He will be indifferent if the ratio equals one.
*Exchange and Transactions
Exchange is only one of four ways in which a person can obtain a product. The person can
self-produce the product or service, as when a person hunts, fishes, or gathers fruit. The person
can use force to get a product, as in a hold up or burglary. The person can beg, as happens when
a homeless person asks for food. Or the person can offer a product, a service, or money in
exchange for something he or she desires. Exchange, which is the core concept of marketing,
involves obtaining a desired product from someone by offering something in return. For
exchange potential to exist, five conditions must be satisfied:
1. There are at least two parties.
2. Each party has something that might be of value to the other party.
3. Each party is capable of communication and delivery.
4. Each party is free to accept or reject the exchange offer.
5. Each party believes it is appropriate or desirable to deal with the other party.

MARKETING AND MARKETING MANAGEMENT:

“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.”
For a managerial definition, marketing has often been described as the art of selling Products.
But people are surprised when they hear that the most important part of marketing is not selling!
Selling is only the tip of the marketing iceberg. Peter Drucker, a leading management theorist,
puts it this way: 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
customer so well 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. When Sony designed its Walkman, when Nintendo designed a superior
video game, and when Toyota introduced its Lexus automobile, these manufacturers were
swamped with orders because they had designed the right. product based on careful marketing
homework.

“Marketing (management) is the process of planning and executing the conception, pricing,
promotion, and distribution of ideas, goods, services to create exchanges that satisfy individual
and organizational goals.”
Coping with exchange processes calls for a considerable amount of work and skill. Marketing
management takes place when at least one party to a potential exchange thinks about the means
of achieving desired responses from other parties. We see marketing management as the art and
science of choosing target markets and getting, keeping, and growing customers through
creating, delivering, and communicating superior customer value. Apart from these core
concepts there are additional concepts which will help in understanding the marketing. These
concepts are as follows:

Evolution of Marketing:
Once upon a time, when the needs and wants were satisfied by the barter trade, there was no
need for marketing. Two parties interested in each other’s products simply negotiate with each
other regarding the quantities of each product that must be exchanged. Even at the time of
industrial revolution when the demand for different products was far greater than the supply,
even in that scenario there was no need for marketing. In fact producers were focused on
production aspects. With the advancement of production technology and the increase in
competition, the focus shifted through various functional areas towards marketing. The evolution
of marketing can be easily understood by understanding the company orientations toward the
market place.
Company Orientations toward the Marketplace:
We have defined marketing management as the conscious effort to achieve desired exchange
outcomes with target markets. But what philosophy should guide a company’s marketing efforts?
What relative weights should be given to the interest of the organization, the customers, and
society? Very often these interest conflict. Clearly, marketing activities should be carried out
under a well-thought-out philosophy of efficient, effective, and socially responsible marketing.
However, there are five competing concepts under which organizations conduct marketing
activities: the production concept, product concept, selling concept, marketing concept, and
societal marketing concept.
1) The Production Concept
The production concept is one of the oldest concepts in business.
The production concept holds that consumers will prefer products that are widely available and
inexpensive. Managers of production-oriented businesses concentrate on achieving high
production efficiency, low costs, and mass distribution. They assume that consumers are
primarily interested in product availability and low prices. This orientation makes sense in
developing countries, where consumers are more interested in obtaining the product than in its
features. It is also used when a company wants to expand the market. Some service organizations
also operate on the production concept. Many medical and dental practices are organized on
assembly-line principles, as are some government agencies (such as unemployment offices and
license bureaus). Although this management orientation can handle many cases per hour, it is
open to charges of impersonal and poor-quality service.
2) The Product Concept
Other businesses are guided by the product concept.
The product concept holds that consumers will favour those products that offer the most quality,
performance, or innovative features. Managers in these organizations focus on making superior
products and improving them over time. They assume that buyers admire well-made products
and can appraise quality and performance. However, these managers are sometimes caught up in
a love affair with their product and do not realize what the market needs. Management might
commit the better-mousetrap fallacy, believing that a better mouse-trap will lead people to beat a
path to its door. Product-oriented companies often design their products with little or no
customer input. They trust that their engineers can design exceptional products. Very often they
will not even examine competitors’ products. A General Motors executive said years ago: How
can the public know what kind of car they want until they see what is available? GM’s designers
and engineers would design the new car. Then manufacturing would make it. The finance
department would price it. Finally, marketing and sales would try to sell it. No wonder the car
required such a hard sell! GM today asks customers what they value in a car and includes
marketing people in the very beginning stages of design.
3) The Selling Concept
The selling concept is another common business orientation.
The selling concept holds that consumers and businesses, if left alone, will ordinarily not buy
enough of the organization’s products. The organization must, therefore, undertake an aggressive
selling and promotion effort. This concept assumes that consumers typically show buying inertia
or resistance and must be coaxed into buying. It also assumes that the company has a whole
battery of effective selling and promotion tools to stimulate more buying. The selling concept is
practised most aggressively with unsought goods, goods that buyers normally do not think of
buying, such as insurance etc. These industries have perfected various sales techniques to locate
prospects and hard-sell them on their product’s benefits.
4)The Marketing Concept
The marketing concept is a business philosophy that challenges the three business orientations
we just discussed. Its central tenets crystallized in the mid-1950s.The marketing concept holds
that the key to achieving its organizational goals consists of the company being more effective
than competitors in creating, delivering, and communicating customer value to its chosen target
markets.
The marketing concept has been expressed in many colorful ways:
*Meeting needs profitably..
*Find wants and fill them..
*Love the customer, not the product..
*Have it your way.. (Burger King)
*You.re the boss.. (United Airlines)
*Putting people first.. (British Airways)
*Partners for profit.. (Milliken and Company)

Theodore Levitt of Harvard drew a perceptive contrast between the selling and marketing
concepts:
Selling focuses on the needs of the seller; marketing on the needs of the buyer. Selling is
preoccupied with the seller’s need to convert his product into cash; marketing with the idea of
satisfying the needs of the customer by means of the product and the whole cluster of things
associated with creating, delivering and finally consuming it.
The marketing concept rests on four pillars : target market, customer needs, integrated
marketing, and profitability. They are illustrated in Figure, where they are contrasted with a
selling orientation. The selling concept takes an inside-out perspective. It starts with the factory,
focuses on existing products, and calls for heavy selling and promoting to produce profitable
sales. The marketing concept takes an outside-in perspective. It starts with a well-defined market,
focuses on customer needs, coordinates all the activities that will affect customers, and produces
profits by satisfying customers.

5)The Societal Marketing Concept

Some have questioned whether the marketing concept is an appropriate philosophy in an age of
environmental deterioration, resource shortages, explosive population growth, world hunger and
poverty and neglected social services. Are companies that do an excellent job of satisfying
consumer wants necessarily acting in the best long-run interests of consumers and society ? The
marketing concept sidesteps the potential conflicts among consumer wants, consumer interest,
and long-run societal welfare. Consider the following criticism:
The fast-food hamburger industry offers tasty but unhealthy food. The hamburgers have a
high fat content, and the restaurants promote fries and pies, two products high in starch and fat.
The products are wrapped in convenient packaging, which leads to much waste. In satisfying
consumer wants, these restaurants may be hurting consumer health and creating
environmental problems.
Situations like this one call for a new term that enlarges the marketing concept. Among those
suggested are “humanistic marketing” and “ecological marketing.” We propose calling it the
societal marketing concept.
The societal marketing concept holds that the organization’s task is to determine the needs,
wants and interests of target markets and to deliver the desired satisfactions more effectively and
efficiently than competitors in a way that preserves or enhances the consumer’s and the society’s
well-being.
The Difference between Selling and Marketing:
Before we move on to the marketing concept, let us analyse the difference between selling and
marketing. Marketing is much wider than selling, and much more dynamic. In fact, there is a
fundamental difference between the two.” Selling revolves around the needs and interests of the
seller; Marketing revolves around the needs and interests of the buyer
Holistic Marketing Orientation and Customer Value: A holistic marketing orientation
can also provide insight into the process of capturing customer value. One conception of holistic
marketing views it as "integrating the value exploration, value creation, and value delivery
activities with the purpose of building long-term, mutually satisfying relationships and co-
prosperity among key stakeholders. “According to this view, holistic marketers succeed by
managing a superior value chain that delivers a high level of product quality, service, and speed.
Holistic marketers achieve profitable growth by expanding customer share, building customer
loyalty, and capturing customer lifetime value (Figure below), a holistic marketing framework,
shows how the interaction between relevant actors (customers, company, and collaborators) and
value-based activities (value exploration, value creation, and value delivery) helps to create,
maintain, and renew customer value.

(A Holistic Marketing Frame Work)

The holistic marketing framework is designed to address three key management questions:
1. Value exploration - How can a company identify new value opportunities?
2. Value creation- flow can a company efficiently create more promising new value offerings?
3. Value delivery- How can a company use its capabilities and infrastructure to deliver the new
value offerings more efficiently?
Marketing Myopia: A short-sighted and inward looking approach to marketing that focuses on
the needs of the company instead of defining the company and its products in terms of
the customers' needs and wants. It results in the failure to see and adjust to the rapid changes in
their markets.
The marketing myopia theory was originally proposed by Theodore Levitt. The theory states that
marketers should look towards the market and modify the company and products accordingly
rather than looking towards your own company, its potential and then catering the market. The
needs of the market should receive first priority.
Implications of the Marketing Myopia theory – Marketing myopia can be used by marketers
as well as advertisers to determine whether or not they are catering the right market. Should they
adapt their products to cater a larger market. What kind of advertising strategies should they use.
How can they bring about synchronization between the production capabilities of companies and
the demand in the market.
Digitalization:
Conversion of analog information in any form (text, photographs, voice, etc.) to digital form with
suitable electronic devices (such as a scanner or specialized computer chips) so that the
information can be processed, stored, and transmitted through digital circuits, equipment,
and networks. Ex.The new Apple watch is an example of digitalization at its best where
technology has taken an ordinary watch and introduced technology into it with phone
capabilities, messaging, and even internet capabilities.
Ex.The company was able to get rid of many of its filing cabinets, because the new computer
system allowed for the digitalization of its company records.

Customization refers in the context of international marketing to a country-tailored product

strategy which focuses on cross-border differences in the needs and wants of target customers,
appropriately changing products in order for them to match local market conditions. Therein,
customization follows a market-driven orientation (as opposed to a product-driven orientation)
and aims at increasing customer satisfaction by adapting the company's products to local needs.
Ex:
*Targeting  total  customer satisfaction (TCS).
* Maintaining corporate social responsibility (CTS).
* Harnessing human resources than technology.
* Companies are serious about human resource management than product management

Marketing Mix:
Marketing is a process of creating and delivering value. What is the mechanism through which a
marketer carries out the value delivery process? The marketer delivers value to the customer
basically through his market offer. He takes care to see that the offer fulfils the needs of the
customers. He also ensures that the customer perceives the terms and conditions of the offer as
more attractive, vis-a-vis other competing offers. How is this actually accomplished?
 If we turn to the nuts and bolts of this task, we can see that in the first place, the marketer creates
the product that will meet the identified needs of the consumer. Second, he carries out functions
such as transportation, so that the product can conveniently reach the consumer. Third, he
communicates the benefits of the offer to the consumer by carrying out various promotional
activities such as personal selling, advertising and sales promotion. Lastly, he tackles the price
mechanism and consummates the marketing task by arriving at a price that is acceptable to the
consumer. These are the elements with which the marketer accomplishes his value delivering
task.
Marketers use numerous tools to elicit the desired responses from their target markets.
These tools constitute a marketing mix:Marketing mix is the set of marketing tools that the firm
uses to pursue its marketing objectives in the target market. As shown in Figure below ,
McCarthy classified these tools into four broad groups that he called the four Ps of marketing:
product, price, place, and promotion. Marketing-mix decisions must be made to influence the
trade channels as well as the final consumers. Typically, the firm can change its price, sales-force
size, and advertising expenditures in the short run. However, it can develop new products and
modify its distribution channels only in the long run. Thus, the firm typically makes fewer
period-to-period marketing-mix changes in the short run than the number of marketing- mix
decision variables might suggest.
“ Marketing mix is the set of marketing tools that the firm uses to pursue its marketing
Objectives in the target market.”
Robert Lauterborn suggested that the sellers’ four Ps correspond to the customer’s four Cs:

Winning companies are those that meet customer needs economically and conveniently and
with effective communication
Consumer buying Behaviour
The starting point for understanding consumer buying behavior is the stimulus response model
shown in Figure below. As this model shows, both marketing and environmental stimuli enter
the buyer’s consciousness. In turn, the buyer’s characteristics and decision process lead to certain
purchase decisions. The marketer’s task is to understand what happens in the buyer’s
consciousness between the arrival of outside stimuli and the buyer’s purchase decisions.
As this model indicates, a consumer’s buying behavior is influenced by cultural, social,
personal, and psychological factors.
 (Stimulus Response Model)
Buyer’s Buying Decision Process: The Five-Stage Model:

The consumer passes through five stages: problem recognition, information search, evaluation of
alternatives, purchase decision, and post purchase behaviour. Clearly, the buying process starts
long before the actual purchase and has consequences long afterward.
But consumers do not always pass through all five stages in buying a product. They may skip
or reverse some stages. A woman buying her regular brand of toothpaste goes directly from the
need for toothpaste to the purchase decision, skipping information search and evaluation. The
model in Figure below provides a good frame of reference, however, because it captures the full
range of considerations that arise when a consumer faces a highly involving new purchase.
 ( Five Stages model)

Problem Recognition
The buying process starts when the buyer recognizes a problem or need. The need can be
triggered by internal or external stimuli. With an internal stimulus, one of the person's normal
needs—hunger, thirst, sex—rises to a threshold level and becomes a drive; or a need can be
aroused by an external stimulus. A person may admire a neighbor's new car or see a television ad
for a product or services.
Marketers need to identify the circumstances that trigger a particular need by gathering
information from a number of consumers. They can then develop marketing strategies that
trigger consumer interest. This is particularly important with discretionary purchases such as
luxury goods, vacation packages, and entertainment options. Consumer motivation may need to
be increased so that a potential purchase is even given serious consideration.

Information Search
An aroused consumer will be inclined to search for more information. We can distinguish
between two levels of arousal. The milder search state is called heightened attention. At this
level a person simply becomes more receptive to information about a product. At the next level,
the person may enter an active information search: looking for reading material, phoning friends,
going online, and visiting stores to learn about the product,of key interest to the marketer are the
major information sources to which the consumer will turn and the relative influence each will
have on the subsequent purchase decision. These information sources fall into four groups:
*Personal. Family, friends, neighbors, acquaintances
*Commercial. Advertising, Web sites, salespersons, dealers, packaging, displays
*Public. Mass media, consumer-rating organizations
*Experiential. Handling, examining, using the product
The relative amount and influence of these sources vary with the product category and the
buyer's characteristics.
Evaluation of Alternatives
How does the consumer process competitive brand information and make a final value
judgment? No single process is used by all consumers or by one consumer in all buying
situations. There are several processes, the most current models of which see the process as
cognitively oriented. That is, they see the consumer as forming judgments largely on a conscious
and rational basis.
Some basic concepts will help us understand consumer evaluation processes:
First, the consumer is trying to satisfy a need.
Second, the consumer is looking for certain benefits from the product solution.
Third, the consumer sees each product as a bundle of attributes with varying abilities for
delivering the benefits sought to satisfy this need. The attributes of interest to buyers vary by
product—for example:
1. Cameras. Picture sharpness, camera speeds, camera size, price
2. Hotels. Location, cleanliness, atmosphere, price
3. Mouthwash. Color, effectiveness, germ-killing capacity, price, taste/flavor
4. Tires. Safety, tread life, ride quality, price
Consumers will pay the most attention to attributes that deliver the sought-after benefits. The
market for a product can often be segmented according to attributes that are important to
different consumer groups.
BELIEFS AND ATTITUDES Evaluations often reflect beliefs and attitudes. Through
experience and learning, people acquire beliefs and attitudes. These in turn influence buying
behavior. A belief is a descriptive thought that a person holds about something. People's beliefs
about the attributes and benefits of a product or brand influence their buying decisions. Just as
important as beliefs are attitudes. An attitude is a person's enduring favorable or unfavorable
evaluation, emotional feeling, and action tendencies toward some object or idea.58 People have
attitudes toward almost everything: religion, politics, clothes, music, food.

Purchase Decisions
In the evaluation stage, the consumer forms preferences among the brands in the choice set. The
consumer may also form an intention to buy the most preferred brand. In executing a purchase
intention, the consumer may make up to five sub-decisions: brand (brand A), dealer (dealer 2),
quantity (one computer), timing (weekend), and payment method (credit card). Purchases of
everyday products involve fewer decisions and less deliberation. For example, in buying sugar, a
consumer gives little thought to vendor or payment method.
In some cases, consumers may decide not to formally evaluate each and every brand; in other
cases, intervening factors may affect the final decision.

Post purchase Behavior

After the purchase, the consumer might experience dissonance that stems from noticing certain
disquieting features or hearing favorable things about other brands, and will be alert to
information that supports his or her decision. Marketing communications should supply beliefs
and evaluations that reinforce the consumer's choice and help him or her feel good about the
brand.
The marketer's job therefore does not end with the purchase. Marketers must monitor post
purchase satisfaction, post purchase actions, and post purchase product uses.

Post purchase Satisfaction:

What determines customer satisfaction with a purchase? Satisfaction is a function of the
closeness between expectations and the product's perceived performance. If performance falls
short of expectations, the consumer is disappointed; if it meets expectations, the consumer is
satisfied; if it exceeds expectations, the consumer is delighted. These feelings make a difference
in whether the customer buys the product again and talks favorably or unfavorably about it to
others.
Consumers form their expectations on the basis of messages received from sellers, friends,
and other information sources. The larger the gap between expectations and performance, the
greater the dissatisfaction. Here the consumer's coping style comes into play. Some consumers
magnify the gap when the product is not perfect, and they are highly dissatisfied; others
minimize the gap and are less dissatisfied.
The importance of post purchase satisfaction suggests that product claims must truthfully
represent the product's likely performance. Some sellers might even understate performance
levels so that consumers experience higher-than-expected satisfaction with the product.

Post purchase Satisfaction:

Satisfaction or dissatisfaction with the product will influence subsequent behavior. If the
consumer is satisfied, he or she will exhibit a higher probability of purchasing the product again.
For example, data on automobile brand choice show a high correlation between being highly
satisfied with the last brand bought and intention to buy the brand again.
Dissatisfied consumers may abandon or return the product. They may seek information that
confirms its high value. They may take public action by complaining to the company, going to a
lawyer, or complaining to other groups (such as business, private, or government