Download Lesson-1-2 - Jahanzaib Yousaf

Lesson -1
The Core Concepts of Marketing
CONSUMER:
An individual who derives direct utility of the product. Who is involved in buying of a product for personal
and non-business consumption. Also termed as “Ultimate user”. Consumer has s budget, and he or she tends
to derive maximum utility within that budget.
CUSTOMER: An individual who actually makes a decision in selecting a certain product. He or she may and
may not directly consume the product. But he or she takes a buying decision. A housewife for example buys
cooking oil for her household- she is a customer. The entire family is a consumer.
Two kinds of customers: Internal and External.
*Internal are those, who work in the organization.
*External are those who are individuals, business people and groups outside.
CUSTOMER NEED: Needs can be described as human requirements. Need is there and its natural. We need
food to satisfy our hunger, water to quench out thirst. Of course need can be more than just food, water and
shelter. We need recreation, education, entertainment and lots of other things to sustain our living. Need can
be classified as:
CUSTOMER WANTS:
Need becomes Want, when they are directed towards a specific object. When hungry we need food; but we
want say a burger. Want can vary from place to place and from people to people. A man in USA can want a
burger to eat when hungry whereas a man in Pakistan needs a ‘Nan”. Want can be different at different
income levels and in various times.
CUSTOMER DEMAND:
Want becomes a demand when backed up by an individual’s ability to pay for it. A hungry person can want a
burger, but does he have money to demand a burger. Or is there a burger available to him?
CUSTOMER COST: Anything a customer has to incur in order to obtain a product or service. The concept
of customer cost is very broad as it has many forms:
Money cost, Time cost, Psychic cost, energy cost.
CUSTOMER VALUE: customer value is the amount of benefit that a customer will get from a service or
product relative to its cost. Difference between what a customer gets from a product, and what he or she has to
give in order to get it. Customer Value = Benefit /Cost.
CUSTOMER SATISFACTION: The feeling of pleasure and disappointment resulting after the use of a
product or service. Marketers are interested to measure the degree of satisfaction of a customer after using a
product or service.
MARKET: consist of a group of current and future customer having common needs and willing to satisfy
their needs. E.g. children are a good market for many products such as, food items, education, Toys and
garments.
TARGET MARKET: A particular group of customers which a company plans to serve or do business for.
E.g. BMW normally makes cars for the elite and high rollers and customer with a sense of style and desire for
exclusiveness. Similarly BATA has many different products targeted toward different customers such as,
School shoes, athletic shoes, formal shoes, comforters, casual wears and kid shoes etc.
PRODUCT: Anything that can be offered to satisfy customer needs, or a bundle of benefits offered to
customers to fulfill needs. It may be a tangible good (TV or mobile) or an intangible service (Healthcare,
Internet service). Products are classified in to: Ideas, People, Places, Information, Events, Organizations or
Properties.
DEFINITION OF MARKETING:
1. “Total system of business activities designed to plan, price, place and promote want satisfying goods
and services to target markets for profits”.
2. “A social and managerial process through which individuals and groups obtain what they need or want
through offering and exchanging goods or services of equal value”.
3. “Marketing is the process of identifying customer needs and making efforts to satisfy those needs”.
4. “Marketing is the process through which Organizations identify customer problems and provide
solutions to the problems”.
MARKETING MIX: Consist of 4Ps:
 Product: Anything having the potential to satisfy human needs.
 Price: The amount of money which a customer is willing to pay in order to fulfill a need.
 Placement: The process of making products available for the customers at the right place at the right
time and with the right cost.
 Promotion: The process through which a business communicates with its customers to bring awareness
for its products.
Lesson -2
MARKETING ORIENTATION
There are five competing concepts of philosophies to conduct marketing activities.
a) The Production Concept
b) The Product Concept
c) The selling Concept
d) The Marketing Concept
e) The Societal Concept
A) THE PRODUCTION CONCEPT: This philosophy approach is that consumers will prefer products that
are widely available and are with low price. Managers of this concept concentrate on achieving high
production efficiency, lower costs and mass distribution. They assume that consumers are only interested in
product availability and low prices. Production concept does work for some products, but not for all kinds of
products.
B) THE PRODUCT CONCEPT: This concept is that consumers will favor that product, which offers most
quality performance and innovative features. The managers of this concept focus their attention towards
making products more superior and keep improving it. They assume that consumers admire and prefer wellmade products and appraise quality and performance. Automobile industry is one good example.
C) THE SELLING CONCEPT: This concept emphasizes on aggressive selling and high promotional back
up. Selling, concept is practical on what we call as ‘unsought goods’ such as insurance, encyclopedia etc. At
most times, the selling concept is practical by managers having uniqueness and overcapacity. Their aim is to
sell what they can make rather that what the market needs. The customer still may not fully like the product
and have what we calls ‘bad-mouth’. Bad mouth is when a customer talks not in favors of the product.
D) THE MARKETING CONCEPT: This concept holds that the key to organizational goals consists of
company being more effective than competitors in creating, delivering and communicating consumer value to
the chosen target.
Marketing concept becomes clear in the following statements:
‘Find wants and fill them’.
‘You are the boss (Customer)’.
‘Have it in your way’.
E) THE SOCIETICAL CONCEPT: This concept further elaborates the marketing approach to include
consumer and society overall well being. Promoting business practices which are not only positive for the
customers but also benefits the society at large. Environmental deterioration, resource shortage, explosive
population growth, poverty, hunger etc are just a few things in our society now. Marketing aims at delivering
satisfaction more effectively and efficiently.
What is the difference between Selling and Marketing?
Selling focuses on the needs of the sellers which is profits that are achieved through selling in big volumes;
whereas marketing considers needs of the buyers and developing long term relationship. Marketing focuses on
creating customer value and customer retention.
Selling concept is:
Factory
Marketing concept is:
Target Market
Product
Need
Selling and Promotion
Integrated Marketing
Profit from volume
Consumers Satisfaction