Unit-1

What is Marketing?

Marketing is the process of identifying and meeting human and social needs in a way that harmonizes with the goals of the organization.
- American Marketing Association Definition: "Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large."
- Marketing Management: The art and science of choosing targets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value.

What is Marketed?

Goods: Physical products like bikes, smartphones, ice cream.
Services: Airlines, hotels, beauty salons, banking, legal, medical services, software.
Events: Trade shows, performances, sporting events, craft fairs, farmers' markets.
Experiences: Theme parks (Disneyland), water parks, unique travel experiences.
Persons: Artists, musicians, sports stars, celebrities (self-branding).
Places: Cities, countries marketed to attract tourists, residents, and businesses.
Properties: Real estate, financial properties (stocks, bonds) - intangible rights.
Organizations: To improve public image and attract donors/members.
Information: TV, radio, newspapers, magazines, online platforms.
Ideas: Social marketing campaigns, political campaigns, charitable causes.

Who is a Marketer?

Someone who seeks a response (attention, purchase, vote, donation) from another party (prospect).
Skilled at stimulating demand for their company's products.

8 States of Demand

Negative Demand: Consumers dislike the product and may pay to avoid it (e.g., dental services).
Non-existent Demand: Consumers unaware of or uninterested in the product (e.g., niche courses).
Latent Demand: Consumers have a need not fulfilled by existing products (e.g., smartphone vs. basic phone).
Declining Demand: Consumer purchases decrease (e.g., pendrives due to cloud storage).
Irregular Demand: Demand fluctuates seasonally (e.g., raincoats, air conditioners, theme parks).
Full Demand: Consumers are adequately buying all products supplied (e.g., groceries).
Overfull Demand: Demand exceeds supply (e.g., cement, popular concert tickets).
Unwholesome Demand: Demand for products with undesirable social consequences (e.g., illegal drugs, excessive alcohol).

What is a Market?

Traditional: A physical place where buyers and sellers gather.
Economists: A collection of buyers and sellers negotiating transactions for a specific product.

5 Basic Markets

Resource Markets: Where companies buy raw materials and supplies.
Manufacturer Markets: Where companies buy goods from other companies for use in production.
Consumer Markets: Where individuals and households buy goods and services for personal use.
Intermediary Markets: Where companies buy goods for resale (wholesalers, retailers).
Government Markets: Where government agencies buy goods and services.

A Simple Marketing System

Interacting Markets: Every economy consists of interconnected markets.
Marketers' Perspective: "Industry" refers to sellers; "market" refers to customer groups.
Types of Markets: Need markets (health-conscious), product markets (home décor), demographic markets (Gen-Alpha), geographic markets (Indian market).
Demand: Foundation of a company's operations.
Marketing's Value: Drives economic growth, introduces new products, creates jobs.

Marketplaces vs. Marketspace vs. Metamarkets

Marketplace: A physical store.
Marketspace: An online store (e.g., Amazon).
Metamarket: A cluster of complementary products/services related in consumers' minds (e.g., the automobile metamarket).
Metamediaries: Help buyers navigate metamarkets (e.g., travel agencies).

The New Marketing Realities

Technology: E-commerce, online/mobile communication, AI.
Globalization: Increased competition from global players.
Physical Environment: Climate change, global health issues.
Social Responsibility: Addressing poverty, pollution, climate change, social injustice.

Holistic Marketing

Holistic marketing is a philosophy that emphasizes the importance of integrating all aspects of marketing into a cohesive strategy. It's about creating a unified and consistent brand experience for customers across all touchpoints.

Key Components of Holistic Marketing

Relationship Marketing:
- Focuses on building long-term, mutually beneficial relationships with key stakeholders, including customers, employees, partners, and the financial community.
- Aims to create a "marketing network" of loyal and engaged stakeholders who contribute to the company's success.
- Examples: Loyalty programs, customer relationship management (CRM) systems, employee empowerment initiatives.
Integrated Marketing:
- Coordinates all marketing activities and programs to deliver a consistent message and value proposition to customers.
- Integrates the 4 Ps of marketing (product, price, place, promotion) into a comprehensive strategy.
- Ensures that all marketing efforts work together seamlessly to achieve common goals.
- Examples: Consistent branding across all channels, integrated marketing campaigns, coordinated messaging across online and offline platforms.
Internal Marketing:
- Focuses on motivating and empowering employees to deliver excellent customer service and support the company's marketing efforts.
- Recognizes that employees are internal customers who need to be engaged and aligned with the company's values and goals.
- Examples: Employee training programs, internal communication initiatives, employee recognition programs.
Socially Responsible Marketing:
- Considers the ethical and societal impact of marketing decisions.
- Aims to balance the company's needs with the needs of customers and society as a whole.
- Examples: Sustainable marketing practices, cause-related marketing, ethical sourcing.

Benefits of Holistic Marketing

Enhanced customer experience: Creates a seamless and consistent experience for customers across all touchpoints.
Improved brand reputation: Builds a strong and positive brand image by consistently delivering on its promises.
Increased customer loyalty: Fosters long-term relationships with customers by providing value and exceeding expectations.
Improved employee morale: Creates a positive and supportive work environment where employees feel valued and empowered.
Enhanced business performance: Drives revenue growth and profitability by aligning all marketing efforts with the company's overall goals.

Examples of Holistic Marketing

The Body Shop: Known for its ethical sourcing and commitment to social and environmental causes.
Nike: Integrates its marketing efforts across various channels and focuses on building relationships with athletes and consumers.
Starbucks: Creates a consistent brand experience across its stores and online platforms, and focuses on building community and customer loyalty.

Core Marketing Concepts

Needs, Wants, and Demands

Needs: Basic human requirements or states of felt deprivation.
- Examples: Air, food, water, clothing, shelter, recreation, education.
Wants: When needs are directed to specific objects that might satisfy the need, shaped by culture and personality.
- Example: Food is a need, but wanting biryani or pizza is a want.
Demands: Wants for specific products backed by an ability to pay (buying power).
- Example: Many people desire a Rolls Royce car, but only a few can afford it.

Five Types of Needs

Stated needs: What the customer explicitly says they want (e.g., "I want an inexpensive car").
Real needs: The underlying need behind the stated need (e.g., "I want a car with low operating costs").
Unstated needs: Needs the customer expects to be fulfilled without explicitly stating them (e.g., "I expect good service from the dealer").
Delight needs: Needs that would enhance the customer's experience but are not expected (e.g., "I would like the car to have a built-in navigation system").
Secret needs: Needs that are not expressed, often due to social or psychological reasons (e.g., "I want my friends to see me as a savvy consumer").

Market Segmentation and Targeting

Market Segmentation: Dividing the market into distinct groups of buyers with different needs, characteristics, or behaviors.
Target Market: Selecting specific segments to focus marketing efforts on, based on their potential profitability and alignment with the company's goals.

Market Offerings and Value Propositions

Market Offering: A combination of products, services, information, and experiences offered to a target market to satisfy their needs.
Value Proposition: A set of benefits that the company promises to deliver to customers to satisfy their needs.

Brands

Brand: A name, term, design, symbol, or other feature that identifies and differentiates a company's offerings from those of competitors.

Customer Value and Satisfaction

Customer-Perceived Value: The customer's evaluation of the difference between the benefits and costs of a market offering, relative to competing offerings.
Customer Satisfaction: The extent to which a product's perceived performance matches or exceeds customer expectations.

Customer Engagement Marketing

Customer Engagement Marketing: Fostering direct and continuous customer involvement in shaping brand conversations and experiences.
Customer Brand Advocacy: Satisfied customers initiating favorable interactions with others about a brand.
Customer-Generated Marketing: Customers playing a role in shaping their own brand experiences and those of other customers through online reviews, social media, etc.

Marketing Channels

Communication channels: Deliver and receive messages from target buyers (e.g., social media, email, websites).
Distribution channels: Display, sell, or deliver products to customers (e.g., distributors, wholesalers, retailers).
Service channels: Facilitate transactions and provide customer support (e.g., banks, insurance agencies, transportation companies).

Supply Chain

Supply Chain: The entire system of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer.
Partner Relationship Management: Working closely with partners in and outside the company to create greater value for customers.

Competition

Competition: Includes all actual and potential rival offerings and substitutes that a buyer might consider.
Marketing Environment

The marketing environment consists of the factors and forces outside marketing that affect marketing management's ability to build and maintain successful relationships with target customers. It can be divided into two categories:

Task Environment

The task environment includes the actors close to the company that affect its ability to serve its customers.

The company: Internal departments like top management, finance, R&D, purchasing, operations, and accounting. All departments must "think consumer" and work together to provide superior customer value and satisfaction.
Suppliers: Provide the resources needed by the company to produce its goods and services.
- Material suppliers
- Service suppliers (marketing research agencies, advertising agencies, banking and insurance agencies, transportation companies, telecommunication companies)
Distributors & Dealers: Help the company promote, sell, and distribute its goods to final buyers.
- Agents
- Brokers
Target customers: The people or organizations that the company aims to sell its products or services to.

Broad Environment

The broad environment consists of the larger societal forces that affect the task environment.

Demographic environment: The study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics. Changes in demographics can have a significant impact on marketing strategy.
Economic environment: Factors that affect consumer purchasing power and spending patterns (e.g., inflation, recession, unemployment rates, income distribution).
Physical environment: Natural resources that are needed as inputs by marketers or that are affected by marketing activities (e.g., shortages of raw materials, increased pollution, increased government intervention).
Technological environment: Forces that create new technologies, creating new product and market opportunities (e.g., automation, artificial intelligence, the Internet of Things).
Political-legal environment: Laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society.
Socio-cultural environment: Institutions and other forces that affect a society's basic values, perceptions, preferences, and behaviors.

Customer Lifetime Value & Customer Equity

Customer Lifetime Value (CLV): The value of the entire stream of purchases a customer makes over a lifetime of patronage.
Customer Equity: The total combined customer lifetime values of all the company's customers.

Building the Right Relationships with the Right Customers

Strangers: Low potential profitability, focus on making a profit on each transaction.
Butterflies: High potential profitability, but short-term loyalty. Enjoy the relationship while it lasts.
True Friends: High potential profitability and long-term loyalty. Invest in these relationships to nurture them.
Barnacles: Low potential profitability and long-term loyalty. May require efforts to increase profitability or may need to be "fired" as customers.

The Evolving Marketing Environment

The marketing environment is constantly changing, and marketers need to adapt to new technologies and trends to stay ahead of the competition. Here are some of the key forces shaping the modern marketing landscape:

Internet of Things (IoT)

Connected World: The IoT refers to a global environment where everything and everyone is digitally connected to everything and everyone else. This creates new opportunities for marketers to collect data, personalize experiences, and engage with customers in real-time.
Digital and Social Media Marketing: Marketers are increasingly using digital tools like websites, social media, mobile apps, email, and blogs to reach and engage customers on their digital devices.

Big Data and Artificial Intelligence

Data Explosion: Marketers have access to massive amounts of data from various sources, including customer transactions, website traffic, social media activity, and connected devices.
Data-Driven Insights: This "big data" can be analyzed to gain deeper customer insights, personalize marketing offers, and improve customer engagement and service.
AI-Powered Tools: Artificial intelligence (AI) is being used to automate marketing tasks, personalize customer experiences, and provide more efficient customer service through chatbots and virtual assistants.

Globalization

Global Marketplace: Marketers are increasingly taking a global view of their industry, competitors, and opportunities. The internet and advances in transportation have made it easier for businesses to reach customers around the world.
Global Competition: Companies face competition from both domestic and international players. This requires marketers to be aware of global trends and adapt their strategies to different cultural contexts.
The Expanded Marketing Process Model

The traditional marketing process often focuses on the 4 Ps (Product, Price, Place, Promotion). However, a more holistic and contemporary view expands this process to encompass a broader range of activities and considerations. Here's a breakdown of the expanded marketing process model:

1. Understanding the Marketplace and Customer Needs:

Market Research: Conduct thorough research to understand customer needs, wants, and demands. This includes analyzing market trends, competitor activities, and the overall business environment.
Customer Insights: Develop a deep understanding of your target audience, including their demographics, psychographics, behaviors, and motivations.

2. Designing a Customer Value-Driven Marketing Strategy:

Segmentation: Divide the market into distinct groups of buyers with similar needs and characteristics.
Targeting: Select the most attractive segments to focus your marketing efforts on.
Positioning: Develop a unique and compelling value proposition that differentiates your offering in the minds of your target customers.

3. Constructing an Integrated Marketing Program:

Product: Develop products, services, or experiences that meet the needs of your target market and deliver on your value proposition.
Price: Set prices that are attractive to customers and profitable for the company.
Place: Make your offering available to customers through appropriate distribution channels.
Promotion: Communicate the value of your offering to customers through advertising, public relations, sales promotion, and other marketing communications.

4. Engaging Customers and Building Profitable Relationships:

Customer Relationship Management (CRM): Build and maintain strong relationships with customers through personalized communication, loyalty programs, and exceptional customer service.
Customer Engagement: Create meaningful interactions with customers across all touchpoints, fostering brand loyalty and advocacy.
Community Building: Foster a sense of community around your brand, encouraging customer interaction and co-creation.

5. Capturing Value from Customers:

Customer Lifetime Value (CLV): Focus on maximizing the long-term value of your customer relationships.
Customer Equity: Build a strong base of loyal and profitable customers.
Sales and Market Share: Track key performance indicators (KPIs) to measure the effectiveness of your marketing efforts.

Key Considerations in the Expanded Model:

Holistic Approach: Integrate all aspects of marketing into a cohesive strategy, including internal marketing, relationship marketing, and socially responsible marketing.
Customer-Centricity: Place the customer at the center of all marketing decisions.
Data-Driven Decision Making: Use data and analytics to track performance, gain insights, and optimize marketing campaigns.
Digital Transformation: Embrace digital technologies and channels to reach and engage customers in the modern marketplace.
Sustainability: Consider the environmental and social impact of marketing activities.

By adopting this expanded marketing process model, businesses can create a more comprehensive and effective marketing strategy that drives sustainable growth and builds strong customer relationships.