Unit 1: Introduction to Marketing

Meaning, nature and scope of Marketing; Importance of Marketing; Difference between

Marketing & sellings; Concepts of Marketing: Production concept, product concept,
Sales concept & Marketing concept; Marketing Philosophies: marketing & societal
marketing
Session I
What is marketing?
To a lay man, the marketing means promoting and selling things. As evident also in
the
Definition of marketing given by Cundiff and Still Marketing is the term used
to describe collectively those business functions most directly concerned
with demand stimulating and demand fulfilling activities of the business
enterprise.
Stimulating and fulfilling demand, however, is possible only when things to be
promoted or sold are meeting consumers needs and wants, else consumers would not
buy things.
Needs are basic human requirements.
For example: everyone needs food, water, recreation etc. These needs can be fulfilled
in many ways. One may want to have a cake, a burger or biscuits for the need of food.
What one wants to fulfill the needs are his/her wants. One may want to have a cake
for satisfying the need for food, but may not be able to buy it. When these wants are
backed by the ability to buy, wants become demand.
Therefore, for successful stimulation and fulfillment of the demand, a marketer must
address the needs and wants of the consumers. Noted marketing guru
Philip Kotler defines marketing as exchange of products and transactions
to satisfy human wants or needs.
Hence, in true sense, marketing does not only means promoting and selling things but
also understanding consumers needs and wants, and then offering things that fulfill
these needs and wants.
Because the primary objective of any commercial business is to earn profit, the
meaning of marketing can be summarized for commercial business as meeting needs
profitably in the words of Philip Kotler.
Following characteristics of marketing are worth revisiting for clear understanding of
What does marketing mean?
At the core, marketing is set of activities that fosters and facilitates exchange
between two parties (say individuals or institutions).
The exchange essentially constitutes flow of ownership of things from seller to
buyer, therefore marketing can be termed as set of activities or the process of
flow of ownership.
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Marketing is more than promoting or selling things as it requires understanding

needs and wants of consumers also.

Nature of marketing
Marketing is both science as well as art.
Marketing is art because many marketing functions like sales and advertising
require people with certain personality traits in order to be able to do justice to the
functional role.
Salespersons for example, should have extrovertive personality and flair for interaction
with people, and not just the good knowledge of the products and sales processes etc.
Also, a good advertisement can come from highly creative minds. Therefore, a good
marketing calls for certain innate traits that cannot be transferred easily, and hence it
is an art.
On the other hand, good marketing can be classified as science as well. Because
many marketing processes like distribution, and setting prices are quite
standardized and scientific.
Besides this, the marketing on the whole can also be described as the standard
process of understanding consumer needs and wants, creating things aimed at
satisfying these needs and wants, and making such things available to consumers in
exchange of profit. Because of these standard and scientific processes of marketing,
that can be transferred easily, marketing can be termed as scientific. Marketers
performance can markedly improve by receiving formal training on this body of
knowledge.
Assessment
1.
2.
3.
4.

In your own words, explain what is marketing?

Clearly differentiate between needs, wants, and demand.
Is marketing an art or science? Explain.
What challenges marketing being an art poses for an organization.

Fill in the blanks

1. Marketing is set of activities that fosters and facilitates
_________ (options: need, wants, demand, exchange)
2. Marketing is more than promoting or selling things as it requires understanding
of ________also. (options: products, needs and wants, consumers)
3. Marketing is _______because many marketing functions like sales and
advertising require people with certain__________. (options: science, art,
personality traits, knowledge, qualification)
4. Because of __________and scientific processes of marketing, that can be
__________easily, marketing can be termed as scientific. (options: transferred,
standard, flexible, established, understood)
Session II
Scope of marketing:

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The definition of marketing as discussed under the heading What is marketing in last
session, can be summarized as the exchange of things that satisfy needs and wants of
the consumers; where the terms exchange and things have broad connotations
today.
Marketing things include not only physical goods (e.g. biscuits) but also :
1.People (e.g. physicians),
2.Places (e.g. Kerala Gods own country),
3.Property (e.g. shops in malls or financial bonds),
4.Events (e.g. common wealth games),
5.Experiences (e.g. fun worlds),
6.Organizations (e.g. schools),
7.Information (e.g. encyclopedia),
8.Services (e.g. legal services), and
9.Ideas (e.g. innovative concept) etc.
Also, the exchange need not necessarily be a physical one.
For example: employers promoting their organizations to employees may get better
productivity and longer retention in return.
Therefore, the scope of marketing is not limited to the physical goods, and dealing with
the consumers but includes virtually anything on the offer that may not necessarily be
addressing to consumers per se.
Importance of marketing:
Imagining life without marketing today is a costly proposition, because of many
important contributions like :
Revenue generation: of all the functions of management like financing,
production, and resourcing etc. , only marketing is the function that produces
revenue directly. In this sense, it is indispensable function for any organization.
Easy availability of products: goods are today available wherever and
whenever you want. This is possible only because of intense distribution in
widely existing markets.
Consumer education: it is only due to successful marketing function (e.g. sales
demo, promotional leaflet etc.) that consumers learn in great detail about many
complex products like insurance policies and high-end technology products.
The ease with which you make purchase decision for a particular model of the
product is possible only because of consumer education.
Reduction in unit cost: although marketing activities are perceived to be
adding to the cost of goods to be sold, the per unit cost in most of the markets
actually comes down because of market development and mass consumption,
that results from increased awareness and acceptance through advertising and
mass communication.
Improved standard of living: In the words of Paul Mazur Marketing is the
delivery of a standard of living to the society. This statement can not be
neglected because marketing indeed improves the standard of living by - (i) it is
because of marketing only that so many products catering to almost all our
needs and wants are available in the market today, making our life easy and
satisfying; and (ii) producing these goods, and processes of exchange create
opportunity for employment to many in society.
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Assignment
1. Is marketing relevant to an NGO? What an NGO exchanges for a donation?
Assessment
1. Explain the importance of marketing for an individual, an organization, and an
economy?
2. Enlist all what can be subjected to marketing?
Fill in the blanks
1. A marketing exchange _________ be necessarily a ________. (options: need to,
need not to, physical, virtual)
2. Per unit cost in most of the markets actually ________because of _______market
and mass consumption, that results from ______ awareness and acceptance.
(options: goes up, comes down, increased, decreased, development of, reduction
of)
3. Of all the functions of management, which one generates revenue?
a. Finance
b. Accounts
c. Human resource
d. Marketing
e. operations
Session III
Philosophies / Concepts of marketing:
Marketing, as it exists today, has evolved from many perspectives and thoughts.
Broadly we can classify these schools of thoughts in to following five
philosophies of marketing:
1. The production concept:
The production concept is followed by the organizations believing that
consumption of their product would increase if they make it available widely at
lower price.
Remaining profitable even after providing products in far and wide locations at
lower cost is possible only when firms achieve economies of scale due to
increased demand.
As the scale of operation increases the personalization reduces, and focus on
reducing cost leads to lower quality products. Therefore, this concept suits to
the organizations which have very large production capacities and are dealing
in un-differentiated and commoditized products. It is not very rare to find firms
dealing in mostly undifferentiated industrial goods that still use this concept.
2. The product concept:
The production concept was very much in practice till early 1920s, until it was
realized that lowering unit price beyond a point is not possible, and to be able
to command higher price offering better product is necessary. This very logic
gave birth to the product concept.
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The firms following this concept try to continuously innovate to come up with
better products, and are often caught in the better mouse trap fallacy believing
that a better mouse trap will make consumers to beat the path to the sellers
doorsteps. The better mouse trap fallacy comes in to picture when firms start
offering so much innovative features and better functionalities in improved
products that are not required by the consumers.
3. The selling concept:
In the early 1930s, the firms following the product concept started realizing that
the better products that are not much in demand can be sold if consumers are
persuaded to buy through selling efforts.
This realization founded the selling concept that assumes that if consumers are
persistently persuaded, they will start liking the product and would eventually
buy it.
Firms still use this concept that are either selling unsought goods (e.g.
insurance, fire extinguisher etc.), or operating in saturated markets which are
characterized by either overcapacity or less demand.
4. The marketing concept:
Few decades later, in 1960s, sellers observed that even selling effort is not
enough to sell the goods that are not sought by the consumers, the focus
started shifting to first understanding the needs and wants and then produce
goods instead of conventional approach of first producing goods and then trying
to sell them somehow.
In other words instead of finding right consumers for already produced goods,
find the right products for your consumers.
This concept was major shift in the evolution of the concept of marketing today,
as the focus shifted from the goods or seller to the consumer.
5. The societal marketing concept:
1990s witnessed focus on consumer reaching a step further when marketers
started ensuring societal good for securing higher acceptability of their goods.
The societal marketing concept advocates that even though a firms products
may be satisfying needs and wants of a group of consumers, the firm should
not offer any thing that is not in the best interests of consumer or society at
large.
In other words the seller should behave in socially responsible manner and
should care for the environment, quality of life, and public health etc. over and
above just satisfying needs and wants for profit.
For example: major snacks brands today try to ensure that their products have
no harmful contents like preservatives, cholesterol or trans-fat; and many retail
store chains have stopped providing plastic carry bags even though it might
mean reduced convenience to shoppers.
Difference between selling and marketing:

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Of all the philosophies explained above, it is of particularly importance to

understand the difference between two most widely used concepts i.e. selling
and marketing; which incidentally are often are misunderstood as synonyms.
As it is evident from the discussion on (i) the meaning of marketing, and (ii) the
philosophies of marketing; the difference between selling and marketing can be
summarized as follows:

Selling

Marketing

Focus on product and seller.

Focus here is on the consumer.

Selling emphasizes on meeting

sellers profit motive.

Marketing emphasizes on customers needs and

satisfying them, profit follows customer satisfaction.

Goods are already produced and

seller somehow wants to sell
them to consumers.

Marketing concept requires products to be made to

meet the needs and wants of the consumers.

Short term orientation of

reaching sales volume or
targeted profit.

Long term orientation and continuous association

with consumer for repeated transactions/ purchase.

Price is decided by unit

production cost.

Price is determined by consumers, that in-turn

determines the unit cost.

Selling ends with closing the

deal.

Selling is a small function of marketing. After-sale

feedback from consumer forms the basis for
improved product in future.

Selling means exchanging

products for a price.

Marketing means obtaining consumer and retaining

them.

Fill in the blanks

1. The production concept suits to the organizations which have
_______production capacities and are dealing in ___________products. (options:
small, large, un-differentiated, differentiated)
2. Societal marketing argues that a marketer should care for ________________.
(options: what consumers like, what is in consumers interest.)
3. Match the following statements with the relevant philosophies being followed in
the statement:
Note :
4 Ps of marketing are :

Product
Place
Promotion
Price

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