ssrn_id2416770_code2021543 introduction marketing management

INTRODUCTION TO MARKETING MANAGEMENT

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MARKETING MANAGEMENT- INTRODUCTION / CONCEPTUAL OVERVIEW

Concept of Marketing: nature, scope, relevance and applicability, core concept of marketing,

marketing management – nature and scope. Company orientation towards the market place.

Marketing Vs. Selling. A brief idea about marketing mix.

DEFINITIONS OF MARKETING

According to Philip Kotler, "Marketing is human activity directed at satisfying needs and wants

through exchange process."

According to American Marketing Association: ‘Marketing is the process of planning and

executing the conception, pricing, promotion and distribution of ideas, goods and services to create

exchanges that satisfy individual and organizational objectives.

According to J.F. Pyle, "Marketing is that phase of business activity through which human wants

are satisfied by the exchange of goods and services."

According to William Stanton, "Marketing is a total system of business activities designed to plan,

price, promote and distribute want-satisfying products to target markets to achieve organizational

objectives."

This definition of marketing rests on the following concepts:

(i) Needs, wants and demands;

(ii) Products;

(iii) Value and satisfaction;

(iv) Exchange

(v) Markets.

1. NEEDS, WANTS AND DEMANDS

A human need is a state of felt deprivation of some basic satisfaction. People require foods,

clothing, shelter, safety, belonging, esteem etc. these needs exist in the very nature of human

beings.

Human wants are desires for specific satisfiers of these needs. For example, cloth is a need but

Raymonds suiting may be want. While people’s needs are few, their wants are many.

Demands are wants for specific products that are backed up by an ability and willingness to buy

them. Wants become demands when backed up by purchasing power.

2. PRODUCTS

Products are defined as anything that can be offered to someone to satisfy a need or want.

3. VALUE AND SATISFACTION

Consumers choose among the products, a particular product that give them maximum value and

satisfaction. Value is the consumer’s estimate of the product’s capacity to satisfy their

requirements.

4. EXCHANGE AND TRANSACTIONS

Exchange is the act of obtaining a desired product from someone by offering something in return. A

transaction involves at least two thing of value, conditions that are agreed to, a time of agreement

and a place of agreement.

5. MARKET A market consist of all the existing and potential consumers sharing a particular need or want who

might be willing and able to engage in exchange to satisfy that need or want.


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FEATURES OF MARKETING

Marketing is a regular and continuous activity: Marketing is a continuous activity in which

goods and services are manufactured and distributed to consumers. Assembling, grading,

packaging, transportation, warehousing, etc. are supplementary to marketing and are useful for

smooth and orderly conduct of marketing operations.

Facilitates satisfaction of human wants: Marketing activities are basically for satisfying the needs

of consumers and also for raising social welfare. Identification of consumer needs should be the

starting point of marketing activity.

Relates to goods and services: Marketing relates to goods and services. It is concerned with the

exchange of goods and services with the medium of money. Trade transactions are between sellers

and buyers of goods. Thus, goods and services constitute the basic and the liveliest element in

marketing.

Brings transfer of ownership: Marketing activity brings transfer of ownership of goods and

services and facilitates physical distribution. Production acts as a base of marketing.

Creates utility: Marketing activity creates utilities (time, place and possession) through which

human wants are satisfied.

Wider socioeconomic significance: Marketing activity has wider socioeconomic significance as it

facilitates large-scale production, creates massive employment opportunities, and promotes social

welfare and cultural exchanges.

Importance of 4 Ps: Marketing is the sum total of 4Ps. These are: product, price, promotion and

physical distribution. Large-scale marketing is possible through appropriate combination of 4Ps

called marketing mix.

Integral part of business: Marketing is one aspect of business. It is within the scope of business

and is also linked with other functional areas of business.

Evolutionary concept: The concept of marketing has undergone significant changes. It is not

merely for profit maximization. It has wider social significance.

Precedes and follows production: Production and marketing are closely related activities. Goods

are produced for marketing. Here, marketing follows production. In addition, marketing suggests

what consumer wants and production is adjusted accordingly. Here, production follows marketing.

Wide in scope: The concept of marketing is wide/comprehensive. It is not concerned merely with

selling of goods but with other functional areas of business such as production, finance and

personnel.

THE SCOPE OF MARKETING

Marketing people are involved in marketing 10 types of entities: goods, services, experiences,

events, persons, places, properties, organizations, information, and ideas.

1.Goods. Physical goods constitute the bulk of most countries’ production and marketing effort.

The United States produces and markets billions of physical goods, from eggs to steel to hair

dryers. In developing nations, goods— particularly food, commodities, clothing, and housing—

are the mainstay of the economy.


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2. Services. As economies advance, a growing proportion of their activities are focused on the

production of services. The U.S. economy today consists of a 70–30 services-to-goods mix.

Services include airlines, hotels, and maintenance and repair people, as well as professionals such

as accountants, lawyers, engineers, and doctors. Many market offerings consist of a variable mix

of goods and services.

3. Experiences. By orchestrating several services and goods, one can create, stage, and market

experiences. Walt Disney World’s Magic Kingdom is an experience; so is the Hard Rock Cafe.

4.Events. Marketers promote time-based events, such as the Olympics, trade shows, sports events,

and artistic performances.

5.Persons. Celebrity marketing has become a major business. Artists, musicians, CEOs, physicians,

high-profile lawyers and financiers, and other professionals draw help from celebrity marketers.4

6.Places. Cities, states, regions, and nations compete to attract tourists, factories, company

headquarters, and new residents.5 Place marketers include economic development specialists, real

estate agents, commercial banks, local business associations, and advertising and public relations

agencies.

7.Properties. Properties are intangible rights of ownership of either real property (real estate) or

financial property (stocks and bonds). Properties are bought and sold, and this occasions a

marketing effort by real estate agents (for real estate) and investment companies and banks (for

securities).

8.Organizations. Organizations actively work to build a strong, favorable image in the mind of

their publics. Philips, the Dutch electronics company, advertises with the tag line, “Let’s Make

Things Better.” The Body Shop and Ben & Jerry’s also gain attention by promoting social causes.

Universities, museums, and performing arts organizations boost their public images to compete

more successfully for audiences and funds.

9.Information. The production, packaging, and distribution of information is one of society’s major

industries.6 among the marketers of information are schools and universities; publishers of

encyclopedias, nonfiction books, and specialized magazines; makers of CDs; and Internet Web

sites.

10. Ideas. Every market offering has a basic idea at its core. In essence, products and services are

platforms for delivering some idea or benefit to satisfy a core need.

CONCEPTS OF MARKETING / COMPANY ORIENTATION TOWARD THE MARKET

PLACE

As the market has changed, so has the way the company deals with the marketplace. The company

orientation towards marketplace deals with the concepts which a company may apply while

targeting a market. There are basically five different orientations which a company takes towards

the marketplace. There are five distinct concepts under which business organization can conduct

their marketing activity.


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Production Concept

Product Concept

Selling Concept

Marketing Concept

Societal Marketing Concept

1. PRODUCTION CONCEPT

In this approach, a firm is considered as the central point and all goods and commodities produced

were sold in the market. The major emphasis was on the production process and control on the

technical perfections while producing the goods.

The production concept holds that consumers will favour those products that are widely available

and low in cost. Management in production oriented organization concentrates on achieving high

production efficiency and wide distribution coverage.

Marketing is a native form in this orientation and it was assumed that a good product sells by itself.

Only distribution and selling were considered to be ‘marketing’. The technologist’s thoughts that

amenability and low cost of the products due to the large scales of production would be the right

‘Marketing Mix’ for the consumers.

But, they do not the best of customer patronage. Customers are in fact motivated by a variety of

considerations in their purchase. As a result, the production concept fails to serve as the right

marketing philosophy for the enterprise.

2. PRODUCT CONCEPT

The product concept is somewhat different from the production concept. The product concept holds

that consumers will favour those products that offer the most quality, performance and features.

Management in these product-oriented organizations focuses their energy on making good products

and improving them over time.

Yet, in many cases, these organizations fail in the market. They do not bother to study the market

and the consumer in-depth. They get totally engrossed with the product and almost forget the

consumer for whom the product is actually meant; they fail to find out what the consumers actually

need and what they would accept. This stage symbolize as-; “Marketing Myopia”

Marketing Myopia

At this stage, it would be appropriate to explain the phenomenon of ‘marketing myopia’. The term

‘marketing myopia’ is to be credited to Professor Theodore Levitt in the Harvard Business Review

article. Professor Levitt has explained ‘marketing myopia’ as a coloured or crooked perception of

marketing and a short-sightedness about business.


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Excessive attention to production or product or selling aspects at the cost of the customer and his

actual needs, creates this myopia. It leads to a wrong or inadequate understanding of the market and

hence failure in the market place. The myopia even leads to a wrong or inadequate understanding of

the very nature of the business in which a given organization is engaged and thereby affects the

future of the business.

3. SALES CONCEPT

The sales concept maintains that a company cannot expect its products to get picked up

automatically by the customers. The company has to consciously push its products. Aggressive

advertising, high-power personal selling, large scale sales promotion, heavy price discounts and

strong publicity and public relations are the normal tools used by organization that rely on this

concept. In actual practice, these organizations too do not enjoy the best of customer patronage.

The selling concept is thus undertaken most aggressively with ‘unsought goods’, i.e. those goods

that buyers normally do not think of buying, such as insurance, encyclopedias. These industries

have perfected various techniques to locate prospects and with great difficulty sell them as the

benefits of their products.

Evidently, the sales concept too suffers from marketing myopia.

DIFFERENCE BETWEEN SELLING AND MARKETING

The marketing and selling are considered synonymously. But there is great of difference between

the two. Theodore Levitt in his sensational articles ‘Marketing Myopia’ draws the following

contrast between marketing and selling.

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 mean of the product and the whole cluster of thing

associated with creating delivering and finally consuming it.

Selling Marketing

1 Selling starts with the seller, Selling

focuses with the needs of the seller.

Seller is the center of the business

universe. Activities start with seller’s

existing products.

Marketing starts with the buyers.

Marketing focuses on the needs of the

buyer. Buyer is the centre of the business

universe. Activities follow the buyer and

his needs.

2 Selling emphasizes on profit. It seeks

to quickly convert ‘products’ into

‘cash’; concerns itself with the tricks

and techniques of pushing the

product to the buyers.

Marketing emphasizes on identification of

a market opportunity. It seeks to convert

customer ‘needs’ into ‘products’ and

emphasizes on fulfilling the needs of the

customers.

3 Selling views business as a ‘goods

producing processes’.

Marketing views business as a ‘customer

satisfying process’.

4 It over emphasizes the ‘exchange’

aspect without caring for the ‘value

satisfactions’ to the buyers.

It concerns primarily with the ‘vale

satisfactions’ that should flow to the

customer from the exchange


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5 Seller’s convenience dominates the

formulation of the ‘marketing mix’.

Buyer determines the shape of the

‘marketing mix’.

6. The firm makes the product first the

then decides how to sell it and make

profit.

The customer determines what is to be

offered as a ‘product’ and the firm makes a

‘total product offering’ that would match

the needs of the customers.

7 Emphasizes accepting the existing

technology and reducing the cost of

production.

Emphasis’s on innovation of adopting the

most innovative technology.

8. Seller’s motives dominate marketing

communications.

Marketing communications acts as the tool

for communicating the benefits/

satisfactions of the product to the

consumers

9 Costs determine price. Consumer determines price.

10 Transportation, storage and other

distribution functions are perceived

as mere extensions of the production

function.

They are seen as vital services to provide

convenience to customers.

11 There is no coordination among the

different functions of the total

marketing task.

Emphasis is on integrated marketing

approach.

12 Different departments of the business

operate separately.

All departments of the business operate in

a highly integrated manner with view to

satisfy consumers.

13 The firms which practice ‘selling

concept’, production is the central

function.

The firms which practice ‘marketing

concept’, marketing is the central function.

14. ‘Selling’ views the customer as the

last link in the business.

‘Marketing’ views the customer as the very

purpose of the business.

4. MARKETING CONCEPT

The Marketing concept was born out of the awareness that marketing starts with the determination

of consumer wants and ends with the satisfaction of those wants. The concept puts the consumer

both at the beginning and at the end of the business cycle. The business firms recognize that “there

is only one valid definition of business purpose: to create a customer”. It proclaims that “the entire

business has to be seen from the point of view of the customer”. In a company practicing this

concept, all departments will recognize that their actions have a profound impact on the company’s

to create and retain a customer. Every department and every worker and manager will ‘think

customer’ and ‘act customer’.


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The marketing concept holds that the key to achieving organizational goals consists in determining

the needs and wants of the target markets and delivering the desired satisfactions efficiently, than

competitors. In other words, marketing concept is a integrated marketing effort aimed at generating

customer satisfaction as the key to satisfying organizational goals.

It is obvious that the marketing concept represents a radically new approach to business and is the

most advanced of all ideas on marketing that have emerged through the years. Only the marketing

concept is capable of keeping the organization free from ‘marketing myopia’.

The salient features of the marketing concept are:

1) Consumer orientation

2) Integrated marketing

3) Consumer satisfaction

4) Realization of organizational goals.

1. Consumer Orientation

The most distinguishing feature of the marketing concept is the importance assigned to the

consumer. The determination of what is to be produced should not be in the hands of the firms but

in the hands of the consumers. The firms should produce what consumers want. All activities of the

marketer such as identifying needs and wants, developing appropriate products and pricing,

distributing and promoting then should be consumer oriented. If these things are done effectively,

products will be automatically bought by the consumers.

2. Integrated Marketing

The second feature of the marketing concept is integrated marketing i.e. integrated management

action. Marketing can never be an isolated management function. Every activity on the marketing

side will have some bearing on the other functional areas of management such as production,

personnel or finance. Similarly any action in a particular area of operation in production on finance

will certainly have an impact on marketing and ultimately in consumer. Therefore, in an integrated

marketing set-up, the various functional areas of management get integrated with the marketing

function..

3. Consumer Satisfaction

Third feature of the marketing is consumer satisfaction. The marketing concept emphasizes that it is

not enough if a firm ahs consumer orientation; it is essential that such an orientation leads to

consumer satisfaction.

For example, when a consumer buys a tin of coffee, he expects a purpose to be served, a need to be

satisfied. If the coffee does not provide him the expected flavor, the taste and the refreshments his

purchase has not served the purpose; or more precisely, the marketer who sold the coffee has failed

to satisfy his consumer. Thus, ‘satisfaction’ is the proper foundation on which alone any business

can build its future.

4. Realization of Organizational Goals including Profit

If a firm has succeeded in generating consumer satisfaction, is implies that the firm has given a

quality product, offered competitive price and prompt service and has succeeded in creating good

image. It is quite obvious that for achieving these results, the firm would have tried its maximum to

control costs and simultaneously ensure quality, optimize productivity and maintain a good

organizational climate. And in this process, the organizational goals including profit are

automatically realized. The marketing concept never suggests that profit is unimportant to the firm.

The concept is against profiteering only, but not against profits.

BENEFITS OF MARKETING CONCEPT


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The concept benefits the organization that practices it, the consumer at whom it is aimed and the

society at the society at large.

1. Benefits to the organization: In the first place, of the practice of the concept brings substantial benefits to the organisation that

practices it. For example, the concept enables the organization to keep abreast of changes. An

organization précising the concept keeps feeling the pulse of the market through continuous

marketing audit, market research and consumer testing. It is quick to respond to changes in buyer

behaviour, it rectifies any drawback in its these products, it gives great importance to planning,

research and innovation. All these response, in the long run, prove extremely beneficial to the firm.

Another major benefit is that profits become more and certain, as it is no longer obtained at the cost

of the consumer but only through satisfying him. The base of consumer satisfaction guarantees long

– term financial success.

2. Benefits to Consumers: The consumers are in fact the major beneficiary of the marketing concept. The attempts of various

competing firms to satisfy the consumer put him an enviable position. The concept prompts to

produces to constantly improve their products and to launch new products. All these results in

benefits to the consumer such as: low price, better quality, improved/new products and ready stock

at convenient locations. The consumer can choose, he can bargain, he can complain and his

complaint will also be attended to. He can even return the goods if not satisfied. In short, when

organizations adopt marketing concept, as natural corollary, their business practices change in

favour of the consumer.

3. Benefits to the society: The benefit from the marketing concept is not limited to the individual consumer of products. When

more and more organizations resort to the marketing concept, the society in Toto benefits. The

concept guarantees that only products that are required by the consumers are produced; thereby it

ensures that the society’s economic resources are channelized in the right direction. It also creates

entrepreneurs and managers in the given society. Moreover, it acts as a ‘change agent’ and a ‘value

adder’; improves the standard of living of the people; and accelerates the pace of economic

development of the society as a whole. It also makes economic planning more meaningful and more

relevant to the life of the people.

In fact, the practice of consumer oriented marketing benefits society in yet another way by enabling

business organizations to appreciate the societal content inherent in any business. When the

organizations move closer to the customers, they see clearly the validity of the following

observation of Drucker, “The purpose of any business lies outside the business – in society.” And

this awareness of the societal content of business often enthuses organizations to make a notable

contribution to the enrichment of society.

5. SOCIETAL MARKETING CONCEPT

Now the question is whether the marketing concept is an appropriate organizational goal in an age

of environmental deterioration, resource shortages, explosive population growth etc. and whether

the firm is necessarily acting in the best long run interests of consumers and society. For example,

many modern disposable packing materials create problem of environmental degradation Situations

like this, call for a new concept, which is called ‘Social 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 satisfaction more effectively and efficiently

than competitors in a way that preserves or enhances the consumer’s and the society’s well being.


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The societal marketing concept calls upon marketers to balance three considerations in setting their

marketing policies namely firm’s profits, consumer want satisfaction and society interest.

META – MARKETING

Like societal marketing, the concept of meta-marketing is also of recent origin. It has considerably

helped to develop new insight into this exciting field of learning. The literal meaning of the term

‘meta’ is “more comprehensive” and is “used with the name of a discipline to designate a new but

related discipline designed to deal critically with the original one”. In marketing, this term was

originally coined by Kelly while discussing the issues of ethics and science of marketing. Kotler

gave the broadened application of marketing nations to non-business organisations, persons, causes

etc. In broadening the concept of marketing, marketing was assigned a more comprehensive role.

He used the term meta-marketing to describe the processes involved in attempting to develop or

maintain exchange relations involving products/ services organizations, persons, places or causes.

The examples of non-business marketing or meta-marketing may include Family Welfare

Programmes and the idea of prohibition.

DEMARKETING

The demarketing concept is also of recent origin. It is a concept which is of great relevance to

developing economies where demands for products/ services exceed supplies.

Demarketing has been defined as “that aspect of marketing that deals with discouraging customer,

in general, or a certain class of customers in particular on either a temporary or permanent basis.

The demarketing concept espouses that management of excess demand is as much a marketing

problem as that of excess supply and can be achieved by the use of similar marketing technology as

used in the case of managing excess supply. It may be employed by a company to reduce the level

of total demand without alienating loyal customers (General Demarketing), to discourage the

demand coming from certain segments of the market that are either unprofitable or possess the

potential of injuring loyal buyers (Selective Demarketing), to appear to want less demand for the

sake of actually increasing it (Ostensible Demarketing). Whatever may be the objective, there is

always a danger of damaging customer relations in any demarekting strategy. Therefore, to be

creative, every company has to ensure that its long-run customer relations remain undamaged.

IMPORTANCE OF MARKETING

1. Satisfies Human Wants: Marketing plays an important role in the satisfaction of human wants

by maintaining regular supply of goods to consumers. It provides better life and welfare to

people by satisfying their wants and also by providing useful goods and services which can make

their life happy and enjoyable.

2. Provides profit and goodwill to marketing enterprises: Marketing is important to marketing

firms as they earn profit by conducting marketing activities. Marketing enables a firm to expand

business activities for market reputation and goodwill. The firm can achieve its objectives

through successful conduct of marketing activities. Even new product can be introduced for

consumer satisfaction and sales promotion.

3. Facilitates specialization and division of labour: Marketing function, if performed

successfully, leads to specialization, division of labour and efficient performance of production

function climaxing in economic stability.

4. Widens markets: Marketing facilitates widening of markets through large scale movement of

goods throughout the country. Even advertising and sales promotion techniques are useful for

widening markets. They provide convenience to consumers and profit to traders.


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5. Improves the standard of living of the society: Continuous production improves the skill of the

workers. In addition, marketing process provides new varieties of quality goods to customers. It

facilitates production as per the needs of consumers and supplies such production to consumers.

This raises the standard of living of the people. It is the marketing which has

converted "YESTERDAY'S LUXURIES INTO TODAY'S NECESSARIES".

6. Facilitates economic growth: Marketing brings industrial/economic growth. It facilitates full

utilization of available natural resources. Marketing creates new demand for goods and thereby

encourages production activities. This leads to the creation of massive employment

opportunities. Thus, marketing is the kingpin that sets revolving of the whole economy.

7. Creates new norms of socioeconomic behavior: Marketing develops new ways of life in the

society. It makes the society progressive and dynamic. National economic policy is successfully

implemented through marketing. It not only expands the home market but tries to establish a

sound base for exports.

8. Provides channels of communication to marketing firms: The marketing firms receive

continuous feedback about demand for products and services through marketing. The three

elements of marketing, namely, concentration, equalization and dispersion with their sub

processes such as buying, assembling, transport, storage, standardization, grading, insurance,

etc., facilitate quick communication between traders and consumers. Marketing is beneficial to

producers and consumers. They get goods as per their needs and manufacturers get more profit

and consumer support.

9. Facilitates price control: Marketing facilitates price control by the manufacturers. It brings

proper balance between demand and supply and this ensures price stability.

10. Facilitates stability to marketing firm: Marketing is one major revenue generating source of a

firm. It raises the turnover and profit of a business unit. A firm's survival, growth and stability

are dependent on its ability to market the products efficiently. Marketing is thus one challenging

function of management.

11. Brings success in business: Marketing is a major activity of every business enterprise. If the

marketing is not efficient, there will be losses and the whole firm will come in danger. This

suggests that marketing is a risky activity with equal chances of getting profit and incurring

losses. It is the successful marketing which supports all other activities of a business unit.

THE 7 PS OF THE MARKETING MIX

Marketing Mix

Marketing Mix is one of the most fundamental concepts in marketing management. For attracting

consumers and for sales promotion, every manufacturer has to concentrate on four basic

elements/components. These are: product, pricing, distributive channels (place) and sales promotion

techniques. A fair combination of these marketing elements is called Marketing Mix. It is the

blending of four inputs (4 Ps) which form the core of marketing system.

Definitions of Marketing Mix

According to W. J. Stanton, "Marketing mix is the term used to describe the combination of the

four inputs which constitute the core of a company's marketing system: the product, the price

structure, the promotional activities, and the distribution system."

According to Philip Kotler, "A Marketing mix is the mixture of controllable marketing variables

that the firm uses to pursue the sought level of sales in the target market."


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Features of Marketing Mix

1. Combination of four marketing variables: Marketing mix is a combination/integration of four

basic marketing variables namely, product, price, promotion and place. These variables are

interdependent.

2. Useful for achieving marketing targets: Marketing mix aims at achieving marketing targets in

terms of sales, profit and consumer satisfaction. It is rightly said that marketing mix is the

marketing manager's instrument for attainment of marketing objectives/targets.

3. Flexible and dynamic concept: Marketing mix is not a rigid combination of four variables. It is

in fact a flexible combination of variables. It is necessary to adjust the variables in the mix from

time to time as per the changes in the marketing environment. It is the continuous monitoring of

the marketing mix which facilitates appropriate changes in the mix.

4. Periodical adjacent of variables necessary: Marketing mix variables are interrelated and need

suitable adjustments from time to time. Updating of marketing mix is essential for making it a

powerful tool for achieving marketing targets. Updating is also essential due to environmental

changes taking place within the firm.

5. Marketing manager acts as a mixer of ingredients: A marketing manager has to function as a

mixer of marketing ingredients and has to achieve desired results through skillful combination of

four Ps. He needs maturity, imagination and intelligence for appropriate blending of the

variables.

6. Customer is the focus point: The main focus of marketing mix is the customer. His satisfaction

and support are important. Variables of marketing mix are for giving more satisfaction and

pleasure to consumers.

7. Variables are interrelated: Marketing mix variables are interrelated. Decisions in one area

affect action in the other areas. An integrated approach is needed while making changes in the

marketing mix variables.

8. Consumer-oriented activity: Marketing mix is a consumer-oriented activity as its purpose is to

give satisfaction and pleasure to consumers. Here, the needs and expectations of consumers are

given special attention and 4 Ps are adjusted accordingly.

9. Four Ps of sellers correspond to four Cs of customers: Four Ps in the marketing mix represent

the sellers' view of the marketing tools available for influencing buyers. Each tool is designed to

deliver a customer benefit.


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THE 7 PS OF THE MARKETING Mix

E.J. McCarthy introduced the 4Ps of the marketing mix in 1960. The concept has then been widely

used by marketers who used it as a tool to define their marketing strategy, but it was primarily

directed to tangible products.

In the 1980s, Booms and Bitner have added 3 additional Ps to the traditional marketing mix. The

7Ps model is more suitable for service industries and will be therefore increasingly relevant during

the 21st century.

1. Product

As seen in the goods-service continuum, your product can have both tangible and intangible

aspects, and is the thing you offer to satisfy your customers’ wants and needs. Within this element,

you need to consider such things as your product range; its quality and design; its features and the

benefits it offers; sizing and packaging; and any add-on guarantees and customer service offerings.

2. Price

Sound pricing decisions are crucial to a successful business and should be considered at both long-

term strategic and short-term tactical levels. Within this element of the mix you should consider list

price and discount price; terms and conditions of payment; and the price sensitivity of your market.

Worth remembering is the connection of price to your position in the marketing – specifically that

only one operator in any market can be the cheapest. Jostling between competitors for this position

is rarely wise.

3. Promotion

This is the element of the marketing mix that most people mean when they talk about ‘marketing’.

But jumping straight into decisions about what promotional tools to use without considering their

relationship to the rest of the mix can be a sure-fire way to waste money. There are many different


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promotional techniques, each with their own strengths but essentially they can be broken down into

four broad categories: Advertising; Public Relations; Sales Promotions; and Direct Selling. These

techniques are used to communicate the specific benefits of your product to your customers.

4. Place

Marketers love models that explain the way they work; they love it even more when elements of

each model begin with the same letter – hence the use of the word ‘Place’ to describe distribution

channels. Your choice of such channels is important, as is the variety of channels you use.

For example, a common issue for businesses beginning to trade on-line is how that will affect their

off-line business, for example selling directly through the web could alienate retail outlets that have

been the mainstay of your business in the past.

5. People

The impact that your people can have on your marketing cannot be underestimated. At its most

obvious, this element covers your front line sales and customer service staff who will have a direct

impact on how your product is perceived. You need to consider the knowledge and skills of your

staff; their motivation and investment in supporting your brand. Any element of the marketing mix

will also have its impact on other elements of your business, but the people element is one where

the importance of regarding marketing as an integral part of the way you do business is crystal

clear.

6. Process

The process part of the mix is about being ‘easy to do business with’. If you’ve ever become

frustrated at call centres that can’t answer your questions, or annoyed when you can’t buy

something in a shop because the computerized till doesn’t recognize that it exists, even when you

can see it on the shelves, you’ll know how important this element can be. The more ‘high contact’

your product, and the more intangible, the more important it is to get your processes right.

Remember to look at this from your customers’ point of view. The process problems that are most

annoying to a customer are those that are designed for the provider’s convenience, not the customer.

7. Physical Evidence

When you sell tangible goods, you can offer your customer the chance to ‘try before they buy’, or at

least see, touch or smell. With services, unless you offer a free trial, your customer will often be

buying on trust. And to help them do so you need to provide as much evidence of the quality you

will be providing as possible. So physical evidence refers to all the tangible, visible touch points

that your customer will encounter before they buy, from your reception area and signage, to your

staff’s clothing and they images you include in you corporate brochure. Think about how all the

elements of your marketing mix hang together. Does your pricing reflect the quality of your

product? Does your choice of promotional tools reinforce your choice of distribution channel? Do

your people understand how to implement your process?


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HOLISTIC MARKETING DIMENSIONS

1. RELATIONSHIP MARKETING -: Aims to build mutually satisfying long-term relationships

with key constituents in order to earn and retain their business.22 Four key constituents for

relationship marketing are customers, employees, marketing partners (channels, suppliers,

distributors, dealers, agencies), and members of the financial community (shareholders, investors,

analysts). The ultimate outcome of relationship marketing is the building of a unique company

asset called a marketing network.

A MARKETING NETWORK consists of the company and its supporting stakeholders (customers,

employees, suppliers, distributors, retailers, ad agencies, university scientists, and others) with

whom it has built mutually profitable business relationships. The operating principle is simple:

Build an effective network of relationships with key stakeholders, and profits will follow.

A growing number of companies are also shaping separate offers, services, and messages for

individual customers, based on information about past transactions, demographics, psychographics,

and media and distribution preferences. By focusing on their most profitable customers, products,

and channels, these firms hope to achieve profitable growth by capturing a larger share of each

customer’s expenditures, building high loyalty and customer lifetime value. Such activities fall

under the umbrella of “customer centricity.”

2. INTEGRATED MARKETING-: With integrated marketing, the marketer’s task is to devise

marketing activities and assemble fully integrated marketing programs that create, communicate,

and deliver value for consumers. Marketing activities come in all forms. McCarthy classified these

activities as marketing mix tools of four broad kinds, which he called the four Ps of marketing:

product, price, place, and promotion.

The firm can change its price, sales force size, and advertising expenditures in the short run. 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. The four Ps represent the sellers’ view of the

marketing tools available for influencing buyers. From a buyer’s point of view, each marketing tool


15

is designed to deliver customer benefit. A complementary breakdown of marketing activities has

been proposed, centering on the customer questions that the four dimensions (SIVA) are designed

to answer:

1. Solution: How can I solve my problem?

2. Information: Where can I learn more about it?

3. Value: What is my total sacrifice to get this solution?

4. Access: Where can I find it?

Two key themes of integrated marketing are that (1) many different marketing activities

communicate and deliver value; and (2) when coordinated, marketing activities maximize their joint

effects. In other words, marketers should design and implement any one marketing activity with all

other activities in mind.

3. INTERNAL MARKETING-: Holistic marketing incorporates internal marketing, ensuring that

everyone in the organization embraces appropriate marketing principles, especially senior

management. Internal marketing is the task of hiring, training, and motivating able employees who

want to serve customers well. Smart marketers recognize that internal marketing activities can be as

important as, or even more important than external marketing activities. It makes no sense to

promise excellent service before the company’s staff is ready to provide it.

Internal marketing must take place on two levels. At one level, the various marketing functions—

sales force, advertising, customer service, product management, marketing research—must work

together and be coordinated from the customer’s point of view. At the second level, other

departments must embrace marketing and must “think customer.”Marketing is not a department so

much as a company orientation.

4. PERFORMANCE MARKETING-: Holistic marketing incorporates performance marketing and

understanding the business returns from marketing activities and programs, as well as addressing

broader concerns and their legal, ethical, social, and environmental effects. Top management is

going beyond sales revenue to examine the marketing scorecard and interpret what is happening to

market share, customer loss rate, customer satisfaction, product quality, and other measures. Financial accountability. Marketers are increasingly asked to justify their investments to top

management in financial and profitability terms, as well as in terms of building the brand and

growing the customer base.32 Therefore; they’re using a variety of financial measures to assess

the direct and indirect value of their marketing efforts. They’re also recognizing that much of

their firms’ market value comes from intangible assets such as their brands, customers,

employees, and distributor and supplier relations.

Social responsibility marketing. Marketers must consider the ethical, environmental, legal,

and social context of their activities. Under the societal marketing concept, the company’s task

is to determine the needs, wants, and interests of target markets so it can satisfy customers more

effectively and efficiently than competitors while preserving or enhancing customers’ and

society’s long-term well-being. Sustainability has become a major concern in the face of

challenging environmental forces. For example, McDonald’s strives for a “socially responsible

supply system” encompassing everything from healthy fisheries to redesigned packaging.


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References …

1 P K Mishra, P S Das, Jr Das : Marketing Management ,:Alok Publication (2007) , Bhubaneswar.

2. Philip Kotler, Principles Of Marketing By Philip Kotler

3. Geoff Lancaster And Paul Reynolds Amsterdam: Management Of Marketing: Elsevier

Butterworth-Heinemann Linacre House, Jordan Hill, And Oxford Ox2 8dp First Published (2005)

Isbn 0 7506 6103 8

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