WELCOME TO ONLINE CLASS
Fundamentals of Marketing
BBA 4th semester
-Assist.Prof.Pramila Shrestha
Fundamentals of marketing
• Course – 9 units
• Exam pattern – Theory – 60 marks
– Practical – 40 marks
• Theory
• Group A – Brief answer questions 10 × 1 = 10 marks
• Group B – Short answer questions 6 × 5 = 30 marks
• Group C – Comprehensive answer questions - 20 marks
(case study)
Total - 60 marks
• Book : Asmita Publication
• Unit 1: Introduction LH 6
• Meaning of marketing.
• Evolution of the marketing philosophies - Basic principles of the
production, product, selling, societal, marketing, and holistic
marketing concepts.
• Meaning and tasks of marketing management.
• Marketing challenges of the 21st century and firms' responses to
the challenges.
• Concept, relevance and practices of relationship marketing
• Concept of green marketing and E - marketing.
• Components of the marketing mix for products and services.
Unit 1 : Introduction
• Meaning of marketing:
Simply the activity of buying and selling of goods and services is
known as marketing, but it is not sufficient to define marketing as just
only the activity of buying and selling of goods and services. Because in
the modern age, marketing is not limited only to buying and selling.
There are two concepts of marketing by the analyzation of various views of
various scholars-
1. Old concept of marketing (focus only production of goods) :- According
to this concept, marketing is the economic process where the ownership of
goods and services are transferred from producer to consumers and their
value determines in terms of money price.
It means marketing is to supply goods and services from producer to
consumer and earn profit by selling them.
It is product oriented concept that ignores the value of customer’s
satisfaction, need, desire, behavior, purchasing capacity etc. According to this
concept, the purchased goods and services are acceptable by the customers.
Customers’ needs, interests are not considered but in fact, no one can get
success in this competitive environment by ignoring the value of customers.
2. Modern Concept (Focus on customers) : Marketing is a continuous
process of identifying the target market of goods and services
according to the need, desires, hobby of the customer and always tries
to give the maximum satisfaction to the customers. It starts before
production and it does not complete after selling. It is a broad sense of
marketing that focuses on consumers.
Marketing means identifying the needs or wants of potential
customers and supplying the goods and services which can satisfy their
needs or wants.
Conclusion
The continuously doing economic activites that are done before production
and after sale are known as marketing which can fulfill the customer’s need
and want. It is a dynamic process which starts from generating ideas to
produce goods according to the interest of customers and it doesn’t end until
even after the final sale. What to produce? How, when to produce? How much
price to determine? How to supply to ultimate customers etc are all concerned
with marketing.
- 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.”
Evolution of the Marketing Philosophies- Basic Principles
The
The Product The Selling
Production
Concept Concept
Concept
The Holistic The Societal The Modern
Marketing Marketing Marketing
Concept Concept Concept
Evolution of marketing philosophies
Today’s marketing is completely different than old days. Today the
customers living in one corner of the world can easily get the product of another
corner of the world whenever they need. This stage of development is not a
result of a single day’s effort. It is a result of the efforts of hundreds of years.
Some people say that marketing is as old as mankind. Others think that it
began along with the barter system, i.e. exchange of goods to goods. In fact,
evolution of marketing is closely related to the development of human
civilization.
- According to Peter Drucker, marketing system began in the middle of 17th
century in Japan, when the first member of Mitsui family tried to settle in
Tokyo as a merchant and opened the first “Departmental Store”.
2. Product concept (Quality Oriented) :- This is also and old concept of
marketing. According to this concept, consumers give attention towards the
quality goods with reasonable price. So the organization or marketers always tries
to improve the quality of goods and earn profit by selling the goods in reasonable
price.
• Basic Principles:
1. Establishing the factory to produce goods
2. Giving focus to improve the quality of goods
3. Maximizing the sales volume through quality of goods and providing the
goods to quality – conscious consumers
4. Maximizing the profit by giving quality goods to the customers or quality
assurance to the people
- Then during the 19th century the concept of marketing expanded to many
Western countries and after 50 years the concept developed in USA.
The importance of marketing department, marketing research,
advertisement are considered.
Finally the “Societal Marketing Concept” came in existence which is the
latest or modern concept of marketing. There are some concepts introduced in the
process of evolution of marketing philosophies. Various concepts of marketing
and their basic principles are as follows-
1. Production concept
2. Product concept
3. Selling concept
4. Modern marketing concept
5. Societal marketing concept
6. Holistic marketing concept
3. Selling concept:- Selling concept was developed after production and product
concept. According to this concept, consumers do not buy the goods until they are
motivated through the sales promotion. So the organization or marketers always
tries to sell more quantity of goods by creating need and interest amongst the
customers through the promotional activities.
This concept gives emphasis on needs of seller but not on the need of
consumer. It believes that goods can be definitely sold by applying sales
promotional techniques like advertisement, decoration and display of goods,
publicity, exhibition, trade fair etc.
• Basic Principles:
1. Establishing a factory to produce goods
2. Giving focus to produce goods according to sellers need
3. Maximizing the sales volume through the aggressive promotional tools as
much as possible
4. Maximizing the profit through mass sales volume
4. Modern Market concept:- Modern marketing concept is a new concept.
According to this concept, consumers buy the goods or services when they need
or want. So the organization or marketers always tries to identify the needs or
wants of the consumers. Unless providing satisfaction to the customers, it is
impossible to get success in competitive market. This concept gives emphasis on
addressing consumers’ need, want and satisfaction.
• Basic Principles:
1. Identify the target market or target consumers to deal with
2. Giving focus to produce goods according to customers’ needs and wants
3. Integrating or coordinating all marketing activities (4Ps and other
components) to fulfil the target consumers’ needs and wants
4. Maximizing the profit through customers’ satisfaction
5. Societal marketing concept:- Along with the development of modern marketing
concept, several vital problems have been developed in the world that affect
negativity on social welfare in long run. For example, environmental degradation,
resource shortage, neglected social services etc. As a result, other concept of
marketing has introduced i.e. societal marketing concept. According to this
concept, along with consumers’ wants and interest, social interest also should be
considered so that long – run social welfare could be maintained.
• Basic Principles:
1. Identify the target society to deal with
2. Identify and understand the basic needs, wants and problems of target social
groups
3. Fulfilling the social needs, wants and problems through integrating or
coordinating socially acceptable marketing tools.
4. Survive or sustain the business by providing social welfare and well being and
accepting social responsibility
6. Holistic Marketing concept:- According to this concept, there are so many
categories of customers including individuals and organizations and society
whose needs and wants are unlimited and are not identifiable at all times. On the
other hand, there is high competition in the market. All the needs of all types of
customers can not be satisfied by a single marketing efforts. So in order to meet
all these needs and satisfy all customers, marketers need to use all possible
marketing efforts like-
i. Integrated marketing:- Customers needs and wants can be fulfilled by
integrating or coordinating marketing activities (4Ps).
ii. Relationship marketing:- It is used to maintain good and long – term
relationship with customers.
iii. Managing internal marketing:- It is used to make all members of companies
like employees, managers, subordinates etc customer – oriented so that
customers can get better treatment and quality services from the staffs. For
that they are given better opportunities, training, benefits etc.
iv. Societal marketing:- Enhancing social welfare and safety in the long – run
• Basic Principles:
1. Identifying the target markets
2. Giving focus on all aspects of customers as well as social needs and wants
3. Application of integrated marketing, relationship marketing, internal
marketing, societal marketing etc
4. Maximizing profitability, survival and long – term growth by developing
corporate culture
Meaning of Marketing Management
Marketing management is an organizational discipline which focuses on the
practical application of marketing orientation, techniques and methods inside
organizations and on the management of firm’s marketing resources and
activities.
In other words, marketing management can be defined as the process of
analysis and planning of new product development, executing the conception,
pricing, promotion and distribution or exchange of goods and services to the
target group that can satisfy the customer and can achieve organizational goals.
It also controls the all marketing activities programme. According
to Philip Kotler, “Marketing management is the process of planning,
implementing and controlling marketing activities or practices to
achieve the desired organizational goals.”
In short, marketing management is a part of management which is
related with planning, organizing, implementing, directing, supervising,
coordinating, communicating and controlling the marketing activities
and programs to get desired goal of the organization.
Tasks of Marketing Management
1. Marketing Planning
2. Implementing the marketing plans and programs
3. Marketing control
1. Marketing Planning:- One of the task of marketing management is formulating
strategic planning to achieve desired organizational goals in long – run.
Some processes of marketing planning are as follows:
i. Situational analysis
ii. SWOT analysis
iii. Establishing the marketing goals
iv. Designing the marketing programs like product design, price mechanism,
distribution system, promotional tools, service delivery etc.
v. Allocation of resources for each marketing program.
vi. Determining and maintaining supervision and standard of performance.
2. Implementing the marketing plans and program:- Marketing management has
the task of implementing or executing the plans and programs systematically,
effectively and efficiently. It consists of :
i. Develop a good marketing organizational structure
ii. Recruitment and selection of appropriate manpower and assigning them right
jobs
iii. Create efficient work – team and make assure that all members participate to
execute the assigned jobs properly
iv. Develop effective communication system to communicate the staffs regarding
their roles, authority and responsibility
v. Develop effective leadership and maintain motivation to motivate the staffs
for proper working environment in the organization
3. Marketing control:- Marketing control is also taken as an important task of
marketing management which is related with establishing standard, measuring the
actual performance, comparing the actual performance with standard, identifying
the deviation or mistakes and taking corrective action on marketing operations or
activities.
It consists of :
i. Annual plan control:- It aims to control on the result of annual plan like sales,
market shares, marketing expenses, target market satisfaction etc.
ii. Profitability control:- It aims to measure and control long – run profit of the
company.
iii. Efficiency control:- It aims to measure and control the efficiency of sales,
advertising and sales promotion, distribution system etc.
iv. Strategic control:- It aims to measure and control entire marketing system.
Marketing challenges of 21st century
1. Customers are more informative than marketers.
2. Customers are increasingly demanding for better quality and reliability of goods
and even they need after sale services.
3. Customers’ needs, wants and expectations are changing rapidly.
4. Marketers operate the business in such market where all customers want the
same thing.
5. New goods and services are coming very fast in the market.
6. Competitors have introduced multiple brands of their products.
7. Competition is now being global, not domestic.
8. Medias are being fragmented and expensive for advertising the products.
9. Internet and E – commerce impact on business practice.
10. Accountability of the marketers has been rapidly increased towards their
customers.
Firms’ response to cope with the marketing
challenges of 21st century
1. Firms should develop good marketing plans for long – term
profitability.
2. Firms should develop logical arguments to protect and increase the
investments in marketing.
3. Firms should develop the effective strategies to deliver the promise to
consumers.
4. Firms should develop the right metrics (measurement) to monitor the
progress and provide accountability.
5. Firms should motivate others to be passionate about the data quality. It
means data is important in direct and digital based marketing.
Relationship Marketing
Relationship marketing is the practice of building mutually beneficial
good business relationship with different supportive key parties or stakeholders
in marketing network like customers, employees, suppliers, distributors,
retailers, advertising agencies, university scientists etc. The properly
implemented relationship marketing results strong economic, social and
technical ties among the parties. Ultimately such relationship provides greater
customer satisfaction and helps in retaining the existing customers against
shifting them to the competitive products.
Relationship marketing is adopted by smart marketers who try to build up
long – term trusting and win – win relationship with stakeholders.
Relationship marketing is a method of delivering high customer satisfaction
which focuses on customer loyalty, long – term engagement of customers and
their satisfaction rather than shorter term goals like customer acquisition and
individual sales transactions.
With the help of relationship marketing, marketers may be able to be
familiar with the customers, understand the behavior and know the way to
provide them high satisfaction so that the customers not only purchase the firm’s
product repeatedly, but also create other many new customers. It means existing
customers are retained as well as new customers are attracted.
------------------------------------Points to be noted----------------------------------------
1. Not only maintaining harmonious relationship with the customers, but also
with other stakeholders like suppliers, distributors etc.
2. It can help to understand the need and desire of the customers.
3. It helps to provide high satisfaction to the customers.
4. It helps to retain the existing customers and create new customers.
5. It helps to develop loyal and committed customers.
Relevance/Importance of Relationship Marketing
Long-term Customer Loyal
Relation Satisfaction Customers
Identification Development
Long-term
of Strength of New
Profit
and Weakness Partnership
Contd…
1. Long-term Relation: Relationship marketing is important to maintain the long-term
relationship with customers and other stakeholders in the company. The major aspects of
relationship marketing are to build up long-term, reliable and effective relations with
customers, suppliers, distributors and other different stakeholders.
2. Customer Satisfaction: Relationship marketing is important for delivering customer
satisfaction. Approaches of relationship marketing are based on company interaction.
Company can interact with all the stakeholders (company, suppliers, and middlemen) to
satisfy their customers. All the organizational activities are focused on satisfaction of
target customers. For this all the personnel should be motivated and trained.
3. Loyal Customers: Relationship marketing focuses on building economic, technological,
social relation with the related parties that helps to build satisfied and loyal customers.
Contd…
4. Development of New Partnership: Relationship marketing is important to develop
partnership marketing. In relationship marketing, marketers perform several regular
functions for the mutual benefits of customers and other stakeholders for the
customers’ satisfaction.
5. Long-term Profit: Relationship marketing is important to earn long-term profit. It
involves the interaction with different stakeholders for solving the problems faced by
the company and focuses on customer satisfaction which helps to create the loyal
customers. Ultimately it results profitability of the company.
6. Identification of Strength and Weakness: In relationship marketing, all satisfied and
loyal customers are requested to give their valuable suggestions, reactions and
complaints about goods and services which helps to identify the strength and weakness
of the company
Green Marketing
• Green product
• Green price
• Green promotion
• Social responsibility
• Maintaining environmental protection and ecological balance
Green marketing refers to the process of selling the goods or services
based on their environmental benefits. It is a business practice where the goods
or services may be environmentally friendly itself or produced and packaged in
environmentally friendly way.
Green marketing concept is a part of societal marketing concept that gives
focus on protection of long – term welfare of consumers and society by producing
and using pure, useful and high quality products without damaging the
environment or not any adverse effect on the environment. Green marketing tries
to maintain balance of interest of the firm, consumer and society.
Green marketing gives consideration to preserve and conserve the
environment and to maintain ecological balance. Green marketing encourages
production of pure (eco – friendly) products by using pure technology,
conservation of energy, preservation of environment, minimum use of natural
resources.
Green marketing is called as “ecological marketing” , “eco – friendly
marketing”, “environmental marketing”, “sustainable marketing” etc.
E – Marketing / Internet Marketing
The large business that is conducted through electronic media and
platform, i.e. internet is called E – marketing or internet marketing. In this form,
direct marketing orders are received and processed over the internet. Websites are
used for providing general information regarding the product like its specification
(including designs, branding, packaging, labeling), its uses etc.
In this way of marketing, internet technology provides faster, efficient and
much more powerful methods of designing, promoting and distributing products,
conducting research and gathering market information. It has become a wide
source of information as the internet is connected with millions of computers
around the world which makes possible the direct marketing based on electronic
communication.
• These are the features of E- marketing:
Individual Elimination of Data
Online Selling
Communication Middlemen Depository
Need of
Good Enhance
Electronic Global Alliance
Relationship Promotion
Devices
Meaning of Marketing Mix
The combination and coordination of all the activities conducted to satisfy the
needs of a target market is known as marketing mix. IT means all those activities
from research, identification of customers’ need, production of the goods or services
and satisfying the customers through sales and distribution are included in marketing
mix.
• Components of marketing mix for products and services
1. Major components of marketing mix ( 4Ps)
i. Product mix
ii. Price mix
iii. Place or distribution mix
iv. Promotion mix
2. Supportive components of marketing mix
i. Process mix
ii. People mix
iii. Physical evidence mix
Components of Marketing Mix of Products and Services
Product Price Place Promotion
• Variety • List Price • Channels • Advertising
• Quality • Discounts • Coverage
• Personal Selling
• Design • Allowances • Assortments
• Features • Payment Period • Locations • Sales Promotion
• Brand Name • Credit terms • Inventory • Public Relations
• Packaging • Transportation
• Services • Logistics
i. Product mix:- Product mix is an important component of marketing mix that
includes the activities to produce goods like determination of quality, price,
colour, packaging, sellers services, goodwill, reputation, guarantee, warrantee etc.
of the product.
ii. Price mix:- Other component of marketing mix is price mix that is related to
determining the right price for the product which is affordable and acceptable to
the target customers. It includes analysis of competitors price, formulation of
pricing objectives, determining the terms and conditions of sales, rates of
discount, allowances, commission, setting the base price etc.
iii. Place or distribution mix:- Next important component of marketing mix is
place or distribution mix that is related to manage the flow of products from the
factory to the markets. It includes selection of the distribution channels, channels
conflict management, techniques of solving them and physical distribution of the
product.
iv. Promotion mix:- Promotion mix is also taken as an important marketing mix
that helps to create the demand by giving information and messages about the
product. It includes major promotional activities like advertising, personal selling,
sales promotion, publicity and public relation.
v. Process mix:- In service marketing or service oriented firm, process mix is also
taken as a component of marketing mix. Because the services providers can adopt
a variety of delivery processes to increase the level of customer service and even
build an image of organization. E.g. : Education institution provides the services
like tuition, homework, checking etc. Bank provides token system, seat to sit,
ATM service, SMS banking etc.
vi. People mix:- In service marketing, most of the services are provided to the
customer through human resources (people). So people mix is also taken as an
important marketing mix where the activities of selection, training, motivation of
the employees are done to provide better services to the customers.
vii. Physical evidence mix:- In services marketing, normally customers cannot
easily believe or judge the quality of service until they buy or use the service. So
service providers have to arrange the physical environment to communicate the
quality of their services. So physical evidence is also taken as an important
component of marketing mix that includes infrastructure of the service outlets,
office room conditions, furnishing layouts, decoration etc.
Assignment
• Brief Answer Questions
1. What is marketing management?
2. Point out the tasks of marketing management.
3. Mention any four marketing challenges for 21st Century.
4. Point out any four firms' responses to cope with the challenges of 21st century.
5. Give the meaning of relationship marketing.
6. Explain in brief about concept of marketing.
7. Write about the various marketing philosophies.
8. Give the concept and problems of green marketing in Nepal.
9. What are the major components of marketing mix.
10. Illustrate the concept and components of holistic marketing concept.
Short Answer Questions
1. What is a societal marketing concept? Show the differences between sales oriented marketing
concepts and societal marketing concepts.
2. “Modern marketing is a customer oriented philosophy of business.” Justify this statement.
3. Point out the differences between the marketing concept and selling concept.
