Q.1) Explain Various stages in the evolution of marketing?

Marketing theory has gone through a series of

evolutionary stages before arriving at the marketing
concept (the view that everything the company does
should be driven by market forces, and ultimately by
customer needs). In total, there are five stages:

Production Orientation
Production orientation is the view that the route to
corporate success lies in production efficiency, getting
production costs as low as possible (usually by
manufacturing in very large volume) in order to reduce
costs and prices.
This orientation had its beginnings at the start of the
Industrial Revolution. Up until the nineteenth century,
almost everything was hand-made and made to measure.
Clothing was produced by tailors to almost exact
measurements or was made at home, houses and
vehicles were produced to customer specification, and
relatively few items were standardized. Producing in this
way is relatively expensive, consequently prices were high
for most goods and people owned correspondingly fewer
things. When machines were introduced to speed up the
manufacturing process, costs dropped to perhaps one
tenth of the cost of customized products, so that prices
could also be cut provided enough goods could be sold.
The longer the production run, the lower the costs and
consequently the greater the profit: customers were
prepared to accept items that were not exactly meeting
their needs, since prices were a fraction of what they
would have had to pay for the perfect, tailor-made article.
For manufacturers, the key to success was therefore ever
more efficient (and low-cost) production, but at the cost of
meeting individual customers’ needs.
Product Orientation
Product orientation is the view that an ideal product can be
produced that will have all the features any potential
customer might want.
This orientation is thought to be a result of oversupply of
basic goods. Once everyone already owned the core
benefits of the products concerned, manufacturers needed
to provide something different in order to find new
customers. Products with more features, made to a higher
standard, began to be introduced. By the late nineteenth
century extravagant claims were being made for products
on the basis of their quality and features. Manufacturers
sought to resolve the problem of diverse customer need
by adding in every possible feature. The drawback of this
approach is that the price of the product increases
dramatically, and customers are not always prepared to
pay for features they will never use.

Sales Orientation
Moving on, we can identify the next stage in the evolution
of marketing theory as sales orientation. This concept is
based on the idea that manufacturing companies can
produce far more goods than the market can accept.
Sales-oriented companies assume that people do not
want to buy goods, and will not do so unless they are
persuaded to do so: such companies concentrate on the
needs of the seller rather than the needs of the buyer.
Sales orientation relies on several assumptions: first, that
customers do not really want to spend their money:
second, that they must be persuaded by the use of hard-
hitting sales techniques: third, that they will not mind being
persuaded and will be happy for the salesperson to call
again and persuade them some more: and fourth, that
success comes through using aggressive promotional
techniques.
Sales orientation is still fairly common, especially in firms
selling unsought goods such as home improvements and
insurance, and often results in short-term gains. In the
longer term, customers will judge the company on the
quality of its products and after-sales service, and
(ultimately) on value for money. Sales orientation should
not be confused with the practice of personal selling:
successful salespeople do not operate on the basis of
persuasion, but rather on the basis of identifying and
meeting individual customers’ needs.
Marketing Orientation
Marketing orientation means being driven by customer
needs: this is sometimes also called customer orientation.
Companies that are truly marketing oriented will always
start with the customer’s needs, whatever the business
problem. Customers can be grouped according to their
different needs, and a slightly different product offered to
each group. This type of differentiation allows the
company to provide for the needs of a larger group in total,
because each target segment of the market is able to
satisfy its needs through purchase of one or other of the
company’s products.
The underlying assumption of marketing orientation is that
customers want to satisfy their needs, and will be willing to
buy products that do so. Customer need includes a need
for information about the products, advice about product
usage, availability of products and so forth. Customer
need therefore goes beyond the basic core benefits of the
product itself.
Marketing orientation also implies that customer needs are
the driving force throughout the organization. Decisions
within the organization, in every department from
manufacture through to delivery, need to be taken in
consideration of customer needs at every stage. Quality
control in the factory, accurate information given by
telephonists and receptionists, and courteous deliveries by
drivers all play a part in delivering customer value. Three
components can be identified to determine the degree to
which a company is marketing-orientated: competitor
orientation, customer orientation and inter-functional co-
ordination.
Societal Marketing Orientation
Societal marketing includes the concept that companies
have a responsibility for the needs of society as a whole,
so should include environmental impact and the impact of
their products on non-users.
Societal marketers believe that sustainability is a key issue
since it is of no help to the long-term survival of the firm if
natural resources are used too quickly. Long-term results
of use of the product are also considered, in terms of their
impact on the environment. For example, a car
manufacturer might aim to make cars quieter in operation
rather than simply improving the soundproofing for its
occupants and ignoring the needs of people who live near
major roads.

Q.2) a) Explain core concepts of Marketing?

Philip Kotler, the eminent writer, defines modern marketing as,
“Marketing is social and managerial process by which individuals and
groups obtains what they needs and wants through creating and
exchanging product and value with others.” Careful and detailed
analysis of this definition necessarily reveals some core concepts of
marketing, shown in Figure.

1. Needs:
Existence of unmet needs is precondition to undertake marketing
activities. Marketing tries to satisfy needs of consumers. Human needs
are the state of felt deprivation of some basic satisfaction. A need is the
state of mind that reflects the lack-ness and restlessness situation.

2. Wants:
Wants are the options to satisfy a specific need. They are desire for
specific satisfiers to meet specific need. For example, food is a need
that can be satisfied by variety of ways, such as sweet, bread, rice,
sapati, puff, etc. These options are known as wants. In fact, every need
can be satisfied by using different options.
3. Demand:
Demand is the want for specific products that are backed by the ability
and willingness (may be readiness) to buy them. It is always expressed
in relation to time. All wants are not transmitted in demand. Such
wants which are supported by ability and willingness to buy can turn
as demand.

4. Product:
Product can also be referred as a bundle of satisfaction, physical and
psychological both. Product includes core product (basic contents or
utility), product-related features (colour, branding, packaging,
labeling, varieties, etc.), and product-related services (after-sales
services, guarantee and warrantee, free home delivery, free repairing,
and so on). So, tangible product is a package of services or benefits.
Marketer should consider product benefits and services, instead of
product itself.

5. Utility (value), Cost, and Satisfaction:

Utility is the consumer’s estimate of the product’s overall capacity to
satisfy his/her needs. Buyer purchases such a product, which has more
utility. Utility is, thus, the strength of product to satisfy a particular
need.

Cost means the price of product. It is an economic value of product.

The charges a customer has to pay to avail certain services can be said
as cost. The utility of product is compared with cost that he has to pay.
He will select such a product that can offer more utility (value) for
certain price. He tries to maximize value, that is, the utility of product
per rupee.

Satisfaction means fulfillment of needs. Satisfaction is possible when

buyer perceives that product has more value compared to the cost paid
for. Satisfaction closely concerns with fulfillment of all the
expectations of buyer. Satisfaction releases the tension that has
aroused due to unmet need(s). In short, more utility/value with less
cost results into more satisfaction.

6. Exchange, Transaction, and Transfer:

Exchange is in the center of marketing. Marketing management tries
to arrive at the desired exchange. People can satisfy their needs and
wants in one of the four ways – self-production, coercion/snatching,
begging, or exchanging.

Marketing emerges only when people want to satisfy their needs and
wants through exchange. Exchange is an act of obtaining a desired
product from someone by offering something in return. Obtaining
sweet by paying money is the example an exchange.

Transaction differs from exchange:

Exchange is a process, not event. It implies that people are negotiating
and moving toward the agreement. When an agreement is reached, it
is transaction. Transaction is the decision arrived or commitment
made.
7. Relationships and Network:
Relationship marketing results into economical, technical, social, and
cultural tie among the parties. Marketing manager is responsible for
establishing and maintaining long-term relations with the parties
involved in business.

Network is the ultimate outcome of relationship marketing. A

marketing network consists of the company and its supporting
stakeholders – customers, employees, suppliers, distributors,
advertising agencies, colleges and universities, and others – whose
role is considered to be essential for success of business. It is a
permanent setup of relations with stakeholders. A good network of
relationships with key stakeholders results into excelling the
marketing performance over time.

8. Market, Marketing, Marketer, and Prospect:

In marketing management, frequently used words are markets,
marketing, marketer, and prospects. A market consists of all potential
customers sharing a particular need or want who might be willing and
able to engage in exchange to satisfy this need or want.

Marketing is social and managerial process by which individuals and

groups obtain what they need and want through creating and
exchanging product and value with others.

Marketer is one who seeks one or more prospects (buyers) to engage

in an exchange. Here, seller can be marketer as he wants other to
engage in an exchange. Normally, company or business unit can be
said as marketer.
Prospect is someone to whom the marketer identifies as potentially
willing and able to engage in the exchange. (In case of exchange
between two companies, both can be said as prospects as well as
marketers). Generally, consumer or customer who buys product from
a company for satisfying his needs or wants can be said as the
prospect.

Q.2) b) Discuss buying decision process giving examples

Depending upon the goods or services we’re buying,
some stages in the buying decision-making process may
be bypassed altogether. Alternatively, some stages can
become far more complex, requiring intensive evaluation.
Let’s take a look at an example.
5 stages in the buying decision-making process
To provide our readers with a sound understanding of
the five stage consumer buying decision-making process,
we’ll consider each stage in sequential order.
Recognition of an unsatisfied need
The first stage of the process involves buyers realising
that they have a need that is yet to be satisfied. For
example, you might be at home with your partner on a
Saturday evening. Being somewhat bored you might say
to your other half, “I’m feeling restless – I wouldn’t mind
doing something tonight”. This is a prime example of this
stage. Basically, at this time a need exists (for
entertainment), but it hasn’t yet been determined how this
need will be satisfied.
Information search
Stage two involves information search. It is the stage at
which we apply informal and/or formal consideration. As
discussed, you may have recognised that an unsatisfied
need for entertainment exists. But, as yet, you do not
know how this void will be filled. You and your partner,
therefore, begin searching for information that will
ultimately lead to the fulfilment of your need.
Continuing on with the scenario, above, you might start
recalling past activities, which had previously satisfied
your need for entertainment. You might also recall word of
mouth (WOM) testimonials from family and friends. Or you
may have seen a TV commercial recently, advertising
something that caught your attention.
At this time, you may consider these past and present
options as part of your bundle of possible entertainment
solutions.
Evaluation of alternatives
Stage three is when you evaluate your preferred bundle of
various options, which were identified in the previous
stage. They are then compared to each other for their
ability to best satisfy your needs. These preferred options
represent the greatest interest to us. Consumer behaviour
experts refer to these as, the buyer’s evoked set. Here,
buyers consider the core and augmented
product elements of all products contained in their evoked
set. The core component represents the benefits of the
product (in this case entertainment), whereas the augment
component referrers to the extended attributes of the
product, for example, price, location and convenience.
To explain this stage in the buying decision-making
process, let’s make some assumptions. In fact, we’ll say
you and your partner have now identified a number of
possible entertainment options. These include:
 Going to the cinema;
  Dining out at your favourite restaurant;
 Going to a night club;
 Having a dabble at a casino; and
 Watching a DVD at home.
At this stage, buyers will begin to evaluate these for their
ability to satisfy their need. Other factors also start to
creep into the equation at this time. In line with our
boredom example, things like how much energy you have,
the cost of each activity, the proximity of these options to
your home will be evaluated.
Actual purchase decision
Quite simply, the fourth stage where the purchase
decision is made. Having evaluated your evoked set, as
well as the situational factors just discussed, a choice is
made. Let’s presume you and your partner are high
income earning professionals. With cash not being an
issue, you decide to splash-out at your local Casino for the
evening. You immediately book a taxi and reserve a table
at one of the Casino’s upper-class restaurants and also
attend the Casino’s latest show.
Post-purchase evaluation
The fifth stage occurs when the ultimate consumer or
business buyer performs post-purchase evaluation of of
the good or service they buy. This post-evaluation process
presents significant implications for marketers. If, for
example, the product fails to live up to the buyer’s
expectations, it can negatively affect future sales and
repeat business.
To conclude our ‘boredom’ scenario, you and your partner
might arrive at the Casino, completely satisfied with your
decision, going on to have a fabulous night out.
By contrast, your taxi might arrive 30 minutes late. As a
result, by the time they get to the Casino you could be
feeling tired an agitated. Your partner could turn to you
and say, “You know, perhaps we should have gone to the
cinema and viewed a movie instead.” This post-purchase
experience is termed buyers’ remorse or cognitive
dissonance.
By thoroughly understanding the buying decision-making
process, marketers can devise various strategies, which
can reduce the likelihood of buyers’ remorse or post-
purchase anxiety from occurring. Although, our example
clearly demonstrates that this is not always possible due
to external factors outside of the firm’s direct control.
Q.3) Write Short Notes on
Product Differentiation Product differentiation (or just differentiation)
is a marketing process of differentiating an offering (product or service) from
others in the market, to make it more appealing to the target audience.

It involves defining the offering’s unique position in the market by explaining the
unique benefit it provides to the target group. This may also be referred to
pinpointing a unique selling proposition of the product to make it stand out from
the crowd.

Why Is Product Differentiation Important?

The increased competition has divided the demand among different players in
the market. This has made it very important for businesses to make their
customers understand what different they have to offer.

Besides making the product survive in the market, product differentiation is

important for the following reasons:
 Product differentiation translates the product attributes into benefits.
 It answers the biggest question of the customers – ‘What’s in for me?’.
 It gives the customers a reason to purchase the brand’s product and repeat
the purchase.
 It increases the recall value of the product.
 It increases brand loyalty and builds brand equity.
 Attribute-based differentiation is important for the brand to defend their price
from levelling down to the bottom part of the price spectrum.

Product Differentiation Types & Factors

Differentiation depends on customer perception. It’s not how the brand sees its
product, it is how the customer recognises the product. There are three types of
product differentiation:

1. Horizontal differentiation: Distinctions in products that cannot be evaluated

in terms of quality. E.g.: Mineral water brands.
2. Vertical differentiation: Distinctions in products that can be evaluated in
terms of quality. It’s a case where it is possible to say that one good is better
than the other.
3. Simple (or Mixed) differentiation: Differentiation based on numerous
characteristics.
Product Life Cycle
product life cycle is an important concept in marketing. It describes the stages a
product goes through from when it was first thought of until it finally is removed from the
market. Not all products reach this final stage. Some continue to grow and others rise
and fall.

What are the main stages of the product life cycle?

The main stages of the product life cycle are:

1. Research & development - researching and developing a product before it is

made available for sale in the market
2. Introduction – launching the product into the market
3. Growth – when sales are increasing at their fastest rate
4. Maturity – sales are near their highest, but the rate of growth is slowing down,
e.g. new competitors in market or saturation
5. Decline – final stage of the cycle, when sales begin to fall

This can be illustrated by looking at the sales during the time period of the product.

Overview of the Product Life Cycle

Extending the Product Life Cycle

For successful products, a business will want to do all it can to extend the growth and
maturity phases of the life cycle, and to delay the decline phase.

What can businesses do to extend the product life cycle?

To do so, it may decide to implement extension strategies - which are intended to

extend the life of the product before it goes into decline.

Examples of extension strategies are:

1. Advertising – try to gain a new audience or remind the current audience

2. Price reduction – more attractive to customers
3. Adding value – add new features to the current product, e.g. improving the
specifications on a smartphone
4. Explore new markets – selling the product into new geographical areas or
creating a version targeted at different segments
5. New packaging – brightening up old packaging or subtle changes

Evaluating the Product Life Cycle Model

The product life cycle model is by definition simplistic. It is used to predict a likely shape
of sales growth for a typical product.

Whilst there are many products whose sales do indeed follow the classic shape of the
life cycle model, it is not inevitable that this will happen.

For example, some products may enjoy a rapid growth phase, but quickly move into a
decline phase if they are are replaced by superior products from competitors or demand
in the market overall declines quickly.

Other products with particularly long life cycles seem to enjoy a maturity phase that
lasts for many years.