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Southern University Bangladesh


Department of Business Administration
Program: Undergraduate (BBA)
Course Title: MODERN MARKETING PRACTICES
Chapter 01: Introduction to Marketing

DEFINITION OF MARKETING

The process by which company create value for customer and build strong customer relationship in
order to capture value from customer in return.

THE MARKETING PROCESS

Create value for customer and Capture value from


Build customer relationships customers in return

Understand the Design a Construct an Build Capture value


customer customer- integrated profitable from customer
marketplace and driven marketing relationships to create profits
customer needs marketing program that and create and customer
and wants strategy delivers customer equity
superior value delight

This figure presents a simple, five-step model of the marketing process. In the first four steps,
companies work to understand consumers, create customer value, and build strong customer
relationships. In the final step, companies reap the rewards of creating superior customer value. By
creating value for consumers, they in turn capture value from consumers in the form of sales, profits,
and long-term customer equity.

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TASNIM ISLAM LECTURER DEPARTMENT OF BUSINESS ADMINISTRATION, SOUTHERN UNIVERSITY BANGLADESH
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What can be marketed?

Marketers market 10 main types of entities: goods, services, events, experiences, persons, places, properties,
organizations, information, and ideas. Let’s take a quick look at these categories.

GOODS
Physical goods constitute the bulk of most countries’ production and marketing efforts. Each year, U.S.
companies market billions of fresh, canned, bagged, and frozen food products and millions of cars, refrigerators,
televisions, machines, and other mainstays of a modern economy.
SERVICES
As economies advance, a growing proportion of their activities focus on the production of services. The U.S.
economy today produces a 70–30 services-to-goods mix. Services include the work of airlines, hotels, car rental
firms, barbers and beauticians, maintenance and repair people, and accountants, bankers, lawyers, engineers,
doctors, software programmers, and management consultants. Many market offerings mix goods and services,
such as a fast-food meal.
EVENTS
Marketers promote time-based events, such as major trade shows, artistic performances, and company
anniversaries. Global sporting events such as the Olympics and the World Cup are promoted aggressively to
both companies and fans.
EXPERIENCES
By orchestrating several services and goods, a firm can create, stage, and market experiences. Walt Disney
World’s Magic Kingdom allows customers to visit a fairy kingdom, a pirate ship, or a haunted house. There is
also a market for customized experiences, such as a week at a baseball camp with retired baseball greats, a four-
day rock and roll fantasy camp, or a climb up Mount Everest.9
PERSONS
Artists, musicians, CEOs, physicians, high-profile lawyers and financiers, and other professionals all get help
from celebrity marketers.10 Some people have done a masterful job of marketing themselves—David Beckham,
Oprah Winfrey, and the Rolling Stones. Management consultant Tom Peters, a master at self-branding, has
advised each person to become a “brand.”
PLACES
Cities, states, regions, and whole nations compete to attract tourists, residents, factories, and company
headquarters.11 Place marketers include economic development specialists, real estate agents, commercial
banks, local business associations, and advertising and public relations agencies. The Las Vegas Convention &
Visitors Authority succeeded with its provocative ad campaign, “What Happens Here, Stays Here,” portraying
Las Vegas as “an adult playground.” In the recession of 2008, however, convention attendance declined.

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TASNIM ISLAM LECTURER DEPARTMENT OF BUSINESS ADMINISTRATION, SOUTHERN UNIVERSITY BANGLADESH
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Concerned about its potentially out-of-step racy reputation, the Authority took out a full-page BusinessWeek ad
to defend its ability to host serious business meetings. Unfortunately, the 2009 summer box office blockbuster
The Hangover, set in a debauched Las Vegas, likely did not help the city position itself as a choice business and
tourist destination.12
PROPERTIES
Properties are intangible rights of ownership to either real property (real estate) or financial property (stocks and
bonds). They are bought and sold, and these exchanges require marketing. Real estate agents work for property
owners or sellers, or they buy and sell residential or commercial real estate. Investment companies and banks
market securities to both institutional and individual investors.
ORGANIZATIONS
Organizations work to build a strong, favorable, and unique image in the minds of their target publics. In the
United Kingdom, Tesco’s “Every Little Helps” marketing program reflects the food marketer’s attention to detail
in everything it does, within the store and in the community and environment. The campaign has vaulted Tesco
to the top of the UK supermarket chain industry. Universities, museums, performing arts organizations,
corporations, and nonprofits all use marketing to boost their public images and compete for audiences and
funds.
INFORMATION
The production, packaging, and distribution of information are major industries. Information is essentially what
books, schools, and universities produce, market, and distribute at a price to parents, students, and communities.
The former CEO of Siemens Medical Solutions USA, Tom McCausland, says, “[our product] is not necessarily
an X-ray or an MRI, but information. Our business is really health care information technology, and our end
product is really an electronic patient record: information on lab tests, pathology, and drugs as well as voice
dictation.”
IDEAS
Every market offering includes a basic idea. Charles Revson of Revlon once observed: “In the factory we make
cosmetics; in the drugstore we sell hope.” Products and services are platforms for delivering some idea or benefit.
Social marketers are busy promoting such ideas as “Friends Don’t Let Friends Drive Drunk” and “A Mind Is a
Terrible Thing to Waste.”

KEY CUSTOMER MARKETS


Consider the following key customer markets: consumer, business, global, and nonprofit.
Consumer Markets Companies selling mass consumer goods and services such as juices, cosmetics, athletic
shoes, and air travel spend a great deal of time establishing a strong brand image by developing a superior
product and packaging, ensuring its availability, and backing it with engaging communications and reliable service.

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TASNIM ISLAM LECTURER DEPARTMENT OF BUSINESS ADMINISTRATION, SOUTHERN UNIVERSITY BANGLADESH
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Business Markets Companies selling business goods and services often face well-informed professional buyers
skilled at evaluating competitive offerings. Business buyers buy goods to make or resell a product to others at a
profit. Business marketers must demonstrate how their products will help achieve higher revenue or lower costs.
Advertising can play a role, but the sales force, the price, and the company’s reputation may play a greater one.
Nonprofit and Governmental Markets Companies selling to nonprofit organizations with limited
purchasing power such as churches, universities, charitable organizations, and government agencies need to price
carefully. Lower selling prices affect the features and quality the seller can build into the offering. Much
government purchasing calls for bids, and buyers often focus on practical solutions and favor the lowest bid in the
absence of extenuating factors.

Differences between Consumer Markets and Business Markets

 In consumer market the purchase might even be made when the products are not required in
day to day activities. But in business market the business has to buy to stay profitable.
 The business buyer is sophisticated in terms of the process involved in buying, decision making
while on the other hand the consumer in the consumer market might not be as sophisticated
 The business buyer is an information-seeker, constantly on the lookout for information and
advice. On the other hand the consumer only searches information when he requires to make a
decision.
 Packaging is important in consumer market while its non existent in the business market.
 Expert advice is taken while making purchases in the business market as against the consumer
market.
 Consumer market products are simplistic while business products are complicated.

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TASNIM ISLAM LECTURER DEPARTMENT OF BUSINESS ADMINISTRATION, SOUTHERN UNIVERSITY BANGLADESH
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BASIC MARKETING CONCEPTS

• Needs- These include basic physical needs for water, food, shelter, closing, safety; social needs for
recognition, belonging to a group, affection; individual needs for self-expression and achievement;
organizational needs expressed by groups of people or businesses.

• Wants- Wants may be expressed by products or services which may be desirable by individuals or
organizations to meet their specific individual or organizational needs.

• Demands- Demand for products or services may be expressed by an individual, a group of a


individuals or organizations, backed by their respective buying power in the marketplace.

• Products And Services- Products and services are designed to satisfy the needs, wants, and demands
of broad range of individuals and organizations in the marketplace.

• Customer Value- A customer value is the difference between the value the customer receives by
owning and using a particular product or service and the actual cost of purchasing such product or
service.

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• Customer Satisfaction- Customer satisfaction is expressed by the buyer of a product or service based
on the degree to which such product or service meets the customer's expectations.

• Exchange- Exchange is the act of obtaining a required product or service from someone and offering
something of value in return.

• Transaction- A transaction is an exchange or trade of a product or a service between a buyer and a


seller, based on mutually agreed terms and conditions, including price, method of delivery, terms of
payment, and warranty.

• Relationship Marketing- Relationship marketing is a process of continuous development,


maintenance and improvement of profitable and mutually beneficial relationships with customers,
distributors, dealers, and suppliers.

• A Market- A market is represented by individuals and organizations, who are or may become buyers
for specific products and services.

Company Orientation Toward the Marketplace

The Production Concept

This concept is the oldest of the concepts in business. It holds that consumers will prefer products that
are widely available and inexpensive. Managers focusing on this concept concentrate on achieving high
production efficiency, low costs, and mass distribution. They assume that consumers are primarily
interested in product availability and low prices. This orientation makes sense in developing countries,
where consumers are more interested in obtaining the product than in its features.

The Product Concept

This orientation holds that consumers will favor those products that offer the most quality, performance,
or innovative features. Managers focusing on this concept concentrate on making superior products and
improving them over time. They assume that buyers admire well-made products and can appraise
quality and performance. However, these managers are sometimes caught up in a love affair with their
product and do not realize what the market needs. Management might commit the “better-mousetrap”
fallacy, believing that a better mousetrap will lead people to beat a path to its door.

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TASNIM ISLAM LECTURER DEPARTMENT OF BUSINESS ADMINISTRATION, SOUTHERN UNIVERSITY BANGLADESH
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The Selling Concept

This is another common business orientation. It holds that consumers and businesses, if left alone, will
ordinarily not buy enough of the selling company’s products. The organization must, therefore,
undertake an aggressive selling and promotion effort. This concept assumes that consumers typically
show buying inertia or resistance and must be coaxed into buying. It also assumes that the company has
a whole battery of effective selling and promotional tools to stimulate more buying. Most firms practice
the selling concept when they have overcapacity. Their aim is to sell what they make rather than make
what the market wants.

The Marketing Concept

This is a business philosophy that challenges the above three business orientations. Its central tenets
crystallized in the 1950s. It holds that the key to achieving its organizational goals (goals of the selling
company) consists of the company being more effective than competitors in creating, delivering, and
communicating customer value to its selected target customers. The marketing concept rests on four
pillars: target market, customer needs, integrated marketing and profitability.

The Societal Marketing Concept

This concept holds that the organization’s task is to determine the needs, wants, and interests of target
markets and to deliver the desired satisfactions more effectively and efficiently than competitors (this is
the original Marketing Concept). Additionally, it holds that this all must be done in a way that preserves
or enhances the consumer’s and the society’s well-being.

The Holistic Marketing Concept

Without question, the trends and forces that have defined the first decade of the 21st century are leading
business firms to a new set of beliefs and practices. “Marketing Memo: Marketing Right and Wrong”
suggests where companies go wrong—and how they can get it right—in their marketing.
The holistic marketing concept is based on the development, design, and implementation of marketing
programs, processes, and activities that recognize their breadth and interdependencies. Holistic
marketing acknowledges that everything matters in marketing—and that a broad, integrated perspective is

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TASNIM ISLAM LECTURER DEPARTMENT OF BUSINESS ADMINISTRATION, SOUTHERN UNIVERSITY BANGLADESH
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often necessary. Holistic marketing thus recognizes and reconciles the scope and complexities of
marketing activities.
Figure provides a schematic overview of four broad components characterizing holistic marketing:
relationship marketing, integrated marketing, internal marketing, and performance marketing.We’ll
examine these major themes throughout this book. Successful companies keep their marketing changing
with the changes in their marketplace—and market space.

Definition of Marketing management

Marketing management 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 goals.
Marketing management has the task of influencing the level, timing, and composition of demand in a
way that will help the organization achieve its objectives.
OBJECTIVES OF MARKETING MANAGEMENT

 Creating new customer

 Satisfying the needs of customer

 Enhancing the profitability of business

 Raising the standards of living of people

 Determining the Marketing Mix

Types of Demand and marketing manager’s task


1. Negative Demand:
Feature: A major part of the market dislikes the product and may even pay price to avoid it.
Example: Vaccination
Marketing tasks: i. Analyze why the market dislike the product.
ii. Analyze whether the marketing program consist of program redesign,
lower price and more positive promotion.
2. No demand:
Feature: Target consumers may be unaware and uninterested about the product.
Example: i. Farmers may be not interested in new farming method.
ii.College students may not be interested in foreign language course.
Marketing tasks: Find ways to connect the benefits of products with the peoples natural
needs and interest.
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3. Latent demand:
Feature: Consumers may share a strong need that cannot be satisfied by any existing
product.
Example: Harmless cigarette, safer neigherhood,more fuel efficient car.
Marketing tasks: i.Measure the size of the potential market.
ii.Develop goods and services to satisfy the demand.
4. Declining demand:
Feature: When the demand of the product or service becomes lower.
Example: Private colleges have seen application falls.
Marketing tasks: i.Reverse the declining demand through creative
remarketing.
ii.Analyze the cause of decline and determine whether the demand can
be stimulated by new target market.

5. Irregular demand:
Feature: Demand varies on a seasonal, daily and hourly basis.
Examples: Museums are under visited in week days and over crowded on week days.
Marketing tasks: Find ways to alter the pattern of demand through flexible pricing,
promotion and other incentives.

6. Full demand:
Feature: When the organization is pleased with their volume of business.
Marketing tasks: i.Maintain the current level of demand in the face of changing
consumer preference.
ii. Maintain and improve the products quality and continuously
measure consumer satisfaction.
7. Overfull demand:
Feature: Demand level is higher that the organization can and want to handle.
Example: National park is terribly overcrowded in the summer.
Marketing Tasks: i.Finding ways to reduce the demand of the products.
ii.Rasing price.
iii.Reducing promotion and service.
8. Unwholesome demand:
Feature: Those kinds of demands, not acceptable by the society.
Example: CIgeretts, hard drings, alcohol.
Marketing tasks: i.Fear message
ii.Price hikes.
iii.Reduce availability.

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TASNIM ISLAM LECTURER DEPARTMENT OF BUSINESS ADMINISTRATION, SOUTHERN UNIVERSITY BANGLADESH
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Marketing Management Tasks

Developing Marketing Strategies and Plans

The first task is to identify its potential long-run opportunities, given its market experience and core
competencies.

Capturing Marketing Insights

Marketing managers needs a reliable marketing information system to closely monitor its marketing
environment so it can continually assess market potential and forecast demand.

Connecting with Customers

Marketing managers must consider how to best create value for its chosen target markets and develop
strong, profitable, long-term relationships with customers’ .To do so, it needs to understand consumer
markets.

Building Strong Brands

Marketing managers must understand the strengths and weaknesses of the company as customers see it.

Shaping the Market Offerings

At the heart of the marketing program is the product—the firm’s tangible offering to the market, which
includes the product quality, design, features, and packaging. To gain a competitive advantage,
Marketing managers may provide leasing, delivery, repair, and training as part of its product offering .
A critical marketing decision relates to price. Marketing managers must decide on wholesale and retail
prices, discounts, allowances, and credit terms. Its price should match well with the offer’s perceived
value; otherwise, buyers will turn to competitors’ products.

Delivering Value

Marketing managers must also determine how to properly deliver to the target market the value
embodied in its products and services. Channel activities include those the company undertakes to make
the product accessible and available to target customers .

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TASNIM ISLAM LECTURER DEPARTMENT OF BUSINESS ADMINISTRATION, SOUTHERN UNIVERSITY BANGLADESH
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Communicating Value

Marketing managers must also adequately communicate to the target market the value embodied by its
products and services. It will need an integrated marketing communication program that maximizes the
individual and collective contribution of all communication activities. Marketing managers needs to set
up mass communication programs consisting of advertising, sales promotion, events, and public
relations. It also needs to plan more personal communications, in the form of direct and interactive
marketing, as well as hire, train, and motivate salespeople.

Creating Successful Long-Term Growth

Based on its product positioning, Atlas must initiate new-product development, testing, and launching as
part of its long-term view. The strategy should take into account changing global opportunities and
challenges. Finally; marketing managers must build a marketing organization capable of implementing
the marketing plan. Because surprises and disappointments can occur as marketing plans unfold,
Marketing managers will need feedback and control to understand the efficiency and effectiveness of its
marketing activities and how it can improve them.

Marketing environment

The actors and forces outside marketing that affect marketing management’s ability to build and
maintain successful relationships with target customers.
Microenvironment
The actors close to the company that affect its ability to serve its customers— the company, suppliers,
marketing intermediaries, customer markets, competitors, and publics.

1. Suppliers: They are the people who provide necessary resources needed to produce goods &
services. Policies of the suppliers have a significant influence over the marketing manager’s decisions
because, it is laborers, etc. A company must build cordial & long-term relationship with suppliers.
2. Marketing Intermediaries: They are the people who assist the flow of products from the producers
to the consumers; they include wholesalers, retailers, agents, etc. These people create place & time
utility. A company must select an effective chain of middlemen, so as to make the goods reach the
market in time. The middlemen give necessary information to the manufacturers about the market.
If a company does not satisfy the middlemen, they neglect its products & may push the competitor’s
product.
3. Consumers: The main aim of production is to meet the demands of the consumers. Hence, the
consumers are the center point of all marketing activities. If they are not taken into consideration,
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TASNIM ISLAM LECTURER DEPARTMENT OF BUSINESS ADMINISTRATION, SOUTHERN UNIVERSITY BANGLADESH
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before taking the decisions, the company is bound to fail in achieving its objectives. A company’s
marketing strategy is influenced by its target consumer. Eg: If a manufacturer wants to sell to the
wholesaler, he may directly sell to them, if he wants to sell to another manufacturer, he may sell
through his agent or if he wants to sell to ultimate consumer he may sell through wholesalers or
retailers. Hence each type of consumer has a unique feature, which influences a company’s
marketing decision.
4. Competitors: A prudent marketing manager has to be in constant touch regarding the information
relating to the competitor’s strategies. He has to identify his competitor’s strategies, build his plans to
overtake them in the market to attract competitor’s consumers towards his products.
5. Public: A Company’s obligation is not only to meet the requirements of its customers, but also to
satisfy the various groups. A public is defined as “any group that has an actual or potential ability to
achieve its objectives”. The significance of the influence of the public on the company can be
understood by the fact that almost all companies maintain a public relation department. A positive
interaction with the public increase its goodwill irrespective of the nature of the public. A company
has to maintain cordial relation with all groups, public may or may not be interested in the company,
but the company must be interested in the views of the public.
Public may be various types. They are:
a. Press: This is one of the most important group, which may make or break a company. It includes
journalists, radio, television, etc. Press people are often referred to as unwelcome public. A
marketing manager must always strive to get a positive coverage from the press people.
b. Financial Public: These are the institutions, which supply money to the company. Eg: Banks,
insurance companies, stock exchange, etc. A company cannot work without the assistance of
these institutions. It has to give necessary information to these public whenever demanded to
ensure that timely finance is supplied.
c. Government: Politicians often interfere in the business for the welfare of the society & for other
reasons. A prudent manager has to maintain good relation with all politicians irrespective of their
party affiliations. If any law is to be passed, which is against the interest of the company, he may
get their support to stop that law from being passed in the parliament or legislature.
d. General Public: This includes organisations such as consumer councils, environmentalists, etc. as
the present day concept of marketing deals with social welfare, a company must satisfy these
groups to be successful.

Macroenvironments
The larger societal forces that affect the microenvironment—demographic, economic, natural,
technological, political, and cultural force.
These are the factors/forces on which the company has no control. Hence, it has to frame its policies
within the limits set by these forces:
1. Demography: It is defined as the statistical study of the human population & its distribution. This is
one of the most influencing factors because it deals with the people who form the market. A
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TASNIM ISLAM LECTURER DEPARTMENT OF BUSINESS ADMINISTRATION, SOUTHERN UNIVERSITY BANGLADESH
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company should study the population, its distribution, age composition, etc before deciding the
marketing strategies. Each group of population behaves differently depending upon various factors
such as age, status, etc. if these factors are considered, a company can produce only those products
which suits the requirement of the consumers. In this regard, it is said that “to understand the market
you must understand its demography”.
2. Economic Environment: A company can successfully sell its products only when people have
enough money to spend. The economic environment affects a consumer’s purchasing behavior
either by increasing his disposable income or by reducing it. Eg: During the time of inflation, the
value of money comes down. Hence, it is difficult for them to purchase more products. Income of
the consumer must also be taken into account. Eg: In a market where both husband & wife work,
their purchasing power will be more. Hence, companies may sell their products quite easily.
3. Physical Environment or Natural Forces: A company has to adopt its policies within the limits set
by nature. A man can improve the nature but cannot find an alternative for it.
Nature offers resources, but in a limited manner. A product manager utilizes it efficiently.
Companies must find the best combination of production for the sake of efficient utilization of the
available resources. Otherwise, they may face acute shortage of resources. Eg: Petroleum products,
power, water, etc.
4. Technological Factors: From customer’s point of view, improvement in technology means
improvement in the standard of living. In this regard, it is said that “Technologies shape a Person’s
Life”.
Every new invention builds a new market & a new group of customers. A new technology improves
our lifestyle & at the same time creates many problems. Eg: Invention of various consumer comforts
like washing machines, mixers, etc have resulted in improving our lifestyle but it has created severe
problems like power shortage.
Eg: Introduction to automobiles has improved transportation but it has resulted in the problems like
air & noise pollution, increased accidents, etc. In simple words, following are the impacts of
technological factors on the market:
a) They create new wants
b) They create new industries
c) They may destroy old industries
d) They may increase the cost of Research & Development.
5. Social & Cultural Factors: Most of us purchase because of the influence of social & cultural factors.
The lifestyle, values, believes, etc are determined among other things by the society in which we live.
Each society has its own culture. Culture is a combination of various factors which are transferred
from older generations & which are acquired. Our behaviour is guided by our culture, family,
educational institutions, languages, etc.
The society is a combination of various groups with different cultures & subcultures. Each society has
its own behavior. A marketing manager must study the society in which he operates.

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TASNIM ISLAM LECTURER DEPARTMENT OF BUSINESS ADMINISTRATION, SOUTHERN UNIVERSITY BANGLADESH
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Consumer’s attitude is also affected by their society within a society, there will be various small
groups, each having its own culture.
Eg: In India, we have different cultural groups such as Assamese, Punjabis, Kashmiris, etc. The
marketing manager should take note of these differences before finalizing the marketing strategies.
Culture changes over a period of time. He must try to anticipate the changes new marketing
opportunities.

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TASNIM ISLAM LECTURER DEPARTMENT OF BUSINESS ADMINISTRATION, SOUTHERN UNIVERSITY BANGLADESH