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Wednesday, October 2, 2013


What is the meaning and concept of marketing, marketing mix and marketing strategies ?

In USA, 300 college administrators were asked about the meaning of marketing. As many as 90 per cent said that marketing was selling, advertising and/or public relations. It is no wonder that the Americans are bombarded with TV commercials, newspaper advertising, sales calls, etc.

The American Marketing Association defines marketing as follows:

"Marketing is the performance of business activities that directs the flow of goods and services from producer to consumer or user."

The entrepreneur has first to decide what product he should select. This he can do only if he can identify the needs, which require satisfaction among human beings. Once he has identified the need of a group of human beings (called market segment), he can determine the product, which can help to satisfy that need. This is a part of the modern philosophy of marketing or the marketing concept. 

  Human Needs and Marketing Concept

We would now like you to fill in what you think come before a product comes into existence in the box marked (a) in Figure I. Also complete the box marked (c) with what you think should happen when the product or service has reached the consumer or user.

Let us now analyse what could have been written in box (a) in Figure I, for what comes before the product. You must remember that if you are an entrepreneur who wants to start a new business, you do not have a product. In fact you will have to decide what product you should manufacture and sell. How do you decide this? The answer to this question helps you in filling up (a). Please do so. The entrepreneur has first to decide what product he should select. This he can do only if he can identify the needs, which require satisfaction among human beings. Once he has identified the need of a group of human beings (called market segment), he can determine the product, which can help to satisfy that need. This is a part of the modern philosophy of marketing or the marketing concept. 

Marketing concept: It emphasizes consumer-orientation and satisfaction as well as profitability for the organisation. 
Philip Kotler, a well-known author in the area of marketing, defines marketing as  "A human activity directed at satisfying needs and wants through exchange processes.”

Thus the most fundamental concept, which must be realised as being the basis of all marketing activities, is the existence of human needs.

The human need is a state in which a person feels deprived of something. There are many human needs described in many ways. Briefly, these needs can be divided into two types.

1 Physiological needs; and
2 Psychological and Sociological needs.  

The physiological needs consist of the need for food, clothing, shelter and even sex. Similarly, there are social needs for belonging, affection and love from others. Of course, there are higher order psychological needs of self-actualization.

It is important to understand that at any time some needs in a human being are dormant and unsatisfied whereas others are active and are being satisfied. A marketing man may thus devise a product or service aimed at satisfying a certain dormant need and thus provide satisfaction to the user. This is why a man is often described as `a bundle of dormant wants'. The need exists but these have to be converted into `wants' by a marketing strategy.

In a socially competitive society, people may have unlimited wants but the ability to buy may be restricted on account of their economic background. They will, therefore, select from among those products, which give satisfaction or are needed more. Thus, when they are backed by ability to buy, the wants are converted into demand for your product. Therefore, when people decide to satisfy their needs and wants, in terms of marketing activities, exchange takes place. This explains in detail the definition given by Kotler.  

A process-oriented definition of marketing is "the process of ascertaining consumer needs, converting them into products or services, and then moving the product or service to the final consumer or user to satisfy' certain needs and wants of specific consumer segment or segments with emphasis on profitability, ensuring the optimum use of the resources available to the organisation".

In practice, often, separate departments with their own way of thinking perform the business functions, such as production, finance and marketing. Production is often considered the more important function as compare to marketing. This practice is, gradually losing ground and it is being recognised that unless you can sell a product, you should not manufacture it.

Marketing is performed within a certain environment which itself is always changing. The marketing activities have, therefore, to change in consonance with environment to be continuously effective. In order to appreciate this process it is easier to divide the marketing activities into four basic elements, which are together referred to as the marketing mix. These four basic elements are:  

-          Product,
-          Price,
-          Promotion, and
-          Place (or physical distribution).  

As all these four start with the letter `P' they are, at times, referred to as the four Ps of the marketing mix or the 4Ps in marketing.  

The word product stands for the goods or services offered by the organisation: Once the needs are identified, it is necessary to plan the product and after that keep on analysing whether the product still satisfies the needs which were originally planned for, and if not, to determine the necessary changes. You will learn this in greater detail when we talk about product strategies, about how new products are introduced, how they have to be modified in due course to continue to be successful in sales and why marginal or non-profitable products should be removed, unless they are contributing in some way to the overall benefit of the organisation.  

Price refers to the money value that the customer has to pay. The product has to be adequately priced. This involves considerations of the profit margin, the cost, the possibility of sales at different prices and the concept of the right price. 

Promotion is the aspect of selling and advertising, or communicating the benefits of the product or service, to the target customers or the market segment involved in order to persuade them to purchase such products or services.  It includes selling through advertising as well as the sales force. Besides, a certain amount of promotion is done through special seasonal discounts, competitions, special price reductions, etc. collectively called sales promotion.  

Finally, physical distribution refers to the aspect of the channels of distribution through which the product has to move before it reaches the consumer. It also includes the logistics aspects of distribution such as warehousing, transportation, etc. needed for geographical distribution of the products.  

It is also concerned with the selection of distribution channels. The organisation must decide whether it should sell through wholesalers (who buy in large quantities and sell to retailers) and then to retailers (i.e., the shopkeepers, who ultimately sell to consumers), or whether directly to the consumers. There are many ways in which a product can be moved from the producer to the consumer. The optimum method has to be determined in terms of both consumer satisfaction and profitability to the organisation, or optimum use of the organisation's resources.  


Having now understood the importance of consumer orientation as well as the elements of the marketing mix, it should be remembered that the marketing strategy consists in directing a proper marketing mix towards a target group of customers or market segment. This is illustrated in Figure II. It will be noticed that the "Four Ps" are decided and directed at the consumers on the basis of proper diagnosis of firm-market system arrived through the process of marketing research. 
This chart also gives you a bird's eye view of marketing:


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