Fundamentals of

Marketing
Marketing is a process that involves carefully designing,

implementing and controlling formulated strategies to facilitate the

exchange of goods and services between organizations and
customers.
Evolution of Marketing:o Production Era- The demand for products was more than the supply
in the market; thus, it was a sellers market.
o Sales Era- The need for developing promotion and distribution
strategies emerged to sell products. The organizations started
advertising their products to increase their sales.
o Marketing Era- In the marketing era, organizations realized the
importance of customers and started designing the products as per
customers needs. The marketing era led to the development of
customer-centered activities over the production and selling
activities.

Fundamentals of
Marketing
Objectives of Marketing:oCreating demand for the products by identifying the needs and wants of the

consumers
oIncreasing the market share of the organization
oBuilding the goodwill of the organization in the market
oIncreasing profits and achieving long-term goals through customer satisfaction.
Market: Refers to a place where a business is carried out, or where actual buying
and selling of products take place.
Types of Markets:oConsumer- Include the markets that sell the products for personal consumption.
oBusiness- Include the organizations that buy the products from other organizations
to reproduce or resell them to earn profits.
oGlobal- Include the organizations that sell goods and services in the global market.
oNon-Profit and Government- Include organizations that are indulged in social
services, such as selling goods to charitable organizations and governmental
agencies at low prices.

Fundamentals of
Marketing
Needs: Needs are felt deprivation of some basic

satisfaction.
Five Types of Needs:
o Stated- Involve the needs that a consumer
conveys to a marketer.
o Real- Include the actual needs of the customer
o Unstated- Involve a need that a customer does
not tell a marketer.
o Delight- Involve expectations of the customer
from a marketer.
o Secret- Include the esteem needs of a customer in
a society.

Fundamentals of
Marketing
Exchange: The act of obtaining a desired product from someone by giving

something of value in return.

Value= Benefits/Price or Quality Received/ Expectations or Benefits- Costs
o There is a positive relation between product value and customer satisfaction.
Demand: A want for specific products supported by an ability to pay.
Types of Demand:
o Negative- Involves a disliking for the product by a customer.
o Non-Existent- Implies no demand for a product by the customer.
o Latent- Implies a demand for a product by a customer that is not satisfied by an
existing product.
o Declining- Refers to a falling demand for a product.
o Irregular- Demand that varies according to seasons or festive occasions.
o Full- Refers to a situation where the demand for a product equates its supply.
o Overfull- Implies a situation where a demand for a product exceeds the supply of a
product.
o Unwholesome- Implies a demand for a product that has undesirable social
consequences.

Fundamentals of
Marketing
Production Concept: Customers will favor products that are in high supply

at low prices.
Product Concept: The product concept focuses on quality, features, and
attributes of products.
Selling Concept: The selling concept involves the use of aggressive selling
efforts by organizations to persuade customers to buy the product.
Marketing Concept- Customer is the King
o Pillars of Marketing Concept Customer Orientation: An organization can be successful only when it
determines the needs and wants of customers before deciding what
product to sell.
Organizational Integration: Working together to achieve the marketing
goals.
Profit Orientation: Generating profits by satisfying the needs of customers.
Societal Marketing: Organizations are a part of society so they should work
to improve societys welfare.

Fundamentals of
Marketing
Marketing Environment: All internal and external factors which directly or

indirectly influence the organizations decisions related to marketing

activities.
Features of Marketing Environment:
o Specific and General Forces- Specific forces directly affect the affect the
activities of the organization. General forces indirectly affect the organization.
o Complexity- A marketing environment includes number of factors, conditions,
and influences. The interaction among all these elements make the marketing
environment complex in nature.
o Vibrancy- A large number of forces outline the marketing environment, which
does not remain stable and changes over time. Understanding the vibrant
nature of marketing environment may give an opportunity to marketers to
gain edge over competitors.
o Uncertainty- Market forces are unpredictable in nature.
o Relativity- Explains the reasons for differences in demand in different
countries. The product demand of any particular industry, organization, or
product may vary depending upon the country, region or culture.

Fundamentals of
Marketing
Importance of Marketing Environment:i) Identification of Opportunities- Helps an organization in exploiting the

chances or prospects for its own benefit.

ii) Identification of Threats- Gives warning signals to organizations to
take the required steps before it is too late.
iii) Managing Changes- Helps in coping with the dynamic marketing
environment.
) Types of Marketing Environment:i) Micro
ii) Macro
Micro- Refers to the environment, which is closely related to the
organization, and directly affects organizational activities.
a) Suppliers- Provide raw materials to produce goods and services.
Suppliers can influence the profit of an organization because the
price of raw material determine the final price of the product.

Fundamentals of Marketing
b)Marketing Intermediaries- Helps organizations in
establishing a link with customers.
1) Resellers- Purchase the products from organizations
and sell to the customers.
2) Distribution Centers- Help organizations to store the
goods.
3) Marketing Agencies- Promote the organizations
products by making the customers aware about
benefits of products.
4) Financial Intermediaries- Provide finance for business
transactions.
c) Customers- Buy the product of the organization for final
consumption.
d) Competitors- Help an organization differentiate its
products to maintain position in the market.
Macro- Involves a set of organizational factors that is

Fundamentals of
Marketing
a) Demographic- It is the scientific study of human population in terms

b)
1)
2)
3)
4)
5)

of elements, such as age, gender, education, occupation, income,

and location.
Economic- It affects the organizations cost structure and customers
purchasing power.
Inflation- Influences the customers demand for various products.
Interest Rates- Determine the borrowing activities of an
organization.
Unemployment- Looks to a no income state, which affects the
purchasing power of an individual.
Customer Income- Regulates the buying behavior of a customer.
Monetary and Fiscal Policy- Monetary policy stabilizes the economy
by controlling the interest rates and money supply. Fiscal policy
regulates government policy in various areas by collecting revenue
from citizens by taxing their income.

Marketing
c) Natural- This environment consists of natural resources , which
are needed as raw materials to manufacture products by the
organization.
d) Socio-Cultural: This comprises forces, such as societys basic
values, attitudes, perception, and behavior. These forces help
in determining what type of products customers prefer, what
influences the purchase attitude or decision, which brand they
prefer, and at what time they buy the product.
e) Technological- Technology acts as a rapidly changing force,
which creates new opportunities for the marketers to acquire
market share.
1) Pace of Technological Change- If the pace is fast, product
obsolescence occurs at a rapid rate; organizations need to
modify their products as and when required.
2) Research and Development- Helps in increasing growth
opportunities for an organization.
3) Increased Regulation- Refers to government guidelines to
ban unsafe products. Marketers should be aware of these
regulations to prevent their violation.

Fundamentals of
Marketing
f) Political and Legal Environment- This consists of legal bodies and
government agencies that influence and limit the organizations
and individuals.
Marketing Mix- A collection of tools that can be used in achieving
marketing objectives.
a) Product- Includes the goods, services, events, persons, places,
ideas, and information offered to the customers by producers.
b) Price- The price strategy involves decision about the price to be
charged from a customer and includes deciding about selling
price, discounts, and credit limits.
c) Place- Focuses on the distribution of the product to the end user
by an organization.
d) Promotion- Involves the use of communicative tools to increase
the awareness of the customer about the product.