Core Concepts of Marketing in Brief

There are certain fundamental concepts and tasks which one needs to know to fully understand the marketing function. These concepts provide foundation for a marketing orientation and to manage the marketing function.

1. Needs and Wants

          The marketer’s task lies in satisfying human needs and wants through the exchange process. It is alleged that “marketing creates needs” and makes people buy things they do not actually need. In reality, marketing or marketers do not create “needs”, but they create “wants”. Some needs are the basic human requirements of food, clothing, shelter, water and air. There are other needs such as social needs, esteem needs etc. When we desire certain specific objects or items to fulfill these needs, they are called wants. For example, when a person is hungry, he can satisfy his hunger by taking a simple meal at home. Instead, if he wants to eat a Pizza or a Hamburger or a 5-Star Hotel meal, it is not a ‘need’ but a ‘want’. This difference between wants and needs is not the same as understood in the subject matter of ‘economics’. The marketer identifies the need which may lie unexpressed by the customer.

          The task of a marketer is to influence our wants rather than needs. He does so along with other influential factors such as socio-cultural forces and institutions such as family, religion, and different reference groups.

          Marketers, suggest to consumers that a particular car would satisfy the person’s need for esteem. They do not create the need for esteem, but try to )oint out how a particular product would satisfy that need.

2. Demand

          Human wants are unlimited, but their resources are limited. When a want for n object is backed or supported by buying ability, willingness to spend and desire to acquire a product I service, it becomes a potential demand. The task of assessing or estimating demand is very crucial for a marketer.

          He should understand the relationship of the demand for his product with its rice. Demand forecasting is essential for allocation of resources in a company. This is the reason why marketers segment consumers on the sis of their earning capacity. The income of the consumer indicates the potential to buy.

3. Product and Services

          Product is a generic term used to describe what is being offered by a seller marketer. It may be a good, a service or idea. Which can be marked by offering a set of benefits it offers to customers to satisfy their needs. However, there is a distinction between products and services. When we say ‘product’, we mean a physical or a tangible product such as a tooth paste, a refrigerator or a mobile phone, whereas ‘service’ refers to an act, performance, a benefit and indicates intangibility and absence of ownership or possession. Services can include banking service, hospitality service, airlines service, health service, entertainment service etc. Thus, a product can be defined as anything that can be offered to market to satisfy a need or want. Today, many types of entities such as goods, services, experiences, events, persons, places and ideas are being marketed.

4. Target Market

          Very few products can satisfy everyone in the market. Therefore, marketers divide the market into distinct groups of buyers who have similar preferences. These groups are called segments with their own specific demographic, psychographic and behavioral characteristics. The marketer decides as to which of these segment or segments offer highest opportunity for his company. For each of these target markets, the firm develops a product I service suited to their needs. TATA group has recently designed an economy car called ‘NANO’ which is priced around Rs.1 Lakh. The target market for this car is all aspirants who dream of owning a car but cannot afford cars, which are currently available for minimum Rs.2.5 Lakh. A Target Market is the group of people at whom a marketer targets his marketing efforts to sell his goods and services.

5. Marketing Management

          Marketing Management which is also the title of this course refers to all the activities which the marketing managers, executives and personnel have to undertake to carry out the marketing function of the firm. It involves (i) analyzing the market opportunities by undertaking consumer needs and changes taking place in the marketing environment, (ii) planning the marketing activities, and (iii) implementing marketing plans and settings control mechanism to ensure smooth and successful accomplishment of the organizations goals. Marketing Management is a critical function, especially in highly competitive markets. It provides competitive edge to an organization through strategic analysis and planning.

6. Values and Satisfaction

          In developed and developing economies, consumers have several products or brands to choose to satisfy his/her need. Consumers’ perceptions about value which they can expect from different products or services depend upon several factors. Sources that build the customer expectations include, own experience with products, friends, family members, consumers’ reports and marketing communications. Customer value is the difference between total benefits received and total costs incurred by him in acquiring the product or services. The types of benefits could be product’s functional value, or its brand related image value and any accompanying service value. The types of costs a customer can incur may be monetary cost and energy cost.

          Value is primarily a function of quality, service and cost. Value increases with increase in quality and service and decreases with increase in cost. Value is an important marketing concept and the task of marketing is to identify, create, communicate, deliver and monitor customer value.

          Customers generally experience satisfaction when the performance level meets minimum performance expectations of a product or service. When the performance as perceived exceeds the expected performance level, the customer will be not just satisfied, but delighted.

          Thus customer satisfaction or delight with respect to a product or service encourages customers to come back and repurchase the product or service in future. Satisfied customers can be an asset to the marketing company over a period of time, as they will spread favorable word-of-mouth information or opinions.

          Peter Drucker, the famous management thinker in one of his classic articles has said “Marketing is everything”. All other activities in the organization are support services to the marketing strategy that the company pursues. Marketing is important not only to the company but to the consumers and society and to the economy.

          Consumer stands to benefit from marketing activities. He has more alternatives to choose from, improved and better quality products are available and he is able to buy goods at convenient locations. Thanks to much improved customer service, a consumer is able to complain and expects his complaint to be attended in reasonable time. He can now buy with credit or debit card or cash or on installments.

          For the society as a whole, marketing is important because it acts as a change agent making people use latest products and improves the standard of living of the people. As we know, the main objective of marketing is to produce products and services for the society as per their needs and tastes, and while doing so it creates demand for these goods and services, encourages using them, thus leading to higher demand and sales. This higher demand allows the company to achieve economies of scale in both production and distribution, resulting in decrease in production and distribution costs which can be used to reduce prices to consumers.

          For a company in any business, marketing is considered to be the most important activity. It helps an organization to keep abreast of changes taking place in the market and consumer tastes and preferences through market research. Based on this reliable data, it responds to these changes by rectifying any drawbacks in its products or changing its competitive strategy. Thus the company’s decision- making and planning are not based on just hunches but on sound market information.

          The firm that follows such practices is sure to prosper under all conditions. Marketing provides an effective channel of communication to the company with its consumers by way of advertising and sales promotion. Marketing thus brings revenue and earns goodwill for the company.

          Successful operation1 of marketing activities creates, maintains and increases the demand for goods and services in the economy. It results in the increased level of production. This, in turn, increases the national income, which is beneficial to the economy. Marketing operations require the services of intermediaries such as wholesalers, retailers, transporters, and service provides for storage, finance, insurance and advertising. These services provide employment in large numbers.