Lecture on Marketing and its Evolution

Introduction to Marketing

• Marketing is more than just advertising and selling.
• Conceptual standpoint: Creating satisfied customers by creating value.
• Peter Drucker’s Quote: Two primary business functions are marketing and innovation; everything else is cost.

Understanding Value in Marketing

• Value is defined from the customer’s perspective.
• Long-term relationships are built by creating real value, not by exploiting customers.
• Example: Tax consultancy - customers pay for the value they perceive.

Needs, Wants, and Demand

• Needs: Inherent to individuals; states of felt deprivation (e.g., hunger, thirst, socialization).
• Wants: Needs shaped by societal interaction and technology.
• Demands: Wants backed by purchasing power; example provided with desire for a Ferrari.

Market Offerings

• A combination of products, services, and experiences.
• Importance of understanding benefits over products (Marketing Myopia).
• Example: Customers buy a drill for the capability it provides, not the tool itself.

Marketplace and Exchanges

• Marketplace: Collection of customers and potential customers.
• Companies identify, understand, and meet customer needs to create transactions.
• Consumers search for products/services, engage with companies, and make purchases.

Key Elements in the Marketplace

• Firm’s Perspective: Start from understanding the firm’s side of the market.
• Supplier Relationships: Essential for product/service creation (example: Tesla and battery suppliers).
• Competitors and Market Definition: Competing firms in the same market sphere.
• Marketing Intermediaries: Facilitate distribution to final consumers.

Understanding Customer Needs

• Differentiation between production, product, selling, and marketing concepts.
• Shift from firm-oriented (production) to customer-oriented (marketing) approaches.

Marketing Concepts Over Time

• Production Concept: Focus on making enough products (e.g., Henry Ford's Model T).
• Product Concept: Quality improvements to stand out in the market.
• Selling Concept: Focus on convincing consumers to buy through communication.
• Marketing Concept: Start with customer needs, create value, and build relationships.
• Societal Marketing Concept: Focus on societal welfare beyond customer satisfaction.

Marketing Mix (4Ps)

• Product, Price, Promotion, Place (distribution channels).
• Integrated marketing programs ensure cohesion across all elements.

Customer Relationship Management

• Focus on long-term customer satisfaction and lifetime value.
• Managing expectations is crucial to foster satisfaction.

Metrics for Marketing Success

• Customer Lifetime Value: Assessing the long-term value of customer relationships.
• Share of Customer: Amount a customer spends on your brand relative to others.
• Customer Equity: Cumulative value of all customer relationships.

Impact of Digital Changes

• Digital and social media have transformed marketing approaches.
• Globalization and sustainable marketing are significant trends.

Conclusion

• Marketing starts with understanding the customer and building a value proposition.
• Effective marketing combines a well-designed product/service with strategic pricing, promotion, and distribution.
• The goal is to build lasting relationships and monitor success via customer lifetime value.