The Core Marketing Concepts

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The Core Marketing Concepts

Philip Kotler has explained the following nine core concepts of marketing that have a sequential relationship as shown in the following figure:

Core Marketing concepts

Needs, Wants, and Demands

Needs: The starting, as well as ending points for marketing, is the needs of people and organizations. Needs are a state of self-deprivation. Needs may be physiological, learned, or emotional. Needs may be passive or active. When a need becomes active it results in a drive. Drive creates problems and demands an immediate solution. The solution lies in products and services.

Wants: Wants are desires for specific satisfiers of needs. Wants are shaped by culture, social class, and individual personality. What a person will want when he/she is hungry will depend on his/her consumption behavior shaped by the culture, social class, and individual taste and preferences.

Demands: Demands are human wants backed by ability and willingness to buy, Consumers may have unlimited wants but their resources are limited. Thus, they have to choose products that deliver the most utility and satisfaction.

Needs are not created by the marketer, They exist in the individual through the biological, social, and individual processes, Marketers can influence human wants by providing a variety of need-satisfying objects, suitable culturally, socially, and individually, Marketers can also influence demand by offering products at different price and quality levels that suit the buying power of various categories of buyers.

Target Markets, Positioning, and Segmentation

Target markets: An organization cannot operate in every market and satisfy every category of needs. The marketer has to define the area in which it performs the marketing activities. The defined market is the target market for the organization.

Positioning: The marketer studies the images consumers have about the product or service. Out of the several images, the marketer selects one or two unique and strong images (positions), The selected image or images are established in the mind of the buyers through a positioning strategy. Advertising, packaging, and distribution outlets help to establish and build the positions.

Segmentation: The target market is located by the process of market segmentation. Market segmentation involves dividing the total market into smaller market segments. The target market segments are identified by examining demographic, psychographic, and behavioral differences among the buyers. The firm develops product or service offers according to the needs of the market segments.

Offerings and Brands

Offerings: Offerings constitute the physical product, services attached with the product, plus associated information and experiences. It is the total value proposition by the company to customers. It is in the form of product/ service attributes and benefits.

Brands: A brand is an offering from a company that includes brand attributes and images. The brand has a name, -logo, symbol, and other identification features. The brand provides a certain image and ownership value for the buyer.

Value and Satisfaction

Value: Customer value is the difference between the values the customer receives from owning and using a product and the costs of buying the product. Value is a combination of quality, service, and price (QSP). Marketers sell different types of values attached to a product. Some products have price value (economy); some have service value (warranty, training, and credit); and some have image value (prestige and self-respect). For instance, a beauty parlor catering to women sells youth, attractiveness, and confidence values to its customers.

Satisfaction: Satisfaction depends on the product’s performance in delivering value as per the customer’s expectations. If the product performs ‘less than the customer’s expectation, the buyer is <issatisfied; if it matches the expected performance, the buyer is satisfied. If the performance exceeds expectation, the buyer I? delighted and highly satisfied. Satisfied customers become brand loyal and are likely to tell other people about their good experiences. The key to success in marketing is to match product performance with customer expectations. Many successful companies like to delight customers by providing more performance (values) than expectations.

Marketing Channels

Marketing channels are the medium through which a firm reaches the market. There are three types of channels. First, there is a communication channel through which tho marketing messages are delivered to and received from the target market. These include the media, mail, telephone, Internet, etc. Second, there is a distribution channel (distributors, wholesalers, and retailers) through which the products are delivered to the target buyers. Third, there is a service channel, which provides transportation, warehousing, insurance, finance, and other services that facilitate the marketing of products and services.


Supply Chain

Marketing channels build forward linkage for the firm. The backward linkage is built through the supply chain. The supply chain is the channel that links the firm to the sources of raw materials, components, and other resources.


Competition

The marketing gamut includes competition. The competition includes all actual and potential rival offerings and substitutes in the market. Competitions exist at four levels: generic, form, industry, and brand. Generic competition is very general in nature and exists between firms that compete for the same purchasing power of consumers (housing companies vs. automobile manufacturers). Form competition exists between companies that sell products that satisfy the same category of needs (cars vs. motorcycles). Industry competition exists between companies that manufacture and sell the same class of products or services (Toyota vs. Kia). The brand competition is the closest competition that exists between two similar brands of rival companies (Toyota’s Land Cruiser vs. Mitsubishi’s Pajero).


Marketing Environment

The marketing environment constitutes all those external forces that directly or indirectly influence the marketing policies of a firm. The marketing environment consists of the task (micro) environment and the broad macro-environment. The task environment is made up of the immediate players such as the company, suppliers, distributors, dealers, and customers. The macro-environment consists of the broad forces that operate in the market such as the demography, natural forces, economy, socio-culture, technology, and politics and law.


Marketing Planning

Successful marketing highly depends on effective planning and program building. A marketing program consists of a plan of action for the implementation of the marketing tools (marketing mix) in a target market. The marketing program is also directed at creating new needs for consumers.

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