MARKETING MANAGEMENT - 2ND EDN
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Chapter 1 Fundamentals of Marketing
LEARNING OBJECTIVES This chapter explains 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.
Marketing nature, key components and limitations. Marketing concept. Marketing versus alternate philosophies production orientation, product orientation and selling orientation. Difference between a customer oriented company and a profit oriented company. The profile of customer-centric organizations. Characteristics of an effective marketer. Relationship between marketing orientation and profitability. Drawbacks of the marketing concept. Segmentation, targeting and positioning. Marketing mix components, characteristics of an effective marketing mix and pitfalls of the 4Ps framework. Doing things right versus doing the right things. Emerging concepts the service concept and the experience concept.
Section 1 Foundations of Marketing
1.1 Understanding Marketing Marketing is the process of finding out customer needs and serving those needs profitably. If an organization is obsessed with looking for profits, it will never find them. But if it is focused on satisfying its customers, profits will come automatically. Profit is an outcome of serving customer needs well. Profit is a legitimate goal of a business organization. Reasonable profits are required to keep stakeholders interested in running the business, and to increase the capability of the organization to serve its customers better. In that sense, customers should allow companies to have reasonable profits, because lack of resources will impair the company s capabilities to serve customers in the future. But a business with a single-minded focus on maximization of profits will not survive. In such companies, customer interests are not accorded top priority. Customer interests are likely to be compromised if they conflict with the profit maximization goal of the company. Customers stop patronizing such companies once they realize that their interests can be compromised in the organizational pursuit of profits. The essence of marketing is providing desired value to customers. A company cannot possibly