Core Marketing Concepts

 Core Marketing Concepts 

           The tactic used by businesses to meet consumer wants, boost revenue, optimize profits and outperform rivals is known as the marketing concept. 

         The fundamental idea of marketing is a social and management process that allows people and organizations to create, offer and exchange valuable items with one another in order to achieve what they need and want. These are distinct product desires supported by the capacity and willingness to purchase them. 

       There are five core concepts in marketing. 

 1. Requirements, wants and needs 

 2. Market offers, including goods, services and encounters 

 3. Value, contentment and excellence 

 4. Relationships, trade and transactions 

 5. marketplaces. 

1. Needs, Wants and Demands

       Demands, wants and needs are all included in the foundational ideas of marketing. Another way to differentiate a product is by how well it satisfies the needs, wants, or demands of the customer. Humans cannot survive without fundamental necessities such as food, clothing and shelter. These are known as needs. Wants rely largely on the basic needs of humans. The needs become attractive when they are directed at specific goods which meet the needs. If a person wants something that is premium, but still has the money to buy it, then such wishes are known as demands. The fundamental difference between demands and wants is based on ability to pay. A client might have a wish, but he might not be able to get it. Demands, wants and needs are crucial aspects of marketing since they assist the marketer in choosing the things to provide in the marketplace. 

2. Segmentation, Target Markets and Positioning 

       The process of breaking down the total market into comparatively different homogenous consumer subgroups with certain demands or characteristics that cause them to react similarly to a given marketing effort is known as market segmentation. A market segment is a subsection of a broader market that consists of people, groups, or organizations that have comparable needs for products because they have one or more traits in common. It is frequently necessary to segment markets, whether they are consumer or industrial. The marketer in each scenario has to select one or more useful segmentation variables, or dimensions that separate the entire market into relatively homogeneous groups with distinct demands and preferences.

      When targeting, marketers determine which potential segments to invest in to attempt and convert them into customers by assessing each group’s appeal. The chosen client group or groups represent the target market for the business. Most businesses identify relatively homogeneous categories and, in response, produce appropriate goods and marketing campaigns that suit the needs and preferences of each segment, as opposed to aiming a single product and campaign to the general market. However, it should be acknowledged that not every market area offers a corporation equally alluring chances. Businesses must classify market segments based on their attractiveness in the present and future, as well as their strengths and capabilities in relation to the demands of various market segments and the competitive environment. 

         Developing a marketing plan with the intention of influencing a certain market segment’s perception of a product or service in relation to competitors is known as positioning. Creating a positioning plan means knowing exactly what standards your target market uses to assess rival items and then persuading them that yours will satisfy those requirements. Many techniques can be used for positioning. 

3. Marketing Offerings and Brands 

       A group of interconnected businesses that work together to make a good or service accessible to consumers or business users is known as a marketing channel or distribution channel. Every marketing decision made by a company is directly impacted by its channel choices. Choosing a distribution channel frequently requires making long-term agreements with other businesses. As a result, management has to carefully plan its channels, considering both the probable selling environment of today and tomorrow.

      A channel level is any layer of marketing middlemen that helps move the product and its ownership closer to the final consumer. A channel’s length can be determined by counting the number of intermediate levels. 

1.   Businesses that use a direct marketing channel sell to customers directly;        there are no intermediate layers. 
2.  One or more middlemen are present in an indirect marketing channel. 

     Some common business distribution channels are as follows: 

1.   A business marketer can sell directly to business clients by using its own     sales team.
2.  It can sell to different kinds of middlemen, who then sell to these clients. More layers, in the producer’s perspective, equate to less control and more complicated channels. There are various kinds of flows connecting the institutions in the channel. The product’s physical flow, ownership flow, payment flow, information flow and promotion flow are among the flows. Even channels with one or a few layers might become extremely complex due to these flows. 

4. Marketing Channels: Paid, Owned, Earned Media

         Pre-selling, selling, consuming and post-consuming are the times when a business and its customers engage in interactive discourse known as communication. Businesses can now readily interact using modern media types including computers, mobile phones, fax machines and pagers in addition to more classic media like newspapers, radio, television and telephones. New technologies have prompted many businesses to shift from mass communications to more focused and one-to-one conversations by lowering the cost of communication. 

5. Value and Satisfaction / Supply Chain 

      The concept of customer value is important for the marketers because the primary goal of marketing is to deliver and enhance the customer value. The distinction between the benefits a client receives from possessing and utilising a product and the expenses incurred in acquiring it is known as customer value. It may also be defined as the sum of tangible and intangible benefits vis-à-vis cost to the customer.

        Often, customers don’t accurately or objectively assess the product values and costs. They act upon a value also known as the perceived value of the customer. In comparison, consumer satisfaction depends on the perceived success of a business in providing value according to the expectations of a buyer. When the performance of the product falls short of consumer expectations, the buyer will be disappointed. The buyer will be delighted if performance exceeds expectations. Customer expectations are based on their past purchasing experiences, friends’ opinions and information and promises from marketers and competitors. They may satisfy those who buy but fail to attract majority if they set expectations too low and if they raise expectations, buyers may become disappointed.

 6. Competition and Marketing Environment 

        There is more to the business transformation process than meets the eye. Enterprises function inside a distinct framework, both shaping and being shaped by their surroundings. The characters and forces that are external to the company that impact the management’s capacity to establish and preserve connections with targeted consumers comprise the marketing environment.  

● Micro Environment: These are the close-knit aspects that impact the business’s capacity to cater to its clientele, competitors, suppliers, middlemen in the marketing process and the general public. The company itself, supplies, marketing channel companies, client marketplaces, rivals and publics are all part of the microenvironment. 

              The stakeholder groups that a company interacts with on a regular basis make up the microenvironment. The course of these relationships can have an impact on a company’s expenses, output and general success. The following are the elements of the business microenvironment:

 Business’s Internal Environment

 ● Internal business divisions, including purchasing, operations, accounting and research and development (R&D) in addition to senior management and the finance department. 

● What influences the planning tactics of the marketing department. The mission, goals and other strategies of the company are determined by the top management.  Marketing managers make choices within the framework of plans and strategies developed by upper management. 

● Every department needs to keep the client in mind and collaborate to deliver exceptional value and happiness. While the accounting department tracks expenses and revenues and reports to the marketing department on how effectively goals are met, finance is in charge of providing funding and managing how it is used to implement marketing plans. While the purchasing department tries to secure supplies and materials, the operations department is in charge of producing and distributing the intended number and quality of products. R&D concentrates on inventing safe and appealing products.

 1. Suppliers - Due to their provision of the resources needed to generate goods and services, suppliers are crucial components of the value delivery chain. Marketing managers need to be aware of supplier availability, including delays or shortages in supplies, as well as labor strikes, which can eventually lower consumer satisfaction. Increasing costs of supplies may compel a price increase that hurts sales volume for the company. The majority of marketers view suppliers as collaborators in developing and providing value for the client.

 2. Marketing Intermediaries - Firms which help the business to promote, sell and distribute its goods to final buyers are the marketing intermediaries. They include-- 

a. Distributing channel companies known as resellers assist businesses in locating and closing deals with potential clients. Among them are retailers and wholesalers who purchase goods to resale. Take Wal-Mart, Carrefour, Big Bazaar, etc. as examples. 

b. Physical Distribution: Companies assist the company in stocking and transporting goods from their places of origin to their final locations. A corporation should find effective solutions to store and send items while collaborating with warehouse and transportation companies, taking into account aspects like cost, delivery, safety and speed. 

c. Marketing Services: Agencies, or marketing research firms, assist businesses in achieving their goals and promoting their goods in the appropriate markets. 

d. Financial intermediaries: These companies include banks, credit and insurance companies, as well as other establishments that support financial transactions and provide insurance against the risks involved in purchasing and selling goods. 

3. Customers – Customers are the people or entities who purchase a business’s goods and services. They are of five types - 

 a. The consumer market is made up of people and families who purchase goods and services for their own use. 

 b. Business-Business marketplaces purchase goods and services to be used in their production process or for additional processing. 

 c. Resellers advertise the products and services they have purchased in order to resell them for a profit. 

 Additional resellers comprise – 

 a. Government: Government markets are composed of government organizations that purchase products and services to generate public services or distribute them to those in need.

 b. International - Buyers in other nations, such as consumers, producers, resellers and governments, make up the international market. 

4. Competitors - According to the marketing principle, a company needs to offer more value and satisfaction to its customers than its rivals in order to succeed. All people and businesses who cater to a target market and offer goods and services that customers consider to be acceptable alternatives are considered competitors. Businesses need to obtain a tactical edge over these groups. No company should choose a single competitive marketing strategy over another. Every business should think about how big it is and where it stands in the industry in relation to its rivals. 

5. Publics- Any group that is interested in or has an impact on an organisation’s capacity to fulfill its goals is considered part of the public. There are seven distinct categories of publics.

 a. Financial Public: These affect the company’s capacity to raise capital. Investing houses, banks and stockholders are the main financial stakeholders. 

b. Public Media: They provide news, features and so on. These consist of radio and television stations, as well as newspapers and periodicals. 

c. Government Public - Management needs to consider changes in the government. When conducting business, management must always abide by laws and regulations, particularly those pertaining to product safety, honesty in advertising and other things. 

d. Participatory democracy Public: Consumer advocacy organizations, environmental groups and other parties may raise concerns about a company’s marketing strategies. A public relations department can assist in maintaining contact with citizen and consumer groups. 

e. Local public: This group consists of neighborhood dwellers and community-based organizations. 

f. General public - A company must be concerned with how the public perceives its offerings and operations. Public perception of the company influences its purchasing. 

g. Internal public - These consist of the board of directors, employees, managers and volunteers. Large companies inform and inspire their internal publics through newsletters and other channels. Positive attitudes among staff members have a trickling effect on the general public. 

● Macro Environment: The macro environment is made up of the more significant social forces that have an impact on the micro environment. These factors are thought to be beyond of the organization’s control. The demographic, environmental, technical, political, economic and cultural influences comprise the macroenvironment. 

  1. Demographic Environment: The size, distribution and growth rate of groups of individuals with various characteristics are referred to as the demographic environment. Since individuals from various nations, ethnicities, age groups and household configurations frequently display distinct purchasing behaviours, marketers are interested in demographic traits that are related to consumer behaviour. Marketers monitor demographic fluctuations in geographic areas, changes in family and age structures, educational attainment and population diversity. 

•  Population Size and Growth - One way to identify possible market opportunities is to look at population size and growth rates. Currently, there are about 7 billion people on the planet and that number is growing by nearly 100 million every year. Therefore, it is anticipated that during the 2020s, the global population will increase by 1 billion. Developing nations in Asia, Africa and Latin America will account for almost 95% of the growth. Countries differ greatly in terms of population size and growth rates. The US is a distant sixth in population now, with China having the greatest, followed by India. India is expected to surpass all other countries in terms of population by the year 2100 due to its high population growth. But for the broader market, marketers cannot depend only on population increase in developing nations. 

•  Demographic Characteristics and Trends - Although national and worldwide population statistics are significant, most advertisers focus on certain segments of these sizable populations. For this reason, demographic subgroup patterns are typically the most beneficial to marketers. Urban population expansion is an important occurrence in many countries. Largest cities and fastest rates of urbanization are typically found in developing nations like Brazil, Mexico and India. Nonetheless, many affluent nations are witnessing an increase in their urban population. The aging of the population is another intriguing trend that is particularly noticeable in the US, UK, Italy, Japan and other countries. However, developing nations like Nigeria, Mexico, China and Brazil have comparatively young populations. Because older consumers have different requirements and purchasing behaviours than younger consumers, these changes have significant marketing consequences.

 2. Economic Environment - Both population and purchasing power are necessary for the market. A number of variables in the economic environment have an impact on consumers’ purchasing power and spending habits. It covers variables and patterns pertaining to income distribution and the output of commodities and services. The size and requirements of different markets are typically influenced by demographic and cultural trends, but the purchasing power of these markets is also influenced by economic trends. A large or rapidly expanding population alone will not suffice to create good market prospects; the economy must also generate enough purchasing power to allow consumers to meet their needs and wants.

 Global economic developments might have an impact on marketing initiatives in other regions of the world. Market opportunities depend on the size and expansion of the economy. The entire size of an economy expressed in terms of the quantity of goods and services produced is represented by the Gross Domestic Product (GDP) of a nation. Trends in economic activity are indicated by changes in GDP. The amount of economic activity per person is another significant economic component. Per capita statistics evaluates each country’s individual customers’ purchasing power by combining economic and population data.

 Individual customers in many emerging nations have little purchasing power due to their enormous populations in comparison to their economic might. Subgroups within these nations, however, could have significant purchasing power or economic growth may offer substantial opportunities in the future. 

3. Natural Environment - The natural environment includes materials found in it that are either impacted by or necessary as inputs for marketing operations. The factors include: 

•  Shortages of Raw Materials - Air and water may seem to be infinite resources. But in most industrialized countries, there is already an issue with water scarcity. Food and forests are examples of renewable resources that need to be used responsibly. Another major issue is the quick depletion of nonrenewable resources including coal, oil and different minerals. 

• Increased Pollution – The increased pollution is one of the primary sources of environment depletion. Industries nearly degrade the state of the environment. The amount of chemical pollutants in the soil and food supply, the disposal of radioactive and chemical wastes, the hazardous mercury levels in the ocean and the littering of non-biodegradable wastes like plastics, bottles and other packaged materials in the environment are all major examples of rising pollution. 

•  Greater Government Intervention: Concern for and initiatives to support a clean environment differ throughout national governments. While some wealthy nations, such as Germany, have very tight laws governing environmental quality, certain developing countries, primarily due to a lack of funding or political will, take minimal action to reduce pollution. 

4. Technological Environment - The most significant factor influencing future developments is the technological environment. It comprises the dynamics that give rise to novel products, technology and business prospects. The atmosphere of technology: 

•  Changes rapidly - Not even thirty or perhaps one hundred years ago were all of the ordinary things that we use today available. Electricity, radios and automobiles were unknown to Abraham Lincoln. Similarly, Jawahar Lal Nehru did not know about personal computers, cell phones, DVD players or even the internet. 

•  Creates New Markets and Opportunities - New technology creates new markets and opportunities, thereby replacing the older technologies. Marketers need to keep a careful eye on the technology landscape. Businesses whose products are not updated may soon find themselves out of date. Additionally, they won’t take advantage of emerging markets and products.

 

• Develop practical and affordable products - In an effort to gain a stronger marketing focus, many companies are augmenting their R&D teams with marketing personnel. Scientists are making predictions about futuristic products like three-dimensional televisions, flying cars and space colonies. Creating usable, reasonably priced versions of these products is a commercial as well as a technological problem in each scenario. 

• Product safety - Customers want to know that their products are safe, especially as items and technology get more sophisticated. Governmental organizations need to look into and outlaw possibly dangerous goods. Higher research expenses and a lengthier period between product conception and launch are the outcomes of safety requirements. 

5. Political and Legal Environment - The laws, governmental bodies and pressure groups that impact or constrain different groups and individuals within a particular society comprise the political environment. The political and legal environment includes elements and patterns associated with the actions of the government as well as certain laws and rules that have an impact on marketing practices. It is closely related to both the social and economic environments; that is, legislation aimed at improving a specific situation is usually motivated by pressure from the social environment, such as health or ecological concerns, or the economic environment, such as high unemployment or slow economic growth. By creating and implementing regulations, regulatory agencies carry out the purposes of legislation. As a result, it is critical for marketers to comprehend particular legislative, regulatory and political procedures as well as significant developments in each of these fields. The following are the areas of concern:

 a. Increasing legislation. 

b. Changing government agency enforcement. 

c. Increased emphasis on ethics and socially responsible behaviour. 

6. Cultural Environment - A society’s fundamental beliefs, attitudes, preferences and behaviours are influenced by a variety of institutions and external factors that make up the cultural environment. People’s fundamental ideas and values are shaped by the society in which they are raised. Parents instill core values and beliefs in their children and businesses, governments, religions and schools all support these values and beliefs. Secondary values and beliefs are more malleable. Therefore, while core ideas are unchangeable, secondary beliefs may be altered by marketers. Society’s major cultural views are expressed in people’s views of:

a. Themselves 

b. Others 

c. Organizations 

d. Society

e. Nature 

f. The universe 

       The purchasing behaviour of consumers is significantly influenced by cultural influences, which encompass the values, ideas, attitudes, beliefs and behaviours of particular population subgroups. As a result, marketers need to be aware of key cultural traits and developments in various areas.

•   Cultural Diversity - Cultural disparities are important in both home and foreign markets. A cultural group’s traits influence the kinds of things they desire as well as how they purchase and utilize them. Diverse cultural groupings found in global markets also enable marketers to tailor their approaches accordingly. Effective marketers are aware of the need to strike a careful balance between significant cultural distinctions and universal cultural traits. The complexity of this culture presents a constant challenge for marketers. 

•  Changing Roles - Typical home duties vary as more women enter the job and as household compositions shift. Men are no longer only responsible for providing for the family financially and pursuing a job and women are no longer exclusively responsible for taking care of the home, the kids, or grocery shopping. In many households, roles have changed and boundaries have blurred. Men tend to devote more time to housework and shopping, while women are more likely to pursue professional advancement and supply the majority of a family’s income. Businesses who can create strategies that effectively cater to these evolving positions stand to gain a great deal from the market. 

• Emphasis on Health and Fitness – An other trend in culture is the growing focus on fitness and health. Eating more nutrient-dense foods, exercising frequently, taking part in sports and emphasizing general wellness are all parts of living a healthier lifestyle. This means that businesses who offer goods and services targeted at enhancing fitness and health may find new markets.

 

• Desire for Convenience - An growing demand for convenience is a result of shifting household composition, an increase in the number of working women and a general lack of time. Families with two incomes frequently have more money than free time and they are prepared to spend it in order to avoid having to spend it on unpleasant tasks like cleaning, cooking, or car maintenance. As a result, a lot of customers purchase goods and services to reduce the amount of time spent on these tasks, creating new business prospects for companies that can satisfy these demands. 

•  Consumerism - The campaign to create and defend consumers’ rights is known as consumerism. The drive toward consumerism may gain momentum in the twenty-first century. Better consumer information, services, quality, dependability and reasonable costs are demanded by increasingly informed, knowledgeable and organized consumers. One reason why marketers need to take an ethical stance is the consumerism movement. Reacting to consumerism effectively means offering consumers functional items at reasonable rates, maintaining integrity and engaging in social responsibility