BBA I SEM- FUNDAMENTALS OF MARKETING - UNIT I (STUDY NOTES) LATEST SYLLABUS

UNIT I

1.1 MARKETING & CORE CONCEPTS

1. Meaning

Marketing is the process of identifying, anticipating, and satisfying customer needs profitably. It is not just about selling or advertising; it is about creating value for customers and building strong customer relationships.
👉 In simple words: “Marketing is finding out what customers want, making it, pricing it right, promoting it, and delivering it effectively.”

2. Core Concepts of Marketing

The foundation of marketing lies in a few key ideas:

1.      Needs, Wants, and Demands

Needs → Basic human requirements (food, clothing, shelter).

Wants → Culturally shaped desires (pizza instead of plain food).

Demands → Wants backed by purchasing power (ability to pay).

2.      Market Offerings (Products & Services)

Anything offered to satisfy a need or want (goods, services, ideas, experiences).

3.      Value and Satisfaction

Customers choose products that offer the best value (benefits vs. cost).

Satisfaction comes when performance meets or exceeds expectations.

4.      Exchange and Transactions

Marketing happens through exchange: customers give money (or something valuable) in return for goods/services.

5.      Markets

The set of all actual and potential buyers of a product.

1.2 EVOLUTION OF MARKETING

Marketing has developed over time through different approaches.

1. Production Concept (Before 1930s)

·         Focus: High production efficiency and low cost.

·         Businesses assumed customers cared most about availability and affordability.

·         Example: Henry Ford’s Model T – standardized, mass-produced cars at low prices.

·         Limitation: Ignored quality, design, and changing preferences.

 

2. Product Concept (1930s–1950s)

·         Focus: Better quality, performance, and features.

·         Belief: “If we make the best product, customers will automatically prefer it.”

·         Example: Electronics companies competing on features (e.g., sharper radios, better cameras).

·         Limitation: Sometimes companies over-engineered products customers didn’t actually need.

 

3. Selling Concept (1950s–1960s)

·         Focus: Aggressive selling and promotional efforts.

·         Belief: “Customers must be convinced to buy, otherwise they won’t.”

·         Very common in insurance, encyclopedias, or unsought goods.

·         Example: Door-to-door salespeople using persuasion techniques.

·         Limitation: Short-term focus; led to customer dissatisfaction and lack of loyalty.

 

4. Marketing Concept (1960s onwards)

·         Focus: Understanding and meeting customer needs better than competitors.

·         Shift from “inside-out” (what company makes) to “outside-in” (what customer wants).

·         Example: Consumer goods companies (like P&G, Unilever) using research to design products customers truly want.

·         Importance: Customer satisfaction became the central idea.

 

5. Societal Marketing Concept (1980s onwards)

·         Focus: Balancing company profit, customer satisfaction, and social well-being.

·         Belief: “Do good for society while doing good for business.”

·         Example: Body Shop promoting cruelty-free beauty products; Coca-Cola working on water sustainability.

·         Importance: Introduced ethics, sustainability, and social responsibility into marketing.

 

6. Holistic / Relationship Marketing (2000s onwards)

·         Focus: Building long-term relationships, integrating technology, and viewing marketing broadly.

·         Involves relationship marketing, digital marketing, internal marketing, and societal marketing.

·         Example: Apple and Amazon create ecosystems that keep customers engaged for life.

·         Importance: Looks at all stakeholders (customers, employees, society, investors) as part of marketing.

 1.3 MARKETING vs. SELLING

1. Meaning

Selling: Focuses only on pushing products to customers to increase sales.

Marketing: Focuses on understanding customer needs and creating products that satisfy them.

2. Key Differences

Basis	Selling	Marketing
Orientation	Product-oriented (make and sell)	Customer-oriented (sense and respond)
Focus	Company’s need to sell	Customer’s need to be satisfied
Approach	Inside-out (starts with the company’s product, then pushes to customers)	Outside-in (starts with customer needs, then designs product to meet them)
Time Horizon	Short-term (immediate sales)	Long-term (customer relationships, loyalty)
Goal	Profit through volume of sales	Profit through customer satisfaction and value creation
Tools Used	Aggressive promotion, personal selling, advertising	Market research, segmentation, pricing, product design, relationship building
Customer Role	Passive buyer (persuaded to purchase)	Active participant (their needs shape the offering)
Example	Insurance agent pushing policies, door-to-door vacuum sales	Apple studying customer lifestyle and creating products accordingly

 

3. Importance

·         Selling may work for short-term revenue but often fails to build loyalty.

·         Marketing builds brand value, repeat customers, and sustainable growth.

In simple words:

·         Selling is product-driven, marketing is customer-driven.

·         Selling ends with the sale; marketing begins with the customer and continues after the sale.

 

1.4 MARKETING MYOPIA

Meaning

The term Marketing Myopia was introduced by Theodore Levitt in 1960. It means a short-sighted and narrow view of marketing, where companies focus too much on selling their products rather than understanding what customers actually need.

In simple words: Businesses fail when they define themselves by their products, not by the customer’s needs.

 

Examples

1.      Railroad Industry – They thought they were in the railroad business, not the transportation business. As a result, they ignored cars and airplanes and lost importance.

2.      Kodak – Focused only on film cameras and ignored digital technology until it was too late.

3.      Nokia – Focused on hardware phones, underestimated the importance of software and user experience, and lost to smartphones.

 

Causes of Marketing Myopia

1.      Believing growth is assured by a growing population.

2.      Too much faith in mass production and efficiency.

3.      Focus only on existing products, ignoring innovation.

4.      Failure to adapt to changing consumer preferences.

How to Avoid Marketing Myopia

1.      Customer Orientation – Think in terms of customer needs, not just products.

2.      Innovation – Constantly adapt and update offerings.

3.      Long-term Vision – Focus on building relationships, not just short-term sales.

4.      Define Business Broadly – Instead of “we sell shoes,” think “we provide comfortable walking experiences.”

Importance

·         Helps businesses stay relevant in changing markets.

·         Encourages customer-focused strategies.

·         Prevents decline by broadening vision beyond current products.

1.5 Marketing Mix

Meaning

·         The Marketing Mix refers to the set of controllable tools a company uses to influence consumers and achieve its marketing objectives.

·         Popularly called the 4Ps of Marketing: Product, Price, Place, Promotion.

·         Later extended to 7Ps (adding People, Process, Physical Evidence) for services marketing.

👉 In simple words: It’s the recipe businesses use to attract customers and meet their needs.

 

1. Product

·         Anything offered to satisfy customer needs (goods, services, ideas, experiences).

·         Decisions involve product design, features, quality, branding, packaging, warranty, and after-sales service.

·         Example: iPhone’s sleek design, innovative features, and AppleCare support.

 

2. Price

·         The amount customers pay for a product.

·         Pricing strategies: penetration pricing, skimming, competitive pricing, psychological pricing.

·         Must balance customer affordability with company profitability.

·         Example: Starbucks prices higher than competitors to signal premium quality.

 

3. Place (Distribution)

·         How the product reaches the customer (distribution channels).

·         Involves location, logistics, supply chain, wholesalers, retailers, e-commerce.

·         Example: Amazon’s efficient delivery system ensures products reach quickly.

 

4. Promotion

·         Communication strategies used to inform, persuade, and remind customers.

·         Includes advertising, personal selling, sales promotion, PR, digital marketing.

·         Example: Coca-Cola’s global ad campaigns promoting happiness and togetherness.

 

Extended 7Ps (for Services)

5. People

·         Employees and staff delivering the service shape customer experiences.

·         Example: Hotel staff friendliness in Taj Hotels builds loyalty.

6. Process

·         The way services are delivered and consumed.

·         Efficient, smooth processes = better customer satisfaction.

·         Example: Fast, simple online ordering at Domino’s.

7. Physical Evidence

·         Tangible cues that support service quality.

·         Example: Clean ambiance in a restaurant, website design, or branded packaging.

 

Importance of Marketing Mix

1.      Provides a framework to design effective marketing strategies.

2.      Ensures customer satisfaction by balancing product, price, place, and promotion.

3.      Helps businesses gain competitive advantage.

4.      Allows flexibility to adapt to changing markets.