Marketing: Core Concepts, Philosophies and the Marketing Mix

A small firm in Pune makes a good water purifier, but sales are slow, and the owners' first idea is to push the sales team harder. Marketing starts a step earlier: what do buyers need, and what will they pay for?

Philip Kotler calls marketing the social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others. Kotler and Keller's shortest definition is “meeting needs profitably”.

Needs may be physical (food, clothing, shelter), social (belonging, affection, recognition) or individual (knowledge, self-expression). Take thirst: the need is to quench it, the want is water, and the demand is a particular brand of bottled water the buyer can pay for.

Exchange. Marketing works through exchange. A transaction is one completed exchange.

Utility. A buyer agrees to an exchange because they expect satisfaction from the product's utility: the value that makes it able to satisfy a want. Marketing adds several kinds. A dealer who delivers a refrigerator to a village adds place utility; an EMI plan that spreads the payment adds possession utility.

What can be marketed. Ten kinds of entity, not only goods:

Don't confuse marketing with selling. Marketing is sometimes described as the art of selling. Peter Drucker argued the opposite: the aim of marketing is to know and understand the customer so well that the product fits and sells itself, which makes selling superfluous. Nor is a want the same as a need: marketers shape wants, but the need was there first.

Where it breaks. The definitions describe marketing at its best. Firms also use it to sell things people do not need, and the line between shaping wants and manipulating them is a judgement. The societal marketing concept, below, takes this up.

For exams. Expect the need–want–demand chain, a kind of utility matched to an example, and the AMA or Kotler definition. Know Drucker's point that marketing aims to make selling superfluous.

Need, want plus buying power, demand.

In December a hotel in a hill station is full and turns guests away; in July it is half empty. The same hotel needs two different marketing jobs in one year.

So marketers manage demand, not just respond to it. Philip Kotler (1973) described eight states of demand, each calling for a different marketing task.

Back to the hill-station hotel. Its demand is irregular, so its task is synchromarketing. It might offer lower monsoon tariffs and promote off-season events to fill July rooms. In peak weeks it can raise tariffs, which also eases the pressure of overfull demand.

Don't confuse demarketing with countermarketing. Demarketing cuts demand for a wanted product for a while, because supply cannot keep up. Countermarketing tries to end demand for a harmful product. Likewise, latent demand is a need with no product to meet it; no demand is a product that buyers do not care about.

Where it breaks. Real markets mix states. One product can face full demand in cities and no demand in villages, and the state changes over time. The eight states describe a market at one moment, so the task must be reviewed as the market moves.

For exams. Expect a state matched to its task. The pairs most often mixed up: irregular with synchromarketing, declining with remarketing, negative with conversional, latent with developmental.

Negative, none, latent, declining, irregular, full, overfull, unwholesome.

A bicycle maker improves its frames every year, yet young buyers move to electric scooters. It perfected the product while the need it served, getting around town, found a new answer.

Six philosophies are usually taught, roughly in the order in which they appeared.

Marketing myopia (Theodore Levitt, 1960) is defining a business by its product rather than by the need it meets. The railways did this by seeing themselves in the railroad business rather than in transport. The bicycle maker above made the same mistake.

Levitt also drew the contrast between selling and marketing. Selling focuses on the seller's need to turn products into cash; marketing focuses on the buyer's needs. In Kotler and Armstrong's terms, selling works inside-out, from the factory; marketing works outside-in, from the market.

Holistic marketing (Kotler and Keller) has four components:

• Relationship marketing: lasting ties with customers, employees and partners.
• Integrated marketing: all activities combined to create, communicate and deliver value.
• Internal marketing: hiring, training and motivating staff to serve customers well, from top management down.
• Performance marketing: financial returns, and the wider ethical, social and environmental effects.

Earlier editions named the fourth socially responsible marketing, a label many study notes still use.

Don't confuse societal marketing with holistic marketing. Societal marketing adds society's long-term well-being to consumer wants and company profit. Holistic marketing is wider: it treats all marketing activity as one connected system, and social responsibility is one part of it, under performance marketing.

Where it breaks. The six concepts are often taught as eras, one replacing the next. In fact all six exist today. Many firms still follow the production or selling concept, and selling is common for unsought goods such as insurance.

In practice. Ask where a plan starts. If it starts from stock in the warehouse and asks how to move it, it follows the selling concept. If it starts from a customer group and its needs, it follows the marketing concept.

Production, product, selling, marketing, societal, holistic.

A firm launches a good shampoo at a fair price, but the shops near its buyers do not stock it and few people have heard of it. One weak tool can sink the other three.

Neil Borden popularised the term (his 1964 article describes using it from 1949); E. Jerome McCarthy (1960) grouped the tools into the 4Ps. Robert Lauterborn (1990) restated them from the customer's side as the 4Cs. Jagdish Sheth and Rajendra Sisodia offered the 4As, also from the buyer's viewpoint.

An example. Take a shampoo maker aiming at village households, as an illustration. Product: a single-use sachet. Price: say ₹5, small enough to pay from a day's wages. Place: the village kirana store. Promotion: a wall painting and a demonstration at the weekly market. Read from the buyer's side, each P passes one A: the shampoo works (acceptable), the sachet is affordable, the store is a short walk away (accessible), and the demonstration makes people aware.

Services add three more Ps (people, process and physical evidence), covered in the services chapter.

Don't confuse the 4Cs with the 4As. Both look from the buyer's side. Lauterborn's 4Cs rename each P: price, for instance, becomes the customer's whole cost, not only the money. Sheth and Sisodia's 4As are tests the offer must pass with customers: acceptable, affordable, accessible and known.

Where it breaks. The 4Ps are a seller's checklist. They say nothing about which customers to serve; that comes first, from segmentation and targeting. The tools also interact: a deep price cut can undo a premium image that promotion has built.

For exams. Match each framework to its author: Borden (the term), McCarthy (4Ps, 1960), Lauterborn (4Cs, 1990), Sheth and Sisodia (4As). Expect a P matched to its C or A.

Go deeper for practitioners

Where the idea came from. Borden credited James Culliton (1948), who described the business executive as a “mixer of ingredients”. Borden's own list was much longer than four, with twelve elements such as branding, packaging, display and servicing. McCarthy's 4Ps made it short enough to teach and remember. Bernard Booms and Mary Jo Bitner (1981) added the three service Ps.

A decision. A two-wheeler tyre maker is losing sales in small towns. The sales team asks for a price cut. Research shows that local mechanics, whom riders trust, recommend a rival. That is a place-and-promotion problem, so a price cut would cost margin and leave the cause untouched. Working with mechanics is the better first move.

Links. Each P has its own chapter in this unit: product decisions, pricing decisions, distribution, and promotion decisions.

Product, price, place, promotion, seen from the buyer's side.

A neighbourhood electronics shop finds customers checking prices on their phones at the counter. Its pricing, service and stock all have to change, though nothing inside the shop has.

Kotler and Keller name the major societal forces that keep changing what marketers must do. A strategy that is not revised as these forces change soon loses its relevance.

Back to the electronics shop. It faces several forces at once. Online sellers bypass it (disintermediation), and buyers arrive knowing the online price (consumer buying power). If it adds its own website and home delivery, it becomes a brick-and-click shop: that is re-intermediation.

New capabilities. The same forces give marketers new tools:

• the internet as an information and sales channel with worldwide reach;
• richer data about markets and individual customers;
• social media and brand communities to amplify messages and buzz;
• permission-based ads, coupons and samples;
• mobile, location-based marketing near the point of sale;
• mass customisation of products;
• online recruiting, training and internal communication;
• cost savings from comparing suppliers online and running reverse auctions.

Don't confuse disintermediation with re-intermediation. Disintermediation removes the middleman: the buyer deals with the seller directly online. Re-intermediation is the traditional firm's reply: it adds online channels of its own, so a pure-click rival meets a brick-and-click one.

Where it breaks. A list of forces dates quickly, and textbook editions regroup them. Use it as a checklist to scan, not as a fixed set. The forces also pull in different directions: technology makes mass customisation possible, while competition pushes prices down.

In practice. When reviewing a marketing plan each year, ask which force has moved most, and which part of the mix must change in response.

Technology, globalisation and empowered buyers keep changing the task.