MGT211 Theme 6 by VUBuddy

Introduction to Business MGT211 · Short Notes By VU Nexus · Theme 6: · Marketing Principles and Strategies · Introduction to Marketing Concepts

Marketing is a customer-centric approach where businesses identify, understand, and fulfill customer needs better than competitors. Unlike the selling concept (focused on pushing products), the marketing concept creates value through customer orientation, integration across departments, and long-term profitability through customer satisfaction. The societal marketing concept adds social responsibility, focusing on societal well-being — e.g., eco-friendly packaging or fair-trade practices. Example: A café using organic ingredients and reducing plastic waste aligns profit with environmental care.

The Marketing Mix: From 4Ps to 7Ps

The Marketing Mix helps businesses deliver the right product, at the right price, in the right place, with the right promotion.

4Ps:

Product: Tangible or intangible offering (e.g., smartphone’s design & warranty). Price: Strategy like premium pricing (Apple) or penetration pricing (new brands). Place: Distribution channels — direct (e-commerce) or indirect (retailers). Promotion: Advertising, sales promotions, social media marketing. For services, 4Ps expand to 7Ps: People: Service staff interactions. Process: Service delivery speed & quality. Physical Evidence: Tangible cues (e.g., store ambiance, cleanliness). Example: A dahi bhalla vendor uses good location, hygiene, and fast service to attract customers.

Understanding Buyer Behavior

Buyer behavior studies how and why customers make purchase decisions, influenced by: Psychological factors: Needs (Maslow), perceptions. Social factors: Family, peers, culture. Situational factors: Time, discounts, urgency.

Buyer Decision Process:

1. Problem Recognition – Need arises (“I need a new laptop”).
2. Information Search – Checking reviews or asking friends.
3. Evaluation – Comparing alternatives (MacBook vs Dell).
4. Purchase Decision – Selecting based on price/features.
5. Post-Purchase Behavior – Satisfaction → loyalty or returns.

Marketers use these insights for targeted ads (e.g., student discounts) and customer follow-up (emails, offers).

Market Segmentation, Targeting & Positioning (STP Model)

Segmentation: Dividing the market into subgroups (e.g., age, income, lifestyle). Example: Fitness app — athletes (high intensity) vs seniors (low impact). Targeting: Selecting which segment to serve. o Undifferentiated: One product for all (e.g., salt). o Differentiated: Multiple products for segments (e.g., Nike shoes). o Niche: Focus on one small group (e.g., luxury watches). Positioning: Creating a distinct brand image. Example: Tesla = innovation, Volvo = safety.

Product Development & Product Life Cycle

A Product satisfies customer needs through: Core Benefit – Main need (communication via smartphones). Actual Product – Design, features (e.g., iPhone camera). Augmented Product – Add-ons (e.g., AppleCare).

Product Life Cycle (PLC):

1. Introduction: Heavy promotion (free trials).
2. Growth: Increasing sales.
3. Maturity: Diversify products (e.g., Coca-Cola Zero).
4. Decline: Drop or modify product.

New Product Development (NPD): Idea → Screening → Testing → Launch. Failures often occur due to poor market research (e.g., Google Glass).

Pricing Strategies

Price = amount paid by customers. It affects demand, profit, and brand image.

Pricing Methods:

1. Cost-Based Pricing: Cost + markup (ignores competition).
2. Value-Based Pricing: Based on customer’s perceived value.
3. Competition-Based Pricing: Set by market rates (FMCGs).

Key Pricing Strategies:

Psychological Pricing: Rs. 99 instead of Rs. 100. Penetration Pricing: Low price to gain market share. Price Skimming: High launch price → reduce later (tech products). Bundle Pricing: Combine items at discount. Promotional Pricing: Temporary discounts. Dynamic Pricing: Real-time changes (airlines, hotels).

Future Pricing Trends:

AI-Powered Dynamic Pricing (Amazon).