1. Basic Marketing Concepts ORIENTATIONS OF BUSINESS VILLAGE ECONOMY One to one transaction Production as per demand Production by individuals or family Production by low tech machinery Low batch / low value production Individuality of artisans Barter exchange 12/16/20151MKI/MM

2. Basic Marketing Concepts INDUSTRIAL REVOLUTION Bulk production Uniform quality Lower customization Low cost per unit if produced in bulk Larger manpower requirement Spread out markets Supply surpassing demand 12/16/20152 MKI/MM

3. Basic Marketing Concepts PRODUCTION ORIENTATION Philosophy : if you offer the lowest price, customers will queue in for your product. Means : Higher production will lead to lower per unit costs so that lower price can be offered. Limitations : High production of identical goods in a undeveloped economy resulted in high inventories leading to very low margin of profit 12/16/20153 MKI/MM

4. Basic Marketing Concepts PRODUCT ORIENTATION Philosophy : if you offer at better product, customers will queue in for your product. Means : More emphasis on R&D will help in offering technologically superior products to the customers. Limitations : The so called better products were technology oriented and not customer oriented. The problem was multiplied as now there were high inventories of a variety of products. The R & D expenditure made it unprofitable to sell low volumes at low price. 12/16/20154 MKI/MM

5. Basic Marketing Concepts SELLING ORIENTATION Philosophy : Customers need extra incentives for purchasing a product. Means : Offer more discounts and free gifts than your competitor so that customers prefer your product. Limitations : There was no customer loyalty as customers were buying not because of the core benefits of the product but because of the incentives associated. 12/16/20155 MKI/MM

6. Basic Marketing Concepts CUSTOMER ORIENTATION OR MARKETING ORIENTATION Philosophy : Products must be made for the customer. Means : Economic performance by giving the customer what he wants at a price he is willing to pay. Advantages : The product was made for the customer and hence repeat purchase and long term loyalty was possible. 12/16/20156 MKI/MM

7. Basic Marketing Concepts ENVIRONMENTAL ISSUES Philosophy : Marketing orientation must not destroy the environment and ecological balance. Means : Green Marketing and Active support to environment protection Activities. 12/16/20157 MKI/MM

8. Basic Marketing Concepts SOCIETAL ISSUES Philosophy : Marketing orientation must not harm the societal well-being. Means : More focus on customer well- being. Paradigm shift from “What customer wants” to “What is good for the customer.” 12/16/20158 MKI/MM

9. Basic Marketing Concepts ORIENTATIONS OF BUSINESS PRODUCTION ORIENTATION ↓ PRODUT ORIENTATION ↓ SELLING ORIENTATION ↓ MARKETING ORIENTATION ↓ ENVIRONMENTAL ORIENTATION ↓ SOCIETAL ORIENTATION 12/16/20159 MKI/MM

10. Basic Marketing Concepts THE ‘VALUE’ CONCEPT Customer purchases a product or a service which offers him a better value and that is why only lowest price goods or only highest quality goods or services are not sold. The customer mentally weighs the benefits he gets from the product against the cost he has to pay and compares this with competing products. He purchases the product which offers him the maximum benefits for the cost he incurs. This comparison offers him value. Total benefits to customer Value = ----------------------------------- Total cost to customer Total benefits include functional as well as emotional benefits. Total cost includes monetary cost, cost of time and cost of physical and mental efforts. 12/16/201510 MKI/MM

11. Basic Marketing Concepts The Value Cycle Identify Value Communicate Value Deliver Value Create Value 12/16/201511 MKI/MM