MARKETING

Introduction to Marketing To prepare to be a marketer,

one needs to understand

• What Marketing is?

• How it works?

• What is Marketed?

• Who does the Marketing?

What Marketing is?

• Marketing deals with identifying and meeting human and social needs.

• One of the shortest definitions of marketing is “meeting needs profitably.”

Defining Marketing

“Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others.”

- Philip Kotler

Some more Definitions:

• “Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stake holders”

-- American Marketing Association

Some more Definitions:

• William Stanton: “Marketing is a total system of business activities designed to plan, price, promote and distribute want-satisfying products to target markets to achieve organizational objectives.”

Features/Characteristics of Marketing

• Regular and continuous activity

• Facilitates satisfaction of human wants

• Relates to goods and services

• Brings transfer of ownership

• Creates utility

Features/Characteristics of Marketing

• Wider socio-economic significance

• Importance of 4 Ps

• Evolutionary concept

• Precedes and follows production

Conditions of Exchange

• There are at least two parties• Each party has something of value to the

other party• Each party is capable of communication and

delivery• Each party is free to accept or reject the

exchange offer• Each party believes it is appropriate or

desirable to deal with the other party

Adding Degrees of Satisfaction

Total Satis

faction Total Satisfaction

Possession utility

Place utility

Time utility

Form utility

Oriental rug

Store has it in stock

Delivered to your home

Pay with your VISA card

4 P’s of Marketing

Importance of Marketing

Business Organization

• Accomplishment of Objectives• Widens Markets• Reputation• Develop Brand Loyalty• Introduce New Products• Face Competition• Growth and Stability• Economization of storage • Decision Making

Consumers and Society

• Quality products

• Reasonable Prices

• Higher Standard of Living

• Creation of utility

• Spread effect

• Economic Growth and Prosperity

Core Concepts of Marketing

Product or Offering Product or Offering

Value and Satisfaction Value and Satisfaction

Needs, Wants, and DemandsNeeds, Wants, and Demands

Exchange and Transactions Exchange and Transactions

Relationships and Networks Relationships and Networks

Target Markets & Segmentation Target Markets & Segmentation

Marketing Channels Marketing Channels

Supply Chain Supply Chain

Competition Competition

Marketing Environment Marketing Environment

Needs and Wants

• Needs are basic human requirements

• Wants are needs directed to specific objects/services that might satisfy the need

Product

• A product is any offering catered to satisfy needs and wants.

• A brand is when the product is from a known source.

Demand

• This is the wants for specific products backed by an ability to pay.

Target Market

• Very rarely does a product cater to the entire market. Most products are designed to cater to a group of customers who specifically want such a product. This group of customers is the target market which is a slice of the total market. We say it is the market segment.

Value and Satisfaction

• Value = Benefits/Costs

• Benefits = Functional Benefits + Emotional benefits

• Costs = Monetary costs + Time + Energy +

Psychic costs

Exchange

• Get something (product /service) by offering something in return.

Eg. kind (barter) or money (value )

• Exchange is a value creating process because it leaves both parties better off

(win – win situation)

Transaction and Transfer

• A transaction is an exchange between two things of value on agreed conditions and a time and place of agreement.

• A transfer is a one way exchange without receiving anything in return.

Relationship Marketing

• Building long term mutually satisfying relations with customers, suppliers, distributors in order to retain their long term preference and business

Marketing Network

• A marketing network is the relationships built with its stakeholders. Effective relationships make up an effective and strong network.

Marketing Channels

• Marketing channels are used to reach the target segment.

• Communication channels

eg. Advertising, telephone enquiry system

• Distribution channels – trade, direct sales

Supply Chain

• The supply chain represents a value delivery chain – from procurement of raw materials to final delivery of product to consumer.

Competition

• Potential and rival substitutes and offerings a buyer might consider.

• Competition can be viewed in various perspectives – brand, industry, form, generic

Marketing Environment

• Competition• Customers• Govt. policies• Suppliers• Trade

• Product• Import tariffs• Trends• Technology• Politics

Marketing Mix

• It is the tools that an organization employs to pursue its marketing objectives in the target market

• Product, Price, Place, Promotion

• 4 C’s – Customer solution, Cost, Convenience, Communication

Concepts under which firms conduct marketing activities

• Production concept

• Product Concept

• Selling Concept

• Marketing Concept

• Societal marketing Concept

Customer needs

• Stated needs

• Real needs

• Unstated needs

• Delight needs

• Secret Needs

Company Responses and Adjustments

• Reengineering• Outsourcing• E – Commerce• Bench marking• Alliances

• Partner – supplies• Market centered• Global/local• Decentralization

Simple Marketing System

Industry(a collection

of sellers)

Market(a collection

of Buyers)

Goods/services

Money

Communication

Information

Manufacturermarkets

Services,Services,moneymoney

Governmentmarkets


ServicesServices


TaxesTaxes

Taxes,Taxes,goodsgoods



MoneyMoney MoneyMoney

Consumermarkets

IntermediarymarketsGoods, servicesGoods, services Goods, servicesGoods, services

ResourcesResources ResourcesResourcesResourcemarkets

MoneyMoney MoneyMoney

Structure of Flows

Customers

Front-line people

Middle Management

TopManagement

Traditional Organization Chart

Customer-Oriented Organization Chart

Customers

Front-line people

Middle management

Topmanage-

ment

Customers Cus

tom

ers

Evolving Views of Marketing’s Role

a. Marketing as anequal function

FinanceProduction

Marketing Humanresources

b. Marketing as a moreimportant function

Finance

Humanresources

Marketing

Production


c. Marketing as themajor function

Marketing

Finance

Hum

an

resources

Production

d. The customer as thecontrolling factor

Customer

Human

reso

urces

FinanceProductio

n

Marketing


e. The customer as the controllingfunction and marketing as the

integrative function

Customer

Marketing

Production

Hum

an

resources

Finance

Concepts of Marketing (Company Orientations Towards the

Marketplace)

Company Orientations Towards the Marketplace ( Concepts of Marketing)

• Exchange Concept

• Production Concept

• Product Concept

• Selling Concept

• Marketing Concept

• Societal Concept

• Holistic Marketing Concept

Exchange ConceptExchange ConceptFocuses on exchange of goods

and services

Company Orientations Towards the Marketplace ( Concepts of

Marketing)

Producers Consumers

Supply of Goods

Money Flow


Marketing)

ProducersLarge ScaleProduction

ConsumersGoods,

Imposed

Production cost is reduced

Wide Choice of Goods

Production ConceptProduction Concept

Treats large scale productionas the base of marketing. Consumers prefer products that are widely available and inexpensive


Marketing)

ProducersProducts withBetter quality

& performance

ConsumersLikes & Dislikes

considered

Product Excellence

Better Quality attracts

Product ConceptProduct ConceptConsumers favor products thatoffer the most quality, performance,or innovative features


Marketing)

ProducersConsumers

Selling ConceptSelling ConceptConsumers will buy products only if

the company aggressivelypromotes/sells these products


Marketing)


ConsumersGoods,

Imposed

Production cost is reduced

Wide Choice of Goods

Marketing ConceptMarketing ConceptFocuses on needs/ wants of target

markets & delivering value better than competitors


Marketing)


ConsumersGoods,

Imposed

Societal ConceptSocietal ConceptEqual weightage to three parties

Consumers, Company and Society

Society


Marketing)

Holistic Marketing Concept

Holistic Marketing Concept

Attempts to recognize and reconcile

The scope and complexitiesof marketing activities

Holistic Marketing

Internal Marketing

Socially ResponsibleMarketing

Integrated Marketing

RelationshipMarketing

Internal Marketing

• Marketing Department

• Senior Management

• Other Departments

Integrated Marketing

• Communication

• Products and Services

• Channels

Relationship Marketing

• Customers

• Channel

• Partners

Socially Responsible Marketing

• Ethics

• Environment

• Legal Framework

• Community

Selling and MarketingSelling Marketing

• Selling starts with seller & is preoccupied all the time with the needs of the seller

• Emphasizes on saleable surplus available with the company

• Marketing starts with the buyer and focuses constantly on the needs of the buyer

• Emphasizes on identification of market opportunity

Selling and MarketingSelling Marketing

• Seeks to convert products in to cash

• Views business as – goods producing process

• Selling views the customer as the last link in the business

• Seeks to convert customer needs in to products

• Views business as – a customer satisfying process

• Marketing views the customer as the very purpose of business

Shifts in Marketing Management

• From marketing does marketing to everyone does the marketing

• From organizing by product units to organizing by customer segments

• From making everything to buying more goods and services from outside

• From using many suppliers to working with fewer suppliers in a “Partnership”


• From relying on old market positions to uncovering new ones

• From emphasizing tangible assets to emphasizing intangible assets (brands, customer base, employees, distributors and supplier relations and intellectual capital)

• From building brands through advertising to building brands through performance and integrated communications (IMC Mix)


• From attracting customers through stores and salespeople to making products available online

• From selling to everyone to trying to be the best firm serving well defined target markets

• From focusing on profitable transactions to focusing on customer lifetime value


• From a focus on gaining market share to a focus on building customer share

• From being local to being “Glocal” – both global and local

• From focusing on the financial scorecard to focusing on the marketing scorecard (market share, customer loss rate, customer satisfaction, product quality etc)

• From focusing on shareholders to focusing on stakeholders

MARKETING

Business

marketings

company orientations

reducedwide

building brands

producerslarge

imposedproduction

product

marketing