Transcript The Future of….. - II Sem Notes

The Future of…..
Individuals
 Groups

Institutions

Organisations

Society

Country

World
All depends on….
MARKETING
&
INVENTIONS/INNOVATIONS
There is a mistaken belief that
companies are customer
oriented. But that’s not true; they
are paying lip service. They are
still product centric.
- Marketing Guru Philip Kotler
Are they really marketing oriented?
In
the car Park, the Prime Parking
spots are reserved for Directors &
Senior staff rather than customers
When confronted with a problem
from a customer, an employee will
refer the customer on to another
employee without trying to resolve
the matter themselves.
The company listens to customers
comments & complaints, but has
poorly defined procedures for acting
on them.
Advertising is based on what senior
staff want to say , rather than a
sound analysis of what prospective
customers want to hear.
Goods and services are
distributed through channels that
are easy for the company to set
up, rather than on the basis on
what customers prefer.
MARKETING MANAGEMENT
Market+ Marketing+ Marketing Management
Markets
The word ‘market’ is derived from the Latin word ‘Marcatus’ which
means merchandise ,trade or a place where business is
conducted.
A market is a set of actual and potential buyers
who might transact with a seller.
Sellers constitute the industry and
buyers constitute the market.
Evolution of Market
The
Cave Man- Food Gatherers
Nomadic
Hunter Stage-Hunting
for Food
Agrarian
Period- Family system
Market Continued…
Division
of Labour-Barter System
Melas-Local
Market(No
Permenant shop)
Shops,Bazzars-Permanent
(Small Shops)
Places
Market Continued….
Department
Multiple
Super
Stores
Shops
Market/Bazzars
Market Continued…..
Mail
to order
Tele
Marketing
Internet
Marketing
Mobile
Marketing
Market Continued…..
Thus the evolution of Market
demanded a new concept/meaning
to a Market.
A market can be an environment in
which both demand and supply or
customer and supplier can come in
to a contact and effect the trade.
09/02/2009
Elements of Market
1. Customers 2. Producers 3.
Product/service 4. Intermediaries
5. Competitors 6. Service
Providers (Insurers,
Transporters,Warehouses,Financ
iers etc.)
Types of Market
Markets have been classified, on the basis of
different approaches, in various ways.
o On The basis of Geographical Area:
1. Local Market: When buyers and sellers,
belong to a local area or areas, say a town or
village, participate in market, it is called local
market. Here demand is limited in a small area.
E.G : Un-branded Products, vegetables, fish etc.
2. State Market: When sellers and
buyers belong to a state, it is called
state market.
E.G: KSEB (only excess is sold to
other states)
Supply is limited to a state.
3. National Market: A country is
regarded as a market.
E.g.: Consumer Durables,
fashionable items
4. World Market: Involvement of
buyers and sellers beyond the
boundaries of a Nation.
E.g.: Capital Goods, spices etc.
On the Basis of Commodities /Goods
A.
Commodity Markets: Produced goods
are bought and sold.
 1. Produce Exchange Market: This type of
markets is found only in developed
industrial centres/cities. Sellers & buyers of
a certain particular commodity is traded.
E.G.: The Cotton Exchange Market of
Mumbai
2. Manufactured Goods Market
3. Bullion Market: This type of
market deals with the purchase &
sale of gold, silver etc.
E.g.: Bullion Markets of Mumbai,
Calcutta, Kanpur etc.
B. Capital Markets
Financial needs are met by capital
Markets.
1. Money Market: It consists of short-term and call
money market.
London is the world’s biggest money market.
2. Foreign Exchange Market: This type of market
helps exporters and importers, in converting
their currencies into foreign currencies and vice
versa.
3. The Stock Exchange Market
C. On the Basis of Economics:
1. Perfect Market:
conditions;
a. Large number of Buyers &Sellers
b. Uniform price throughout the
market
c. Buyers & sellers have perfect
knowledge about the goods and
services
Goods can be moved from one place
to another without any restrictions.
2.Imperfect Market: conditions
a. Products are similar but not
identical b. Prices are not uniform
c. There is lack of communication
d. Restrictions on the movements of
goods.
D. On the basis of Transaction
1.
Spot Market: Physical delivery
of goods are takes place
immediately.
2. Future Market: Contracts are
made over the price for future
delivery.
E. On the basis of Regulation
 1.
Regulated Market: These are types of
Markets which organised, controlled and
regulated by statutory measures.
E.g.: Sock Market by SEBI, Money Market by
RBI, Insurance Market by IRDA etc.
2. Unregulated Market: Less control on price,
quality, commission etc. Absolute free market is
An utopia.
F. On the basis of Time
1. Very short Period Market: deals in perishable
goods like fruits, milk, fish etc.
There is no change in the supply of goods.
Price is determined on the basis of demand.
2. Short Period Market: In this market supply can
be adjusted to meet the demand to certain
extend.
E.G.: Meat Market
3. Long Period Market: Supply is
adjusted to meet the demand.
E.G.: Durable goods
G. On the Basis of Volume of
Business:
1. Retail Market: goods are sold in
small quantity. Directly to Consumers
2. Whole Sale Market: Deals in
large Quantity. To dealers and/or
directly to customers also.
H. On the Basis of importance:
1.Primary Market: producers
sells to the
intermediaries/customers directly
invest in the organisations.
2. Secondary Market:
Intermediaries sell goods to
customers/customers invest in
organisations through stock
exchanges.
A Definition of
Marketing
Marketing:
the process of planning and
executing the conception, pricing,
promotion, and distribution of ideas,
goods, services, organizations, and events
to create and maintain relationships that
will satisfy individual and organizational
objectives.
Another Definition
Marketing:
an organizational
process for creating,
communicating, and delivering
value to customers and for managing
customer relationships in ways that
benefit the organization and its
stakeholders.
Marketing is “The process of
discovering and translating
consumer needs and wants into
product and service specifications,
creating demand for these products
and services and then in turn
expanding this demand”.Prof.H.L.Hansen
Core Marketing Concepts
Needs, Wants, and Demands

Abraham Maslow’s Hierarchy of Needs
Adapted 8 level
Hierarchy of
Needs diagram,
based on
Maslow's theory
Transcendence
helping others to self-actualise
Self
Actualization
Aesthetic needs
beauty, balance, form, etc
Cognitive needs
knowledge, meaning, self-awareness
Esteem Needs
(self-esteem)
Social Needs
(sense of belonging, love)
Safety Needs
(security, protection)
Physiological Needs
(hunger, thirst)
Needs
A
human need is a state of felt
deprivation.
An unsatisfied person will do
one of two things:
Look for an object that will
satisfy the needs
Try to reduce the need.

10/02/09
Needs
 People
in industrial societies try
to find or develop objectives that
will satisfy customers’ desires
(e.g., substitutes or alternatives.)
Physiological Needs- for food,
cloth and shelter
Taj Hotles, K.R Bakes
Reymond,Zero, Sowgandhika
Haritha Apartments, Oceanus
Homes etc.
Social Needs for belonging,
affection, fun, and relaxation.
Greeting Cards
Diamond Necklace, Titan Watches
Black Thunder, Veega Land
Movies, Parks etc.
Esteem needs for prestige,
recognition, and fame
BMW car,Omega watches,
member of International Clubs
etc.
Wants

Wants are how people communicate their needs.

Wants are described in terms of objectives that will satisfy needs.

As people are exposed to more objectives that arouse their interest
and desire, producers try to provide more want-satisfying goods and
services.
 Restaurants were once able to satisfy the hunger
 Today’s restaurant customers are more sophisticated and want
and expect hygiene, prestige & quick service along with food.
Wants

The sellers confusing wants and needs suffer from “marketing
myopia.”

They are so taken with their products that they focus only on
existing wants and lose sight of underlying customer needs.
 They forget that a physical product is only a tool to solve a
consumer problem
 The customer have the same need but want a new product
Demands

Customers choose products that produce the most satisfaction
for their money (i.e., economic value) due to the fact that
people have unlimited wants, but limited resources.

When this decision process is backed by buying power, wants
become demands.
 Motel 6 and Sleep Inns mean basic accommodations, a
low price, and convenience.
 Four Seasons and Ritz Carlton mean luxury, comfort, and
status.
Needs, Wants, and Demands

Understanding customer needs, wants, and demands in detail
provides important input for designing marketing strategies.
 All Disney World managers spend one week per year on
the front line – taking tickets, selling popcorn, or loading
and unloading rides.
 Most successful writers personally reads letters and of
guest comment cards submitted by customers.

Managers can identify customer needs, wants, demands
through market research & open door policy.
Product

A product is anything that can be offered to satisfy a need or a want.


The concept of product is not limited to physical objects.
Products include experience, persons, places, organizations, information,
and ideas.

What are some travel and tourism “products” that you can list?
 Disneyworld is an experience.
 Starbucks and Barnes & Noble have turned buying books into an
experience (relaxation).
 Marriott vacation club and Marriott time-share resort create customer
experience such as dolphin safari for its New Port Beach property or
a water rafting trip for its Utah property.

One of the most interesting areas of marketing is product planning and
development.
– Travel industry develops heritage tourism or eco-tourism in response
to customer needs.
Value, Satisfaction, and Quality

Customer value is the difference between the customer benefits from owning
and/or using a product and the costs of obtaining the product.

The purpose of marketing is to generate customer value.
 Free delivery (Domino’s and Pizza Hut)
 Free continental breakfast (by most mid-scale hotels)

Customer satisfaction is perceived value delivered relative to a buyer’s
expectations.
– Customer delight creates an emotional tie to a goods or service, not just a
rational preference, and this creates high customer loyalty.
– Satisfying the guest is not enough, only when guests leave very satisfied
are they likely to come back.

Quality is the totality of features and characteristics of a product or service
that bear on its ability to satisfy customer needs.
– It is closely linked to customer value and satisfaction.
Exchange, Transactions, and
Relationship Marketing

Exchange is the act of obtaining a desired object from someone by offering
something in return.

A transaction is marketing’s unit of measurement and consists of a trade of
values between two parties.
– Monetary transaction
• IBM gives $500 to Hilton and obtains the use of a meeting room.
– Barter transaction
• A restaurant might provide free meals to a radio station in return for
free advertising on that station.
– A transaction involves at least two things of value, a time of agreement,
and a place of agreement.

Relationship marketing is building strong economic relationships with social
ties by following through on promises. Both transaction parties involved
frequently seek long-term benefits.
11/02/09
Evolution of Marketing
1.Barter Era
2.Production Era:
It originated with the industrial
revolution in the 18th Century.
Mass production oriented
No preference for customer
Profit was the ultimate purpose at any
cost
3. Sales Era:(1920s)
Production capacity increased
supply of goods exceeded
demand
compelled to sell all the produced
goods
selling activity became dominant
No consideration for customer
satisfaction
4. Marketing Era:(1950s)
Emphasis on customer Needs
Customer satisfaction
Long term Profitability
Marketing Research
5. Management Era: Marketing
function has to do
Planning,Organising,Directing &
Controlling of:
1. Product 2.Price 3. Market 4.
Marketing Research 5. Promotion
6.Distribution etc.
Traditional vs. Nontraditional
Marketing
 Traditional
Marketing
– Goods
– Services
 Non-Traditional
– Places
– Events
– Causes
– Persons
Marketing
Marketing As Utility
Type
Description
Examples
Organizational
Function
Responsible
Form
Conversion of raw
materials and
components into
finished goods and
services
Boeing 767 aircraft, Pen, Paper etc
Production
Time
Availability of goods
and services when
consumers want them
One-hour dry cleaning; Federal Express’
guarantee of package delivery by 10:30 a.m.
the next day etc.
Marketing
Place
Availability of goods
and services at
convenient locations
coffee and snacks in bookstores; day cares
in office complexes; ATM machines in gas
stations; mail boxes outside convenience
stores etc.
Marketing
Ownership
(possession )
Ability to transfer title
to goods or services
from marketer to buyer
Retail sales (in exchange for currency or
credit-card payment) etc.
Marketing
MOTTS
The copy reads:
“Same ingredients.
Ours just
fits through a
straw.” and
“MOTTS MEANS
FRUIT”
Nature of Marketing
A. It is an Economic Function
B. It is a Legal Process
C. It is a System
D. It is an Interrelated Activity
E. It is a Managerial Function
F. It is a Philosophy
G. It may not be a Profit Making
Activity
H. It is a Social Process
o Scope of Marketing
1. Understanding Customers’
Needs and Wants
2. Study of Buyer Behaviour
3.Product Planning &
Development
4. Pricing
5.Distribution
6.Promotion
7. Mktg. Information &
Demand Forecasting
8. Consumer satisfaction
9. Marketing Audit
MARKETING PROCESS

Concentration
Small Lot Output
Assembly of Parts
To Facilitate Regular Supply
 Dispersion
 Equalisation
Function of
Exchange
Mktg.
Functions
Function of
Physical
Supply
Facilitating
Functions
Function of Exchange
1. Buying & Assembling
2. Selling
Function of Physical Supply
1. Transportation
2. Storage
Facilitating Functions
1. Financing
2. Risk-bearing
3. Standardisation & Grading
4. Pricing
5. Advertising & Sales
Promotion
Marketing as Demand Satisfaction

Demand is a measure of the desire that potential
customers have for a product or service . . . plus their
willingness and ability to pay for it
 Marketing
Concept
– Serve existing demand
– Reactive Market Orientation
 Demand
Creation
– Create products to satisfy unstated needs
– Proactive Market Orientation
 How
to Create Customers Through Marketing
Concept
– Identifying customer needs
– Designing goods and services that meet those needs
– Communicating information about those goods and
services to prospective buyers
– Making the goods or services available at times and
places that meet customers’ needs
– Pricing goods and services to reflect costs,
competition, and customers’ ability to buy
– Providing for the necessary service and follow-up to
ensure customer satisfaction after the purchase
Target Market
 Group
Distribution
Product
Target
Market
Promotion
© PhotoDisc
Price
of
people toward
whom the firm
decides to
direct its
marketing
efforts
Marketing Mix
Distribution
Product
Target
Market
Promotion
Price
Blending the
four strategy
elements of
marketing
decision-making
– Product
– Price
– Distribution
– Promotion
to satisfy chosen
target markets
Product Strategy
Deciding
Distribution
Product
Target
Market
Promotion
© PhotoDisc
Price
– What goods or
services to offer
– Customer service
– Package design
– Brand names
– Trademarks
– Warranties
– Product Life
Cycle
– Positioning
– New – product
development
Pricing Strategy
Distribution
Product
Target
Market
Promotion
© PhotoDisc
Price
 Deals
with the
methods of
setting
profitable and
justifiable
prices
PRICE
1.
2.
3.
4.
5.
Credit Terms
Payment Period
Discount
Commission
Differentials etc.
Distribution Strategy
Decisions about
Distribution
Product
Target
Market
Promotion
© PhotoDisc
Price
– Modes of
transportation
– Warehousing
– Inventory
control
– Order
processing
– Marketing
channels
Promotional Strategy
 Blending
Distribution
Product
Target
Market
Promotion
© PhotoDisc
Price
together
the various elements
of promotion to
communicate most
effectively with the
target market.
 Promotional
elements include
advertising, sales
promotion, public
relations, and
personal selling.
Distribution Strategy
Decisions about
Distribution
Product
Target
Market
Promotion
© PhotoDisc
Price
– Modes of
transportation
– Warehousing
– Inventory
control
– Order
processing
– Marketing
channels
Companies should view the 4 Ps
in terms of the Customer’s 4 Cs
•
•
•
•
Product
Price
Place
Promotion
•
•
•
•
Customer Needs
Cost to the Customer
Convenience
Communication
A rapidly evolving global
market is shifting the focus
from 4Ps to 4Cs, and now 4
Ts.
Are Indian Companies ready
for the Change?
4 Ps to 4 Ts
•
•
•
•
Product
Price
Place
Promotion
• Trade
• Tariff
• Transportation
• Transformation
(Source: USP AGE;
March- 2007)
Trade
Globalisation
Urguary Round
GAAT
India’s share of world Trade – 0.67%
Expected Share-1%
Export Processing and Special Economic Zones
TARIFF
Proliferation of Trade Barriers
America had the Tariff around the 40%
America, Japan, Italy, Australia, Finland
&France were high tariff Countries
WTO prefer Tariff To Non Tariff Barriers
(NTB)
TRANSPORTATION
 Air
Freight and Air Services
 JIT
 Intelligent
Transport System (ITS)-reduced
cost
Shopper’s stop, Viveks and Subhiksha are
in the path of ITS
Air service has a vital role –direct flight to
relevant locations/good inter connections)
12/02/09
Research shows that:
Businesses in computing,
software, R&D, Biotechnology,
food, finance and Insurance
heavily depends on Air Freight
and Air Services.
TRANSFORMATION
More aware and intelligent customer than before
 Television no more a favourite of advertisers
 Advertising cost more than its worth
 Getting more importance to P.R
 More interest in Web sites, blogs etc.
 F.M a new media habit
 Prosumers- New interest of Marketers account
for 20% or more for any category of products

12/02/09
Importance of Marketing Mix
 It
act as the link between the business firm and
its customers
 Since marketing mix are based on customer
needs it helps increase sales, customer
satisfaction and profit
 It signifies that these four elements are closely
inter-related
 It helps to adapt different environment and
customers by changing the elements
Expanded Marketing Mix
4
P’s added another 4 P’s
 5. Packaging
 6. People – attitude, style, sense of responsibility
of people who come into contact with customers
 7. Physical Evidence-to make customer induced
& confident
 8. Process-The process involved in transferring
product from manufacturer to customer.
 6,7&8 are more important in service sectors.
Why is marketing planning
necessary?
 Systematic
futuristic thinking by management
 better co-ordination of company efforts
 development of better performance standards for
control
 sharpening of objectives and policies
 better prepare for sudden new developments
 managers have a vivid sense of participation
Objectives of the marketing plan
 Acts
as a roadmap
 assist in management control and monitoring the
implementation of strategy
 informs new participants in the plan of their role
and function
 to obtain resources for implementation
 to stimulate thinking and make better use of
resources
Standard Planning Framework
Analysis
- where are we now?
Objectives - where do we want to be?
Strategies - which way is best?
Tactics - how do we ensure arrival?
Control - are we on the right track?
The contents and structure of the
marketing plan
 The
executive summary
 table of contents
 situational analysis and target market
 marketing objectives
 marketing strategies
 marketing tactics
 schedules and budgets
 financial data and control
Behavioural planning problems
 Planning
recalcitrance: resistance and nonco-operation by managers in planning
 fear of uncertainty in planning: a lack of
comfort in planning activities
 political interests in planning
activities:resource bargaining, padding of
requirements, and avoidance of consensus
 planning avoidance: compliance rather than
commitment to planning
Cautionary notes for effective
planning
 Don’t
blindly rely on mathematical and
statistical calculations. Use your judgement
as well
 Don’t ever assume that past trends can be
exploited into the future forever
 if drawing conclusions from statistical data,
make sure the sample size is sufficiently
large
Objectives of the marketing plan
 Acts
as a roadmap
 assist in management control and monitoring the
implementation of strategy
 informs new participants in the plan of their role
and function
 to obtain resources for implementation
 to stimulate thinking and make better use of
resources
Importance of Marketing
To
the Firm
It helps to understand the Consumer
Behaviour
It helps to decide about the product,
price, promotion and distribution
It generate revenues to the firm
It gives vital information to take decisions
in other areas like production, finance
and human resources
Marketing & innovation/inventions
became two basic functions to stay
and grow in this cut throat
competition
To the Customers
Customer is considered as the kingBeginning & End is the customer
Customers’ preferences are taken in
to consideration
Customers get wide choice
Better customer service
Healthy competition
 To the Society
Improves the quality of life
Ensures optimum production and
optimum consumption
It creates place, time and possession
utilities
It provides employment
opportunities
It converted yesterday’s luxuries
into today’s necessities
It is also helpful in making aware of
social causes, social events etc
To the Nation (Particularly
developing countries)
Development of Various
Manufacturing and service industries
Improved standard of living
Increase in the National Income
Maximum utilisation of Available
Resources
Dvelopment of Basic Infrastructure
(transportation,communication etc.)
Balanced National Growth
Increased Exports
Increased Foreign Exchange
Increased National Image
Criticisms of marketing planning
 Formal
plans can be quickly overtaken by
events
 Elements of the plan my be kept secret for
no reason
 gulf between senior managers and
implementing managers
 the plan needs a sub-scheme of actions
Marketing & Relationship with
other business functions
1. Financial Management
2. Production and Operations
Management
3. Human Resource
Management
Marketing & Other Disciplines
1. Psychology
2.Sociology
3.Statistics
4.Law
5.Economics
Marketing and Social Responsibility
1. Customers prefer goods from
‘good citizen’ organisations
2.Improving Standard of Living
3. Balanced Growth
4.Marketing Social Causes &
Events
5. Societal Marketing
Marketing- Is a science or an art?
Science- it is a systematised body of
knowledge.
Art- it is the exercise of systematic
knowledge to reap a good result.
Marketing is an art, because;
1. Each marketer applies marketing
concepts in his/her own way
2. The aim is to get satisfaction from
the consumers. The marketer
adjusts or tackles the situation,
aiming to success in his field
3. The success of a marketer
depends on his/her ability and skill
4. As an art, it creates interest,
feelings, satisfaction etc.
5. It deals with human behaviour
6.No scientific approach to deal with a
problem/situation
7. Re-testing of marketing situation is
little bit of difficult
Marketing cannot be called as exact
science like physics, chemistry etc.
1.Of course, it developed as a body
of theory
2.Systematic approach can be
developed to handle the situations
3. In marketing research,
scientific method of study is
adopted-setting hypothesis,
testing hypothesis, generalising
in to the theories etc.
We can conclude that Marketing
is an art as well as science
Approaches to the study of
Marketing
 Product
or Commodity Approach- analyses the
problem relating the commodity/product
1.Source and Conditions of Supply
2.Nature and extend of Demand
3.Mode of Transporting 4. Storage
5. Standardisation 6. Packing 7. After Sales
Services
 Institutional Approach: Focus on
the study of Institutions
i.e. The number of, functions of,
problems of
1.Intermediaries 2. Importers &
Exporters 3. Agencies (Advertising,
Parcel services etc.) 4.Warehouses
5.Financial Institutions etc.
 Functional Approach: It gives
importance to different functions
of Marketing
1. Buying & Selling 2.Pricing
3. Standardisation 4. Storage
5. Transportation 6. Promotion
7. Packing 8. After sales Service
 Management Approach:
Under this management
functions of Planning, organising,
staffing, directing and controlling
is applied on:
1. Controllable Factors
2. Uncontrollable Factors
Controllable Factors:
a. Product b. Place
c. Price
d. Promotion
Uncontrollable Factors:
a. Consumer’s Buying Behaviour
b. Trader’s Behaviour
c. Competitor’s behaviour
d. Government Behaviour
e. Public Behaviour (Media Public
also)
 Systems Approach:
It focus on interrelationships and
interconnections among the
functions of Marketing and
interrelationship with other areas
of business.
 Legal Approach: Emphasise
only aspect i.e. legal aspect with
respect to
1. Transfer of Ownership
2.Relationship with third parties
Societal Marketing Concept



The pure marketing concept ignores possible conflicts between short-run
consumer wants and long-run societal needs.
Organization should determine the needs, wants, and interests of target
markets and deliver the desired satisfaction more effectively and
efficiently than competitors in a way that maintains or improves the
consumer’s and society’s well-being.
Societal marketing concept starts with the question about whether the
marketing concept is adequate in an age of environmental problems,
– Laws that increase restaurant liability for serving excessive alcoholic
beverages to guests.
– Disapproval of nutritional value of product sold in fast-food
restaurants
– Eco-tourism
– Laws against resort development
Marketing Ethics
 Ethics
is essentially about the definition of what
is right and wrong
 But what is write and what is wrong?-difficult
to define
 Ethics is more or less affected by the culture of
a particular region/country
 Whether marketers should give importance to
ethics?
Marketing Management
“Marketing management is the analysis,
planning, implementation, and control of programs
designed to create, build, and maintain beneficial
exchanges with target buyers for the purpose of
achieving organizational objectives”
- Philip Kotler
Marketing Management Process
1.Analysis:
1. Where we are now?
2. How does the company’s market share
compare with that of its competitors?
3. What are the strength & weaknesses of the
company and its products?
4. What opportunities and threats does it face in
its marketing environment?
2. Planning:
A. Where we want to be?
B. What is the mission of the
business?
C. What objectives should be set for
the next year
D. What strategy should be adopted
to achieve the objective
3. Implementation: How we are
going to put into effect the
Strategy i.e tactics
4. Controlling.
Marketing Management Philosophies
 Manufacturing
(Production)
 Product
 Selling
 Marketing
 Societal Marketing
Manufacturing Concept
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Consumers favor available and highly affordable
products.
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Management should improve production and distribution
systems.
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However, don’t forget the customer!
 Manufacturing oriented restaurant after dining hours.
Customers are forced to cluster in one section of the
restaurant, thus creating unnecessary density and
customer dissatisfaction.  this is usually done to
facilitate cleaning or to enable to wait staff to provide
service with a minimum of walking.
Product Concept
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Consumers prefer existing products and product forms.
Management’s job is to develop good versions of these
products.
Inward focused like the Manufacturing Concept, so don’t
forget your customers!
– Recent trend of seeking healthy food.
– Victoria Station was a restaurant chain that
specialized in excellent prime rib. They had an
excellent product by maintaining the juices and
avoiding shrinkage of the beef. Unfortunately, many
customers no longer wanted red meat. They want
chicken, seafood, and pasta.
Selling Concept
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Consumers will not buy enough products unless the company
undertakes large selling and promotion efforts.
Aim is to maximize sales without worrying about customer
satisfaction.
Fails to establish a long-term relationship with customers because
the sellers do not concern creating a product to meet the needs of
the market
– Restaurants often advertise when sales start to drop, without
first analyzing why sales are dropping. They do not try to
change their product to fit the changing market. They push
their products on the customer through increased advertising
and couponing. Eventually, they go out of business because
their product no longer satisfies the needs of the marketplace.
Market Concept
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Achieving organizational goals depends on determining the needs
and wants of target markets and delivering desired satisfaction
better than competitors
Creates long term customer relationships
Frequently confused with “Selling Concept”.
– The selling concept takes an inside-out perspective. It starts
with the company’s existing products and calls for heavy
selling and promoting to achieve profitable sales.
– The market concept starts with a well-defined market, focuses
on customer needs, and integrates all the marketing activities
that effect customers. It meets the organizational goals by
creating long-term customer relationships based on customer
value and satisfaction.
Marketing and Sales Concepts Contrasted
“We don’t have a Marketing department: we have a customer
department.” – Herb Kelleher, CEO of Southwest Airline
Marketing Management
Vs.
Sales Management
• It is a modern concept • It is an old concept
• Its objective is
• Its objective is to
customer satisfaction
maximise sales
&delight
• It deals with the
• It deals with the
problems of customers
problems of sellers
Marketing Management
Vs.
Sales Management
• Its Scope is wider
- Discovering Needs
- Obtaining Need
- Customer Satisfaction &
Delight
- Repetition of Orders
• It includes Sales
Management
• Its Scope is Narrow
- Selling
- Sales Promotion
• It is a part of Marketing
Management
Marketing Manager’s Responsibilities
and Functions
 To
have constant touch with the market-business
research
 To find out Marketing Opportunities
 To interpret the Market situations
 To develop and improve marketing plans,
proceedures etc.
 To develop sales force
 To avail of resources to be utilised effectively
 To
forecast effectively
 To keep adequate inventory to meet demand
 To give suggestions to develop
product/services based on the customers’
needs
 To adopt sound pricing policy for competing
market
 To adopt most suitable and profitable
channels of distribution
 To adopt effective promotion methods
 To
maintain good inter-relation with both within
and outside the firm
 To develop the existing market
 To exploit the new market
 To facilitate growth and diversification
 To control the marketing costs
 To evaluate the performance of persons coming
under him.
MARKETING ENVIRONMENT
Objectives
 Identify
the major trends& changes in the firm’s
internal & External environments.
 Identify
Strength, weakness, opportunites, and
threats
 Understand
how companies can react to the
marketing environment.
Key Environments
Marketing
Environment
– The actors and forces that affect a firm’s
ability to build and maintain successful
relationships with customers.
– Aspects of the marketing environment:
• Micro environment
• Macro environment
Micro-Environment
1.
Customers
some of the situations where customer’s long
term interest have been neglected by companies
In 2002 Consumers, association launched a
campaign against financial services companies
which it claimed had sold mis-sold endowment
policies to individuals
Car Manufacturers often add expensive music
system to cars as standard, but safety
equipment to the status of ‘optional extra’
2. Competitors:
Identifying the competitors
A. Direct Competitor B. Indirect
Competitor
C. Good Competitor D. Bad
Competitor
3. Intermediaries:
The number of intermediaries
vitality of intermediaries
for e.g. food manufacturers who
do no get shelf space in the
major supermarkets may find it
difficult to achieve large-volume
of sales
The type of intermediaries
Their selection, motivation,
reward and control.
4. Suppliers:
The number of Suppliers
as partners
scope for backward integration
Bargaining Power of Suppliers
Availability in crisis time
Quality, Delivery Time, cost etc.
5. Government:
1. Tax Laws
2. Social Responsibility like sick
benefits, maternity benefits etc.
3. Various Laws for regulating
the marketing Activities
4. Government Organisations
6. The facilitators:
A. The Bargaining Power
B. The Number of Facilitators
in Each categorie
C. The Terms and Conditions
D. The influencing group of
facilitators
Local Communities:
A. Creating image through
Charitable Contributions,
Sponsorship of Local Events, giving
support for the local environment
B. The impact of Negative Image
7. Pressure Groups:
1. Consumer Associations
2.Nature Clubs/Associations
3. Trade Unions 4. Employers
Associations 5. Feminists etc.
8. Value Chain:
It may be through adding
further components, changing
the form of a product, or adding
ancillary services to product offer
etc.
Value Chain Analysis
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Figure 3
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Procurement
Human Resource Management
Technology Development
Procurement
Primary Activities
A value chain for coffee
• Value chain
member
• Grower
• Merchant
• Functions
performed
• Produces coffee
beans
• Adds value by
checking,grading,et
c.
• Coffee Manufacturer
• Whole Saler
• Retailers
• Processing the coffee
beans, adding other
ingredients, packaging
etc .
• Stores without any
defectives
• Convenient purchasing
and providing adquate
information to the
customers
Coffee shop-adds value by
providing a ready made cup
off coffee in pleasant
surroundings.
The Macro Environment
Economic Environment
a. Nature of Economic Systems-monopoly, mixed etc.
b. Structural Anatomy c. Role of Govt.
c. Factor Endowment
d. Markets
d. Market Competitiveness
2. Political & Legal Environment
a. The stability of the political system
b. The philosophy of the political parties
c. The Legislation
d. The Govt. Support
1.
3.Social & Cultural Environment
1. The leisure is becoming a
bigger part of many people’s life
2. Attitude towards the work
3. The role of women in decision
making
4. The role of children
in decision making 5. Greater
life expectancy 6. growing
concern for environment 7. The
cultural difference between areas
8. The beliefs and attitudes.
4.The Demographic Environment
5.The Natural/physical
Environment
Air Pollution
2. Noise Pollution
3. Water Pollution 4.Green-house effect
5. Shortage of Input: power, water,oiletc.
6. Cost of Input
6. Technological Environment
The Marketing Environment Analysis
1.
Marketing & Environment
Interface- Nature
Exchange of Information
 Exchange of Resources
 Exchange of Influence and Power
Strategies to deal with Marketing Environment
1. Anticipating and Adapting
2. Smoothing or Levelling
3. Rationing
4. Contracting 5. Coalescing
6. Procurement of Key Personnel
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