Transcript a.introduction to mkg

MARKETING
MANAGEMENT
INTRODUCTION TO MARKETING MANAGEMENT
• What is market?
• The term ‘market’ owes its origin to the Latin word
‘marcatus’ having a verb ‘mercari’ implying ‘merchandize’ ,
‘ware-traffic’, ‘trade’ or ‘ a place where business is
conducted’.
• Originally market was a public place in a town or village,
where household provisions and other objects were
available for sale.
• Now the definition of market has expanded to a globalized
world.
The Essentials of Market
• The essentials of a market are:
• Existence of a commodity or item which is to be
dealt with.
• The existence of buyers and sellers.
• A place, be it a certain region, a country or the
entire world or virtual place like the internet.
• Interaction between buyers and sellers to facilitate
transactions.
Classification of Markets
• Market can be classified on various basis.
On the basis of geographical area.
On the basis of nature of competition in the
market.
o On the basis of nature of goods sold.
o
o
Classification of Markets
1. Geographical area as a basis
• On the basis of geographical area, the market can be
classified as :
o Local market
o Market place where the purchase and sale of
goods/services involve buyers and sellers of a small
local area.
o National market
When goods and services are exchanged all over the
country, it is called as national market
o Global or World market
Many manufactured products and specialized services
are sold across the globe by many companies. Such
market is called as global market.
Classification of Markets
2. On the basis of nature of competition in the market
 Perfect market
 Imperfect market
Classification of Markets
3. On the basis of nature of goods sold
Consumer goods market
 A consumer goods market is defined as a market where
the final output of the firm goes for the consumption by
individuals or institutions.
 These goods can be durables or non durables. Durables
are also called as FMCG products.
Industrial goods market
A business market is defined as a market where output of
one firm goes either as raw material, goods in process or
as consumables of another industry.
This market is also called as organizational or B2B market
The demand for the product is derived demand.
Classification of Markets
 Non-Profit and Government Market
This market consists of non-profit organizations such
as social service agencies, educational organizations,
charitable organizations and Govt. Departments and
agencies that need special skills to sell to them.
These buyers have limited purchasing power.
The Govt. which is a large buyer, make purchases
on the basis of tenders, bids and negotiation.
MARKETING
• Marketing is a set of business activities that
facilitate movement of goods and services from
producers to consumers.
• It is an ongoing process that comprises the
following:
1. Discovering and translating consumer needs into
products and services
2. Creating demand for them, serving the customer and
his demand through a marketing programme of
promotion
3. Distribution to fulfill the company’s marketing goals in
a competitive environment
MARKETING
DEFINITION
• “Marketing is an organization function and a set of
process 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)
• “Marketing is the management process
responsible for identifying, anticipating and
satisfying customer requirements, profitably.
(Chartered Institute of Marketing)
THE EXCHANGE PROCESS
• THE EXCHANGE PROCESS IN MARKETING
Barter System of Exchange
• Marketing system evolves from simple barter
system through the stage of money economy to
today’s complex marketing.
• But for transaction to take place between two
parties, it was necessary that there be needs and
wants on both sides.
THE EXCHANGE PROCESS
• MONEY ECONOMY
• The development of money came to act as a
common medium and the exchange process
became very easy and convenient.
• The exchange process in money economy can be
shown as follows:
THE EXCHANGE PROCESS
PRODUCERS/
SELLERS
Flow of
Goods &
Service
Market
Flow of
Money
BUYERS
• Thus Exchange is an act of obtaining a desired
product or service from someone by offering
something in return.
THE EXCHANGE PROCESS
• For an exchange process to take place between
two or more parties, the following conditions have
to be met.
1. Each party has something that could be of value
to other party.
2. Each party has desire, willingness and ability to
exchange
3. Each party is capable of communicating and
delivering
4. Each party has the freedom to accept or reject
the offer.
Marketing Orientations
(Marketing Management Philosophies)
• Marketing activity should be carried out under a
well thought out philosophy of efficiency,
effectiveness, and social responsibility.
• There are six competing concepts under which
organizations conduct marketing activities. They
are:
1. The production concept
2. The product concept
3. The selling concept
4. The marketing concept
5. The societal marketing concept
Marketing Orientations:1PRODUCTION CONCEPT
Production Concept
Philosophy
Quality products at affordable prices sell
themselves
Objective
Minimize costs to lower prices, keep
quality comparatively high
How?
Focus on production & distribution
efficiency to maximize sales and
revenue
Marketing Concepts – Production Concept (Summary)
• The production concepts hold that consumers will
prefer products that are widely available and
inexpensive.
• Managers of production oriented companies
concentrate on achieving high production
efficiency, low costs and mass distribution.
• The company assumes that consumers are
primarily interested in product availability and low
prices.
• This concept holds good in those cases where the
cost of production of the company is more than the
cost of production of its competitors and the
demand for the product exceeds its supply
Marketing Orientations : 2-Product
Concept
2.Product Concept
• The product concept holds that consumers will
favor those products that offer the most quality,
performance or innovative features
• Managers in these organizations focus on
making superior products and improving them
over time
• The product concept can lead to what Theodore
Levitt calls “marketing myopia”. Marketing
myopia is the wrong concept about the product
and its purchase by consumers
3. The Selling Concept
The Selling Concept
• The selling concept assumes that
consumers and businesses, if left along,
will ordinarily not buy enough of the
organization’s products. The organizations
must therefore undertake an aggressive
selling and promotion effort.
PRODUCT
PROMOTION
SALES
Selling Concept
• The selling concept is given below in detail
Starting Point
Factory
Focus
Products
Means
Aggressive
Selling &
Promotion
Ends
Profit through
sales volume
Selling Concept
• The selling concept is aggressively used for
selling unsought goods, ie. Products that buyers
normally do not think of buying. Eg. Insurance,
encyclopedia, funeral plots etc
• The selling concept is aggressively used by
political parties during the time of election
• Most firms practice selling concept when they
have over capacity
4. Marketing Concept
Marketing Concept
• The marketing concept holds that the key
to achieving the organization’s goals
consists of the company being more
effective than competitors in creating,
delivering, and communicating superior
customer value to its chosen target
markets.
• This concept developed after 1950’s
globally
Marketing Concept
• The marketing concept can be
summarized as follows:
Starting Point
TARGET
MARKET
Focus
CUSTOMER
NEEDS
Means
INTEGRATED
MARKETING
Ends
PROFIT
THROUGH
CUSTOMER
SATISFACTION
Marketing Concept
A.Target Market
• The starting point of marketing concept is the target
customers. Target customers is the group of customers for
whom the product is created and directed
B.Customer Needs
• The focus of activity should be towards the needs of the
customers.
• A company can define its target customers but fail to
correctly understand the customer’s needs.
• Understanding customer need is not very easy. There can
be different types of customer needs such as:
o
o
o
o
o
Stated needs
Real needs
Unstated needs
Delight needs
Secret needs
Marketing Concept
• While defining needs, a company should make a
distinction between the following:
Responsive Marketing
A responsive marketer finds a stated need and fills it
o Anticipative Marketing
An anticipative marketer looks ahead into what needs
customers may have in the near future
o Creative Marketing
A creative marketer discovers and produces solutions
customers did not ask for but to which they
enthusiastically respond
o
Marketing Concept
C.Integrated Marketing
• When all the company’s departments work together
to serve the customer’s interest, the result is the
integrated marketing.
• Integrated marketing takes place at two levels. They
are:
o
o
The various marketing functions – sale force, advertising,
customer service, product management, marketing
research – must work together
The second is that the marketing must be embraced by the
other departments . To foster teamwork among all
departments, the company carries out internal and external
marketing.
Marketing Concept
• Under marketing concept, the company changes
the traditional organizational chart into modern
customer oriented organization chart.
Customers
Top
Management
Front-line Management
Middle
Management
Front-line People
Middle Mgmt
CUSTOMERS
CUSTOMERS
CUSTOMERS
Top
Management
Traditional Orgn Chart
Modern Orgn Chart
Marketing Concept
• The integrated marketing concept as customer as the
controlling function can be shown as follows:
Human Resource
Marketing
Customer
Production
Finance
Marketing Concepts : 5. The Social
Marketing Concepts
SOCIETAL MARKETING CONCEPT
SOCIETY’S
WELFARE
SMP
COMPANY
PROFITABILITY
CUSTOMER
SATISFACTION
The Societal Marketing Concept
• This marketing concept emphasizes that the key
task of the company is not only to determine the
needs and wants of the target markets and
delivering the desired satisfaction, but also to
preserve and enhance the consumers and
society's overall well being
• This calls upon marketers to build social, ethical
and environmental considerations into their
marketing practices
IKEA : Societal Marketing Concept
The Holistic Marketing
Concept
The Holistic Marketing
Concept
 The holistic marketing concept is based on the
development, design and implementation of
marketing programs, processes and activities that
recognizes their breadth and interdependencies.
 Holistic marketing recognizes that “everything
matters” in marketing and that a broad, integrated
perspective is often necessary.
The Holistic Marketing
Concept
 The holistic marketing concept is based on the
development, design and implementation of
marketing programs, processes and activities that
recognizes their breadth and interdependencies.
 Holistic marketing recognizes that “everything
matters” in marketing and that a broad, integrated
perspective is often necessary.