Transcript 1 – Introduction – Marketing, Marketing Management and All That Jazz

WHAT IS MARKETING ?
Marketing is a social process by which
individuals and groups obtain what they need
and want through creating and exchanging
products and value with others
PHILIP KOTLER
NEEDS ,WANTS and DEMANDS --PRODUCTS------VALUE & SATISFACTION--EXCHANGE & TRANSACTION---MARKETS &
MARKETERS
WHAT IS MARKETING ?
The essence of Marketing is
a transaction - an
exchange- intended to satisfy human needs and
wants. There are three elements in the marketing
process :
(A) MARKETERS
(B)WHAT IS BEING MARKETED
(C) TARGET MARKET
NEEDS,WANTS AND DEMANDS

NEED : A state of felt deprivation of some basic
satisfaction ( Food, Clothing, Shelter, Belonging
etc. )

WANTS : Wants are desires for specific satisfiers of
the deeper needs. Needs are few and wants are
many .

DEMANDS : are wants backed by ------Ability to
buy and Willingness to buy
PRODUCTS / OFFERS / SATISFIERS / RESOURCES

Anything that can be offered to someone to
satisfy a need or want is a product .

Product refers to physical object

Services refer to intangible object
VALUE AND SATISFACTION

Value is the customers’ estimate of the
Product’s capacity to satisfy a set of goals

Customer gets benefits & assume costs

WHEN :Customer

Customer Expectance>Performance (dis-satisfied)

Customer Expectance<Performance (Highly satisfied)
Expectance=Performance (satisfied)
EXCHANGE AND TRANSACTION

Exchange is a process rather than event. It is a
value creating process because it normally
leaves both parties better off.

A transaction is a trade of values between two
or more parties ( A BARTER TRANSACTION
OR A MONETARY TRANSACTION ).
WHAT IS MARKET ?

A market consists of all the potential customers
sharing a particular need or want who might be
willing and able to engage in exchange to satisfy
that need or want.
WHAT IS MARKETING MANAGEMENT ?

Marketing
Management
planning,
implementation
programs
designed
to
is
the
and
analysis,
control
create,
build
of
and
maintain beneficial exchanges and relationships
with
target
markets
for
the
purpose
achieving Organisational objectives.
of
WHAT IS MARKETING MANAGEMENT ?

Marketing
management
management
or
it
involves
is
the
demand
task
of
influencing the level, timing and composition
of demand. At times the actual demand level
may be below, equal to, or above the desired
demand level and the major task of marketing
management is to regulate the level of
demand.
STATE OF DEMAND AND MARKETING TASK
 State








of demand
Negative Demand
No Demand
Latent Demand
Falling Demand
Irregular Demand
Full Demand
Overfull Demand
Un-wholesome Demand
 Marketing








task
Conversional Mktg.
Stimulational Mktg.
Developmental Mktg.
Remarketing
Synchro-marketing
Maintenance Mktg.
Demarketing
Counter-marketing
EVOLUTION OF MARKETING MANAGEMENT

Marketing management has evolved through
following stages :

(1) Production Orientation Stage

(2) Sales Orientation Stage

(3) Marketing Orientation Stage

(4) Social Responsibility & Human
Orientation Stage
COMPANY ORIENTATION FOR
MARKETING ACTIVITIES

Marketing Management can be defined as the
effort to achieve desired EXCHANGE outcomes
with TARGET MARKETS.

Now the question arises :

(1) What philosophy should guide the marketing
activities?

(2) What weights should be given to the interests of
the organisation, the customers and the society?
The Marketing Concept
The marketing concept:
• A marketing management philosophy that
holds that achieving organizational goals
depends on knowing the needs and wants of
target markets and delivering the desired
satisfaction better than competitors.
MARKETING CONCEPT, DIMENSIONS

There are FIVE competing concepts under
which organizations conduct their marketing
activities:

The Production Concept

The Product Concept

The Selling Concept

The Marketing Concept

The Societal Marketing Concept
(1) THE PRODUCTION CONCEPT
Company
Produce more & more
Produce
Consumers
Sell
Practically sells itself
THE PRODUCTION CONCEPT

Consumers will favour those products that are
widely available and low in cost.

Therefore increase production and cut down
costs.

And build profit through volume.
(2) THE PRODUCT CONCEPT
Produce
Quality
Products
Sell
Practically sells itself,if
it gives most quality for
money
Consumers
Buyers admire well-made products and can
appraise product quality and performance.
THE PRODUCT CONCEPT

Consumers will favour those products that offer
the most quality, performance, or innovative
features.

Therefore, improve quality, performance and
features.

This would lead to increased sales and profits.
(3) SELLING CONCEPT

Consumers have normal tendency to resist.
Produce
Sell it
Aggressive selling &
promotion efforts
Consumers
Making sales becomes primary function and
consumer satisfaction secondary .
THE SELLING CONCEPT

Consumers , if left alone , will not buy enough
of company’s products.

Therefore, promote sales aggressively.

And,build profit through quick turnover.
(4) MARKETING CONCEPT

“ LOVE THE CUSTOMER , NOT THE
PRODUCT ”
Learn what they
want(MR)
Produce it
Consumers
Market it
Sell what they want(Satisfy
needs of customers)
THE MARKETING CONCEPT

The key to achieving organizational goals
consist in determining the needs and wants of
target markets and delivering the desired
satisfactions more effectively and efficiently
than competitors.

And build profit through customer satisfaction
and loyalty.
(5) THE SOCIETAL MARKETING CONCEPT

It is Marketing Concept (+) Society’s well being.
 Balancing
of following three considerations
while setting marketing policies :
Customer’s want satisfaction

Society’s well being

Company’s profits
THE SOCIETAL MARKETING CONCEPT

The societal marketing concept holds that the
organization’s task is to determine the needs,
wants, and interests of target markets and to
deliver the desired satisfactions more effectively
and efficiently than competitors in a way that
preserves or enhances the consumer’s and the
society’s well being.

It addresses conflicts between consumer’s and
firm’s short run wants and long term welfare.
STRATEGIC CONCEPT OF MARKETING

Shifted the focus of Marketing from Product
or customer to the CUSTOMER IN THE
CONTEXT OF THE BROADER EXTERNAL
ENVIRONMENT .

To
succeed,
customer
in
marketers
a
context
must
know
the
including
the
competition, Govt. Policy& regulation and the
broader economic, social and political macro
forces that shape the evolution of market.
STRATEGIC CONCEPT OF MARKETING

Shifted
the
Marketing
Objectives
from
PROFIT TO STAKEHOLDER BENEFITS.
 Stakeholders
are individuals or groups who
have an interest in the activity of a company .
They include-----The employees and management,
Customers, Society, Shareholders, Financiers/ Bankers,
Government etc.
STRATEGIC CONCEPT OF MARKETING

Strategic Marketing Concept is Strategic
Management, which integrates marketing with
the other management functions.

( Major task is Profit for Stakeholders’ benefits
).
MARKETING SYSTEM

Marketing is concerned with the flow of goods
and services from the points of production to the
points of consumption. There is a systematic
arrangement of these functions of marketing to
move the goods and services to the needy
persons. This system is essential to the creation
of time, place and possession utilities.
GOALS OF THE MARKETING SYSTEM
MAXIMIZE CONSUMPTION
MAXIMIZE CONSUMER SATISFACTION
MAXIMIZE CHOICE
MAXIMIZE LIFE QUALITY
THREE LEVELS OF MARKETING



Responsive Marketing
Anticipative Marketing
Need Shaping Marketing
RESPONSIVE MARKETING
It is the form of marketing when some company
defines an existing clear need and prepare an
affordable solution.
(Recognizing that women wanted to spend less
time for cooking and cleaning, led to the
invention of modern washing machine,
microwave oven etc.)
ANTICIPATIVE MARKETING
It is a form of marketing when a company
recognize an emergent or latent need, and
come out with an affordable solution. Evian,
Perrier anticipated growing market for
bottled drinking water as the quality of
water deteriorated in many places.
Anticipative marketing is more risky than
responsive marketing; companies may come
into market too early or too late, or may
even be totally wrong about thinking that
such a market would develop.(eg. Dish
washers in India)
NEED SHAPED MARKETING
The broadest level of marketing occurs when a
company introduces product that nobody asked for
and often could not even conceive of.
(e.g. Sony Walkman, Sony Compact Disc )
Late Akio Morita, founder and chairman of Sony,
who introduced these and many other new
products, summarized his marketing philosophy in
these words:
them.”
“ I don’t serve markets. I create
The Scope Of Marketing
Marketers are involved with marketing ten types of entities:
Physical Goods
Service
Experiences
Events
Persons
Places
Properties
Organizations
Information
Ideas
Exchange and Marketing
Pots
Hats
bats
soap
knife
Ten exchanges required
without central market
In very basic economic
systems, each seller
must meet directly with
each buyer in order to
exchange something of
value. As needs
increase, the number of
exchanges can soon
become unmanageable
for one person.
In a centralized market,
a buyer can go to one
location to find many
different products from
many different sellers.
By reducing the time both
buyers and sellers must
spend to complete an
exchange, prices can be
lowered.
Pots
Central
market
middleman
Hats
soap
bats
knife
Five exchanges required
with central market
PRODUCTS / OFFERS / SATISFIERS / RESOURCES

Consumer markets

Business markets

Global markets

Nonprofit/Government markets
Marketing Functions

Environmental analysis and marketing research:
Monitoring and adapting to external factors that affect success or failure,
such as the economy and competition; and collecting data to resolve specific
marketing issues.

Broadening the Scope of Marketing:
Deciding on the emphasis to place, as well as the approach to take, on
societal issues, global marketing, and the Web.


Consumer analysis:
Examining and evaluating consumer characteristics, needs and purchase
processes; and selecting the group(s) of consumers at which to aim
marketing efforts.
Marketing Functions continued

Product planning (including goods, services, organizations, people, places,
ideas):
Developing and maintaining products, product assortments, product images,
brands, packaging, and optional features, and deleting faltering products.

Distribution planning:
Forming logistical relationships with intermediaries, physical distribution,
inventory management, warehousing, transportation, allocating goods and
services, wholesaling, and retailing.

Promotion planning:
Communicating with customers, the general public, and others through some
type of advertising, public relations, personal selling, and/or sales promotion.
Marketing Functions continued

Price planning:
Determining price levels and ranges, pricing techniques, terms of
purchase, price adjustments, and the use of price as an active or
passive factor.

Marketing management:
Planning, implementing, and controlling the marketing program
(strategy) and individual marketing functions; appraising the risks
and benefits in decision making; and focusing on total quality.
Marketing Functions (Remember)
Facilitating Functions
Physical Functions
Exchange Functions
Buying and Selling
Transportation
DONE FOR THE DAY