LECTURE 01

INTRODUCTION TO MARKETING

Contents

Concept of Marketing Nature of Marketing Integrated Marketing Concept Marketing Activities Concept of Market Micro and Macro Marketing Evolution of Marketing Contd.

Contents (Contd.)

Marketing Philosophies Modern Marketing Concept Selling vs. Marketing Marketing Bridges Gap b/w Producer and Seller Scope of Marketing Functions of Marketing Importance of marketing Modern Marketing Process

Concept of Marketing
Meaning & Definition Marketing provides Utility

Concept of Marketing

Identifying and meeting human and social needs Meeting needs profitably AMA: Marketing is an organizational function and set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

Concept of Marketing (Contd.)

Social Definition (Philip Kotler): Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering and fully exchanging products and services of value with others. Peter F. Drucker: The aim of marketing is to make selling superfluous To know and understand the customer so well that the product or service fits him

Concept of Marketing (Contd.)

Marketing satisfies needs by providing UTILITY

Form Utility Conversion of I/T into O/T Person Utility Establishing Contact with the Cr Exchange Utility Transferring Gs to Br (Introducing Money; Banking and Financing) Place Utility Physical Distribution & Logistics (Transporting, Storage, Pkging; Insce) Time Utility Providing goods when needed (Warehousing)

Nature of Marketing

Nature of Marketing
1.

Customer & Competitor Directed

COMPETITOR EMPHASIS Major Major Market Driven CUSTOMER EMPHASIS Minor Competitor Oriented Minor Customer Oriented Self Centered

Nature of Marketing (Contd.)

2.

Delivers Value
Customer

Value = Total Benefits Total Cost Perceived monetary value of the bundle of economic, functional and psychological benefits that consumers expect from a given market offering TC Evaluating, Obtaining, Using and Disposing of the given market offering
3.

4.

Creation of mutually relationships Aims cr satisfaction

beneficial

Nature of Marketing (Contd.)

6.

Marketing is Business
Goal

Orientation Exchange for Money Profit Focus

6. 7. 8. 9.

Part of total envt. Discipline System and Process Integrated process

Integrated Marketing Concept

Integrated Marketing Concept

Many different marketing activities communicate and deliver Value and When coordinated, marketing activities maximize their joint effort

Marketing Activities

Marketing Activities

Sellers View 4 Ps (McCarthy) Buyers View SIVA

S -Solution problem? I -Infon. about it? V -Value sacrifice to get it? A -Access How can I solve my How can I learn more What is my total Where can I find it?

Concept of MARKET
What is Marketed Who Markets

Concept of Market

What is Marketed?
1. 2. 3. 4. 5.

Goods Services Events Experiences Persons

Concept of Market (Contd.)

What is Marketed?
6. 7. 8. 9. 10.

Places Properties Organizations Information Ideas

Concept of Market (Contd.)

Who Markets? 1. Marketers and Prospects

Eight demand states: Negative

demand: consumers dislike the product and may even pay a price to avoid it. Nonexistent demand: consumers may be unaware or uninterested in the product. Latent demand: consumers may share a strong need that cannot be satisfied by an existing product. Declining demand: consumers begin to buy the product less frequently or not at all.

Concept of Market (Contd.)

Who Markets? 1. Marketers and Prospects

Eight

demand states: -

Irregular

demand: consumer purchases vary on a seasonal, monthly, weekly, daily, or even hourly basis. Full demand: consumers are adequately buying all products put into the marketplace. Overfull demand: more consumers would like to buy the product than can be satisfied. Unwholesome demand: consumers may be attracted to products that have undesirable

Concept of Market (Contd.)

Who Markets? 2. Markets

Traditional Place where Br and Sr gathered to buy and sell goods S Constitutes Industry B Constitutes Market

Types Consumer Market Business / Industrial Market Non-Profit Market Global / International Market

Concept of Market (Contd.)

3.

Who Markets? Market Places; Market Spaces; and Metamarkets

Market Place : Market Space : S.& B. and www Meta-Market : Mohan

Physical Digital Virtual world where meet through internet Northwestern Universitys Sawhney: -

Cluster of complementary products & services that are closely related in the minds of consumers but spread across a diverse set of industries.

Micro & Macro marketing

Micro & Macro marketing

Micro Marketing

Process of formulating and implementing such strategies by a firm (4 P Decisions) that ensures flow of need satisfying Gs and Ss at profit Marketing is a total system of interacting business activities designed to plan, price, promote and distribute want satisfying products & services to present and potential customers

Stanton:

Micro & Macro marketing

Macro Marketing
Complex

system of organizations and processes by which a nations resources are distributed amongst people to satisfy their needs and wants How effectively society uses its resources Functions: Information Function Equalizing and Distribution Function Centralized Exchange Function

Evolution of Marketing
Evolution Comparison of:

Production Orientation; Marketing Orientation; & Customer Orientation

Evolution of Marketing

Evolution of Marketing (Contd.) PROD . MKTG. BASIS

N

ORIENTATION

ORIENTATION

CUSTR ORIENTATION
through

FOCUS STRESS EMPHASIS AIM

Push the product inAnalyze custr the market create demand Production Deptt. Product

andCustomer Satisfaction Pdt. Pdn and Mktg Deptts/ All Deptts. Consumer

PHILOSOPHY

Consumer satisfaction Profit through sale ofProfit throughProfit through a successful product assessment ofincreased sale as a Consumer Behaviorresult of customer and placing the pdtsatisfaction accordingly To sell what could beTo sell what isTo produce what is produced produced by creatingwanted and what demand artificially should give satisfaction to the consumers.

Marketing Philosophies
(Changing Concepts of Marketing)

Marketing Philosophies
1.

Production Concept
Belief

: in cost & Focus : efficiency

Cr favors products that are widely available Mass Prodn High Production

Mass Distn Wide Distn Cr interested in getting quality products at cost with assured supply.

Marketing Philosophies (Contd.)

2.

Product Concept
Belief most Focus Cr will favor those products that offer Qlty, Perfce & Features : Making good Products Improving them over time Leads to Marketing Myopia
Professor

Thoedre Levitt Crooked perception of marketing & a short sightedness about business Undue concentration on the product rather than on the need Inadequate understanding of the market

Marketing Philosophies
3.

Selling Concept

Belief : selling Focus :

Organization must make aggressive promotion effort Hard Selling

Marketing Philosophies
4.

Marketing Concept
Belief : Key to achieving organizational goals consists in determining the needs and wants of target markets and delivering desired satisfaction more effectively and efficiently than competitors Focus : C. Satis. through better offerings

Marketing Philosophies (Contd.)

5.

Societal Marketing Concept

Organizations task is to determine the needs, wants and interests of target markets & to deliver the desired satisfaction more effectively and efficiently than competitors in a way that preserves or enhances the customers and societys well-being.

Marketing Philosophies (Contd.)

CHARACTERISTIC Production Orientation Product Orientation Present Selling Orientation Present Marketing Orientation Present Desire to capitalize Dominant on synergies and efficiencies in production process Attention to Not Pertinent designing and production of a quality product Dedicated resources Not Pertinent to stimulating interest and desire for product purchase Focus on identifying Not Pertinent and satisfying needs and wants of customers Consideration of the Not Pertinent short and long term effects of actions on customers and on society Societal Marketing Orientation Present

Dominant

Present

Present

Present

Not Pertinent

Dominant

Present

Present

Not Pertinent

Not Pertinent

Dominant

Present

Not Pertinent

Not Pertinent

Not Pertinent

Dominant

Modern Marketing Concept

Nature Foundation Importance Limitation

Modern Marketing Concept

Nature
1. 2. 3. 4. 5. 6.

Customer Orientation Marketing Research Marketing Planning Integrated Marketing Systems approach Customer Satisfaction

Modern Marketing Concept (Contd.)

Foundation
Achieving Goals by meeting Customer Needs

Customer Orientation

Integrated Marketing

Profit to follow Customer Satisfaction

Modern Marketing Concept (Contd.)

Importance
1. 2. 3. 4. 5.

Product Acceptability Efficiency in marketing operations Rational Decision Making and Problem Solving Sustained growth of the organization Effective mgmt of environment

Limitation Ignores social perspective of business

Marketing vs. Selling

Marketing vs. Selling

Selling

Procuring orders from Customers and delivery of products Design of products acceptance to Cr and transfer of ownership from the Sr to Br

Marketing

Marketing vs. Selling (Contd.)

BASIS Focus Emphasis
Aim Approach Process Belief Strategy

SELLING Sellers Needs Pdt. Orientation

MARKETING Buyers needs Customer needs and wants Sales Volume = CS = Fragmented Integrated Convert pdts. to cash Convert Cs needs to pdts Caveat Emptor Caveat vendor High pressure selling Pdt planning & to sell goods already development to produced match pdts with mkts

Marketing vs. Selling (Contd.)

BASIS Pricing Planning Business View Ideology SELLING Cost determines price Short-run Goods producing process MARKETING Consumer determines price Long-run Consumer satisfying process

Existing technology Innovation; providing and decreasing costs better value to customers

Customer Last link in business Very purpose of View business

Marketing Bridges Gap b/w Producer and Seller

Marketing Bridges gap b/w Pr & Cr

1. 2. 3. 4. 5. 6. 7.

Spatial Separation Temporal Separation Separation of Information Separation of Values Separation of Ownership Discrepancies of Quantity Discrepancies of Assortment

Scope of Marketing

Scope of Marketing

Product Policy and Planning Marketing research Motivation research Test marketing Distribution Channels Transportation Warehousing Sales planning Sales Targets Expense Limits

Scope of Marketing (Contd.)

Sales Management Recruitment T & D Sales Targets Incentives Performance Appraisal Miscellaneous 4 Ps Packaging

Functions of Marketing

Functions of Marketing
1.

2.

3.

Functions of Research 1. Marketing Research 2. Product Planning and Development Functions of Exchange 1. Buying 2. Assembling 3. Selling Functions of Physical Treatment 1. Stdzn, Grading & Branding 2. Packaging

Functions of Marketing (Contd.)

3.

4.

Functions of Physical Treatment (Contd.) 1. Storage / Inventory mgmt / Warehousing / Material Handling 2. Transportation Functions of Facilitating Exchange 1. Salesmanship 2. Advertising 3. Pricing 4. Financing 5. Insurance

Importance of Marketing

Importance of Marketing

Marketing affects our lives Marketing satisfies our needs Generates revenues for the business firms Marketing and Economy

Modern Marketing Process

Modern Marketing Process

Customer Demand through Market Research

Market Anticipation

Producers

Goods Flow

Marketing Mix

Goods Flow

Customers

Exchange something of Value