somebody’s
responsibility- it’s
everyone’s
responsibility
8.COMPETITION
4. Generic competition: A
company sees its competitors as
all companies that compete for
the same consumer dollars. LG
would see itself competing with
companies that sell consumer
durables, vacations, furniture etc.
Dr. Rajesh Verma, Lovely Professional University. 4–3
EVOLUTION OF MARKETING
Marketing Management Philosophies
SELLING MARKETING
Selling starts with seller Marketing starts with buyers
Emphasis is on saleable surplus Emphasis is on identification of a
market opportunity
Seeks to quickly convert Seeks to convert customer needs
products into cash into products
Views business as goods Views business as customer
producing process satisfying process
Cost determines price Consumer determines price
Views customer as the last link in Views customer as the very
business purpose of the business
Firm makes the product first & What is to be offered is
then figure out how to sell it determined by the customer
Dr. Rajesh Verma, Lovely Professional University. 4–8
MARKETING TASKS
1. Entrepreneurial marketing:
Most companies are started by individuals who visualize an
opportunity and knock on every door to gain attention.
2. Formulated marketing:
As small companies achieve success, they inevitably move
toward more formulated marketing.
3. Intrepreneurial marketing:
Their brand and product managers start living with their
customers and visualizing new ways to add value to their
customers’ lives.
Dr. Rajesh Verma, Lovely Professional University. 4–9
SCOPE OF MARKETING
The first force is the company itself and the role it plays in the
microenvironment. This could be deemed the internal
environment.
• Top management is responsible for setting the company’s
mission, objectives, broad strategies, and policies.
• Marketing managers must make decisions within the
parameters established by top management.
• Marketing managers must also work closely with other
company departments.
• All departments must “think consumer” if the firm is to be
successful.
Dr. Rajesh Verma, Lovely Professional University. 4–14
II. SUPPLIERS
Marketing intermediaries are firms that help the company to promote, sell, and
distribute its goods to final buyers.
• Resellers are distribution channel firms that help the company find customers
or make sales to them.
• These include wholesalers and retailers who buy and resell merchandise.
• Resellers often perform important functions more cheaply than the company
can perform itself. However, seeking and working with resellers is not easy
because of the power that some demand and use.
Physical distribution firms help the company to stock and move goods from
their points of origin to their destinations. Examples would be warehouses
(that store and protect goods before they move to the next destination).
Marketing service agencies (such as marketing research firms, advertising
agencies, media firms, etc.) help the company target and promote its
products.
Financial intermediaries (such as banks, credit companies, insurance
companies, etc.) help finance transactions and insure against risks.
Dr. Rajesh Verma, Lovely Professional University. 4–16
IV. CUSTOMERS
Company must study its customer markets closely since each market
has its own special characteristics. These markets normally include:
• Consumer markets (individuals and
households that buy goods and
services for personal consumption).
• Business markets (buy goods and
services for further processing or for
use in their production process).
• Reseller markets (buy goods and
services in order to resell them at a
profit).
• Government markets (agencies that
buy goods and services in order to
produce public services or transfer
them to those that need them).
• International markets (buyers of all
types in foreign countries).
Dr. Rajesh Verma, Lovely Professional University. 4–17
V. COMPETITORS
Demography is the study of human populations in terms of size, density, location, age, sex,
race, occupation, and other statistics. It is of major interest to marketers because it involves
people and people make up markets. Demographic trends are constantly changing. Some more
interesting ones are.
1). The world’s population rate is growing at an explosive rate that will soon exceed food
supply and ability to adequately service the population. Emerging markets such as India &
China are receiving increased attention from global marketers.
2). The most important trend is the changing age structure of the population. The population
is aging because of a slowdown in the birth rate and life expectancy is increasing. The new
prime market is the middle age group
Many in the modern family now “telecommute”--work at home or in a remote office and
conduct
their business using fax, cell phones, modem, or the Internet In general, the population is
becoming better educated. The work force is be-coming more white-collar. Products such
as books and education services appeal to groups following this trend. Technical skills (such
as in computers) will be a must in the future. The final demographic trend is the increasing
ethnic and racial diversity of the population. Diversity is a force that must be recognized in the
next decade. However, companies must recognize that diversity goes beyond ethnic heritage.
Dr. Rajesh Verma, Lovely Professional University. 4–21
II. ECONOMIC ENVIRONMENT
The economic environment includes those factors that affect consumer
purchasing power and spending patterns. Major economic trends
include:
• Personal consumption (along with personal debt) has gone up and
the early 1990s brought recession that has caused adjustments both
personally and corporately in this country. Today, consumers are
more careful shoppers.
• Value marketing (trying to offer the consumer greater value for their
money) is a very serious strategy. Real income is on the rise again but
is being carefully guarded by a value-conscious consumer.
• Income distribution is still very skewed and all classes have not
shared in prosperity. In addition, spending patterns show that food,
housing, and transportation still account for the majority of consumer
earnings. It is also of note that distribution of income has created a
“two-tiered market” where there are those that are affluent and less
affluent.
Dr. Rajesh Verma, Lovely Professional University. 4–22
III. NATURAL ENVIRONMENT
The natural environment involves natural resources that are needed as inputs by
marketers or that are affected by marketing activities. During the past two
decades environmental concerns have steadily grown. Some trend analysts
labeled following specific areas of concern:
• Shortages of raw materials. Staples such as air, water, and wood products
have been seriously damaged and non-renewable such as oil, coal, and
various minerals have been seriously depleted during industrial expansion.
• Increased pollution is a worldwide problem. Industrial damage to the
environment is very serious. Far-sighted companies are becoming
“environmentally friendly” and are producing environmentally safe and
recyclable or biodegradable goods.
• Government intervention in natural resource management has caused
environmental concerns to be more practical and necessary in business and
industry.
• Environmentally sustainable strategies. The so-called green movement has
encouraged or even demanded that firms produce strategies that are not only
environmentally friendly but are also environmentally proactive.
Dr. Rajesh Verma, Lovely Professional University. 4–23
IV. TECHNOLOGICAL ENVIRONMENT
The cultural environment is made up of institutions and other forces that affect
society’s basic values, perceptions, preferences, and behaviors. Certain cultural
characteristics can affect marketing decision-making. Among the most dynamic
cultural characteristics are:
1). Persistence of cultural values. People’s core beliefs and values have a high
degree of persistence. Core beliefs and values are passed on from parents to
children and are reinforced by schools, churches, business, and government.
Secondary beliefs and values are more open to change.
2). Shifts in secondary cultural values. Since secondary cultural values and
beliefs are open to change, marketers want to spot them and be able to capitalize
on the change potential. Society’s major cultural views are expressed in: