Introduction toMARKETING Gururaj Phatak B.Sc, MBA (PhD)
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What is Market?• “Market” is a public place in a town or village, where household provisions are and other objects are available for sale.• The Essentials of Market are:• A Commodity/Item/ Good which is dealt with.• The existence of Buyers & Sellers• A Place; be it a certain region• Interaction between Buyers And Sellers to facilitate transactions
Classification of Markets Market On the basis of On the basis of Nature ofOn the Basis of Nature of Goods Sold:Geographic Area: Competition :Local Market Consumer Good Market i.e. Perfect Market FMCGRegional Market Imperfect Market: Industrial Good MarketNational Market Monopoly B2BInternational Market Oligopoly Non Profit Market Government Market
Classification of Markets: On the Basis of Geographical Area: Local Market: is the place where purchase and sale of goods/services involve buyers and sellers of a small local area The example of local market is a village or a town, market. In this market day today requirement like vegetables, fruits, etc are sold Regional Market: where the purchase and sale of goods involve buyers and sellers of a region, such as large town market catering to needs of a group of villages or towns, such market is common in wholesale/retail sale of food grains. National Market: when a purchase and sale of goods involve both buyers and sellers of the entire nation then it is called as national market. This type of market in the case of commodities such as Cotton and Textiles Market located in Mumbai. Tea Market located at Kolkata. With the advance of IT this concept getting obsolete, you can operate in any market sitting in your town or city International Market: when the purchase and sales of goods involve buyers and sellers of many nations it is said as International Market
Classification of Markets:On the basis of nature of Competition:Perfect Market: There is equal numbers of Buyers & SellersImperfect Market: Difference between numbers of Buyers & SellersThis involved three types Monopoly Monopolistic And Oligopoly( these concepts are discussed in detail in “ PRICING” unit)On the basis of nature of Goods Sold:Consumer Market: a consumer goods market is defined as a market where the finaloutput of the firm goes for the consumption of individual household.Industrial Good Market: a business market is defined as a market where output ofone firm goes either raw material, goods in process or as consumables of anotherindustry.Non profit Organization: such as Social Service organizations, EducationalInstitutions,Government Market: Government which is a large buyer, makes purchases on thebasis of tenders, bids etc
Defining Marketing:According to American Marketing Association (AMA)Marketing is defined as:“Marketing is an organization function and a set of processfor creating, communicating and delivering value tocustomers and for managing customer relationships in waysthat benefit the organization and its stakeholders”
The Exchange Process: Rs 1200/- FLOW OF MARKET FLOW PRODUCERS GOODS AND & Place of of SELLERS SERVICES Exchange MONEY The process of obtaining a desired Product from Someone (Producers and Sellers) by offering something in return (Money). BUYERS -Philip Kotler or CONSUMERS
Conditions of Exchange PROCESSEach party has something that could be value to otherparty.Each party has desire, willingness & ability to exchange.Each party is capable of communicating and delivering.Each party has the freedom to accept or reject the offer.
THE CORECONCEPTS OF MARKETING 1. NEED 2. WANT 3. DEMAND 4. PRODUCT AND SERVICES 5. VALUE AND SATISFACTION 6. QUALITY 7. RELATIONSHIP(CRM) 8. STP
Need:Needs are the human basic requirements of food, clothing, shelter, water,and air.We can distinguish among 5 types of needs.Stated needs: the customer wants an inexpensive car.Real needs: the customer wants a car whose operating cost, not just itsinitial price is low.Unstated needs: the customer expects good service from the dealerDelight needs: the customer would like the dealer to include an onboardnavigation system.Secret needs: the customer wants to be seen by friends as savvyconsumer
Wants:Wants are the specific objects might satisfy the need.Ex: when a person is hungry.Need- food,Want: simple meal in home, or pizza fromor a burger. “Marketer create wants rather than needs”
Demands:Demand for a commodity or a product implies:Desire to acquire it,Willingness to buy,Ability to pay for it.In market if price of a product increases demand for the sameproduct decreases and vice versa.Ex: KSRTC Bus rates increases the demand for travelling inbus decreases. The consumer prefer trains rather than busHubli to Gadag Bus fare is 35 but for train is 10 rupeesrespectively.
Product and services:Product: A product is anything that can beoffered to a market for attention, acquisition, use,or consumption that might satisfy a want or need.Ex:Service: any act or performance that one party can offer toanother party is essentially intangible and does not result inthe ownership of anything
Value and Satisfaction:Value is primarily function of Quality, Service and costCustomer Value:Is the total difference between Total Benefits Received and Total Costincurred by him/her in acquiring product or services. Customer Value = T.B.R - T.C.Ex: Apple Inc Products.
Satisfaction:“A Person’s feelings of pleasure or disappointment resulting fromcomparing products perceived performance or a outcome in relation tohis or her expectations.”Levels of satisfaction: My satisfaction level about suits.1. If a product/service meets his/her expectation : Satisfied2. If a product/service does not meets his/her expectation: Dissatisfied3. If a product/service exceeds his/her expectation : Delighted1.ex: 3. ex:2.ex:
Target Market:A part of the qualified available market the company decides topursue is known as Target Market.Ex:Quality: In marketing what customer says aboutproduct or service that is your quality.Ex:
Marketing Information,Functions of Marketing Research & Information MR& Projects, Segmentation, DistributionMarketing Cost AnalysisManagement Product & Product Research, NPD, Pricing Packaging, branding, pricing, warranties, After sales services Department Sales Forecasting, of Planning & Marketing Mix, Marketing Control Annual Marketing Plans, Management Budgeting &control Management Development Promotion & Sales Force control, Advertising and Publicity, (Marketing Management of Public and communication) Government Relations Channel Choice & Decisions, Transport, Warehousing, Insurance, Distribution Order Processing, Protective Packaging, Inventory Control
The Product Concept:The consumers will prefer those products that offer Quality,Performance or Innovative features.Managers in such companies focus on developing superior productsand improving existing product lines by devoting time to innovations.Concept of Marketing Myopia :A company wants to sell and market to their segment audience and Fromtries to get them to buy their product through marketing practices butfail to make the audience realize how that product is going to improvetheir lives or businesses by purchasing it. It is a short-term approachto marketing and lacks long term vision.Marketing Myopia is the failure to define an organizations purpose interms of its function from the consumers point of view. For example,railway companies that define their markets in terms of trains, ratherthan transportation, fail to recognize the challenge of competitionfrom cars, airlines, and buses. It is therefore necessary to define theneeds of the consumer in more general terms rather than product-specific terms.Marketing Myopia is the short sighted look of the managers inwrongly identifying the category and goals of the company, notlooking at the whole industry of the product neglecting the fields ofopportunities in their area of industry, not listening to the customersreal needs.
Production Concept: One of the oldest concepts of the marketing. It assumes that consumers will prefer those products and services that are easily affordable. Companies which adopt this philosophy for their marketing should focus on production and distribution efficiency.Selling Concept: It assumes that consumers generally will not buy a company’s products unless aggressive selling and promotion efforts are undertaken. The problem with this approach is the belief that the customer will certainly buy the product after persuasion and will not complain even if dissatisfied. In reality this does not happen and companies pursuing this concept fail in business. This approach is applicable in Insurance, Vacuum Cleaners that buyers do not think of buying only.
Marketing Concept: The process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational goals. This starts with Identifying from Market research, exacts needs & wants of the target market.The Differences between Selling and Marketing Concepts:Selling Concept: Marketing Concept: Emphasis on Product. Emphasis on customer needs and wants Goal is to sell what is to produced. Goal is to produce what is needed by the customer Aggressive sales & Promotion is used All departments of the company work together for serving the customers Objective is profit through sales Objective is profit through customer volume satisfaction
Social Responsibility Marketing (CSR) Or Societal Marketing Concept: This marketing concept emphasizes that the key task of the company is not only determine the needs and wants of the target market and delivering the desired satisfaction but also to preserve and enhance the consumers and society’s overall well being. This concept call upon marketers to build social, ethical, and environmental considerations in to their marketing practices. Green Marketing: The concept of marketing which deals with eco-friendly products to fulfill the needs of the society. Ex: in 1994 branded its “Earthlight”, Eco-friendly, energy saving, fluorescent bulbs.
Holistic Marketing Concept:A concept based on the development, design and implementation of marketing programs,processes and activities that recognizes their interdependencies. Marketing Department, INTERNAL Senior MARKETING Management, Other Departments. Holistic Marketing Communications INTEGRATED Product Concept & MARKETING Services, Channels. Customers, Channel, RELATIONSHIP Partners. MARKETING
Internal Marketing: It is the task of hiring, training, and motivating able employees who want to serve customers well. Internal Marketing takes place at two levels: 1. Various Marketing Functions: Sales Force, Advertising, Customer Service, Product Management, Market Research. 2. Coordinating with Other Departments: “ Think Customer” Philosophy.
Integrated Marketing:Mixing and Matching Marketing Activities to Maximize their individual and Collective Efforts.What is Marketing Mix:According to McCarthy :“ The set of Marketing tools the firms uses to pursue its Marketing Objectives”According to him 4Ps ofMarketing are:Product 4CsPrice 4PsPromotion Product Customer SolutionPlace Price Customer Cost Promotion Communication Place Convenience
Relationship Marketing: The Concept of Marketing Which emphasis on building mutually satisfying long term relationships with key parties in order to earn and retain their business. CRM PRM Its has 2 Major Parts: Customer Relationship Management Partner Relationship Management Is about acquiring, Activities of the firm This leads to Build,developing and retaining undertakes to build mutually satisfying long Marketing Network:satisfied loyal customer, term relations with keyachieving profitable partners such asgrowth and creating suppliers, distributors, ad The company and its supportingeconomic value in agencies, and marketing stakeholders(customers, employees,companys brand. research suppliers. suppliers, distributors, retailers, ad agencies, university scientists and others)with whom it has built mutually profitable relationships.