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    Mm Module 1 Mm Module 1 Document Transcript

    • MARKETING MANAGEMENT MODULE – 1 INTRODUCTION TO MARKETING MANAGEMENT : MEANING OF MARKET : The term market does not necessarily mean any particular place, where goods are bought and sold. A place for the purpose of meeting of buyers and sellers is just a matter of convenience. So, a market may mean either a particular place or the whole of any region. Thus, the term market merely refers to getting together of buyers and sellers of a particular commodity of any region, small or large. In a broader sense, a market is a collection of people sharing a common want or need and who are motivated to enter into exchange process to satisfy need or want. In spatial terms, a market may be local, regional, national or international in scope. MEANING OF MARKETING : Marketing is a comprehensive term and it includes all resources and a set of all activities necessary to direct and facilitate the flow goods & services from producer to consumers in the process of distribution. According to American Marketing Association (AMA) “marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods & services to create exchanges that satisfying individual and organizational objectives”. In other words “marketing is that phase of business activity through which human wants are satisfied by the exchange of goods and services”. Thus, modern marketing concept is of consumer oriented. It analysis the needs of the consumers before the products are produced and offered to sale. MEANING OF MARKETING MANAGEMENT : Marketing Management represents marketing concept in action. It may be defined as the process of management of marketing programmes for accomplishing organizational goals and objectives .Marketing management performs all managerial functions in the field of marketing .It represents an important functional area of business management efforts for the flow of goods & services from the producers to the consumers.
    • The elements of a marketing programme are conceptualized in terms of 4 p’s – product, price, promotion & place. These 4 main elements are known as marketing mix. Product : It includes design, features, quality, range, size, models, appearance, packaging, warranties and name. It also includes presale and post sale services like training for use, repairs, maintenance or replacements. Price : It includes concession on basic price, discounts, rebates, credits, installment facilities and delivery terms. Promotion : It includes advertising, publicity media choices, messages, frequency of exposure, public relations, campaigns, sales promotion, point of purchase, displays etc., Place : It includes retail outlets, wholesalers, transportation, warehousing, inventory levels, order processing procedures etc., EVOLUTION OF MARKETING : PRODUCT ORIENTATION “Some organizations remain at the product orientation stage”. PRODUCT ORIENTATION SALES ORIENTATION “Some organizations have progressed only to sales orientation stage”. PRODUCT ORIENTATION SALES ORIENTATION MARKET ORIENTATION “Many organizations have progressed to the market orientation stage”. Marketing has evolved through 3 successive stages of development, product, and sales & market orientation. Although many firms have progressed to the market orientation Stage, Some are still in the first or second stage, as shown in the above diagram. PRODUCT ORIENTATION STAGE : Manufacturers at this stage typically focused on the quality & quantity of output while assuming that customers would seek out & buy reasonably priced well made products.
    • In this era, the demand for goods generally exceeded the supply, and then the primary focus in business was to efficiently produce large quantities of products. The primary concern of business was how to produce & distribute an adequate quantity of acceptable products to meet the needs of a rapidly growing population. Manufacturers, wholesalers & retailers operating in this stage emphasized internal operations & focused on efficiency & cost control. There was not much need to worry about what the customers wanted because it was highly predictable. Most people spent the vast majority of their incomes on necessities. When this was the prevailing approach to business, the term “marketing was not in use. Producers had sales department , headed by executives whose primary responsibility was simply to carry out a transaction , at a price after dictated by the cost of production. SALES ORIENTATION STAGE : Managers began to realize that to sell their product in an environment where consumers had limited resources & numerous options required substantial post production effort. Thus, the sales orientation stage was characterized by a heavy reliance on promotional activity to sell the products the firm wanted to make. The main economic problem no longer was how to manufacture efficiently, but rather it was how to sell the resulting output. Just offering a quality product was no assurance of success. In this stage , advertising consumed a large share of a firm’s resources & sales executives began to gain respect & responsibility from company management . MARKET ORIENTATION STAGE : In this stage , companies identify what customers want & tailor all the activities of the firm to satisfy those needs as efficiently as possible. Many companies recognized that to put idle capacity to work they had to make available what consumers wanted to buy instead of what the businesses wanted to sell. In this third stage, firms are marketing rather than merely selling. Note that, not every organization needs to be market oriented to prosper. A monopolist selling a necessity is guaranteed of having customers. Therefore, its management should be much more concerned with low –cost, efficient production than with marketing. Potential customers here consider the product to be so superior that they will seek it out. For ex : the world’s best heart surgeons or particularly popular artist find a market for their services regardless of their orientations .
    • ROLE AND IMPORTANCE OF MARKETING : 1) Marketing is a sum of several distinct activities that facilitates the flow of goods from the producers to final consumers. That means, marketing stimulates to division of labour and specialization which contributes to the satisfaction of consumers needs quickly, efficiently and economically. 2) Marketing helps to watch the organization’s human, financial and physical resources with the wants of customers along with maximum economy and efficiency. 3) Customers do not always run to a producer and demand supplies, however useful and valuable the product may be. It must be available when needed, at places they are convenient and at prices that seem reasonable. They have to know what is available, where and at what price. Often they have to be persuaded, that the purchase is beneficial to them. 4) Marketing initiates a company to know its customer’s buying habits which in turn helps the company to decide the ;  Quantity of supplies to be sent to various outlets.  Frequency of such supplies.  Places where the stocks may be held in the meantime  Economical ways and route of transportation 5) Marketing helps to add value, by finding a better match between the product and needs. 6) It reduces wastages, which would otherwise occur if the product is not needed or production does not match demand. 7) It improves effectiveness of communication through better targeting of messages. 8) It cuts the costs, through more effective distribution arrangements. 9) It improves better understanding between the marketing and customer because of increased contracts. 10) Marketing also brings coordination between various levels of operation in a business. Every task is well knit with other tasks and the whole activity is carried out within the set time frame, thereby increasing managerial efficiency and progressive team work. As a manager or as an entrepreneur, you would definitely be interested to improve your market share and expand your business. This you can do better through an understanding of marketing management. It is essential for a marketing professional to identify, respond and adapt to market changes and understand the customer’s need and the market ahead of competitors. Marketing management is concerned with the skills to analyze, plan coordinate and implement the various marketing strategies towards the
    • accomplishment of customer’s requirements and the company’s objectives. It has to;  Plan and develop the product on the basis of known consumer demand.  Build up appropriate marketing plan or marketing mix (product, price, promotion, and place) to fulfill the set goals of the business.  Formulate sound marketing policies and programmes.  Looks after their implementation and control. In marketing management, our major concern is to manage that process which; - Identifies the needs and interests of the customers. - Helps in designing a product or service that matches the customer needs. - Promotes, sells and delivers that product or service. CONCEPTS OF MARKETING : There are 5 Marketing concepts under which organization conducts its marketing activities: Production concept Product concept Selling concept Marketing concept Societal concept PRODUCTION CONCEPT : – It is one of the oldest concepts in business. The production concept holds that the consumers will prefer products that are widely available and inexpensive. Managers of production oriented business concentrate on achieving high production efficiently, low costs and mass distribution. They assume that consumers are primarily interested in product availability and low prices. This orientation makes sure in developing countries where consumers are more interested obtaining the product than its features. It is also used when a company wants to expand its business and market. Some service organization also operates on the production concept. Many medical and dental practices are organized in assembly line principles, as are some government agencies (such as employment offices). Although this management orientation can handle many cases per hour, it is open to chances of impersonal and poor quality service. PRODUCT CONCEPT : Other businesses are guided by this concept, which 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. They assume that buyers admire well made products and can evaluate quality and performance. Product oriented
    • companies often trust that their engineers can design exceptional products. They get little or no customer input and very often they will not even examine competitor’s products. SELLING CONCEPT : It is another common business orientation. It holds that consumer and business if left alone will ordinarily not buy enough of the organization’s products. The organization must, therefore must undertake an aggressive selling and promotion effort. “Sell more stuff to more people more often for more money in order to make more profit”. The selling concept is practiced most aggressively with unsought goods, goods that buyers normally do not think of buying, such as insurance, encyclopedias etc. Most firms practice the selling concept when they have over capacity. Their aim is to sell what they make rather than what the market wants. Sellers have to scramble for customers. Prospects are bombarded with TV commercials, newspaper ads, direct mail and sales costs. At every turn, someone is trying to sell something. Hard selling carries high risks such as bad mouth and negative publicity affecting the goodwill and company’s regulations and thereby affecting its sales/profits. THE SOCIETAL MARKETING CONCEPT : Some have questioned whether the marketing concept is an appropriate philosophy in an age of environment deteration, resource shortages, explosive population growth, world hunger and poverty and neglected social services. Are companies that do an excellent job of satisfying customer’s wants necessary action in the best long run interest of consumer and society. The marketing concept sidesteps the potent ional conflicts among customer wants customer interiors and long run societal welfare. For example, the fast food hamburger industry offers tasty but unhealthy food. The hamburgers have a high fat contents and the restaurant promote fries and pies produce high in starch and fat. The products are wrapped in convenient packing which leads to much waste. In satisfying customer’s wants, these restaurants may be hurting customer heath and causing environmental problems. Hence , the Societal Marketing concept holds that the organization task is to determine the needs , wants and interests of target markets and to develop and deliver the desired satisfaction more effectively and efficiently than competitors in the way that preservers or enhances the customer and the society’s well being. The Societal marketing concept calls upon marketers to build social and ethical considerations into there marketing practices. They must balance and juggle the often conflicting criteria of company profits, consumer satisfaction and public interest.
    • THE MARKETING CONCEPT : The Marketing concept holds that the key to achieving its organization goals consist of the company being more effective than competitors in creating, delivering and communication superior customer value to its chosen target markets. This can be explained in many ways • Meeting needs profitably • Find wants and fill them • Love the customer not the product • Putting people first and so on. The marketing concept rests on four pillars, • Target market • Customer needs • Integrated marketing • Profitability Target Market : The markets can rarely satisfy everyone in a market. E.g., Not everyone likes same soft drinks, automobiles etc. Therefore marketers, start by dividing up the market they identify and profile distinct groups of buyers who might prefer or require varying product and service mixes. Market segments can be identified by demographic method. Thus the market decides which segment presents the greatest opportunity is called ‘Target Marketing’. For each chosen target market offering, the offering is positioned in the minds of target buyers. For e.g., Volvo develops its cars for buyers to whom automobile safety is major concern. Customer needs : Companies do best when they choose their target market but fail to correctly understand the customer needs Understanding customer needs and wants is not always simple. Some customers have needs of which they are not fully conscious or they cannot articulate these needs. For example, the customer asks for an inexpensive car, a powerful lawn mover etc. An inexpensive car to a customer means he needs a care whose operating cost is low and it should give him good service hence the market should produce a care which includes both the qualities to satisfy his customer.
    • Integrated Marketing : When all the companies department works together to server the customers interests results in integrated marketing. Profitability : The ultimate purpose of marketing concept is to keep organizations achieve their objectives. In the case of private firms the major objective is long run Profitability. In the case of non profit and public organizations it is serving and attaching enough funds to perform useful work. DIFFERENCE BETWEEN SELLING AND MARKETING Sl. Sl. no SELLING no MARKETING 1 Selling is a promotional effort 1. Marketing is to achieve organizational . which focuses mainly on the goals by being more effective in sales of the company output. creating, delivering and communicating customer value. It is like forcibly pushing the 2. It is pulling strategy where the product 2. product into the market is sought by the customer himself (pushing concept). (pulling concept). It requires aggressive 3. It requires only well planned, customer 3. marketing strategy. oriented marketing strategy. It focuses on needs of a seller. 4. It focuses on the needs of a buyer. 4. It is preoccupied with sellers 5. It is customer satisfaction which seller 5. needs to convert his product converts into cash(profit). into cash (profit). Customer may show buying 6. Customer gets attracted with the 6. inertia or resistance and must product and lays the product according be co-axed into buying. to his/her wish and will.