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1 overview

  1. 1. CONCEPTS IN MARKETING OVERVIEW OF CONTEMPORARY MARKETING Prof: P.C.Mehra Professor of Marketing International Management Institute
  2. 2. What is marketing ? Nothing but organized common sense !!
  3. 3. EVOLUTION OF MARKETING  Science of Marketing as old as mankind  Barter of goods  Concept of exchange  Industrial revolution resulted in spurt in production  Post war era resulted in manifold increase in availability  Emerged concepts of today’s marketing
  4. 4. MARKETING IN THE LAST 50 YEARS Era of the 50’s Production driven What is made will be sold 60’s to mid 80’s Sales driven Somehow sell Mid 80’s to late 90’s Customer Orientation Make what will satisfy customer needs & wants Now Customization Focus on the Individual as a customer
  5. 5. The New Economy  Substantial increase in buying power  A greater variety of goods and services  A greater amount of information about practically anything  A greater ease in interacting and placing and receiving orders  An ability to compare notes on products and services
  6. 6. The New Economy  Websites can provide companies with powerful new information and sales channels.  Companies can collect fuller and richer information about markets, customers, prospects and competitors.  Companies can facilitate and speed up communications among employees.  Companies can have 2-way communication with customers and prospects
  7. 7. The New Economy  Companies can send ads, coupons, samples, information to targeted customers.  Companies can customize offerings and services to individual customers.  The Internet can be used as a communication channel for purchasing, training, and recruiting.  Companies can improve logistics and operations for cost savings while improving accuracy and service quality.
  8. 8. Adapting Marketing to the New Economy  How Business Practices are Changing  From organizing by product units to organizing by customer segments  Shift focus from profitable transactions to customer lifetime value  Shift focus from financial scorecard to also focusing on the marketing scorecard  Shift focus from shareholders to stakeholders
  9. 9. Adapting Marketing to the New Economy  Everyone does the marketing  Build brands through performance, not just advertising  Customer retention rather than customer acquisition  From none, to in-depth customer satisfaction measurement  From over-promise, under-deliver to under- promise, over-deliver
  10. 10. Adapting Marketing to the New Economy  How Marketing Practices are Changing: Customer Relationship Marketing  Reduce rate of customer defection  Increase longevity of customer relationship  Enhance growth potential through cross-selling and up-selling  Make low profit customers more profitable or terminate them
  11. 11. Defining marketing  Peter Drucker…. the only valid purpose of business is the creation of a customer.  Peter Doyle…. Selling is making people want what you’ve got, while marketing is selling people what they want.  Theodore Levitt….People buy solutions to problems, not products, and successful marketers are problem solvers.
  12. 12. MARKETING “ Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering and freely exchanging products and services of value with others.” -Philip Kotler
  13. 13. MARKETING “Marketing is getting the right goods & services to the right people at the right time, at the right place, at the right price with the right communications & promotions” -- American Marketing Association
  14. 14. The Scope of Marketing  Places  Properties  Organizations  Information  Ideas  Goods  Services  Experiences  Events  Persons Marketing of any or all of the following:
  15. 15. IMPLICATIONS OF MARKETING  Understanding consumer buying behaviour  Designing products to satisfy customer needs  Understanding the customers price sensitivity / threshold level  Understanding & planning for competition  Identifying the relevant customer group(s)  Creating visibility & availability  Constantly remaining in touch with the market
  16. 16. Production ConceptProduction Concept Product ConceptProduct Concept Selling ConceptSelling Concept Marketing ConceptMarketing Concept Consumers prefer products that are widely available and inexpensive Consumers favor products that offer the most quality, performance, or innovative features Consumers will buy products only if the company aggressively promotes/sells these products Focuses on needs/ wants of target markets & delivering value better than competitors Company orientations towards the market place
  17. 17. PRODUCTION CONCEPT  The production Concept holds that consumers will prefer products that are widely available and inexpensive  Usually applicable in situations where demand outstrips supply  Concentration on high production and low costs as also mass distribution
  18. 18. PRODUCT CONCEPT  The Product Concept holds that consumers will favour those products that offer the most quality, performance or innovative features.  Indicates an obsession with the product  Believes a good product will sell automatically  Referred to as Marketing Myopia
  19. 19. SELLING CONCEPT  The Selling Concept holds that consumers & businesses, if left alone, will ordinarily not buy enough of the organization's products. The organisation, must therefore, undertake aggressive selling and promotion.  Companies aim to sell what they make rather than make what they sell  Usually adopted by companies having excess capacity or unsought products.
  20. 20. THE MARKETING CONCEPT  The Marketing Concept holds that the key to achieving organisational goals depends on determining the needs & wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors do.  The Marketing Concept thus focuses on the customer - begins with the customer ( determining needs & wants) and ends with the customer (ensuring customer satisfaction)
  21. 21. SOCIETAL MARKETING CONCEPT  The Societal Marketing Concept holds that organisational task is to determine needs, wants and interests of the target markets and to deliver the desired satisfaction more effectively & efficiently than competitors in a way that preserves or enhances the consumer’s & society’s well being. Society (Human welfare) Company (Profits) Consumers (want satisfaction)
  22. 22. MARKETING PHILOSOPHIES : a comparative analysis Concept Focus Means End Production Production Wide distribution Profit through low cost, high volume Product Product Quality Profit through superior product Selling Product Selling & promotion Profit through volumes Marketing Customer needs Integrated marketing Profit through customer satisfaction
  23. 23. Product vs Market orientation Marketing is a function which adds value to a business Product Orientation Marketing Orientation AVON We sell cosmetics We sell hope XEROX We sell copiers We help improve office productivity COLUMBIA PICTURES We make movies We market entertainment
  24. 24. Marketing Myopia --Theodore Levitt  There is no such thing as a growth industry. Companies are organized & operated to create & capitalize on growth opportunities. Companies must respond to market requirements & must think of themselves as creators and satisfiers of customers rather than a producer of goods and services. The firm must adopt a broad and dynamic view of market opportunity.
  25. 25. Selling & Marketing a comparative analysis  Theodore Levitt in his classic article Marketing Myopia says:  Selling focuses on the needs of the seller while marketing focuses on the needs of the buyer  Selling is pre-occupied with the seller’s need to convert his product into cash, while marketing is satisfying the needs of the customer by delivering value through a product  In selling costs determine price, whereas in marketing customer determines price  Selling has a short term orientation towards today’s products & markets, while marketing has a long term orientation with focus on emerging trends & opportunities besides new products & markets.  “ The aim of Marketing is to make Selling superfluous” ….Peter Drucker
  26. 26. Contrasts between the Selling concept and the Marketing concept
  27. 27. Customers Front-line people Middle Management Top Management Traditional Organization Chart
  28. 28. Customers Front-line people Middle management Top manage- ment C ustom ers Custom ers Customer-Oriented Organization Chart
  29. 29. Product or OfferingProduct or Offering Value and SatisfactionValue and Satisfaction Needs, Wants, and DemandsNeeds, Wants, and Demands Exchange & Transactions Relationships & Networks Exchange & Transactions Relationships & Networks Target Markets & SegmentationTarget Markets & Segmentation Marketing ChannelsMarketing Channels Supply ChainSupply Chain CompetitionCompetition Marketing EnvironmentMarketing Environment Core Concepts of Marketing
  30. 30. The customer as the controlling function and marketing as the integrative function Customer Marketing Production Hum an resources Finance Evolving views of Marketing’s role
  31. 31. Some core Marketing concepts  Target market…..implying market focus  Customer needs….implying customer orientation  Profitability…implying profit through customer satisfaction  Integrated marketing….the entire organization THINKS customer first*  * “ Marketing is far too important to be left only to the Marketing department”…..David Packard, Hewlett-Packard
  32. 32. Assignment  Think of your own organization from which you come from, and answer the following:  Was your organization marketing oriented…illustrate ?  Did it need to be ?  If it was marketing oriented, how customer focused was it… illustrate ?  What was the effect of its marketing orientation….illustrate?  If it was not, in retrospect, how could it have changed its orientation and to what effect?

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