Marketing Management

1. • Marketing Management

2. Chapter 1
Overview of Marketing and
Marketing Management

3. Outline
• Introduction
• What is Market?
• Types of Markets
• What is Marketing?
• Importance of Marketing
• Scope & Functions of Marketing
• Role of Marketing Management
• Marketing Process
• Marketing Mix
• Summary

4. Introduction (1)
• Marketing is the most important functions of
any marketing of goods, services, events and
etc. in organization
• Marketing is simple, yet complex.
• We are all involved in marketing and: “the
history of marketing is that it is one of man’s
oldest activities and yet it is regarded as the
most recent of the business disciplines (Baker,
1976).

5. Introduction (2)
• Marketing came into existence with the first
barter exchange, when someone realized that
exchanges add value for both parties.
• This was the first real step forward in economic
development.
• Marketing has evolved (like other practices such
as architecture, medicine, engineering) over the
centuries to where it is today (Michael Baker).

6. Introduction (3)
• According to Peter Drucker, the first test of any
business is not the maximization of profit but
the achievement of sufficient profit to cover
the risks of economic activity and thus avoid
loss.
• Customers are the foundation of a
business and their purpose of existence.
• In other words, customers are the mainstay of
the business.

7. Introduction (4)
• As Peter Drucker puts it: There is only one valid
definition of business purpose: to create a
customer.
• It is the customer who determines what
business is…
• What the business thinks it produces is not of
first importance to its success in the market
place.
• Marketing is the human activity directed at
satisfying human needs and wants through an
exchange process Where?

8. What is a market?

9. What is a market? (1)
• “A market consists of all the potential
customers sharing a particular need
or want who might be willing and
able to engage in exchange to satisfy
that need or want” (Philip Kotler).

10. What is a market? (2)
• Market can defined with different
perspectives
• 1. Place concept: A market may be
considered as convenient meeting
place where buyers and seller gather
together for exchange of goods. We go
to buy shoes, clothes, vegetables, fruits,
etc., to nearby places in our city.

11. What is a market? (3)
2. Area Concept: It is the economic concept. Any
area providing a set of price-making forces
may become a market; we need three
conditions:
1. Unmet wants
2. Products to meet this demand
3. Means of interaction or intercommunications
so that forces of demand and supply can
interact to determine the price without face-
to-face meeting of seller and buyer.

12. What is a market? (4)
• 3. Demand Concept: Today, a market is
equated with the total demand.
• Hence, market means a group of people
having unmet wants, purchasing power to
make their demand effective and the will to
spend their income to fulfill those wants.

13. What are the types of market?

14. TYPES OF MARKETS (1)
• There are a number of market
1. On the basis of selling area, we have
local, national and international markets.
2. On the basis of article of trade, we have
products markets, eg., cotton market,
bullion market.
3. On the basis of nature of exchange
dealings, we have spot or cash market
and futures or forward market.

15. TYPES OF MARKETS (2)
4. On the basis of nature of goods sold, we have
consumer goods market and industrial goods
market.
5. On the basis of period, we have short-term
and long-term markets, eg., money market for
short-term funds and capital market for long-
term funds.
6. On the basis of nature and magnitude of
selling, we have wholesale and retail market.

16. Types of Market (3)
• In general, market can be classified into two
• Consumer markets
• Business markets

17. What is Marketing?

18. What is Marketing?(1)
• Almost every marketing textbook has a
different definition of the term “marketing.”
The better definitions are focused upon
customer orientation and satisfaction of
customer needs;
• The American Marketing Association (AMA)
uses the following: “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 objectives.”

19. What is Marketing? (2)
• Philip Kotler uses, “Marketing is the social
process by which individuals and groups
obtain what they need and want through
creating and exchanging products and value
with others.”
• The Chartered Institute of Marketing (CIM),
“Marketing is the management process that
identifies, anticipates and satisfies customer
requirements profitably.”

20. What is Marketing? (3)
• To summarize then we can see that a simple
definition of marketing would be,
• “The right product, in the right place, at the
right time, at the right price,” Adcock et. al.
• This is a succinct and practical definition that
uses Borden/McCarthy’s 4Ps – Product, Price,
Place & Promotion, which are covered in
Chapter the following chapters.

21. What is Marketing? (4)
• Origin of Marketing
• Hundred years ago, most firms were
production-oriented, i.e., the manufactures
focused on production of quality products and
then looked for people to purchase them.
• With technological transformation, the
emphasis shifted to an effective sales force to
find customers for their growing output.

22. What is Marketing? (5)
• After 1950, the shift to marketing was so
emphatic that the manufactures first took into
consideration the customers’ wants and then
manufactured their goods accordingly.

23. Market Orientation
• Production Orientation
--1850s -> 1930s
• Sales Orientation
-- 1930s -> 1950s Time
• Marketing Orientation
-- 1960s -> ??
• Consumer Relationship Marketing (CRM)
-- 1990s -> ??
What is Marketing? (6)

24. What is Marketing? (7)
• Production Orientation
• Focus on the means of production,
and assumes customers will want
the product/service.

25. What is Marketing? (8)
•Product Orientation
• Focus on the technical perfection of
the product/service seen through
the producer’s (firm) eyes.
• Assumes customers will perceive
product/service in the same way
and thus buy.

26. What is Marketing? (9)
• Selling Orientation
• Focus on persuading (usually aggressive)
customers to buy products which do
not usually match their
requirements. This is unlikely to
lead to repeat buy/business.

27. What is Marketing? (10)
• Customer Orientation
• Focus on discovering customer
needs (basic survey/question & answer type)
and satisfying them. This is unlikely
to make best uses of production and
other organizational resources.

28. What is Marketing? (11)
• Marketing Orientation
• Focus on the identification of customers
needs, organizational resources and
objectives. Achieve effective match
through market segmentation, targeting,
positioning and resource development
(see also Role of Marketing).

29. •Core Marketing Concept

30. Core Marketing Concepts
Products
and
Services
Value, satisfaction,
and quality
Needs, wants,
and demands
Exchange, transactions,
and relationships
Markets
Core
Marketing
Concepts

31. Basic Questions
• What Motivates a Consumer to Take Action?
• What Will Satisfy Consumer’s Needs and
Wants?
• How Do Consumers Choose Among Products
and Services?
• How do Consumers Obtain Products and
Services?
• Where to obtain?

32. What Motivates a Consumer to Take Action?
• Needs - state of felt deprivation for basic items such
as food and clothing and complex needs such as for
belonging. i.e. I am thirsty
• Wants - form that a human need takes as shaped by
culture and individual personality. i.e. I want a
Coca-Cola.
• Demands - human wants backed by buying power.
i.e. I have money to buy a Coca-Cola.

33. What Will Satisfy Consumer’s
Needs and Wants?
• Products - anything that
can be offered to a
market for attention,
acquisition, use or
consumption and that
might satisfy a need or
want.
• Examples: persons,
places, organizations,
activities, and ideas.
• Services - activities or
benefits offered for sale
that are essentially
intangible and don’t
result in the ownership
of anything.
• Examples: banking,
airlines, haircuts, and
hotels.

34. How Do Consumers Choose Among Products
and Services?
• Customer Value - benefit that the customer
gains from owning and using a product
compared to the cost of obtaining the
product.
• Customer Satisfaction - depends on the
product’s perceived performance in
delivering value relative to a buyer’s
expectations. Linked to Quality and Total
Quality Management (TQM).

35. How do Consumers Obtain Products and
Services?
• Exchanges - act of obtaining a desired object from
someone by offering something in return.
• Transactions - trade of values between parties.
Usually involves money and a response.
• Relationships - building long-term relationships with
consumers, distributors, dealers, and suppliers.

36. • The Importance of Marketing

37. The Importance of Marketing (1)
• The first decade of the 21st century
challenged firms to prosper
financially and even survive in the
face of an unforgiving economic
environment.
• Marketing is playing a key role in
addressing those challenges.

38. The Importance of Marketing (2)
• In other words, there must be a top line
for there to be a bottom line.
• Thus financial success often depends on
marketing ability.
• Finance, operations, accounting, and
other business functions won’t really
matter without sufficient demand for
products and services so the firm can
make a profit.

39. The Importance of Marketing (3)
• Marketing’s broader importance extends to
society as a whole.
• Marketing has helped introduce and gain
acceptance of new products that have eased
or enriched people’s lives

40. • Scope of Marketing

41. Scope of Marketing (1)
• The scope of marketing is very wide.
• It may be analyzed in terms of marketing
performance through various functions.
• A number of functions are inherent in
every marketing process and these
functions are to be performed on the
basis of various utilities:

42. Scope of Marketing (2)
• Hence, marketing functions are
–Functions of exchange
–Functions of physical distribution
–Functions of facilities

43. Scope of Marketing (3)
• Functions of exchange
–Buying function
–Assembling function
–Selling function

44. Scope of Marketing (4)
• Functions of physical distribution
–Transport
–Inventory Management
–Warehousing
–Material handling

45. Scope of Marketing (5)
• Functions of facilities
–Financing
–Risk taking and insurance
–Standardization
–After-sale-service

46. Role of Marketing Management

47. Role of Marketing Management (1)
• In a business firm, marketing generates
revenues that are managed by the
finance people and used by the
production people to create products
and services
• Hence marketing consists of all activities
designed to generate and facilitate any
exchange intended to satisfy human
needs and wants.

48. Role of Marketing Management (2)
• Organizational Resources
• Effective match Specification of Target
Market
• Customer Satisfaction
Organizational
Aims/objectives

49. • Marketing management process

50. Marketing management process (1)
• Marketing has been viewed as an ongoing or
dynamic process involving a set of interacting
activities dealing with a market offering by
producers to consumers.
• Hence, marketing is a matching process by
which a producer provides a marketing mix to
meet a consumer demand.
• This process should implement models to
meet customers demand

51. Marketing management process (2)
• Analysis/Audit - where are we now?
• Objectives - where do we want to be?
• Strategies - which way is best?
• Tactics - how do we get there?
• Implementation - Getting there
• Control - Ensuring arrival

52. Marketing Management Process (3)
A simple model of the marketing process:
• Understand the marketplace and customer
needs and wants.
• Design a customer-driven marketing strategy.
• Construct an integrated marketing program
that delivers superior value.
• Build profitable relationships and create
customer delight.
• Capture value from customers to create
profits and customer quality.

53. Marketing Management Process (4)
• As far as Customers are concerned there are
three elements to address
• Customer value: Difference between the values
that the customer gains from owning and using a
product versus the costs of obtaining the product.
• Customer satisfaction: The extent to which a
product’s perceived performance in delivering
value matches a buyer’s expectations.
• Quality: the characteristics of a product or
service that bear on its ability to satisfy stated or
implied customer needs.

54. Marketing Mix

55. Marketing Mix- The Four P’s (1)
Target
Customers
Intended
Positioning
Product
“Goods-and-service”
combination that a
company offers a
target market
Price
Amount of money
that consumers
have to pay to obtain
the product
Activities that
persuade target
customers to buy
the product
Promotion
Company activities
that make the
product available
Place

56. Marketing Mix- The Four P’s (2)
• The marketing mix (4Ps/7Ps) chapter six)
represent the marketing variables which are
directly controlled by the organization.
• By developing an appropriate balance
between these elements an organization can
tailor its value proposition in order to meet
the needs of its target market and achieve its
own specified objectives.

57. Summary
• Introduction
• What is Market?
• Types of Markets
• What is Marketing?
• Importance of Marketing
• Scope & Functions of Marketing
• Role of Marketing Management
• Marketing Process
• Marketing Mix

58. • The End of Chapter One