Introduction to Marketing To prepare to be a marketer, one needs to understand• What Marketing is?• How it works?• What is Marketed?• Who does the Marketing?
What Marketing is?• Marketing deals with identifying and meeting human and social needs.• One of the shortest definitions of marketing is “meeting needs profitably.”
Defining Marketing“Marketing is a societal process bywhich individuals and groups obtainwhat they need and want throughcreating, offering, and freelyexchanging products and services ofvalue with others.”- Philip Kotler
Some more Definitions:• “Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stake holders” -- American Marketing Association
Some more Definitions:• William Stanton: “Marketing is a total system of business activities designed to plan, price, promote and distribute want- satisfying products to target markets to achieve organizational objectives.”
Features/Characteristics of Marketing• Regular and continuous activity• Facilitates satisfaction of human wants• Relates to goods and services• Brings transfer of ownership• Creates utility
Features/Characteristics of Marketing• Wider socio-economic significance• Importance of 4 Ps• Evolutionary concept• Precedes and follows production
Conditions of Exchange• There are at least two parties• Each party has something of value to the other party• Each party is capable of communication and delivery• Each party is free to accept or reject the exchange offer• Each party believes it is appropriate or desirable to deal with the other party
Adding Degrees of Satisfaction To tion Possession utility tal s fac Sa tis S ati Place utility fac tal tionTo Time utility Form utility Oriental rug Store has it in stock Delivered to your home Pay with your VISA card
Business Organization• Accomplishment of Objectives• Widens Markets• Reputation• Develop Brand Loyalty• Introduce New Products• Face Competition• Growth and Stability• Economization of storage
Consumers and Society• Quality products• Reasonable Prices• Higher Standard of Living• Creation of utility• Spread effect• Economic Growth and Prosperity
Core Concepts of Marketing Target Markets & Segmentation Needs, Wants, and Demands Product or Offering Value and Satisfaction Exchange and Transactions Relationships and Networks Marketing Channels Supply Chain Competition Marketing Environment
Needs and Wants• Needs are basic human requirements• Wants are needs directed to specific objects/services that might satisfy the need
Product• A product is any offering catered to satisfy needs and wants.• A brand is when the product is from a known source.
Demand• This is the wants for specific products backed by an ability to pay.
Target Market• Very rarely does a product cater to the entire market. Most products are designed to cater to a group of customers who specifically want such a product. This group of customers is the target market which is a slice of the total market. We say it is the market segment.
Value and Satisfaction• Value = Benefits/Costs• Benefits = Functional Benefits + Emotional benefits• Costs = Monetary costs + Time + Energy + Psychic costs
Exchange• Get something (product /service) by offering something in return. Eg. kind (barter) or money (value )• Exchange is a value creating process because it leaves both parties better off (win – win situation)
Transaction and Transfer• A transaction is an exchange between two things of value on agreed conditions and a time and place of agreement.• A transfer is a one way exchange without receiving anything in return.
Relationship Marketing• Building long term mutually satisfying relations with customers, suppliers, distributors in order to retain their long term preference and business
Marketing Network• A marketing network is the relationships built with its stakeholders. Effective relationships make up an effective and strong network.
Marketing Channels• Marketing channels are used to reach the target segment.• Communication channels eg. Advertising, telephone enquiry system• Distribution channels – trade, direct sales
Supply Chain• The supply chain represents a value delivery chain – from procurement of raw materials to final delivery of product to consumer.
Competition• Potential and rival substitutes and offerings a buyer might consider.• Competition can be viewed in various perspectives – brand, industry, form, generic
Marketing Mix• It is the tools that an organization employs to pursue its marketing objectives in the target market• Product, Price, Place, Promotion• 4 C’s – Customer solution, Cost, Convenience, Communication
Concepts under which firms conduct marketing activities• Production concept• Product Concept• Selling Concept• Marketing Concept• Societal marketing Concept
Traditional Organization Chart Top Management Middle Management Front-line people Customers
Customer-Oriented Organization Chart Customers Front-line people Middle management sC erus om t Top om t us manage- er C s ment
Evolving Views of Marketing’s Role Finance ProductionProduction Finance Human resourcesMarketing Human resources Marketing a. Marketing as an b. Marketing as a more equal function important function
Evolving Views of Marketing’s Role Production on cti Fi du n o an Pr ce Marketing CustomerreHu ur ce M so ur an n ar s ma ces na ce ke so m F i t in re Hu n g c. Marketing as the d. The customer as the major function controlling factor
Evolving Views of Marketing’s Role Production Marketing CustomerreHu ur so ce ma ces an n Fin e. The customer as the controlling function and marketing as the integrative function
Concepts of Marketing(Company Orientations Towards the Marketplace)
Company Orientations Towards the Marketplace ( Concepts of Marketing)• Exchange Concept• Production Concept• Product Concept• Selling Concept• Marketing Concept• Societal Concept• Holistic Marketing Concept
Company Orientations Towards the Marketplace ( Concepts of Marketing) Focuses on exchange of goodsExchange Concept and services Supply of Goods Producers Consumers Money Flow
Company Orientations Towards the Marketplace ( Concepts of Marketing) Treats large scale production as the base of marketing. Consumers prefer products that areProduction Concept widely available and inexpensive Production cost is reduced Producers Consumers Large Scale Goods, Production Imposed Wide Choice of Goods
Company Orientations Towards the Marketplace ( Concepts of Marketing) Consumers favor products that offer the most quality,Product Concept performance, or innovative features Product Excellence Producers Products with Consumers Better quality Likes & Dislikes & performance considered Better Quality attracts
Company Orientations Towards the Marketplace ( Concepts of Marketing) Consumers will buy products only ifSelling Concept the company aggressively promotes/sells these products Producers Consumers
Company Orientations Towards the Marketplace ( Concepts of Marketing) Focuses on needs/ wants of targetMarketing Concept markets & delivering value better than competitors Production cost is reduced Producers Consumers Large Scale Goods, Production Imposed Wide Choice of Goods
Company Orientations Towards the Marketplace ( Concepts of Marketing) Equal weightage to three partiesSocietal Concept Consumers, Company and Society Society Producers Consumers Large Scale Goods, Production Imposed
Company Orientations Towards the Marketplace ( Concepts of Marketing) Attempts to recognize andHolistic Marketing reconcile Concept The scope and complexities of marketing activities
Socially Responsible Marketing• Ethics• Environment• Legal Framework• Community
Selling and Marketing Selling Marketing• Selling starts with seller • Marketing starts with & is preoccupied all the the buyer and focuses time with the needs of constantly on the needs the seller of the buyer• Emphasizes on saleable surplus available with • Emphasizes on the company identification of market opportunity
Selling and Marketing Selling Marketing• Seeks to convert • Seeks to convert products in to cash customer needs in to products • Views business as – a• Views business as – customer satisfying goods producing process process • Marketing views the• Selling views the customer as the very customer as the last link purpose of business in the business
Shifts in Marketing Management• From marketing does marketing to everyone does the marketing• From organizing by product units to organizing by customer segments• From making everything to buying more goods and services from outside• From using many suppliers to working with fewer suppliers in a “Partnership”
Shifts in Marketing Management• From relying on old market positions to uncovering new ones• From emphasizing tangible assets to emphasizing intangible assets (brands, customer base, employees, distributors and supplier relations and intellectual capital)• From building brands through advertising to building brands through performance and integrated communications (IMC Mix)
Shifts in Marketing Management• From attracting customers through stores and salespeople to making products available online• From selling to everyone to trying to be the best firm serving well defined target markets• From focusing on profitable transactions to focusing on customer lifetime value
Shifts in Marketing Management• From a focus on gaining market share to a focus on building customer share• From being local to being “Glocal” – both global and local• From focusing on the financial scorecard to focusing on the marketing scorecard (market share, customer loss rate, customer satisfaction, product quality etc)• From focusing on shareholders to focusing on stakeholders