Marketing 1


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Marketing 1

  1. 1. INTRODUCTION TO MARKETING Prof. Kunal Gaurav Dhruva College of Management Hyderabad
  2. 2. MARKETING - DEFINITION <ul><li>AMA's 2004 Definition - &quot;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 stakeholders.“ </li></ul><ul><li>AMA's 2007 Revised Definition - “Marketing is the activity, conducted by organizations and individuals, that operates through a set of institutions and processes for creating, communicating, delivering, and exchanging market offerings that have value for customers, clients, marketers, and society at large.” </li></ul>
  3. 3. MARKETING – SOCIAL DEFINITION <ul><li>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. </li></ul>
  4. 4. MARKETING MANAGEMENT <ul><li>Marketing management is the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value. </li></ul>
  5. 5. SCOPE: WHAT IS MARKETED? Goods Services Events & Experiences Persons Places & Properties Organizations Information Ideas
  6. 7. NEED, WANT & DEMAND <ul><li>Needs describe basic human requirements such as food, air, water, clothing, and shelter. TYPES – Stated Need, Real Need, Unstated Need, Delight Need & Secret Need. </li></ul><ul><li>These needs become wants when they are directed to specific objects that might satisfy the need. </li></ul><ul><li>Demands are wants for specific products backed by an ability to pay, willingness to purchase & availability of products in the market. </li></ul>
  7. 8. MARKET DEMAND STATES Nonexistent Latent Declining Irregular Full Unwholesome Overfull Negative
  8. 9. CONCEPT OF EXCHANGE <ul><li>There are several ways to obtain a desired product; </li></ul><ul><ul><li>Self Production </li></ul></ul><ul><ul><li>Coercion </li></ul></ul><ul><ul><li>Begging/ Borrowing </li></ul></ul><ul><ul><li>Exchange (Core of Marketing) </li></ul></ul>
  9. 10. CONCEPT OF EXCHANGE <ul><li>Exchange, the core of marketing, involves obtaining a desired product from someone by offering something in return. For exchange potential to exist, five conditions must be satisfied: </li></ul><ul><li>1. There are at least two parties. </li></ul><ul><li>2. Each party has something that might be of value to the other party. </li></ul><ul><li>3. Each party is capable of communication and delivery. </li></ul><ul><li>4. Each party is free to accept or reject the exchange offer. </li></ul><ul><li>5. Each party believes it is appropriate or desirable to deal with the other party. </li></ul>
  10. 11. SERVICE <ul><li>A service is any act or performance that one party can offer to another that is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product. Examples – Financial service, Beauty service, Health service etc. </li></ul>
  11. 12. Categories of Service Mix <ul><li>1. Pure tangible good: The offering is a tangible good such as soap; no services accompany the product. </li></ul><ul><li>2. Tangible good with accompanying services: The offering consists of a tangible good accompanied by one or more services. General Motors, for example, offers repairs, maintenance, warranty fulfillment, and other services along with its cars and trucks. </li></ul><ul><li>3. Hybrid: The offering consists of equal parts of goods and services. For example, people patronize restaurants for both food and service. </li></ul><ul><li>4. Major service with accompanying minor goods and services: The offering consists of a major service along with additional services or supporting goods. For example, airline passengers are buying transportation service, but they get food and drinks, as well. </li></ul><ul><li>5. Pure service: The offering consists primarily of a service; examples include baby-sitting and psychotherapy. </li></ul>
  12. 13. COMPANY ORIENTATIONS Production Selling Marketing Product Societal
  13. 14. EVOLUTION OF MARKETING <ul><li>The Production Concept, one of the oldest in business, holds that consumers prefer products that are widely available and inexpensive. </li></ul><ul><li>The Product Concept holds that consumers favor those products that offer the most quality, performance, or innovative features. </li></ul><ul><li>The Selling Concept holds that consumers and businesses, if left alone, will ordinarily not buy enough of the organization’s products. The organization must, therefore, undertake an aggressive selling and promotion effort. </li></ul>
  14. 15. EVOLUTION OF MARKETING <ul><li>The Marketing Concept holds that the key to achieving organizational goals consists of the company being more effective than its competitors in creating, delivering, and communicating customer value to its chosen target markets. </li></ul><ul><li>The Societal Marketing Concept, which holds that the organization’s task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors in a way that preserves or enhances the consumer’s and the society’s well-being. </li></ul>
  15. 16. Competition <ul><li>Gause’s Principle of Competitive Exclusion: No two species can co-exist that make their living in the identical way. </li></ul><ul><li>Competition, a critical factor in marketing management, includes all of the actual and potential rival offerings and substitutes that a buyer might consider. </li></ul><ul><li>Competition is a combat between individuals, groups, nations, animals, etc. for territory, a niche, or allocation of resources. It arises whenever two or more parties strive for a goal which cannot be shared. </li></ul>
  16. 17. LEVELS OF COMPETITION <ul><li>Generic competition : A company sees its competitors as all companies that compete for the same consumer dollars. e.g.- BMW would see itself competing with companies that sell major consumer durables, FMCG, foreign vacations, and new homes. </li></ul><ul><li>Form competition: A company sees its competitors as all companies that manufacture products that supply the same service. e.g.-BMW would see itself competing against manufacturers of all vehicles, such as motorcycles, bicycles, and trucks. </li></ul><ul><li>Industry competition: A company sees its competitors as all companies that make the same product or class of products. e.g. – BMW, Hyundai Santro, Maruti Alto etc. </li></ul><ul><li>Brand competition: A company sees its competitors as other companies that offer similar products and services to the same customers at similar prices. e.g.- BMW and Mercedes Benz </li></ul>
  17. 18. MARKETING MYOPIA <ul><li>Myopia means short-sightedness. </li></ul><ul><li>Theodore Levitt, in his classic article “Marketing Myopia” in the Harvard Business Review, argues that industries fail not because markets are saturated but because of the failure and short-sightedness of the management. </li></ul>
  18. 19. <ul><li>With the changing times, a good marketer needs the vision to be on top of the changes and trends. Theodore Levitt in his book The Marketing Imagination has cited four conditions for business obsolescence as a result of marketing myopia. They are: </li></ul><ul><li>The belief of companies that as more and more of the population become affluent, the market expands and more and more people buy the products. In other words, if the market for a product expands automatically, companies do not think imaginatively about how to expand the market. </li></ul><ul><li>The belief that there are no substitutes for the industry’s major products. </li></ul><ul><li>The belief that by producing in large quantities, per unit output cost can be significantly reduced, forgetting the market, demand and supply aspects.  </li></ul><ul><li>Preoccupation with a product that lends itself to carefully controlled scientific experimentation, improvement, and manufacturing cost reduction. </li></ul>
  19. 20. <ul><li>Levitt has also devised ways to overcome marketing myopia. Some of the recommendations are </li></ul><ul><li>Be customer led, not product oriented. </li></ul><ul><li>Market orientation should permeate throughout the organization. </li></ul><ul><li>Managers need to be proactive and visionary </li></ul>
  20. 21. THANK YOU!