• What is Marketing?• Core Marketing Concepts• Evolved Marketing Concepts• Role of Marketing in today’s organization• Advantages of Marketing• Identifying the Target Market• Understanding market behavior or consumer behavior
o Process by which companies create customer interest in products or services.o Generates the strategy that underlies sales techniques, business communication, and business development.o An integrated process through which companies build strong customer relationships and create value for their customers and for themselves.
o Used to identify the customer, to keep the customer, and to satisfy the customer.o The adoption of marketing strategies requires businesses to shift their focus from production to the perceived needs and wants of their customers as the means of staying profitable.o The term marketing concept holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions.
o It proposes that in order to satisfy its organizational objectives, an organization should anticipate the needs and wants of consumers and satisfy these more effectively than competitors.o Marketing is defined by the American Marketing Association (AMA) as “Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customer relationships in ways that benefit the organization and its stake holders.”
1. Needs, Wants & Demands o Needs are the basic human requirements. o Need for air, food, water, clothing and shelter. o Need for recreation, education and entertainment. o Needs become wants when directed towards specific objects that may satisfy the need. e.g.: along with food one may want hamburgers, French fries & a soft drink. o Demands are wants for specific products backed by an ability to pay.
o Types of needs:- i. Stated needs (customer wants an inexpensive car). ii. Real needs (customer wants an inexpensive car whose operating cost is low). iii. Unstated needs (customer expects good service from the dealer). iv. Delight needs (customer would like the dealer to include an on board navigation system). v. Secret needs (customer wants friends to see him as a savvy customer)
2. Target Markets, Positioning and Segmentation o Marketer cannot satisfy everyone in the market. o Starting is by dividing the market into different segments. o Identification of target markets. o Firm develops a market offering that it positions in the mind of the target buyers as delivering some central benefit(s).
3. Offerings & Brands o A value proposition is made with a set of benefits that is offered to the customers to satisfy their needs. o A brand is an offering from a known source. E.g.- Burgers from McDonald, Noodles from Maggie, etc.4. Value & Satisfaction o Success of the offering: Product delivers value and satisfaction to the customers. o Value: Combination of quality, service and price (QSP).
5. Marketing Channels To reach a target market, types of channels used:- a. Communication Channel: newspapers, magazines, radio, television, mail, internet, etc. b. Distribution channel: selling or delivering the physical product to the buyer/user. Includes distributer, wholesaler, retailer or agent. c. Service channels: warehouse, transportation companies, banks and insurance companies that facilitate transaction.
6. Supply Chain o Stretches from raw materials to components to final product and that are carried to final buyer.7. Competition o Includes all the actual and potential rival offerings and substitutes a buyer might consider. E.g.- tea of different brands, steel, etc.
8. Marketing Environment Includes: a. Task environment: o Includes agencies that are involved in producing, distributing and promoting the offering. o These are the companies, suppliers and service suppliers ( adertising agencies, banking and insurance co., transportation co. and telecommunication co.)
b. Broad environment: Consists of:- i. Demographic environment ii. Economic environment iii. Physical environment iv. Technological environment v. Political-legal environment vi. Social-cultural environmento Attention to these environments should be paid and accordingly the marketing strategies are timely adjusted.
EVOLVED MARKETING CONCEPTS The Production Concept The The Holistic Product Marketing Concept Concept The The Market Selling Concept Concept
1. THE PRODUTION CONCEPTo One of the oldest concepts.o It holds that consumer prefers the products that are inexpensive and widely available.o Managers of production-oriented business concentrate on achieving high production efficiency, low costs and mass distribution.o Concept often used when a company wants to expand the market.
2. THE PRODUCT CONCEPTo Customers favors the products that offer the most quality, performance, or innovative features.o Managers focus on making superior products and improving them over the time.o A new or improved product is successful only if it is priced, distributed , advertised and properly sold.
3. THE SELLING CONCEPTo Consumers and businesses, if left alone, wont buy enough of the organization’s products.o The concept is practiced most aggressively with unsought goods, goods that buyers do not think of buying, such as insurance and encyclopedia.o Also practiced in overcapacity.o Aim is to sell what is made rather than what market wants.
4. THE MARKETING CONCEPTo Emerged in mid 1950s.o Product-centered “make-and-sell” philosophy shifted to a customer-centered “sense-and-respond” philosophy.o Job to find the right product for the right customer.o Key to achieve organizational goals is by being more effective than the competitors in creating, delivering and communicating with the customers.
MARKETINGSELLING SELLING MARKETING 1. Focuses on the 1. On the needs of the needs of the seller. customer. 2. Preoccupied with the 2. Idea of satisfying the idea of seller’s need needs of the of converting his customer by means of product into cash. the product.
5. THE HOLISTIC MARKETING CONCEPTo Based on the development, design and implementation of marketing programs processes, and activities that recognizes their breadth and interdependencies.o Holistic market recognizes that everything matters in marketing.
The Selling ConceptFactory Existing product Selling & Promotion Profit through sales volume Starting Point Focus Means End The Marketing ConceptMarket Customer needs Integrated marketing Profits through customer satisfactionStarting Point Focus Means End The Product ConceptProduct Product quality Improvement & innovation Profits through better product featureStarting Point Focus Means End The Production ConceptFactory Output Production quantity Profits through and efficiency vol. & low prod. costStarting Point Focus Means End
ROLE OF MARKETINGo Lifeblood and the backbone of any organization.o Marketing conceives the product, prices it, distributes it among all the logistically feasible areas and promotes it the best way it should (basic four Ps: Product, Price, Promotion & Place).o Also formulates the most effective strategies in order for the firm to cope up and meet the ever-changing and fast-paced trends and demands of the business environment.o Conducts research, creates short, mid and long-term plans and develops feasibility studies on whether a certain venture would become a click in the market.o The most essential and vital element of any organization since it is the one that produces profit and customers - and retains them for the firm.
ADVANTAGES OF MARKETINGo Developing products that satisfy needs, including products that enhance society’s quality of lifeo Creating a competitive environment that helps lower product priceso Developing product distribution systems that offer access to products to a large number of customers and many geographic regionso Building demand for products that require organizations to expand their labour forceo Offering techniques that have the ability to convey messages that change societal behaviour in a positive way (e.g., anti-smoking advertising)
IDENTIFYING THE TARGET MARKETo Target market: the type of person that will want or need the product or services.o By targeting a specific market: save money by spending less on marketing and increase marketing.o Process of identifying a target market: market segmentation.o Using market segmentation, a business can use a top-down approach to identifying a target group or niche.
o Efforts can be concentrated on targeted marketing to attract a specific consumer group.o After target market is identified, it is learnt how to drive customers to the product, regardless of the industry.o Done using market research, which is used as a marketing strategy.o Market research is the process of using various techniques to collect, analyse, and report data about potential consumer groups.
o Market research helps in identifying quantitative and qualitative patterns in consumer groups.o Quantitative consumer data refers to numbers such as:- age income family sizeo Qualitative data relies on characteristics such as:- education occupation personality.
oThree steps to follow when identifying the market: 1) Identify Why A Customer Would Want To Buy Your Product/Service 2) Segment the Overall Market 3) Research the Market
Aspects of market segmentation1. Demographic Environment: Age: Teenagers targeted by acne medication company. Income: A person earning Rs.200,000 p.m. is more likely to purchase a Mercedes than a person earning Rs.10,000. Family size: Wholesale distributors that keep prices low by selling in bulk would target larger families. Education: A calculator company may target high school math students. Occupation: A shoe company might sell a shoe targeted for construction workers. Gender: A handbag company will target women. Nationality/Race: A small business selling foodstuffs from India would target the Indian community..
2. Geography Environment: Region of the world: The shoe company, Puma, most aggressively targets consumers in Latin America and Europe for their soccer shoes. Climate: A snow plough manufacturer will target areas where it snows.3. Behavioural Environment: Brand loyalty: Apple targets a niche of consumers loyal to its products. Value of quality: Higher-end watch companies like Rolex target consumers that value high- quality timepieces.
4. Psychographic Environment: Personality: A person who likes to show off is more likely to buy a Hayabusa than a reserved person. Lifestyle: A shoe company like Nike, that sells sports shoes would target sportsperson with their advertising. Interests: Stores that sell arts and crafts materials target hobbyists and students alike.
CLASSIFYING THE MARKETo Market can be classified as follows on the basis of volume of business, nature of transaction, position of seller, area, contents of transaction, etc.On the basis of volume of transaction:1. Wholesale market: The middlemen buy the goods in bulk form the producers and manufacturers.2. Retail market: Goods are sold in small quantity directly to the consumer.
On the basis of nature of transaction:1. Spot market: It is a ready market where the sellers on the spot physically hand over goods to the buyers. An exchange of goods for money at the same time.2. Future market: It is a market in which the buyers and sellers make agreement for delivery of goods in future. The contract is made on a certain date but the goods will be delivered in future.
On the basis of position of seller:1. Primary market: This is the market where the producers of goods sell their farm products to the wholesalers and their agents.2. Secondary market: This is the market where the wholesalers sell their goods to the retailers for onward selling to the consumer. The middlemen buy goods from producers and manufacturers and sell to the retailers.3. Terminal market: It is the market where goods are purchased for final use or consumption. The retailers sell their goods to consumers.
On the basis of area:1. Local market: A place for the purchase and sale of different goods within the city. The buyers and sellers of one city assemble to buy and sell.2. Regional market: Consists of many cities and districts of a particular area. The buyers and sellers of different villages, cities and districts assemble to buy and sell the different commodities.3. National market: Consists of the whole area of country. The buyers and sellers from all over the country take part in buying and selling.4. International market: Consists of the whole world. The buyers and sellers from the whole world meet and exchange their foods and services. The commodities can be bought and sold at different places in the world.
5. Commodity market: A market where the different types of commodities are bought and sold. The wheat, rice, etc. are the commodities that are exchanged by the buyer and sellers.6. Money market: A market where the financial institutions deal in money. The banks and financial institution are engaged in borrowing and lending of funds.7. Stock exchange market: A market where shares and debentures of different companies are bought and sold.
CONSUMER BEHAVIOR• Also called as consumer psychology.• Study of when, why, how, and where people do or do not buy product.• Blends elements from psychology, sociology, social anthropology and economics.• Studies characteristics of individual consumers such as demographics and behavioural variables.• Assesses influence on the consumer from groups such as family, friends, reference groups, and society in general.
• A greater importance is also placed on consumer retention, customer relationship management, personalisation, customisation and one-to-one marketing.
Four main applications of consumerbehaviour:1. For marketing strategy2. Public policies3. Social marketing4. Studying consumer behaviour should make us better consumers
1. For marketing strategy • For making better marketing campaigns. • Companies that introduce new products must be well financed so that they can stay afloat until their products become a commercial success • It is important to please initial customers, since they will in turn influence many subsequent customers’ brand choices.
2. Public policies • Companies come to know what and how to promote their products. • E.g.,- Accunate (drug used to cure acne)- Known to cause deformities in the foetus.3. Social marketing • Involves getting ideas across to consumers rather than selling something. • E.g.,- AIDS awareness for anti-HIV drugs.
4. Studying consumer behaviour should make us better consumers e.g.- Paying less for a small pack of Amrutanjan rather than paying more for a larger pack.