Market, definition of Marketing, Scopes of Marketing, Nature of Marketing, Functions of Marketing, Marketing vs. selling, Roles and Functions of Marketing Manager Marketing Environment and much more.

1. 1

2. What Is Marketing?
Simple definition:
Marketing is the management process responsible for
identifying, anticipating, and satisfying customer
requirements profitably.” (CIM,2001)
Goals:
1. Attract new customers by promising superior value.
2. Keep and grow current customers by delivering
satisfaction.

3. Marketing Defined
 Marketing is the activity, set of instructions, and
processes for creating, communicating,
delivering, and exchanging offerings that have
value for customers, clients, partners, and society
at large.
OLD view of
marketing:
Making a sale—
“telling and selling”
NEW view of
marketing:
Satisfying
customer needs

4. Why is Marketing Important?
Shifting Business Paradigms
Sellers’ markets
Buyers’ markets

5. In order to understand Marketing let us begin with the
Marketing Triangle
5
Customers
CompetitionCompany

6. Marketing Management
The art and science of choosing target markets and
building profitable relationships with them.
 Requires that consumers and the marketplace be
fully understood.
 Aim is to find, attract, keep, and grow customers
by creating, delivering, and communicating
superior value.

7. Simple Marketing System
7
Industry
(a collection
of sellers)
Market
(a collection
of Buyers)
Goods/services
Money
Communication
Information

8. The Marketing Process
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.

10. Core Concepts of Marketing10
Needs, wants
demands
Markets Marketing &
Marketers
Utility, Value &
Satisfaction
Xchange, Transaction
Relationships
Products

11. Needs, Wants, and Demands
Need: State of felt deprivation including physical, social,
and individual needs.
 Physical needs: Food, clothing, shelter, safety
 Social needs: Belonging, affection
 Individual needs: Learning, knowledge, self-expression
Want: Form that a human need takes, as shaped
by culture and individual personality.
 Wants + Buying Power = Demand

12. Core Concepts of Marketing12
 Need – food ( is a must )
 Want – Pizza, Burger, French fry's ( translation of a need
as per our experience )
 Demand – Burger ( translation of a want as per our
willingness and ability to buy )
 Desire – Have a Burger in a five star hotel

13. How Do Consumers Choose Among
Products & Services?
13
 Value - the value or benefits the customers gain from
using the product versus the cost of obtaining the
product.
 Satisfaction - Based on a comparison of
performance and expectations.
 Performance > Expectations => Satisfaction
 Performance < Expectations => Dissatisfaction

14. Customer Value and Satisfaction
Dependent on the product’s perceived
performance relative to a buyer’s expectations.
Care must be taken when setting expectations:
 If performance is lower than expectations, satisfaction is
low.
 If performance is higher than expectations, satisfaction
is high.
Customer satisfaction often leads to consumer loyalty.
Some firms seek to DELIGHT customers by exceeding
expectations.

15. Marketing Management
Marketing managers must consider the following,
to ensure a successful marketing strategy:
1. What customers will we serve?
— What is our target market?
2. How can we best serve these
customers?
— What is our value proposition?

16. Choosing a Value Proposition
The set of benefits or values a company promises
to deliver to consumers to satisfy their needs.
 Value propositions dictate how firms will
differentiate and position their brands in the
marketplace.

17. The Marketing Concept
The marketing concept:
 A marketing management philosophy that holds
that achieving organizational goals depends on
knowing the needs and wants of target markets
and delivering the desired satisfaction better
than competitors.

18. The 4 Ps & 4Cs
18
Marketing
Mix
Product
Price Promotion
Place
Customer
Solution
Customer
Cost
Communication
Convenience

19. The Marketing Mix
The set of controllable, tactical marketing tools that the firm
blends to produce the response it wants in the target
market.
 Product: Variety, features, brand name, quality, design,
packaging, and services.
 Price: List price, discounts, allowances, payment period,
and credit terms.
 Place: Distribution channels, coverage, logistics, locations,
transportation, and inventory.
 Promotion: Advertising, sales promotion, public relations,
and personal selling.

21. Orientation
Towards The
Market Place
Production
Concept
• Emphasis On
Producing Goods
Product
Concept
• Producing Quality
Goods
Selling
Concept
• Aggressive
Selling &
Promotion
Marketing
Concept
• Right products for
Customers
Holistic
Marketing
Concept
• Do everything
possible

22. Production Concept
Oldest Concept
Believed That Consumers Prefer Available Goods
Focus Is On Efficient Production And Mass Distribution
This Orientation Makes Sense In Developing Countries
Efforts On Reducing Costs To Provide Inexpensive Goods

23. Product Concept
Focus Is On Making Superior Goods
Believed That Consumers Prefer Goods With Best Quality &
Innovative Features
Importance Is Given To Improvising The Product
Less Focus On Consumers Need
Goods Sell Themselves

24. Selling Concept
Aggressive Selling And Promotion Effort
Sell More Stuff To More People And More Often
Used With Goods Which Buyers Usually Don’t Think Of Buying
(Unsought Goods) Such As Insurance
Sell What Is Made Not What Market Wants
Carries High Risk As Can Result Into Negative Word Of Mouth

25. Marketing Concept
Emerged In Mid 1950s
Find Right Product For The Customers
Focus Is On Creating, Communicating And Delivering Superior
Customer Value
Build Profit Through Customer Satisfaction And Loyalty
Begins With Well Defined Market And Ends With Long Term
Relationship

26. Holistic Marketing Concept
Acknowledges That Everything Matters In Marketing
Components
Relationship
Marketing
Integrated
Marketing
Internal marketing
Social
Responsibility
Marketing

27. Build Mutually Satisfying Long Term
Relationship
Key Parties Being Customers, Suppliers,
Distributors And Marketing Partners
Focus Is On Developing A Market Network Of
Customers, Employees, Suppliers, Retailers, Ad
Agencies, Etc.
Objective Is To Built Mutually Profitable
Business Relationship Which Will Make Profits
To Follow
Relationship
Marketing

28. Marketing Activities Are Employed To
Communicate & Deliver Value In A Co-
ordinated Manner
Use of Marketing Mix – The 4 Ps
Influence Trade Channels As Well Final
Consumers Using Offering Mix and
Communication Mix
Offering Mix – Product, Price and
Services
Communication Mix – Advertising, Sales
Promotion, PR, Events & Experiences,
Direct Marketing and Personal Selling
Integrated
Marketing

29. Ensuring that everyone in the
organisation embraces appropriate
marketing principles
Task of hiring, training and motivating
employees who want to serve customers
well
No sense in promising excellent services
unless the employees are ready for it
Works at two levels – Marketing Research
and Marketing functions like advertising,
customer service, and product
management
Marketing functions must be co-
ordinated from the point of view of the
customer
Internal Marketing

30. Focus is on enhancing social welfare
Marketers consider the role that they are playing and
could play in terms of social welfare
Understanding broader concepts and ethical,
environmental, legal and social context of marketing
activities
Social Responsibility
Marketing

32. The 7
functions of
Marketing!
Selling
Distribution
Product
Service
Management
Promotion
Pricing
Financing
Marketing
Information
Management

33. Distribution
How the product get
from the manufacturer
to the consumer.

34.  Making decisions about where to sell the
product and how it gets there
Example:
 Redskins Apparel
 Redskins Store
(Dulles and Fair
Oaks Mall)
 Department
Stores
 JCPenney,
Kohls
 Online Website

35. Distribution in
Entertainment Distribution in Sports
 Selecting the right
location for an event
and making tickets
available through ticket
sales outlets
 Involves getting
equipment to stores
where customers buy it
Distribution

36. Financing
Anything dealing with the
money used to start your
business or to keep it in
operation.

37. Financing
 Requires a company to budget for its own marketing
activities
 Assisting customers in paying for the company’s
products

38. Sports Financing
 Sponsors spend large
sums of money to be
visible during sports
and entertainment
events
Financing

39. Customer Financing
 Customers may receive
financing in the form of
different payment
options, such as cash,
credit, and installment
payment
 More options = More
purchases
Financing

40. Marketing Information Management
Obtained through
market research…
learning about what
customers prefer and
how to make a product
better.

41. Surveys
 Process of collecting
information about
customer trends, and
competitor products
 Used to determine
customer
demographics, buying
habits, and attitudes
Marketing Information Management

42. Sporting Industry
 Successful marketing
involves using
marketing info to
predict consumer
demand and estimate
the right quantities of
merchandise
Marketing Information Management

43. Marketing Information Management
 When Domino’s first
considered expanding
operations into Japan, it
used its marketing
research finding to adapt
its traditional pizza to
Japanese tastes

44. Pricing
The process of coming up with what you are going to
charge each customer. Prices need to be seen by
customers as fair, but they must also allow you to
make a fair profit.

45. Release of iPhone 4s
 The process of
establishing and
communicating to
customers the value
of cost of goods and
services
 Prices assigned to
sports and
entertainment events
and goods are
directly related to
consumer demand
Pricing

46. Pricing
 Super Bowl ticket prices
go through the ceiling
since there are limited
number of tickets and
enormous demand

47. Product/Service Management
Obtaining, developing, maintaining, and
improving a product.

48. Product/Servi
ce
Management
*See how the Coca-Cola
bottles have changed
with the times and with
customer’s needs and
wants! 
 Obtaining, developing,
maintaining, and improving a
product or product line to
respond to customer needs and
wants

49. Promotion
Communicating with
potential customers to
inform, persuade, or remind
them about products.

50. Nationals
 Free baseball hats,
bobble heads, t-
shirts, etc are
given away at a
baseball game
Promotion
Any form of communication used to inform,
persuade, or remind people about a business’s
products

51. Selling
Providing customers
with the goods and
services they need and
educating them on
those goods and
services so they can
make an informed
buying decision.

52. Selling
 Any direct and personal communication
with customers to asses and satisfy their
needs and wants is considered selling
 Selling involves not only satisfying
customers but also anticipating their future
needs
 EX: A sales person answers questions about the
operation of a running watch

53. Contrast in Marketing/Selling
Philosophies

54. Focus of Selling Philosophy
Production Selling Consumption

55. Begins At Focus Means Profit
Marketing Concept
Target
Market
Customer
Needs
Co-ordinated
Marketing
Customer
Satisfaction
Selling Concept
Factory Products Means Profit

56. Focus of Marketing Philosophy
Consumer
Need
Evaluation
Integrated
Marketing
Effort
Achievement
of
Organizational
Goals
Consumer
Satisfaction
Feedback

57. Selling vs. Marketing
SELLING MARKETING
“Sells what the producer has and need
not necessary be a product or service
that the Buyer wants
Markets a product or service that meets
the needs of the Buyer and is not what
the producer has to sell
Focus on the needs of the Producer” –
example, selling all the funds of a fund
house because they are available.
Focus on the needs of the Buyer –
example, a growth fund for child
education or income fund for a
retirement plan”
TACTICS Selling makes use of short-
term tactics to get sales – examples are
free gifts, discounts, rebates, bribes, etc.
STRATEGIES Marketing makes use of
long-term strategies to get sales –
examples, value-added service,
customer education, meeting objectives

58. The Marketing Environment

59. Marketing Environment
 The marketing environment consists of actors and forces
outside the organization that affect management’s ability
to build and maintain relationships with target
customers.
 Environment offers both opportunities and threats.
 Marketing intelligence and research used to collect
information about the environment.

60. Marketing Environment
 Includes:
 Microenvironment: actors close to the company that affect
its ability to serve its customers.
 Microenvironment: larger societal forces that affect the
microenvironment.
 Considered to be beyond the control of the organization.

61. The Company’s Microenvironment
 Company’s Internal Environment:
Areas inside a company.
Affects the marketing department’s planning
strategies.
All departments must “think consumer” and
work together to provide superior customer
value and satisfaction.

62. Actors in the Microenvironment
The Company’s Microenvironment

63. The Company’s Microenvironment
 Suppliers:
 Provide resources
needed to produce
goods and services.
 Important link in the
“value delivery system.”
 Most marketers treat
suppliers like partners.

64. The Company’s Microenvironment
 Marketing Intermediaries:
 Help the company to promote, sell, and distribute its goods to
final buyers
 Resellers
 Physical distribution firms
 Marketing services agencies
 Financial intermediaries

65. Partnering With Intermediaries
Coca-Cola provides
Wendy’s with much
more than just soft
drinks. It also pledges
powerful marketing
support.

66. The Company’s Microenvironment
 Customers:
 Five types of markets that
purchase a company’s goods
and services
 Ultimate
 Industrial
 Agricultural
 Government
 International Sellers

67. The Company’s Microenvironment
 Competitors:
 Those who serve a target market with products and services that
are viewed by consumers as being reasonable substitutes
 Company must gain strategic advantage against these
organizations
 Publics:
 Group that has an interest in or impact on an organization's ability
to achieve its objectives

68. Types of Publics

69. The Macro environment
 The company and all of the other actors operate in
a larger macro environment of forces that shape
opportunities and pose threats to the company.

70. The Company’s Macro environment

71. The Company’s Macroenvironment
 Demographic:
 The study of human populations in terms of size, density,
location, age, gender, race, occupation, and other statistics.
 Marketers track changing age and family structures, geographic
population shifts, educational characteristics, and population
diversity.

72. Baby Boomers
 78 million born between 1946 and 1964
 Account for 28% of population
 Earn more than half of all personal income
 Almost 25% belong to racial or ethnic minority
 Spend a lot on anti-aging products and services

73. Generation X
 45 million born between 1965 and 1976
 Defined by their shared experiences
 Increasing divorce rates
 More of their mothers employed
 First generation of latchkey kids
 Care about the environment

74. Generation Y
 72 million born between 1977 and 1994
 Have large amount of disposable income
 Comfortable with computer technology
 Tend to be impatient and “Now-Oriented”
 Many product lines targeted at Gen Ys

75. Generation Y
 72 million born between 1977 and 1994
 Have large amount of disposable income
 Comfortable with computer technology
 Tend to be impatient and “Now-Oriented”
 Many product lines targeted at Gen Ys

76. Levis launched
“street wear”
under brand Sykes

77. Titan launches sunglasses under Fast track

78. MTV and channel V targeted at youth segment
with “Hinglish”

79.  Pair with another student to discuss the
following questions:
 In what ways does the buying behavior of you and your
parents differ?
 In what ways does the buying behavior of you and your
grandparents differ?
 What selling strategies would work best for:
 You
 Your parents
 Your grandparents
Interactive Student
Assignment

80. Social-Cultural Environment
 The institutions and
other forces that affect
a society’s basic values,
perceptions,
preference, and
behaviors.

81. Social-Cultural Environment
 People in India follow:
 Six major faiths
 Speak more than 1600 languages
 33 are spoken by more than hundred thousand
people an 22 are officially recognized

82. Diversity-Based Advertising
Based on careful study of cultural differences, Bank of America has
developed targeted advertising messages for different cultural
subgroups, here Asians and Hispanics.

83. Natural Environment
 Involves the natural
resources that are needed as
inputs by marketers or that
are affected by marketing
activities.
 Environmental campaigns
like Pollution control

84. Factors Impacting the Natural
Environment
Shortages of Raw Materials
Increased Pollution
Increased Government Intervention
Environmentally Sustainable Strategies

85. Environmental Responsibility
McDonald’s has made a substantial commitment to the so-called
“green movement.”

86. Toyota Prius success
 Succeeded because of hybrid gas and electric
engines in 2001
 Quick switch power sources
 55 miles per gallon
 five years-Huge Hit- 6 months waiting list

87. Technological Environment
Most
dramatic
force now
shaping our
destiny.

88. Technological Environment
 Changes rapidly.
 Creates new markets and
opportunities.
 Challenge is to make
practical, affordable
products.
 Safety regulations result
in higher research costs
and longer time between
conceptualization and
introduction of product.

89. Sony faced problems because of its failure to
capture changes in technological environment
Apple came up ipods and Ipads in place of
Sony walkman

90.  Within the last ten years, which technological force
has had the greatest impact on marketing? In what
areas of marketing has this impact been seen?
 What technological force has impacted you the
most? In what ways has this occurred?
Discussion Questions

91. PURCHASING POWER
DEPENDS ON CURRENT
INCOME, PRICES, SAVINGS,
DEBT AND CREDIT
AVAILABILITY
Economic environment

92. Income Distribution (annual household
income)
 Destitute = 16000, not active participants
 Aspirants= 16000-22000 new entrants due to
increase in their income patterns
 Climbers =22000-45000, have desire and
willingness to buy but have limited cash
 Consuming class= 45000-215000, form majority
of consumers
 Rich, those who have money and own a wide range
of products

93. Income Distribution
Walt Disney markets two distinct Pooh bears to match its two-
tiered market.

94. Change in the proportion of expenditure
Grocery
 44 %
Savings and investment
 14%
Eating out
 8%
Personal care
 6%
Clothing
 5%
Books
 5%
 41%
 4.1%
 10.8%
 7.6
 6.9%
 7.6

95. Political Environment
Includes Laws,
Government
Agencies, and
Pressure Groups
that Influence or
Limit Various
Organizations and
Individuals In a
Given Society.
Increasing Legislation
Changing Government
Agency Enforcement
Increased Emphasis on Ethics
& Socially Responsible Actions

96. Cause-Related Marketing
KitchenAid donates
$50 to breast cancer
research for every
pink mixer it sells
and encourages
consumers to host a
“Cook for the Cure”
dinner party.

97. Responding to the Marketing Environment
 Environmental Management Perspective
Taking a proactive approach to managing the
environment by taking aggressive (rather than
reactive) actions to affect the publics and forces in
the marketing environment.
This can be done by:
 Hiring lobbyists
 Running “advertorials”
 Pressing lawsuits
 Filing complaints
 Forming agreements to control channels

98. Rest Stop: Reviewing the Concepts
 Describe the environmental forces that affect the
company’s ability to serve its customers.
 Explain how changes in the demographic and
economic environments affect marketing
decisions.
 Identify the major trends in the firm’s natural and
technological environments.
 Explain the key changes in the political and
cultural environments.
 Discuss how companies can react to the marketing
environment.

99. CONSUMER BEHAVIOR

100. Why does Staples
sell Starbucks
coffee?

101.  Out of 11000 products launched by 77 companies,
only 56% are present five years later – Kuczmaski &
Associates
 Only 8% of new product concepts offered by 112
leading companies reached the market. Out of this
83% failed to reach marketing objectives

102. Application of Consumer Behaviour
 Analyzing market opportunities
 Selecting target market
 Marketing mix decisions
 Use in social and Non profit marketing

103. Importance
Significance in daily life
Application to Decision making

104. CONSUMER
PERCEPTION/
SENSATION
COGNITION
AFFECT
BELIEFS
SOCIAL AND
OTHER INFLUENCE
INFO
SEARCH
CHOICES
PREFERENCES
COMMUNICATION
MARKET
RESEARCH
STRATEGY
Influences on and of Consumer Behavior

105. Questions Faced By Consumers
 Are veggie burgers actually healthy?
 What makeup should you use to get an
“even” skin tone?
 Do I get any useful benefits from spending
more than $125 on a digital camera?
 Should I get a “make-over?” What am I
looking for? What should I do?
 Is my mechanic honest?
 Which tie should I wear for a job interview?
 Should I give my wife roses, chocolate, or
software?

106. Consumer Problems and Recognition
 Consumer problem:
Discrepancy between ideal and
actual state--e.g., consumer:
 Has insufficient hair
 Is hungry
 Has run out of ink in his or
her inkjet cartridge

107. CONSUMER DECISIONS:
Theory and Reality in Consumer Buying
INFORMATION
SEARCH
PROBLEM
RECOGNITION
EVALUATION OF
ALTERNATIVES
PURCHASE
POSTPURCHASE
EVALUATION/
BEHAVIORS
Theory
Complications

108. Approaches to Search for Problem
Solutions
INTERNAL
EXTERNAL
Memory
Thinking
Word of mouth, media,
store visits, trial CATALOG

109. Options Identified and Considered
UNIVERSAL SET
RETRIEVED SET
EVOKED SET
All possible options
Options that readily
come to mind
Options that will be
considered by the
consumer
Note: Retrieved and
evoked sets will vary
among different
consumers

110. REMINDER
 For low involvement
products, efforts aimed at
affecting internal search
tend to be more effective—
the consumer is usually not
willing to expend energy on
external search.
 External search is more
likely for higher
involvement products.

111. Elements of information search
Sources of information
Marketers source: like ads, brochures store displays,
website etc
Non marketers sources: Personal: like friends,
relatives, past experiences etc
Independent sources:
• Public Information: consumer reports, Govt
publications
• Product or service experts: home appraiser,
pharmacies etc

112. Elements of Information Search (contd)
Search strategies
Is the pattern of information acquisition customers
utilize to solve their problems
Customers weigh the cost in terms of physical and
mental efforts against gains from information

113. Elements of information search (contd)
Amount of search
Efforts put into processing the information

114. Decision Making Issues in the amount of
Search Involvement level
 Temporary
 Enduring(ongoing interest)
 Consumer locus of control
 Internal
 External
 Product category complexity
 Consumer knowledge and
Expertise
 Time pressure

115. H O W D O E S H E / S H E U S E T H E I N F O R M A T I O N
T O A R R I V E A T A C H O I C E ?
Alternative Evaluation

116. Evaluation Type
 Compensatory model: Decision based on
overall value of alternatives (good attribute
can outweigh bad ones)
 Non-compensatory: Absolutely must meet
at least one important criterion (e.g., car must
have automatic transmission)
 Hybrid: Combination of the two (e.g., one
non-compensatory measure, then
compensatory tradeoffs on other attributes
 Abandoned strategy: Consumer finds
initial criteria unrealistic and proceeds to less
desirable solution
IMPORTANT
LESS
IMPORTANT

117. Compensatory model
 Customer arrives at choice by considering all the
attributes and benefits of a product or service.
 simple additive rule:
 Weighted additive rule: based on relative importance
of each attribute like quality, customer support, Price
etc

118. Non-Compensatory model
Conjunctive model:
 Setting the minimum cutoff for each attribute.
 Each alternative is examined against the minimum
cutoff of all attributes
Ex. I want a saree whose price is below 5000, should
be pink in color and should be of specific material

119. Disjunctive model:
 Entails tradeoff between aspects of choice
alternatives
 It considers sheer presence or absence of attributes
rather than the degree/amount in which these
attributes are present
 Should serve the same purpose
Ex: trade off between copy speed and dual copying
capability

120. Purchase
 Choice identification: (identifies most preferred
choice)
 Purchase intent: (determination that one will buy the
product)
 Implementation : (paying seeking and obtaining
transfer of ownership)

121. Post purchase experience
 Decision confirmation:
 Experience evaluation:
 Satisfaction/dissatisfaction:
 Exit
 Voice
 loyalty

122. Attitude change via Cognitions
(influencing beliefs)
- Changing consumer’s beliefs about the attributes of a brand
 Providing information about the brand
 Change existing beliefs
 Difficult
 Advertiser’s motives are suspect
 Change importance of attributes
 Add beliefs
Did you know that….?
 Change ideal (fashion)

123. Natural Environment
 Involves the natural
resources that are needed
as inputs by marketers or
that are affected by
marketing activities.

124. Factors Impacting the Natural
Environment
Shortages of Raw Materials
Increased Pollution
Increased Government Intervention
Environmentally Sustainable Strategies

125. Environmental Responsibility
McDonald’s has made a substantial commitment to the so-called
“green movement.”