Marketing Concepts - Chap 1

Marketing Concepts Dr.Sita Mishra

Learning Objectives Understand the new economy. Learn the tasks of marketing. Become familiar with the major concepts and tools of marketing.  Understand the orientations exhibited by companies.  Learn how companies and marketers are responding to new challenges.   

The New Economy – Increased buying power. – Greater variety of goods and services. – Increased information. – Enhanced shopping convenience. – Greater opportunities to compare product information with others.

The New Economy  Websites can provide companies with powerful new information and sales channels.  Companies can collect fuller and richer information about markets, customers, prospects and competitors.  Companies can facilitate and speed up communications among employees.  Companies can have 2-way communication with customers and prospects

The New Economy  Companies can send ads, coupons, samples, information to targeted customers.  Companies can customize offerings and services to individual customers.  The Internet can be used as a communication channel for purchasing, training, and recruiting.  Companies can improve logistics and operations for cost savings while improving accuracy and service quality.

What is Marketing  Simple Definition: Marketing is managing profitable customer relationships. Goals:  Attract new customers by promising superior value.  Keep and grow current customers by delivering satisfaction.

The AMA managerial definition: “Marketing is 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.”

Marketing Defined  Kotler’s social definition: “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.”

Core Marketing Concepts  Needs, wants, demands  Target markets and market segmentation  Marketers & prospects

•Product offering and brand •Value and satisfaction •Exchange and transactions •Relationship and networks •Market

This is a Need 

Needs - state of felt deprivation including physical, social, and individual needs.

Maslow’s Hierarchy of Needs

This is a Want Wants – Needs become wants when they are directed to specific objects that might satisfy the need.

This is Demand Wants

Buying Power

“Demand”

Types of needs  Stated needs  Real needs  Unstated needs  Delight needs  Secret needs

Need / Want Fulfillment  Needs and Wants Fulfilled through a Marketing Offer : Some combination of products, services, information, or experiences offered to a market to satisfy a need or want.

What Satisfies Consumers’ Needs and Wants? Products

nything that can be Offered to a Market to Satisfy a Need or Want



Persons

Places

Information Experiences

Organizations

Ideas Events

Properties

Services Activity or Benefit Offered for Sale That is Essentially Intangible and Does Not Result in the Ownership of Anything

Four Levels of Competition

Generic competition Form competition Industry competition Brand competition

Core Marketing Concepts  Target markets & segmentation – Differences in needs, behavior, demographics or psychographics are used to identify segments. – The segment served by the firm is called the target market. – The market offering is customized to the needs of the target market.

Marketplace, Marketspace,Metamarkets The Marketplace is physical, as when one goes for shopping in a store. Marketspace is digital, as when one goes shopping on the internet. Metamarket is described as a cluster of complementary products and services that are closely related in the minds of consumers but are spread across a diverse set of industries.

Exchange & Transactions  Exchange involves obtaining a desired product from someone by offering something in return. Five conditions must be satisfied for exchange to occur. It is value-creating process.  There must be at least two participants in the process.  Each party must offer something of value to the other.  Both parties must want to deal with each other.  Both participants have the right to accept or to reject the offer.  Both groups must have the ability to communicate and deliver on the mutual agreement.

Transaction  Transaction is a trade of values between two or more parties. It involves at least two things of value, agreed-upon conditions, a time of agreement, and a place of agreement.

Relationship Marketing  Relationship marketing aims to build long-term mutually satisfying relations with key parties, which ultimately results in marketing network between the company and its supporting stakeholders.

Relationship Marketing Four key constituents for marketing are:  Customer  Marketing Partners ( channel, suppliers, distributors, dealers and agencies)  Employee  Members of financial community (shareholders, investors) The development of strong relationships requires an understanding of the capabilities and resources of different groups, as well as their needs, goals and desires.

Marketing Mix

7 P’s in Services Marketing 3 additional P’s in services marketing  People: Any person coming into contact with customers can have an impact on overall satisfaction.  Process: Process(es) involved in providing a service and the behaviour of people, which can be crucial to customer satisfaction.  Physical evidence

Matching Mix Concepts (A & S)  4 A’s Acceptability Affordable Accessible Awareness

4 S’s Solution Sense Spread Supports

PACS Matrix  Product Acceptability Price Acceptable Place Access Promo Awareness

Customer Sol Cost Convenience Communicate

Solution Sense Spread Support

SIVA approach  Solution: How appropriate is the solution to the customers problem/need  Information: Does the customer know about the solution, and if so how, who from, do they know enough to let them make a buying decision  Value: Does the customer know the value of the transaction, what it will cost, what are the benefits, what might they have to sacrifice, what will be their reward?  Access: Where can the customer find the solution. How easily/locally/remotely can they buy it and take delivery. This model was proposed by Chekitan Dev and Don Schultz

Marketing Channels Marketing ChannelsTo reach Target market  Communication channels  Distribution channels  Service channels

Deliver messages to and receive messages from target buyers. Includes traditional media, non-verbal communication, and store atmospherics.

Marketing Channels Marketing Channels  Communication channels  Distribution channels  Service channels

Display or deliver the physical products or services to the buyer / user. 

Marketing Channels Marketing Channels  Communication channels  Distribution channels  Service channels

Carry out transactions with potential buyers by facilitating the transaction. 

Marketing Management Philosophies

Societal Marketing Concept Marketing Concept Selling Concept Product Concept Production Concept

Production Concept  Consumers will favour those products that are widely available and low in cost.  Therefore increase production and cut down costs.  And build profit through volume.

The Production Concept A customer can have any colour he likes for his car so long as it's black’ Henry Ford

Product Concept  Consumers will favour those products that offer the most quality, performance, or innovative features.  Therefore, improve quality, performance and features.  This would lead to increased sales and profits.

Marketing Myopia  Management’s failure to recognize a company’s scope of business.  Sellers pay more attention to the specific products they offer than to the benefits and experiences produced by the products.  They focus on the “wants” and lose sight of the “needs.”

The Selling Concept  Consumers , if left alone , will not buy enough of company’s products.  Therefore, promote sales aggressively.  And,build profit through quick turnover.

The Marketing Concept  The key to achieving organizational goals consist in determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors.  And build profit through customer satisfaction and loyalty.

Marketing and Sales Concepts Contrasted

The Societal Marketing Concept  The societal marketing concept 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. - It addresses conflicts between consumer’s and firm’s short run wants and long term welfare.

Societal Marketing Concept

The Holistic Marketing Concept  It is based on the development, design and implementation of marketing programmes, processes and activities that recognises their breadth and interdependencies. Four components are:  Relationship marketing  Integrated marketing  Internal marketing  Social responsibility marketing

Marketing deptt

Senior Mgt

Other Deptt

Communications Products &

Channels

Services Internal Marketing

Integrated marketing

Holistic Marketing Social Responsibility Marketing Ethics Environment

Relationship Marketing

Community Legal

Customers

Partners Channels

Marketing System

Marketing System  Marketing is concerned with the flow of goods and services from the points of production to the points of consumption. There is a systematic arrangement of these functions of marketing to move the goods and services to the needy persons.  This system is essential to the creation of time, place and possession utilities.

Marketing System  A dynamic marketing system must be willing to undertake the following specific activities : 1. Define market area. 2. Research consumer wants and needs. 3. Develop and redevelop product / service. 4. Select, train, motivate and control human resources. 5. Develop sales approach and advertising support.

WHAT IS MARKET ?

 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.  Potential Market (have sufficient level of interest in a market offer)  Available Market (who have interest, income and access to a particular offer)  Target Market or Served Market (a co. can go for serving whole available market or can concentrate on certain segments)  Penetrated Market (set of buyers who are buying the co.’s product)

Marketer & Prospect – A marketer is someone seeking a response (attention, a purchase, a donation) from another party, called the prospect. – If two parties are seeking to sell something to each other, we call both of them marketers.

STATE OF DEMAND AND MARKETING TASK State of demand        

Negative Demand No Demand Latent Demand Falling Demand Irregular Demand Full Demand Overfull Demand Un-wholesome Demand

Marketing task •Conversional Mktg. •Stimulational Mktg. •Developmental Mktg. •Remarketing •Synchro-marketing •Maintenance Mktg. •De-marketing •Counter-marketing

How Business and Marketing are Changing/ Marketing themes in the new economy          

Changing Technology Globalization Customer Empowerment Customization Customer relationship marketing Customer lifetime value Target marketing Integrated marketing communication Channels as partners Every employee a marketer

WHAT IS MARKETING MANAGEMENT ?  Marketing Management is the analysis, planning, implementation and control of programs designed to create, build and maintain beneficial exchanges and relationships with target markets for the purpose of achieving Organisational objectives.

Shifts in Marketing Management  From Marketing does the 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 supplier to working with fewer suppliers in a partnership  From relying on old market positions to uncovering new ones  From focusing on shareholders to focusing on stakeholders

Shifts in Marketing Management  From emphasizing tangible assets to emphasizing intangible assets  From building brands through advertising to building brands through integrated communication  From offline to online  From mass market to target market  From focusing on profitable transactions to focusing on customer lifetime value  From focus on gaining market share to focus on building customer share  From being local to being “Glocal”

Other Concepts in Marketing         

Green marketing Sustainable marketing Neuro marketing Ambush marketing Viral marketing Buzz or stealth marketing Permission marketing Herd concept in marketing Contextual marketing and so on…………