Marketing Introduction Power Point

MARKETING Core Concept of Marketing Marketing has been defined in various ways. The following definition is given by Philip Kotler "Marketing is a social and managerial process by which individuals and group obtains what they need and want through creating offering and exchanging products of value with others."

This definition of marketing rests on the following core concepts Needs Wants Demands Products Value Cost Satisfaction Exchange Transaction Relationship Markets Marketing and marketers

Needs • Marketing thinking starts with the fact of human needs and wants. • People need food, air, water, clothing and shelter to survive. Besides this, people have a strong desire for recreation, education and other services. They have strong preferences for peculiar versions and brands of basic goods and services. • Needs for food, clothing shelter etc are not created by society or marketers, they exist on the very texture of human biology.

Wants Wants are desires for specific satisfiers for deeper needs" •Needs for travel in a rich country may be meeting with automobile where as in a poor country the same need may be satisfied by a bicycle. •An American needs food and wants hamburger, French fries and coke and in another country this want may be satisfied with other items. •Although peoples needs are few their wants are many. Human wants are continuously shaped and reshaped by social forces and institution "

Demands • Demands are wants for specific products that are backed by an ability and willingness to buy them.“ • Wants become demands when supported by purchasing power. Many people want a Mercedes few are able to buy one. Companies must know when many people would actually be willing and able to buy rather than how many people want their product. • We can now see that marketers do not "create NEEDS" Needs pre exist marketers. Marketers get people to buy thing they don't want.

Products People satisfy their needs and wants with goods and services. We will use the term products to cover both. The importance of physical products lies not so much owning them but in obtaining the services they render. We buy microwave oven as it supplies cooking service and car supplies transportation service. In fact Services are also supplied by other vehicles, such as persons, places, activities, organizations etc. For example, if we are bored we can go to a comedy show and watch a comedian (person) or do some walking activity. A physical product is a package of service and marketer job is to sell the benefits or service built in that product rather than just describing their physical

Value, Cost & Satisfaction How customers choose among many products that might satisfy a given need? Suppose Mr X needs to travel 3 kms every day. A number of products can satisfy the need A bicycle A motorcycle An automobile A taxicab A bus Now each product can satisfy various needs. The X has to decide which product will give the most total satisfaction. The guiding concept is "Customer Value". Suppose X is mainly interested in speed and ease of getting to work and all products are offered free of cost - he will choose automobile. Since each product involves cost he may not buy automobile. Therefore he will consider the products value and price before making a choice. He will therefore buy the product that produces most value per Rupee. According to DeRose, value is ‘’ the satisfaction of customer requirements at the lowest possible cost of acquisition, ownership, and use’’

Exchange, Transactions & Relationships •The fact that people have needs and wants and can place value on products does not fully define marketing. •Marketing emerges when people decide to satisfy needs and wants through exchange. Exchange in one of the four ways people can obtain products. 1) Self production e.g.: People can relieve hunger through hunting or fruit gathering. 2) Coercion - Hungry people can fight or steal food from others. 3) Begging - Nothing to offer back except gratitude. 4) Exchange - Hungry people can approach others and offer resources in exchange such as money, another good or service Marketing arises from the last approach. Exchange in the act of obtaining a desired product from someone by offering something in return.

Conditions for Exchange 2. They are at least 2 parties 2. Each party has something of value to the other party 3. Each Party is capable of communication & delivery 4. Each party is free to accept or reject the offer • •

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Each party believes it is appropriate or desirable to deal with the other party. Two parties are said to be in exchange if they are moving towards an agreement. If an agreement is reached, we say a transaction takes place. Transactions are the basic unit of exchange. A transfer is different from transaction since in transfer one party gives something to the other and receives nothing. However, the transferor has certain expectations such as gratitude or good behavior from the recipient. To affect successful exchanges the marketer analyses what each party expects to give and get.

•MarketingFunctions/Objectives The functions, aims and objectives of marketing are • to give direction and purpose to the marketing division as a whole as well as to its various departments • to place present activities in perspective • to discipline various future activities • to place tactical plans correctly in the strategic selling • to set growth targets

Markets The concept exchange leaders to the concept of market.

A market consists of all potential customers sharing a particular need or want who might be willing and able to engage in exchange to satisfy that need or want" "

•Originally the term "Market" stood for the place where buyers and sellers gathered to exchange their goods, such as village square, grain market, etc. •Economists use the term, market to refer a collection of buyers and sellers who transact over particular product. •The marketers known as sellers constitute the industry and buyers constitute the market. •The sellers send goods and services and communications (ads, direct mail etc) to the market; in return they receive money and information.

Concept a market is a common place or locality where things are brought and sold and where buyers and sellers usually meet to affect purchase and sale. Types of markets 1. The product sold (Cloth market, jute market, share market, grain market etc) 2. volume of selling-Whole sale / retail Regulated market - Panchayath market • Area covered - home, local, national or international 4. Time interval -short period market (money market) or long period market (capital market) 5. Economic concept -perfect or imperfect market. volume of selling Regulated market • Based on control controlled by an association. say Panchayath market 13.Area covered (home, regional, national, international) 8. Depending upon time, it may be short period market (money market) or long period market(capital market) • Economic concept( perfect/imperfect) • .Sellers position Depending upon sellers position, it may be primary/local/secondary/central or terminal market. Consumers buy from retailers or local dealers.

MARKETING MANAGEMENT & MARKETING CONCEPTS Definition - By American Marketing Association "Marketing management is a process of Planning and executing the conception, pricing, promotion and distribution of goods, services and ideas to create exchanges that satisfy individual and organizational goals” There are five competing concepts under which organizations conduct their marketing activity. 6. Production concept 7. Product concept 8. Selling concept 9. Marketing concept 10.Societal marketing concept

1) Production Concept The production concept holds that consumers will favour those products that are widely available and low in cost.

2. The Product Concept •"The product concept holds that consumers will favour these products that offer the most quality performance or innovative features •Product oriented companies often design their products with little or no customer input. They trust that their managers can design the products with little or no customer output.

3. The Selling Concept •The organization must undertake an aggressive selling and promotion effort.

4. The marketing concept achieving organizational goals consists in determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competition.“

The marketing concept rests on 4 pillars, namely 1. Target Market 2. Customer Needs 3. Integrated marketing 4. Profitability

Target Market No company can operate in every market and satisfy every need. Nor can it always do job within on broad market. Companies do best when they define their target market (s) carefully and prepare a tailored marketing program.

Customer Needs A company can define its target market but fail to fully understand the customer’s needs. Consider the following example. A satisfied customer •Buys more and stays "loyal" longer. •Buys additional products as the company introduces &upgrades its products. •Talk favorably about the company and its products •Pay less attention to competing brands and advertising and is less price sensitive •Offers product/service ideas to the company. •Costs less to service than new customers

Integrated Marketing When all the company’s department’s work together to serve the customers interest, the result is integrated marketing.

Profitability The ultimate purpose of the marketing concept is to help organizations achieve their goals – PROFIT

The Societal Marketing Concept •TARGET MARKET •SOCIETY’S WELL BEING

SCOPE/FUNCTIONS OF MARKETING Functions of research Functions of Physical treatment (Packaging, Storage, Transport)

Functions facilitating Exchange and promotion (PRICING, FINANCE,SALES,ADVT)

KEY AREAS Building customer satisfaction through Quality, Service, and value Winning markets through Market oriented strategic planning Managing Marketing information and measuring market demand Analyzing marketing environment Analyzing consumer markets and buying behavior Analyzing business markets and business buying behavior Analyzing industries and competitors Developing new products Managing product lines, brands, and packaging Managing product support and service Designing pricing strategies and programs Selecting and managing marketing channels Managing retailing, wholesale and marketing logistics Designing and managing integrated marketing communications. Managing advertising, sales promotion, and public relations Managing sales force Managing direct and online marketing Organizing, implementing, evaluating, and controlling market activities

SALES MANAGEMENT •

SALES MANAGEMENT is a term applied to the process of distributing goods from the producer to the ultimate user; it is a part of marketing management and consists of advertising and selling, storing, transporting etc. • The three areas attached with sales management are 3. Managing sales force and making them understand the definition of their jobs, ie the sales force must know who is selling what , where and to whom’ 4. Compensation of salesmen, i.e. rewarding sales force suitably. 5. Training of sales force.

FUNCTIONS-SALES MGMT. • • • • • • • • • • • • • • • • •

Analyzing markets thoroughly Studying consumer’s psychology and demand. Studying the conditions existing in competitive firms. Studying the market fluctuations. Preparing market, sales and other relevant business forecasts Assisting in the preparation of marketing plan. Preparing the sales budget from sales plan. Deciding on distribution policy, methods and network Planning of the advertising campaign. Ensuring suitable packing of the products. Creating communication network for the department. Developing systems for sales reporting and statistical analysis. Providing technical advisory and other services to the customers. Determining sales staff requirements and handling the requirement, training and compensation of sales staff To explore newer markets for selling company products. Ensuring effective coordination with production and financial departments Striving continuously to lower selling costs , to expand sales and improve products for its wider acceptability

OBJECTIVES-MARKETING Marketing management is mainly concerned with those activities which lead towards to achieve long term profits by satisfying customer needs and wants. However , the main objectives of marketing management are To create new customers and attract them towards firms goods and services, through promotion mix Every marketing activity revolves around the preferences of customers. Therefore, selling is not only sufficient but satisfaction of consumers is more important. Marketing mix ie 4Ps of the marketing should be planned in such a manner so as to meet the different requirements of all customers. To generate sufficient profits for the growth of business and to survive in the market. To build goodwill of the business by initiating image building activities such as sales promotion, publicity and advertisement, high quality product, reasonable price etc. It also helps to raise the living standard of the peo