WHAT IS MARKETING ?. Marketing is a social process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others PHILIP KOTLER
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WHAT IS MARKETING ? Marketing is a social process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others PHILIP KOTLER NEEDS ,WANTS and DEMANDS --- PRODUCTS------VALUE & SATISFACTION---EXCHANGE & TRANSACTION---MARKETS & MARKETERS
WHAT IS MARKETING ? The essence of Marketing is a transaction - an exchange- intended to satisfy human needs and wants. There are three elements in the marketing process : (A) MARKETERS (B)WHAT IS BEING MARKETED (C) TARGET MARKET
NEEDS,WANTS AND DEMANDS • NEED : A state of felt deprivation of some basic satisfaction ( Food, Clothing, Shelter, Belonging etc. ) • WANTS : Wants are desires for specific satisfiers of the deeper needs. Needs are few and wants are many . • DEMANDS : are wants backed by ------Ability to buy and Willingness to buy
PRODUCTS / OFFERS / SATISFIERS / RESOURCES • Anything that can be offered to someone to satisfy a need or want is a product . • Product refers to physical object • Services refer to intangible object
VALUE AND SATISFACTION • Value is the customers’ estimate of the Product’s capacity to satisfy a set of goals • Customer gets benefits & assume costs • WHEN :Customer Expectance=Performance (satisfied) • Customer Expectance>Performance (dis-satisfied) • Customer Expectance<Performance (Highly satisfied)
EXCHANGE AND TRANSACTION • Exchange is a process rather than event. It is a value creating process because it normally leaves both parties better off. • A transaction is a trade of values between two or more parties ( A BARTER TRANSACTION OR A MONETARY TRANSACTION ).
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.
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.
WHAT IS MARKETING MANAGEMENT ? • Marketing management is demand management or it involves the task of influencing the level, timing and composition of demand. At times the actual demand level may be below, equal to, or above the desired demand level and the major task of marketing management is to regulate the level of demand.
STATE OF DEMAND AND MARKETING TASK • Marketing task • Conversional Mktg. • Stimulational Mktg. • Developmental Mktg. • Remarketing • Synchro-marketing • Maintenance Mktg. • Demarketing • Counter-marketing • State of demand • Negative Demand • No Demand • Latent Demand • Falling Demand • Irregular Demand • Full Demand • Overfull Demand • Un-wholesome Demand
EVOLUTION OF MARKETING MANAGEMENT • Marketing management has evolved through following stages : • (1) Production Orientation Stage • (2) Sales Orientation Stage • (3) Marketing Orientation Stage • (4) Social Responsibility & Human Orientation Stage
COMPANY ORIENTATION FOR MARKETING ACTIVITIES • Marketing Management can be defined as the effort to achieve desired EXCHANGE outcomes with TARGET MARKETS. • Now the question arises : • (1) What philosophy should guide the marketing activities? • (2) What weights should be given to the interests of the organisation, the customers and the society?
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.
MARKETING CONCEPT, DIMENSIONS • There are FIVE competing concepts under which organizations conduct their marketing activities: • The Production Concept • The Product Concept • The Selling Concept • The Marketing Concept • The Societal Marketing Concept
(1) THE PRODUCTION CONCEPT Company Produce more & more Produce Consumers Sell Practically sells itself
THE 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.
(2) THE PRODUCT CONCEPT Practically sells itself,if it gives most quality for money Produce Quality Products Consumers Sell Buyers admire well-made products and can appraise product quality and performance.
THE 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.
(3) SELLING CONCEPT • Consumers have normal tendency to resist. Aggressive selling & promotion efforts Produce Sell it Consumers Making sales becomes primary function and consumer satisfaction secondary .
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.
(4) MARKETING CONCEPT • “ LOVE THE CUSTOMER , NOT THE PRODUCT ” Learn what they want(MR) Produce it Consumers Market it Sell what they want(Satisfy needs of customers)
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.
(5) THE SOCIETAL MARKETING CONCEPT • It is Marketing Concept (+) Society’s well being. • Balancing of following three considerations while setting marketing policies :- • Customer’s want satisfaction • Society’s well being • Company’s profits
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.
STRATEGIC CONCEPT OF MARKETING • Shifted the focus of Marketing from Product or customer to the CUSTOMER IN THE CONTEXT OF THE BROADER EXTERNAL ENVIRONMENT . • To succeed, marketers must know the customer in a context including the competition, Govt. Policy& regulation and the broader economic, social and political macro forces that shape the evolution of market.
STRATEGIC CONCEPT OF MARKETING • Shifted the Marketing Objectives from PROFIT TO STAKEHOLDER BENEFITS. • Stakeholders are individuals or groups who have an interest in the activity of a company . They include-----The employees and management, Customers, Society, Shareholders, Financiers/ Bankers, Government etc.
STRATEGIC CONCEPT OF MARKETING • Strategic Marketing Concept is Strategic Management, which integrates marketing with the other management functions. • ( Major task is Profit for Stakeholders’ benefits ).
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.
GOALS OF THE MARKETING SYSTEM MAXIMIZE CONSUMPTION MAXIMIZE CONSUMER SATISFACTION MAXIMIZE CHOICE MAXIMIZE LIFE QUALITY
THREE LEVELS OF MARKETING • Responsive Marketing • Anticipative Marketing • Need Shaping Marketing
RESPONSIVE MARKETING It is the form of marketing when some company defines an existing clear need and prepare an affordable solution. (Recognizing that women wanted to spend less time for cooking and cleaning, led to the invention of modern washing machine, microwave oven etc.)
ANTICIPATIVE MARKETING It is a form of marketing when a company recognize an emergent or latent need, and come out with an affordable solution. Evian, Perrier anticipated growing market for bottled drinking water as the quality of water deteriorated in many places. Anticipative marketing is more risky than responsive marketing; companies may come into market too early or too late, or may even be totally wrong about thinking that such a market would develop.(eg. Dish washers in India)
NEED SHAPED MARKETING The broadest level of marketing occurs when a company introduces product that nobody asked for and often could not even conceive of. (e.g. Sony Walkman, Sony Compact Disc ) Late Akio Morita, founder and chairman of Sony, who introduced these and many other new products, summarized his marketing philosophy in these words: “ I don’t serve markets. I create them.”
The Scope Of MarketingMarketers are involved with marketing ten types of entities: Places Properties Organizations Information Ideas Physical Goods Service Experiences Events Persons
Pots Hats bats soap knife Ten exchanges required without central market • Exchange and Marketing In very basic economic systems, each seller must meet directly with each buyer in order to exchange something of value. As needs increase, the number of exchanges can soon become unmanageable for one person.
Pots Central market middleman Hats bats knife soap In a centralized market, a buyer can go to one location to find many different products from many different sellers. By reducing the time both buyers and sellers must spend to complete an exchange, prices can be lowered. Five exchanges required with central market
PRODUCTS / OFFERS / SATISFIERS / RESOURCES • Consumer markets • Business markets • Global markets • Nonprofit/Government markets
Marketing Functions • Environmental analysis and marketing research: Monitoring and adapting to external factors that affect success or failure, such as the economy and competition; and collecting data to resolve specific marketing issues. • Broadening the Scope of Marketing: Deciding on the emphasis to place, as well as the approach to take, on societal issues, global marketing, and the Web. • Consumer analysis: • Examining and evaluating consumer characteristics, needs and purchase processes; and selecting the group(s) of consumers at which to aim marketing efforts.
Marketing Functions continued • Product planning (including goods, services, organizations, people, places, ideas): Developing and maintaining products, product assortments, product images, brands, packaging, and optional features, and deleting faltering products. • Distribution planning: Forming logistical relationships with intermediaries, physical distribution, inventory management, warehousing, transportation, allocating goods and services, wholesaling, and retailing. • Promotion planning: Communicating with customers, the general public, and others through some type of advertising, public relations, personal selling, and/or sales promotion.
Marketing Functions continued • Price planning: Determining price levels and ranges, pricing techniques, terms of purchase, price adjustments, and the use of price as an active or passive factor. • Marketing management: Planning, implementing, and controlling the marketing program (strategy) and individual marketing functions; appraising the risks and benefits in decision making; and focusing on total quality.
Marketing Functions (Remember) Facilitating Functions Physical Functions Financing Standardization Storage Processing Exchange Functions Buying and Selling Transportation Market Intelligence Risk Bearing