4. Content
Content
s:
s:
MODULE 1
• Introduction: Nature and scope of
marketing, Evolution, Various
marketing orientations, Marketing Vs
Selling concepts, Consumer need,
Want and demand concepts,
• Marketing Environment – Assessing
the impact of micro and macro
environment.
• Marketing challenges in the globalized
economic scenario.
5. What is Marketing?
What is Marketing?
• Process by which individuals and
groups obtain what they need and want
through creating and exchanging
products and value with others.
• More simply: Marketing is the delivery
of customer satisfaction at a profit.
6. • Is the art and science of choosing target
market and building profitable relationship
with them this involves getting keeping, and
growing customers through creating
delivery and communicating superior
customers, value marketing management is
customer management and demand
management.
• Social definition
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.
7. Marketing Definition Cont….
Marketing Definition Cont….
• Management definition
It 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 goals.
• Marketing management can be described
as carrying out the tasks that achieve
desired exchanges, between the
corporation, and its customers.
9. Nature and scope of
Nature and scope of
•Marketing
Marketing
It is managing profitable Customer
Relationships.
• Building CRM is based on customer value &
Satisfaction.
• The main goal is to attract new customers by
promising & offering superior value & retain by
delivering satisfaction.
• Marketing playing important role in both Profit &
Non Profit Making organizations.
• Marketing deals with customers more than any
other business functions.
• Marketing is all about offering products, services
& achieve full satisfaction.
10. EVALUTION OF MARKETING
Era Prevailing attitude and approach
Production • Consumers favor products that are available and
highly affordable
• Improve production and distribution
• Availability and affordability is what the
customer wants’
PRODUCT • Consumers favor products that offer the most
quality, performance and innovative features
• ‘A good product will sell itself’
SALES Only sales concept.
MARKETING Focus on needs, wants etc,, Customer is a king.
RELATIONSHIP CRM
MARKETING
11. Core Marketing
Core Marketing
Concepts
Concepts
Offerings
Products
Needs, wants, and
and demands Services
Core
Core
Marketing
Marketing
Concepts
Concepts
Markets
Value, satisfaction,
and quality
Exchange, transactions,
and relationships
12. What Motivates a Consumer
What Motivates a Consumer
to Take Action?
to Take Action?
• Needs - state of felt deprivation for basic items such as
food and clothing and complex needs such as for
belonging. i.e. I am thirsty.
Needs are basic human requirements
• Wants - form that a human need takes as shaped by
culture and individual personality. i.e. I want a Coca-
Cola. Wants are needs directed to specific objects/services
that might satisfy the need
Demands - human wants backed by buying power. i.e.
I have money to buy a Coca-Cola.
This is the wants for specific products backed by an ability to
pay.
13. What Will Satisfy Consumer’s
What Will Satisfy Consumer’s
Needs and Wants?
Needs and Wants?
• Products - anything • Services - activities or
that can be offered to benefits offered for
a market for attention, sale that are
acquisition, use or essentially intangible
consumption and that and don’t result in the
might satisfy a need or ownership of anything.
want. • Examples: banking,
• Examples: persons, airlines, haircuts, and
places, organizations, hotels.
activities, and ideas.
14. How Do Consumers Choose
How Do Consumers Choose
Choose Among Products and
Choose Among Products and
•Services? Value - benefit that the customer
Services?
Customer
gains from owning and using a product
compared to the cost of obtaining the product.
• Customer Satisfaction - depends on the
product’s perceived performance in delivering
value relative to a buyer’s expectations. Linked
to Quality and Total Quality Management
(TQM).
15. How do Consumers
How do Consumers
Obtain
Obtain
Products and Services?
Products and Services?
• Exchanges - act of obtaining a desired object
from someone by offering something in return.
• Transactions - trade of values between parties.
Usually involves money and a response.
• Relationships - building long-term relationships
with consumers, distributors, dealers, and
suppliers.
17. Marketing Management
Marketing Management
Philosophies
Philosophies
• Consumers favor products that are
Production Concept
Production Concept available and highly affordable
•Improve production and distribution
•Consumers favor products that offer
Product Concept
Product Concept the most quality, performance, and
innovative features
•Consumers will buy products only if
Selling Concept
Selling Concept the company promotes/ sells these
product
•Focuses on needs/ wants of target
Marketing Concept
Marketing Concept markets & delivering satisfaction
better than competitors
•Focuses on needs/ wants of target
Societal Marketing Concept markets & delivering superior value
Societal Marketing Concept •Society’s well-being
18. Marketing & Sales Differences
Marketing & Sales Differences
SELLING MARKETING
1. Starts with seller & 1. Starts with buyers &
concerned with sellers Concerned with buyer
needs. needs.
2. Core of business activity is 2. Core of business activity is
seller. Buyer.
3. Converts products into 3. Converts needs into
Money. products.
4. It’s a products-Producing 4. Its customer satisfying
Process. process.
5. Marketing Mix planned as 5. Customer dictates the plan
per seller Needs. of MM.
6. Cost determines price. 6. Market determines price.
7. Selling & Promoting. 7. Integrating Marketing.
8. Production is the central 8. Marketing is the central
function of business. function of business.
9. Customer is the last link in 9. Customer is the primary
business. link in business
19. Marketing & Sales
Marketing & Sales
Concepts
Concepts
Contrasted
Contrasted
Starting Focus Means Ends
Point
Selling Profits
Existing
Factory and through
Products
Promoting Volume
The Selling Concept
The Selling Concept
Profits
Customer Integrated
Market through
Needs Marketing
Satisfaction
The Marketing Concept
The Marketing Concept
20. Functions of
Functions of
Marketing functions
Marketing
• A. Exchange
1. Buying
2. Selling
• B. Physical distribution functions
3. Transporting
4. Storing
•C. Facilitating functions
5. Standardizing and grading
6. Financing
7. Risk taking
8. Securing marketing information
21. Assessing Marketing
Assessing Marketing
Environment
Environment
• Includes:
– Microenvironment: Factors close to the
company that affect its ability to serve its
customers.
– Macro environment: larger societal forces that
affect the microenvironment.
» Considered to be beyond the control of the
organization.
24. The Company’s
The Company’s
Microenvironment
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
26. 5 Types of
5 Types of
Customers
Customers
• Consumer markets
• Business markets (B to B)
• Reseller markets
• Government markets
• International markets
27. Competitor
Competitor
s
s
• Must understand
competitor’s strengths
• Must differentiate firm’s
products and offerings
from those of
competitors
• Competitive strategies
should emphasize
firm’s distinctive
competitive advantage
in marketplace
29. The Macro
The Macro
environment
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.
31. Economic
Economic
Environment
Environment
Consists of factors that affect consumer
purchasing power and spending patterns.
• Changes in Income • Income Distribution
32. Global Economic
Global Economic
Development
Development
Key
Key
Changes in Income
Changes in Income Economic
Economic
Concerns for
Concerns for
Marketers
Marketers
Changing Consumer
Changing Consumer
Spending Patterns
Spending Patterns
33. Natural
Natural
Environment
Environment
• Involves the natural resources
that are needed as inputs by
marketers or that are affected
by marketing activities.
34. Natural
Natural
Environment
Environment
Conservation
Conservation
Of Resources
Of Resources
Factors Affecting
Factors Affecting
Ecotourism
Ecotourism the
the
Natural
Natural
Environment
Environment
Recycle and
Recycle and
Reduce Waste
Reduce Waste
35. Technological
Technological
Environment
Environment
• Most dramatic force now
shaping our destiny.
• Robots and machines
• Computerized video
checkout services
• Electronic guest room
locking systems
• Locking fax machines
receive orders at
restaurants
• The development of the
Internet
36. Cultural
Cultural
Environment
Environment
• The institutions and other
forces that affect a
society’s basic values,
perceptions, preference,
and behaviors.
37. Political
Political
Environment
Environment
Increased
Increased
Changing
Changing Emphasis on
Emphasis on
Increasing
Increasing Government
Government Ethics &
Ethics &
Legislation
Legislation Agency
Agency Socially
Socially
Enforcement
Enforcement Responsible
Responsible
Actions
Actions
38. New Challenges
New Challenges
New
M arketing
Landscape &
Information Nonprofit
Technology Marketing
Emerging
Emerging
Ethical
Concerns
Challenges
Challenges Globalizatio
n
Changing
World
Economy
39. Marketing Mix
Marketing Mix
• It is the tools that an organization
employs to pursue its marketing
objectives in the target market
• Product, Price, Place, Promotion
• 4 C’s – Customer solution, Cost,
Convenience, Communication
44. Who Purchases Products
Who Purchases Products
and Services?
and Services?
Actual
Actual
Market -- buyers
Market buyers Buyers
who share a Buyers
who share a
particular need
particular need
or want that can
or want that can
be satisfied by a
be satisfied by a
company’s products
company’s products Potential
Potential
or services.
or services. Buyers
Buyers
45. Marketing
Marketing
Management
Management
Marketing Management
Implementing programs to create exchanges
with target buyers to achieve organizational
goals
Demand Management
Finding and increasing demand, also
changing or reducing demand
Profitable Customer Relationships
Attracting new customers and
retaining current customers
Core Concepts This CTR corresponds to Figure 1-1 on p. 4 and relates to the discussion on pp. 3-10. Also to the CTRs numbers 4 - 8 which follow. Core Concepts Needs. These emerge from a state of felt deprivation. Ask students to distinguish among physical, social, and individual needs. Wants . These are the form taken by human needs as they are shaped by culture and individual experience. Have students provide examples for different wants based upon geographical differences, gender, age, wealth. Link culture to socio-economic standing, education. Demands . These are wants backed by buying power. Discuss such popular items as dream vacations or favorite cars to illustrate the difference between wants and demands. You may want an Acura Legend but drive a Subaru Justy. Introduce the idea that demands are often for a bundle or group of benefits and may address a number of related needs and wants. Products . These are anything offered for sale to satisfy a need or want. Have students discuss an extended view of products to include services and ideas. Discuss the role of value in distinguishing products. Discussion Note: Ask students to identify their product choice set for cars, vacations, dating partners, or college professors. Exchanges . These are the act of obtaining desired objects by offering something in return. Link to barter economies and promises to pay (i.e., credit, checks). Transactions. These are an actual trade of value between at least two parties. Transaction marketing is part of the larger concept of relationship marketing in which parties build long-term, economic ties to enhance quality and customer-delivered value. Markets . These are the set of actual and potential buyers of a product. Markets may be decentralized or centralized. Markets exist wherever something of value is desired, such as in the labor market, the money market, even the donor market - for human “products” such as blood or organs.
Five Marketing Philosophies This CTR relates to the material on pp. 12-17. Teaching Tip: You may find it useful to ask students to give their definitions of philosophy. How do they use philosophies for studying? dating? planning their time? Work from their examples to the idea that businesses too have philosophies about how to get things done. The Production Concept. One of the oldest concepts, it holds that consumers favor products that are available and affordable. Management emphasizes production and distribution efficiency. Examples from the text include Ford's Model T and Texas Instruments. The Product Concept . This concept focuses on the actual product in an effort to continuously improve quality, performance, and features. May lead to marketing myopia or the tendency to too narrowly define the scope of one's business. Consumers buy products for their benefits, not their features. The Selling Concept . This concept views consumers as unwillingly customers whose inherent opposition must be overcome to make a sale. It is most often used today for unsought goods. The selling concept tends to encourage sellers to misrepresent the true nature of their products or services and can lead to problems in maintaining high customer satisfaction. The Marketing Concept . This concept links the company's success with the consumer's continuing satisfaction. Its "outside-in" approach starts with a well defined target market, an analysis of their needs and wants, and then builds the company's offering around meeting those needs better than the competition (Note: the selling and marketing concepts are contrasted on the following CTR of Figure 1-4). The Societal Marketing Concept . This concept adds to the marketing concept the idea that the company should contribute to the betterment of society as a whole (Note: The societal marketing concept is developed in more detail on a following CTR of Figure 1-5 and the accompanying notes).
Marketing and Sales Concept Contrasted This CTR corresponds to Figure 1-4 on p. 15 and to the material on pp. 14-16. Comparisons and Contrasts: The Selling Concept takes an inside-out perspective -- looking at the company’s needs and wants in terms of existing products and ways to find customers for them. The Marketing Concept takes an outside-in perspective - identifying the needs and wants of a clearly defined market and adjusting company efforts to make products that meet the needs. Discussion Note: Promotional tone may help indicate whether a company practices the selling or the marketing concept. Selling involves persuasion -- convincing the customer of their need to buy existing products. Marketing, at its best, involves information -- bringing the developed product to the awareness of a target market that recognizes need satisfying products. As the text notes, companies can let their own success lock them into a rigid selling structure. As times change, and they always do, those companies fail to see the need for meeting new and emerging consumer needs. The marketing concept helps companies focus on customer need satisfaction , leading to long-term success by customer retention .
Microenvironment includes: the company itself, supplies, marketing channel firms, customer markets, competitors, and publics. Macroenvironment includes: demographic, economic, natural, technological, political, and cultural forces.
Resellers are distribution channel firms that help the company find customers or make sales to them. These include wholesalers and retailers who buy and resell merchandise. Resellers often perform important functions more cheaply than the company can perform itself. However, seeking and working with resellers is not easy because of the power that some demand and use. Physical distribution firms help the company to stock and move goods from their points of origin to their destinations. Examples would be warehouses (that store and protect goods before they move to the next destination). Marketing services agencies (such as marketing research firms, advertising agencies, media firms, etc.) help the company target and promote its products to the right markets. Financial intermediaries (such as banks, credit companies, insurance companies, etc.) help finance transactions and insure against risks associated with buying and selling goods.
Financial Public: influence the company’s ability to obtain funds. Banks, investment houses, and stockholders and the major financial publics. Media Publics: carry news, features, and editorial opinion. They include newspapers, magazines, and radio and television stations. Government Publics: Management must take government developments into account. Marketers must often consult the company’s lawyers on issues of product safety, truth in advertising, and other matters. Citizen-Action Publics: A company’s marketing decisions may be questioned by consumer organizations, environmental groups, minority groups, and others. Its public relations department can help it stay in touch with consumer and citizen groups. Local Publics: include neighborhood residents and community organizations. Large companies usually appoint a community relations office to deal with the community, attend meetings, answer questions, and contribute to worthwhile causes. General Public: A company needs to be concerned about the general public’s attitude toward its products and activities. The public’s image of the company affects its buying. Internal Publics: include workers, managers, volunteers, and the board of directors. Large companies use newsletters and other means to inform and motivate their internal publics. When employees feel good about their company , this positive attitude spills over to external publics.
New Marketing Challenges This CTR relates to the material on pp. 17-24. Teaching Tip: Challenge students to see marketing as an exciting and creative field needing new ideas and new solutions to emerging business opportunities. Growth of Nonprofit Marketing. More and more charitable firms and businesses that hold nonprofit status, like colleges and hospitals, are adopting a marketing orientation toward serving their constituencies. Globalization. Technological and economic developments continue to shrink the distances between countries. Computer and communications technology make possible truly global businesses that buy, sell, manufacturer, market, and service customers easily across international borders. Rising affluence creates new markets. Similarly, more European and Asian companies now compete successfully in the US. market. Changing World Economy. Even as new markets open to rising affluence in such countries as the “newly industrialized” pacific rim, poverty in many areas and slowed economies in previously industrial nations has already changed the world economy. Americans increasingly maintain living standards only by having two incomes per household. Value is hunted for by penny-wise consumers. Ethics and Responsibility . The greed of the 1980s and other problems has spurred a new interest in ethical conduct in business. Many consumers feel business in general has more of an obligation to those who generate profits -- the consumer! New Landscape and Information Technology . The new marketing landscape is a dynamic, fast-paced, and evolving function of all these changes and opportunities. More than ever, there is no static formula for success. Only strategies that incorporate and implement constant improvement in product quality and higher delivered customer value stand any chance of long-term success. Information and the internet have created a technology boom.
The Marketing Management Process The marketing concept suggests that businesses must actively manage an on-going relationship with customers. Key concepts of this perspective include: Marketing Management . The text defines marketing management as “the analysis, planning, implementation, and control of programs designed to create, build, and maintain beneficial exchanges with target buyers for the purpose of achieving organizational objectives.” Discussion Note: You might point out to students the influential role played by Professor Kotler in the development of marketing management, in both business and academic settings. Demand Management . Matching supply and demand can be a difficult balancing act. Traditional views of marketing were simplistic: build demand. Now marketers recognize the need to manage demand so that infrastructure resources are not overburdened. Discussion Note: It might help to compare demand management with Just-in-Time Inventory or Supply management. JIT lowers costs by not requiring extra capacity to hold things -- supplies or inventory -- before they are needed. By matching consumer demand to the systems designed to meet needs and wants, overall costs of marketing, and hence, the price of products, is reduced. Building Customer Relationships . Growing markets traditionally mean a plentiful supply of new customers. But as consumers become more sophisticated and as market growth slows, maintaining existing customers is the key to long term marketing success. As pointed out in the text, a continuing customer relationship means years of revenues for a company, not one time only sales. Further, existing customers are less expensive to promote to as they have already processed a great deal of product-specific information. Marketing Management This CTR corresponds to the material on pp. 11 - 12.