MARKETING

MANAGEMENT
MODULE -1
Question:

When I say “Marketing”,

what comes to your find first ???
Correct answer:

Consumer satisfaction.
Why is the subject “ Marketing” important
for this course?
 The essence of any managerial process is to achieve
organisational objectives by satisfying the needs of the
customer
 Marketing is the specialised tool by which the customer and
his needs are first of all identified and the necessary
managerial functions are adopted to satisfy the needs .
 Customer behaviour,objectives and customer relationship
management are critical for any organisation whether they are
in the supply of products or services
 Most systems and operational management techniques are
associated with management of marketing or sales
management.
Importance of marketing in Modern
Business
 Marketing was once only a Company department performing a staff function
 Marketing is now the driving force of all modern organisations and business.
 Marketing preceeds all management activities of a new organisation or in the
introduction of a new product or market.
 With the advent of the Internet and the resulting information revolution
,marketing has become the most important function in customer relationship
management.Most Companies survive and grow by using the existing
customers instead of trying to find new ones.
 Internet has made the customers very aware of the competition and have
made them extremely price sensitive.Marketing has to be very Sophisticated
to meet this factor head-on.
IMPORTANCE OF MARKETING IN THE
GLOBAL ECONOMY
 Nations depend upon marketing to sell their raw materials
and industrial output to other countries

 After globalization most of the firms have realized that

profit and growth objectives can be achieved by
combining domestic and international marketing.
What Can Be Marketed?

 Goods  Places
 Services  Properties
 Experiences
 Organizations
 Events
 Information
 Persons
 Ideas
Who Markets
 A Marketer is someone who seeks response (attention, a
purchase, vote etc.) from other party called the prospect.
Popular definitions of Marketing
 1)“Marketing is the task of creating, promoting and delivering
goods and services to consumers and businesses”… Philip Kotler.
Philip Kotler is regarded as the father of Marketing, he adds” It is
not enough to satisfy customers, you should delight them”.

 2)“Marketing is the sum total of all business activities which deal

with the movement of goods and services from producers to
ultimate users". Hector Lazo,Head of marketing ,University of
New York.

 3)Marketing is the act of identifying and meeting human and social

needs.
 CONTINUED…
 4)Marketing is the art and science of meeting needs in a profitable
manner.

 5)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.

 6)Definition by AMA< Marketing Management is the process of planning and

execution of the conception,pricing,promotion and distribution of ideas,goods and
services to create exchanges that satisfy individual and organisational goals.
 A good definition
 Marketing management is the art and science of choosing
target markets and getting ,keeping and growing the
customers through creation ,delivering and
communication of superior customer value.
 IMPORTANCE OF MARKETING IN
SOCIOECONOMIC SYSTEM
 Marketing creates utilities:
(Something that makes a product capable of satisfying
wants is its utility)
 Form Utility is associated with physical or chemical
changes that make a product more valuable. ( More
associated with production not marketing)
 Place utility makes a product accessible to potential
customers where they want it.
 Time utility makes a product available when they
want it.
 Information utility is created by informing prospective
buyers that a product exists.
 Image Utility (Special type of information utility)

It is the emotional or psychological value that a person

attaches to a product or brand because of its reputation
or social standing.

 Possession utility is created when ownership is transferred

to the buyer.
 IMPORTANCE OF MARKETING IN
ORGANIZATIONS

 The basic reason for firm’s existence is

customers want satisfaction. Marketing helps
the firm to identify the customer needs and
wants.
 Marketing is the only revenue-producing
activity for the firm.
 Marketing has become increasingly important
for service firms and nonprofit organizations.
IMPORTANCE OF MARKETING IN YOUR
LIFE

 Marketing is a large part of your daily life.

Consumers are exposed to number of
commercial messages a day.
 Studying marketing will make you a better-
informed customer.
 Marketing probably relates -- directly or
indirectly -- to your career aspirations.
 Evolution of Marketing
 The concept of Marketing emerged after Industrial Revolution
(latter part of 1800‘)

 This concept has evolved through three successive stages:

Production era
Sales Era
Marketing Era
 Production Era

 Manufacturers in this stage focused on increasing out put

while assuming that customers would seek out and buy
reasonably priced and well made product

 Executives with back ground in manufacturing and

engineering shaped the firm’s strategy

 More emphasis was on efficiency and cost control

 Sales Era

 This concept evolved in early 1930’s

 During this stage managers realized that to sell the product a

firm want to make some promotional activities

 This era was characterized by aggressive selling and usage of

unethical practices to sell the product.
 Marketing Era

 This era began in the mid of 1950’s

 Companies identified the importance of customer needs and

wants

 Marketing activities were directed towards the twin goal –

Customer orientation and profitability.
 PRODUCTION ORIENTATION

Some industries and organizations remain at the

production-orientation stage.

PRODUCTION ORIENTATION SALES ORIENTATION

Other industries and organizations have progressed only to the

sales-orientation stage.

PRODUCTION SALES MARKETING

ORIENTATION ORIENTATION ORIENTATION

Many industries and organizations have progressed to the

marketing-orientation stage.
Late 1800s Early 1930s Mid-1950s 1990s
Marketing
Marketing Management
Management
Philosophies/Concepts/
Philosophies/Concepts/ Orientations
Orientations
• Consumers favor products that are
Production
Production Concept
Concept available and highly affordable
•Improve production and distribution

•Consumers favor products that offer

Product
Product Concept
Concept the most quality, performance, and
innovative features

•Consumers will buy products only if

Selling
Selling Concept
Concept the company promotes/ sells these
product

•Focuses on needs/ wants of target

Marketing
Marketing Concept
Concept markets & delivering satisfaction
better than competitors

•Focuses on needs/ wants of target

Societal
SocietalMarketing
MarketingConcept
Concept markets & delivering superior value
•Society’s well-being
 Production concept

 Believes that consumers will prefer products that are readily

available at reasonable prices.

 Improvement in production and distribution efficiency was the

main focus for managements under this concept

 The production concept, though useful in some situations,

resulted in marketing myopia i.e., this concept focused too
narrowly on their own activities and lose sight of the real
objectives of customer’s needs satisfaction.
 Product concept

 This concept believes that consumers will automatically

favour products that offers the most quality ,performance and
innovative features. Thus the importance is on product
development.
 Continuous improvements in product and quality are the
essentials that follow this concept.
 This also lead to marketing myopia.
 Selling Concept.

 This concept believes that left to themselves Consumers and

businesses will not buy enough to satisfy the sellers volumes

 Thus constant sales promotions and efforts have to be made in

order to reach the required sales volumes

 The sales concept is centered on the idea of high pressure

selling to maximize sales volume and hence profits
 Continued…
 This concept seems to be effective for some industries such as
insurance, encyclopedias etc

 However the stress is on to sell what the industry has and not
what the customer needs
 Marketing Concept

 Believed that instead of make-and-Sell, Companies should

Sense-and-Respond. So the job is not to find the right
customers for your products but the right product for your
customers.
 There are 2 orientations that support this concept: s

1. Reactive Market orientation: You see the need and you

respond with a product
2. Proactive Market orientation: You see a future need and
you respond with a product. So by the time the need arrives
in the market your product is there.
 Characteristics of Marketing concept
 First identify the needs of a target segment of the market.
 Design the most effective product that best meets the requirements
of the consumer.
 Unlike the selling concept ,marketing concept focuses on the needs
of the consumer.
 Correctly identify the target market and the target markets
consumers needs.
 Implement integrated marketing throughout all departments in the
Organization.
 Aim at profitability by creating superior customer value.
 Societal Marketing concept.

 Is marketing concept ethical enough?

 Marketing has to be made humane and ecological, hence the

societal approach was introduced.

 Care should be taken to minimize environmental deterioration,

hunger, poverty and moral breakdown

 Hence needs to be satisfied in a manner which enhances and

preserves consumers society and society’s well being
Societal
Societal Marketing
Marketing Concept
Concept
Society
Society
(Human
(Human Welfare
Welfare))

Societal
Societal
Marketing
Marketing
Concept
Concept

Consumers
Consumers Company
Company
(Wants)
(Wants) (Profits)
(Profits)
Marketing
Marketing &
& Sales
Sales Concepts
Concepts
Contrasted
Contrasted
Starting Focus Means Ends
Point

Selling Profits
Existing
Factory and through
Products
Promoting Volume

The
The Selling
Selling Concept
Concept

Profits
Customer Integrated
Market through
Needs Marketing
Satisfaction

The
The Marketing
Marketing Concept
Concept
 Customer concept

 Concentrate on consumer loyalty and long term commitment

 One to one marketing

 Suitable for specialised firms operating in the high end market.

 Relationship marketing.
Selling Vs marketing
Selling Marketing

1.Emphasis is on the product. 1.Emphasis is on customers

2.Company first makes the wants.
product and then figures 2. Company first determines
out how to sell it. customers’ wants and then
figures out how to make
and deliver a product to
satisfy those wants
 Selling Marketing
3.Management is Sales 3.Management is profit
volume oriented oriented
4.Planning is done for a short 4.Planning is done for a long
period, in terms of today’s period, in terms of new
product and markets. products, tomorrow’s markets,
and future growth.
5.Needs of seller are stressed.
5.Wants of buyer are stressed.
Core Marketing Concepts

Needs, wants,
and demands

Markets Products
and services

Exchange, Value,
transactions, satisfaction,
and relationships and quality
What are Consumer’s Needs, Meeting Consumers’ Needs,

Wants and Demands?

Wants, and Demands

This interview with Jeff Manning, Executive Director of the

California Milk Processor Board, describes how the needs of
consumers led to a popular slogan.

 Needs - states of felt deprivation for basic items such

as food and clothing and social needs such as craving
for belonging and affection.

 Wants - forms that a human need takes as they are

shaped by culture and individual personality
characteristics.

 Demands - human wants backed by buying power

and willingness to buy.
Customer’s “ needs” ”wants” and what
leads to “Demand” ?
 “Needs” are the basic human requirements. People need food ,air,
water ,clothing and shelter for basic survival
 People also have strong need for recreation, education and
entertainment.
 Needs become” wants” when they are directed to specific objects that
might satisfy their needs.
 An American needs food but wants hamburger while a hungry chinese
may want noodles. Thus wants are shaped by socio-cultural factors.
 Demands are wants for specific products backed by an ability to pay.
People need transport, many people want a car but only a few can form
the Demand for a Mercedes Car
 Types of needs acc. to Maslow’s
Hierachy of needs theory
 Psychological needs.
 Safety needs
 Social needs
 Esteem needs
 Self Actualisation needs
 Types of Demand.
 Negative demand : being almost nonexistent due to
Inherently negative nature of the topic
eg: Vaccinations, Income tax, funeral services

 Nil-Demand: Due to real or perceived low or nil-

utility
eg: Chinese language courses etc
 Continued….
Latent Demand: Huge demand exists for a product
that is not yet in existence.
eg: harmless cigarettes, non polluting cars, sweets
which do not cause weight gain or pose problems for
diabetic patients.

Declining Demand: Falling demand due to change in

technology or customer behavior
eg: market for type writers, Non-a/c Cinema halls,
hand wound watches.
 Continued…

 Overfull Demand: Demand more than what the,

selling organization can handle.
Eg: Nano cars, Movie ticket for first day first
show.

 Unwholesome Demand: When there is a strong

demand for undesirable products and services.
Eg: Drugs, Alcohol, pirated movies
 Continued
 Irregular Demand: Demand varies seasonally, and
maybe periodically.

 Full Demand: Markets have reached their full

potential of product intake, and organizations are
incapable of selling more.
Eg: Newspapers, Lottery tickets
What Will Satisfy Consumer’s
Needs and Wants?

 Services - activities or
 Products - anything benefits offered for
that can be offered to sale that are
a market for attention, essentially intangible
acquisition, use or and don’t result in the
consumption and that ownership of anything
might satisfy a need
or want.
How Do Consumers Choose Among
Products and Services?
Value Gained From Owning a Product and
Costs of Obtaining the Product is
Customer Value

Product’s Perceived Performance in Delivering

Value Relative to Buyer’s Expectations is
Customer Satisfaction

Total Quality Management Involves

Improving the Quality of Products, Services, and
Marketing Processes
 How
How Do
Do Consumers
Consumers choose
choose Among
Among
Products
Products and
and Services?
Services?
The offering will be successful if it delivers value and
satisfaction to the Target buyer .

 Customer Value - benefit that the customer gains

from owning and using a product compared to the
cost of obtaining the product.
Value is a combination of quality, service, and price
- called customer value triad.
 Customer Satisfaction - depends on the product’s
perceived performance (out come) in delivering
value relative to a buyer’s expectations.
 If performance falls short of expectation the
customer is dissatisfied.
 If it matches the customer is satisfied
 If it exceeds the customer is delighted.

Ex: you might be satisfied with a Lays pack (Rs.10)

from a petty shop but not the same from a shop
situated near tourist places (Rs.15)
How Do Consumers Obtain
Products and Services?

Exchanges Transactions

Relationships
Building a Marketing
Network Consisting of
The Company and All
Its Supporting
Stakeholders
How
How do
do Consumers
Consumers Obtain
Obtain
Products
Products and
and Services?
Services?
 Exchanges - act of obtaining a desired object from someone by
offering something in return. This stage includes offering
something, discussing the mutually beneficial and acceptable
terms and trying to arrive at mutually agreeable terms.

 Transactions –It is a consequence of exchange process. When

two parties reach on terms of exchange it become transaction. It
is a trade of values between two or more parties.

 Relationships - building long-term relationships with consumers,

distributors, dealers, and suppliers.
 Markets

 Traditionally market was a physical place where buyers

and sellers gathered to buy and sell goods

 Economists describe markets as” a collection of buyers

and sellers who transact over a particular product or
product class”
Who Purchases Products and
Services?

Market –
a place where Actual
Ethical to
F
rs
c
a
S
a n
o
itu
l Buyers
buyers and U
td
p
n
x
ec
sellers
Meet to buy
or
Attitudes
of Potential
sell products
Others Buyers
.
 Classification of Markets
 Resource market
 Banks, raw material sellers, labour

 Manufacturer market
 a market which is involved in the production of
goods for resale

 Intermediary market
 Sells goods made by the manufacturers to the
consumers
 Government market
 Provides public service, collects tax revenue, buys from
manufacturers or intermediary markets

 Consumer market
 Companies selling mass consumer goods and services.
Companies spend a huge amount of time and money to build
superior brand image.

 Global Markets
 Markets across political boundaries. Marketers must decide which
countries to target,how to adapt their products and
communications and how to price them…etc
Market place… Market space….
Meta market
 Market place can be a physical entity (market-
store, supermarket etc)

 Market space which is in fact digital cyber

space where products and services are offered
and exchanged
Continued…
 Metamarkets
 These are a cluster of complementary products or services that are
closely related in the minds of consumers but are spread across a
diverse set of industries
 Example: automobile Metamarket consists of automobile
manufacturers, new and used car dealers, Financing companies,
Insurance companies, Mechanics, Spare parts dealers, Service
shops, auto magazines, classifieds, Auto sites on internet etc.
Modern Marketing System

Suppliers
Suppliers

Company
Company
Competitors
Competitors (Marketer)
(Marketer)
Environment

Environment
Marketing
Marketing
Intermediaries
Intermediaries

End
End User
User
Market
Market
Marketing mix
 Set of controllable, tactical, marketing
tools that the firm blends to produce the
response it wants in the target market
 The Four Ps of the Marketing
Mix
Product Place

C
Price Promotion

2-11
 The Marketing Mix
 To achieve the company’s objective a marketing program based
on the most suitable marketing mix will be drawn up.
 Marketing mix is made up of the following factors:

 Product
 Goods and services offered by a company to the target market, to satisy
needs and wants
 The different physical attributes of the products such as design, features,
quality, brand name, usage etc
 Price
 Money value that the consumers have to pay to buy the product or service
 Discounts, allowances, payment periods, credit facilities
Continued…

 Place
 Physical distribution activities through which the product moves from the
factory to the customer
 Include the aspects of Channels, Coverage (extent), Location, Transport,
inventory and Logistics management

 Promotion

 activities of personal selling, advertising and communicating product

benefits and attributes to target consumers to persuade them to purchase
 Marketing Mix (4p’s)
Promotion
A successful product or service means
nothing unless the benefit of such a
service can be communicated clearly to Advertising
the target market. An organisations
promotional mix can consist of: Personal
Selling

Sales
Promotional Mix Promotion

Public Relation

Publicity

Direct
Marketing
THANK YOU