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UNIT 1 MANAGEMENT
Structure 1.1 Introduction Objectives 1.2 1.3 1.4 1.5 1.6 1.7 Market and Marketing The Exchange Process
INTRODUCTION TO MARKETING
Core Concepts of Marketing Functions of Marketing Importance of Marketing Marketing Orientations The production concept The product concept The selling concept The marketing concept The societal marketing concept
1.8 1.9 1.10 1.11 1.12
Summary Glossary Terminal Questions Answers Case Study
In some ways marketing is as old as civilization itself, in fact marketing came into existence with barter and with the passage of time barter evolved into the art of selling The industrial revolution of 18th and 19th century further fostered the evolution of marketing .The rapid social change driven by
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technological and scientific innovation fuelled the systematic approach to marketing. The late 50s observed the emergence of real marketing concept which was entirely different from sales concept and with even higher level of competitiveness forced the marketers to depart from traditional sales approach. So customer satisfaction became an inseparable function of marketing function. To consider long-term interest of society over the specific needs and interest of a given target market was of paramount importance to the marketing. This new approach is called Social Marketing but from 1960 onwards most markets witnessed saturation which pioneered the sophistication of marketing management. The advent and wide availability of Internet completely changed Marketing Concept. Increasingly demanding customers, rapid technological change, heterogeneous & fragmenting markets and intense competition lead to the emergence of new branches of marketing which could potentially meet the challenges of the 21st century marketer. Marketing focuses on identifying and meeting human and social needs. The shortest definition of marketing is “meeting needs profitably.” The marketer Procter & Gamble observes that people feel overweight but they want tasty but less fatty food and they come up with the idea of Olestra likewise CarMax sensed the people uncertainty while buying used automobile and invents an entirely new system for selling cars Its origin dates back to the ancient civilisation when man used symbols signs and material artefacts to transact and communicate with others. The term marketing is often used interchangeably with advertising or publicity and most importantly sales. Marketing encompasses many activities like advertising, promotion, product design etc This unit will provide answers to questions like, What is marketing? What are the functions and relevance of marketing? What are the modern concepts of marketing adopted by marketing managers with the changing landscape? Caselet: Marketing Management at Apple Computer
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When Apple Computer launched its iPod digital music player, CEO Steve Jobs called it the “21st century walkman”, referring to the Sony product that, starting in 1979, revolutionised the way consumers listen to music on the go. The stylish iPod has more than fulfilled that prophecy. Despite intense competition from Sony, Samsung and other rivals, the iPod captured more than 60% of the US market for digital music players. Just as important, iPod plays a strategic role as the cornerstone of Apple’s ambitious marketing drive to bring its brand to a broader customer base and boost long term profits. Apple’s marketers know that customers associate the brand with usefriendly functionality, innovative technology and sleek design. Therefore, every Apple product- the iPod, Macintosh desktops and laptop computers, even the online iTunes Music Store and Tiger Software is consistent with this image and delivers the kind of experience that customers expect from the brand. The iPod runaway success brought new attention to the rest of Apple’s offerings and, as customers try other Apple products, is helping reverse Macintosh’s steep decline in market share. However, market share is only one measurement of marketing accomplishment, as the CEO well knows. Can Apple’s marketing managers keep up the momentum in building relationships with customers and profits for shareholders, is a thing to watch in the future. (Source: “A Framework for Marketing Management”, 3rd Edition, Philip Kotler and Kevin Lane Keller, Pearson Education) Objectives After studying this unit, you should be able to:
define market and marketing. discuss the concepts and functions of marketing. explain the importance of marketing. differentiate between types of marketing orientations. evaluate how marketing function has changed over a period of time.
1.2 MARKET AND MARKETING
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Non-profit and governmental markets: In these markets. whereas market space is the virtual world where buyers and sellers meet through Internet Markets can differ in size. past consumers. market for cars. etc. So market has become a virtual world and marketing comes off in space than in a geographical place so market may be defined as a set of consumers. We can categorise markets on the following basis: 1. shopping centers and shopping malls. 4 Sikkim Manipal University . FMCGs. Consumer markets are craved up into four primary categoriesconsumer products. Globalization and technological advances like internet and e-commerce empowers the marketer to overcome geographical boundaries. resellers and intermediaries who are either involved in the process of exchange or are in the process of getting involved in an exchange process. consumer durables. For example: Markets for machines. (Provided these goods are bought for individual use) Industrial Markets: The goods and services sold in these markets are not directly aimed at final consumers. retail products. location.Marketing Management Unit 1 Market Earlier. etc. Markets based on focus of the marketer: We can classify markets as: Consumer markets: These are the markets dominated by products and services intended for the general consumer. Some examples include local farmers' markets held in town squares or grounds. types and variety of human communities. international currency and commodity markets. potential consumers. soft drinks. etc. sellers. photocopier. and transportation products. trucks. but at buyers who purchase them for use in the production of other goods and services. the buyers are government agencies and non-profit institutions who buy Page No. So market place is a physical place where buyers and sellers meet for an exchange. food and beverage products. a market was defined as a place where buyers sellers. geographic scale. auditing services. range. For example. resellers and intermediaries met for exchange of goods and services but with the changing landscape modern day marketing witnessed drastic changes. as well as the types of goods and services traded.
etc. 5 Sikkim Manipal University . Markets based on area: When area is used as a basis of market classification. (3) buyers and seller are free to get in or leave the market. (2) all buyers and sellers attempt to maximize their profit (income). Reliance. It is a free-market situation in which the following conditions are fulfilled: (1) buyers and sellers are numerous and but few who have any degree of individual control over prices. all countries except India constitute international market. International markets: They are the markets for products and services that are bought by consumers residing outside the national boundaries of the country to which the manufacturing company belongs. The local market includes customers located within the region where the product or services are made available. tailors. prices. 2. The concept of Perfect Competition was propounded by Dr. For example. for companies like Tata Motors.Marketing Management Unit 1 products and services for running their organisations.e. We can classify markets as: Perfect competition: A kind of market structure which reflects a perfect degree of competition and single price prevails..where are they located and how far they are willing to travel to purchase the product . vegetable market. Alfred Marshal. The health of national market can be deciding factor for business success. Wipro. For example. Markets based on nature of competition: The most important form of market classification is based on the nature of competition. we categorise markets into: Local markets: This market include the client or customers who will purchase the product in the region or area where it is brought forth Marketing managers must know who are the target customers . hairdressers. National markets: It encompasses domestic marketplace for goods and services functioning within the borders of and governed by the regulations of a particular country. 3. (4) all buyers and sellers are endowed with the information regarding availability. the military needs an incredible amount of supplies to feed and equip troops. spice market located in Kerala. and quality of goods being Page No. rice market located in Kolkata. For example. the buyer-seller interaction.. etc. i. For example. etc.
railways. The price of the product is set by the single seller (price is often regulated by some regulatory authority like the government). and (5) all goods of a specific category are homogeneous. and (4) other potential producers do not have access to the specialised information about production techniques. (3) there are restrictions on entry into and exit out of the industry. Monopoly 2. Also called perfect market or pure competition. These markets are further divided into three parts: 1. Monopolistic competition Monopoly: A kind of market structure where there is a single seller and there is no close substitute for the product that is offered by the seller. There are three key features of oligopoly: (1) the industry is controlled by a small number of large firms. there are fewer buyer and sellers. etc. steel and aluminium industry. A few examples of monopoly are local water utility. (2) the firms sell either homogeneous or differentiated products. Each seller has some degree of control over price. There are four key features of monopoly: (1) there is a single firm that sells all the output in a market. local electricity utility. The industry that closely resembles perfect competition in real life is the agricultural industry. hence interchangeable for one another. Imperfect market: A market category where individual firms exercise control over the price. Oligopoly 3. and (3) there are significant barriers to entry into the industry. (2) the firm or the seller offers a unique product. Monopolistic competition: A kind of market structure where there are many sellers (but not as many as in a perfect market) and they Sikkim Manipal University Page No.Marketing Management Unit 1 traded. A few examples of oligopoly are the petroleum. and the firms do not sell identical products. Oligopoly: A kind of market structure where there are a few sellers in the market and they control the supply of a product in the market. 6 .
American Marketing Association defines marketing as: “The performance of business activities that directs the flow of goods and services from producer to consumer or user. (2) they sell similar but not homogeneous products.Simply you can describe marketing as the art of anticipating and serving customer needs .” This definition seems somewhat narrow because of its emphasis on flow of products that have already been produced. arouse. As philosophy marketing is based on a notion about the business in terms of customer needs and their satisfaction . and (4) the producers have extensive knowledge of technology and prices. etc) to the customer. and satisfy customer needs. product development. Levitt) "Selling concerns itself with the tricks and techniques of getting people to exchange their cash for your product. (3) there is relative freedom of entry and exit. Marketing Marketing is the management process which facilitates the movement of goods and services from concept (advertising. view the entire business process as consisting of a tightly integrated effort to discover.Marketing Management Unit 1 produce somewhat different products that are close substitutes of each other. And it does not. It is not concerned with the values that the exchange is all about. advertising. Let us look at some common and popular definitions of marketing that will help you understand the meaning of marketing." The broad field of marketing includes activities such as: Estimating customer demand. Setting a price and making the product available to the customers. Promoting the product to educate/inform the customers by using tools such as public relations. create. 7 . and direct marketing. needs and wants and designing a product to satisfy them. This definition is more of a Sikkim Manipal University Page No. as marketing invariably does. There are four key features of monopolistic competition: (1) there are large numbers of small firms.Marketing differs from selling because (in the words of Harvard Business School's emeritus professor of marketing Theodore C.
marketing is a _______________ process. offering and freely exchanging products and services of value to each other.3 THE EXCHANGE PROCESS Marketing occurs when the people decide to satisfy their needs and wants through exchange of goods and services. In __________________ there is a single seller in the market. serving the consumer and his demand through a network of marketing channels and expanding the market base in the face of competition. which assumes that there is nothing beyond smooth flow of quality goods and services to customers. According to Kotler. this definition is more relevant. Self assessment questions 1. 4. In industrial markets.” From a broader social point of view. goods are generally bought for individual consumption. 8 . Which of these is a feature of an imperfect market? a) Large number of buyers b) Identical products c) Few sellers d) Freedom of entry and exit 2.Marketing Management Unit 1 physical distribution-oriented idea. (a) True (b) False 3. 1. It is the core concept of marketing.” Paul Mazur defines marketing as: “An ongoing process of discovering and translating consumer needs and desires into products and services. Phillip Kotler defines marketing as: “A societal process by which individuals and groups obtain what they need and want through creating. creating demand for these products and services. It is the act of obtaining a desired object from someone by Sikkim Manipal University Page No.
agreed-upon conditions. Exchange can be looked at as a value-creating process as it usually leaves both parties better off. For example. a time of agreement.1: The Concept of Exchange You must note that an exchange is not an event. we say that a transaction takes place. Figure 1. A transaction involves at least two things of value. For exchange potential to exist. When they reach an agreement. car and cash) Each party is able to communicate and deliver Each party is free to accept or reject the exchange offer Each party believes it is appropriate to deal with other party An exchange will actually occur only when the two parties involved can agree on terms that will leave them both better off (or at least not worse off) than before. It is a process. 9 .Marketing Management Unit 1 offering something in return.1 shows an exchange process where customer and marketer exchange things that have value and both the parties agree to the terms and conditions of the exchange. a process of negotiation in which both the parties try to arrive at mutually agreeable terms. Fig 1. Sikkim Manipal University Page No. exchange takes place when you buy a music CD from a store and give money to the store owner or when you give your services to an organisation in return of a salary. the following five conditions must be fulfilled There are at least two parties At least two things of value (for example. and a place of agreement.
Fig 1.pdf) Sikkim Manipal University Page No. 10 . This definition rests on the following core concepts: Needs. a legal system exists to support and enforce compliance among the parties involved in a transaction. Exchange takes place when there is a __________________. goods or services are traded for other goods or services. You must also note that transactions do not require money as one of the traded values.idc. A transaction _______________. involves at least two things that have 1. wants and demands Products Value and Satisfaction Exchange and transactions Markets Figure 1. 6.2 depicts the five core concepts of marketing.ac.2: Core Concepts of Marketing (Source: http://www.Marketing Management Unit 1 Generally. For example.in/~chakku/dm/02_marketting %20design.4 CORE CONCEPTS OF MARKETING Marketing is a social process which alleviate individuals and groups to get what they need and they want through creating and exchanging products and value with others.iitb. in a barter transaction. Self assessment questions 5.
For example. communicating and delivering products and services. For example. The human needs can be further divided into three types: • • • Physical needs Social needs Individual needs Physical needs: It addresses the basic need for food. clothing. Marketing aims at identifying: • • • Human (and social) needs and wants. counselling. Human needs and wants are unlimited. warmth and safety. cars. teaching. Sikkim Manipal University Page No. Consumers’ demand. hair dressing. while the resources available to meet them are limited. if you are thirsty this is your need but if you want Coca-Cola to quench your thirst this is your want. Demand is want for specific products that are backed by an ability and willingness to buy them at a price. 2. You have money to buy Coca Cola. 11 . Services may be described as intangible products such as banking and other financial services. Wants are shaped up by culture and individual personality For example. Wants and Demand: A need can be defined as a felt state of deprivation of some basic satisfaction. Social needs: It calls for belongingness and affection Individual needs: It includes needs for knowledge and selfexpression Wants are desire for specific satisfiers of deeper needs. transportation or medical treatment. Needs. Products and Services: A product is a mix of intangibles and tangibles offered by the marketer at a price. food. etc. mobiles. and Endeavours to satisfy them by creating.Marketing Management Unit 1 1. cleaning. air conditioner.
Value and Satisfaction: Value is the benefit that the customer gains from owning and using a product compared to the cost of obtaining the product.3 depicts LUBER can accomplish restorations. and marketing communications. family members. 3.3: LUBER delivers value and satisfaction (Source: http://lakeunionboatrepair. electronic installations.Marketing Management Unit 1 Sometimes it becomes difficult to distinguish services from product as it is closely associated with product .html ) Customer satisfaction is based on the products performance and expectations. The sources that build customer expectations include experience with products. electrical refits. friends. Performance ≥ Expectations → Satisfaction Sikkim Manipal University Page No. 12 . for instance if you visit a doctor the combination of a diagnosis with the administration of a medicine may confuse you. consumer reports. Customers generally experience satisfaction when the performance level meets or exceeds the minimum performance expectation levels. Much depends on what consumers’ perceptions are about the value that different products or services are expected to deliver. associates.com/Services. neighbours. major/minor damage repair. Figure 1. custom interiors and delivers value and satisfaction Fig 1.
or organisation has an existing or potential exchange relationship. I am willing to buy a sports car but I do not have enough money to buy it. It is my demand.Marketing Management Unit 1 Performance < Expectation → Dissatisfaction 4. _______________ is a felt state of a deprivation of some basic satisfaction. A customer is satisfied when the performance of a product exceeds minimum performance _______________ level.5 FUNCTIONS OF MARKETING Marketing can be thought of as a mixture of various activities that will get the consumer to buy a product. 13 .3 depicts the major functions of marketing namely. It is an approach that focuses on developing a series of transactions with consumers. etc. Transaction and Relationship: (The concept of exchange and transaction has already been discussed in the previous section. like hair dressing. Self assessment questions 7. group. 5. group. These activities are referred to as marketing functions. whether physical or virtual. Sikkim Manipal University Page No. Services. consulting. __________________ in nature. Figure 1. a) True b) False 9. Markets: A market can be viewed as any person.) Building relationship with the customers is an important part of business transactions. 1. are 10. or organisation with which an individual. marketers have realised its relevance and are now focusing on relationship marketing. a) Need b) Want c) Desire d) Demand 8.. Exchange. Of late. Without the existence of a marketplace. no marketing would take place.
Sales planning 5. Sales operations 6. It is an impersonal presentation and promotion of ideas. Fig 1. It attempts to inform. products or services paid for by the sponsor. So. functional and economic utility) and distribution analysis are the important sub-functions of marketing research. Sales promotion 4. particularly in consumer goods markets.Marketing Management Unit 1 1. 14 .3: Functions of Marketing Sikkim Manipal University Page No. Advertising: Advertising is a mass media tool. It is perhaps a very powerful tool in the hands of the marketer. Marketing research 2. persuade and remind customers about products and services. 2. Advertising 3. market analysis (measurement and evaluation of target market and its characteristics). tastes. product/service determination (analysis of consumer aspirations. expectations. Physical distribution 1. Marketing Research: Marketers need to approach their customers in a scientific manner and marketing research provides a basis for it as it is basically concerned with gathering data about the market.
price and quantity determinations. 15 . Consumer sales promotion and dealer sales promotion are the important sub-functions of a sales promotion programme. packaging. marketers use various sales promotion devices when the product is launched and when the product reaches its maturity. direction and supervision. Physical Distribution: Moving and handling of products comes under physical distribution. Usually. “It is the best product“. Sales promotion is a long-term incentive to boost sales and is directed at the dealers. it is attempting to _______________ the consumers. compensation and evaluation. The sub-functions include formulating sales plans. training. warehousing and transportation are the key decisions to be accessed in the physical distribution system. Sales Operations: It is concerned with transferring of products to the customer point. Sales Planning: This function involves the planning for marketing of the right products at the right prices. If an advertisement says that. Sales Promotion: It is a short-term incentive to boost sales. 6. budgeting (forecast sales.Marketing Management Unit 1 3. 4. Self assessment questions 11. Order processing. Sales force management includes recruitment. inventory. 5. Organising field and indoor sales force and their management are the sub-functions of sales operations. a) True b) False Sikkim Manipal University Page No. setting sales quota and estimating sales expenses) are the important sub-functions coming under sales planning. a) Inform b) Remind c) Persuade d) Inform and/or persuade 12. It acts as a supplement to personal selling and advertising.
Marketing Management Unit 1 13. Handling of goods is a part of physical distribution function of marketing. It ensures that high quality goods and services are available to the customers at the right time and at the right place. All other activities in the organisation are support services to the marketing strategy that a firm pursues. market share and cash flows. popularly known as the father of modern management. It brings revenue and earns goodwill for a manufacturer or a marketer. Marketing is important for the company. It generates additional employment. measured in terms of profits. increases per capita income and helps in the overall progress of an economy. a) True b) False 1. said in one of his articles that “marketing is everything”. consumers and the economy. which accelerates the growth cycle for the country. 16 . It generates resources that are ploughed back to the economic system.6 IMPORTANCE OF MARKETING Peter Drucker. Importance of marketing for the consumer It provides more alternatives to choose from. and allows the consumer to bring a balance between his income and level of consumption. Importance of marketing for the company The success of company is known by its achievement in the marketing front. Sikkim Manipal University Page No. controls the price mechanism. Importance of marketing for the economy It opens up new vistas of research by supporting product innovation and enhancing the quality of life of the people of the economy.
4 depicts the marketing orientations namely production concept. Figure 1. Things are continuously changing in terms of business and social changes. customer related changes.Marketing Management Unit 1 Self assessment questions 14. the organisations should select their marketing orientation considering these factors.7 MARKETING ORIENTATIONS It is necessary for marketing management to formulate strategies that could build profitable relationships with the target consumers . Marketing ensures that goods and services are available at the right time and at the right place. Therefore. product concept. Marketing activities attempt to enhance the quality of life of the consumers. selling concept. How the marketing orientation has been undergoing various shifts will be clear by learning about the various marketing orientations that exist. a) True b) False 1. and changes in manufacturing and marketing organisations. a) True b) False 15. marketing concept and societal marketing concept. Sikkim Manipal University Page No. 17 .
So. managers try to achieve higher volume by lowering production costs and following intensive distribution strategy. performance and other innovative features.5: Production Concept (Source:http://www. 1. application of this concept leads to poor quality of service and higher level of impersonalisation in business.7. These are discussed in following subsections.com/business/marketing/2459production-concept.1 The production concept The basic proposition of this concept is that customers will choose products and services that are widely available and are of low cost. However.Marketing Management Fig 1.html) Companies interested to take the benefit of scale economies pursue this kind of orientation. objective and operation of Production Concept Fig 1. Figure 1.soopertutorials. 18 .4: Marketing orientations Unit 1 Companies conduct their marketing activities around five concepts. Managers Sikkim Manipal University Page No.5 depicts the philosophy. 1.2 The product concept It is based on the idea that consumers will favour those products that offer attributes like quality.7.
For example. For example. form the actual product. packaging. telephone. Product’s attributes like design. quality level. Marriott’s Page No. towels. wardrobes. etc. Here. The actual product: the basic utilities associated with the product like physical attributes and tangible elements of a product. 19 Sikkim Manipal University . The essential benefit associated with the product forms the core product. The potential product: it includes all possible augmentations and transformations the product may undergo in future.Marketing Management Unit 1 focus on developing superior products and improving the existing product lines over a period of time.6: The Total Product Concept The core product: this explains the reasons for which the customer purchases the product. All these levels put together form the total product. bed sheet. styling. features. a hotel room includes a bed. etc. a hotel guest is buying rest and sleep and buyer of car is buying ease of transportation. brand name. The actual product The potential product These layers along with the features associated with them are depicted in figure 1.6. Fig 1. the company looks for innovative ways to differentiate its offer. A product has three layers or levels known as: The core product.
Theodore Levitt of Harvard Business School termed this as ‘marketing myopia’. Figure 1. The focus of the total product concept is on the product attributes. He recommended that companies should not be short-sighted and adapt to the changing needs of the customers and environment. when consumers became aware of the various brands and technologies related to televisions. 1. 20 . will not buy enough of the firm’s products unless they are persuaded to do so through the selling effort. Later. The market could not perceive the benefit of the technology and the idea flopped. A similar thing happened with Onida when it launched “The Golden Eye Technology in India”. objective and operation of selling concept Sikkim Manipal University Page No.7.7 depicts the philosophy. The marketers believe that the consumers need to be motivated to buy a firm’s products or services through persuasion and selling action.3 The selling concept It proposes that customers. LG again brought this technology to the market and achieved marketing success. Prof.Marketing Management Unit 1 TownePlace Suites all-suite hotels are examples of innovative transformation of the traditional hotel product. whether individuals or organisations. The problem with this orientation is that managers forget to read the customer’s mind and launch products based on their own technological research and scientific innovations.
vacuum cleaner.7: Selling philosophy (Source: http://courses. fire fighting equipments including fire extinguishers.htm ) Companies selling unsought goods like life insurance. even if he/she is dissatisfied. used (and still use!) this concept.edu/kt3650_1/sld004. 1.4 The marketing concept It proposes that the reason for success lies in the company’s ability to create. Figure 1. in comparison to the competitors.7. deliver and communicate a better value proposition through its marketing offer. In reality. The problem with this concept is that some marketers assume that a customer will certainly buy his product after persuasion and he/she will never complain. objective and operations behind Marketing Concept Sikkim Manipal University Page No.Marketing Management Unit 1 Fig 1.8 depicts the underlying philosophy. this does not happen and companies who blindly pursue this concept often fail in business.unt. for its chosen target segment. etc. 21 .
Sikkim Manipal University Page No. Their aim is to provide maximum satisfaction to the consumers.Marketing Management Unit 1 Fig 1. instead of spending on a mass. sales promotion. Keeping the marketing goals in mind. Next. integrated marketing communication and profitability. companies design and offer a suitable product or service to us. Based on our needs. prefer to look for specific product market to which their product will best match and accordingly design a marketing program that suits the taste of this target segment.8: Marketing concept (Source: http://courses.unt. a company needs an integrated approach. advertising.edu/kt3650_1/images/img050. 2. customer service and marketing research. 1. Companies. undifferentiated market. For this. distribution channel selection. customer need. the companies need to integrate various key marketing functions like product design. they conduct marketing research.gif) This concept is an elaborative attempt to explain the phenomenon that rests on four key issues: target market. 3. To achieve its goal of higher consumer satisfaction. 22 . the marketers attempt to know the needs of the consumers.
the sole purpose being generation of consumer satisfaction Consumer determines determines cost price. It proposes that the enterprise’s task is to determine the needs. Sikkim Manipal University Page No. people used to say that a company works for only profits. tomorrow’s market and future growth Stresses needs and wants of the buyer Views business as a customer satisfying process Emphasis is on innovation in every sphere.5 The societal marketing concept Then term ‘societal marketing’ is growing in popularity day-by-day. Management is profit-oriented Planning is long run oriented. has become a by-product that comes out of the efforts and strategies followed by firms in their pursuit to create superior product value and higher customer satisfaction.1: Differences between Selling and Marketing Concepts Selling Emphasis is on the product Company manufactures the product first and then decides to sell Marketing Emphasis is on the needs and wants of the consumer Company first determines customers’ needs and wants.1 makes a distinction between selling and marketing concepts. in terms of new products. in terms of today’s products and markets Stresses needs of the seller Views business as a goods producing process Emphasis is on staying with existing technology and reducing costs Different departments work in highly separate water tight compartments Costs determine price It views customer as the last link in business It views customers as the very purpose of business 1. price Management is sales-volume oriented Planning is short run oriented. 23 . on providing better value to the customer by adopting a superior technology All departments of business operate in an integrated manner. Table 1. now. And in the end. But slowly this perception is changing as profitability. Earlier.Marketing Management Unit 1 4. wants and intentions of the target market and to deliver the expected satisfaction more effectively and efficiently than the competitors in a way to preserve or enhance the consumer’s and society’s well-being.7. companies look to earn profit. Table 1. and then decides on how to deliver a product to satisfy these needs and wants.
Some people also refer to social marketing as cause related marketing that utilises concepts of market segmentation. product concept development. Professor Sikkim Manipal University Page No. Societal concept is just an extension of the marketing concept with consideration for ______________ needs and values. you help support one day’s education of one child. Each time you buy a P&G product. 19. Self assessment questions 16. For example. consumer research. use________________ concept to sell their policies. A concept where the marketer produces a product that is technologically superior is product concept. Almost all major companies are engaged societal marketing in some form or other. a) Product b) Production c) Selling d) Marketing 17. a) True b) False 18.Marketing Management Unit 1 It combines the best elements of marketing to bring social change in an integrated planning and action framework with the utilisation of communication technology and marketing techniques. Marketing concept ______________ focuses myopia’ on customer’s was given needs by and 20. It also expects marketers to instil social and ethical considerations into their marketing decisions. The term ‘marketing _______________. 24 . generally. product testing and brand communication to maximise the target segment response. P&G with CRY & Sony launched “Shiksha” to help educate underprivileged children. Health insurance companies.
needs. 2. Sikkim Manipal University Page No. Main functions of marketing are advertising. 25 . sales planning Marketing is not only important for a company but also for consumers and the economy. product concept. 4. It attempts to improve standard of living through better product and service offers. offering and freely exchanging products and services of value with others. Exchange process. sales promotion. 3. Production Concept: A concept that assumes that customers will choose products and services that are widely available and are of low cost Product Concept: A concept based on the proposition that consumers will favour those products that offer the most attributes like quality. Marketing. has evolved over a period of time and has witnessed changes and modifications with the progress of civilisation. selling concept.Marketing Management Unit 1 1. They are production concept. wants and demand. Marketing Orientation: It requires the firm to look for consumer needs and the necessity to search for new opportunities to satisfy the consumers in a better way than the competitor. by which individuals and groups obtain what they need and want through creating. product and services. Markets. market research. and 5. 1.8 SUMMARY Let us recapitulate the important concepts discussed in this unit: Marketing is a social activity directed towards satisfying customer needs and wants through an exchange process. marketing concept and societal concept. performance and other innovative features. as a concept. The five core concepts of marketing are: 1.9 GLOSSARY Marketing: A societal process. There are five concepts that explain this change and offer ways to companies on how to conduct their activities. Customer value and satisfaction.
4. Marketing involves satisfaction of consumer needs. a) Sikkim Manipal University Page No. Monopoly 4. c) 2. Explain the core concepts of marketing. 1. What are the marketing concepts? Explain the evolution process of management philosophy. False 3.11 ANSWERS Self-Assessment Questions 1. Elucidate the statement. Societal 5. What role does marketing play in an economy? 5. 26 . 3. Describe an exchange process with the help of an example. Transaction 6. 6. Explain the concept of market and marketing. Value 7.10 TERMINAL QUESTIONS 1. 2.Marketing Management Unit 1 Selling Concept: A concept that proposes that customers will not buy enough of the organisation’s products unless they are persuaded to do so through selling effort Exchange Process: It occurs when the buyer with a demand and a seller with a product offering confront each other Needs: A condition or situation in which something is required Marketing Myopia: it refers to a short-sighted and inward looking approach to marketing that focuses more on the needs of the producer than the needs and wants of the consumer 1.
Expectation 11. False 9. 27 . products and services.2. 4. Exchange process involves an interaction between buyer and seller in which each party gives the other something of value. For more details.4. True 14. For more details. 2. True 18. d) 12. Marketing is a process through which goods and services move from concept to the customer. For example. refer to section 1. exchange. 3. refer to section 1. True 16. refer to section 1. physical or virtual. Sikkim Manipal University Page No. c) 17. False 13. Society’s 19.Marketing Management Unit 1 8. True 15. Marketing supports the process of economic development as it enhances quality of life of the people and generates employment. Intangible 10. where buyers and sellers meet to exchange goods and services. refer to section 1.3. Market is a place. Wants 20. customer value and markets. For more details. There are five core concepts of marketing: needs.6. Theodore Levitt Terminal questions 1. sale of a book. For more details.
savings accounts.5. refer to section 1. 6. (Source: blog. All you have to do is watch television for a short period of time and you'll see a number of ads for banks that have branches all over the country.4 and 1. 1. marketing and societal. Consumer needs are fundamental to the formulation of any marketing strategy. There are five marketing concepts: production.in) Banking is now more customer-oriented.7. annuities.com/ mobile. product. Marketing concepts aid a company in conducting their activities. and other financial services.netpmb. mortgages.com/ggn.ac. refer to section 1. 28 .12 CASE STUDY Marketing in the banking industry Banks play a large role in the economy of every country in the world.Marketing Management Unit 1 5. They offer a large and ever expanding number of services to the public and private sector such as long and short-term loans. financial advice. For more details. from developing a product to its delivery.reuters. offering more convenience to the customers Sikkim Manipal University Page No. Banks are getting more serious about marketing and it shows. selling. For more details.
consumer finance. For the banker to derive maximum returns and enhance his market position the marketing mix has to be effectively managed. 29 . etc.Marketing Management Unit 1 Depending on customer needs for finance. Increased competition and technology have enhanced the quality of service offered to the customers and also improved the returns for bankers. These changes have helped banks tackle the challenges of services marketing. Sikkim Manipal University Page No. The augmented product includes services like internet banking. offer convenience to customers and have also improved the efficiency of banking operations. These augmented services help the banker differentiate his service offering from those of his competitors. People also play an important role. The banking industry has changed drastically over the past decade. This has resulted in improved service to the customers of the banking industry. the service quality in a bank. the market can also be segmented into trade finance. even though their role has been eclipsed by technology in the recent past. ATMs and credit and debit cards. The banking reforms and the opening of the economy to foreign and private banks have improved the working of the public sector banks. etc. Physical evidence includes the infrastructure and buildings not only in branch offices. 24hour customer service etc. which have helped banks increase business volumes and attract new customers. used by present-day banks to promote their service offerings. publicity. The promotion or communication mix in banking refers to varied strategies like personal selling. Process determines the efficiency of banking operations and thus. but also the ATMs or other places of interaction. The place element of the marketing mix refers to making the services available and accessible to customers. Even the quality of cheque books and mailers to customers forms physical evidence. ATMs. discounts. advertising. Improvements in the availability and accessibility of services have changed the process of banking. Technological innovations have given rise to modern channels like the Internet. The core products offered by a bank include a savings bank account or a housing loan. The products offered by a bank may be in the core or augmented form.
Marketing Management: Pearson Education Panda. (2003). V.com/lesson-store/lesson-what-ismarketing. Comment on the marketing practices of ICICI Bank.ksu. What type of orientation do private banks have? Hint: Private Banks work for customer satisfaction and profits.agecon. Hint: It uses customer oriented marketing and differentiates itself using innovative promotion methods. S and Namakumari. HSBC and many more compete in India and looking at the future prospects of banking in India. 4.29/12/2011 Page No. HDFC Bank. Source: www. (2010). Management: Macmillan Publishers S. Philip (2007). 2. How are the marketing efforts of public banks different from those of private banks? Hint: Public banks do not have as much funds to allocate like big private banks do. Punjab National Bank. Tapan K. Marketing Management: Excel Books. Standard Chartered.com/marketing/. one can say that marketing will surely be the differentiating factor.icmrindia. Marketing E-References http://www. Questions 1.netmba. ICICI Bank. How have banks used marketing concept to their benefit? Hint: Banks have become more customers oriented. Axis Bank. 3. New Delhi Ramaswami.edu/accc/kcdc/PDF%20Files/marketing.pdf29/12/2011 http://marketingteacher.org REFERENCES Kotler.29/12/2011 http://www. 30 Sikkim Manipal University .Marketing Management Unit 1 Today banks like State Bank of India.html.
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