System Analysis

Unit 1 Examining Concepts of Marketing Management Chapter 1 - Introduction to marketing

Lesson 2 - Scope of marketing, core marketing concepts Scope of marketing, Core marketing concepts
In this lesson we shall discuss the areas that the marketing covers. Whatever concepts we have learnt in the first lesson in the definition of marketing, which form the core concepts of marketing. The concept of marketing revolves around demand for the product/services. In this lesson we are going to study 8 different types of demands, which plays a major role in the marketing activities. At the end of this lesson you will be in the position to understand briefly all the major concepts of marketing which will be dealt in detail in the coming lessons. Human need is a state of felt deprivation of some basic satisfaction. Wants are desires for specific satisfiers of these deeper needs. Demands are wants for specific products that are bagged by an ability and willingness to buy them. Marketers do not create the needs. They can influence the demand by making the product appropriate, attractive, affordable and easily available to target customers.

Products:
Anything that can be offered to satisfy a need or a want, Persons : Singer Places : Goa Activities : Sing in karaoke lounge. Organizations : Health club Ideas : Osho ashram Other terms can be : Offerings, satisfiers or resources. Eg: A woman is not buying lipstick, she is buying .hope. She is confident that she will definitely look good after using that lipstick. And this hope brings her to the shop. A physical object is a means of packaging a service. The marketers job is to sell the benefit or services built in to physical products rather than just describe their physical features. There is a very common problem that marketers may come across. We need to understand it completely so as to stay away from falling prey to it! Let us understand it now.

Core Marketing Concepts Needs Wants And Demands:

Marketing thinking starts with the fact of human needs and wants. We all have some needs residing in ourselves. These needs exist. Remember that needs can never be created.

Needs:
Needs are the basic human requirements. People need food, air, water, clothing & shelter to survive. People also have needs for recreation, education and entertainment. Eg: Hunger food. According to Abraham Maslows need hierarchy, all the human needs can be categorized as shown in the diagram

Marketing myopia Maslows Hierarchy Of Needs

Sellers who concentrate their thinking on the physical product instead of the customers need are said to suffer from marketing myopia.

3E.004U

Copy Right : Rai University

System Analysis

Wants: The needs become wants they are directed to specific objects that might satisfy the needs. Eg: Mercedes Needs Pre-exists (cant be created)

Demands: Demands are wants for specific products that are bagged by an ability and willingness to buy them. I hope all of you have understood the Core Concepts of Marketing. Now let us discuss the same in detail -

Examining Concepts of Marketing Management Exchange It is one of the core concepts of marketing. It is the process of obtaining a desired product from someone by offering something in return. There are five conditions that needs to be satisfied: There are at least two parties Each party has something that might be of value to the other party

Each party is capable of communication & delivery Each party is free to accept or reject the exchange offer Each party believes it is appropriate or desirable to deal with the other party A transaction is a trade of values between two or more parties. It involves two things: A time of agreement A place of agreement

Copy Right : Rai University

3E.004U

System Analysis

As you have seen in the above diagram, Sun Microsystems which develops & markets Sun one, Solaris, Java, etc, is a marketer where they are selling top end equipments to a call centre / ITES company. The ITES Company wants to buy top end equipments with a good price, friendly customer service with a faster implementation. Sun wants a good price for the same and also the future business requirements. Smart marketers look beyond the attributes of the products & services they sell. Eg: Coke Means much more to consumers than just something to drink, it has become an Ameri-

can icon with a rich tradition and meaning. Value & Satisfaction: Customer value Difference between the values the customer gains from owning & using a product & the costs of obtaining the product. Customer satisfaction With a purchase, how well the products performance lives up to the customers expectations. Customers expectations must be set at the right level of expectations, neither too low or too high. Customer Value & Satisfaction are key building blocks for developing & managing customer relationships.

Needs of Internal Customer

Markets - Set of all actual & potential buyers of a product or service. They share a particular need or want that can be satisfied through exchange relationships. Marketing Managing markets to bring about

profitable exchange relationships by creating value & satisfying needs & wants Core Marketing Activities: Product development, research, communication, distribution, pricing & service.

3 Cs Of Internal Customer Care

3E.004U

Copy Right : Rai University

System Analysis

Communication

Marketing Management Art & science of choosing target markets & building profitable relationships with them. Involves getting, keeping & growing customers through creating, delivering and communicating superior customer value.

2] No Demands:
Target consumers may be uninterested in the product. Eg: *Farmers may not be interested in new farming methods *College students may not be interested in a foreign language course. The marketing task is to find ways to connect the benefits of the products to the persons natural needs and interests.

Demand states and marketing tasks:

Marketing management has the task of influencing the level, timings and composition of demand in a way that will help the organization to achieve its objectives.
Marketing Demand management management

3] Latent Demand:
Many consumers may share a strong need that cannot be satisfied by any existing products. Eg: *Latent demand for harmless cigarettes. *Safer neighborhood. *More fuel efficient cars.

Organization essentially has a desired level of transaction in a target market.

1 ] Negative Demand:
The market is in a state of negative demand if; a major part of the market dislikes the product and may even pay a price to avoid it. Eg: People have a negative demand for Vaccination Dental work Vasectomies Gall bladder operation Employers feel a negative demand for Ex-convicts Alcoholics The marketing task is to analyse, why the market dislikes the products? Whether

The marketing task is to measure the size of the potential market and develop effective goods and services that would satisfy the demand.

3] Declining Demand:
A substantial drop in the demand for products. Eg: *Boy scout enrolment among Singapore students. The marketing task is to: i. Analyse the cause of market decline. ii.Determine whether the demand can be restimulated by changing target markets, changing product features and developing more effective goods.

10

Copy Right : Rai University

3E.004U

System Analysis

iii. To reverse the declining demand through creative remarketing of the product.

fixed percentage annually.

8] Unwholesome Demand:
Unwholesome products will attract organized effort to discourage their consumption. Un-selling campaigns have been conducted against cigarettes, alcohols, hard drugs, handguns and pirated movies. The marketing task is to: i. Use fear communication. ii. Price hike. iii. Reduced availability.

5] Irregular Demand:
Organizations face demand that varies on a seasonal, daily or even hourly basis, causing problems of idle capacity or overcrowded capacity. Eg: *Markets weekdays. * Hospitals :- visited on weekends, not on

:- OTs booked for early weak

The marketing task is called Synchro Marketing (alter pricing, promotion & other incentives)

6] Full Demand:
Organizations face full demand when they are pleased with there volume of business. The marketing is to: i. Maintain the current level of demand in the face of changing consumer preferences and increasing competition. ii. Quality should be improved. iii. Continuously measure consumer satisfaction. Eg: Maruti at the time of bookings made open.

Rule Of Marketing In The Non-Profit Centres

Marketing is increasingly attracting the interested the interest of non-profit organizations, Eg: Colleges Hospitals Churches Even government and statutory boards rely increasingly on marketing on several fronts. Marketing techniques have been employed to promote national and social issues. Eg: Social marketing campaigns, aids prevention ads, discourage cigarette smoking. Marketing has also been used to promote tourism in various countries. Eg: India, Indonesia, Hongkong etc.

7] Overfull Demands:
Some organizations face a demand level that is higher then they can or want to handle. Marketing task is De-marketing which requires finding ways to reduce the demand temporarily or permanently. Steps involved in de-marketing: i. Raising prices. ii. Reducing promotion and service. iii. Selective de-marketing(less profitable markets) Eg: Quota system for new car registration by a

Activity:
1. Now at this point, with your understanding or logic try to distinguish between marketing and selling. 2. Marketing is hunting or harvesting, discuss

3E.004U

Copy Right : Rai University

11

System Analysis

Points to ponder -

12

Copy Right : Rai University

3E.004U