WHAT IS MARKETING?

SELLING & MARKETING

Difference in focus

Is selling part of Marketing?

Marketing is the set of activities undertaken to facilitate and generate an exchange process that satisfies human or organizational needs and wants

SELLING & MARKETING

Key concepts
Needs Wants Demand Exchange

KEY CONCEPTS
Needs
Necessities

Wants
Preferences

Shaped by desires
Desires shaped by external influences (society, culture, reference groups, companys activities, etc.) & internal influences (personality, motivations, attitudes, perception, learning, lifestyle) Needs are generic, wants vary

KEY CONCEPTS
Demand
A Want backed by purchasing power

Exchange
A transaction where both parties agree to give the other party something of value Conditions
Involvement of more than one party Willing parties Each party having something to offer Parties must communicate

KEY CONCEPTS
Marketing according to the AMA Marketing is the total system of business activities designed to plan, price, promote and distribute want-satisfying products to target markets in order to achieve organizational objectives

EVOLUTION OF MARKETING THE ERAS

Trade / Barter Era

Production Era

Sales Era

Marketing dept. Era

Marketing Company Era

Marketing Era

EVOLUTION OF MARKETING
Trade / Barter
Exchange of valuable goods

Production
Late 1800s Industrialization Revolution

Continued till 1920s

Few products

Demand greater than supply

If we can make it, we can sell it

EVOLUTION OF MARKETING
Sales
1930s surplus production capacity Supply increases, several industrialized nations Supply equal to demand We have to beat the competition Advertising, promotion of product in relation to competitors Make consumers like the product Shape consumer expectations as per the product

EVOLUTION OF MARKETING
Marketing Department
Demand exceeds supply Make customers switch from competitor To do that, it is important to understand what need of the customer our product will meet that the competitors product does not Consumer needs get attention for the first time Marketing departments are established Activities like advertising, distribution, shipping, & research brought under one umbrella

EVOLUTION OF MARKETING
Marketing Department
Limited role of Marketing - Advisory Product still not shaped as per consumer expectations Research about consumer needs & expectations reflects in promotion, not in product design Product design, pricing, repositioning not controlled by Marketing Isolated & contradictory goals of each department not integrated & focused toward satisfying consumer needs

EVOLUTION OF MARKETING
Marketing Company
1960s Marketing aspect understood at strategic planning level Entire company driven by consumer needs & expectations R&D to production to after-sale support The customer rules Departmental goals consolidated, integrated & focused on meeting consumer needs

THE MARKETING CONCEPT

Consumer Orientation

Orientation

Goal Marketing is the total

system of business

activities designed to Marketing Concept plan, price, promote and distribute wantsatisfying products
Market Driven Approach Integrated to target Marketing

markets in

order to achieve

Value Based Philosophy

organizational
objectives.

Handout # 1

THE MARKETING CONCEPT

Examples:
FMCG companies Banking Airlines Tourism Cellular service Non-profit organizations

Handout # 2

THE SOCIETAL MARKETING

CONCEPT

CONSUMERISM
Industrialization gave rise to several workforcerelated problems & thus criticism
Low minimum wages Unsafe / unhealthy working conditions Child labor

In Sales & Marketing eras, criticism also included marketing & production activities
Automobile manufacturers Sugar mills Cigarette industry Plastic industry Planned Obsolescence

Criticism affected company image & ultimately sales

CONSUMERISM
Todays public is conscious & aware

Consumerism is the set of activities undertaken by individuals, independent organizations, government agencies and business organizations designed to protect the consumer from unethical marketing practices and conditions Purpose of consumerism is to ensure consumer rights in the process of exchange
The right to be The right to be The right to be The right to be consumption informed told the truth given sufficient number of alternatives assured of safety in the process of

CONSUMERISM
Three types of organizations make up the consumer movement
Consumer action groups Government agencies protecting consumer rights through laws & legislation
Deceptive advertising Federal Trade Commission (FTC) Advertising to children Federal Communications Commission (FCC) Product safety standards to protect consumers from risk or injury Consumer Product Safety Commission (CPSC)

CONSUMERISM
Three types of organizations make up the consumer movement
Consumer action groups Government agencies protecting consumer rights through laws & legislation
Warning labels on hazardous products / packaging Ingredients / nutritional information on food products Food & Drug Administration (FDA) Monopolistic practices - FTC Environmental protection EPA Handouts # 3 & 4

CONSUMERISM
Three types of organizations make up the consumer movement
Business organizations reactive or proactive
Today companies adopt a more proactive approach Result of Consumerism

Consumerism has given rise to the Societal Marketing Concept

Companies are conscious of their social responsibility

SOCIAL RESPONSIBILITY
TOYOTA investing on clean cars Recycled packaging material M&S Recycling products or product components KODAK recycles disposable cameras HP and CANON refilling printer cartridges PTC undertaking tree plantation

SOCIAL RESPONSIBILITY
P&G & Lever Brothers launching frequent CSR activities

Food companies using more natural & healthy ingredients

Socially responsible behavior toward not only consumers but toward
Employees Channel members Competitors

Handout # 5

SOCIETAL MARKETING CONCEPT MAKES SENSE WHY??

Until the 1960s, natural resources were seen as limitless
Companies have realized that resources are fast depleting According to Business Week Out of the worlds natural resources that are being used annually, 70% are being used by 25% of the people in industrialized nations Companies have had to become responsible in the use of resources

SOCIETAL MARKETING CONCEPT MAKES SENSE WHY??

Their market is not only the consumers of their products Satisfying needs / expectations of broader customer base will mean long-term satisfaction
Will require greater investment of time, effort, money

ETHICS IN MARKETING

IMPORTANT QUESTIONS IN STUDY OF ETHICS

How do people decide what is ethical?
Upbringing Education Religion Experiences

Why do people act ethically or unethically?

Based on their expectations of reward or punishment
Magnitude Likelihood of occurrence

THEORIES IN ETHICS
Egoism

Utilitarianism
Duty-based Virtue Ethics

THEORIES IN ETHICS
Egoism
People act in their own interest

Utilitarianism
Actions of individuals or organizations are good if they bring benefit for maximum number of people Life-saving drugs with side-effects

Duty-based
Rightness / wrongness of actions is not judged by consequences Actions are right if they stem from some basic obligation or duty Supermarket designed for low-income shoppers

THEORIES IN ETHICS
Virtue Ethics
Virtuous actions are good for the company Truthful client-handling

Criticisms on Marketing
Advertising is misleading Advertising forms unrealistic expectations Products dont last long Marketing / Advertising encourages materialism Marketing encourages convincing / winning consumers by hook or crook Manipulative techniques are used to lure customers

DIVISIONS OF ETHICAL ISSUES

Product-related ethical issues
Whether certain products should be marketed or not

Process-related ethical issues

Whether certain processes should be used Dumping

ETHICAL ISSUES IN INTL MARKETING

Language differences

Different norms & values about acceptable behavior

Less developed societies do not pay much attention to social, environmental issues Some countries give protection to local industry, despite unethical practices International ethical disputes are difficult to handle - arbitration

TEACHING ETHICS IN THE WORKPLACE

Some companies prepare & circulate a Code of Conduct or Code of Ethics Handout # 6