Marketing Marketing is a social and managerial process by which individuals and groups obtain what they need and

want through creating, offering, and exchanging products of value with others. Needs, Wants and Demands:
A human need is a state of deprivation of some basic satisfaction. eg. food, clothing, shelter etc. Wants are desires for specific satisfiers of needs. Demands are wants for specific products that are backed by an ability and willingness to buy them. Wants become demands when supported by purchasing power. Products: A product is any thing that can be offered to satisfy a need or want. It can consist of three components : physical good, service and idea. The importance of physical products lays not so much in owning them as in obtaining the service they render. A physical object is a means of packaging a service. The marketer’s job is to sell the benefits or services built into physical products rather than just describe their physical features. Sellers who concentrate their thinking on the physical product instead of the customer’s need are said to suffer from marketing myopia. Value,Cost and Satisfaction: Value is the consumer’s estimate of the product’s overall capacity to satisfy his or her needs. Exchange and Transactions: Marketing emerges when people decide to satisfy needs and wants through exchange. Exchange is the act of obtaining a desired product from someone by offering something in return. For exchange potential to exist. Five conditions must be satisfied: 1. There are at least two parties. 2. Each party has something that might be of value to the other party. 3. Each party is capable of communication and delivery. 4. Each party is free to accept or reject the exchange offer. 5. Each party believes it is appropriate or desirable to deal with the other party. Needs, wants and demands

Products
(goods, services and ideas)

Value, Cost and Satisfaction

Exchange and transactions

Relationships and networks

Markets

Marketers and prospects

Relationships and Networks: Relationship marketing is the practice of building long term satisfying relations with key parties – customers, suppliers, distributers- in order to retain their long -term preference and business.

retailers and others with whom it has built mutually profitable business relationships. and profits will follow Market: A market consist of all the potential customers sharing a particular need or want who might be willing and able to satisfy that need or want. Resources Money Resource Markets Taxes. distributors. . goods money Services. A prospect is some one whom the marketer identifies as potentially willing and able to engage in an exchange of values. money Manufacturer markets Taxes. suppliers. Markets Taxes Consumer market Services Money Goods and services Intermediary Market Money Goods and services Flow of economy between five type of markets Marketers and Prospects: A marketer is some one seeking one or more prospects who might engage in an exchange of values.Relationship marketing helps company to build marketing network. goods Service Money Taxes goods Govt. Money Resources Services. A marketing network consists of the company and all of its supporting stakeholders: customers. The operating principle is: Build a good network of relationships with key stakeholders. employees.

Managers in product oriented organization focus their energy on making superior products and improving them over time. customer needs. The Marketing Concept:It holds that the key to achieving organizational goals consists of being more effective than competitors in integrating marketing activities towards determining and satisfying the needs and wants of target markets. . Starting point Factory Focus Products Means Selling and Promoting Ends Profits through sales volume (a) The Selling Concept Target Markets Customer needs Integrated marketing Profits through customer satisfaction (b) The marketing Concept The Societal Marketing Concept:It holds that the organizations task is to determine the needs. performance or innovative features. will ordinarily not buy enough of the organization’s products.Competing concepts under which organization can choose to conduct its marketing activities: The production concept:It holds that consumers will favor those products those are widely available and low in cost. The marketing concept rests on four pillars: Target marketing. integrated marketing. The organization must therefore undertake an aggressive selling and promotion effort.being. The Selling Concept:It holds that the consumers. Managers of production oriented organizations concentrate on achieving high production efficiency and wide distribution The Product Concept:It holds that consumers will favor those products that offer the most quality. wants and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors in a way that preserves or enhance the consumer’s and the society’s well. and profitability. if left alone.

typically a small market whose needs are not being well served. Local marketing: Marketer pronounced regional differences in community’s demographics and lifestyles. and buying habits. Salt or any basic daily need commodity. An auto company may identify four broad segments : Car buyers seeking basic transportation. It can be done at levels: segments. and mass promotion of one product for all buyers. geographical locations. Customers in niche are ready to pay a premium to the firm best satisfying their needs. e. Segment Marketing: A market segment consists of a large identifiable group. Individual Marketing: Ultimate level of segmentation leads to “segments of one” . those seeking luxury. Key concepts are that it creates the largest potential market. purchasing power. The benefits of targeting marketing are: (1) More fine tuned product/service offer (2) Appropriate price (3) Easier choice of distribution channels (4) Fewer competitions. e. those seeking high performance. The marketer tries to isolate some broad segments that make up a market. Marketer recognizes that buyers differ in their wants.g. buying attitudes. Marketers identify niches by dividing a segment into sub segments or by defining a group with a distinctive set of traits who may seek a special combination of benefits. and those seeking safety . which leads to the lowest cost.Market Segmentation Market segmentation is done to increase a company’s targeting precision. and individuals. Niche Marketing: A niche is a narrowly defined group. local areas. which in turn can translate into either lower prices or higher margins. mass distribution. niches.g. Mass marketing: Mass production.

its products. Adding new ones and dropping failed products. In addition.g. Place (Distribution): refers to marketing activities that make products available to consumers at the right time and in a convenient location. price flexibility. Strategic decisions must also be made regarding branding. Payment period. and activities to directly or indirectly expedite exchange in a target market. related items within a product line. Also pricing strategies for entering a market especially with a new product must be designed. warranties and returns. A product can be a good. or idea. List Price. . These tools are known as four Ps of marketing. in many cases the system(s) by which goods are moved from where they are produced to where they are purchased by the final consumer. Strategies are needed for managing existing products over time. promotional strategies must be adjusted as a product moves from the early stages to the later stages of its life. and other product features such as services. Strategies applicable to middlemen. e. Strategies are needed to combine individual methods such as advertising. Credit terms Promotion: It is marketing activities used to communicate positive. Product: A product is anything that satisfies a need or wants and can be offered in an exchange. and sales promotion into a coordinated campaign. Price: Necessary strategies pertain to the locations of customers. such as wholesalers and retailers must be designed. Discounts. persuasive information about an organization. service. Here strategies involve the management of the channel(s) by which ownership of product is transferred from producer to customer and. and terms of sale. Allowances. packaging. personal selling.Mass customization is the ability to prepare on a mass basis individually designed products and communications to meet each customer’s requirements Marketing Mix: Marketing mix is the set of marketing tools that the firm uses to pursue its marketing objectives in the target market.

Photographic equipment etc. Soaps. E. E. strong brand preference and special purchasing efforts. E.) 3 Installations . Shopping Goods: Consumer compares quality. Video Telephone and Encyclopedias.g.g. furniture. Business Products 1 Raw Material (Part of another tangible product prior to being processed) (A) Farm Products (Wheat.g. expensive suits. chips in computer. . Newspapers. price in several stores before making a purchase. and branding and advertising tend to be less important) (A) Component Material (Usually fabricated further e.Classification of Products Consumer Products Products (Use by household consumers for nonbusiness purpose) Business Convenience Goods: Frequent purchases with minimum efforts.g.) 2 Fabricating Materials and Parts (Price and services are the major marketing considerations. E. expensive and long-lived purchase.e. Unsought Goods: New product that the consumer is not yet aware of or a product that the consumer is aware of but does not want right now. Light bulbs etc. Aid in an organization’s operations without becoming part of the finished product.g. fashionable apparel.Manufactured products that are an organization’s major. pig iron into steel) (B) Component Parts (Assembled with no further changes in form e. NO middlemen are involved. large generators etc.g. 4 Accessory equipments – of substantial value and used in an organization’s operations. 5 Operating Supplies – Convenience goods of business sector.) (B) Natural Products (Fish. Readily accessible when consumer demand arises. They directly affect the scale of operation. Specialty Goods: Unique characteristics. Cotton etc. A factory building. Petroleum etc.g.

sign. are sold to the same customer groups. P& G carries width of five lines. No. are marketed through the same channels.g. User A product line is a group of products that are closely related because they perform a similar function. or fall within given price ranges. Benefits 3. 1 . and consistency. length. of items in its product mix. intended to identify the goals or services of one seller or group of sellers and to differentiate them from those of competitors.PRODUCT MIX A product mix is the set of all products and items that a particular seller offers for sale to buyers. Paper Tissues. refers to how closely related the various product lines are in end use. Personality 6. term. Toothpaste. Attribute 2. Culture 5. Disposable Diapers. 1 Add new product lines1 (widen product mix) 2 Lengthen each product line. Values 4. depth. or a combination of them.Detergents. of different product lines e. A brand can convey up to six levels of meaning: 1. of variants of each product in the line. distribution channels. symbol. production requirements. BRAND A brand is a name. Width: No. 3 Add more product variants to each product (deepen product mix) 4 More product line consistency or less. Length: Depth: Consistency: The company can expand its business in four ways. Product mix has a certain width. Bath soaps. Total no. or design.

(B) Price Lining: Selecting a limited number of prices at which a business will sell related products. Under flexible price strategy similar customers may pay different prices when buying identical quantities of a product. a seller charges the same price to all similar customers who buy identical quantities of a product. 2 Discounts and Allowances (A) Quantity Discounts (B) Trade Discounts (C) Cash Discounts Geographic Pricing Strategies (A) Point of Production Pricing (B) Uniform Delivered Pricing (C) Zone Delivered Pricing (D) Freight Absorption Pricing Special Pricing Strategies (A) One Price and Flexible Price Strategies: Under one price strategy. Odd pricing suggests lower price than even pricing.PRICING STRATEGIES 1 Market Entry Strategies (A) Market Skimming Pricing: Setting a relatively high initial price for a new product when the new product has distinctive features strongly desired by consumers or demand is fairly inelastic or the new product is protected from competition through one or more entry barriers such as a patent. 3 4 . (C) Odd Pricing: Setting prices at odd amounts such as Rs899 rather than Rs900. (B) Market Penetration Pricing: A relatively low initial price is established for a new product when a large mass market exists for the product or demand is highly elastic or economies of scale are possible or fierce competition already exists.

Indirect Distribution: A channel including producer. final customer. Direct Distribution: No middlemen. which types of middlemen. of middlemen used at the wholesale and retail levels in a particular territory.Channels of Distribution A distribution channel consists of the set of people and firms involved in the transfer of title to a product as the product moves from producer to ultimate consumer. Specify the role of distribution U within the marketing N mix Select type of distribution channel Determine appropriate intensity of distribution Choose specific channel members WELL DESIGN DIST RIB TIO CHANNEL Sequence of decisions to design a distribution channel 1 Specify the role of distribution: (either defensively or offensively): Under defensive approach. 4 Choosing specific channel members: Selecting specific firms to distribute the product. Channel consists only producer and final customer. Dual Distribution: Use of multiple distribution channels. a firm uses distribution to gain an advantage over competitors. and at least one level of middlemen. 3 Determining intensity of distribution: To decide about no. but not necessarily better than. This is done to reach different types of markets when selling: The same product to both consumer and business markets. Factors affecting Choice of Channels: Market Considerations: Type of Market . if so. 2 Selecting the type of channel: Here a firm needs to decide whether middlemen will be used in its channel and. other firms’ distribution. With an offensive strategy. a firm will strive for distribution that is as good as. Unrelated products.

- Number of potential customers Geographic concentration of the market Order Size Product Considerations: - Unit Value Perish ability Technical nature of product Middlemen Considerations: - Services provided by middlemen Availability of desired middlemen Attitudes of middlemen toward producer’s policies Company Considerations: - Desire for channel control Services provided by seller Ability of management Financial resources Promotional Program .

5 Publicity: It is a special form of public relations that involves news stories about an organization or its products. in hopes of influencing the recipients’ feelings. beliefs. it involves an impersonal message that reaches a mass audience through the media. or behavior. including newsletters. annual reports. persuade. But several other things distinguish publicity from advertising: It is not paid for. Promotional Methods 1 Personal selling: It is direct presentation of a product to a prospective customer by a representative of the organization selling it. the organization that is the subject of the publicity has no control over it. lobbying. Unlike most advertising and personal selling. It is paid for by the sponsor and frequently involves a temporary incentive to encourage a purchase. Like advertising. . and it appears as news and therefore has grater credibility than advertising. It can take many forms. and remind the market of a product and/ or the organization selling it. 4 Public relations: It encompasses a wide variety of communication efforts to contribute to generally favorable attitudes and opinions toward an organization and its products.Promotion is the element in an organization’s marketing mix that serves to inform. and sponsorship of charitable or civic events. 2 Advertising: It is impersonal mass communication that the sponsor has paid for and in which the sponsor is clearly identified. 3 Sales promotion: It is demand stimulating activity designed to supplement advertising and facilitate personal selling. it does not include a specific sales message.

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