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Marketing

Marketing is a economic process by which goods and services are exchanged between
the producers and consumers and their values is determined in terms of money prices.

Scope of marketing

It is seen as the task of creating ,promoting & delivering goods & services to
customers & business. Marketers are skilled in stimulating demand for the company’s
products tey are responsible for demand management .marketing managers seek to
influence the level , timing & composition of demand to meet the organizations
objectives

Marketing people are involved in marketing ten types of entities


• Goods
• Services
• Experiences
• Events
• Persons
• Places
• Properties
• Organizations
• Information
• Ideas
A. Goods: Physical goods constitute the bulk of production and marketing efforts.
B. Services: A growing portion of business activities are focused on the production of
services. The U.S. economy today consists of a 70-30 services to goods mix.
C. Events: Marketers promote time-based events such as trade shows, artistic
performances, and the Olympics.
D. Experiences: By orchestrating several services and goods, a firm can create and
market experiences such as Walt Disney World's Magic Kingdom.
E. Persons: Celebrity marketing is a major business.
F. Places: Cities, states, regions and whole nations compete actively to attract tourists,
factories, and new residents.
G. Properties: Are intangible rights of ownership of either real property (real estate) or
financial property (stocks and bonds).
Concepts of marketing

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 Maslow’s need hierarchy, all the human needs can be categorized as
shown in the diagram

Wants:

The needs become wants they are directed to specific objects that might satisfy the needs.
Eg: Mercedes

Demands:

Demands are wants for specific products that are bagged by an ability and willingness to buy
them.
MARKET

A market is a common place or locality where things are brought and sold and where
buyers and sellers usually meet to affect purchase and sale.

The Marketplace is physical, as when one goes for shopping in a store.

Marketspace is digital, as when one goes shopping on the internet.

• Available Market (who have interest, income and access to a particular offer)

• Target Market or Served Market (a co. can go for serving whole available
market or can concentrate on certain segments)

• Penetrated Market (set of buyers who are buying the co.’s product

Elements of a modern marketing system :

communication

products

Industry Market ( a collection of


(a collection of sellers) money buyers)

information

Generally markets are divided into 4 categories :

1. consumer markets
2. business markets
3. globe markets
4. non profit & govt markets.

Consumer markets :
companies selling mass consumer goods and services such as drinks
, cosmetics , air travel and equipment spend a great deal of time trying to establish a
superior brand image. But brand strength depends on developing a product and packaging
, availability , communication and reliable service.
Business market :
companies selling business goods and services often face well trained
and well informed professional buyers who are in evaluating competitive offerings.
Business buyers buy goods in order to make or resell a product to others at a profit.
Business marketers must demonstrate how their products will help these buyers achieve
higher revenue or low costs.

Global markets :
Companies selling goods and services in the global market place face
additional decisions and challenges . they must decide which in countries how to enter
each country , how to adopt their products and service features to each country . how to
price their products in different countries and how to adopt their communications to fit
different cultures . these decisions must be made in the face of diff requirements for
buying,negotiating , owning and disposing of property ,diff cultures , languages , legal n
political systems and currency value.

Non profit and govt.markets :


Companies selling their goods to non profit organizations such as
churches , universities , charitable organisations or govt agencies need to price carefully
because these organisaitions have limited purchasing power . lower prices affect on the
feautures and qualities of products.

Marketing process
I. Situation Analysis: A thorough analysis of the situation in which the firm finds
itself serves as the basis for identifying opportunities to satisfy unfulfilled customer
needs. In addition to identifying the customer needs, the firm must understand its
own capabilities and the environment in which it is operating.

The situation analysis thus can be viewed in terms of an analysis of the external
environment and an internal analysis of the firm itself. The external environment can
be described in terms of macro-environmental factors that broadly affect many
firms, and micro-environmental factors closely related to the specific situation of the
firm.

The situation analysis should include past, present and future aspects. It should
include a history outlining how the situation evolved to its present state, and an
analysis of trends in order to forecast where it is going. Good forecasting can reduce
the chance of spending a year bringing a product to market only to find that the need
no longer exists.

If the situation analysis reveals gaps between what consumers want and what
currently is offered to them, then there may be opportunities to introduce products to
better satisfy those consumers. Hence, the situation analysis should yield a summary
of problems and opportunities. From this summary, the firm can match its own
capabilities with the opportunities in order to satisfy customer needs better than the
competition.

There are several frameworks that can be used to add structure to the situation
analysis:

♦ 5 C Analysis: company, customers, competitors, collaborators and climate.


Company represents the internal situation; the other four cover aspects of the
external situation.

♦ PEST analysis: for macro-environmental political, economic, societal, and


technological factors. A PEST analysis can be used as the "climate" portion of
the 5 C framework.

♦ SWOT analysis: strengths, weaknesses, opportunities, and threats for the


internal and external situation. A SWOT analysis can be used to condense the
situation analysis into a listing of the most relevant problems and opportunities
and to assess how well the firm is equipped to deal with them.

II. Marketing Strategy: Once the best opportunity to satisfy unfulfilled customer needs
is identified, a strategic plan for pursuing the opportunity can be developed. Market
research will provide specific market information that will permit the firm to select
the target market segment and optimally position the offering within that segment.
The result is a value proposition to the target market. The marketing strategy then
involves:

♦ Segmentation

♦ Targeting (target market selection)

♦ Positioning the product within the target market

♦ Value proposition to the target market

III. Marketing Mix Decisions: Detailed tactical decisions then are made for the
controllable parameters of the marketing mix. The action items include:

♦ Product development: specifying, designing and producing the first units of the
product.

♦ Pricing decisions

♦ Distribution contracts

♦ Promotional campaign development


IV. Implementation and Control: At this point in the process, the marketing plan has
been developed and the product has been launched. Given that few environments are
static, the results of the marketing effort should be monitored closely. As the market
changes, the marketing mix can be adjusted to accommodate the changes. Often,
small changes in consumer wants can addressed by changing the advertising
message. As the changes become more significant, a product redesign or an entirely
new product may be needed. The marketing process does not end with
implementation—continual monitoring and adaptation is needed to fulfill customer
needs consistently over the long-term.

MARKETING MANAGEMENT

Marketing management is an important to operative function (as distinct from managerial


function) of management. It performs all managerial functions in the field of marketing.
It is responsible for planning, organizing, directing and controlling the marketing
activities. It is required to build up appropriate marketing-mix to achieve the objectives
of the business.

According to E.W. Cundiff and R.R still, “Marketing management is concerned with the
direction of purposeful activities towards the attainment of marketing goals.” The basic
goals of marketing are satisfaction of needs of customers and generation of revenue for
the business. Most of the big business enterprises organize the marketing activities
separately under the charge of a marketing manager. The marketing manager looks after
various aspects of marketing to achieve the objectives of marketing, viz; creation
of customers and satisfaction of their wants and earning of profits.

Marketing management attempts to contribute to the organizational objectives. It deals


with planning, organizing, directing and controlling the activities related to the marketing
of goods, ideas and services to satisfy the customer’s needs and contribute to
organizational objectives. The nature of marketing management is
1
2
3
4
1) Marketing management is a functional area of management. As a managerial
function, it includes analysis, planning, implementation and control of activities
concerned with development and distribution of products for satisfying the needs
of the customers.
2) Marketing management is goal directed. It attempt to satisfy the needs of
customers by offering them want satisfying products and generate revenue for the
business.
3) Marketing management determines the appropriate marketing mix of the firm.
Product design, its promotion, its pricing and its distribution are properly
harmonized so that goods are accepted by the customers.
4) Marketing management is the marketing concept in action. It includes all
activities which are necessary to know the needs of customers and supplies goods
and services to satisfy the needs of the customers. The marketing concept is based
on the philosophy that all activities of the business enterprises should be oriented
towards the satisfaction of requirements or needs of the customers .

MARKETING TASKS

The process of marketing management is about attracting and retaining customers by offering
them desirable products that satisfy needs and meet wants.

Marketing management in a customer-orientated business consists of five key tasks summarised


in the table below:

Identify target markets

Management have to identify those customers with whom they want to trade. The
choice of target markets will be influenced by the wealth consumers hold and the business'
ability to serve them.

Market research

“Marketing research is the systematic search for and analysis of facts related to
a marketing problem. Its emphasis is shifting from fact finding, information gathering
activity to a problem solving and action recommending function”.
Management have to collect information on the current and potential needs of customers in
the markets they have chosen to supply. Areas to research include how customers buy (which
marketing channels are used) and what competitors are offering

Product development

A product is something which is offered by a business firm to customers to


satisfy their needs. It has great importance in all other areas of marketing
management. For instance, marketing research is mainly directed towards knowing
the needs of the customers and increasing the sale of the product; and storage and
transportation activities depend upon the nature of the product. Therefore, it is
necessary to plan and develop products which meet the specifications of then
customers. Products are the foundation of any marketing programme. The success of
marketing department depends upon the nature of the product offered to the
customers. The product must be so designed and developed that it meets the
requirements of the customers.
Product planning and development involves a number of decisions, namely,
what to manufacture or buy? How to have its packaging? How to fix its price and
how to sell it? The design, quality, colours, size and other feautures of the product can
be determined by conducting marketing research. The product department will be
guided by the requirement of the users.

Marketing mix

Having identified the target markets and developed relevant products,


management must then determine the price, promotion and distribution for the product.
The marketing mix is tailored to offer value to customers, to communicate the offer and to
make it accessible and convenient

Marketmonitoring

The objective in marketing is to first attract customers - and then (most importantly)
retain them by building a relationship. In order to do this effectively, they need feedback
on customer satisfaction. They also need to feed this back into product design and
marketing mix as customer needs and the competitive environment changes
MARKETINGCONCEPT

The marketing concept is the philosophy that firms should analyze the needs of their
customers and then make decisions to satisfy those needs, better than the competition.
Today most firms have adopted the marketing concept, but this has not always been the
case. In 1776 in The Wealth of Nations, Adam Smith wrote that the needs of producers
should be considered only with regard to meeting the needs of consumers. While this
philosophy is consistent with the marketing concept, it would not be adopted widely until
nearly 200 years later. To better understand the marketing concept, it is worthwhile to put
it in perspective by reviewing other philosophies that once were predominant. While
these alternative concepts prevailed during different historical time frames, they are not
restricted to those periods and are still practiced by some firms today.

The Production Concept

The Production concept holds that consumers will prefer products which are widely
available & inexpensive.

The production concept prevailed from the time of the industrial revolution until the early
1920's. The production concept was the idea that a firm should focus on those products
that it could produce most efficiently and that the creation of a supply of low-cost
products would in and of itself creates the demand for the products. The key questions
that a firm would ask before producing a product were:
Can we produce the product?
Can we produce enough of it?
At the time, the production concept worked fairly well because the goods that were
produced were largely those of basic necessity and there was a relatively high level of
unfulfilled demand. Virtually everything that could be produced was sold easily by a
sales team whose job it was simply to execute transactions at a price determined by the
cost of production. The production concept prevailed into the late 1920's.
The Product Concept

The Product concept holds that consumers will favor the most quality , performance or
innovative features

Product oriented companies often design their products with little or no


customer input. They trust that their managers can design the products with little or no
customer output.

• Therefore, improve quality, performance and features.


• This would lead to increased sales and profits.

The Selling Concept

The Selling concept holds that consumers & businesses if left alone ,will ordinarily
not buy enough of the organizations products.

By the early 1930's however, mass production had become commonplace,


competition had increased, and there was little unfulfilled demand. Around this time,
firms began to practice the sales concept (or selling concept), under which companies not
only would produce the products, but also would try to convince customers to buy them
through advertising and personal selling. Before producing a product, the key questions
were:
Can we sell the product?
Can we charge enough for it?
The sales concept paid little attention to whether the product actually was needed; the
goal simply was to beat the competition to the sale with little regard to customer
satisfaction. Marketing was a function that was performed after the product was
developed and produced, and many people came to associate marketing with hard selling.
Even today, many people use the word "marketing" when they really mean sales.
The Marketing Concept

The Marketing concept holds that consumers a business should start with the
deteAfter World War II, the variety of products increased and hard selling no longer
could be relied upon to generate sales. With increased discretionary income, customers
could afford to be selective and buy only those products that precisely met their changing
needs, and these needs were not immediately obvious. The key questions became:
What do customers want?
Can we develop it while they still want it?
How can we keep our customers satisfied?
In response to these discerning customers, firms began to adopt the marketing concept,
which involves:
Focusing on customer needs before developing the product
Aligning all functions of the company to focus on those needs
Realizing a profit by successfully satisfying customer needs over the long-term when
firms first began to adopt the marketing concept, they typically set up separate marketing
departments whose objective it was to satisfy customer needs. Often these departments
were sales departments with expanded responsibilities. While this expanded sales
department structure can be found in some companies today, many firms have structured
themselves into marketing organizations having a company-wide customer focus. Since
the entire organization exists to satisfy customer needs, nobody can neglect a customer
issue by declaring it a "marketing problem" - everybody must be concerned with
customer satisfaction. The marketing concept relies upon marketing research to define
market segments, their size, and their needs. To satisfy those needs, the marketing team
makes decisions about the controllable parameters of the marketing mix.
rmination of consumer wants & end with the satisfaction of those wants.

Societal Marketing

Societal Marketing =

Consumer Satisfaction + Company ‘ s Profits + Society’s well being.

Societal marketing focuses on satisfying customer needs and wants while enhanchig
individual and societal wellbeing.

Societal marketing is defined as the use of marketing principles and techniques to that are
helpful to them and or society (e.g., having family meals, praying together, etc.).
influence a target audience to voluntarily accept, reject, modify, or abandon a behavior
for the benefit of individuals, groups or society as a whole. Social marketing is usually
done by a non-profit organization, government, or quasi-government agency. The goal is
either to steer the public away from products that are harmful to them and / or society
(e.g., illegal drugs, tobacco, alcohol, etc.) or to direct them towards behaviors or products
that are helpful to them and or society (e.g., having family meals, praying together, etc.).
Difference between selling and marketing

SELLING MARKETING
“SELLING IS NOTHING BUT CONVERTING PRODUCT “ MARKETING IS NOTHING BUT CONVERTING
CUSTOMER NEEDS INTO PRODUCTS”.
INTO CASH ”.

• SELLING FOCUSES ON THE NEEDS OF THE


• MARKETING FOCUSES ON THE NEEDS OF THE BUYER

SELLER.
• Emphasis is on customers’ wants.
• Emphasis is on the product. • Company first determines customers’ wants
• Company first makes the product and and then figures out how to make and delivers
then figures out how to sell it. a product to satisfy those wants.
• Management is profit oriented
• Management is sales volume oriented. • Planning is long run oriented, in terms of new
• Planning is short run oriented, in terms products, tomorrow’s market, and future
of today’s products and markets. growth.
• Cost determines the price • Maker determines the price
• Customer is the very purpose of business.
• Customer is last link in the business
• MARKETING IS “PULL”.
• SELLING IS “PUSH”

Marketing mix

Marketing mix is a set of marketing variables that the firm uses to pursue its marketing
objectives in the target market.

The term marketing mix became popularized after Neil H . Borden published his 1964
article , “The concept of marketing mix”. The ingredients in bordens marketing mix
included product ,planning ,pricing ,branding ,distribution channels ,personal selling
,advertising ,promotions ,packaging ,display ,servicing ,physical handling and fact
finding and analysis. E.Jerome McCarthy later grouped these ingredients into four
categories that today known as 4 P’s of marketing they are

 PRODUCT

 PRICE

 PLACE
 PROMOTION

The Four Ps are:

♦ Product: The Product management and Product marketing aspects of marketing


deal with the specifications of the actual good or service, and how it relates to
the end-user's needs and wants.

♦ Pricing: This refers to the process of setting a price for a product, including
discounts.

♦ Promotion: This includes advertising, sales promotion, publicity, and personal


selling, and refers to the various methods of promoting the product, brand or
company.

♦ Placement or distribution refers to how the product gets to the customer; for
example, point of sale placement or retailing. This fourth P has also sometimes
been called Place, referring to "where" a product or service is sold, e.g. in which
geographic region or industry, to which segment (young adults, families,
business people, women, men, etc.).

These four elements are often referred to as the marketing mix. A marketer can use these
variables to craft a marketing plan. The four Ps model is most useful when marketing low
value consumer products. Industrial products, services, high value consumer products
require adjustments to this model. Services marketing must account for the unique nature
of services. Industrial or b2b marketing must account for the long term contractual
agreements that are typical in supply chain transactions. Relationship marketing attempts
to do this by looking at marketing from a long-term relationship perspective rather than
individual transactions.

For a marketing plan to be successful, the mix of the four "p's" must reflect the wants and
desires of the consumers in the target market. Trying to convince a market segment to
buy something they don't want is extremely expensive and seldom successful. Marketers
depend on marketing research, both formal and informal, to determine what consumers
want and what they are willing to pay for. Marketers hope that this process will give them
a sustainable competitive advantage. Marketing management is the practical application
of this process.

Most companies today have a customer orientation (also called customer focus). This
implies that the company focuses its activities and products on customer needs. Generally
there are two ways of doing this: the customer-driven approach and the product
innovation approach.

In the consumer-driven approach, consumer wants are the drivers of all strategic
marketing decisions. No strategy is pursued until it passes the test of consumer research.
Every aspect of a market offering, including the nature of the product itself, is driven by
the needs of potential consumers. The starting point is always the consumer. The
rationale for this approach is that there is no point spending R&D funds developing
products that people will not buy. History attests to many products that were commercial
failures inspite of being technological breakthroughs.

The next big thing is a concept in marketing that refers to a product or idea that will allow
for a high amount of sales for that product and related products. Marketers believe that by
finding or creating the next big thing they will spark a cultural revolution that results in
this sales increase.

In a product innovation approach, the company pursues product innovation, then tries to
develop a market for the product. Product innovation drives the process and marketing
research is conducted primarily to ensure that a profitable market segment(s) exists for
the innovation. The rationale is that customers may not know what options will be
available to them in the future so we should not expect them to tell us what they will buy
in the future. It is claimed that if Thomas Edison depended on marketing research he
would have produced larger candles rather than inventing light bulbs. Many firms, such
as research and development focused companies, successfully focus on product
innovation. Many purists doubt whether this is really a form of marketing orientation at
all, because of the ex post status of consumer research. Some even question whether it is
marketing.

Diffusion of innovations research explores how and why people adopt new products,
services and ideas.

A relatively new form of marketing uses the Internet and is called internet marketing or
more generally e-marketing, affiliate marketing or online marketing. It typically tries to
perfect the segmentation strategy used in traditional marketing. It targets its audience
more precisely, and is sometimes called personalized marketing or one-to-one marketing.

MARKETING STRATEGIES

Marketing strategies explain how the marketing function fits in with the overall strategy for a
business. Examples of marketing strategies could be:

Business Strategy Example Marketing Strategies


Grow sales Launch new products
Expand distribution (e.g. open more shops)

Start selling products into overseas markets

Increase profits Increase selling prices

Reduce the amount spent on television advertising

Build customer awareness Implement a public relations programme

Invest more in advertising

Once a strategy has been identified, then the business must develop an action to turn the
strategy into reality. The starting point for this plan is the setting of marketing objectives.

Marketing objectives are the specific targets for marketing set by the business to achieve their
corporate objectives.

Examples of marketing objectives might be:

• Increase sales by 10%


• Launch a new product by the end of the year
• Achieve a 95% customer satisfaction rating
• Increase the number of retail outlets selling our products by 250 within 12 months

It is important for a business to set marketing objectives because managers can then have
targets for their work. They can then measure more effectively the success or failure of their
marketing strategies to achieve these objectives.

To be successful,the company must do a better job than the competitors of satisfying


target consumers. Thus , marketing strategies must be geared to the needs of consumers and
also to the strategies of competitors.

Designing competitive marketing strategies begins with through competitor analysis. The
company constantly compares the value and customer satisfaction delivered by its products ,
prices ,channels and promotion with those of its close competitors.

The competitive marketing strategy a company adopts depends on its industry position. A firm
that dominates a market can adopt one or more of several market leader strategies. Market
challengers are runner up companies that aggressively attack competitors to get more market
share. The challenger might attack the market leader, other firms its own size , or smaller
local and regional competitors. Some runner up firms will choose to follow rather than
challenge the market leader. firms using market follower strategies seek stable market shares
and profits by following competitors product offers , prices , and marketing programs . smaller
firms in a market , or even larger firms that lack established positions , often adopt market
nicher strategies. They specialize in serving market niches that major competitors overlook or
ignore.

The marketing strategy then involves:

♦ Selective customers

♦ Target marketing

♦ Delivery value
♦ Customer value

♦ Marketing management concept

♦ Production concept

♦ Selling concept

♦ Marketing concept

♦ Social concept

The marketing environment

The marketing environment is defined as the external forces that directly or indirectly
influence an organization’s capability to undertake its business.

The macro marketing environment consists of six core forces: political, legal, regulatory,
societal/green, technological, plus economic/competitive issues.

The micro marketing environment includes more company-specific forces: types of


competition, supplier power, buyer power, and a business’s other publics.