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or firms obtain what they need or want through creating, offering, exchanging products of value with each others. CORE CONCEPTS OF MARKETING:
M A R K E T I N G
NEED/ WANT/ DEMAND PRODUCT (GOODS/ SERVICES) VALUE/ COST/ SATISFACTION EXCHANGE/ TRANSACTION RELATIONSHIP/ NETWORK
(6) M A R K E T
7. MARKETERS/ PROSPECTS
(1) NEED/ WANT/ DEMAND: Need: It is state of deprivation of some basic satisfaction. eg.- food, clothing, safety, shelter. Want: Desire for specific satisfier of need. eg.- Indians needs food – wants paneer tikka/ tandoori chicken. Americans needs food- wants hamburger/ French fries. Demand: Want for a specific product backed up by ability and willingness to buy. eg.- Need – transportation. Want – car (say, Mercedes)……but able to buy only maruti. Therefore, demand is for maruti. Marketers cannot create needs. Needs pre exists. Marketers can influence wants. This is done in combination with societal influencers. Demand influenced by making productAPPROPRIATE ATTRACTIVE APPROACHABLE/ AFFORDABLE AVAILABLE EASILY 1
VALUE. Hence. Idea. Product component1. Satisfaction – Estimated in terms of time lead & travel comfort. Hence.Rail/ air/ road or train/ plane. Product fulfills/ satisfies Need/ Want.Self Production .Product/ Promotion/ Price/ Place (2) PRODUCTS.Exchange 2 . COST. Importance of product lies in . (4) EXCHANGE/ TRANSACTION: To satisfy need/ want. .Begging . (3) VALUE/ COST/ SATISFACTION: • • • • Decision for purchase made based on value/ cost satisfaction delivered by product/ offering. Physical Good . Product is anything that can satisfy need/ want. Egg.burger/ pizza. Marketing Myopia: Focus on products rather than on customer needs. focus is on providing/ satisfying service rather than providing products. 3.Price of each products. eg.material eaten. products are really a via. Physical Good. Need – to reach B ( from A) Method/ Products.Owning them (minor) . Service – purchase of raw material/ cooking Idea – speed of computer/ processing power. Value is products capacity to satisfy needs/ wants as per consumer’s perception or estimation.Products capacity to satisfy. people may obtain the product through . Each product would have a cost/ price elements attached to it.media for services. Fast food.Chapter-1 Introduction To Marketing Management To target consumers ( 4 P’s).Obtaining them (major). Service.Travel from city A to city B. 2.GOODS/ SERVICES/ PLACE.By force or coercion . in marketing.
1) 2) 3) 4) 5) At least two things of value. Proof of transaction is BILL/ INVOICE.It is one way. Outcome of Relationship Marketing is a MARKETING NETWORK. Hence. Achieved through promise and delivery of . over a period of time. b) Monetary Transaction. Competition is between whole network for market share and NOT between companies alone. 3 . Place of agreement.fair pricing. When agreement is reached. suppliers. TRANSFER: .Process of trying to arrive at mutually agreeable terms. suppliers. MARKETING NETWORK: It is made up of the company and its customers. May have legal system for compliance. TRANSACTION: . distributors in order to retain their long term performances and business. Time of agreement. a) There must be at least two parties. Negotiation may lead to – Transaction .It’s a pattern of building long term satisfying relationship with customers.Event that happens at the end of an exchange. we say a transaction has taken place.good service . Exchange is a process towards an agreement. e) Each party believes it is appropriate to deal with the other party. the following conditions must be fulfilled. c) Each party is capable of communication & delivery d) Each party is free to accept/ reject the exchange offer. For exchange potential to exist. differ from Transaction. Condition agreed upon. b) Each party has something of value for other party. distributors.Decision not to Transaction (5) RELATIONSHIP/ NETWORKING: Relationship marketing:. employees. NEGOTIATION: .high quality . advertisement agencies.Chapter-1 Introduction To Marketing Management EXCHANGE: .The act/ process of obtaining a desired product from someone by offering something in return. retailers. research & development with whom it has built mutually profitable business relationship. a) Barter transaction.
Most of time. Buyers – referred to in a group as “MARKET”. composition of demand in a way that will help the organization to achieve its objective. One party seeks the exchange more actively. ii) Manufacturing Market. services. iii) Intermediary Market. It defines marketing management as the process of planning & executing the conception of pricing. Types of Markets: i) Resource Market. and the other party is called “Prospect”. 4 . v) Government market. Marketer may be seller or buyer. called as “ Marketer”. In Marketing terms: Sellers – called as “INDUSTRY”. (7) MARKETERS/ PROSPECTS: Working with markets to actualize potential exchanges for the purpose of satisfying needs and wants.Chapter-1 Introduction To Marketing Management (6) MARKET: A market consists of all potential customers sharing particular need/ want who may be willing and able to engage in exchange to satisfy need/ want. marketing management is essentially demand management. timing. promotion. Marketing Management takes place when at least one party to a potential exchange thinks about the means of achieving desired responses from other parties. Can be practiced in any market. iv) Consumer Market. willing or able to offer these resources in exchange for what they want). Hence. ideas to create exchanges that satisfy individual and organizational goals. Task of marketing management is to influence the level. have resources that interest others.American Marketing Association. A marketer is a company serving a market in the face of competition. distribution of goods. marketer is seller. Market Size = fn (Number of people who have need/ want. Prospect is someone whom marketer identifies as potentially willing and able to engage in exchange. AMA.
not fulfilled by current products.VSNL sim card.Maruti Udyog Ltd. . . mobile. eg. COMPANY ORIENTATION TOWARDS MARKET PLACE: Companies activities to address the market affects.Negative demand – Major market dislikes product. . 100 unit/ day: total cost = 10000 + 2000 = 12000/= 1000 unit/ day: total cost = 10000 + 20000 = 30000/= unit cost= 120/=.fans. eg. . Interest of each group may be different and in conflict to each other. . eg.Good volume of business...Full Demand . narcotic drugs. Total cost = (Fixed cost) + (Variable Cost). Hence. society. fixed cost comes down. It’s applicable when . .. eg.No Demand .Product demand is more than product supply. Hence.Irregular Demand .Demand greater than ability to handle.. 5 ... eg. At the time of launch of M800..Product cost is to be lowered to expand market through scale economies. Q: What weightage should an organization give to each group? A: Company should choose its orientation towards market place. eg.tooth paste. unit cost= 30/=. most of FMCG items.Need exists. .Unwholesome Demand – Unwholesome product.cigarettes.Latent Demand .Seasonally.ATM.Overfull Demand .Chapter-1 Introduction To Marketing Management States of “DEMAND” could be: . Eg.Declining demand – Demand decreases over period of time.Constant unaware and uninterested in product. Eg. raincoat. hence try to avoid.. Scale economies are economics of production achieved through higher level of productin due to fixed cost(overheads) getting distributed over a larger market share. customers. . focus is on efficiency and wide distribution. . eg. Orientation/ Philosophy could be Production concept Product concept Selling/ Sale concept Marketing concept Societal concept i) Production concept: Consumers will favour those products that are widely available and low in cost. in scale economies.segway. eg.injections.pagers.organization. scooters.
Eg.Company has effective selling & promotion tools to stimulate buying. Hence. This is marketing myopia. but didn’t sell due to complications. In current world. credit cards.non carbonated/ fruit based.insurance. a company needs to identify specific target market which it can address or whose specific needs it can fulfill. many markets are buyer markets.thirst satisfier.Bottled drink/ Packaged drink. Nokia. Want . Energy. This concept may lead to marketing myopia. any company may not be able to operate in every market to satisfy every need.Chapter-1 Introduction To Marketing Management ii) Product concept: Consumer will favour those products that offer superior quality. In some situation.carbonated artificial flavoured. iii) Selling concept: Consumers. . . . selling is just one part of marketing. This is the key to achieving organization goals. performance features. In reality. Intel. Need – Thirst. (d) Profitability.Companies have over capacity. Marketing Activities – Activities to create/ deliver/ consume the product to satisfy/ identify need/ want. companies have to sell what they make rather than make what they sell. Toyota.Hence. focus is on aggressive selling & promotion effort. Eg.. Assumptions – Customer shows buying inertia.Gillete. Product – Pepsi. Fruity. Sony.Needs/ Wants are/ can be quite special/ different for different conditions . producers need to sell aggressively. Four Pillars of Marketing concept – (a) Target market. (a) TARGET MARKET: Normally. PIP television is innovative product. innovation. (b) Customer needs. This gives rise to a feeling that selling is all or most important part of marketing. Hence.non carbonated/ milk based. 6 .. Used when – Goods that buyers normally do not think of buying. will ordinarily not buy enough of the organization product. iv) Marketing concept: Integrate marketing activities towards determining & satisfying needs/ wants of target market more effectively than competition. (c) Integrated market. if left alone.
Like. Responsive Marketing: Find stated Need & fulfill it.Good fuel economy 3. .Changing buying pattern. Internal Marketing – Directed at people within organization.Inexpensive car 2.Good service from dealer 4. 1. Secret Need. 7 .Increase in marketing expenditure.Achieve organizational goals(profit). External Marketing – Directed at people outside organization.Increase in competition.off. Every staff member must be conscious of how his/ her work impacts other customers. . Purchase/ production/ finance/ HR/ R & D. (d) PROFITABILITY: Ultimate Purpose: . Eg. This may involve.Satisfying customer needs better than competition. Real Need. Like. (c) INTEGRATED MARKETING: All departments within an organistion work together to serve customer’s interest. Key : Do job well and achieve profits as a by-product. ATM’s.Free accessories 5.going deeper into needs .Slow growth. . .understanding possible trade. Doing job well: .Declining sales. Needs could be ( Inexpensive Car). It occurs at two levels: -Within marketing department/ functions. trade off need to be understood.cell phones. Hence. In Reality: Many/ Most organizations embrace marketing concept due to situation. . Situation could be .Chapter-1 Introduction To Marketing Management (b) CUSTOMER NEEDS: Customers needs need to be fully understood. This may not be possible.. Unstated Need. Delight Need. Services/ advertising / sales / product management/ market research -Marketing department with other company department. Stated Need. Company need to understand customer need/ tradeoff and meet them better than competition. Creative Marketing: Discover/ produce solution that customer did not ask for but Customer response is enthusiastic.Seen in good light by friends Customer needs could be a range of attributes of product features at low price.
. i.e.Slow Learning – Resistance to change/ old habits die hard. . .degradable paper bags in lieu of plastics. ..Chemical companies – Effluent management systems. To deliver desired satisfaction more efficiently & effectively than competition.Two way (reusable) soft drinks bottle in lieu of disposable bottles. . (v) Societal marketing concept: Organization’s task is To determine Needs/ Wants/ Demands/ interests of target market. Emerged in the background of – Environmental deterioration. – Consciousness of social services or social awareness.Chapter-1 Introduction To Marketing Management While converting to a marketing oriented organization. 8 . To preserve/ enhance consumers/ societies well being while doing so. a company faces/ may face internal hurdles.Organised Resistance – Perception of erosion of power of outer departments such as production/ finance/ R & D. Eg. These could be.Fast Forgetting – Small success leading to forgetting key success factors. .Use of Bio. build social/ ethical considerations int marketing practice. – Resource shortage.