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CHAPTER 1 FUNDAMENTALS OF MARKETING

UNDERSTANDING MARKETING
 Process

of finding out customer needs and serving those needs profitably  Profit is a legitimate goal of a business organization  Essence of marketing is providing desired value to customers  Marketing should be considered a central business function

What is Marketing

Philip Kotler .Marketing is Is a societal process by which individuals and group obtain what they need and want through creating offering and freely exchanging products and services of value with others.

Marketing is BUSINESS FUNCTION RELATIONSHIP SCIENCE PROCESS PHILOSOPHY .

This involves getting.According to Philip Kotler “Marketing management is the art and science of choosing target markets and building profitable relationship with them. keeping and growing customers through creating delivering and communicating superior value” .

Marketing is a viewpoint . and satisfy consumer needs. Marketing is designed to bring about desired exchanges with target audience for the purpose of mutual gain. which looks at the entire business process as a highly integrated effort to discover . create . arouse . Marketing is the economic process by which the goods and services are exchanged between the maker and user and their values determined in terms of money prices. .Selected Definitions of Marketing Marketing is primarily concerned with the problem of profitably disposing what is produced. Marketing is performance of business activities that direct the flow of goods and service from the producer to the consumer.

Do these definitions bring the full meaning of Marketing .

What are their needs? What must we do to meet their needs? 1. marketing must know: Who are our customers? 2. “Meeting Human Needs” To accomplish this. 3. .Marketing is ……..

.  The transaction takes place as per agreed upon conditions  The transaction succeeds when both the parties involved are satisfied.  Marketing involves a buyer and seller… in other words. one party provides to the other something of value in return for something else of value.Marketing as a process  Marketing is a process of exchange  Marketing means offering something and getting something in return. it is a transaction between two parties.

THE MARKETING CONCEPT  All activities are focused upon providing customer satisfaction  Every employee in an organization is a marketer  Internal communication .

PRODUCTION CONCEPT  Inward looking orientation  Management becomes cost focused  Objective is cost reduction  Business mission is focused on current production capabilities  Manufacture products and aggressively sell them to customers .

SELLING CONCEPT     Product or service is not designed and made according to customer’s requirements Customer has to be persuaded to believe that the product or the service meets his requirements Customer dissatisfied and bad-mouths company Marketing makes selling redundant .

he buys an offering that fulfills his needs .PRODUCT CONCEPT  Companies become centered on constantly improving the product  Myopic focus on the product  No attention on the other ways in which customers can fulfill their needs – MARKETING MYOPIA  Customer does not buy a product.

furnishing. and their unwillingness to experiment with this model  Can be easily applied in businesses like automobiles. not products  Service model of marketing instead of selling the title to the products  Hindrance: Mindset of the customer and marketer. and for most consumer durable items . carpeting.SERVICE CONCEPT  Customers buy services.

2006 . Ltd.Marketing Management by Arun Kumar and N Meenakshi © Vikas Publishing House Pvt.

EXPERIENCE CONCEPT  Create an experience around the product to make it memorable  Reaffirm it with cues at every customer interaction point  Experiences are inherently personal for a customer  An experience should be built around a well defined theme .

Experience Concept (Contd. or distracts from the theme Customers purchase memorabilia as a physical reminder of an experience The more senses an experience engages. the more effective and memorable it becomes . contradicts.)     Companies must introduce cues that affirm the nature of the experience to the guest Eliminate anything that diminishes.

In defining business the focus is not to be on the “Product” but on the basic “Human Need” .

Bus . Flight . Truck Movies . TV programmes Beverages of all kinds Photostat Machine/Fax/ Fairness cream/ cold cream Greeting cards/Gifts Need Transportation Entertainment Nutrition Office Productivity Beauty Social satisfaction .Product Vs. Need Focus Product Railway .

Customer Delivered Value Starting point Factory Focus Existing products Means Selling and promotion Ends Profits through sales volume (a) The selling concept Profits through customer satisfaction Market Customer needs Integrated marketing (b) The marketing concept .

Concern with fulfilling the needs of the customers. Views business as a “Customer satisfying process” Concerns itself with value satisfaction that should go to the customer in the exchange process. Concern is with the trick of getting the cash from the customer. . Views business as a “Goods producing process” Over emphasis on the exchange aspect without caring for the value satisfaction. and is pre-occupied with the needs of the seller Marketing starts with the buyers and focus is only on their needs Seller is the centre of the business Emphasis is on saleable surplus available with the seller Buyer is the centre of the business The aim is to convert the customer needs into products. The firm makes the product and then decides how to sell it. Emphasis is on staying with the existing technology and reducing cost. The product is determined by the buyer. Marketing Selling starts with the seller. Emphasis is on innovation in every sphere.Selling Vs.

Emphasis is on “Somehow selling” Selling views customer as the last link in the business . Marketing views customer as the very purpose of the business.Selling Vs. The entire organization is focused on the customer. Sellers motives dominate the marketing communication Distribution functions are vital services to be provided to the customer for the customer convenience. Marketing Distribution function is considered to be mere extensions of the production function. Marketing communication is looked upon as a tool for communicating the benefits provided by the product Emphasis is on integrated marketing covering all the 4P’s.

PROFILE OF CUSTOMER-CENTRIC ORGANIZATIONS  Shared values and beliefs  Skills in understanding and responding to customers  Market intelligence  Formal and informal means of information dissemination  Responsiveness .

Profile of Customer-centric Organizations (Contd.)  Desire to serve customer needs better than competition  Organizational structure must reflect marketing strategy  Clear communication .

MARKETING MIX  PRODUCT  PRICE  PLACE  PROMOTION  CRITICISM OF THE 4Ps APPROACH TO MARKETING .

Variety Quality Design Features Brand name Packing Services Product Payment Period Credit Terms List Price Discounts Allowances Price 4 P’s Of Marketing Place Promotion Personal Selling Public Relations Sales Promotions Advertising Channels Coverage Locations Inventory Transportation Logistics .

4 P’s Vs. 4 C’s 4 P’s Product Price Place Promotion 4 C’s Customer Solution Customer Cost Convenience Communication .

CHARACTERISTICS OF AN EFFECTIVE MARKETING MIX  Marketing mix should match customer needs  True source of competitive advantage  Well blended to form a consistent theme  Match corporate resources .

)  SEGMENTATION.Characteristics Of An Effective Marketing Mix (Contd. TARGETING. AND POSITIONING Segmentation Target markets Positioning  MARKETING ORIENTATION AND BUSINESS PERFORMANCE .

Assignment -1 Segment the Magazine MarketPictorial Presentation .

Substantiate!!! .Assignment-2 “Washing Powder Nirma” -Successful Blend of Marketing Mix.