Introduction to marketing

Akash Saxena

By Akash saxena

The American Marketing Association (AMA) defines marketing as “The process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational goals.” This definition needs further explanation On the part of marketers, they need to •Plan and execute •The marketing mix (product, price, place and promotion) •Of their offerings (Kotlar has suggested ten type of entities, includes ideas, goods, services, places, individuals etc) •To create exchanges (marketing is exchange oriented) •That satisfy individual and organizational goals.

Marketing: What is it

By Akash saxena

What is Marketing?
Marketing in its most basic form is a societal
“ Process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others .”
More simply : Marketing is the delivery of customer satisfaction at a profit .

By Akash saxena

The genesis of marketing
Man is a social animal. Society is based on sharing needs and

solutions At the very basic marketing is the process of identifying a need and satisfying it.

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An example
Food is a basic need. There are people and

organizations who produce variety of food stuff to meet this need while earning profits. McDonalds produce tasty burgers to satisfy appetite of people while earning soaring profits every year.
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David Packard, Cofounder H.P. “Marketing is too important to be left only to the marketing department”

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Core Marketing Concepts

Needs , wants , and demands

Product s and Service s


Exchange , transactions , and relationships
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Value , satisfaction , and quality

Needs - state of felt deprivation for

What Motivates a Consumer to Take Action?

basic items such as food and clothing and complex needs such as for belonging . i . e . I am thirsty

Wants - form that a human need takes as
shaped by culture and individual personality . i . e . I want a Coca - Cola .

Demands - human wants backed by buying
power . i . e . I have money to buy a Coca Cola .

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What Will Satisfy Consumer ’ s Needs and Wants? Products –

anything that can be offered to a market for attention , acquisition , use or consumption and that might satisfy a need or want . Examples : persons , places , organizations , activities , and ideas .


– activities or benefits offered for sale that are essentially intangible and don ’ t result in the ownership of anything . Examples : banking , airlines , haircuts , and hotels .
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Anything that can be

offered to a market for attention, acquisition, use, or consumption that might satisfy a need or want.
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H o n d a J zz, a A p ro d u ct so l b y d H onda I di n a

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A physical good {Soap, Cereal etc} Service {Airline, Insurance, Banking} Person {Amitabh Bacchan, Sonia

Gandhi} Organization {Nonprofit, Trade Organization} Place {Bareilly, U.P., India} Idea {Vote for BJP, Education of girl child} Properties (DLF, Unitech) Information (News, Databases) Experiences (Disney World, Space Tourism) saxena By Akash Events (Olympics, ICC World Cup,

1. Physical Goods

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2. Services
TATA AIG Life Insuran ce

Indian Rail Promotion al Offers

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3. Person

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4. Organization

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5. Place

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6. Idea

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7. Information

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8. Properties

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9. Event

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10. Experience

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Classifying Products
Consumer Products
 Products purchased to satisfy

personal and family needs

Business Products
 Products bought to use in an

organization’s operations, to resell, or to make other products (raw materials and components)

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Consumer Products

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Consumer Products
Convenience Products
Relatively inexpensive, frequently

purchased items for which buyers exert minimal purchasing effort Characteristics
 Marketed through many retail outlets  Relatively low per-unit gross margins  Little promotional effort at the retail level  Packaging is important marketing mix element

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Consumer Products (cont’d)
Shopping Products
Items for which buyers are willing to

expend considerable effort in planning and making purchases Characteristics
 Do not have brand loyalty appeal  Expected to last a long time; less frequently

purchased  Require fewer retail outlets  Inventory turnover is lower  Gross margins are higher  More amenable to personal selling  Supported (servicing and promoting the product) by both the producer and channel members
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Consumer Products (cont’d)
Specialty Products
Items with unique characteristics that buyers

are willing to expend considerable effort to obtain Characteristics
 Are preselected by the consumer  Have no close substitutes or alternatives

 Are available in a limited number of retail outlets  Purchased infrequently and represent a significant

and expensive investment  Have high gross margins and low inventory turnover
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Consumer Products (cont’d)
Unsought Products
Products purchased to solve a sudden

problem, products of which the customers are unaware, and products that people do not necessarily think about buying Characteristics
 Speed and problem resolution of the utmost

importance  Price and other features not considered  No consideration of substitutes or alternatives  Purchased infrequently
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Business Products
Facilities and nonportable major equipment  Office buildings, factories and warehouses, production lines, very large machines

Accessory Equipment
Equipment used in production

or office activities

 File cabinets, small motors,

calculators, and tools

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Business Products (cont’d)
Raw Materials
Basic natural materials that become part of

a physical product such as ores, water, lumber, grains, and eggs

Component Parts
Items that become part of the physical

 Finished items ready for assembly  Items needing little processing

before assembly  Computer chips, engine blocks, girders, and paints
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Business Products (cont’d)
Process Materials
Materials that are not readily identifiable

when used directly in the production of other products such as screws, knobs, and handles

MRO Supplies
Maintenance, repair, and operating items

that facilitate production and do not become part of the finished product such as cleaners, rubber bands, and staples

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Business Products (cont’d)
Business Services
The intangible products that many

organizations use in their operations such as cleaning, legal, consulting, and repair service.

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How Do Consumers Choose Choose Among Products and Services?
Customer Value –
benefit that the customer gains from owning and using a product compared to the cost of obtaining the product. Value = Benefits/costs Benefits = functional benefits, social benefits etc. Cost = cost of effort, monetary cost, social cost etc

Customer Satisfaction –
depends on the product’s perceived performance in delivering value relative to a buyer’s expectations. Linked to Quality and Total Quality Management (TQM).
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How do Consumers Obtain Products and Services?
Exchange is one of three ways we can satisfy our needs. Suppose you want some clothes. Then you can obtain it through ØMaking it yourself ØYou can steal or use some form of coercion (compel by threat) ØOr you can offer something of value (perhaps your money, your services, or another good) to a person who will exchange clothes for what you offer. •Only the third alternative is an exchange in the sense that marketing is occurring.

Exchanges can be defined as – An act of obtaining a desired object from someone by offering something in return.

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The following conditions must exist for a marketing exchange to take place: •Two or more social units – people or organizations – must be involved, and each must have wants to be satisfied. If you totally self sufficient in one area there is no need to exchange. •The parties must be involved voluntarily (no force). Each party believes that it is appropriate or desirable to deal with the other party •Each party must have something of value to contribute in the exchange. •The parties must be capable of communication & Delivery of the product or the service. •Each party must be free to accept or reject any offer
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Transactions – It is used interchangeably with exchange at times but a transaction is the outcome of the exchange process.
A transaction can be defined as trade of values between parties. It usually involves money and a response.

Relationships – In the extremely competitive marketing environment it is extremely important to build and maintain long term relationships with your buyers and suppliers.

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When one person/party offers

something to other party and gets nothing in return. Gifts, Subsidies and charitable contributions are all transfers Marketers have broaden the concept of marketing to include the study of transfer behavior as well as transaction behavior

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 In most generic sense, marketers seek to draw

a behavioral response from another party.  Business firm – purchase  Political candidate – vote  Church – active member  Social action group – a passionate adoption of some cause Marketing consists of actions undertaken to elicit desired responses from a target audience

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What is marketed
Kotler has suggested 10 types of

marketable entities – Goods, services, events, experiences, persons, places, properties, organizations, information, ideas

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Who markets
A marketer is someone who seeks a

response (attention, a purchase, a vote, a donation) from another party called prospect

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Economic Utilities
How marketing relates to production ?
Together, production and marketing provide the four basic economic utilities. Form Utility, Time utility, place utility and possession utility

Form utility: is provided when someone produces something tangible
- for instance a shoe. But simply making any shoe will not satisfy the customer needs and wants. The product must be something that customer wants, only then it will provide utility. wants it. wants it.

Time utility: means having the product available when the consumer Place utility: means having the product available where the customer Possession utility: means obtaining a product and having the right By Akash saxena
to use or consume it. Customers usually exchange money or something



Provided by production with guidance of marketing

Value that comes from satisfying human needs




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Provided by marketing


Who Purchases Products and Services?

Market -- buyers Market buyers who share a who share a particular need particular need or want that or want that can can be satisfied by be satisfied by a a company’s company’s products products or services. or services.
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Actual Actual Buyers Buyers

Potenti Potenti al al Buyers Buyers

 

Grouping of customers

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Type of markets
Consumer markets Business Markets Global markets Non profit & Government markets.

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Type of markets (another perspective)
Market places – Physical – A store Market spaces – Digital – Internet

store Meta Market (Mohan Sawhney)consists of all related aspects to a product market – Ex. Auto manufacturers, new & used car dealers, Insurance companies, repairs, parts, registration, accessories etc all fall under automobile meta market.

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U d n E rE e s U d n r e s e k rM a M ta e k r t Environment e k rM a M g n ir ta e k g n i t m rt e tn n II a ie d e s e im rr a i d e s e i r

p m o C y n a p m o C y n a k rM a M (( )k rr e ta e ) r e t e

p m o C o tm io tC e s rp o t i t e s r

p p u S s r e iu lS p p s r e i l
Modern Marketing System

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A Short History of marketing
Era Production Sales Marketing Relationship Time period Prior to 1920s Prior to 1950s Since 1950s Prevailing attitude A good product will sell itself Creative advertising and selling will overcome consumer’s resistance and convince them to buy The consumer is a king, find a need and fill it

Began in 1990s Long term relationships with customers and other partners lead to success

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Evolution of Business Models and the role of Marketing





Societal Mktg

As business philosophy has evolved, so has the role of marketing…customer satisfaction is now at the core of most successful corporations
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Marketing Management Marketing Management Philosophies Philosophies
Production Concept Production Concept Product Concept Product Concept Selling Concept Selling Concept Marketing Concept Marketing Concept
Societal Marketing Concept Societal Marketing Concept
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•Consumers favor products that are available and highly affordable •Improve production and distribution •Consumers favor products that offer the most quality, performance, and innovative features •Consumers will buy products only if the company promotes/ sells these product •Focuses on needs/ wants of target markets & delivering satisfaction better than competitors •Focuses on needs/ wants of target markets & delivering superior value


rial revolution of the 17th century and continued till late 19

ant assumptions of production concept is –

ays that supply creates its own demand (it was truly applicab

zed by:

rs market.

than supply

turing were given little importance

nd low priced production, was the need of the hour.

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Modern Day perspectives of Production concept
Managers of production oriented firms

concentrate on achieving high production efficiency, Low costs, and mass distribution This orientation makes sense in developing countries such as china. Companies like Lenovo & Haier take advantage of country’s huge and inexpensive labour pool to dominate the market. Marketers also use the production By Akash concept saxena a firm wants to expand when

Product Concept
The concept proposes that “Consumers

favor products that offer the most quality performance; or innovative features” Manager’s Focus: Making superior product and improving them over time. (However these managers are sometimes caught up in a love affair with their products “MARKETING MYOPIA”) The better mousetrap fallacy, believing that a better mousetrap will lead people to beat a path to their door. However, a new and improved product will not By Akash saxena necessarily successful unless it is

Marketing Myopia (Theodore Levitt)

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ed till mid 1950s

proved that producing the goods was not everything, a compan

n processes

he main objective

gained significance

nd analysis of market data.

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Marketing Concept:

During the sales era, companies ignored consumer wants and needs. They simply focussed on selling their products •By the early 1950s companies begun to realise that they would fail if they did not satisfy consumer needs. •Marketing era begun in the mid 1950s •Here the stress is on consumer orientation •Coordinated marketing management (customer orientation and profitability) •It embraces all the activities of a firm. •Aims at matching the company’s offering with customer needs to achieve the desired level of customer orientation and generate profits for the company. •Long term profitability •Functional integration

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Marketing and selling concepts (Contrasted) Starting Point

Existing Products

Selling and Promoting

Profits through Volume


Customer Needs

Integrated Marketing

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M e h T e k rT a C g n ie th c n o tM p e e k r a C g n i t c n o t p e

S e h T g n ie lh lT e n o C tS p e c g n i l l e n o C t p e c
Profits through Satisfaction

Societal Marketing Concept

Society Society (Human Welfare)) (Human Welfare

Societal Societal Marketing Marketing Concept Concept
Consumers Consumers (Wants) (Wants)
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Company Company (Profits) (Profits)

Societal Marketing concept:

ØThe customer and society are interrelated ØHelp maintain society’s well being ØEnvironmental and social concerns ØThe concept calls for striking a balance between the company’s profits, the customers wants and society’s interest. ØExamples: Kodak – which is concerned for the environment for a very long period of time (recycling, reusing and recreating) ØCustomers react unfavorably to those who practice otherwise HLL – Various social initiatives

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Sony Environmental Vision for an Environmentally Sustainable Society The Sony Group Environmental Vision presents a vision and basic approaches for environmental management activities throughout the global Sony Group with the aim of creating a sustainable society. It utilizes eco-efficiency to manage progress towards the target. Basic Approach to Creating a Sustainable Society

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Green house gas emission from the product use.

New Marketing Landscape & Information Technology

Nonprofit Marketing

Ethical Concerns Changing World Economy
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