Introduction to Marketing

•Definitions
•Scope of Marketing
•Evolution of Marketing
•Company Orientation
towards Market Place
 DEFINITIONS
Marketing is an organizational function
and a set of processes for creating,
communicating, and delivering value
to the customers and for managing
customer relationships in ways that
benefit the organization and its stake
holders. - AMA
 DEFINITIONS
• Marketing Management is the art and science
of choosing target markets and getting,
keeping and growing customers through
creating, delivering and communicating
superior customer value
Philip Kotler, Keller, Koshy and Jha
 DEFINITIONS
• Marketing is a societal process by which
individuals and groups obtain what they need
and want through creating, offering, and
freely exchanging products and services of
value with others.
- Philip Kotler.
 DEFINITIONS
• There will always, one can assume, be need for some
selling. But the aim of marketing is to make selling
superfluous. The aim of marketing is to know and
understand the customer so well that the product or
service fit him and sells itself. Ideally, marketing
should result in a customer who is ready to buy. All
that should be needed then is to make the product
or service available.
- Peter Drucker
 DEFINITIONS
• We define marketing as the process of
creating, distributing, promoting, and pricing
goods, services, and ideas to facilitate
exchange relationships in a dynamic
environment.
-Pride and Ferrel
 DEFINITIONS
• Marketing is a total system of business
activities designed to plan, price, promote and
distribute want satisfying products to target
markets to achieve organizational objectives.
- Stanton, Etzel and walker
 SCOPE OF MARKETING

• Goods • Places

• Services • Properties

• Events • Organizations

• Experiences • Information

• Persons • ideas
Evolving Views of Marketing’s Role

Finance
Production
Production Finance
Human
resources
Marketing Human
resources Marketing

a. Marketing as an b. Marketing as a more

equal function important function
 Evolving Views of Marketing’s Role

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c. Marketing as the d. The customer as the

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Evolving Views of Marketing’s Role

Production

Marketing

Customer

e. The customer as the controlling

function and marketing as the
integrative function
COMPANY ORIENTATIONS TOWARDS
MARKET PLACE
• WHAT PHILOSPHY SHOULD GUIDE A
COMPANY’S MARKETING EFFORTS?
• WHAT RELATIVE WEIGHTS SHOULD BE GIVEN
TO THE INTERESTS OF THE ORGANISATION,
THE CUSTOMERS, AND SOCIETY?
 COMPETING CONCEPTS
• PRODUCTION CONCEPT
• PRODUCT CONCEPT
• SELLING CONCEPT
• MARKETING CONCEPT
• CUSTOMER CONCEPT
• SOCIETAL MARKETING CONCEPT: HUMANISTIC
MARKETING, ECOLOGICAL MARKETING
• HOLISTIC MARKETING
 THE PRODUCTION CONCEPT
• Consumers prefer products that are widely
available and inexpensive. Managers of
production-oriented business concentrate on
achieving high production efficiency, low
costs, and mass distribution.
 PRODUCT CONCEPT
• Consumers will favor those products that offer
the most quality, performance or innovative
features. Managers focus on making superior
products and improving them over time.
 SELLING CONCEPT
• Consumers and businesses, if left alone, will
ordinarily not buy enough of the
organization's products. Organization must
undertake an aggressive selling and promotion
effort.
 MARKETING CONCEPT
• Marketing concept emerged in 1950s.
• Make-and-sell.
• Sense and respond.
• Not hunting but gardening.
• Not right customers to products, but right
product to customers.
 SELLING - MARKETING
• Focus on need of the seller – focus on need of
the buyer.
• Convert product into cash - satisfying the need
of the customer.
-Theodore Levitt
 HOLISTIC MARKETING CONCEPT
• Companies have new capabilities that can transform
the way they have been doing marketing.
• Companies can operate a powerful new information
and sales channel.
• Companies can collect fuller and richer information.
• Companies can facilitate and speed up internal
communication.
 FOUR COMPONENETS
• Relationship Marketing.
• Integrated Marketing.
• Internal Marketing.
• Social Responsibility Marketing.
• An approach to marketing that attempts to
recognize and reconcile the scope and
complexities of marketing activities.
 INTEGRATED MARKETING
• The marketer’s task is to devise marketing
activities and assemble fully integrated
marketing program.
• Mc McCarthy classified the set of marketing
tools into four broad groups, which he called
four Ps of marketing.
 INTERNAL MARKETING
• Internal marketing is the task of hiring, training, and
motivating able employees who want to serve
customers well.
• It must take place at two levels
1. Various marketing functions must be integrated
2.Marketing thinking must be so pervasive throughout
the company.
 SOCIAL RESPONSIBILITY MARKETING
• The cause and effects of marketing extend beyond
the company and the customer to society.
• Social responsibility also requires that marketers
carefully consider the role that they are playing and
could play in terms of social welfare.
• Different names for this situation are humanistic
marketing, ecological marketing and societal
marketing concept. Also called as cause-related
marketing.
BUILDING CUSTOMER SATISFACTION, VALUE
AND RETENTION
 Strategic Planning: Three Key Areas
• Managing a Company’s businesses as an
investment portfolio.
• Assessing each business strength by
considering the market’s growth rate and a
company’s position and fit in that market.
• Establishing a strategy for each business.
Corporate and Division Strategic Planning

• All corporate headquarters undertake four

planning activities
– Defining the Corporate Mission
– Establishing Strategic Business Units (SBUs)
– Assigning resources to each SBU
– Planning new businesses, downsizing, or
terminating older businesses
Corporate and Division Strategic Planning

• Defining the Corporate Mission

– Mission statements define which competitive
scopes the company will operate in
• Industry scope
• Products and applications scope
• Competence scope
• Market-segment scope
• Vertical scope
• Geographical scope
The Boston Consulting Group’s Growth-Share
Matrix
Corporate and Division Strategic Planning

• Intensive Growth
• Integrative Growth
• Diversification Growth
• Downsizing Older Businesses
Intensive Growth Strategies: Ansoff’s Product-Market Expansion
Grid
Business Unit Strategic Planning
The Marketing Process
 Marketing Mix Strategy
• Robert Lauterborn suggested the customer’s
four Cs.
• Customer solution
• Customer Cost
• Convenience
• Communication
BUYER BEHAVIOUR
 DEFINITIONS
• The behaviour that consumers display in searching
for, purchasing, using, evaluating, and disposing of
products and services that they expect will satisfy
their needs.
- Schiffman and Kanuk.
• Consumer Behaviour refers to the mental and
emotional processes and the observable behaviour
of consumers during searching, purchasing and post
consumption of a product or service. - Batra &
Kazmi
 Consumer & Customer
A consumer is one who typically engages in any
one or all of the activities of Consumer
Behaviour.

Any one who regularly makes purchases from a

store or a company is termed as “Customer”.
 A Simple Model of Consumer Decision Making
External Influences
Socio cultural Environment
Firm’s Marketing Efforts
1. Family
Input 1. Product
2. Informal sources
2. Promotion
3. Other noncommercial sources
3. Price
4. Social class
4. Channels of distribution
5. Subculture and culture
Consumer Decision Making
Psychological Field
1. Motivation
Need Recognition 2. Perception
3. Learning
Process Pre purchase Search 4. Personality
5. Attitudes
Evaluation of Alternatives
Experience

Post decision Behavior

Output Purchase
Post purchase
1. Trial
Evaluation
2. Repeat purchase
 Culture

• “That complex whole which includes

knowledge, belief, art, morals, custom, and
any other capabilities and habits acquired by
man as a member of society.”
• “Meanings that are shared by most people in
a group” - Peter and Olson
 Culture…What is it?
• Value system
• Norms, beliefs, behaviors
• Common way of thinking
• Society’s communicable knowledge
• Society’s characteristics passed on
generation by generation
 Social Factors

Reference
Groups

Roles &
Family
Statuses
 Marketing Environment
• Marketing Environment consists of the task
environment and broad environment
• Task Environment includes the immediate
actors involved in producing, distributing, and
promoting the offering.
• Broad Environment consists of six
components: demographic, economic,
physical, technological, political-legal and
social-cultural.
 Factors Influencing Company
Marketing Strategy Marketing
Demographic/ intermediaries Technical/
economic M physical
environment pl ark environment
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Competitors
 DEMOGRAPHIC ENVIRONMENT
• Worldwide population growth: If the world were a village
of 1000 people:
• 520 women, 480 men, 330 children, 60 people over the
age of 65, 10 college graduates and 335 illiterate adults.
The village would contain 52 North Americans, 55
Russians, 84 Latin Americans, 95 East and West
Europeans, 124 Africans, and 584 Asians. 165 speak
Mandarin, 86 English, 83 Hindi/Urdu, 64 Spanish, 58
Russians, 37 Arabic, and the rest one of the over 200
languages. There would be 329 Christians, 178 Moslems,
132 Hindus, 62 Buddhists, 3 Jews, 167 nonreligious, 45
atheists, and 86 others.
 POPULATION AGE MIX
• India is a young country. The median age of
India's population in 2000 is 23.4 years. In
2005 24.3 years. Cross 30 years by 2025.
15.35% is 6 years. 24% - 24-35years. Above 54
are 14%
- Survey of “The Economist”
 LITERACY LEVELS
• A literate person is one who is above 15 years
of age and can read and write
• Literacy rate in India is about 60%
• In males it is 70% and in females 48%
• Only about 3.4% of males are graduate and
above
• Only 1.4% of females are graduate and above
 ECONOMIC ENVIRONMENT
• INCOME DISTRIBUTION:
• Destitute: annual household income of
Rs16000
• Aspirants:16000-22000
• Climbers: 22000-45000
• Consuming: 45000-215000
• Rich: above 215000
 1995-1996 2006-2007
(All figures in millions)

INCOME HOUSE ESTIMATED HOUSE ESTIMATED

CLASS HOLDS POPULATI HOLDS POPULATI
ON ON
THE RICH 1.2 7 5.2 30

CONSUMING 32.5 186 75.5 432

CLASS
CLIMBERS 54.1 312.2 81.7 472

ASPIRANTS 44 253.9 20.2 117

DESTITUTE 33 190.4 16.5 95

Source: NCAER (National Council of Applied Economic Research)

 SOCIAL-CULTURAL ENVIRONMENT
• Cartoon Network survey:
• 90% - looking good is important
• 84% - being religious
• 40%- having boyfriend is important
• Most of the respondents aspiration is to
become doctors
• 7-14 years children and their mothers
aspiration is to get good grades
 NATURAL ENVIRONMENT
• SHORTAGE OF RAW MATERIALS
• INCREASED ENERGY COSTS
• ANTI-POLLUTION PRESSURES
• CHANGING ROLE OF GOVERNMENTS
• GREEN MARKETING
 TECHNOLOGICAL ENVIRONMENT
• ACCELERATING PACE OF CHANGE
• UNLIMITED OPPORTUNITIES FOR
INNOVATIONS
• GREATER EMPHASIS ON R&D
• INCREASED REGULATION OF TECHNOLOGICAL
CHANGE
 POLITICAL-LEGAL ENVIRONMENT
• INCREASE IN BUSINESS LEGISLATION
• PROTECTING THE WELFARE OF CONSUMERS
– Safety
– Information
– Choice
– Representation
– Redressal
– Consumer education
 COMPANY RESPONSES
• REENGINEERING
• OUTSOURCING
• E-COMMERCE
• BENCHMARKING
• ALLIANCES
• PARTNER SUPPLIERS
• MARKET CENTRED STRATEGIES
• GLOBAL AND LOCAL
• DECENTRALISATION
 Dealing with the Competition

Poor firms ignore their competitors;

average firms copy their competitors;
winning firms lead their competitors.

Philip Kotler
Michael Porter model of 5 competitive
forces
 Identifying competitors
• Market concept of competition
• Industry concept of competition
• Industry = set of sellers and
degree of differentiation
• Pure monopoly
• Oligopoly
– Pure oligopoly
– Differentiated oligopoly
• Monopolistic competition
• Pure competition
 Analyzing competitors
• Strengths and Weaknesses
– Dominant
– Strong
– Favorable
– Tenable „sustainable“
– Weak
– Nonviable

Customer’s Ratings of Competitors on Key Success Factors

Customer Product Product Technical Selling
Awareness Quality Availability Assistance Staff

Competitor A E E P P G

Competitor B G G E G E

Competitor C F P G F F

Note: E = excellent, G = good, F = fair, P = poor.

 Analyzing competitors
Three Variables:
• Share of market
• Share of mind
• Share of heart
 SELECTING COMEPETITORS

• Strong Vs Weak.
• Close Vs Distant.
• Good Vs Bad.
 Hypothetical Market Structure

10% 20% 30% 40%

Market Market Market Market
Nichers Follower Challenger Leader
 Designing Competitive Strategies
MARKET LEADER MARKET CHALLENGER
• Expanding the total market • First define the strategic
• Defending market share goals and opponent's)
• Expanding market share • Choose general attack
strategy
• Choose specific attack
strategy
 MARKET LEADER
Expanding the total market:
– Targeting Product to New Users
• Market-penetration strategy
• New-market strategy
• Geographical-expansion strategy
– Promoting New Uses of Product
– Encouraging Greater Product Use
 MARKET LEADER

Defending market share

Expanding the market share:
 Market challenger
• Whom to attack:
• The Market Leader
• Firms of its own size that are not doing well or
underfinanced.
• It can attack small local and regional firms.
 MARKET FOLLOWER
Imitation may be more profitable than
innovation
• Four broad strategies:
– Counterfeiter: duplicates leader’s product and
sells it in black market.
– Cloner: emulates name, package with slight
variations.
– Imitator: copies from leader but differentiates.
– Adapter: adopts leader product and improves.
 MARKET NICHER

• Niche specialties:
– End-user
– Vertical-level
– Customer-size
– Specific customer
– Geographic
– Product/product line
– Product feature
– Job-shop
– Quality-price
– Service
– Channel