Hello Every Body

WELCOME
To
All Students
Of
BBA3rd semester , LACM
On

Principles of Marketing Management

2020
Course Course instructor tor : Indra Shrestha
About me

Name: Indra Kumar Shrestha

Academic Qualification:
- MBA and MA (Sociology)
- Diploma in Social Development Planning and
Management
Involvement
Senior Lecturer, Trainer/Consultant/Facilitator
associated with different I/NGOs, Organizations

12/18/22 4
Logical Question

5
CORRECT THE FORMULA
WITH A SINGLE STROKE

5 + 5 + 5 = 550

6
5 + 5 + 5 = 550
 PRINCIPLES OF MARKETING
Chapter
1
Defining Marketing in a Changing
World: Creating Customer Value
and Satisfaction
• A Penny Saved Is A
Penny Earned.
Funs on Marketing

• You see a gorgeous girl at a party. You go up

to her and say, "I am very rich. Marry me!"
That's Direct Marketing.
• You're at a party with a bunch of friends and
see a gorgeous girl. One of your friends goes
up to her and pointing at you says, "He's very
rich. Marry him." That's Advertising.
• You see a gorgeous girl at a party.You
go up to her and get her telephone
number. The next day you call and say
"Hi, I'm very rich. Marry me." That's
Telemarketing.
• You're at a party and see a gorgeous girl. You get up and
straighten your tie, you walk up to her and pour her a
drink. You open the door for her, pick up her bag after she
drops it, offer her a ride, and then say, "By the way, I'm
very rich. Will you marry me?" That's Public Relations.
• You're at a party and see a
gorgeous girl. She walks up to you
and says, "You are very rich…"
That's Brand Recognition.
• You see a gorgeous girl at a party. You go up to her and
say, "I'm rich. Marry me" She gives you a nice hard slap on
your face. That's Customer Feedback !!!!!
• You see a gorgeous girl at a party. You go
up to her and say, "I am very rich. Marry
me!" And she introduces you to her
husband.That's Demand and supply gap.
"The aim of marketing is to know
and understand the customer so
well the product or service fits him
and sells itself."
• Peter F. Drucker
What is Marketing?

• 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.
 What Is Marketing
What Is Marketing

Marketing is the process of developing,

promoting, and distributing products to satisfy
customers' wants and needs.
• "Marketing is the activity, set of
institutions, and processes for
creating, communicating, delivering,
and exchanging offerings that have
value for customers, clients, partners,
and society at large."
 The management process
• "

responsible for identifying,

anticipating and satisfying
customer requirements
profitably."
What is a
Product?
• Anything that can be offered to a market for attention, acquisition,
use or consumption which Satisfies a want or a need.
• Includes:
– Physical Products
– Services
– Persons
– Places
– Organizations
– Ideas
– Combinations of the above
 What Is Marketing
Products = Goods and Services

Goods: Hammers, automobiles, soda pop, clothing,

and computers
Services: Dry cleaners, amusement parks, and
movie theaters
Exchange: Buying or selling a good or service
Goods - things you can touch -
“tangible”
Services - things you can’t touch - but
you can see their effect “intangible”
“… services are not physical, they are
intangible…”
 Service

A product without physical characteristics;

a bundle of performance and symbolic
attributes designed to produce consumer
want satisfaction.
 4 Characteristics of Services
1. Intangibility - “You can’t touch this”
2. Production (or performing the service)
and Consumption (using the service) -
happens at the same time
3. Heterogeneity - services are not
always delivered the same way
4. Perishability - cannot be put in
inventory or stored for later use
ie. You can’t buy 2 haircuts
Marketing management process

• Analysis/Audit - where are we now?

• Objectives - where do we want to
be?
• Strategies - which way is best?
• Tactics - how do we get there?
• (Implementation - Getting there!)
• Control - Ensuring arrival
Successful marketing requires:

• Profitable
• Offensive (rather than defensive)
• Integrated
• Strategic (is future orientated)
• Effective (gets results)
Core Marketing
Concepts

Products
Needs, wants, and
and demands Services

Core
Marketing
Concepts
Markets
Value, satisfaction,
and quality

Exchange, transactions,
and relationships
What Motivates a Consumer
to Take Action?
• Needs - state of felt deprivation for 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.
What Will Satisfy Consumer’s
Needs and Wants?

• Products - anything • Services - activities or

that can be offered to a benefits offered for
market for attention, sale that are
acquisition, use or essentially intangible
consumption and that and don’t result in the
might satisfy a need or ownership of anything.
want. • Examples: banking,
• Examples: persons, airlines, haircuts, and
places, organizations, hotels.
activities, and ideas.
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.

• 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).
How do Consumers Obtain
Products and Services?
• Exchanges - act of obtaining a desired object from
someone by offering something in return.

• Transactions - trade of values between parties.

Usually involves money and a response.

• Relationships - building long-term relationships

with consumers, distributors, dealers, and
suppliers.
 The Marketing Concept
What is a Market?

A market is all potential customers who share

common needs and wants and who have the
ability and willingness to buy the product.
Who Purchases Products
and Services?

Actual
Market - buyers
Buyers
who share a
particular need
or want that can
be satisfied by a
company’s products Potential
or services. Buyers
 What Is Marketing
Functions of Marketing 35% of Test

These functions define marketing as it is

applied in business operations.
 Distribution
 Financing
 Marketing-Information Management
 Pricing
 Product/Service Management
 Promotion
 Selling
Slide 1 of 4
 Economic Utilities
Economic Utilities
Economic utilities reflect the value that producers
and marketers add to raw materials when they
make them into products and offer them for sale to
the public.
 Form utility
Form Utility is NOT
 Place utility
A marketing utility.
 Time utility
 Possession utility
 Information utility
 Economic Utilities
Form Utility

Changing raw materials or putting parts together to

make them more useful.
 Example: The parts of a lounge chair—
the wood frame, the fabric, the glue and
nails, and the reclining mechanism—are
less useful by themselves. Putting them
together adds form utility.
• Form utility: Marketing creates
form utility by transforming
marketing information into goods,
services or ideas.
 Economic Utilities
Place Utility

Having a product where customers can buy it.

 Example: Selling directly to the customer
through catalogs.
• Place utility: This means making
the product available where
consumers need it
 Economic Utilities
Time Utility
Having a product available at a time
convenient for customers.
 Example: Retailers offer large supplies
of backpacks in the late summer, near
the beginning of the school year.
• Time utility: Having it available
when it is needed.
• 365 Days services
• 24 hours ATM Services.
 Economic Utilities
Place Utility

Having a product where customers can buy it.

 Example: Selling directly to the customer
through catalogs.
• Place utility: This means
making the product available
where consumers need it.
 Economic Utilities
Information Utility

Providing information so the customer is

comfortable buying.
 Example: Salespeople explain
features of products.
 Example: Packaging explains qualities
and uses.
 Example: Advertising informs
consumers about products.
In summary, marketing objectives is to have the right
product at the right place, at the right time, and for the
right person
• Marketing Management Cycle –
The various steps adopted by the
organization in its attempt to
prepare for the future and manage
the present.
8 Marketing Acts as a Source of New Ideas:

•The concept of marketing is a dynamic concept. It has

changed altogether with the passage of time. Such changes
have far reaching effects on production and distribution.
•With the rapid change in tastes and preference of people,
marketing has to come up with the same.

•Marketing as an instrument of measurement, gives scope

for understanding this new demand pattern and thereby
produce and make available the goods accordingly.
Marketing Management Cycle

Analysis
Planning

Monitoring Implement
and ation
controlling
• First, Planning is the process of examining and
understanding the surroundings within which the
organization functions. For example, “environmental
scanning” is the process of studying and making sense of
all the things that might impact the firm’s operation that
are external to the firm. This would include studying and
gaining an understanding of such things as: competition,
legislation and regulation, social and cultural trends, and
technology. Both present and developing trends in each
of these areas must be identified and monitored. The
planning stage also includes creating documents that
outline the organization’s intended response to these
environmental (external) variables
• Second, Implementation is the process of putting plans
that have been made into action. It is the transition from
expected reality to existing reality
• Third, Monitoring is the process of tracking plans and
identifying how plans related to changes that take place
during program operation when more information is
acquired. Correction is the stage in which we take action
to return our plan to the desired state based on feedback
obtained in the monitoring stage. If we find that return to
the planned state is not practicable, we may adjust our
planning outcomes. Thus, Monitoring and Correction may
be considered two stages because after plans are put into
action, one must continually monitor performance and
make adjustments to the plan based on the feedback
gathered through these monitoring activities. In summary,
the marketing management cycle is composed of planning,
implementing, monitoring, and correcting. We use the use
the letters ‘PIMC’ as a device to remember the stages.
Modern Marketing System
Suppliers

Company
Competitors
(Marketer)
Environment

Environment
Marketing
Intermediaries

End User
Market
Marketing Management

Marketing Management
Implementing programs to create exchanges
with target buyers to achieve organizational
goals

Demand Management
Finding and increasing demand, also
changing or reducing demand

Profitable Customer Relationships

Attracting new customers and
retaining current customers
Marketing Management
Philosophies
• Consumers favor products that are
Production Concept available and highly affordable
•Improve production and distribution

•Consumers favor products that offer

Product Concept the most quality, performance, and
innovative features

•Consumers will buy products only if

Selling Concept the company promotes/ sells these
product

•Focuses on needs/ wants of target

Marketing Concept markets & delivering satisfaction
better than competitors

•Focuses on needs/ wants of target

Societal Marketing Concept markets & delivering superior value
•Society’s well-being
Production Concept:
• The company following the production concept believes in
the fact that it should produce goods efficiently and try to
bring down the prices so that products become affordable.
The firm undertakes mass production and makes an effort
to improve the distribution.

• Henry Ford, "Doesn't matter what color car you want, as

long as it is black.“
• Dominant era: From mid C19th to early C20th, industrial
revolution
• Important fact: This happens when the
demand is more than the supply
Limitations:
• The managers may become narrow in their
thinking and forget about customer
satisfaction. Later they may realize that
there is a need to redefine the marketing
objectives and plans. Also,the quality may
become an issue if it begins to decline.
Product Concept:
• According to this concept, people like products
which are very good in terms of performance and
quality. The company aims at making a
continuous effort towards product improvement
and innovation.
• Limitations:
• Here the firm may face problems when substitute
products are available. It happens many times that
firms fail to predict the future take into account
the challenge of substitutes. For example:
consumers may prefer airplanes rather than trains
or modern digital cameras instead of the non
digital camera using film.
selling concept
• According to this concept the company’s entire focus is on
selling and hence making a lot of sales.The selling effort is
backed by serious promotional activities and aggressive
advertising The company does not bother about the market
demand, they just want to sell what they produce.

• When is the selling concept adopted? This concept is

practiced when the firm is into the business making
products which the consumers do not know much about.
We call these unsought goods. The consumers do
not consider or think about buying such products. A good
example of such products is: Insurance Policies
• It began to be dominant around 1930 and stayed in
widespread use until about 1950.

More useful for unsought goods

• Important Fact: This is adopted when the firm faces
something which we call over capacity
Limitations: 
• In the selling concept as it is important for the firms to
think about the long term relations with the
customers rather than making sales. In the selling
concept marketing begins after the product has
been made.
• Marketing should start with identifying the market needs,
this means that marketing is something that should begin
before the product is made. Customer satisfaction
and long term profitable relations are more important.
The Marketing concept
• The marketing concept is concerned with first
identifying the consumer needs and then making
products that give maximum customer
satisfaction.
• Marketing starts before the product, service or
solution is ready and continues even after the sale
has been made.
• The firm here aims to make products and provide
services better than the competitors.
• Here the company makes sincere efforts towards
retaining the customers and also attracting new
ones.
• Dominant era: 1930's to WWII 1950's to present.
Contd.
• If the customers are satisfied with the product
they will buy it again and again and tell other
people about it also.
• If the product turns out to be better than what they
had expected, the consumers will be really
impressed and this will prove to be very beneficial
in the long run. For eg.Good Customer loyalty
• This means that the firm should focus on the
customer centered approach and make profits
through customer satisfaction.
• Companies like Dell and Wal-mart have had had
great success by following the Marketing concept.
Marketing & Sales
Concepts
Contrasted
Starting Focus Means Ends
Point

Selling Profits
Existing
Factory and through
Products
Promoting Volume

The Selling Concept

Profits
Customer Integrated
Market through
Needs Marketing
Satisfaction

The Marketing Concept

Societal Marketing Concept
Society
(Human Welfare)

Societal
Marketing
Concept

Consumers Company
(Wants) (Profits)
Contd.

• The Societal concept seems to be the best

marketing concept as this gives importance to the
society’s well being, interests and welfare.
• Societal concept focuses on consumer needs and
wants, profits and also the social welfare. This
helps in improving the image of the company.
• Here the firms are concerned with social issues
like: Environmental problems and pollution
caused by the waste material, health problems
caused by fast food etc.
• Societal marketing emerged in the 1960s
Market dynamics

Factors which effect the supply and

demand of products in a market, are as
important to economics as they are to
practical business application.
Market dynamics were established by
many economists; arguably they are
most developed in Porter’s five forces
of competition.
Market Dynamics

• Market dynamics means the factors that effect a market.

• From the theory of economics they would be supply,
demand, price, quantity, and other specific terms.
• From a business standpoint, market dynamics are the
factors that effect the business model which involves the
applying party.
Production Concept
Product Concept
Selling Concert
Marketing concept
Societal Concept
Holistic Concept

“The whole is more than the sum of its parts.” — Aristotle

Kotler, “The Holistic Marketing Concept is based on the

development, design and implementation of marketing
programs, processes and activities that recognizes their
breadth and inter-dependencies”
• A Common Goal
• Holistic marketing concept believes that the business and
all its parts should focus towards one single goal which is
a great customer experience.

• Aligned Activities
All of the services, processes, communication and other
business activities should be directed towards that
common goal.
• Integrated Activities
All activities should be designed and integrated in such a
way so as to create a unified, consistent customer
experience.
New Marketing Challenges

New
Marketing
Landscape &
Information Nonprofit
Technology Marketing

Emerging
Ethical
Concerns
Challenges Globalizatio
n
Changing
World
Economy
Essential features of market
• Existence of a commodity/item
• The existence of sellers and
buyers
• A place (local, national,
international )
Classification of Market

On the basis of geographic area

• Local Market
• National Market
• World Market
Local Market

• Market of small local area where

purchase of goods/services
involve by local buyers and
sellers.
• Local village or town market
• Sales and purchase of vegetables,
fruits, meat
National Market

• Trading of goods and services

involve throughout the entire
nation
• Buyers and sellers are throughout
the national market
• Sugar, cotton, Tea etc.
World market

• Sales of goods and services across the

globe by many companies
• Coco cola, Sony, Nike, adidas,
Especially MNC’s Products
Classification of Market

On the basis of Nature of competition in the market

• Perfect Market
• Imperfect Market
- Monopoly
- Monopolistic
- Oligopoly
Perfect Market

• Theoretical free-market situation where (1) buyers and

sellers are too numerous and too small to have any degree
of individual control over prices, (2) all buyers and sellers
seek to maximize their profit (income), (3) buyers and
seller can freely enter or leave the market, (4) all buyers
and sellers have access to information regarding
availability, prices, and quality of goods being traded, and
(5) all goods of a particular nature are homogeneous,
hence substitutable for one another. Also called perfect
market or pure competition.
Monopolistic competition

• Characteristics:
–many firms
–no barriers to entry
–product differentiation
–barriers means that profits are competed
away...
–E.g. DeBeers Diamond South Africa

10.99
Imperfect Market

• Imperfect competition is a market situation where

individual firms have a measure of control over the price
of the commodity in an industry.

– a firm that can affect the market price of its

output can be classified as an imperfect
competitor.
– Normally, imperfect competition arises when an
industry's output is supplied only by one, or a
relatively small number of firms.
Imperfect Markets

• Monopoly – market situation where a single seller exists

and has complete control over an industry
– e.g., Meralco is sole distributor of electric power in
Metro Manila

• Oligopoly – market structure with few sellers;

– e.g., cement and automobile industries,
– firms operating in an oligopolistic market situation
may either collude or act independently

• Monopolistic competition – occurs when there are many

sellers producing differentiated products
– firms have slight control over the price of the
commodity and they advertise
 Number Ability to Entry Example
of firms affect barriers
price
Perfect competition Many Nil None Fruit stall

Imperfect competition:

Monopolistic competition Many Small None Corner shop

Oligopoly Few Medium Some Cars

Monopoly One Large Huge Post Office

Forms of Market
Competition
Oligopoly

Perfect
Competition Monopoly

Monopolistic
Competition
Sources of market imperfection

• Imperfect competition often arises when an

industry’s output is supplied by one or a
small number of firms.
• This may be traced to the existence of
barriers to entry and the existence of
significant differences or advantages in cost
conditions.
Oligopoly

• A market with a few sellers

• The essence of an oligopolistic
industry is the need for each firm to
consider how its own actions affect the
decisions of its relatively few
competitors.
• Oligopoly may be characterized by
collusion or by non-co-operation

10.105
Summary of structure of market

Number Ability to Entry Example

of firms affect barriers
price
Perfect competition Many Nil None Fruit stall

Imperfect competition:

Monopolistic competition Many Small None Corner shop

Oligopoly Few Medium Some Cars

Monopoly One Large Huge Post Office

• Classification of Market

On the basis of Nature of goods sold

• Consumers goods market
• Industrial goods market
• Consumer Goods Market
–All individuals/households who buy
products for personal/households
consumption.
109
110
Households consumerrgoods
Industrial Goods Market
• Organizational or Business to Business Market
 What is a Business Market?

• A business market comprises all the

organizations that buy goods and
services for use in the production of
other products and services that are
sold, rented, or supplied to others.
• The business market is huge and
involves many more dollars and
goods than do consumer markets.

113
 Organizational consumers
purchase for:
• Further production
• Usage in operating the
organization, and /or
• Resale to other
consumers

114
Industrial and organizational
market

115
 Industrial or organizational
markets
• Producer
- Manufacturers
- Service providers
• Reseller
- Wholesalers
- Retailers

116
Contd.
• Government
- Federal
- State
- Local
• Institutional
- Charitable - educational
- Community - other non-
business
117
Difference in organizational
markets
• Use goods for further production,
operation, or resale
• Purchase equipment, raw materials,
and semi finished goods
• Demand is derived from that of final
consumers
• Can make items themselves

118
 Differences in organizational
transactions
• Buying specialists arte often used.
• Often use multiple buying responsibilities
• Often use multiple buying suppliers
• More likely to require exact specifications
• Often lease equipment and space
• Competitive bidding and negotiation

119
 Characteristics of Business Markets

Contain fewer, but

Marketing Structure larger buyers
and Demand
Customers are more
geographically concentrated

Buyer demand is derived from

final consumer demand
Demand is often more inelastic

Demand often fluctuates more,

and more quickly
120
Characteristics of Business
Markets
• Nature of the Buying
Unit
– Business purchases
involve more buyers.
– Business buying
involves a more
professional
purchasing effort.

121