Introduction to Marketing Management

Chapter 1

Marketing = ?
Marketing

is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, services to create exchanges that satisfy individual and organizational goals

American Marketing Association

Definitions of marketing
Marketing is the management process that identifies, anticipates and satisfies customer requirements profitably The Chartered Institute of Marketing The right product, in the right place, at the right time, and at the right price Adcock et al

Definitions of marketing

The right product, in the right place, at the right time, and at the right price Adcock et al Marketing is the human acti ity directed at satisfying human needs and !ants through an e"change process Kotler 1980

Definitions of marketing

Marketing is a social and managerial process by !hich indi iduals and groups obtain !hat they !ant and need through creating, offering and e"changing products of alue !ith others Kotler 1991

The #ature of Marketing

What is the Purpose of Marketing?

Satisfaction
is a persons feelings of pleasure or disappointment resulting from comparing a products perceived performance (or outcome) in relation to his or her expectations.

$atisfaction

The #ature of Marketing

What is the Purpose of Marketing?

$atisfaction %unctional $atisfaction &sychological $atisfaction The %our 'tilities

Consumer &roblems (ffering a Total Consumption $ystem &ro iding )enefit )undles

$imple Marketing $ystem

Communication

Industry (a collection of sellers)

Goods services Money

Market (a collection of Buyers)

Information

The 4 Ps & 4Cs

Marketing Mix "onvenience

!roduct

!lace

!rice

!romotion

"ustomer "ost

"ommunication

$trategy Decision *reas (rgani+ed by the %our &s

Product
Physical Goods Service Features uality !evel Accessories "nstallation "nstructions #arranty Product !ines Packaging $randing

Place
%b&ectives 'hannel (ype Market )xposure *inds of Middleman *inds and !ocations of Stores +o, to +andle (ransporting and Storing Service !evels -ecruiting Middlemen Managing 'hannels

Promotion
%b&ectives $lend Salespeople *ind .umber Selection (raining Motivation Advertising (argets *inds of Ads Media (ype 'opy (hrust #ho Prepares/ Sales Promotion Publicity

Price
%b&ectives Flexibility !evel over P!' Geographic (erms 0iscounts Allo,ances

Scope What do we market

Goods Services )vents )xperiences Personalities Place %rganizations Properties "nformation "deas and concepts

The ,istory of Marketing

The Three -ras

The &roduction -ra The $ales -ra The Marketing -ra

The #e! -ras

#on.)usiness Marketing $trategic Marketing $ocial /esponsibility International e.Commerce

* Chronological - olution of Marketing Definitions

10123 The deli ery of a standard of li ing to society

10453 The performance of business acti ities that direct the flo! of goods and ser ices from producer to consumer or user

10213 * total system of interacting business acti ities designed to plan, price, promote, and distribute !ant.satisfying goods and ser ices to present and potential customers 10223 -"change acti ities conducted by indi iduals and organi+ations for the purpose of satisfying human !ants

10673 The process of planning and e"ecuting the conception, pricing, promotion, and distribution of ideas, goods, and ser ices to create e"changes that satisfy indi idual and organi+ational ob8ecti es 10623 $trategically managing human and organi+ational e"change relationships to pro ide socially responsible !ant and need satisfaction throughout the !orld

Core Concepts of Marketing

Needs, wants demands

!roducts

Utility, Value & Satisfaction

Markets

Marketing & Marketers

Exchange, Transaction Relationshi s

Core Concepts of Marketing

.eed

1 food 2 is a must 3 #ant 1 Pizza, $urger, French fry4s 2 translation of a need as per our experience 3 0emand 1 $urger 2 translation of a ,ant as per our ,illingness and ability to buy 3 0esire 1 +ave a $urger in a five star hotel

Marketing Management Philosophies

Production

Sales Market

Competing Philosophies

Societal Marketing
12

Marketing Management Philosophies

rientation
Production Sales Market Societal

!e" #deas
$ocus on efficienc" of internal operations

$ocus on aggressi'e sales techni)ues and %elie'e that high sales result in high profits $ocus on satisf"ing customer needs and wants while meeting o%&ecti'es $ocus on satisf"ing customer needs and wants while enhancing indi'idual and societal well(%eing

Management Orientations

Production concept Product concept The customer concept Selling concept Marketing concept Societal marketing concept

%our -ras in the ,istory of Marketing

Production Era &rior to 1095s Production orientation )usiness success often defined solely in terms of production ictories Sales Era &rior to 1075s Customers resist nonessential goods and ser ices &ersonal selling and ad ertisings task is to con ince them to buy

Marketing Era $ince 1075s Marketing -merges $atisfying customer needs

Concept

Emergence of the Marketing Concept $hift from sellers to buyers market Company:!ide consumer orientation (b8ecti e of achie ing long:run success

Relationship Era )egan in 1005s Carried customer orientation e en further %ocuses on establishing and maintaining relationships !ith both customers and suppliers In ol es long:term, alue: added relationships

The &roduction Concept

&/(D'CTI(# C(#C-&T

In!ard looking orientation Management becomes cost focused (b8ecti e is cost reduction )usiness mission is focused on current production capabilities Manufacture products and aggressi ely sell them to customers

Customer concept

$eparate offers, ser ices and messages to indi iduals based on their indi idual preferences; ,igh customer loyalty < focusing on customer life time alue;

&/(D'CT C(#C-&T

Companies become centered on constantly impro ing the product Myopic focus on the product #o attention on the other !ays in !hich customers can fulfill their needs : M*/=-TI#> M?(&I* Customer does not buy a product, he buys an offering that fulfills his needs

$-@@I#> C(#C-&T

&roduct or ser ice is not designed and made according to customers requirements Customer has to be persuaded to belie e that the product or the ser ice meets his requirements Customer dissatisfied and bad.mouths company Marketing makes selling redundant

*ifference +etween ( Sales & Marketing ?

Sales
trying to get the customer to ,ant ,hat the company produces

Marketing
trying to get the company produce ,hat the customer ,ants

$ellin g < marketing concept contrast

$-/AIC- C(#C-&T

Customers buy ser ices, not products $er ice model of marketing instead of selling the title to the products ,indrance3 Mindset of the customer and marketer, and their un!illingness to e"periment !ith this model Can be easily applied in businesses like automobiles, carpeting, furnishing, and for most consumer durable items

-B&-/I-#C- C(#C-&T

Create an e"perience around the product to make it memorable /eaffirm it !ith cues at e ery customer interaction point -"periences are inherently personal for a customer *n e"perience should be built around a !ell defined theme

The Marketing Concept

Customers are the @ifeblood of the (rgani+ation CCustomer is =ingD choosing and targeting appropriate customers positioning your offering interacting !ith those customers controlling the marketing effort continuity of performance

The Marketing Concept

'ustomer Satisfaction

(otal 'ompany )ffort

(he Marketing 'oncept

Profit
9.1

The Marketing Concept

* Customer (rientation

)acked )y Integrated Marketing

*imed at >enerating Customer $atisfaction and /epurchase *s The =ey To $atisfying the (rgani+ations >oals

The Marketing Concept

Focus Sales Concept Marketing Concept Products Customer Needs Means Selling & Promotion Integrated Marketing End Profits Through Sales Volume Profits Through Customer Satisfaction

Sales vs. Market Orientations

Organizations Firms Focus Business

For Whom?

Primary Prof it Goal? Ma"imum sales volume

Tools to Achieve Primaril promotion

!ales Inwar Orientation

Selling goods and services

Ever !od

Out#ard "ar#et Orientation

Satisf ing #ants and needs

Specific groups of people

Customer satisfaction

Sales vs. Market Orientations

Selling

Marketing

Starts #ith the seller $ concerned #ith the seller%s needs. Core of the !usiness activit is seller Salea!le surplus is important

Starts #ith the !u er $ concerned #ith the !u er%s needs. &u er is the core of all facult . 'dentification of a market opportunit is important. Converts products. customer%s needs into

Converts e"isting product into mone . &usiness is a good producing process Cost determines the price Customer is the last link in !usiness Production is the central function of !usiness.

&usiness is a customer ( satisf ing process. Market determines the price. Customer !usiness is the var purpose of

Marketing is the central function of !usiness.

$ocietal marketing concept

$ocietal marketing concept

Marketing that preser es or enhances an indi iduals and societys long.term best interests

Who is a Customer ??

,n"one who is in the market looking at a product ser'ice for attention. ac)uisition. use or consumption that satisfies a want or a need '5S(%M)- has needs, ,ants, demands and desires 5nderstanding these needs is starting point of the entire marketing (hese needs, ,ants 66 arise ,ithin a frame,ork or an ecosystem 5nderstanding both the needs and the ecosystem is the starting point of a long term relationship

Marketing &rocess *cti ities

/nderstand the organi0ation1s mission Set marketing o%&ecti'es 2ather. anal"0e. interpret 3SW T4 information *e'elop a marketing strateg" #mplement the marketing strateg" *esign performance measures 5'aluate marketing efforts((change if needed

Wh Stud Marketing?

&etter)informed consumers *emand for customer satisfaction Pla s an important role in societ +ital to !usiness survival, profits and gro#th Offers career opportunities -ffects our life ever da .ast route corporate ladder up the

Professional Selling Marketing Research Advertising Retail Buying Distribution Management Product Management Product Development Wholesaling