INTRODUCTION TO MARKETING

In todays competitive environment a lot of emphasis is laid on the marketing, we find every organization carrying out a lot of marketing activities. Hence, it is important for you to understand what market is, what marketing is, and how is it different from selling. Definitions of Marketing: Marketing deals with identifying and meeting human and social needs. One of the important definitions of marketing is meeting needs profitably. American Marketing Association - It is the process of planning & executing the conception, pricing, promotion & distribution of ideas, goods & services to create exchange that satisfy individual & organizational goals Philip Kotler defines Marketing as 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. The Chartered Institute of Marketing defines Marketing as Marketing is the management process for identifying, anticipating & satisfying customer requirements profitably. Managerial Definition: The art of selling product is called marketing. Selling is a part of marketing but selling only is not marketing. Importance of Marketing: Much of marketing is concerned with the problem of profitably disposing of what is produced. Marketing is the economic process by which goods and services are exchanged between the producer and the consumer and their values determined in terms of money prices. Marketing originates with the recognition of a need on the part of a consumer and terminates with the satisfaction of that need by the delivery of a usable product at the right time, at the right place and at an acceptable price. Marketing is so basic that it cannot be considered a separate function. It is really the whole business seen from the point of view of the final result, i.e., from the point of view of the customer. Marketing is a viewpoint, which looks at the entire business process as a highly integrated effort to discover, create, arouse and satisfy consumer needs. Marketing is the delivery of a standard of living to society. Peter Drucker - There will always, one can assume, be need for some selling. But the aim of marketing is to make selling superfluous. The aim is to know and understand the customers well that the product or service fits 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.

Unit -1

Marketing Management: Tasks and Trends

Def of Marketing Management: Art & science of choosing target markets & building profitable relationships with them. Involves getting, keeping & growing customers through creating, delivering and communicating superior customer value. Market: It is a physical place where buyers and sellers gathered to buy & sell goods. It is a collection of buyers and sellers who transact over a particular product. Marketer & Prospect: A marketer is some one seeking a response (attention, a purchase, a vote, a donation) from another party. A prospect is a person from whom the response is expected. In the above definition the another party is a prospect.

The marketer must try to understand the target market needs, wants and demands. Needs A state of felt deprivation Needs are the basic human requirements. People need food, air, water, clothing & shelter to survive. Wants The form taken by a human need as shaped by culture & individual personality or society. Ex: American needs food but wants a soft drink, ice cream or a burger Demands Human wants that are backed by buying power. These are the wants for specific products backed by an ability to pay. Ex: Many people wants Mercedes only a few are able and willing to buy. Marketing Channel: It is a system which allows the free flow of goods from manufacturer to the customer. Market Segment: A market segment is a part or segment which consists of group of customers who has similar set of wants. Market Segmentation: The process of dividing the entire market into segments depending on their wants/characteristics is called Market Segmentation. The basic criteria for segmenting a market are Geographic segmentation Demographic segmentation Psychographic segmentation Behavioral segmentation Product: A product is a good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers and is received in exchange for money or some other unit of value. A product is a bundle of features & benefits designed to meet needs of target customers. Product mix: A company or SBUs (Strategic Business Unit) complete assortment of products and product lines. Marketing Mix: It is defined as the set of marketing tools the firm uses to pursue its marketing objectives. The 4 key elements are product, promotion, price and distribution

Scope of Marketing:
It is seen as the task of creating, promoting & delivering goods & services to consumers & businesses. Marketers are skilled in stimulating demand for companys products, they are responsible for demand management. Marketing managers seek to influence the level, timing & composition of demand to meet the organizations objectives. Marketing people are involved in marketing 10 types of entities: Goods: Physical goods constitute the bulk of tangible products like Food products, cars, refrigerators, television sets, machines, FMCGs, etc., Services: As economies advance a growing proportion of their activities is focused on the production of services. Services include the work of airlines, hotels, car rental firms, barbers and beauticians, maintenance and repair people ,as well as professionals working with or for the organizations such as accountants, bankers , lawyers, doctors, software programmers etc. Experiences: By orchestrating several services and goods, affirm can create and market experiences. Ex: Walt Disney Worlds Magic Kingdom represents experiential marketing. Customers visit a fairy Kingdom , a pirate ship or a haunted house. Events: Marketers promote time based events such as major trade shows, artistic performances and company anniversaries. Ex: Global sporting events such as the Olympics or World Cup are promoted aggressively to both companies and fans. Persons: Celebrity marketing is major business. Today every major film star has an agent, a personal manager and ties to a public relations agency. Ex: Artists musicians, CEOs, physicians, high profile lawyers and financiers and other professionals are also getting help from celebrity marketers.

Places: Cities, States, regions and whole nations compete actively to attract tourists factories, company head quarters and new residents. Ex: Place marketers include economic development specialists, real estate agents, commercial banks etc. Properties: Properties are intangible rights of ownership of either real property (real estate) or financial property(stocks and bonds).Properties are bought and sold, and this requires marketing. Ex: Real estate agents work for property owners or sellers. Investment companies and banks are involved in marketing securities to both institutional and individual investors. Organizations: Organizations actively work to build a strong, favorable, and unique image in the minds of their target publics. Ex: Universities, museums, non-profit organizations all use marketing to boost their public images and to compete for audiences and funds. Information: Information can be produced and marketed as a product. This is essentially what schools and universities produce and distribute at a price to parents, students and communities. Ex: Magazines such as Road and Tract and Byte supply information about the car and computer world. Ideas: Every market offering includes a basic idea. Products and services are platforms for delivering some idea or benefit. Ex: Charles Revson of Revlon observed: In the factory, we make cosmetics; in the store we sell hope. Difference between Selling and Marketing In general we use marketing and selling as synonyms but there is a substantial difference between both the concepts. It is necessary to understand the differences between them for a successful marketing manager.

Selling Emphasis is on the product Company manufactures the product first

Marketing Emphasis on consumer needs wants Company first determines customers needs and wants and then decides out how to deliver a product to satisfy these wants Management is profit oriented

Management is sales volume oriented Planning is short-run-oriented in terms of todays products and markets Stresses needs of seller Views business as a good producing process Emphasis on staying with existing technology and reducing costs

Planning is long-run-oriented in terms of new products, tomorrows markets and future growth Stresses needs and wants of buyers Views business as consumer satisfying process Emphasis on innovation on every every sphere, on providing better value to the customer by adopting a superior technology All departments of the business

Different departments work as

in a highly separate water tight compartments

integrated manner, the sole purpose being generation of consumer satisfaction

Cost determines Price

Consumer determine price, price determines cost Marketing views the customer as the very purpose of the business

Selling views customer as a last link in business

Different Types of Markets:

Before delving too deep into the study of marketing, it is worth pausing to consider the different types of market that exist. Markets can be analyzed via the product itself, or end-consumer, or both. The most common distinction is between consumer and industrial markets.

Consumer Markets: Consumer markets are the markets for products and services bought by Individuals for their own or family use. Goods bought in consumer markets can be categorized in several ways Fast-moving consumer goods (FMCGs) Fast-moving consumer goods are those that sell in high volumes, with low unit value, and have fast consumer repurchase. Good examples include ready meals, baked beans, newspapers etc Consumer durables: These have low volume but high unit value. Consumer durables are often further divided into: White goods (e.g. fridge-freezers; cookers; dishwashers; microwaves) Brown goods (e.g. DVD players; games consoles; personal computers) Soft goods: Soft goods are similar to consumer durables, except that they wear out more quickly and therefore have a shorter replacement cycle Examples include clothes, shoes Services (e.g. hairdressing, dentists, childcare) Industrial Markets: Industrial markets involve the sale of goods between businesses. These are goods that are not aimed directly at consumers. Industrial markets include Selling finished goods Examples include office furniture, computer systems Selling raw materials or components Examples include steel, coal, gas, timber Selling services to businesses Examples include waste disposal, security, accounting & legal services

Concepts of Marketing: (Marketing Orientation and Business Performance)

Production Concept: The production concept is one of the oldest concepts in business. It holds that customers will choose products and services that are widely available and are of low cost. So business is mainly concerned with making as many units as possible. Managers of production oriented businesses concentrate on achieving high production efficiency, low costs and mass distribution. By concentrating on producing maximum volumes, such a business aims to maximize profitability by exploiting economies of scale. Managers try to achieve higher volume with low cost and intensive distribution strategy.

Product concept: The product concept holds that consumers will favor those products that offer the most quality, performance or innovative features. Managers in these organizations focus on making superior products and improving them overtime. This concept can lead to Marketing Myopia, a term coined in 1960 by Theodore Levitt. Myopia means shortsightedness or lack of discernment in thinking or planning. The innovations in the scientific laboratory are commercialized and the consumers get an opportunity to know and use these products. This is called Technology Push Model. The problem with this orientation is that the managers forget to read the customers mind and launch products. Many times it is observed that the innovations enter in to the market before the market is ready for the product. Innovative products are launched without educating the customers about the innovation and the probable advantage that the customer is going to get. The Golden Eye Technology was brought to the Indian Market by the television. The Selling Concept: The selling concept holds that consumers and businesses, if left alone, will ordinarily not buy enough of the organizations products. The organization must, therefore, undertake an aggressive selling and promotion effort. The selling concept is epitomized in the thinking of Sergio Zyman, Coca-Colas former vice president of marketing: The purpose of marketing is to sell more stuff to more people more often for more money in order to make more profit. The selling concept is practiced more aggressively with unsought goods, goods that buyers normally do not think of buying, such as insurance, plots. Most firms practice the selling concept when they have over capacity. Their aim is to sell what they make rather than what the market wants. The Marketing Concept: The Marketing Concept proposes that the reason for success lies in the companys ability to create, deliver and communicate a better value proposition through its marketing offer in comparison to the competitors for its chosen target market. The marketing concept has emerged in the mid-1950s.Instead of a product centered, make and sell philosophy, business shifted to a customer centered, sense and respond philosophy. A marketing oriented firm is one that allows the wants and needs of customers and potential customers to drive all the firms strategic decisions. In order to determine customer wants, the company usually needs to conduct marketing research. The marketer expects that this process, if done correctly, will provide the company with a sustainable competitive advantage. Companies such as 3M, HP, and Motorola have made a practice of researching or imagining latent needs through a probe and learn process. Service Concept: A Service is any act or performance one party can offer to another that is essentially intangible and does not result in the ownership of anything. A service can be defined as it is a product which consisting of activities, benefits, satisfaction that are offered for sale in connection with sale of goods. Services have distinctive four characteristics Intangibility Inseparability Heterogeneity Perishability

Experience Concept: Organizations to operate designs the strategies depending on the experiences of the customers after consuming the products offered by them. If the performance of the product does not match the expectations of customer, it leads to customer dissatisfaction. If the performance reaches the expectation, it leads to customer satisfaction. If the performance exceeds the expectations of customer it results in customer delight. Green Marketing: According to the American Marketing Association, green marketing is the marketing of products that are presumed to be environmentally safe. Thus green marketing incorporates a broad range of activities, including product modification, changes to the production process, packaging changes, as well as modifying advertising. Other similar terms used are Environmental Marketing and Ecological Marketing. Green marketing involves developing and promoting products and services that satisfy customer's want and need for Quality, Performance, Affordable Pricing and Convenience without having a detrimental input on the environment. Evolution of Green Marketing: The green marketing has evolved over a period of time. The evolution of green marketing has three phases. First phase was termed as "Ecological" green marketing, and during this period all marketing activities were concerned to help environment problems and provide remedies for environmental problems. Second phase was "Environmental" green marketing and the focus shifted on clean technology that involved designing of innovative new products, which take care of pollution and waste issues. Third phase was "Sustainable" green marketing. It came into prominence in the late 1990s and early 2000. Benefits of Green Marketing: Companies that develop new and improved products and services with environment inputs in mind give themselves access to new markets, increase their profitability and enjoy competitive advantage over the companies which are not concerned for the environment. Examples of Green Marketing: Tata Group of Companies: Tata Motors Ltd is setting up an eco-friendly showroom using natural material for its flooring and energy efficient lights. The Taj Chain is in the process of creating eco rooms with napkins made up of recycled papers. The rooms will have CFL or LEDs. Launched a low cost water purifier made up of natural ingredients. Samsung recently launched solar mobile guru. Battery operated LG TV. Environmental Scanning: Environmental scanning is referred as the basic monitoring system of economic, competitive, socio-cultural, demographic, political and legal settings to determine the opportunities and threats to the firm. such analysis of information comparing, processing and forecasting the above conditions is known as environmental scanning. Environmental scanning refers to possession and utilization of information about occasions, patterns, trends, and relationships within an organizations internal and external environment. Organizational environment consists of both external and internal factors. Environment must be scanned so as to determine development and forecasts of factors that will influence organizational success.

It helps the managers to decide the future path of the organization. Scanning must identify the threats and opportunities existing in the environment. While strategy formulation, an organization must take advantage of the opportunities and minimize the threats. A threat for one organization may be an opportunity for another. MARKETING ENVIRONMENT: Marketing environment is a component of business environment that influences the company's capacity to promote and perform efficient operations on the market. The marketing environment surrounds and impacts upon the organization. There are three key elements to the marketing environment which are the internal environment, the microenvironment and the macroenvironment. Environmental Factors

Internal Environment

External Environment

Mission & Objective Mgt Structure & Nature Internal Power r/l Human Resources Company Image

Micro

Macro

Suppliers Customers Competitors Mktg Intermediaries Public

Global Economical Socio-Cultural Political Legal Technological Natural

External Factors: External environmental factors are again classified as Micro environment and macro environment. Micro-environment comprises the external factors that affect directly the company and exert mutual influence. These factors are partially controllable by the organization. External micro-environment factors are:

Financial and material suppliers. Can create opportunities and threats related to supplier's disappearance or disconnection of usual supply. This sort of situations can lead to operation blockage caused by lack of resources. Therefore, the relation between supplier and company need to be long term, strategic partnerships. Marketing intermediates. Commissioners, brokers, transporters, logistics, consultants need also to be in strategic, long term partnerships with the company. Customers. Individuals or companies that buy our products. They are the main micro-environment element because they assure operation continuity by purchasing the company's products for consumption or use. Company's operations focus need to be on customer satisfaction and relational marketing implementation. Competitors. They are the micro-environment factor that causes most of the treats, being focused on reaching to more and more market segments, also by drawing customers from competitors over the market. The main concern relating to competitors in gaining competitive advantages. The public. Mass-media, public administration, politic groups, shareholders, all these factors can create both opportunities and threats for the company.