INTRODUCTION TO MARKETING

Marketing is defined as a human activity directed at satisfying needs and wants through exchange process Philip kotler The official definition for the term marketing by American Marketing Association (AMA) reads as follows marketing is process of planning and executing the conception, pricing, promotion and distribution of ideas goods and services to create exchanges that satisfy individual and organizational objectives Marketing is basically the process of determining consumer demand for a product or service motivating its sales and distributing it to the ultimate consumer at a profit. It is specifically concerned with how transactions are created, stimulated, facilitated and valued. Marketing is therefore an important socioeconomic activity. It is an essential activity for satisfaction of wants and for raising social welfare. It links producers and consumers together for mutual benefits and facilitates transfer of ownership of goods and services form producers to consumers. Production will be meaningless if goods produced are not supplied to consumers through proper marketing mechanism.

Scope of marketing
1. Marketing research
This forms first step of marketing. Through this process detailed and reliable information of different aspects of marketing is available. This information is useful for planning and decision making with regards to marketing activities.

2. Product planning and development

The product must be made as pr the need and expectations of the customers and suitable modifications must be made in the existing product

3. Price
Price is a key element in marketing because it is the measuring rod of the success of the firm. To a buyer price is the value placed on what is exchange. Therefore all marketing planners should be equipped to make correct pricing decisions.

4. Advertising and publicity

A firm must give due publicity to its products through proper advertising various ways or channels such as television, cinema, radio, newspaper etc. Advertising builds awareness of the product that may add to the customers knowledge of the product.

5. Sales promotion
Sales promotion is basically an activ8ity intended to stimulate purchases adding an incent9ive to the inherent features of the product offered. Following are some of the sales promotion tolls, discounts, contest and games, premiums and gifts, trade fairs and shows etc.

6. Packing and branding and labeling

Durables and attractive packaging is extremely necessary I order to maintain interest of consumers. Periodical changes must be made in product in respect o design, colors, and size.etc. Branding means giving suitable name to the product. Labeling gives useful information to the purchaser

7. After sale services

After sale services are required in case of consumer durables and expensive products. After sale service in the form of repairs, maintenance and replacements must be provided to the customers

8. Test marketing
Test marketing refers to introducing a product in small segments of market to find out whether or not the consumer has accepted the product. If he has accepted then the product is further marketed on a large scale.

Features of marketing
1) Marketing is consumer oriented
Marketing is dynamic field of business activity and is becoming more and more complex. The present generation of producers is intelligent in regards to application of producers. They first want to find out what the consumer wants, and then they produce goods according to needs of the consumers. They realize that only such products could be sold to the best satisfaction of the users and to the profits of the makers. Today, the manufacturer spreads his net in such a way that the consumer is safely brought into it and retained.

2) Marketing starts and end with consumers

There is a feeling that marketing activity is concerned only with the flow of goods form producers to consume. This concept, however, has changed also to include the flow of information from the consumers to producer. This information has to be collected even before a product is planned. Subsequent information would enable a manufacturer to access periodical changes that are required. Today, even they have full-fledged function i.e. market or marketing research and market information being added to marketing. Therefore, it is rightly said as modern marketing starts and ends with consumer.

3) Marketing precedes and exceeds production

A market transaction takes place when there is a successful matching of buyer and a seller. The power of either party to influence a transaction is basically depended upon the competitive strength. The seller has the bargaining power over the features of the product its price comparability etc. The buyer on the other hand acquires his bargaining power form the usefulness and acceptability of a product to him. The above factors compel the producers to accept consumers orientation as the marketing philosophy for their firm, if they ever want to bargaining power, thus marketing through its studies and research will determine for the engineers designers and manufacturing man what the customer wants in a given product, what price he is willing to pay and where and when it will be wanted

4) Marketing is a continuous activity

Marketing is not a single days activity. It has to be done on daily basis. Even after the product introduction marketing activity is to be continued.

5) Marketing relates to goods and services

Marketing relates to goods and services means the goods and services are exchanged by the seller with the buyer with money as main medium. Thus, marketing relates to goods and services.

6) Marketing is transfer of ownership

Marketing is transfer of ownership in the sense that the ownership of goods is transferred to buyer from the seller in return of consideration.

7) Marketing is sum total of 4 Ps

Product, price, promotion, physical distribution or place is the 4 Ps which constitute marketing activity.

8) Marketing is wider in scope

Marketing does not only means selling or promoting goods. It starts with marketing research followed by product planning and development, price determination, advertising sales promotion, packing, branding and labeling, after sale service and ends with test marketing.

INTRODUCTION TO SERVICE MARKETING

A service is an activity or benefit that one party can offer to another which is essentially intangible and does not result in ownership of anything. Its production may or may not be tied to physical product.

Definition
AMA defines service as Services are the benefit or satisfaction which are offered for sales or are provided in connection with the sales of goods.

Characteristics of services
The distinct features of services are:

1) Intangibility
Physical products can be examined in terms of physical integrity, taste, value, smell, color etc before one makes a purchase. But service has no tangible properties and hence cannot be tasted before the purchase , therefore the purchaser have to believe the attributes like reliability, personal care etc advertised by the service provider.

2) Perish ability
Services cannot be stored as in case of products. E.g. - products like machines, equipments, soaps, toothpaste can be preserved or stored till they are sold, but services like room service in a hotel cannot be stored. Suppose a room in hotel falls vacant for a day or two it cannot be stored in the sense that it will not earn for its non-occupancy.

3) Inseparability
Production and consumption of goods are independent activities. Producer produces goods according to production program and keeps ready for consumption so that the consumers can avail it whenever he wants. But in case of services production and consumption are inseparable, if the benefit of the service has to be realized both producer and consumer must be prevent at a convenient place to exchange service.

4) Heterogeneity/ Variability
The services rendered vary from customers to customers. Sometimes services vary according to the needs of the customers. Variability of service standard is of great concern for them. Some services provide greater quality and service variability will be moderately less in such services.

5) Ownership
Ownership of service cannot be transferred as in case of products. The service user has only the right to a buying process such as occupying a room, or hiring a taxi etc. We cannot buy and own services therefore services are provided to the customers. The service provider sells the service and the consumer consumes it, but he cannot owe it. Services are performed and hence the ownership is not transferred from the seller to the buyer but the buyer is only buying the right of service process such as use of advocates time or a consultants time.

6) Simultaneity
Services cannot move through the channels of distribution and cannot be delivered to the ultimate customers and users. Thus either the users are brought to the services. E.g.-doctor, plumber, lawyers etc. when the producer approaches the buyer time is taken away from the production of services and cost of those services will increase.

7) Quality Measurement
A service sector can measured in terms of service level but it is very difficult to rate or quantify the total purchase. E.g. - we can quantify the food served in the hotel but not the way the waiter serves it to the customers.

8) Nature of Demand
Demand for service is fluctuating in nature. During the peak tourist season there is abnormal increase in the demand of services. E.g. - Tourist go to the hill station during summer season wherein public transport utilities, hotel accommodations etc are used substantially.

PRICING IN SERVICES
Price is the value paid for a service/ offering. Exchange value of a product/service is always expressed in terms of money.

A. Internal factors
The internal factors are also called as controllable factor they are: a. Organizational policies : Policies of decision making differ takes place at two levels of organization i.e. top executive level and the lower level as price decision is an outcome of production and marketing results. b. Service differentiation : The service provider has to price the service to differentiate his service forum that of another. c. Service cost : It is necessary for the service provider to assure that the price charge d for his services covers fixed variable and semi variable incurred in providing the service. d. Marketing mix elements : i. Product or services : The price of a service varies depending upon the factor whether the service idea is new or already established in the market. ii. Distribution channel The price of service depends upon the factor whether the service provider is an agent or the main service provider iii. Pricing objective : The objective of pricing is a main factor determining the price whether financial objectives like profit maximization resource mobilization, pre-determined profit level is used for patronage objective like instilling confidence in the customers is used or volume objective like capturing market share is used.

B. External factors :
a. Demand : i. Different groups of users : Different prices can be changed for offering the same service to obtain maximum value from each segment of users. E.g. If in a sport club low price is offered to a senior citizen and higher price to others. ii. Different points of consumption : Where different price are charged by service provider at different service locations e.g. in a factory outlet the price of the product is lowered than that charged at branches in different cities. iii. Different time of production : There is a greater discrimination in the price depending upon at the time at which it is offered because services are highly perishable in nature e.g. seasonal and off seasonal tariff rates in hotels located at tourist spots. b. Completion : If there is a similarity in service rendered then the pricing decision of competitors will have a direct bearing on an organization pricing policies. c. Government control : This is on certain products like electricity; water supply, health care etc. determine the pricing decisions of these services.

Basis or approach to pricing services/ types or methods or pricing services. 1. Cost based pricing
In cost based pricing company determines the price by adding direct material and labor cost overheads and percentage of profits. Direct cost involves materials and labor that are associated with the service. Overheads are share of indirect cost and profit margin. This type is called COST PLUS PRICING. This method is used in companies where cost can be estimated in advance e.g. construction, engineering, advertising etc.

2. Competition based pricing

In this method of pricing the price is fixed on basis of price fixed by other firms or competitors in same industry or markets. Competition based pricing does not mean changing identical rate charge by other rather using the price as other as a basis for fixing the firms prices.

3. Demand based pricing

The third major basis of pricing is demand based pricing which involves setting the price depending upon the customer perception of values i.e. price is based on what the customer will pay for the service provided. It is the buyers perception of total value that prompts the willingness to pay a particular price for a service.

PLACE MIX IN SERVICES

Place is one of the most important eleme3nt in services mix. Place refers to contact between the service provider and one who gets the benefits of the service that its the consumer. The two main issuers considered regarding the decision of place are accessibility and availability. Accessibility refers to the ease and convenience with which a service can be purchased, used or received and availability refers to the extent to which a service is obtainable or capable of being purchased, used or received.

Location of premises
There are several key factors to be considered in decision about location of premises

1. Services inseparability
Some services are more inseparable than others for e.g. hair dresser has to perform a service on a person to person basis with the clients where as credit card customers are able to use the credit card for payments at vast number of location without direct contact with the credit card company on each occasion. The degree of direct access to the service provider required will influence the channel decision. Many services are now provided by telephone with the loan cheques being delivered to the customers home by currier services with hours of loan being approved.

2. Perishaibility
In case of goods the inventory stocks are held in ware houses form where they are transported to market. But services cannot be stored this way so intermediaries play an important role in facilitating the service exchange and thus form a part of service production and delivery process.

3. Role of consumer as co-producer of service

The role of customer is very important in production and delivery of a service in order to gain value for a service the customer is required to have an extensive interaction e.g. audience going to a theater to watch movie. Customer studying the menu for placing the order at a restasruants.etc.

4. Customers needs and wants

Customers needs are key factor influencing decisions about service distribution. These differ between various customer segments using the same services and between different types of services offering e.g. some customers may be willing to collect their own meal while others choose an outlet which offers delivery. Etc.

5. Importance of geographical location as part of services

Manufacturers choose to produce goods at a location convenient for cheap labor or natural resource and move the products to target markets for consumption. But in case of services it depends upon the geographical location as part of the services.

6. Target market
The main key factor is to make service accessible and available to all target market segments. In all such cases service providers can choose where to locate their services in order to maximize their market opportunities.

7. Flexibility in production
In series extreme case of inflexibility in production exists because services are located at one location.

8. Flexibility of consumption
Decisions on services location are also influenced by extent to which consumers are willing or are able to be flexible where they consume a service.

Factors influencing the look of premises

1. 2. 3. 4. 5. Nature and objective of service organizations Selecting are or site Flexibility Aesthetic factors Society

Franchising
Franchising is a relationship where one party, the franchiser, provides the development work on a service and instructs standards of delivery, while coming to an arrangement with a second party, the franchisee who is licensed to deliver the service taking some share of the financial risk and reward I the share

Agents
Agents are the person who works for principal continually rather than for a single deal. The role of the agent is to facilitate buying and selling g for which he is paid commission.

Brokers
They bring buyers and sellers together by assisting in negotiations they are paid by the party who hires them they rarely become involved in financing or assuming risk they are not long term representatives of buyer and seller like the agents. They do not take any title to service.

PRODUCT IN SERVICES:
Products refers to the service offering although service products are essentially intangible that are certain physical characteristics which consumer assess in their evaluation of product choice. They are 1) Attractiveness of the offering in terms of physical features. 2) Facilities available 3) Accessibility in terms of ease of getting service provider to the consumer While packaging the services the service provider have to consider the following aspects. 1) 2) 3) 4) 5) Items purchased by customer e.g. meal Items whose status is altered by service e.g. Car repair. Peripheral items Items without which services cannot be given Items that form part of process e.g. computer/ATM

Describes the bundle of services that are needed to be fulfilled the needs of target market. SASSAR & OLSEM see purchased bundles of service concepts which comprise of 3 elements 1) Physical items or benefits which are tangible or material elements which are facilitating or support goods e.g. Food serve by a restaurant 2) Secondly, there are sensual benefits that can be defined by one or more of five senses such as taste and aroma of restaurant meal. 3) Finally, the psychological benefits of a service purchased bundles. These are the benefits which cannot be clearly defined and are determined by customers subjectively.

Core services & peripheral Services

1) Core services:
The core service is the reason for being in the market. E.g. a college exists because its people with skill and abilities to manage organizations. The core services offering is necessary output of an organization which are intended to provide the intangible benefits which the customer are looking for e.g. peace of mind in case of insurance product. It denotes the core of service offering as Reyson said, In factory we make coteries but in the store we sale E.g. airlines safe & reliable journey. Hospital- good health Hotel: hospitality

2) Peripheral Service:
Peripheral services are those which are either irresistible for.. Core services or available only to improve the overall quality of the service bundle peripheral service offers components both the expected or tangible product and augmented product. Hey there are lots of mistakes I know but I have written this only please bear with it. There many spelling mistakes. See it.

PROCESS
The service process refers to how a service is provide or delivered to a customer. Delivery system is a creative process. It beings with a service concept and strategy to provide a service3. In order to achieve these objectives, various alternatives must be analyzed and identified before a decision is made. Designing a service process involves issues such as location facility, design and layout for effective design and layout for effective customer and work flow, procedure and job definitions for service providers, extent of customers involvement, measures to ensure service quality, equipment selection and adequate service capacity

PHYSICAL EVIDENCE
Physical evidence is termed as the social environment along with the tangible cues. Zeithmal and Bitner define physical evidence as the environment in which the service is delivered and where the firm and customer interact and any tangible commodities that facilitates performance communication of the service. Physical evidence includes all the efforts taken by the service provider to tangibilise their services, they include: a) physical facilities b) Physical environment c) Social settings

a) Physical facilities
Physical evidence includes essential evidence and peripheral evidence. Essential evidence are the technical facilities without which the service delivery s not possible e.g.-air-draft in the airline service.

B) Physical environment
Another factor influencing consumer expectations of service quality and satisfaction is the physical setting or the service environment within which the service takes place. The important elements of physical settings are: a) Ambience The ambience of the physical setting includes temperature, lightning, noise, music, scent and colour. All these factors affect the way the people think, feel and respond to a particular service setting. b) Space People need space around them to feel comfortable. Ease of access, good visibility, proximity of linked services will help to make the customer feel comfortable.

c) Dcor and Artifacts Sings, symbols and artifacts are the important components of dcor. Signs represent the first encounter the customer has with the service firm. Sign can be used as labels for directional purpose. The style of the dcor can generally create an impression of cheap, serious, cheerful and expensive

PEOPLE IN SERVICES
In service business, the service provider reflects the organizational realities. It is through the interaction with the staff, that the customer forms an opinion of organization. A service firm may have the latest equipment and all facilities but yet it may not be able to provide satisfactory customer service due to lack of interpersonal relationship between the service provider and the customer. The various types of service provider are:

A) Customer contact employees

They are known as frontline staff as they come in direct contact with the customers in the process of service delivery. It consists of different degree of the personnel customer contacts varies: a) High contact personnel b) Low contact personnel c) Skilled and professional

B) Non-contact employees
Those employees who contribute to the service delivery but do not come in contact with customers are called non-contact employees.

PLACE DECISION IN SERVICES

In service, the place decision depends on the location and use of distribution channel. The main problem in the creation of channels for services is that they cannot be manufactured in one place and distributed all over. They can be offered from either single outlet. Common functions like promotion, production, and purchasing can be done at a central point. The next option is the use of agents or brokers to sell the services. They work on commission basis or charge fees to the customers. The third option is known as franchising. Franchising is the agreement between the service organization and the individual or a firm.