Terms Used in Marketing

Needs: Felt state of deprivation of some basic necessity.

They are basic human requirements. Ex: Food, Air, Water, Shelter, Education, Recreation,
Entertainment
Wants:Specific satisfier of needs.Ex: A South Indian needs food but wants Idlis to eat.
Demand: Willingness to buy backed by adequate purchasing power. Ex:
Faculty of MIM willing to buy a TVS Fierro.
Faculty of MIM willing to buy a Mercedes.
Income : - Personal
- Disposable
- Discretionary (Discretionary Power)
Family and household Units: In Family people are related by blood. Household Unit is
any dwelling where people may or may not be related by blood but Unit has
purchasing power. Ex: Students staying in a room.
Economic good, Economic Bad and Free Good
Consumer and Customer: Customer is one who pays for the product. Consumer is the
one who uses the product

MBA SDM KRR AUG 2010

Market :Place(Market Place) or service(Market Space) for exchange
of goods or services
- Consumer Markets
- Business Markets/Industrial Markets
- Global Markets
- Nonprofit and Governmental Markets
- Rural Markets
Market Segments: Distinct group of buyers who prefer/require
varying product mixes and services
Ex: Smokers who want to eat chewing gum for getting rid of smell of
cigarettes
Non-smokers who want to eat chewing gum for getting rid of
boredom
Teenagers who want to eat chewing gum as a fashion
Children eating chewing gum for the taste and experience
Target Markets : Segments with greater opportunity for Marketer
MBA SDM KRR AUG 2010
Marketer: Someone seeking a response(attention,purchase,a vote,
donation etc) from another party.(called Prospect)
Offering: Combination of Product, Service, Information and experience
given by the marketer to the prospect
Product : Tangible offering Ex: Writing instrument
Service: Intangible offering Ex: Insurance coverage
Brand:It is an offering from a known source (Name,Symbol,Logo,
Color etc with which one identifies the source is called Brand Name)

Value = Benefits/Cost = Functional Benefits+Emotional benefits

(Monetary cost +Time cost +Energy cost
+ Psychic cost)
Metamarket: Cluster of complementary products and services that are
closely related in the mind of consumer but spread across a diverse set
of industries Ex: Automobiles, Dealer, Spare parts, Insurance,
Financing company, Auto magazines.

MBA SDM KRR AUG 2010

 Marketing - an Exchange Process
How any one can obtain a product?
1. Self-production
2. Coercion
3. Begging
4. Exchange :Process of obtaining a desired product from someone by
offering something in return.
Conditions for exchange to exist :1. There are at least two parties
2. Each party has something that might be of value to the other party
3. Each party is capable of communication and delivery
4. Each party is free to accept or reject the offer
5. Each party believes it is appropriate or desirable to deal with the other party
Marketing:Marketing is the process of Planning and Executing the concept
ion, Pricing, Promotion, and Distribution of Ideas, Goods, and Services
to create exchanges that satisfy individual and organizational goals.

MBA SDM KRR AUG 2010

 Satisfaction and Utility
Satisfaction: Perceived Value = Price
Delight : Perceived Value > Price
Dissatisfaction(Dissonance): Perceived Value < Price

Utility: Want satisfying power of Product

Types of Utilities
1. Form Utility (Task Utility for services)
2. Time Utility
3. Place Utility
4. Possession Utility
5. Information Utility

 Importance of Marketing in Modern Business and Careers in

Marketing

MBA SDM KRR AUG 2010

 Selling versus Marketing
Starting Point Focus Means Ends

SELLING AND PROFITS THROUGH

SELLING FACTORY PRODUCTS
PROMOTING SALES VOLUME

CUSTOMER INTEGRATED PROFITS THROUGH

MARKETING TARGET
NEEDS MARKETING CUSTOMER
MARKET
SATISFACTION

MBA SDM KRR AUG 2010

 MARKETING MIX

Marketing Mix

PRODUCT
•Product Variety PROMOTION
•Quality PRICE PLACE •Sales promotion
•Design •List Price •Channels •Advertising
•Features •Discounts •Coverage •Sales force
•Brand Name •Allowances •Assortments •Public Relations
•Packaging •Payment Period (SKUs) •Direct Marketing
•Sizes •Credit Terms •Locations
•Services •Inventory
•Warranties •Transport
•Returns

MBA SDM KRR AUG 2010

 Types of Demand
 Negative Demand: You pay Price to avoid it; eg.,
vaccination for diseases,vasectomies, etc.
 No Demand: Unaware of product or uninterested
 Latent Demand: Ned exists but no product to satisfy it.
Eg., Harmless cigarettes,
 Declining Demand
 Irregular Demand
 Full Demand
 Overfull Demand( Demarketing need to be done to
discourage consumers)
 Unwholesome Demand: Not healthy eg, Large families, X
Rated films.

MBA SDM KRR AUG 2010

 MARKETING OF SERVICES
Difference between product and services
 Tangibility
 Storage
 Features: Product – Form, Ease of Use,
Durability, Dependability,
Performance, Esthetics,
Serviceability,Availability of
Options and Expandability
Service - Courtesy, Timeliness.
Accuracy, Friendliness
 Title transfer

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 CONSUMER MARKET VERSUS INDUSTRIAL
MARKETS
 Industrial Markets , also known as Business Markets
Characteristics of Industrial Markets
 Fewer Buyers
 Large buyers
 Close customer-supplier relationship
 Geographically concentrated buyers
 Derived Demand
 Inelastic Demand
 Fluctuating (Volatile Demand)
 Professional Purchasing
 Buying Center is important
 Direct Purchasing
 Leasing

MBA SDM KRR AUG 2010

 Four Types of Buying Behavior
High Low
Involvement Involvement

Significant
differences Complex Variety-
between Buying Seeking
brands
Behavior Behavior
Few
differences Dissonance- Habitual
between Reducing Buying
brands
Buying
Behavior Behavior
Complex Buying behaviour: Buyer develops beliefs about product –
Develops attitude about the product – Makes a thoughtful choice
Complex behaviour is exhibited for expensive, high –involvement
products
Habitual buying is exhibited for Low-involvement products. If same
brand is selected, it is out of habit.
(Whether Ads are effective or sales promotions, for such Products?)
TREE ANALOGY OF STRATEGY

END PRODUCTS

BUSINESS UNITS

CORE PRODUCT

CORE COMPETANCY
Planning New Businesses, Downsizing Older
Businesses
The Strategic-Planning Gap
Three Intensive Growth Strategies: Ansoff’s Product-Market Expansion
Grid
Basic Market-
Preference
Patterns

MM
KRR
Figure 16.1: Nine Price-Quality Strategies

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