Basics of Marketing -106Basics of Marketing -106

Marketing

Learning ObjectivesLearning Objectives

1.Introduction

2.Definition Of Marketing

3.Core Marketing Concepts

4.Marketing orientation/ approaches

5. Marketing Myopia

6.Functions of Marketing

7. Tangibility Spectrum/ Goods services Continuum.

1.Introduction

2.Definition Of Marketing

3.Core Marketing Concepts

4.Marketing orientation/ approaches

5. Marketing Myopia

6.Functions of Marketing

7. Tangibility Spectrum/ Goods services Continuum.

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What is Marketing…??What is Marketing…??

Selling?

Advertising?

Promotions?

Making products available in stores?

Maintaining inventories?

All of the above, plus much more!

Selling?

Advertising?

Promotions?

Making products available in stores?

Maintaining inventories?

All of the above, plus much more!

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Marketing = ?Marketing = ?

Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customer and for managing value to customer and for managing customer relationships in ways that benefit the organization and its stake holders.

American Marketing Association

Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customer and for managing value to customer and for managing customer relationships in ways that benefit the organization and its stake holders.

American Marketing Association

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Marketing = ?Marketing = ?

Marketing management is the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value.

Marketing management is the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value.

Marketing=?Marketing=?

Marketing is about identifying and meeting human and social needs.

One of the shortest good definition of marketing is “Meeting needs profitably”.

Marketing is about identifying and meeting human and social needs.

One of the shortest good definition of marketing is “Meeting needs profitably”.

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Simple Marketing SystemSimple Marketing System

Industry(a collection

of sellers)

Market(a collection

of Buyers)

Goods/services

Money

Communication

Information

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Marketing = ?Marketing = ? Marketing is the sum of all activities that take you to a

sales outlet. After that sales takes over. Marketing is all about creating a pull, sales is all about

push. Marketing is all about managing the four P’s –

product price place promotion

Marketing is the sum of all activities that take you to a sales outlet. After that sales takes over.

Marketing is all about creating a pull, sales is all about push.

Marketing is all about managing the four P’s – product price place promotion

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The 4 Ps & 4CsThe 4 Ps & 4Cs

MarketingMix

Product

Price Promotion

Place

CustomerSolution

CustomerCost

Communication

Convenience

Marketing MixMarketing Mix

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1. Product variety2. Quality3. Design4. Features5. Brand name6. Packaging7. Sizes8. Services9. Warranties10. Returns

Product

1. List price2. Discounts3. Allowances4. Payment period5. Credit terms

Price

1. Sales promotion2. Advertising3. Sales force4. Public relations5. Direct marketing

Promotion

1. Channels2. Coverage3. Assortments4. Locations5. Inventory6. Transport

Place

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The Marketing MixThe Marketing Mix

The conventional view of the marketing mix consisted of four components (4 Ps): Product, Price, Place/ distribution and Promotion.

Generally acknowledged that this is too narrow today; now includes , Processes,]People [employees & Customers], Physical evidence

Marketers today are focused on virtually all aspects of the firm’s operations that have the potential to affect the relationship with customers.

The conventional view of the marketing mix consisted of four components (4 Ps): Product, Price, Place/ distribution and Promotion.

Generally acknowledged that this is too narrow today; now includes , Processes,]People [employees & Customers], Physical evidence

Marketers today are focused on virtually all aspects of the firm’s operations that have the potential to affect the relationship with customers.

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Scope – What do we marketScope – What do we market

Goods Services Events Experiences Personalities Place Organizations Properties Information Ideas and concepts

Goods Services Events Experiences Personalities Place Organizations Properties Information Ideas and concepts

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Core Concepts of MarketingCore Concepts of Marketing

Based on : Needs, Wants, Desires / demand

Products, Utility, Value & Satisfaction

Exchange, Transactions & Relationships

Markets, Marketing & Marketers.

Based on : Needs, Wants, Desires / demand

Products, Utility, Value & Satisfaction

Exchange, Transactions & Relationships

Markets, Marketing & Marketers.

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Needs, wantsdemands

Markets Marketing &Marketers

Utility, Value &Satisfaction

Exchange, TransactionRelationships

Products

Core Concepts of MarketingCore Concepts of Marketing

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Core Concepts of MarketingCore Concepts of Marketing

Need – food ( is a must )

Want – Pizza, Burger, French fry's ( translation of a need as per our experience )

Demand – Burger ( translation of a want as per our willingness and ability to buy )

Desire – Have a Burger in a five star hotel

Need – food ( is a must )

Want – Pizza, Burger, French fry's ( translation of a need as per our experience )

Demand – Burger ( translation of a want as per our willingness and ability to buy )

Desire – Have a Burger in a five star hotel

Needs, wants and DemandsNeeds, wants and Demands

1.Needs- are basic human requirements. For ex-Food, Security, Clothing, and Survival.

2.Wants- are needs directed to a product.

3.Demand- is want accompanied by buyer’s ability to pay.

1.Needs- are basic human requirements. For ex-Food, Security, Clothing, and Survival.

2.Wants- are needs directed to a product.

3.Demand- is want accompanied by buyer’s ability to pay.

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UtilityUtility

Marketers can provide four types of utility to their target customers.

1.Form Utility- For Ex. Design concept and fabric into wide range of clothing

2. Time Utility- For ex. ATM, Amazon.com, Dell etc.

3.Place Utility-For ex. Domino Piza delivered at door step of Customer.

Marketers can provide four types of utility to their target customers.

1.Form Utility- For Ex. Design concept and fabric into wide range of clothing

2. Time Utility- For ex. ATM, Amazon.com, Dell etc.

3.Place Utility-For ex. Domino Piza delivered at door step of Customer.

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Utility Continued………….Utility Continued………….

4. Possession Utility- For ex customer who has purchased car may use it for whatever purpose he desires.

4. Possession Utility- For ex customer who has purchased car may use it for whatever purpose he desires.

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Offerings and BrandsOfferings and Brands

Companies address needs by putting forth a value proposition, a set of benefits that they offer to customers to satisfy their needs. The Intangible value proposition is made physical by an offering, which can be a combination of products, services, Information, and experience.

A brand is an offering from a known source.

Companies address needs by putting forth a value proposition, a set of benefits that they offer to customers to satisfy their needs. The Intangible value proposition is made physical by an offering, which can be a combination of products, services, Information, and experience.

A brand is an offering from a known source.

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Value and SatisfactionValue and Satisfaction

Value is central marketing concept. Value - the value or benefits the customers gain from using

the product versus the cost of obtaining the product.

Satisfaction - Based on a comparison of performance and expectations.

Performance > Expectations => Satisfaction

Performance < Expectations => Dissatisfaction

Value is central marketing concept. Value - the value or benefits the customers gain from using

the product versus the cost of obtaining the product.

Satisfaction - Based on a comparison of performance and expectations.

Performance > Expectations => Satisfaction

Performance < Expectations => Dissatisfaction

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Customer looks ValueCustomer looks Value

Value = Benefit / Cost

Benefit = Functional Benefit + Emotional Benefit

Cost = Monetary Cost + Time Cost + Energy Cost + Psychic Cost

Value = Benefit / Cost

Benefit = Functional Benefit + Emotional Benefit

Cost = Monetary Cost + Time Cost + Energy Cost + Psychic Cost

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Concept Of ExchangeConcept Of Exchange

An exchange arises when one person gives something of value ,in return for something of value from another person.

The Conditions necessary for an exchange to take place are

1.At least, two parties must be involved.

2.Each party must have something that interest the other.

An exchange arises when one person gives something of value ,in return for something of value from another person.

The Conditions necessary for an exchange to take place are

1.At least, two parties must be involved.

2.Each party must have something that interest the other.

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Exchange continued…………….

Exchange continued…………….

3.The parties must involve themselves voluntarily and each party must consider the other desirable or at least acceptable to deal with.

4.Each party must be in a position to communicate and deliver the product

5. Each party must be free to accept or reject any offer from the other party.

3.The parties must involve themselves voluntarily and each party must consider the other desirable or at least acceptable to deal with.

4.Each party must be in a position to communicate and deliver the product

5. Each party must be free to accept or reject any offer from the other party.

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MarketMarket

Market is a set of existing and potential buyers for a defined product or service.

Market Place- is the place where one goes for Shopping and market space is digital as when shop on the internet.

Meta Market- the convergence of Suppliers of all complementary products and Services that are closely related to product in consumer markets.

Market is a set of existing and potential buyers for a defined product or service.

Market Place- is the place where one goes for Shopping and market space is digital as when shop on the internet.

Meta Market- the convergence of Suppliers of all complementary products and Services that are closely related to product in consumer markets.

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Types of MarketsTypes of Markets

1. Consumer Market

2. Business Market/ Industrial Market

3. Global Market

4. Non Profit and Govt. Market

1. Consumer Market

2. Business Market/ Industrial Market

3. Global Market

4. Non Profit and Govt. Market

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Approaches/ orientations to Marketing

Approaches/ orientations to Marketing

1. The Production Concept

2. The Product Concept

3. The Selling Concept

4. The Marketing Concept

5. The Holistic Marketing Concept

1. The Production Concept

2. The Product Concept

3. The Selling Concept

4. The Marketing Concept

5. The Holistic Marketing Concept

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The Production ConceptThe Production Concept

The production Concept is one of the oldest concepts in business. It holds that consumers will prefer products that are widely available and inexpensive. Managers of Production- oriented businesses concentrate on achieving high production efficiency, low costs, and Mass Distribution

The production Concept is one of the oldest concepts in business. It holds that consumers will prefer products that are widely available and inexpensive. Managers of Production- oriented businesses concentrate on achieving high production efficiency, low costs, and Mass Distribution

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Product ConceptProduct Concept

The Product concept Proposes that consumers favor products that offer the most quality, performances, or innovative features. Managers in these organizations focus on making superior products and improving them over time.

The Product concept Proposes that consumers favor products that offer the most quality, performances, or innovative features. Managers in these organizations focus on making superior products and improving them over time.

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The selling ConceptThe selling Concept

The selling concept holds that consumers and businesses if left alone, won’t buy enough of the organization’s products. The organization must, therefore, undertake an aggressive selling and promotion effort.

The selling concept is practiced most aggressively with unsought goods such as Insurance, encyclopedias and cemetery pots.

The selling concept holds that consumers and businesses if left alone, won’t buy enough of the organization’s products. The organization must, therefore, undertake an aggressive selling and promotion effort.

The selling concept is practiced most aggressively with unsought goods such as Insurance, encyclopedias and cemetery pots.

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Marketing ConceptMarketing Concept

The Marketing Concept emerged in the mid -1950s. Instead of product – centered ,Make and sell philosophy business shifted to sense and respond.

The Marketing Concept emerged in the mid -1950s. Instead of product – centered ,Make and sell philosophy business shifted to sense and respond.

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The Holistic Marketing concept

The Holistic Marketing concept

The holistic marketing concept is based on the development, design, and implementation of marketing programs, processes and activities that recognizes their breadth and interdependencies. Holistic Marketing is thus an approach that attempts to recognize and reconcile the scope and complexities of marketing activities.

The holistic marketing concept is based on the development, design, and implementation of marketing programs, processes and activities that recognizes their breadth and interdependencies. Holistic Marketing is thus an approach that attempts to recognize and reconcile the scope and complexities of marketing activities.

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Over View Of Holistic MarketingOver View Of Holistic Marketing

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Relationship MarketingRelationship Marketing

Marketing is to establish, maintain and enhance relationship with customer and other partners at profit, so that the objective of the parties involved are met. This is achieved by mutual exchange and fulfillment of promises.

Marketing is to establish, maintain and enhance relationship with customer and other partners at profit, so that the objective of the parties involved are met. This is achieved by mutual exchange and fulfillment of promises.

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Why is it important?Why is it important?

• 5 times costlier than old one• 5% improvement in customer

retention= 25 to 85% increase in profit

• deliver additional products and services to an existing customer

• 5 times costlier than old one• 5% improvement in customer

retention= 25 to 85% increase in profit

• deliver additional products and services to an existing customer

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Basis of building relationship

Basis of building relationship

• Mutual benefits

• Mutual commitment

• Trust

• Connective links

• Mutual benefits

• Mutual commitment

• Trust

• Connective links

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The Firm’s PotentialMarketing Relationships

The Firm’s PotentialMarketing Relationships

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Buyer Partnerships

InternalPartnerships

Supplier Partnerships

Lateral Partnerships

FocalFirm

Employees

BusinessUnits

GoodsSuppliers

ServicesSuppliers

Competitors

NonprofitOrganizations

Government

UltimateCustomers

IntermediateCustomers

FunctionalDepartments

Marketing MyopiaMarketing Myopia

Theodore Levit in his classical article “ Marketing Myopia” in the Harvard Business Review argues that industries fail not because markets are saturated but because of the failure and short-sightedness of the Management.

Marketing Myopia occurs when a marketer is excessively preoccupied with product development, manufacturing or selling & ignores customer needs , wants and Interests.

Theodore Levit in his classical article “ Marketing Myopia” in the Harvard Business Review argues that industries fail not because markets are saturated but because of the failure and short-sightedness of the Management.

Marketing Myopia occurs when a marketer is excessively preoccupied with product development, manufacturing or selling & ignores customer needs , wants and Interests.

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Marketing Myopia Continued……….

Marketing Myopia Continued……….

For example- Radio and Pager.

Ways to overcome Marketing Myopia

1.Be Customer Oriented, not product oriented

2. Market orientation should permeate throughout the organization.

3. Managers need to be proactive and Visionary.

For example- Radio and Pager.

Ways to overcome Marketing Myopia

1.Be Customer Oriented, not product oriented

2. Market orientation should permeate throughout the organization.

3. Managers need to be proactive and Visionary.

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Difference between Selling and MarketingDifference between Selling and Marketing

SellingSelling1.Emphasis on Product.

2.Company manufactures the product first and then decide to sell it.

3.Management is sales volume oriented.

1.Emphasis on Product.

2.Company manufactures the product first and then decide to sell it.

3.Management is sales volume oriented.

MarketingMarketing1. Emphasis on

consumer needs and wants.

2. Company first determines consumer needs and wants and then decides on how to deliver a product to satisfy these wants.

3. Management is profit oriented

1. Emphasis on consumer needs and wants.

2. Company first determines consumer needs and wants and then decides on how to deliver a product to satisfy these wants.

3. Management is profit oriented

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Difference between Selling and MarketingDifference between Selling and Marketing

SellingSelling4.Views business as a

goods producing process.

5.Cost determines price.

6. Customers as the last link in business.

4.Views business as a goods producing process.

5.Cost determines price.

6. Customers as the last link in business.

MarketingMarketing4. Views business as

consumer satisfying process.

5.Consumer determine price, price determines cost.

6. Customer as the Very beginning of a business.

4. Views business as consumer satisfying process.

5.Consumer determine price, price determines cost.

6. Customer as the Very beginning of a business.

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Functions Of MarketingFunctions Of Marketing

Marketing as a managerial activity involves analyzing the marketing opportunities, planning the marketing activities, implementing marketing plans and setting control mechanism in such a way that organizational objectives are accomplished at minimum cost.

1.Understanding Consumer needs.

2.Environmental Scanning and Marketing Opportunity analysis.

Marketing as a managerial activity involves analyzing the marketing opportunities, planning the marketing activities, implementing marketing plans and setting control mechanism in such a way that organizational objectives are accomplished at minimum cost.

1.Understanding Consumer needs.

2.Environmental Scanning and Marketing Opportunity analysis.

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Functions of Marketing Continued….Functions of Marketing Continued….

3.Development of Marketing Plan and Strategy

4.Implementation Of Marketing Plan

5. Development of Control Mechanisms.

3.Development of Marketing Plan and Strategy

4.Implementation Of Marketing Plan

5. Development of Control Mechanisms.

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Who is a Customer ??Who is a Customer ??

Anyone who is in the market looking at a product /

service for attention, acquisition, use or consumption

that satisfies a want or a need

CUSTOMER IS . . . . .

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Customer –Customer –

CUSTOMER has needs, wants, demands and desires

Understanding these needs is starting point of the entire marketing

These needs, wants …… arise within a framework or an ecosystem

Understanding both the needs and the ecosystem is the starting point of a long term relationship

CUSTOMER has needs, wants, demands and desires

Understanding these needs is starting point of the entire marketing

These needs, wants …… arise within a framework or an ecosystem

Understanding both the needs and the ecosystem is the starting point of a long term relationship

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Customers - Problem SolutionCustomers - Problem Solution

As a priority , we must bring to our customers “WHAT THEY NEED”

We must be in a position to UNDERSTAND their problems

Or in a new situation to give them a chance to AVOID the problems

As a priority , we must bring to our customers “WHAT THEY NEED”

We must be in a position to UNDERSTAND their problems

Or in a new situation to give them a chance to AVOID the problems

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P r o d u c tP r o d u c tP r o d u c tP r o d u c t

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Anything that is offered to the market for

attention, acquisition, use or consumption that

satisfies a want or a need

Product is . . . . . Product is . . . . .

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Types of ProductsTypes of Products

ConsumerProducts

IndustrialProducts

PRODUCTS

Services

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Product Items, Lines, and MixesProduct Items, Lines, and Mixes

Product ItemProduct Item

Product LineProduct Line

Product MixProduct Mix

A specific version of a product that can be designated as a distinct offering among an organization’s products.

A specific version of a product that can be designated as a distinct offering among an organization’s products.

A group of closely-related product items.

A group of closely-related product items.

All products that an organization sells.

All products that an organization sells.

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Product MixProduct Mix

Width – how many product lines a company has

Length – how many products are there in a product line

Depth – how many variants of each product exist within a product line

Consistency – how closely related the product lines are in end use

Width – how many product lines a company has

Length – how many products are there in a product line

Depth – how many variants of each product exist within a product line

Consistency – how closely related the product lines are in end use

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Gillette’s Product Lines & MixGillette’s Product Lines & Mix

Blades and Writingrazors Toiletries instruments Lighters

Fusion – 5 bladeMach 3 TurboMach 3 Series Paper Mate CricketSensor Adorn Flair S.T. Dupont Trac II Toni S.T. DupontAtra Right GuardSwivel Silkience Double-Edge Soft and Dri Lady Gillette Foamy Super Speed Dry LookTwin Injector Dry Idea Techmatic Brush Plus

Width of the product mixWidth of the product mix

De

pth

of

the

pro

du

ct

line

sD

ep

th o

f th

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rod

uc

t lin

es

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What is a Service? Defining the EssenceWhat is a Service? Defining the Essence

An act or performance offered by one party to another (performances are intangible, but may involve use of physical products)

An economic activity that does not result in ownership

A process that creates benefits by facilitating a desired change in customers themselves, or their physical possessions, or intangible assets

An act or performance offered by one party to another (performances are intangible, but may involve use of physical products)

An economic activity that does not result in ownership

A process that creates benefits by facilitating a desired change in customers themselves, or their physical possessions, or intangible assets

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Some Industries - Service SectorSome Industries - Service Sector

Banking, stock broking

Lodging

Restaurants, bars, catering

Insurance

News and entertainment

Transportation (freight and passenger)

Banking, stock broking

Lodging

Restaurants, bars, catering

Insurance

News and entertainment

Transportation (freight and passenger)

Health care

Education

Wholesaling and retailing

Laundries, dry-cleaning

Repair and maintenance

Professional (e.g., law, architecture, consulting)

Health care

Education

Wholesaling and retailing

Laundries, dry-cleaning

Repair and maintenance

Professional (e.g., law, architecture, consulting)

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Goods services continuum Goods services continuum

Pure Tangible Product

Materials / Components

Computers

Major Product withMinor Services

Product = Service

Major Service withMinor Product

Business Hotels

Good Transportation

Banking Pure Intangible Service

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Intangibility – Services are intangibility cannot be seen, tasted, felt, heard or smelled before purchase.

Inseparability - Services are produced and consumed simultaneously.

Variability or Heterogeneity – Services are highly variable

Perishability – Services cannot be stored.

Non Ownership - Services are rendered but there is no transfer of title

Intangibility – Services are intangibility cannot be seen, tasted, felt, heard or smelled before purchase.

Inseparability - Services are produced and consumed simultaneously.

Variability or Heterogeneity – Services are highly variable

Perishability – Services cannot be stored.

Non Ownership - Services are rendered but there is no transfer of title

Major Characteristic of Services Major Characteristic of Services

Books Recommended Books Recommended

1. Principles Of Marketing- Philip Kotler and Gary Armstrong

2. Marketing Management- Rajan saxena

3. Marketing Management- V.S. Ramaswamy and S. Namakumari

4. Marketing Management- ICFAI University

5. Marketing Management- Dr. K. Karunakaran

1. Principles Of Marketing- Philip Kotler and Gary Armstrong

2. Marketing Management- Rajan saxena

3. Marketing Management- V.S. Ramaswamy and S. Namakumari

4. Marketing Management- ICFAI University

5. Marketing Management- Dr. K. Karunakaran

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