MARKETING: SCOPE AND CORE CONCEPTS

Samir K Mahajan

NEEDS, WANTS, AND DEMAND

Needs are the basic human requirements. People need food, air, water, clothing, and shelter to survive. People also havestrong needs for recreation, education, and entertainment.

These needs become wants when they are directed to specific objects that might satisfy the need. An individual needsfood but may want a hamburger, fish-fries, a mango, a pizza, rice and a soft drink. Wants are shaped by one's society.

Demands are wants for specific products backed by an ability to pay and willingness to pay. Many people want aMercedes; only a few are willing and able to buy one. Companies must measure not only how many people want theirproduct but also how many would actually be willing and able to buy it.

The marketer must try to understand the target market's needs, wants, and demands.

OFFERINGS AND BRANDS

Companies address needs by putting forth a value proposition – a set of benefits they offer to customers to satisfy theirneeds. The intangible value proposition is made physical by an offering, which can be a product, a combination ofproducts, services, information, and experiences.

A brand is an offering from a known source. Brand is the "name, term, design, symbol, or any other feature that identifiesone seller's product distinct from those of other sellers." Brands are used in business, marketing, and advertising. A brandname such as KFC carries many associations in the minds of people: chicken fries, cold drinks, burger, fun, children,convenience. These associations make up the brand image. All companies strive to build brand strength—that is, a strong,favourable, and unique brand image.

What is Marketing?

Marketing is the science and art of exploring, creating, and delivering value to satisfy the needs of a target market at aprofit.

Marketing identifies unfulfilled needs and desires. For example when eBay recognized that people were unable to locatesome of the items they desired the most , it created an online auction clearinghouse.

It defines, measures and quantifies the size of the identified market, and the profit potential. It pinpoints whichsegments the company is capable of serving the best , and thus it designs and promotes the appropriate products andservices. (Philip Kotler)

Marketing includes diverse disciplines like sales, public relations, pricing, packaging, distribution, promotions and so on.

Marketing’s key processes are: (1) opportunity identification, (2) new product development, (3) customer attraction, (4)customer retention and loyalty building, and (5) order fulfilment. A company that handles all of these processes well willnormally enjoy success. But when a company fails at any one of these processes, it will not survive.

What is the mission of marketing?

According to Philip Kotler, at least three different answers have been given to the question of mission of marketing.

o The earliest answer was that the mission of marketing is to sell any and all of the company’s products to anyone and

everyone.

o A second, more sophisticated answer, is that the mission of marketing is to create products that satisfy the unmet

needs of target markets.

o A third, more philosophical answer, is that the mission of marketing is to raise the material standard of living

throughout the world and the quality of life. Marketing’s role is to sense the unfulfilled needs of people and create

new and attractive solutions. The modern kitchen and its equipment provide a fine example of liberating women

from tedious housework so that they have time to develop their higher capacities.

What is Marketing Management?Marketing management is a business discipline which focuses on the practical application of marketing techniques and themanagement of a firm's marketing resources and activities.

SOME DEFINITIONS OF MARKETING

Marketing is the process of discovering and translating consumer needs and wants into products and services, creatingdemand for these products and services, and then in turn expanding this demand. —H.L. Hansen.

Marketing is the business process by which products are matched with markets and through which transfer ofownership are affected. —Edward W . Cundiff

According to the American Marketing Association (AMA) Board of Directors, Marketing is the activity, set of institutions,and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients,partners, and society at large.

Marketing is the social process by which individuals and groups obtain what they need and want through creating andexchanging products and value with others.” — Philip Kotler

SCOPE OF MARKETING OR WHAT ARE MARKETED

Marketing is a dynamic business process. Due to change of time, the scope of marketing has been changed. Marketingpeople are involved in marketing 10 types of entities: goods, services, experiences, events, persons, places, properties,organizations, information, and ideas which forms the scope of marketing.

o Goods: Good is defined as something tangible that can be offered to market to satisfy a need or want. Exchange ofphysical goods result in ownership. Goods constitute the bulk of most countries’ production and marketing effort.The total marketing programs are centred with goods. In a developing country like India fast moving consumer goods(shampoo, bread, ketchup, cigarettes, newspapers etc.) and consumer durables (television, gas appliances, fans etc.)are produced and consumed in large quantities every year .

o Services: Service is any activity or benefit that one party can offer to another that is essentially intangible and doesnot result in the ownership of anything. Services include the work of professionals lawyers, doctors, teachers etc,hotels, airlines, banks, insurance companies, transportation corporations etc. Production of service may or may notbe tied to a physical product. Many market offerings consists of a variable mix of goods and services. At the pure,service end would be a doctor listening to a patient or watching movie in a cinema hall; and at a more tangible levelin fast food centre, the consumers consume both a good and a service. As economies advance, the share of service ingross domestic product increases.

SCOPE OF MARKETING contd. o Experiences: By mixing several services and goods, one can create, stage and market experiences. For example, water

parks, zoos, museums etc. provide the experiences which are not the part of routine life. There is a market for differentexperiences such as climbing Mount Everest or Kanchanjunga, travelling in Palace on Wheels, rope ways, river rafting, atrip to Moon, travelling in Trans Siberian Railways across five time zones etc.

o Events: Marketers promote time–based, theme-based or special events such company anniversaries, sports events (FIFAworld cup, IPL, as Olympics, ), artistic performances (KK live concert), trade shows (Book Fair, Automobile fair), awardceremonies (Film fare awards, Screen awards), beauty contests (Miss World, Miss Universe, Miss India, MissChandigarh), Other notable example is organising of Ardh Kumbh and Maha Kumbh at Hardwar, Ujjain, Nasik etc. duringdifferent years.

o Persons: Celebrity marketing has become a major business. Film stars, singers, cricketers, footballer celebrity cook arehas an agent, personal manger and ties with public relation agency, and getting help from celebrity marketers. In the18th parliamentary election, BJP’s election strategy centres around Narendra Damodar Modi, that’ s power ofpersonality.

o Places: Cities, states, regions and whole nations compete actively to attract tourists, factories, company headquartersskilled labour and new residents. India and China are competing actively to attract foreign companies to make theirproduction hub. Cities like Bangalore, Hyderabad and Gurgaon are promoted as centre for development of software.Bangalore is regarded as software capital of India. Kerala, Himachal Pradesh, Uttranchal Pradesh and Rajasthan areaggressively promoting themselves to attract local as well as foreign tourists. Due to its cost effectiveness andcompetitive ability of Indian doctors coupled with ancient therapies, India is fast emerging as country that can provideexcellent medical treatment at minimum costs.

SCOPE OF MARKETING contd

o Properties: Properties whether real property (real estate) or financial property (share and debt. instruments) arebought and sold, and this requires marketing effort. Property dealers in Ahmedabad work for property owners as wellas property seekers to sell or buy plots, residential or commercial real estate. In India some builders like Ansal, SaharaGroup, both build and market their residential and commercial real estates. Brokers and sub-brokers buy and sellsecurities on behalf of individual and institutional buyers.

o Organizations: Organizations actively work to build a strong, favourable image in the mind of their publics. Companiesspend money on corporate identity ads. Companies can gain immensely by associating themselves with social causes.Bill Universities, museums, and performing art organisations use marketing to boost their images, and to compete forimages.

o Information: Information can be produced and marketed as a product. This is essentially what schools, colleges anduniversities produce and distribute at a price to parents, students and communities. Encyclopaedias and most non-fiction books market information. Magazines such as Fitness and Muscle provide information about staying healthy ;Business India, Business Today and Business World provide information about business activities that are taking placein various organizations There are number of magazines which are focussed an automobiles, architecture and interiordesigning, computers, audio system, television programmes etc. which cater to the information needs of the customers.

o Idea: Every market offering includes a basic idea. Charles Revson of Revlon observed: "In the factory, we makecosmetics; in the store we sell hope. Film makers, marketing executives and advertising agencies continuously look for acreative spark or an idea that can immortalise them and their work. Idea here means the social cause or an issue thatcan change the life of many. Social marketers are busy promoting ideas such as ‘Say no to drugs’, ‘save water’ , ‘exercisedaily’.

MARKETERS S AND PROSPECTS

A marketer is someone who seeks a response (an attention, a purchase, a vote, a donation) from another party, called theprospect. If two parties are seeking to sell something to each other, we call them both marketers.

Just as production and logistics professionals are responsible for supply management, marketers are responsible fordemand management. Marketing managers seek to influence the level, timing, and composition of demand to meet theorganization's objectives.

Eight demand states are possible to which the marketer has to deal with

1. Negative demand- Consumers dislike the product and may even pay a price to avoid it. For example – Dental workwhere people don’t want problems with their teeth and use preventive measures to avoid the same.

2. Non existent demand - Consumers may be unaware or uninterested in the product. The best example for the same canbe education courses where there is very low demand or no demand at all.

3. Latent demand - Consumers may share a strong need that cannot be satisfied by an existing product. The best exampleof latent demand are smart phones. People nowadays want more and more features in the smartphone. They might settlefor a normal phone, but then later on they get the it to buy a smart phone.

MARKETERS S AND PROSPECTS contd.

4. Declining demand - Declining demand is when demand for a product is declining. For example, when CD players wereintroduced and IPOD came in the market, the demand for walkman went down.

5. Irregular demand - Irregular demand can be demand which is not consistent. The best example of irregular demand isseasonal products like umbrellas, air conditioners .

6. Full demand - In an ideal environment, a company should always have full demand. Full demand means that the demandis meeting the supply potential of the company.

7. Overfull demand - Overfull demands happen when the companies manufacturing capacity is limited but the demand ismore than the supply. This can be observed in the cement industry occasionally.

8. Unwholesome demand - Consumers may be attracted to products that have undesirable social consequences. Bestexample of unwholesome demand are cigarettes, alcohol, pirated movies, guns etc.

In each case, marketers must identify the underlying cause(s) of the demand state and then determine a plan for action toshift the demand to a more desired state.

Exchange and Transactions

EXCHANGE :Marketing occurs when people decide to satisfy needs and wants through exchange. Exchange is the act of obtaining adesired object from someone by offering something in return. Exchange is only one of the four ways that people canobtain a desired object.

o The first way is self-production . People can relieve hunger through hunting , fishing , or fruit gathering . They need notinteract with anyone else. In this case , there is no market and no marketing.

o The second way is coercion. Hungry people can snatch or steal food from others. No benefit is offered to the othersexcept that of not being harmed.

o The third way is begging. Hungry people can approach others and beg for food. They have nothing tangible to offerexcept gratitude.

o The fourth way is exchange. Hungry people can approach others and offer a resource in exchange , such as money ,another good , or a service.

Marketing arises from this last approach to acquiring products.

Exchange and Transactions contd.

TRANSACTIONS:Transactions are the basic units of exchange. A transaction consists of a trade of values between two parties. These tradevalues may be monetary or non-monetary.

Example: Pujara sells a TV to Harsh and Harsh pay Rs. 2000. This is a classic monetary transaction. There can be a bartertransaction which involves trading goods or services for other goods or services. Say, villagers exchanging vegetables or adomestic-help provided foods for the whole day’s service or a teacher given medical examination by a physician inreturn for tuition given to the later's daughter.

A transaction differs from a transfer. In a transfer, A gives X to B but does not receive anything tangible in return. Gifts,subsidies, and charitable contributions are all transfers.

MARKETS: STRUCTURE OF FLOWS IN A MODERN EXCHANGE ECONOMY

Traditionally, a "market" is a physical place where buyers and sellers gathered to buy and sell goods. Economists describe amarket as a collection of buyers and sellers who transact over a particular product or product class (e.g., the housingmarket or grain market). Modern economies abound in such markets.

Five basic markets and their connecting flows are shown as flows:

Markets contd.

STRUCTURE OF FLOWS IN A MODERN EXCHANGE ECONOMY contd.

Manufacturers go to resource markets (raw material markets, labor markets, money markets), buy resources and turnthem into goods and services, and then sell finished products to intermediaries, who sell them to consumers.

Consumers sell their labour and receive money with which they pay for goods and services. The government collects taxrevenues to buy goods from resource, manufacturer, and intermediary markets and uses these goods and services toprovide public services.

Each nation's economy and the global economy consist of complex interacting sets of markets linked through exchangeprocesses.

RELATIONSHIP BETWEEN INDUSTRY AND MARKET

Marketers often use the term market to mean various groupings of customers. They view the buyers as constituting themarket and the sellers as constituting the industry. They talk about need markets (the diet-seeking market), productmarkets (the shoe market), demographic markets (the youth market), and geographic markets (the Gujarat market); orthey extend the concept to cover other markets, such as voter markets, labour markets, and donor markets.

Following figure shows the relationship between the industry and the market. Sellers and buyers are connected by fourflows. The sellers send goods and services and communications (ads, direct mail) to the market; in return they receivemoney and information (attitudes, sales data). The inner loop shows an exchange of money for goods and services; theouter loop shows an exchange of information.

KEY CUSTOMER MARKETS

Consumer Markets: Companies selling mass consumer goods and services such as soft drinks, cosmetics, air travel, andathletic shoes and equipment to individuals and households spend a great deal of time trying to establish a superior brandimage. Much of a brand's strength depends on developing a superior product and packaging, ensuring its availability, andbacking it with engaging communications and reliable service.

Business Markets: Business buyers (say wholesalers, retails, manufacturer) buy goods in order to make or resell a productto others at a profit. Companies selling business goods and services often face well-trained and well-informed professionalbuyers who are skilled in evaluating competitive offerings

Global Markets: Companies selling goods and services in the global marketplace face additional decisions and challenges.They must decide which countries to enter; how to enter into the industry; how to adapt their product and servicefeatures to each country; how to price their products in different countries; and how to adapt their communications to fitdifferent cultures. These decisions must be made in the face of different requirements for buying, negotiating, owning, anddisposing of property; different culture, language, and legal and political systems; and a currency that might fluctuate invalue.

Governmental and Non-profit Markets: Companies selling their goods to non-profit organizations such as universities,charitable organizations, or government agencies need to price carefully because these organizations have limitedpurchasing power. Lower prices affect the features and quality that the seller can build into the offering. Much governmentpurchasing calls for bids, with the lowest bid being favoured, in the absence of extenuating factors.

MARKETPLACE, MARKET-SPACE AND META-MARKET

The marketplace is physical, as when a buyer shop in a store; market-space is digital, as when a buyer shop on theInternet.

A Meta-market brings all buyers and sellers in one platform for one purpose only. It describes a cluster of complementaryproducts and services that are closely related in the minds of consumers but are spread across a diverse set of industries.

For example. the automobile meta-market consists of automobile manufacturers, new car and used car dealers, financingcompanies, insurance companies, mechanics, spare parts dealers, service shops, auto magazines, adds on cars, classifiedauto ads in newspapers, and auto sites on the Internet.

TARGET MARKET

Target Marketing involves breaking a market intosegments and then concentrating your marketingefforts on one or a few key segments. Marketer canrarely satisfy everyone in a market. Not everyonelikes the same cereal, hotel room, restaurant,automobile, college, or movie. Therefore, marketersstart by dividing up the market into segments.

A target market can be separated from themarket as a whole by segments such as: geography,buying power and demographics, as well as bypsychographics , and identify and profile distinctgroups of buyers who might prefer or require varyingproduct and services mixes. The marketer thendecides which segments present the greatestopportunity—which are its target markets. Thebeauty of target marketing is that it makes thepromotion, pricing and distribution of company’sproducts and/or services easier and more cost-effective. It provides a focus to all of your marketing

PRODUCT POSITIONING

Product Positioning is a marketing strategy that aims to occupy a distinct position, relative to competingbrands in the mind of the customer. For each chosen target market, the firm develops a market offeringwhich is positioned in the minds of the target buyers such as delivering some central benefit(s).

For example, Volvo develops its cars for buyers to whom automobile safety is a major concern. Volvo,therefore, positions its car as the safest a customer can buy.

Companies apply this strategy either by emphasizing the distinguishing features of their brand (what it is,what it does and how, etc.) or they may try to create a suitable image (inexpensive or premium, utilitarian orluxurious, entry-level etc.) through advertising. Once a brand is positioned, it is very difficult to reposition itwithout destroying its credibility.

COMPETITION

Competition: Competition includes all the actual and potential rival offerings and substitutes that a buyer mightconsider. Suppose an automobile company is planning to buy steel for its cars. There are several possible levels ofcompetitors. The car manufacturer can buy steel from SAIL or other integrated steel mills in TATA Steel or abroad(e.g., from Japan or Korea);; or buy aluminium for certain parts of the car to lighten the car's weight ; or buyengineered plastics for bumpers instead of steel. Clearly, TATA STEEL would be thinking too narrowly ofcompetition if it thought steel companies only. In fact, TATA STEEL is more likely to be hurt in the long run bysubstitute products than by its immediate steel company rivals. It must also consider whether to make substitutematerials or stick only to those applications where steel offers superior performance.

VALUE AND SATISFACTION

Customer Value is the difference between the values the customer gains from owning and using a product and the costsof obtaining the product.

e.g. For buying McDonald's food, customer will think about food content, effort etc and the values against the money,and compare McDonald's with BurgerKing and Subway and select the one that gives them the greatest delivered value.

Customer Satisfaction is the extent to which a product's perceived performance matches a buyer's expectations.Customer might be dissatisfied or satisfied.

If the product's performance falls short of expectations, the buyer is dissatisfied.If performance matches or exceeds expectations, the buyer is satisfied or delighted.

Smart companies aim to delight customers by promising only what they can deliver, then delivering more than theypromise.

e.g. A customer of McDonald's expects quality food within short period of time after placing their order. If they get theirfood in hand within their expected time then they become satisfied. Otherwise, dissatisfied.

MARKETING MIX

The marketing mix is abusiness tool used inmarketing and by marketersfor creating and deliveringcustomer value in the targetmarket.

It is often associated with fourelements ( four P’s) such asproduct, promotion, place(distribution) and pricingwhich constitute themarketing mix of the firm.

MARKETING MIX contd.

Product: Product means the goods-and-services combination the company offers to the target market. The marketercreates the product that will meet the identified needs of the consumer.

Price: Price is the amount the consumer must exchange to receive the offering . The marketers tackles the pricemechanism and consummates the marketing task by arriving at a price that is acceptable to the consumer .

Promotion: Promotion includes all of the activities marketers undertake to inform consumers about their products and toencourage potential customers to buy these products. Marketers communicate the benefits of the offer to the consumerby carrying out various promotional activities such as personal selling, advertising and sales promotion.

Place: Place includes company activities that make the product available to target consumers. Place is also known aschannel, distribution, or intermediary. It is the mechanism through which goods and/or services are moved from themanufacturer/ service provider to the user or consumer.

These are the elements with which the marketer accomplishes his value delivering task. It can also be seen that in each ofthese elements, there are several sub-elements. For example, packaging is one of the sub-elements of product andwarehousing is one of the sub-elements of distribution.

MARKETING MIX contd. Example: Marketing Mix of Samsung

Product: Samsung has a vast product portfolio and its presence is in several different product categories. Overall,Samsung is present in the following product categories.

1) Tablets2) Mobile phones – Smart phones, normal phones3) Televisions – LEDs, LCDs. Plasma TV, SMART TV, HDTV etc4) Cameras and Camcorders5) Refrigerators6) Air conditioners7) Washing machine8) Microwave ovens9) IT – Laptops, printers and accessories

The brand image driver for Samsung are the Samsung Smartphone’s such as the Samsung note series or the Samsunggalaxy series. The benefit of Samsung in terms of its product is that there is a trust on all Samsung products because of theway these product have performed in the last few years. Problems with the products has been negligible. And with itsSmart phones, Samsung has achieved a status symbol for its customers.

At the same time, Samsung is known for its service and people know that Samsung gives a very fast service for any of itsproduct. Thus in the marketing mix of Samsung, the product portfolio is one of the strongest point for Samsung.

MARKETING MIX contd. Example: Marketing Mix of Samsung contd.

Price : Because of its presence in different product categories, Samsung uses various pricing strategies. We can divide the pricing strategies and match it with the products that it is used for.

o Skimming price – Samsung’s smart phones are one of the best in the market and are the market leader in terms of the features and USP’s that they provide. Thus Samsung uses Skimming price for these products wherein it tries to get a high value in the start before competitors catch up. Once the model is old or any competitor has launched a similar product, Samsung immediately drops the price.

o Competitive pricing : For products other than smart phones, Samsung uses competitive pricing. Televisions, airconditioners, refrigerators and other products have competition in the form of Panasonic or LG. Samsung is known tobe a great brand but it is not greater than LG for home appliances. In fact LG beats Samsung where home appliancesare concerned. Similarly in Washing machines – Whirlpool, and in Cameras – Cannon, are the brands which are to bebeaten. Thus in various categories, Samsung keeps competitive pricing so as to beat the competitor. Samsung as abrand hardly uses penetrative pricing because it doesn’t enter late in the market. In fact, it is present in most consumerdurable segments in the market.

MARKETING MIX contd. Example: Marketing Mix of Samsung contd.

Place : Samsung is present through various channels in the market. It works on the channel marketing concept whereinthere are three segments. Sales and service dealers, Modern retail and Distributors.

The sales and service dealers handle key accounts for Samsung and are involved in corporate sales. These dealers may alsoopen exclusive Samsung showrooms.

The Modern retail segment includes large retailers like Croma, Hypercity, Vijay sales, Vivek’s and any others who are presentin the modern electronic retail chain. Samsung being such a branded product, the retailers are bound to keep Samsung as analternative for their customers.

As far distribution network in several cities is concerned, Samsung has a single distributor through whom they distributethroughout a territory. For example in Mumbai, Samsung has SSK distributors who are distributors for all Samsung products.This distributor has a huge investment in Samsung. Both the distributor and the company go hand in hand for the sale ofSamsung’s products. Thus all material of Samsung will be sold to a single distributor who in turn will sell it forward toretailers.

Promotions: Samsung uses multiple forms of promotions. Samsung as a company believes in pulling the customer tothemselves through advertising but at the same time uses strong tactics to push the product to the customer through salespromotions. On one hand, Samsung uses various marketing vehicles across the year covering festive season as well as non-festive time. On the other, it gives many offers and discounts to its trade partners to motivate them to sell Samsung abovecompetition.

MARKETING MIX STRATEGY

Marketing-mix decisions must be made for influencing the trade channels as well as the final consumers. The companyprepares an offering mix of products, services, and prices, and utilizes a communications mix to reach the trade channelsand the target customers.

The firm can changeits price andadvertisingexpenditures in theshort run. It candevelop newproducts and modifyits distributionchannels only in thelong run.

MARKETING MIX STRATEGY contd.

The four Ps represent the sellers' view of the marketing tools available for influencing buyers.

From a buyer's point of view, each marketing tool is designed to deliver a customer benefit. Robert Lauterborn suggested that the sellers' four Ps correspond to the customers' four Cs

Four PsProduct PricePromotion Place

Four CsCustomers Solution Customers Cost Convenience Communication

Winning companies will be those that can meet customer needs economically and conveniently and with effective

communication.

MARKETING MIX IN SERVICE MARKETING OR ONLINE BUSINESS

In service marketing, however, the four Ps are expanded to the seven P's to address the different nature of services.The 7 P’s of the marketing mix include People, Product, Price, Promotion, Place, Process, and Physical Evidence.

People : The employees that execute the service, chiefly concerning the manner and skill in which they do so.Process: The processes and systems within the organization that affect the execution of its service, such as job queuingor query handling.Physical evidence: The evidence which shows that a service was performed, such as the delivery packaging for the itemor delivery by a courier service. This reminds or reassures the consumer that the service took place, positively ornegatively.

Elements of Marketing Mix in Service Marketing 0r Online Business

COMPANY ORIENTATIONS TOWARD THE MARKETPLACE Or

APPROACHES TO MARKETING

The company orientation towards marketplace deals with the concepts which a company may apply while targeting amarket. There are basically five different orientations which a company takes towards the marketplace. Very often theseinterests conflict. The competing concepts under which organizations have conducted marketing activities include: theproduction concept, product concept, selling concept, marketing concept, and holistic marketing concept.

The Production Concept :The production concept is one of the oldest concepts in business. It holds that consumers willprefer products that are widely available and inexpensive. Managers of production-oriented businesses concentrate onachieving high production efficiency, low costs, and mass distribution. This orientation makes sense in developingcountries such as China where the largest PC manufacturer and domestic appliances giant Haier take advantage of thecountry's huge inexpensive labour pool to dominate the market. It is also used when a company wants to expand themarket.

The Product Concept :The product concept holds that consumers will favour those products that offer the most quality,performance, or innovative features. Managers in these organizations focus on making superior products and improvingthem over time. However, these managers are sometimes caught up in a love affair with their products. A new orimproved product will not necessarily be successful unless the product is priced, distributed, advertised, and soldproperly.

COMPANY ORIENTATIONS TOWARD THE MARKETPLACE contd.

The Selling Concept :A firm using a sales orientation focuses primarily on the selling and promotion of a particularproduct, and not determining new consumer desires as such. Consequently, this means simply selling an alreadyexisting product, and using promotion techniques to attain the highest sales possible. The selling concept holds thatconsumers and businesses, if left alone, will ordinarily not buy enough of the organization's products. The organizationmust, therefore, undertake an aggressive selling and promotion effort. The selling concept is practiced mostaggressively with unsought goods, goods that buyers normally do not think of buying, such as insurance,encyclopaedias. Most firms practice the selling concept when they have overcapacity. Their aim is to sell what theymake rather than make what the market wants. However, marketing based on hard selling carries high risks.

The Marketing Concept: The ‘marketing Concept ' is perhaps the most common orientation used in contemporarymarketing in which marketing plans centres around supplying products to suit new consumer tastes. The job is not tofind the right customers for the products, but the right products for the customers. The marketing concept holds thatthe key to achieving organizational goals consists of the company being more effective than competitors in creating,delivering, and communicating superior customer value to its chosen target markets. The marketing concept rest onfour (4) pillars:

o Target market which is the starting pointo Focus on customer needs and wants the focuso The means being integrated marketingo The ends being profitability through customer satisfaction

The Holistic Marketing:The holistic marketingconcept is based on thedevelopment, design, andimplementation ofmarketing programs,processes, and activitiesthat recognizes theirbreadth and inter-dependencies. Holisticmarketing recognizes that"everything matters" withmarketing— and that abroad, integratedperspective is oftennecessary. Fourcomponents of holisticmarketing are relationshipmarketing, integratedmarketing, internalmarketing, and socialresponsibility marketing.

COMPANY ORIENTATIONS TOWARD THE MARKETPLACE contd.

o Relationship Marketing: Relationship Marketing aims at building mutually satisfying and long term relationship with keyparties such as customers, supplies, distributors and other marketing partners in order to earn and retain theirbusiness. Since competition today is between marketing networks, and not companies, relationship marketing buildsstrong economic, technical, and social ties among the stakeholders. Relationship marketing focuses on customerretention and customer satisfaction rather than being focused solely on selling a product or service.

e.g. The American Airline maintains a comprehensive frequent flyer program that rewards customer loyalty with thepromise of free flights, upgrades, and discounts.

o Integrated Marketing: Under integrated marketing, the marketer's task is to devise marketing activities and assemblefully integrated marketing programs to create, communicate, and deliver value for consumers in an optimum manner.Businesses must integrate their systems for demand management, resource management and network management.One traditional depiction of marketing activities is in terms of the marketing mix i.e. the 4Ps. The seller’s 4Ps (product,price, place, promotion) correspond to the buyers 4Cs (customer solution, customer costs, convenience,communication).

COMPANY ORIENTATIONS TOWARD THE MARKETPLACE contd.

o Internal Marketing: With an internal marketing strategy, employees are treated as “internal customers” who must beconvinced of a company's vision and worth just as aggressively as “external customers.” It requires the task of hiring,training and motivating able employees who want to serve customers well. Any time a customer interacts with anemployee, it affects their overall satisfaction. Everyone from a sales clerk to an over-the-phone tech support specialisthelps to shape that customer's experience. Therefore, customer satisfaction is deeply dependent on the performance ofa company's staff.

For example, Apple has a unique organizational culture that emphasizes innovation, creativity, and expertise. In orderto promote this culture, they are highly selective when they recruit employees and extremely thorough when theytrain them.. The employees are experts in the products they sell and are willing to answer an endless number ofquestions. They are smart, accessible, and knowledgeable, accurately represent the the image of the company.

o Social Responsibility Marketing : Social responsibility marketing involves a focus on the long run interests of consumersand the society. This concept holds that the organization’s task is to determine the needs, wants and interests of targetmarkets and to deliver the desired satisfaction more than competitors are such that it serves or enhances theconsumer and the society’s well-being. This concept calls on marketers to build social and ethical considerations intotheir marketing practices.

COMPANY ORIENTATIONS TOWARD THE MARKETPLACE contd.

CHANGING TRENDS IN BUSINESS AND MARKETING

“The marketplace isn't what it used to be." It is radically different as a result of major, sometimes interlinking societalforces that have created new behaviours, new opportunities, and new challenges:

Changing technology : The digital revolution has created an Information Age. The Industrial Age was characterized by massproduction and mass consumption, stores stuffed with inventory, ads everywhere, and rampant discounting. TheInformation Age promises to lead to more accurate levels of production, more targeted communications, and morerelevant pricing. Moreover, much of today's business is carried on over electronic networks: intranet, extranets, and theInternet.

Globalization: Technological advances in transportation, shipping, and communication have made it easier for companiesto market in other countries and easier for consumers to buy products and services from marketers in other countries.

Deregulation: Many countries have deregulated industries to create greater competition and growth opportunities.Degradation and delicencing has enormous opportunities for private sector industrial economy in India. More and moreareas of industrial activities are thrown open to private enterprises. The companies can grow as much as it can in theenvironment of free-market economy.

Privatization: Many countries including stresses on private ownership and management instead of public sectorenterprises to increase their efficiency. The government is putting more thrust on private sector initiative in seeking rapideconomic growth. Number of areas of industrial reserved for public sector has been drastically reduced. Private ownershipin public sector companies has been allowed through disinvestment.

CHANGING TRENDS IN BUSINESS AND MARKETING contd.

Industry convergence: Industry boundaries are blurring at an incredible rate as companies are recognizing that newopportunities lie at the intersection of two or more industries. Companies like Samsung, LG that were dealing in consumerelectronics such as TVs and household appliances such as washing machines now markets smart phones. ITC, the largesttobacco company in India now bakes biscuits, sells beauty soaps and shampoo too. There has been convergence of thecomputing and consumer electronics industries as the giants of the computer world such as Dell, Hewlett-Packard releaseda stream of entertainment devices—from MPS players to plasma TVs and camcorders.

Customer empowerment: Customers increasingly expect higher quality and service and some customization. They are moreand more time-starved and want more convenience. They perceive fewer real product differences and show less brandloyalty. They can obtain extensive product information from the Internet and other sources, which permits them to shopmore intelligently. They are showing greater price sensitivity in their search for value.

Customization: The company is able to produce individually differentiated goods whether ordered in person, on thephone, or online. By going online, companies essentially enable consumers to design their own goods. The company alsohas the capacity to interact with each customer personally, to personalize messages, services, and the relationship.

CHANGING TRENDS IN BUSINESS AND MARKETING contd.

Heightened competition: Brand manufacturers are facing intense competition from domestic and foreign brands, which isresulting in rising promotion costs and shrinking profit margins. They are being further challenged by powerful retailerswho are putting out their own store brands in competition with national brands.

Retail transformation: Small retailers are succumbing to the growing power of giant retailers and "category killers." Store-based retailers are facing growing competition from catalogue house, direct-mail firms; newspaper, magazine, and TVdirect-to-customer ads; home shopping TV; and e-commerce on the Internet.

Disintermediation: The amazing success of early online dot-coms such as Amazon, Yahoo, eBay, Flipkart, and dozens ofothers who created disintermediation in the delivery of products and services, put tremendous pressure on manyestablished manufacturers and retailers. In response to disintermediation, many traditional companies are adding onlineservices to their existing offerings.

TRENDS & SHIFTS IN MARKETING MANAGEMENT 0r

TRANSFORMATION IN THE MIND-SET OF MARKETERS

A number of important trends and forces are evoking a new set of beliefs and practices on the part of business firms.Marketers are fundamentally rethinking their philosophies, concepts, and tools. There are 14 major shifts in marketingmanagement that smart companies have been making in the twenty-first century. Successful companies will be those whocan adequately respond to changes in their marketplace and marketspace.

From marketing does the marketing, to everyone does the marketing :Companies generally establish a marketingdepartment to be responsible for creating and delivering customer value. Companies now know that marketing is notdone only by marketing, sales, and customer support personnel; every employee has an impact on the customer andmust see the customer as the source of the company's prosperity. Consequently, companies are beginning to emphasizeinterdepartmental teamwork to manage key processes.

From organizing by product units, to organizing by customer segments :Some companies are now switching from beingsolely product-centered with product managers and product divisions to manage them to being more customer-segment-centered. In late 1999, Royal Bank of Canada reorganized itself around customer segments, not products orterritories. By studying these segments carefully, Royal Bank developed a number of new profit-generating products andservices. As a result, revenues increased by $1 billion over the next three years and the stock price rose 100 percent inthe midst of a stagnant bear market.

TRENDS & SHIFTS IN MARKETING MANAGEMENT contd.

From making everything, to buying more goods and services from outside: More companies are choosing to own brandsrather than physical assets. Companies are also increasingly subcontracting activities to outsourcing firms. Their maxim:Outsource those activities that others can do more cheaply and better, but retain core activities.

From using many suppliers, to working with fewer suppliers in a partnership: Companies are deepening partneringarrangements with key suppliers and distributors. Such companies have shifted from thinking of intermediaries ascustomers to treating them as partners in delivering value to final customers.

From relying on old market positions, to uncovering new ones: In highly competitive marketplaces, companies mustalways be moving forward with marketing programs, innovating products and services, and staying in touch withcustomer needs. Companies must always be seeking new advantages rather than just relying on their past strengths.

From emphasizing tangible assets, to emphasizing intangible assets :Companies are recognizing that much of theirmarket value comes from intangible assets, particularly their brands, customer base, employees, distributor andsupplier relations, and intellectual capital.

TRENDS & SHIFTS IN MARKETING MANAGEMENT contd.

From building brands through advertising, to building brands through performance and integrated communications:Marketers are moving from an overreliance on one communication tool such as advertising or sales force to blendingseveral tools to deliver a consistent brand image to customers at every brand contact.

From attracting customers through stores and salespeople, to making products available online :Consumers can accesspictures of products, read the features, shop among online vendors for the best prices and terms, and click to order andpay. Business-to-business purchasing is growing fast on the Internet. Personal selling can increasingly be conductedelectronically, with buyer and seller seeing each other on their computer screens in real time.

From focusing on the financial scorecard, to focusing on the marketing scorecard: Top management is going beyondsales revenue alone to examine the marketing scorecard to interpret what is happening to market share, customer lossrate, customer satisfaction, product quality, and other measures. They know that changes in marketing indicatorspredict changes in financial results.

From focusing on shareholders, to focusing on stakeholders: Top management respects the importance of creatingco-prosperity among all business partners and customers. These managers develop policies and strategies to balancethe returns to all the key stakeholders.