MARKETING MANAGEMENT Understanding marketing

Marketing is the process of finding customer needs and serving those needs profitably Profit is an outcome of serving customer needs well The essence of marketing lies in providing desired value to customers Successful companies rely on their satisfied customers to return to repurchase and recommend the companys offerings to others The goal of marketing is attracting and retaining customers through longterm satisfaction of their needs Marketing oriented companies build relationships with their existing customers by providing satisfaction Marketing should be considered a central business function as it establishes, develops, and commercializes long term customer relationships so the objectives of both parties are met Customers are the most powerful stakeholders of any company; customer interests must be supreme and should be protected in every decision that a company takes

Marketing vs Selling
1) Selling refers to the act of transferring the ownership of the goods and services from the seller to buyer; Where as marketing refers to the whole process about the entire range of activities starting from identifying the customers requirements to satisfying these in mutually beneficial manner ( to both seller and manufacturer, and the consumer) 2) Selling focuses on the needs of seller; Where as the marketing focuses on the needs of the buyer 3) Selling is product oriented; Where as marketing is consumer-oriented 4) Selling is preoccupied with the sellers need to convert the products into cash; Marketing is preoccupied with the idea of satisfying the customer needs by means of the product by means product

Gandi.Ramu Goud, Dept of MBA,SITS,KMM

Definitions
Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to its customers and for managing customer relationships in ways that benefit the organization and its stakeholders - The American Marketing Association Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering freely exchanging products and services of value with others -Philip Kotler The aim of marketing is to know and understand the customers requirements so well that the products or services, designed accordingly, are sold by themselves. Ideally, marketing should prepare a customer to buy - Peter F Drucker

What is marketed?
Goods- cars, trucks, TV's, Machines, Cosmetics etc Services- airlines, hotels, car travels, barbers, beauticians, doctors, software programmers etc Events- time based events Olympics, Soccer world cup, Major trade shows, Company anniversaries etc Experiences- Experiential marketing amusement park or water parks Persons- Celebrity marketing Places tourism Properties- are the intangible rights of ownership of either real property (real estate) or financial property (stocks and bonds) Organizations- work to build a strong, favorable, and unique image in the minds of target public Information- is essentially what books, schools and universities produce and market, and distribute at a price to parents, students and communities Ideas- every market offering includes a basic idea

Gandi.Ramu Goud, Dept of MBA,SITS,KMM

Aim of Marketing
The aim of Marketing is to have the right product or service at the right price at the right place at the right time

Company Orientations Towards the Marketplace Production concept

Production orientation dominated business thought from the beginning of Capitalism the mid1950s Business concerned itself primarily with production, manufacturing, and efficiency issues This view point was summarize in Says Law which states Supply creates its own demand If a product is made, somebody will want to buy it The basic proposition is that customers will choose products and services that are widely available and are of low cost So business is mainly concerned with making as many units as possible By concentrating on producing maximum volumes, such a business aims to maximize profitability by utilize economies of scale In a production-orientated business, the needs of customers are secondary compared with the need to increase output It is natural that the companies cannot deliver quality products and suffer from problems arising out of impersonal behavior with the customers

The Product Concept

The Product Concept has the proposition that consumers will favor those products that offer the most attributes like quality, performance and other innovative features The managers focus on developing superior products and improving the existing product lines over a period of time

Gandi.Ramu Goud, Dept of MBA,SITS,KMM

 Continuous attempts are made to improve the product and its quality, as it is believed that customers would always prefer to buy the product that is superior This concept can lead to Marketing Myopia , a term coined in 1960 by Theodore Levitt Myopia means shortsightedness The company is so focused on improving the product that it loses sight of the fact that the product is merely a way of fulfilling customer needs In other words, the customer does not buy a product, he buys an offering that fulfills his needs Marketing myopia is dangerous, because it does not allow the company to explore other more effective and efficient ways of serving the customer need that its product is serving

Selling concept
The Selling Concept proposes that customers, be individual or organizations will not buy enough of the organizations products unless they are persuaded to do so through selling effort So organizations should undertake selling and promotion of their products for marketing success This approach is applicable in the cases of unsought goods like life insurance and encyclopedias Most firms practice the selling concept when they have over overcapacity Their aim is to sell what they make, rather than make what the market wants However, marketing based on hard selling carries high risks It assumes that customers who are persuade into buying a product will like it, and that if they dont, they not only wont return or bad mouth it or complain to consumer organizations

Marketing orientation concept

The marketing concept emerged in the mid-1950s Instead of a product-centered, make-and-sell philosophy, business shifted to a customer-centered, sense- and-respond philosophy

Gandi.Ramu Goud, Dept of MBA,SITS,KMM

 The job is not to find the right customers for your products, but to find the right products for your customers The Marketing Concept proposes that the reason for success lies in the companys ability to create, deliver and communicate a better value proposition through its marketing offer in comparison to the competitors for its chosen target market In order to determine customer wants, the company usually needs to conduct marketing research The marketer expects that this process, if done correctly, will provide the company with a sustainable competitive advantage

Marketing concept
Marketing starts with identifying customer needs and wants and ends with satisfying them through a coordinated set of activities that also allows a firm to achieve its own goals The marketing concept hold all the activities of a firm It aims at matching the companys offering with customer needs, to achieve the desired level of customer satisfaction and generate profits for the company The marketing concept is based on the belief that The companys planning and operations are customer oriented The goals of the company should be profitable sales volume and not just volume All marketing activities should be coordinated effectively Important features of the marketing concept Customer orientation Long-term profitability Functional integration The selling marketing,concepts differented Traditional Organization Chart Customer-Oriented Organization Chart Marketings role in the organization

Gandi.Ramu Goud, Dept of MBA,SITS,KMM

Green Marketing
A free society needs both- high standard of individual wealth and clean environment The business enterprises have to develop the capability of providing the elements of an improved quality of life The demand for environmental improvement offers opportunities to nearly all types of companies to participate in this huge market The first opportunity comes from the fact that the companies will not be allowed to pollute the environment Companies have to identify processes whose outputs are being released in in the environment and hence polluting it When companies use new technologies to carry out their emissionproducing processes, they find that the effectiveness and efficiency of the process is improved in addition to reduction of emissions from them The idea is that processes which cause polluting emissions are essentially ineffective and inefficient processes, and better processes should be designed using new technologies Companies have to believe that investing in technologies that help them to reduce emissions make business sense The second opportunity will come to those companies which will develop the technologies that will enable companies to carry out their processes in environment- friendly ways These companies will have to invest heavily in research and development, but they can be assured of a huge success when they come up with technologies that reduce or eliminate polluting emissions from processes Consumers have to play an important role, if companies have to be made responsible for protection of the environment They should stop buying products of companies which are polluting the environment And more importantly, they should be willing to pay an extra amount if a company is earning extra cost in making the product with environment friendly processes

Gandi.Ramu Goud, Dept of MBA,SITS,KMM

 Efficiency vs Effectiveness
An efficient company- produces its products and services economically But the products and services produced by the company have to be desired by customers A company can be extremely efficient and yet be remarkably unsuccessful because it is not producing what customers want to buy An effective company- serves the needs of the customers To be effective, a company must know the requirements of its customers After learning the requirements of its customers, it it proceeds to serve them It does not mind incurring extra expenses in serving customer needs The company has to find the right balance in its emphasis A company has to be effective in serving customers requirements otherwise there would be no buyers for its products or services So, before a company focuses on cost, it should check whether its offering meets customer needs, then only a company think of focusing on costs If a company has ever to make a choice between becoming effective or efficient; it should always strive to become effective Choosing to become effective reflects the marketing orientation of the company

Limitations of the marketing concept

1) Marketing as an ideology Critics recognize the importance of customer orientation but ask why after decades of trying has the concept has not been fully implemented They argue that there are other valid considerations that companies must take into account when making decisions ( for instance, economies of scale) a part from giving customers exactly what they want There has to be a compromise between the satisfaction of customers and achievement of other company requirements 2.Marketing and society

Gandi.Ramu Goud, Dept of MBA,SITS,KMM

 The marketing concept focuses on individual market transactions, since individuals heavily weigh their personal benefits while discounting the societal impact on their purchases Adoption of marketing concept will result in production of goods which do not adequately correspond to societal welfare Providing customer satisfaction may simply be a means to achieving a companys profit objectives and does not guarantee protection of customer welfare Marketing orientation does not guarantee welfare of the customer but it does ensure profits for the firm 3.Marketing as a constraint to innovation Marketing research discourages major innovations Relying on customers to guide development of new products has several limitations This is because the customers have difficulty clear needs beyond their experiences This suggests that the ideas gained from marketing research will be modest compared to these coming from the scientific discoveries of R&D laboratories Particularly for discontinuous innovations, the role of the product development should to be far more positive Technological innovation is the process that realizes market demands which were previously unknown Effective utilization and exploitation of technology in developing new products is at least as important as market need analysis But the criticism is not actually directed towards the marketing concept itself but towards an overdependence an customer as a source of new product ideas Companies must not rely solely on the customer for new product ideas New product development should interface between perceived customer needs and technological research Successful innovations are mostly based on good understanding of user needs and technologies available to meet those needs

Gandi.Ramu Goud, Dept of MBA,SITS,KMM

Marketing orientation and Business performance

Marketing is based upon three measures: Customer orientation, Competitor orientation and the degree of inter-functional coordination Business with the highest marketing orientation have the highest profitability and those with the lowest marketing orientation have the second highest profitability

THE MARKETING MIX

A market is a group of existing and potential buyers or users of a product or service A vital element in every marketing strategy is marketing mix Marketing mix means the set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the target market Marketing Mix Product The first "P" of the marketing mix deals with the product PRODUCT - what is it that you are going to sell Product Mix - range of PRODUCTS or SERVICES offered for sale Product Features- color, packaging, quality, brand name Product Support - maintenance, after-sales Service, pre-sale like advice and Quotations Price The second "P" of the marketing mix is price There are several options to consider regarding price: Pricing - not just how much you charge for a product but how the price fits your target market and the image you wish to develop Pricing Methods you choose depends on: competition in the market and your marketing strategies

Gandi.Ramu Goud, Dept of MBA,SITS,KMM

 demand for your product controlled pricing your costs perceived value Place The 3rd "P" of the marketing mix deals with product placement--the width of distribution Distribution - how your products or services reach your customers Distribution Methods Customers come to you You take the product/service direct to the customer You use an agent merchant franchise etc. to reach your customer LOCATION - the place of the business "locate your business where the market is" Factors in Selecting an area: Customer accessibility Adequacy of transport/communication facilities Supply of skilled labor Population Trends Promotion Our promotions are designed to create demand

PR, Online Marketing, Advertising, Direct Marketing and Event Marketing ADVERTISING and PROMOTION - are aimed at Making potential customers aware of the existence of your business, your product and services and to encourage them to buy from you

Gandi.Ramu Goud, Dept of MBA,SITS,KMM

 Different Methods of promoting your product or service Public Relations - establishing a favorable image Publicity - feeding media of information that is Of public interest (free advertisement) Sales Promotions Merchandising - point-of-sale display

Gathering information and scanning the environment

Successful companies recognize and respond profitably to unmet needs, for this information is to be gathered by scanning the macro environment Macro environmental forces do not affect the operations of a company and its relationship with its customers and suppliers, directly and immediately, however, they affect the company in the long run Demographic environment Demography comprises of the characteristics of human population such as size, growth, distribution, gender, and marital status Marketers are keenly interested in studying the demography; education levels, and standard of living of different cities, regions and nations Consumer groups: infants, children, young adults, adults, senior citizens, women, singles, occupation and literacy Political environment Government policies shape the economic conditions and trade relationships and are influenced by the political environment Government policies influence the marketing decisions and strategies of a firm Organizations should closely monitor the political environment of the countries in which they operate or are planning to operate The political stability of a country affects the level of investment in it Economic environment

Gandi.Ramu Goud, Dept of MBA,SITS,KMM

 The economic performance of a country is measured by its gross domestic product (GDP) Companies that seem to be doing well can suddenly vanish overnight due to economic recession, especially these companies which produce nonessential goods and services Fluctuations in an economy generally follow a pattern of growth, recession, depression and recovery (Business cycle) Socio-cultural environment Socio-cultural forces refer to the attitudes, beliefs, norms, values and lifestyles of individuals in a society Technological environment Advancement in technology has a direct impact on economic growth, and businesses that ignore or do not keep pace with technological advancement often fail to survive in the market Therefore it is important for marketers to know the type of technology used, level of technological development, type of R&D used by the company and its competitors, speed with which technology is adapted and disposed Natural environment Resources, weather, pollution etc Legal environment The laws and regulations of a country have a major impact on the way a company conducts its business

Gandi.Ramu Goud, Dept of MBA,SITS,KMM