MEANING AND CORE CONCEPT OF MARKETING.

AIM OF MARKETING IS TO BUILD AND MANAGE PROFITABLE

CUSTOMER RELATIONSHIP.

What is marketing?

Marketing is the delivery of customer satisfaction at a
profit.

Two fold goal of marketing is
to attract new customer by promising superior value
and
to keep and grow current customers by delivering
satisfaction.

Marketing is all around you and us.
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Marketing defined

Marketing is more than just selling and advertising, it
is a process of satisfying customer needs.

Marketing is a social and managerial process whereby
individuals and groups obtain what they need and
want through creating and exchanging products and
value with others.

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Continue.
Human activity directed at satisfying needs and wants
through exchange processes - Philip Kotler
Marketing is the performance of business activities that
direct the flow of goods and services from producer to
consumer or user
Marketing is the process of planning and executing the
conception , pricing , promotion ,and distribution of ideas ,
goods , and services to create exchanges that satisfy
individual and organizational objectives . - The American
Marketing Association.

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Needs, wants, and demands


Need - Human needs are states of felt deprivation. Eg real needs, hidden
needs , psychological needs , social needs etc.

Want - Wants are the form taken by a human need as shaped by culture
and individual personality, different persons may have different wants
to satisfy the same need eg , a person needs water to satisfy his thirst,
some demands cold drinks, some demands ice-creams etc.

Demand - Human wants that are backed by buying power.

The management of good companies always remain close to customers
through various ways.

Understanding customer needs, wants, and demands in detail provides
important input for designing marketing strategies.

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Marketing offers Products, Services and Experiences
People satisfy their needs and wants with products and services.

Product Anything that can be offered to a market for attention, acquisition,
use or consumption that might satisfy a want or need. It includes physical
objects, services, persons, places, organization and ideas.

Service Any activity or benefit that one party can offer to another that is
essentially intangible and does not result in the ownership of anything.

Offerings set of benefits proposed by the marketer to the customers to buy
or consume ,may includes products , services ,information and experiences .

The term product includes more than just the physical properties of goods and
services, it also includes the meaning of brands to the customer and
experiences associated with it.
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Value, Satisfaction and Quality
Customer value - Customer value is the difference between the values the
customer gains from owning and using a product and the costs of
obtaining the product.

Customer satisfaction The extent to which a products perceived
performance in delivering value matches a buyers expectations.

Performance < Expectation = Dissatisfaction
Performance = Expectation = Satisfaction
Performance > Expectation = Delight.

Quality
Narrow sense Freedom from defect
In broader sense Quality is the characteristics of a product or service
that bear on its ability to satisfy stated or implied customer needs.

Total Quality Management (TQM) is an approach in which all the companys people
are involved constantly improving the quality of products, services and business
processes.
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Exchange, Transaction, and Relationship
Exchange The act of obtaining a desired object from
someone by offering something in return.

Transaction A trade between two parties that
involves at least two things of value, agreed-upon
conditions, a time of agreement, and a place of
agreement.

Barter and Monetary transaction.
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Relationship marketing The process of creating
maintaining, and enhancing strong, value-laden
relationships with customers and other stakeholders.

Marketers need to build long-term relationships
with valued customers, distributors, dealers, and
suppliers. In fact a company wants to build a
unique company assets called a marketing
network.

marketing network consists of the company and all its supporting
stakeholders: customers, employees, suppliers, distributors, retailers,
ad agencies and others with whom it has built mutually profitable
business relationships.
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Markets

The set of all actual and potential buyers of a product
or service.

Originally the place where buyers and sellers
gathered to exchange goods or services.
Economists collection of buyers & sellers who
transact in a particular product class.
Marketers - the sellers as constituting an industry
and the buyers as constituting a markets.

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SEGMENTATION , TARGET MARKETS AND
POSITIONING
SEGMENTATION : process of dividing a large heterogeneous market
into the smaller and specialized market segments , whose response
differ from one another .
TARGET MARKETS : those groups of people whom the firm wants to
serve or wants to design product or services to meet their needs and
wants .
POSITIONING : an act of creating demand or image in the customers
mind for the product offered for sale .

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MARKETING CHANNELS
Communication channels : routes or medias that
deliver or convey desired messages from marketer to
customer.
Distribution channels : routes or marketing
intermediaries used for distributing manufactured
products from producer to final customers.
SUPPLY CHAIN : longer channels stretching from raw
materials to components to final products that are
carried to final users.
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Marketing
Marketing means managing markets to bring about
exchanges and relationships for the purpose of
creating value and satisfying needs and wants.
Marketing as a process by which individuals and
groups obtain what they need and want by creating
and exchanging products and value with others.

Marketing involves serving a market of end users in the face of
competitors.
The company and the competitors send their respective
products and messages to consumer through directly or through
marketing intermediaries to end users.
All the players in this system are affected by major
environmental forces (demographic, economic, physical,
technological, political, legal, social, cultural).
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MARKETING MANAGEMENT CONCEPT

Marketing Management is the analysis, planning, implementation, and
control of programs designed to create, build, and maintain beneficial
exchanges with target buyers for the purpose of achieving organizational
objectives.

Philip Kotler defines marketing management as the process of planning,
implementing and controlling marketing activities or practices to achieve
the desired organizational goal

Marketing management involves managing demand and customer
relationships.

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HISTORICAL DEVELOPMENT OF MARKETING
THE STAGE OF SELF SUFFICIENCY : people used to work to satisfy their needs
THE STAGE OF PRIMITIVE COMMUNISM : traditional division of labor appeared among families
eg some families were supposed to do farming, some hunting etc.
THE STAGE OF SIMPLE BARTER : techniques were developed to satisfy the diverse requirement
through exchange of goods among families
THE STAGE OF LOCAL MARKETS : temporary local markets and eventually small permanent
shops were built
THE STAGE OF MONEY MARKET : it helped in developing division of labor , product
specialization and marketing activities in a systematic way .
THE STAGE OF EARLY CAPATALISM : two classes of people appeared at this stage , Capitalist
class and Labor class . Capitalist used to invest money in the business for production of goods and
employ labor classes, the marketing started developing .
THE STAGE OF MASS PRODUCTION : during the period of industrial revolution in Europe [1770
1820 A.D.] , it changed social and economic life of people and helped innovate the modern
concept of marketing.
THE STAGE OF INTERNATIONALISM : after the world war II , a three tired change took place in
the world : a) countries divided into two ideological blocks , capitalists and communists ,as such
trade barriers increased in the world , b) huge programs of assistance appeared to rebuild the war
ravaged world and create new markets , and
A ray of international cooperation appeared in the world history of commerce . As a result several
international organizations like GATT , IMF ,WORLD BANK and UNCTAD established to
facilitate the mechanics of trade and economic shape of the world .
THE STAGE OF GLOBALIZATION : it covers trade in goods and services , IPR and investments.
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DEMAND MANAGEMENT
A situation may exist at any point of time when there
is no demand, adequate demand, irregular demand,
or too much demand and marketing management
should address these entire situations and achieve
organizational objective.

Marketing Mgmt. is not all about creating more
demand but to manage demand.

De marketing: Marketing to reduce demand
temporarily or permanently The aim is not to
destroy demand but only to reduce or shift it , eg
bajaj shifts its customer from scooter to bikes.
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BUILDING PROFITABLE CUSTOMER
RELATIONSHIP
Managing Demand means managing customer.
Customers New and Repeat.

Traditional approach is to attract more new
customer but it is shifted more to retain existing
customer and build lasting customer relationship.

Attracting new customer is more costly than to keep
current customer satisfied. Losing current customer
means losing not only sales but the value of
purchases and referrals.
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MARKETING MANAGEMENT CYCLE
Marketing management functions are analysis, planning,
Implementation, and control.
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PLANNING
Develop strategic
Plans


Develop marketing
plans
IMPLEMENTATION

Carrye Plans



CONTROL
Measure results

Evaluate results

Take corrective
actions
Marketing Analysis
Complete analysis of companys situation, its market and
marketing environment to find out opportunities and avoid
environmental threats.
It must also analyze companys strengths and weaknesses.

Marketing Planning
Marketing planning involves deciding on marketing
strategies in support to attain overall strategic objective of the
organization.

Marketing strategy
The marketing logic by which the business unit hopes to
achieve its marketing objective. It consists of target markets,
positioning, the marketing mix and marketing expenditure
levels.
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Marketing Implementation
Marketing implementation is the process that turns
marketing strategies and plans into marketing
actions in order to accomplish strategic marketing
objectives.

Planning good strategies is just the beginning but
success comes only after proper and effective
implementation of strategies.

Planning addresses: What & Why
Implementation addresses: Who, Where, When and How.

Doing the right things (Strategy): Doing things right (Implementation)
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Marketing Control
Marketing control is the process of measuring and evaluating
the results of marketing strategies and plans, and taking
corrective action to ensure that objectives are achieved.
Set goals Measure Evaluate Take Corrective
Performance Performance Action
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What do we
want to
achieve?
What do we
want to
achieve?
What do we
want to
achieve?
What do we
want to
achieve?
Operating Control: Checking ongoing performance against the
plan.
Strategic Control: Checks the basic strategies are well matched
to its opportunities.
Marketing Management Philosophies
Production Concept
Product Concept
Selling Concept
Marketing Concept
Societal Marketing Concept
Holistic Marketing Concept

The production concept: The philosophy that consumers will favor
products that are available and highly affordable and that management
should therefore focus on improving production and distribution
efficiency.

One of the oldest philosophies.

Useful in situations:
- When demand exceeds the supply
- When cost of product is too high and improved productivity is needed to bring it down.
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The Product Concept: The idea that consumers will favor
products that offer the most quality, performance and features and
that the organization should therefore devote its energy to making
continuous product improvements.

This concept does not focus on the solution for consumer needs
and wants and alternative products may take over the market.
So production and product concept are considered as marketing
myopia

The Selling Concept: The idea that consumers will not buy
enough of the organizations products unless the organization
undertakes a large-scale selling and promotion effort.

This concept is practices by most firms when they have
overcapacity.
Sell what they make rather than what the market wants.
Having less focus on building long-term, profitable relationship
with customer.

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The Marketing Concept: The marketing management philosophy that holds that
achieving organizational goal depends on determining the needs and wants of target
markets and delivering the desired satisfactions more effectively and efficiently that
competitors do.
Starting point Focus Means Ends
Factory Existing Selling & Profits through
Products Promoting sales volume
The Selling concept

Market Customer Integrated Profits through
needs marketing Customer satisfaction
The Marketing concept

The marketing concept starts with a well-defined market, focuses on customer needs, co-
ordinates all the marketing activities affecting customers and makes profits by creating long
term customer relationships based on customer value and satisfaction.
The marketing concept rests on four pillars: target market, customer needs,
integrated marketing and profitability.
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What is a customer?
- A customer is the most important person ever in this organization.
- A customer is not dependent on us, we are dependent on him.
- A customer is not an interruption of our work, he is the purpose of it.
- We are not doing a favor by serving him, he is doing us a favor by giving us the
opportunity to do so.
- A customer is not someone to argue or match wits with nobody ever won an
argument with a customer.
- A customer is a person who brings us his wants it is our jobs to handle them
profitably to him and to ourselves.


Many companies claims to practice marketing concepts but do not.

The activities to be finely tuned to changing customers need and
competitors strategies.

Customer driven marketing Understanding customer needs even
better than customer themselves do, and creating products and services
that will meet existing and latent needs now and in the future.
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The Societal Marketing Concept: The idea that the organization
should determine the needs, wants, and interests of target markets and
deliver the desired satisfaction more effectively and efficiently than do
competitors in a way that maintains or improves the consumers and
societys well-being.

According to the societal marketing concept, the pure marketing
concepts overlooks possible conflicts between consumers short-run wants
and consumers long-run welfare. Societal marketing concept calls on
marketers to balance in companys profit, consumer wants and societys
interests.
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Consumers
(Want satisfaction)
Societal Marketing
Concept
Society
(human welfare)
Company
(Profits)
Holistic Marketing Concept
It advocates Everything matters in marketing
The holistic marketing concept looks at marketing as a complex activity
and acknowledges that everything matters in marketing - and that a
broad and integrated perspective is necessary in developing, designing
and implementing marketing programs and activities. The four
components that characterize holistic marketing are relationship
marketing, internal marketing, integrated marketing, and socially
responsive marketing.
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Marketing Challenges in the new millennium
Due to technological advances, rapid globalization, and
continuing social and economic shifts all are causing
profound changes in the market place.

Connectedness: explosive advances in connecting technologies have
created exciting new ways to learn about customers and to create tailored
products, distribute them more effectively, and communicate with
customers in large group or one to one.

Technology for connecting
- Computer
- Information
- Communication
- Transportation
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The internet : A vast public web of computer networks that connects
users of all types all around the world to each other and to an amazingly
large information repository. The internet makes up to one big
information highway that can dispatch bits at incredible speeds from
one location to another.

Connection with Customers: Companies are selecting their customers more
carefully and building more lasting and direct relationships with these carefully
targeted customers. (Concept of direct marketing is gaining more popularity).

Connection with Marketing partners:
Connecting inside the company in todays market, all functional area of a
company interacts with customers not only marketing/sales/customer support
people.
Connecting with outside partners
- Supply chain management (from supplier to company to distribution channel are
interlinked)
- Strategic Alliance (partnership with similar/related product for marketing)
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Connection with the world around us:
The companies are more concerned for
social and environmental responsibility.

- Global connection: Marketers are connected
globally with their customers and marketing
partners.

- Connection with our values and social
responsibilities: A worldwide consumerism
and environmentalism movements has raised
greater responsibility to the marketers for any
action they take.

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The new connected world of marketing
The old marketing thinking
- It viewed marketing as customer acquisition rather than customer
care.
- Trying to make profit on each sale rather than trying to profit by
customer lifetime value.
- Trying to sell product rather than to understand, create,
communicate and deliver real value to the customer.
The new marketing thinking
- Improving customer knowledge and customer connections.
- Targeting profitable customer then finding innovative ways to
capture and keep them.
- Forming direct connections with customer and building lasting
relationships.
- Using more effective ways of communication through targeted
media and delivering meaningful and consistent messages.
- Employing more technologies, such as video conferencing,
internets, intranets etc.
- Delivering superior value to their customers.
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