CORE UNIT 1

 HISTORY

& DEVELOPMENT MARKETING AND ITS CONCEPT WHY ORGANIZATIONS NEED IT ELEMENTS OF MARKETING MIX HOW MARKETING ACTIVITIES ARE MANAGED HOW IT LINKS TO THE ORGANIZATION

History of Marketing.
Exchange period Barter Money Production Sales Marketing

 Marketing

is the management process which identifies, anticipates and supplies customer requirements efficiently and profitably. Chartered institute of marketing concerned with meeting business objectives by providing customer satisfaction. the process of planning & executing the conception, pricing, promotion, & distribution of ideas, goods, & services to create exchanges that satisfy individual and organizational goals. American Marketing Association
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is

is

Marketing is the performance of business activities that direct the flow of goods and services from organization to their customers.
Marketing is the process of determining consumer demand for a product, motivating its sale and distributing it into ultimate consumption at a profit. The management of exchange relationship.

MARKETING ACTIVITIES

Identifying Marketing Anticipating Supplying

Customer Needs Mutually Beneficial Exchange Relationship Firms Objectives

Development of Marketing
PRODUCTION ORIENTED STAGE Until the end of 18th century firms were characterized by production orientation; a company which makes what it thinks the customer will buy. It may make good products but will not take the trouble to find out whether there is a market for them.

PRODUCTION STAGE RATIONAL To increase the production by producing more of the products In the beginning it is an expensive product and only few people can buy it With the increased production the cost could be lowered through economies of scale With lower prices it is accessible to more people We do not have to diversify the product

By the middle of 18th century emphasis shifted to a consciousness of the role of Sales Management. Companies were beginning to understand and note the power of the consumer. Confronted with more competition. Depression of 20s and 30s, which made it very difficult for companies to survive, hastened this change.

REASONS FOR SALES CONCEPT

The

product offered satisfies most of the needs the customers which the customer doesn't realize
There

is a resistance from the customer to purchase

Our

job is to implement different sales techniques to convince the them to buy

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In 60s at the time of rapid technological and economic progress, people had significant spare discretionary income which they could spend as they liked. Companies had to persuade people to spend their income on some products rather than others. Companies realize to get closer to their markets and to their customers.

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Attitude that business decisions should be based on What the customer/consumer wants? How to satisfy customers/consumers while still making profits. Customer is The King and (S)he should be given preference. (S)he is always right. In factory we make cosmetics. In store we sell hope Charles Revlon. If the products are not according to the customers need, the result will be the need for an expensive selling effort to persuade them.

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Reasons for Marketing stage All the planning and relevant activities should be customer oriented All the activities should be coordinated Product development should be based on research All the activities should be customer centric Customer should be kept happy by satisfying their needs

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Any company which focuses its attention on the needs of the customer. It can be ensured by Finding out what customers want? Fulfilling the perceived (future) needs. Monitoring progress towards satisfying customers. Improving customer satisfaction.

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CUSTOMER ORIENTED ORGANIZATION CYCLE

Custome r

Feedb ack

Feedba ck

Modifie Needs d Needs

Products and services

Improved products and services

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It is necessary because; It leads to developing the customers loyalty, which leads to long-term profits. Attracting new customers is an expensive enterprise. Satisfied customer recruits new customers. Good word-of-mouth has a very strong impact. Current customers would buy from the same place. Loyal customers does not pay attention to the competitors offer.
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All the departments and parts of an organization has to work in unison, because; Every single person there has to understand this philosophy and should practice it. Flaw in one organization leads to overall marketing activity. It is not only the duty of the Marketing Department to satisfy the customers, rather this is organization wide efforts.

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Marketing is never a one sided approach, it focuses on mutual beneficial exchange relationship. There is no need to always get out of the way to satisfy the customer who is very much demanding. Do business only when your organizational goals are also achieved. There is also restraints on organizations, namely 1. External Factors. Outside the organization. 2. Internal Factors. Inside the organization.
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Market oriented organization will have:

A

commitment to meeting the needs of customers more successfully than the competition A structure and processes of operation which are designed to achieve this aim. All the activities are coordinated and should revolve around meeting the customer needs.

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Advantages Products as per customers requirements Research and development keeps co. ahead Customer knowledge enables to offer effectively Long-term relationship Produce what you sell rather to sell what you produce

Disadvantages Extensive mkt. research needed into customer needs Expensive and time consuming Too narrow on focus Irrational consumer behavior- no amount of research will alter the fickle nature of the average customer
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Advantages Products manufactured are less expensive and timely Suits small and medium sized business units that are not particularly well financed

Disadvantages Sell what you produce rather produce what you sell- no innovation Needs extensive sales promotion efforts to sell product No opportunity for long term profitability Little emphasis on customer satisfaction

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A company in order to succeed has to setup the department of marketing research, because, it needs; An understanding of the market, based on research and not on unsupported hunches. A spirit of innovation: the company must be willing to change as customers requirements change. Skilled direction and administration of its marketing activities

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The study of the relationship between the personality of the consumer and the personality of the product. It looks at the consumers motives, which may be unconscious but which still affect his or her choice of products. Techniques such as in-depth interviews and word association tests can be used to find out how consumers are really thinking.

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1.

The distribution system. Involve lorries, wholesalers, retailers and mail order etc. it may have the following features.

It may be long or short. May be owned by the producer, or could be independent. The customer at the end may be final consumer, or they may produce other goods.

2.

The information system. A company cannot be market-oriented unless it gets information about its customers. It is inside-out and outside-in.

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3.

The flow of influence. A business may be influenced by;

Political and legal factors. Economic influences. Social influences Technological influences.

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Goods-and-service combination that a company offers a target market

Product

Amount of money that consumers have to pay to Obtain the product

Price

Target Customers Intended Positioning

Activities that persuade target customers to buy the product

Company activities that make the product available

Promotion

Place
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