unit imarketing
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Marketing is the delivery of customer satisfaction
at a profit.
Marketing is a social and managerial process by
which individuals and groups obtain what they
need and want through creating and exchanging
products and value with others
Many people think of marketing only as selling
and advertising.
Selling and advertising are only the tip of the
marketing ice-berg.
Marketing is one of three key core functions that
are central to all organizations.
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Marketers act as the customersvoice withinthe firm and marketers are responsible formany more decisions than just advertisingor sales:
Analyse industries to identify emergingtrends.
Determine which national and internationalmarkets to enter or exit.
Conduct research to understand consumerbehavior.
Design integrated marketing mixesproducts, prices, channels of distribution,and promotion programs.
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To explain marketing definition, we examine the
following important terms :
Needs, wants, and demands
Products and services Value, satisfaction and quality
Exchange, transactions, and relationships
Markets
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To attract new customer by promising
superior value, and to keep current
customers by delivering satisfaction
Marketing, more than any other businessfunction, deals with customers.
Creating customer value and satisfaction are at
the very heart of modern marketing thinking and
practice.
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Product:Anything that can be offered to a market to satisfy
a need or want.
The concept of product is not limited to physicalobjects anything capable of satisfying a needcan be called a product.
Services: In addition to tangible goods, products also
include services, which are activities or benefitsoffered for sale that are essentially intangible anddo not result in the ownership of anything.
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Suppliers
Competitors
Company
(marketer)
Marketing
intermediaries End user market
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Micro environment Macro environment
Controllable Partially Uncontrollable
Co OrganizationSuppliers Demographic
Management Customers Economic
Resources Dealers Ecological
M Mix Competitors Technological
Community Political( Social groups)Sociological
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The forces that directly and indirectly influence an
organizations capability to undertake its business.
The trading forces operating in a market place
over which a business has no direct control ,but
which shape the manner in which the business
function and is able to satisfy its customers.
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Internal environment: Forces and actions insidethe firm that affect the marketing operationcomposed of internal stake holders and the otherfunctional areas within the business organization.
External environment Macro environment
Micro environment
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MICRO ENVIRONMENT
The factors in the immediate environment .
MACRO ENVIRONMENT
Broad forces which shape the character of
opportunities and threats.
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WHY IS IT IMPORTANT?
An understanding of macro and micro marketing
environment forces is essential for planning.
Helps a business to compete more effectively against
its rivals.
Assists in the identification of opportunities and
threats.
Enables an organization to take advantage of
emerging strategic opportunities.
http://www.marketingteacher.com/Lessons/lesson_fivefoces.htm -
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http://www.marketingteacher.com/Lessons/lesson_fivefoces.htmhttp://www.marketingteacher.com/Lessons/lesson_fivefoces.htmhttp://www.marketingteacher.com/Lessons/lesson_fivefoces.htm -
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THE INTERNAL ENVIRONMENT
All factors that are internal to the organization are knownas the 'internal environment'. They are generally audited
by applying the 'Five Ms' which are Men, Money,
Machinery, Materials and Markets. The internal
environment is as important for managing change as theexternal. As marketers we call the process of managing
internal change 'internal marketing.
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THE INTERNAL ENVIRONMENT
It includes the following:
The human resource department.
The operations department.
The accounting and finance department.The research and development department.
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INTERNAL PROCESSES AND
PROCEDURES
Allocation of responsibilities within the organization.Resources availability .
The extent to which the major functional areas work
together supporting the marketing function to be
customer oriented .The culture of organization.
The attitude of internal stakeholders.
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The forces close to the company that affects itsability to serve.
It comprises all those organizations andindividuals who directly affect the activities of acompany.
All factors which impact directly on a firm and
its activities in relation to a particular market.
1. Suppliers2. The market channel
3. Customers.4. Competitors5. Public
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Suppliers are either individuals or business houses.
.They provide resources needed by the company .
.The developments in the suppliers environment havea substantial impact on the marketing operations of thecompany .
.Companies can lower their supply costs and increase
product quality to gain competitive advantage in themarket.
.supply shortages have to be fully monitored and plansshould be made to avoid it.
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They are either business houses or
individuals .
They help the company in promoting, selling
and distributing the goods to customers.They are middlemen, distributing agencies,
market service agencies and financial
institutions.
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The target market of the company is usually offive types:
1.Consumer market i.e. individual and householders
2.Industrial market i.e. organizations buying for
producing other and services.3.Reseller market i.e. organizations buying goodsand services with a view to sell them to others.
4.Government and other non profitmarkets.i.e.those buying goods and services in
order to produce public services.5.International market i.e. individuals andorganizations of nations other then home landwho buy for either consumption or industrial use.
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No company stands alone in serving andsatisfying the needs of a customer market. Itfaces competition.
This helps the company in facing a host of
competitors with confidence . The company in order to come out successfully
has to adopt means which may help it tooutmaneuver.
The competitive environment consists of certainbasic things which every marketing manager hasto take note of.
Philip Kotler the best way for a company tograsp the full range of its competition is to take
view point of a buyer.
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Public is defined as any group that has anactual or potential interest in or impact ona companys ability to achieve itsobjective.
The actions of the company do affect theinterest of other groups i.e., those whoform general public for the company whomust be satisfied along with theconsumers of the company.
According to Kotler companies must puttheir primary energy into effectivelymanaging their relationships with theircustomers.
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Macro environment refers to
those factors which are external
to companys activities and donot concern the immediate
environment.
It comprises general forces that affect all
business activities in market .
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1. POLITICAL FORCES
2. ECONOMIC FORCES
3. SOCIAL AND CULTURALFORCES
4. NATURAL FORCES
5. TECHNOLOGICAL FORCES
6. DEMOGRAPHIC FORCES
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Includes laws, government agencies andpressure groups that influence or limit variousorganizations and individuals in a givensociety.
Increasing legislation.
Changing government agency enforcement.
More emphasis on ethics and socially responsible
actions.
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The economic environment consists of factors that affectconsumers purchasing and spending power.
Under economic environment manager generally studies
1.trends of gross national product
2.patterns of real growth in income
3.variations in geographical income distribution.
4.borrowing pattern ,trends and governmental and legalrestrictions.
5.major economic variables
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Social responsibility has crept into the
marketing literature as an alternative to the
market concept.
Socially responsible marketing is that
business firms should take the lead in
eliminating socially harmful products
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Demographic data helps in preparing geographical
marketing plans, household marketing plans, age
and sex wise plans.
It influences behavior of consumers which in turn
will have direct impact on market place.
A marketer must communicate with consumers
anticipate problems ,respond to complaints and
make sure that the firm operates properly.
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Most dramatic force now shaping our destiny.
Changes rapidly.
Creates new markets and opportunities
Challenge is to make practical, affordableproducts.
Safety regulations result in higher research
costs and longer time between
conceptualization and introduction of product.
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Involves the natural resources that are
needed as inputs by marketers or that are
affected by marketing activities.
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Shortage of raw materials.
Limited quantities of non-renewable
resources.
Increased pollution. Waste disposal, air/water pollutants.
Increased government intervention.
Kyoto and other initiatives.
Environmentally sustainable strategies.
G.R.E.E.N. movement.
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A scan of the external macro environment in which the firm
operates can be expressed as a pest analysis.
The acronym PEST (or sometimes rearranged as STEP) is
used to describe a framework for the analysis of these
macro environmental factors.
A PEST Analysis fits into an overall environmental scan,
which includes Political, Economical, Social, and
Technological environment.
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To know where the environment is heading
To discern which events and trends are
favorable
To assess the scope of various opportunities To help secure the right fit between the
environment and the business unit
CONTROLLABILITY
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CONTROLLABILITY
The organization has no control over the macro
environment. It can only respond to the changes takingplace.
The organization has some degree of influence over
the micro environment but by no means complete
control.
The organization controls its own internal environmentalthough this does not mean the marketing department
or marketing manager has control.
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Marketing Interface with
other Functional areas
Research and
Development
Purchasing
ManufacturingOperations
Finance Accounting
Human Resource
ManagementInformation System
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Research and Development:Focus to challenge technical problems without concerning payoffs / supervision
/ accountability
R & D towards Marketing People:
Marketers are more interested in sales than products technical features
Marketing Management:
Focus with business-oriented people pride themselves on sales promotion and
feel about pay
Marketers towards R & D:R & D people only consider maximizing technical qualities rather than
designing for customer requirements.
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Marketers Vs. Research & Development: Companys drive
for success
Balanced company requires, R & D and marketing share
responsibility for successful market oriented innovation
R & D take responsibility - not only for innovation- but for
successful product launch.
Marketers must take responsibility - not only for new sales features
- but for identifying customer needs and preferences
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Purchasing Management refers to the process of efficient, effective
and economical purchasing of materialsto be utilizedby the
organization in relation toits manufacturing activities
Purchase Management:
Focus on obtaining materials and components in right quantities and
qualities at cheap cost
Purchasers towards Marketers:
Marketers request purchasing small quantities of many items ratherthan large quantities of few items.
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Purchasing Vs. Marketers: for success
Purchasing management handle all datas relating to contact with suppliers
They required knowledge of supply chain, business and tax laws, invoice and
inventory procedures and transportation and logistics issues.
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Manufacturing:Responsible for producing right products in right quantities at right time for
right cost.
Manufacturers towards Marketers:
Little understanding of factory economics or politics.
See only problems of their customers
Manufacturing Vs. Marketing
Production planning influence the performance of production
Marketing influenced by scheduling the production plan
When plan and scheduling is problematic, production and marketing need to
cooperate to resolve problems and need to adjust continually.
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Operations:
Used for creating and providing services.
Example: In a hotel,
Operation Department: includes front-desk people, doormen, waitersand waitress.
- Marketers promise the customers about service levels- Operation staffs focus - their convenience - give ordinary service,
whereas marketers want to focus on customer convenienceand provideextraordinary services.
Operations Vs. MarketersOperations concern with production of goods and services with little
resource and effective meeting of customer requirements.
i.e., managing the process of converting the input into output
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Finance Executives:
Focuses on evaluating profit on different business actions
Finance executives towards marketers:
- Marketing people do not spend time relating expenditures to results
- They are not able to prove how much revenue these expenditures will produce
- They are too quick to sales prices to win orders instead price to make profit
- They know they value of everything and the cost of nothing
Marketing Executives:
Focus on asking budgets for advertising, sales promotions and sales force
Marketers towards Financial Executives:- controlling the purse strings tightly and refusing to invest in long term market
development
- They know the cost of everything and the value of nothing
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Finance Vs. marketingCompanys success
The financial management should avoid the mistake of looking marketing
expenses only from the point of view of cost control.
Working capital management should be taken into consideration not only by the
financial managers but also by the marketing executives.
Example:Samsung, a global electronics firm headquartered in Korea, improvedits brand value and has recently emerged as one of the top 100 global brands
because of the combination of philosophical and methodological
foundationsthat providesthe theoretical framework and created an value of
integrated marketing-finance interfacewhich issignificant to a firm
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Accounting:Prepare the sales report and gives effective marketing information system
Accountants towards Marketers:
- Lack in providing sales reports on time
- They enter into the special deals of sales with customers and require special
accounting procedures
Marketers:
- Requires to prepare special reports on sales and profitability by segments,
important customers, individual products, channels, territories, order size etc .
Marketers towards Accountants:- They allocate fixed-cost burdens to different product in the line
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HR management
An integrative general management that involves identifying
organization's demands for human resources with particular skills and
abilities
HR towards Marketers
- Once new product/services introduced marketing has responsibility to
inform HR dept. punctually and sufficiently
Marketers:
The characteristics of Human resources (skill, quality, moral,
commitment, attitude etc) could contribute the strength and weakness
of a marketing organization.
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HR Management Vs. Marketing Management
The involvement, initiative etc., of people at different levels may vary
from organization to organization, and it is essentially required to
manage personnel issues by the Human Resource Management in
order to meet and exceed the marketing objectives.
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Information system
focus on exploring the interface between management, information science
and computer science
Traditional hierarcy:
If a customer wants to buy a particular product,,
1. Marketing dept - first his order arrives here2. Finance dept - credit needs to be approved
3. Production dept- check whether the product is in warehouse
4. Operation dept - needs to pack the product and forward it to shipping for delivery
5. Accounts dept - prepare bill for customer
6. Finance dept - arrange for shipping insurance
The flow of work and information between the different departments may not work
well, creating delays or poor customer service
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Provides input to marketing decisions including product improvements, price
and packaging changes, copywriting, media buying, distribution etc.
It is a part of an ongoing data gathering process involving initial data collection
as well as routine and systematic data collection procedures.
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