1st Chapter - Marketing Management

1st Chapter -Marketing Management Introduction to MarketingBy Asst Prof. Venkatesh.NKoshys Institute of Management Studies Meaning of Marketing Meaning The word market is derived form the Latin word Marcatus meaning goods or trade or a place where business is conducted. The term marketing is defined as a business activity planned at satisfying to a reasonable extent, consumer or customer needs and wants, generally through an exchange process. 1/12/20152Koshys Institute of Management Studies by Venkatesh.NDefinition of MarketingMarketing has been defined in various ways the definition that serves our purpose best is as follows; Marketing is a social & managerial process by which individuals & groups obtain what they need & want through creating, offering, & exchanging products of value with others.1/12/20153Koshys Institute of Management Studies by Venkatesh.NMarketing Management The American Marketing Association (AMA) Marketing management is the process of planning and executing the conception, pricing, promotion, & distribution of ideas, goods, & services to create exchanges that satisfy individual and organizational goals.1/12/20154Koshys Institute of Management Studies by Venkatesh.N5The Goal of Marketing is: To attract new customer by promising superior value, and to keep current customers by delivering satisfaction.To satisfy the customerTo increase profits for the growth of the business:-the marketing department is the only department which generates revenue for the business.To increase the quality of life of people.To create good image.1/12/2015Koshys Institute of Management Studies by Venkatesh.N6ContdMarketing, more than any other business function, deals with customers.To generate customer base for the business:- the marketing manager must attract more and more customers to buy the firms products and services this will also result in to increased sales.1/12/2015Koshys Institute of Management Studies by Venkatesh.N7Marketing Defined 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.Marketers act as the customers voice within the firm and marketers are responsible for many more decisions than just advertising or sales: 1/12/2015Koshys Institute of Management Studies by Venkatesh.N8Contd To explain marketing definition, we examine the following important terms : Needs, wants, and demandsProducts and services Value, satisfaction and qualityExchange, transactions, and relationshipsMarkets 1/12/2015Koshys Institute of Management Studies by Venkatesh.N 1 - 9Core Marketing Concepts

10Needs, Wants, and Demands Needs: The most basic concept underlying marketing is that of human needs.Human have many complex needs: Physical needs for food, clothing, and safetySocial needs or belonging and affection Individual needs for knowledge and self expression 1/12/2015Koshys Institute of Management Studies by Venkatesh.NContdWants:Want are the form taken by human needs as they are shaped by culture and individual personality.People have almost unlimited wants but limited resources.They want to choose products that provide the most value and satisfaction for their money. Demands: When backed by buying power, wants become demands.Consumers view products as bundles of benefits and choose products that give them the best bundle for their money1/12/201511Koshys Institute of Management Studies by Venkatesh.N12Products and Services Product: Anything that can be offered to a market to satisfy a need or want.The concept of anything capable of satisfying a need can be called a product. Services: product is not limited to physical objects In addition to tangible goods, products also include services, which are activities or benefits offered for sale that are essentially intangible and do not result in the ownership of anything.1/12/2015Koshys Institute of Management Studies by Venkatesh.N13Values, Satisfaction, and Quality Values: Customer value is the difference between the values the customer gains from owning and using a product and the costs of obtaining the products.Customers frequently do not judge product value and costs accurately or objectively. They act on perceived value.Satisfaction: Customer satisfaction depends on a products perceived performance in delivering value relative to a buyers expectation.If the products performance falls short of the customers expectations, the buyer is dissatisfied.1/12/2015Koshys Institute of Management Studies by Venkatesh.NContd.Quality:Customer satisfaction is closely linked to quality.Quality has a direct impact on product performance.Quality can be defined as freedom from defects.TQM programs designed to constantly improve the quality of products, services, and marketing processes.

1/12/201514Koshys Institute of Management Studies by Venkatesh.N15Exchange, Transactions, and Relationships Exchange :The act of obtaining a desired(most wanted) 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. 1/12/2015Koshys Institute of Management Studies by Venkatesh.NContdRelationship marketing :The process of creating, maintaining, and enhancing strong, value loaded relationships with customers and other stakeholders

1/12/201516Koshys Institute of Management Studies by Venkatesh.N17Markets The set of all actual and potential buyers of a product or service A simple marketing system Industry (a collection of sellers)Market (a collection of buyers)Communication Products / Services Money Information 1/12/2015Koshys Institute of Management Studies by Venkatesh.NPush and Pull StrategiesPullAdvertising and promotionPushSales force and trade promotion

1/12/201518Koshys Institute of Management Studies by Venkatesh.NScope of MarketingIt creates employment opportunities because sales and marketing is a people oriented activity.It improves the standard of leaving of the peopleIt satisfies the needs of the peoples by providing the goods to the customersIt improves the transport and communicationIt establishes a better relationship B/W the buyer and the seller.It makes goods available to all geographic location 1/12/201519Koshys Institute of Management Studies by Venkatesh.NContdIt increases revenue to the govt.It enables to increase the profit.It helps the top management to manage innovations and changesMaximize sales enables the firm to go for large scale production.Mass production reduces the cost per unit of the product. 1/12/201520Koshys Institute of Management Studies by Venkatesh.N21Marketing Concept The marketing management philosophy that holds that achieving organizational goals depends on determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors do. 1/12/2015Koshys Institute of Management Studies by Venkatesh.N

1/12/201522Koshys Institute of Management Studies by Venkatesh.N 1 - 23Concept of Marketing ManagementProduction ConceptProduct ConceptSelling ConceptMarketing ConceptSocietal Marketing ConceptManagement Orientations1/12/2015Koshys Institute of Management Studies by Venkatesh.NTraditionalProduction Concept:-This concept holds that consumers will favor products that are available and highly affordable and that management should focus on improving production and distribution efficiency. This is one of the oldest concept. It is useful in two situations when the demand for a product exceeds the supply, management should look for ways to increase production and when the product cost is too high improved productivity is needed to bring down.1/12/201524Koshys Institute of Management Studies by Venkatesh.NProduct ConceptThis concept holds that consumers will favor products that offer the most quality, performance, and innovative features. Thus an organization should dedicate energy in making continuous product improvement. A product will not sell unless the manufacturer designs packages and prices it attractively. and place it in convenient place.

1/12/201525Koshys Institute of Management Studies by Venkatesh.NSelling ConceptThis concept holds that consumers will not buy enough of the organizations products unless the organization undertakes a large scale selling and promotion effort. Their aim is to sell what they make rather than to make what the market wants. Such marketing carries high risks. It focus on creating sales transaction rather than on building long-term, relationship with customer.1/12/201526Koshys Institute of Management Studies by Venkatesh.N27Societal Marketing Concept The idea that the organization should determine the needs, wants, and interests of target markets and deliver the desired satisfactions more effectively and efficiently than competitors in a way that maintains or improves the consumers and societys well being. 1/12/2015Koshys Institute of Management Studies by Venkatesh.N28FactoryExisting productsSelling and promoting Profits through sales volume Starting point

Focus

Means

Ends

The selling concept

MarketCustomer needsIntegrated marketing Profits through customer satisfactionThe marketing concept

The selling and Marketing Concepts Contrasted 1/12/2015Koshys Institute of Management Studies by Venkatesh.N29Three Considerations Underlying The Societal MarketingSocietal marketing conceptSociety(Human welfare)Company(Profits)Consumers(Want satisfaction)1/12/2015Koshys Institute of Management Studies by Venkatesh.N

1/12/201530Koshys Institute of Management Studies by Venkatesh.NModern ConceptThe market concept is customer orientation backed by integrated marketing aimed at generating customer satisfaction as the key to satisfy organizational goals.The marketing concepts holds that the key to achieve its organizational goals consists of the company being more effective than competitors in creating delivering and communicating customer value to its chosen target market 1/12/201531Koshys Institute of Management Studies by Venkatesh.NContd.The marketing concept has been expressed as follows.Meeting needs profitabilityFind wants and fill themLove the customer not the productYou are the bossPartners for profit1/12/201532Koshys Institute of Management Studies by Venkatesh.NComponents of modern concepts Customer orientation:- in modern concept the marketer will give first preference to the customer need and satisfaction according to his taste and preference the marketer will change or modify the product and give.

1/12/201533Koshys Institute of Management Studies by Venkatesh.NIntegrated Marketing An approach to achieving theobjectivesof amarketing campaign, through a well coordinated use of different promotionalmethodsthat are intended to reinforce each other.

1/12/201534Koshys Institute of Management Studies by Venkatesh.NProfitable sales through customers satisfaction The main aim of every business is earning and maximizing its profits. Manufacturer cannot ignore the wants and expectations of customers.Customer is the supreme and he determines the products to be produced by the manufacturer.Marketing starts with the generating of a product idea and continues until the customers wants are completely satisfied.1/12/201535Koshys Institute of Management Studies by Venkatesh.NCustomer welfareConsumer welfare refers to the individual benefits derived from the consumption of goods and services. In theory, individual welfare is defined by an individual's own assessment of his/her satisfaction, given prices and income. Exact measurement of consumer welfare therefore requires information about individual preferences.1/12/201536Koshys Institute of Management Studies by Venkatesh.NCharacteristics of modern marketing conceptAccording to this concept consumer is the king of the marketMarketing is the entire process of understanding and satisfying the needs and wants.The main aim of marketing under the concept is not maximization of profits alone but by satisfying the consumer needs and wants.The concepts creates and delivers the standard of living to the society.1/12/201537Koshys Institute of Management Studies by Venkatesh.NFunctions of marketingMerchandising Functions:-the process of the passing of goods to the customers hands is called the function of exchange. this process can be divided into BuyingAssemblingSelling 1/12/201538Koshys Institute of Management Studies by Venkatesh.NFunctions of marketingPhysical distribution functions:-this function related to the process of transporting the goods from the place of seller to the place of buyer and includes two main function.Transportation-a good system of transportation increases the value of goods by the creation of place of utility1/12/201539Koshys Institute of Management Studies by Venkatesh.NContd..Storage and warehousing :- goods must be stored for different reasons goods produced seasonally may be used throughout the year goods meant for use during the short period may be produced over the longer period, manufacturer store raw materials for ready supply are also stored in the hope of getting a higher price in future

1/12/201540Koshys Institute of Management Studies by Venkatesh.NFacilitating functions These functions make the marketing process easy and include.FinancingRisk bearingStandardizationPricing branding Advertising Sales promotion Packaging Market information Marketing researchMarketing intelligence1/12/201541Koshys Institute of Management Studies by Venkatesh.NApproaches to marketingThe marketing expert came out with three fundamental approaches to the study of marketing namely.Commodity approachInstitutional approachFunctional approachDecision making approach System approachSocial approachHolistic approach1/12/201542Koshys Institute of Management Studies by Venkatesh.NCommodity approach (product)This approach is studies marketing on commodity basis. This approach is also called as descriptive approach. in this method the commodity serve as a focus around which other aspects of marketing are studied and its journey from the original producer right up to the final consumer. In this we can locate the center of production people engage in buying and selling of the product mode of transportation and so on. Through such an approach we can find out the difference in marketing product, service and problems.1/12/201543Koshys Institute of Management Studies by Venkatesh.NInstitutional ApproachIn this method descriptive and analysis of the different institutions engaged in marketing are undertaken. Here we study not the product but the producer, wholesaler's agents, retailers, transporters, storing institutions etc. different institutions serve as separate cells of the marketing body.1/12/201544Koshys Institute of Management Studies by Venkatesh.NInstitutional approachThis approach splits down the field of marketing into separate functions. These specific functions are buying, selling, transportation, storage, standardization, grading, financing, risk-taking and marketing research, etc. We also concentrate our attention on the specialized service or functions or activates performed by marketer1/12/201545Koshys Institute of Management Studies by Venkatesh.NManagement approach/decision making approachIn this approach the focus of marketing study is on the decision making process involved in the performance of marketing functions at the level of the firm. the study involves discussions of important concept like devising alternative strategies, analyzing their relative importance determining the strengths and weakness of the company, techniques and methods of problems solving.(in this method the manager is taking decision to change the functional activities about the market like planning, executing, co-ordinating & controlling)1/12/201546Koshys Institute of Management Studies by Venkatesh.NSocietal approach/legal approachSocial approach is the study that emphasizes the fact that marketing is for society and hence, functions as directed by social norms set by the society. This method must bring maximum social well being or welfare.That is not only to provide a car, but less pollutant car, cigarette without smoke, medicines without side effects, holding high the social and cultural values and values adding to the life-style and living1/12/201547Koshys Institute of Management Studies by Venkatesh.NSystem approach Systems approach is an approach that entails analysis of problems and come up with a blend of solutions. It is a generally approach that involves tackling problems in an advanced disciplined manner keeping priorities in mind. It is a branch of systems thinking process.1/12/201548Koshys Institute of Management Studies by Venkatesh.NHolistic approachHolistic approach refers to the practice of looking at the health of an individual in a complete picture rather than isolating parts. It uses natural treatments to attempt to maintain balance.1/12/201549Koshys Institute of Management Studies by Venkatesh.NDistinction B/W Marketing and SellingMarketingMarketing focus on customer needsCustomer enjoys supreme importanceIntegrated approach to achieve ling term goalsConverting customer needs into products Profit through customer satisfactionLet the seller beware

SellingSelling focus on the needs of the seller.Product enjoys supreme importance.Fragmented approaches to achieve immediate goalsConverting customer needs into products.Profit through sales volumeLet the buyer beware.1/12/201550Koshys Institute of Management Studies by Venkatesh.NThank You