unit imarketing

8/21/2019 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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