Nature and Scope of Marketing

Definition:
Marketing is a societal process by which individuals and groups obtain what they need
and want through creating, offering, and freely exchanging products and services of
value with others.

Marketing management as the art and science of choosing target markets and getting,
keeping, and growing customers through creating, delivering, and communicating
superior customer value.
WHAT IS MARKETED?

GOODS
SERVICES
EVENTS
EXPERIENCES
PERSONS
PLACES
PROPERTIES
ORGANIZATIONS
INFORMATION
IDEAS
WHO MARKETS?
MARKETERS AND PROSPECTS A marketer is someone who seeks a response—attention, a
purchase, a vote, a donation—from another party, called the prospect.
Marketers are skilled at stimulating demand for their products, also seek to influence the level, timing, and
composition of demand to meet the organization’s objectives. Eight demand states are possible:
1. Negative demand —. Consumers dislike the product and may even pay to avoid it
2. Nonexistent demand — Consumers may be unaware of or uninterested in the product.
3. Latent demand — Consumers may share a strong need that cannot be satisfied by an existing product.
4. Declining demand — Consumers begin to buy the product less frequently or not at all.
5. Irregular demand — Consumer purchases vary on a seasonal, monthly, weekly, daily, or even hourly basis.
6. Full demand — Consumers are adequately buying all products put into the marketplace.
7. Overfull demand — More consumers would like to buy the product than can be satisfied.
8. Unwholesome demand Consumers may be attracted to products that have undesirable social consequences.
Market
Core Concepts of Marketing
Needs, Wants, and Demands : Needs are the basic human requirements. These needs become wants when directed to specific objects that
might satisfy the need. Demands are wants for specific products backed by an ability to pay.
Target Markets, Positioning, and Segmentation: Marketers identify distinct segments of buyers by identifying demographic,
psychographic, and behavioral differences between them. They then decide which segment(s) present the greatest opportunities. For each
of these target markets, the firm develops a market offering that it positions in target buyers’ minds as delivering some key benefit(s).
Offerings and Brands: Companies address customer needs by putting forth a value proposition, a set of benefits that
satisfy those needs. The intangible value proposition is made physical by an offering. A brand is an offering from a known source.
Marketing Channels:To reach a target market, the marketer uses three kinds of marketing channels. Communication channels deliver and
receive messages from target buyers Distribution channels help display, sell, or deliver the physical product or service(s) to the buyer or
user. the marketer also uses service channels that include warehouses, transportation companies, banks, and insurance companies
Value and Satisfaction:Value, the sum of the tangible and intangible benefits and costs. Satisfaction reflects a person’s judgment of a
product’s perceived performance in relationship to expectations
Supply Chain: The supply chain is a channel stretching from raw materials to components to finished products carried to final buyers.
Competition: Competition includes all the actual and potential rival offerings and substitutes a buyer might consider.
Marketing Environment:The marketing environment consists of the task environment and the broad environment. The task environment
includes the actors engaged in producing, distributing, and promoting the offering. The broad environment consists of six components:
demographic environment, economic environment, social- cultural environment, natural environment, technological environment, and
political-legal environment.
Tasks of Marketing Management

CAPTURING MARKETING INSIGHTS

CONNECTING WITH CUSTOMERS
BUILDING STRONG BRANDS
CREATING VALUE
COMMUNICATING VALUE
DELIVERING VALUE
Corporate Orientation towards
Marketplace
THE PRODUCTION CONCEPT The production concept is one of the oldest concepts in business. It holds that consumers prefer
products that are widely available and inexpensive.
THE PRODUCT CONCEPT The product concept proposes that consumers favor products offering the most quality,
performance, or innovative features.
THE SELLING CONCEPT The selling concept holds that consumers and businesses, if left alone, won’t buy enough of the
organization’s products.
THE MARKETING CONCEPT The marketing concept holds that the key to achieving organizational goals is being more
effective than competitors in creating, delivering, and communicating superior customer value to your target market.
THE HOLISTIC MARKETING CONCEPT
*Relationship marketing aims to build mutually satisfying long-term relationships with key constituents in order to earn and
retain their business
*Integrated marketing occurs when the marketer devises marketing activities and assembles marketing programs to create,
communicate, and deliver value for consumers such that “the whole is greater than the sum of its parts
*Internal marketing, an element of holistic marketing, is the task of hiring, training, and motivating able employees who
want to serve customers well.
*Performance marketing requires understanding the financial and nonfinancial returns to business and society from
marketing activities and program
Marketing Research and Information
System
STEP 1: DEFINE THE PROBLEM, THE DECISION ALTERNATIVES, AND THE RESEARCH OBJECTIVE
STEP 2: DEVELOP THE RESEARCH PLAN

DATA SOURCES: Primary,Secondary

RESEARCH APPROACHES:Observational Research Ethnographic research
Focus Group Survey Research
Experimental Research Behavioural Research

RESEARCH INSTRUMENTS: Questionnaire, Qualitative measures, Technological devices

SAMPLING PLAN: Sampling Unit, Sampling Size, Sampling procedure
CONTACT METHODS: Telephone, Mail, Personal, Online
STEP 3: COLLECT THE INFORMATION
STEP 4: ANALYZE THE INFORMATION
STEP 5: PRESENT THE FINDINGS
STEP 6: MAKE THE DECISION
Developing Marketing Strategy and Plan
THE VALUE CHAIN Harvard’s Michael Porter has proposed the value chain as a tool for identifying ways to create more customer value. 3
According to this model, every firm is a synthesis of activities performed to design, produce, market, deliver, and support its product. Nine
strategically relevant activities —five primary and four support activities—create value and cost in a specific business. The primary
activities are (1) inbound logistics, or bringing materials into the business; (2) operations, or converting materials into final products; (3)
outbound logistics, or shipping out final products; (4) marketing, which includes sales; and (5) service. Specialized departments handle the
support activities—(1) procurement, (2) technology development, (3) human resource management, and (4) firm infrastructure.
(Infrastructure covers the costs of general management, planning, finance, accounting, legal, and government affairs.)
The firm’s task is to examine its costs and performance in each value-creating activity, benchmarking against competitors, and look for
ways to improve
STRATEGIC PLANNING
To ensure they execute the right activities, marketers must prioritize strategic planning in three key areas: (1) managing the businesses as
an investment portfolio, (2) assessing the market’s growth rate and the company’s position in that market, and (3) establishing a strategy
MARKETING PLAN
The marketing plan is the central instrument for directing and coordinating the marketing effort. It operates at two levels: strategic and
tactical. The strategic marketing plan lays out the target markets and the firm’s value proposition, based on an analysis of the best market
opportunities. The tactical marketing plan specifies the marketing tactics, including product features, promotion, merchandising, pricing,
sales channels, and service
Developing Marketing Strategy and Plan
Corporate and Division Strategic planning
Defining the corporate mission 2. Establishing strategic business units 3. Assigning resources to each strategic business unit 4.
Assessing growth opportunities.
Developing Marketing Strategy and Plan
A marketing plan usually contains the following sections.
Executive summary and table of contents.
Situation analysis. This section presents relevant background data on sales, costs, the market, competitors, and the macroenvironment. How do we define the
market, how big is it, and how fast is it growing? What are the relevant trends and critical issues? Firms will use all this information to carry out a SWOT
analysis.
Marketing strategy. Here the marketing manager defines the mission, marketing and financial objectives, and needs the market offering is intended to satisfy
as well as its competitive positioning. All this requires inputs from other areas, such as purchasing, manufacturing, sales, finance, and human resources.
Marketing tactics. Here the marketing manager outlines the marketing activities that will be undertaken to execute the marketing strategy. The product or
service offering section describes the key attributes and benefits that will appeal to target customers. The pricing section specifies the general price range and
how it might vary across different types of customers or channels, including any incentive or discount plans. The channel section outlines the different forms of
distribution, such as direct or indirect. The communications section usually offers high-level guidance about the general message and media strategy.
Financial projections include a sales forecast, an expense forecast, and a break-even analysis. On the revenue side is forecasted sales volume by month and
product category, and on the expense side the expected costs of marketing, broken down into finer categories. The break-even analysis estimates how many
units the firm must sell monthly (or how many years it will take) to offset its monthly fixed costs and average per-unit variable costs .A more complex method
of estimating profit is risk analysis. Here we obtain three estimates ( optimistic, pessimistic, and most likely) for each uncertain variable affecting profitability,
under an assumed marketing environment and marketing strategy for the planning period. The computer simulates possible outcomes and computes a
distribution showing the range of possible rates of returns and their probabilities.
Implementation controls. The last section outlines the controls for monitoring and adjusting implementation of the plan. Typically, it spells out the goals and
budget for each month or quarter so management can review each period’s results and take corrective action as needed
Ethical Issues in Marketing
Socially Responsible Marketing Effective internal marketing must be matched by a strong sense of ethics, values, and social
responsibility
CORPORATE SOCIAL RESPONSIBILITY Raising the level of socially responsible marketing calls for making a three-pronged
attack that relies on proper legal, ethical, and social responsibility behavior
CAUSE-RELATED MARKETING Many firms blend corporate social responsibility initiatives with marketing activities. 48 Cause
related marketing links the firm’s contributions toward a designated cause to customers’ engaging directly or indirectly in
revenue-producing transactions with the firm. Cause marketing is part of corporate societal marketing (CSM), which Minette
Drumwright and Patrick Murphy define as marketing efforts “that have at least one noneconomic objective related to social
welfare and use the resources of the company and/or of its partners
SOCIAL MARKETING Cause-related marketing supports a cause. Social marketing by nonprofit or government organizations
furthers a cause, such as “say no to drugs” or “exercise more and eat better.
Cognitive Campaigns Explain the nutritional values of different foods. Demonstrate the importance of conservation.
Behavioral Campaigns Demotivate cigarette smoking. Demotivate use of hard drugs. Demotivate excessive alcohol
consumption. Action Campaigns Attract people for mass immunization. Motivate people to vote “yes” on a certain issue.
Inspire people to donate blood. Motivate women to receive a Pap test. Value Campaigns Alter ideas about abortion. Change
attitudes of bigoted people.