MARKETING management
(C-10)
BBE Core for Fourth Semester
Reference: Philip Kotler & Keller
Unit 1
Introduction to Marketing
1. Before Marketing, let us understand “MARKET” first.
2. A market is a medium that allows buyers and sellers of a specific
good or service to interact in order to facilitate an exchange.
3. Involves exchanges, Negotiations which can be:-
Face to Face
At certain place
On telephone
Internet/Website
Tele-Marketing
4. Middlemen also play role, facilitate marketing function /
exchange
Wholesalers
Retailers
Dealers / Agent
Franchises
E-Tailers
Meaning
Marketing is about identifying & meeting human and social needs.
Marketing : process of finding customer needs and serving those
needs profitably.
Essence of Marketing : providing desired value to customers.
Goal of Marketing is to attract & retain customers through long-
term satisfaction of their needs.
Marketing is a group of business activities to create & promote
consumer demand & to direct their flow of goods, services from the
original manufacturers to final consumers through the process of
various levels of distribution
Marketing Management is the art & science of choosing target
markets & getting, keeping & growing customers through creating,
delivering & communicating superior customer value.
1. As per American Marketing Association
Marketing is the activity, set of Instructions & processes for
creating, communicating, delivering & exchanging offerings that
have value for customers, clients, partners & society at large.
2. Marketing covers 3 basic activities :-
• Discovery of consumer needs, interests, choices revealing the
marketing opportunities.
• Matching the organizational Resources and limitations, Strengths &
weaknesses with the product demanded by the customers.
• Formulating and implementing marketing mix with the ultimate
goals of profitability for the firm & consumers satisfaction.
A Simple Marketing System
Communication
Goods/Services
Industry Market
Money
Information
Marketing communication
Sellers MARKETING – Buyers
THE CIRCLE
OF EXCHANGE
Flow of
Products Flow of
Money
Feedback
-Information
- Satisfaction
- dissatisfaction
Marketing jobs carried out formally by:-
•Sales Managers,
•Salesmen,
•Advertising Managers,
•Promotion Managers,
•Marketing Managers,
•Marketing Researchers,
•Customer Service Managers,
•Brand Managers,
•President-Marketing.
Importance to Society
1. Marketing Helps in Satisfaction of wants:
Marketing is very helpful in transfer, exchange and movement of
goods. Goods and services are made available to customers
through various intermediaries’ viz., wholesalers and retailers etc.
Marketing is helpful to both producers and consumers.
To the former, it tells about the specific needs and preferences of
consumers and to the latter about the products that manufacturers
can offer.
Thus, marketing has great importance in providing goods necessary
to fulfill human needs.
2. Marketing Is Helpful In Raising And Maintaining The Standard
Of Living Of The Community:
By making available the uninterrupted supply of goods and services
to consumers at a reasonable price, marketing has played an
important role in raising and maintaining living standards of the
community.
Community comprises of three classes of people i.e., rich, middle
and poor. Everything which is used by these different classes of
people is supplied by marketing.
In the modern times, with the emergence of latest marketing
techniques even the poorer sections of society have attained a
reasonable level of living standard.
This is basically due to large scale production and lesser prices of
commodities and services.
Marketing has infact, revolutionised and modernised the living
standard of people in modern times.
3. Marketing Creates Employment:
Marketing is complex mechanism involving many people in one
form or the other.
The major marketing functions are buying, selling, financing,
transport, warehousing, risk bearing and standardisation, etc.
In each such function different activities are performed by a large
number of individuals and bodies.
Thus marketing generates sufficient scope for employment to
thousands of people and improve their income levels.
4. Marketing creates Utility:
The performance of marketing function is all important, because it
is the only way through which the concern could generate revenue
or income and bring in profits.
Marketing does provide many opportunities to earn profits in the
process of buying and selling the goods, by creating time, place
and possession utilities.
E.g. Exchange of goods offered creates possession utility while time
utility and place utility is created due to warehousing and
transportation.
5. Marketing Acts create stability :
In modern times marketing has become a very complex and
tedious task.
Economic growth depends on economic stability. Economic
stability depends on balance between production
and consumption, i.e. demand and supply.
To maintain balance in production and consumption marketing is
necessary. Marketing maintains this balance and stabilizes the
economy.
As a result, producers are depending largely on the mechanism of
marketing, to decide what to produce and sell.
With the help of marketing techniques a producer can regulate his
production accordingly.
Importance to Organizations
1. Marketing as a Source of Income and Revenue:
The performance of marketing function is all important, because it
is the only way through which the concern could generate revenue
or income and bring in profits.
Marketing does provide many opportunities to earn profits in the
process of buying and selling the goods, by creating time, place
and possession utilities.
This income and profit are reinvested in the concern, thereby
earning more profits in future.
Marketing should be given the greatest importance, since the
very survival of the firm depends on the effectiveness of the
marketing function.
2. Marketing Acts as a Source of New Ideas:
The concept of marketing is a dynamic concept. It has changed
altogether with the passage of time.
Such changes have far reaching effects on production and
distribution.
With the rapid change in tastes and preference of people,
marketing has to come up with the same.
Marketing as an instrument of measurement, gives scope for
understanding this new demand pattern and thereby produce and
make available the goods accordingly.
3. Marketing information
An entrepreneur has to take decisions in an ever-changing
environment.
Entrepreneurs have to search new products, new customers, new
market, new process of production and so on.
Producer can collect all this information from various marketing
sources and can introduce changes in their production, and can
survive in the competition.
4. Marketing Acts as a Basis for Making Decisions:
A businessman is confronted with many problems in the form of
what, how, when, how much and for whom to produce?
In the past problems was less on account of local markets. There
was a direct link between producer and consumer.
In modern times marketing has become a very complex and
tedious task. Marketing has emerged as new specialized activity
along with production.
As a result, producers are depending largely on the mechanism of
marketing, to decide what to produce and sell.
Hence, “Success” of business and proper decision making are
interdependent and all this is possible due to marketing.
What is Marketed?
The scope of marketing deals with the question, ‘what is
marketed?’
According to Kotler, marketing deals with ten types of entities.
1. Goods:
Physical goods constitute the major part of a country’s production
and marketing effort. Companies market billions of food products,
and millions of cars, refrigerators, television and machines.
2. Services:
As economies advance, a large proportion of their activities is
focused on the production of services. Services include the work of
airlines, hotels, car rental firms, beauticians, software
programmers, management consultants, and so on. Many market
offerings consist of a mix of goods and services. For example, a
restaurant offers both goods and services.
3. Events:
Marketers promote events. Events can be trade shows, company
anniversaries, entertainment award shows, local festivals, health
camps, and so on.
For example, global sporting events such as the Olympics or
Common Wealth Games are promoted aggressively to both
companies and fans.
4. Experiences:
Marketers create experiences by offering a mix of both goods and
services.
A product is promoted not only by communicating features but
also by giving unique and interesting experiences to customers.
For example, Maruti Cars comes with Bluetooth technology to
ensure connectivity while driving, similarly residential townships
offer landscaped gardens and gaming zones.
5. Persons:
Due to a rise in testimonial advertising, celebrity marketing has
become a business. All popular personalities such as film stars, TV
artists, and sportspersons have agents and personal managers.
They also tie up with PR agencies for better marketing of oneself
6. Places:
Cities, states, regions, and countries compete to attract tourists.
Today, states and countries are also marketing places to factories,
companies, new residents, real estate agents, banks and business
associations. Place marketers are largely real estate agents and
builders.
They are using mega events and exhibitions to market places. The
tourism ministry is also aggressively promoting tourist spots locally
and globally.
7. Properties:
Properties can be categorized as real properties or financial
properties.
Real property is the ownership of real estates, whereas financial
property relates to stocks and bonds.
Properties are bought and sold through marketing.
Marketing enhances the need of ownership and creates possession
utility. With improving income levels in the economy, people are
seeking better ways of saving money.
Financial and real property marketing need to build trust and
confidence at higher levels.
8. Organizations:
Organizations actively work to build image in the minds of their
target public. The PR department plays an active role in marketing
an organization’s image.
Marketers of the services need to build the corporate image, as
exchange of services does not result in the ownership of anything.
The organization’s goodwill promotes trust and reliability.
The organization’s image also helps the companies in the smooth
introduction of new products.
9. Information:
Information can be produced and marketed as a product.
Educational institutions, encyclopedias, non-fiction books,
specialized magazines and newspapers market information.
The production, packaging, and distribution of information is a
major industry.
Media revolution and increased literacy levels have widened the
scope of information marketing.
10. Idea:
Every market offering includes a basic idea. Products and services
are used as platforms for delivering some idea or benefit.
Social marketers widely promote ideas. Maruti Udyog Limited
promoted safe driving habits, need to wear seat belts, need to
prohibit children from sitting near the driver’s seat, and so on.
Nature of Marketing
1. Marketing is an Economic Function
Marketing embraces all the business activities involved in getting
goods and services , from the hands of producers into the hands
of final consumers.
The business steps through which goods progress on their way to
final consumers is the concern of marketing.
2. Marketing is a Legal Process by which Ownership Transfers
In the process of marketing the ownership of goods transfers from
seller to the purchaser or from producer to the end user.
3. Marketing is a System of Interacting Business Activities
Marketing is that process through which a business enterprise,
institution, or organization interacts with the customers and
stakeholders with the objective to earn profit, satisfy customers,
and manage relationship.
It is the performance of business activities that direct the flow of
goods and services from producer to consumer or user.
4. Marketing is a Managerial function
According to managerial or systems approach – “Marketing is the
combination of activities designed to produce profit through
ascertaining, creating, stimulating, and satisfying the needs and/or
wants of a selected segment of the market.”
According to this approach the emphasis is on how the individual
organisation processes marketing and develops the strategic
dimensions of marketing activities.
5. Marketing is a social process
Marketing is the delivery of a standard of living to society.
According to Cunningham and Cunningham (1981) societal
marketing performs three essential functions:-
Knowing and understanding the consumer’s changing needs and
wants;
Efficiently and effectively managing the supply and demand of
products and services; and
Efficient provision of distribution and payment processing systems.
6. Dynamic Process: Marketing is an ongoing activity which does not
stop at any step. After finding customer’s needs and wants it needs
to develop such products or services which can satisfy these needs
and after this there is need to advertising, promotion, distribution,
etc the process goes on.
7. Customer Oriented: Marketing is customer oriented. Marketing is
the process of finding needs and wants of customers and satisfying
those needs profitably.
8. Creative: Marketing is creative in nature, it looks out for new ideas,
views and activities and solves problems or encash opportunities in
a creative way.
9. Marketing is an Art and Science
Scope of Marketing
Marketing has a very wide scope it covers all the activities from
conception of ideas to realization of profits. Some of them as
discussed as below:
1. Product Planning: It includes the activities of product research,
marketing research, market segmentation, product development,
determination of the attributes, quantity and quality of the
products.
2. Branding: Branding of products is adopted by many reputed
enterprises to make their products popular among their
customer and for many other benefits. Marketing manager has to
take decision regarding the branding policy, procedures and
implementation programs.
3. Packaging: Packaging is to provide a container or wrapper to the
product for safety, attraction and ease of use and transportation
of the product.
4. Channels of Distribution: Decision regarding selection of most
appropriate channel of distribution like wholesaling, distribution
and retailing is taken by the marketing manager and sales manager.
5. Sales Management: Selling is a part of marketing. Marketing
is concerned about all the selling activities like customer
identification, finding customer needs, persuading customer to buy
products, customer service, etc.
6. Advertising: Advertisement decisions like scope and time of
advertisement, advertisement message, selection of media, etc
comes into marketing.
7. Finance: Marketing is also concerned about the finance, as for
every marketing activity be it packaging, advertising, sales force
budget is fixed and all the activities have to be completed with in
the limit of that budget.
8. After Sales services: Marketing covers after sales services given
to customers, maintaining good relationships with customers,
attending their queries and solving their problems.
Core Marketing Concepts
Philip Kotler, the eminent writer, defines modern marketing as,
“Marketing is social and managerial process by which individuals
and groups obtains what they needs and wants through creating
and exchanging product and value with others.”
Careful and detailed analysis of this definition necessarily reveals
some core concepts of marketing:
1. Needs, Wants, and Demands
Most basic concept of fundamental marketing is that of human
needs, wants, and demands.
Human needs are states of felt deprivation. Marketers did not
create these needs; they are a primary part of the human makeup.
Basic physical needs for food, clothing, warmth, and safety; social
needs for belonging and affection; and individual needs for
knowledge and self-expression; are needs of human.
Wants are needs shaped by culture and individual personality.
Every human being requires food but what form they take food is
different dew to cultural and social attributes of an individual.
One person may like a burger or hot-dog another might like french
fries or rich.
Individuals’ cultural and social features shape the wants.
With buying power, wants become demands.
Needs and wants drive people to demand for products and
services.
2. Market Offerings
Consumers’ needs and wants are satisfied through market
offerings.
Market offerings are some combination, mixture, or blend of
physical products, services, information, ideas, or experiences
offered to a market to satisfy a need or a want.
3. Target Markets, Positioning and Segmentation
Marketers can rarely satisfy everyone in the market.
So they start with ‘Market segmentation’- To identify and profile
different groups of buyers.
Target segments present the greatest opportunity – those needs
the firm can meet in a superior fashion.
For each chosen target market, the firm develops a market
offering, which is positioned as offering some central benefit.
Marketers view the sellers as constituting the industry and
the buyer as constituting the market.
Positioning is an effort to influence consumer perception of a
brand or product relative to the perception of competing brands or
products.
Its objective is to occupy a clear, unique, and advantageous
position in the consumer's mind.
4. Value and Satisfaction
Consumers usually face a wide-ranging array of products and
services in forms of “market offerings” that might satisfy a certain
need. How do they choose among these many market offerings?
A customer always forms expectations about the value and
satisfaction that various market offerings will deliver and buy them
for that reason.
Customer value and customer satisfaction are key building blocks
for developing and managing customer relationships.
Marketers must be careful to set the right level of expectations.
Overcooked it or under-cooked market offerings will not help the
marketers capture value in return of the customer satisfaction.
Satisfied customers will buy again and tell others about their good
experiences on the other hand dissatisfied customers will
eventually switch to competitors and surely demotivate others
from buying the product.
5. Marketing Channels:
To reach a target market marketer uses three different kinds of
marketing channels:
1. Communication channel: The marketer uses communication
channels to deliver and receive messages from target buyers.
These consist of dialogue channels (newspaper,TV,e mail, toll free
numbers).
2. Distribution channels: To display and deliver the physical product
or service to the buyer or user. They include various trade
channels such as distributors, wholesalers, retailers etc.
3. Service channels: They include the banks and insurance
companies that facilitate transactions along with warehouses,
transportation companies which help to carry to carry out
transactions.
6. Supply Chain
A supply chain is a network between a company and its suppliers
to produce and distribute a specific product, and the supply chain
represents the steps it takes to get the product or service to the
customer.
Supply chain represents a value delivery system.
When a company moves upstream or downstream, the aim is to
capture a higher percentage of supply chain value.
Supply chain management is a crucial process, because an
optimized supply chain results in lower costs and a faster
production cycle.
7. Competition:
Competition includes all the actual and potential rival offerings and
substitutes that a buyer might consider.
Four levels of competition:
1. Brand competition: Similar products or services to the same
customers at similar prices.
2. Industry competition: All companies making the same product or
the class of product.
3. Form competition: All companies manufacturing the products
that supply the same service.
4. Generic competition: All companies that compete for the same
consumer money.
5. Example: Company – Volkswagen
Brand competition: Honda, Toyota and other medium price
automobiles
Industry competition: All automobile manufacturers
Form competition: Automobiles + Motorcycles + Bicycles + Trucks
Generic competition: Consumer durables + Foreign Vacations +
New Homes
8. Marketing Environment
Competition represents only one force in the environment in which
the marketer operates.
The marketing environment consists of the task environment and
the broad environment.
1. The task environment includes the immediate actors involved in
producing, distributing, and promoting the offering.
The main actors are company, suppliers, distributors, dealers, and
the target customers.
Included in the supplier group are material suppliers and service
suppliers such as marketing agencies, advertising agencies,
banking and insurance companies, transportation and
telecommunication companies.
Included with distributors and dealers are agents, brokers,
manufacturer representatives, and others who facilitate finding
and selling to consumers.
2. The broad environment consists of six components:
demographic environment, economic environment, natural
environment, technological environment, political-legal
environment, and social-cultural environment.
These environments contain forces that can have a major impact
on the actors in the task environment.
Market actors must pay close attention to the trends and the
developments in these environments and then make timely
adjustments to their marketing strategies.
Company Orientation towards
Marketplace
1. The Production Concept
The companies who believe in this philosophy think that if the
goods/services are cheap and they can be made available at many
places, there cannot be any problem regarding sale.
Keeping in mind the same philosophy these companies put in all
their marketing efforts in reducing the cost of production and
strengthening their distribution system.
In order to reduce the cost of production and to bring it down to
the minimum level, these companies indulge in large scale
production.
This helps them in effecting the economics of the large scale
production. Consequently, the cost of production per unit is
reduced.
The utility of this philosophy is apparent only when demand
exceeds supply.
Its greatest drawback is that it is not always necessary that the
customer every time purchases the cheap and easily available
goods or services.
2. Product Concept
Those companies who believe in this philosophy are of the opinion
that if the quality of goods or services is of good standard, the
customers can be easily attracted.
The product concept holds that the consumers will favor products
that offer the most in quality, performance, and innovative
features.
Under this concept, marketing strategies are focuses on making
continuous product improvements.
The basis of this thinking is that the customers get attracted
towards the products of good quality.
On the basis of this philosophy or idea these companies direct
their marketing efforts to increasing the quality of their product.
3. Selling Concept
Those companies who believe in this concept think that leaving
alone the customers will not help. Instead there is a need to attract
the customers towards them.
They think that goods are not bought but they have to be sold.
The basis of this thinking is that the customers can be attracted.
Keeping in view this concept these companies concentrate their
marketing efforts towards educating and attracting the customers.
Their aim is to sell what they make rather than make what the
market wants.
This concept offers the idea that by repeated efforts one can sell-
anything to the customers. This may be right for some time, but
you cannot do it for a long-time.
If you succeed in enticing the customer once, he cannot be won
over every time.
On the contrary, he will work for damaging your reputation.
Therefore, it can be asserted that this philosophy offers only a
short-term advantage and is not for long-term gains.
This approach is applicable in the cases of unsought goods like life
insurance, vacuum cleaner, fire fighting equipments including fire
extinguishers.
4. Marketing Concept
The marketing concept holds- “achieving organizational goals
depends on knowing the needs and wants of target markets and
delivering the desired satisfactions better than competitors do”.
Here marketing management takes a “customer first” approach.
Under the marketing concept, customer focus and value are the
routes to achieve sales and profits.
The marketing concept is a customer-centered “sense and
respond” philosophy.
The job is not to find the right customers for your product but to
find the right products for your customers.
The marketing concept and the selling concepts are two extreme
concepts and totally different for each other.
In short, it can be said that it is a modern concept and by adopting
it profit can be earned on a long-term basis.
The drawback of this concept is that no attention is paid to social
welfare.
Difference between Selling Concept and
Marketing Concept
No. The Selling Concept The Marketing Concept
1 undertakes a large-scale selling and undertakes activities such as; market
promotion effort research,
2 The Selling Concept is suitable with The Marketing Concept is suitable for
unsought goods—those that buyers do almost any type of product and market.
not normally think of buying, such as
insurance or blood donations.
3 Focus of the selling concept starts at Focus of the marketing concept starts at
the production level. understanding the market.
4 Any company following selling Companies that are following the
concept undertakes a high risk marketing concept requires to bare less risk
and uncertainty.
5 The Selling Concept assumes Instead of making assumption, The
–“customers who are coaxed into marketing concept finds out what really the
buying the product will like it. Or, if consumer requires and acts accordingly to
they don’t like it, they will possibly them.
forget their disappointment and buy it
again later.”
6 The Selling Concept makes poor Marketing concept works on facets
assumptions. gathered by its “market and customer first”
approach.
Societal Marketing Concept
This concept stresses not only the customer satisfaction but also
gives importance to Consumer Welfare/Societal Welfare.
This concept is almost a step further than the marketing concept.
Under this concept, it is believed that mere satisfaction of the
consumers would not help and the welfare of the whole society
has to be kept in mind.
The societal marketing concept holds “marketing strategy should
deliver value to customers in a way that maintains or improves
both the consumer’s and society’s well-being”.
It calls for sustainable marketing, socially and environmentally
responsible marketing that meets the present needs of consumers
and businesses while also preserving or enhancing the ability of
future generations to meet their needs.
The Societal Marketing Concept puts the Human welfare on top
before profits and satisfying the wants.
For example, if a company produces a vehicle which consumes less
petrol but spreads pollution, it will result in only consumer
satisfaction and not the social welfare.
In short, it can be said that this is the latest concept of marketing.
The companies adopting this concept can achieve long-term profit.
RELATIONSHIP MARKETING (RM)
1. Relationship marketing is about forming long-term relationships
with customers. Rather than trying to encourage a one-time sale,
relationship marketing tries to foster customer loyalty by
providing exemplary products and services.
2. This is different than most normal advertising practices that focus
on a single transaction; watch ad A and buy product B.
3. Relationship marketing, by contrast, is usually not linked to a
single product or offer. It involves a company refining the way
they do business in order to maximize the value of that
relationship for the customer.
4. Relationship marketing mainly involves the improvement of
internal operations. Many customers leave a company not
because they didn't like the product, but because they were
frustrated with the customer service. If a business streamlines its
internal operations to satisfy all service needs of their customers,
customers will be happier even in the face of product problems.
5. Technology also plays an important role in RM.
Holistic Marketing
Holistic marketing concept is a part of the series on concepts of
marketing and it can be defined as a marketing strategy which
considers the business as a whole and not as an entity with various
different parts.
Holistic marketing is an integrative marketing paradigm that
considers the full scope of a business as opposed to narrowly
focusing on the development or execution of particular marketing
activities.
“A marketing strategy that is developed by thinking about the
business as a whole, its place in the broader economy and society,
and in the lives of its customers. It attempts to develop and
maintain multiple perspectives on the company’s commercial
activities.”
Holistic marketing concept involves interconnected marketing
activities to ensure that the customer is likely to purchase their
product rather than competition.
Example of Holistic marketing concept
An organization will have different departments like sales and
marketing, accounting and finance, R&D and product development
and finally HR and operations.
Thus, if you want to implement a holistic marketing concept in
your organization, you need to ensure that R&D and product
development take the feedback from marketing and sales to launch
the product which is most likely to attract customers.
On the other hand they need to work closely with accounting and
finance to find out the exact budget for the project. Sales and
marketing need to communicate to the HR the right kind of people
that they need, and finally, admin and operations need to devise a
plan to retain these people.
Marketing Myopia
Theodore Levitt coined the term Marketing myopia, which is the inward
looking and short sighted approach to marketing. This approach restricts
the firm to see beyond its boundaries and profitability concerns. The
firms primarily focus on satisfying their own needs rather than the needs
and wants of the customers. Company’s response to Marketing Myopia:
Marketing Mania (Read the article to know more).
Marketing [Link]
