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Basic Introduction to Marketing

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ContentsMeaning and Definition of MarketingNature of MarketingImportance of MarketingMarketing OrientationsMarketing vs. SellingScope of MarketingCore Concepts of Marketing

What is Marketing?Marketing deals with identifying human and social needs and meeting those needs profitably.

Marketing is defined as a social and managerial process by which individuals and group obtain what they need and want through creating and exchanging products and services of value with others. Philip Kotler

Definition of Marketing by AMA Marketing is an organizational function and a set of processes for creating, communicating, and delivering values to customers and for managing customer relationship in ways that benefit the organization and its stakeholders.

Nature of Marketing ManagementSpecialized business function requiring specialized skills.

Social function requiring constant interaction with society.

Integrative function combining other business functions like production, finance, personnel, R & D etc.

Universal function which can be applied to both profit-motive and non-profit motive organizations.

Science as well as an art.

Nature of Marketing Management. . .Both consumer oriented and competitors oriented.

It starts with consumers and ends at consumers.

Marketing is a Process.

It Involves a Mix of Product, Pricing, Promotion, and Distribution.

It Is Intended to Satisfy Individual and Organizational Needs.

Importance of MarketingFinancial success often depends on the marketing ability

Marketing enables the organizations to keep abreast of changes

Customer satisfaction, Increases sales and ultimately the profit

Uplifting the standard of the society as a whole

Employment opportunities

Importance of Marketing . . . .Increased Competition

Marketing help in economic growth and activity

Marketing management helps in improving quality of products or services

Evolution of Marketing/Marketing Orientations/Marketing Philosophies

Marketing OrientationsMarketing philosophies has undergone a thorough and gradual changeThis gradual change can be traced by studying different concepts or periodsWhat philosophy should guide a companys marketing efforts?What relative weight should be given to the interests of organization, the customer and the society?

1. Production ConceptOne of the oldest concept of business.Based on the assumption that whatever is produced will be accepted by the customers.It prevailed before 1930s.It holds that consumer will prefer those products which are widely available and inexpensive.Managers concentrate on achieving high production efficiency, low cost and mass distribution.

1. Production Concept. . . . .ExamplesFord car model T.

ITI(Indian Telephone Industry) has monopoly and was producing only black colored instruments.Similarly household electrical appliances like fridge, washing machine geyser, microwave oven etc. were available only in white color (sometime called as white goods).

2. Product ConceptIt holds that customers will accept those products that offer most quality, performance and innovative features.Till 1930s, there prevailed a strong feeling that whenever a firm has a good product, it results in automatic consumer response and needed little or no promotional efforts.Good wine needs no push.Managers focus on making superior products and improving them over time.

2. Product Concept. . . . .However sometimes these managers caught up in a love affair with their products.Over emphasis on product excellence may lead to ignorance of customer needs and wants.This is called the phenomenon of marketing myopia or short-sightedness.

3. Selling ConceptThe failure of production and product concept paved the way for change in outlook that was possible during 1940s.It states that mere making best product is not enoughIt is futile unless the firm resorts to aggressive salesmanship.Effective sales promotion, high advertising and public relations are of top importance.The essence is Goods are not bought but sold.

3. Selling Concept. . . . .The managers main task is to convince the buyers through high pressure tactics.The aim is to sell what companys make rather than what customers want.This concept is used for unsought goods which buyers do not think of buying.

4. Marketing ConceptEmerged in mid 1950s.It believes that companys objectives depend upon understanding the needs and wants of customers.Company must deliver the desired satisfaction in a better way than the competitors are doing.The job is not to find right customers for your products, but right products for your customers.It was found that companies who embrace the marketing concept achieve superior performance.

5. The Societal Marketing conceptThe societal marketing concept hold that marketing strategy should deliver value to the customers in away that maintains or improves both the consumers and societys well being. Long run welfare than short run wants

The Core concepts of Marketing

1. Needs, wants and demandsCustomer Needs, Wants, and Demands

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2. Marketing Offers/ The scope of MarketingProductsServicesPersonsPlacesOrganizationsInformationIdeasEventsExperiences/Experience marketing

3. Segmentation, Targeting and Positioning (STP)Segmentation- Dividing the market into different segments based on different parametersTargeting- Selecting the segment offering greatest potential and profitabilityPositioning- Placing the product/service in the minds of the targeted customers.

4. Value and SatisfactionThe offering will be successful if it delivers value and satisfaction to the targeted buyersValue: the difference between the benefits(Tangible/Intangible) received by using a product/service and the cost(monetary cost/searching cost/psychological cost) of buying a product.Satisfaction: Reflects a persons comparative judgment resulting from a products perceived performance to his expectations

5. Marketing ChannelsDistribution channels: Distributors, wholesalers and retailers etc.

6. Supply ChainDescribes a longer chain stretching from raw material till the final products that are carried to the buyers.

7. CompetitionIncludes all the actual and potential rivals offerings and substitutes that a buyer might consider

8. Marketing EnvironmentMicroenvironment: customers, suppliers, dealers etc.Macro environment: Demographic, economic. Technological, social, legal and political environment etc.

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