Basic Concepts of Marketing Iba
-
Upload
sajjad-pirzada -
Category
Documents
-
view
233 -
download
0
Transcript of Basic Concepts of Marketing Iba
-
7/27/2019 Basic Concepts of Marketing Iba
1/74
Ch.Zia-ur-Rehman
E-mail
mailto:[email protected]:[email protected] -
7/27/2019 Basic Concepts of Marketing Iba
2/74
WHAT IS MARKETING ?
ANY INTERPERSONAL AND
INTERORGANISATIONAL
RELATIONSHIP INVOLVING ANEXCHANGE IS MARKETING .
WILLIAM J.STANTON
(Fundamentals of Marketing McGraw-Hill 13e)
-
7/27/2019 Basic Concepts of Marketing Iba
3/74
WHAT IS MARKETING ?The essence of Marketing is a transaction -an exchange- intended to satisfy human
needs and wants. There are three elementsin the marketing process :
(A) MARKETERS
(B)WHAT IS BEING MARKETED(C) TARGET MARKET
-
7/27/2019 Basic Concepts of Marketing Iba
4/74
WHAT IS MARKETING ?
Marketing is a social process by whichindividuals and groups obtain what they needand want through creating and exchangingproducts and value with others
PHILIP KOTLER
(Principles of Marketing Prentice Hall)
This definition includes following core concepts :
NEEDS ,WANTS and DEMANDS --- PRODUCTS------VALUE & SATISFACTION---EXCHANGE &TRANSACTION---MARKETS & MARKETERS
-
7/27/2019 Basic Concepts of Marketing Iba
5/74
DefinitionMarketing is a system of activities
designed toplan,
price, promote and distribute
something ofvalue, want satisfyinggoods and services
to the marketpresent andpotentialhousehold consumers or industrialusers.
-
7/27/2019 Basic Concepts of Marketing Iba
6/74
NEEDS,WANTS AND DEMANDS NEED : A state of felt deprivation of some basic
satisfaction ( Food, Clothing, Shelter,Belonging etc. )
WANTS : Wants are desires for specificsatisfiers of the deeper needs. Needs are fewand wants are many .
DEMANDS : are wants backed by ------Ability tobuy and Willingness to buy
-
7/27/2019 Basic Concepts of Marketing Iba
7/74
PRODUCTS / OFFERS / SATISFIERS / RESOURCES
Anything that can be offered tosomeone to satisfy a need or wantis a product. In marketing wordProduct is used for both goods andservices .
Product refers to physical objectServices refer to intangible object
-
7/27/2019 Basic Concepts of Marketing Iba
8/74
VALUE AND SATISFACTIONValue is the customers estimate of the
Products capacity to satisfy a set of goalsValue is the ratio between what the customer
gets and what he gives (V=B/C)
Customer gets Benefits & assume Costs WHEN :Customer Expectance=Performance
(satisfied)
Customer ExpectationPerformance of product
(Highly satisfied)
-
7/27/2019 Basic Concepts of Marketing Iba
9/74
EXCHANGE AND TRANSACTION Exchange is the act of obtaining a desired product
by offering something in return .
Exchange takes place when 5 conditions aresatisfied:
1. There should be two parties
2. Both must have something of value to the other
3. Both must be capable of communication &delivery
4. Each party is free to accept or reject the offer5. Each party believes that it is appropriate to dealwith the other party
-
7/27/2019 Basic Concepts of Marketing Iba
10/74
EXCHANGE AND TRANSACTIONExchange is aprocess rather than event.
It is a value creating process because it
normally leaves both parties better off.A transaction is a trade of values
between two or more parties ( A BARTER
TRANSACTION OR A MONETARYTRANSACTION ).
-
7/27/2019 Basic Concepts of Marketing Iba
11/74
WHAT IS MARKET ?
A market consists of all thepotential customers sharing a
particular need or wantWho might be willing and
Able to engage in exchange tosatisfy that need or want withmoney.
-
7/27/2019 Basic Concepts of Marketing Iba
12/74
WHAT IS MARKETING ?
Marketing is the management processwhich identifies, anticipates, andsupplies customer requirementsefficiently and profitably.
In other words, it is theprocess ofunderstanding, creating, anddelivering profitable value to targetedcustomers better than competitors.
-
7/27/2019 Basic Concepts of Marketing Iba
13/74
WHAT IS MARKETING ?
Its aim is to establish, maintain,enhance long term relationshipwith
customers at a profit so that theobjectives of the parties involved aremet.
In short marketing consists ofattracting, developing, and retainingprofitable customers.
-
7/27/2019 Basic Concepts of Marketing Iba
14/74
BUSINESS IS MARKETING
Marketing cannot be considered as aseparate function , it is thewhole
business, seen from the point of view ofits final results.................that is profit,through customer satisfaction.
PETER DRUCKER
-
7/27/2019 Basic Concepts of Marketing Iba
15/74
A SIMPLE MARKETING SYSTEM
Industry Market
Communication
Information/Feedback
Goods & Services
Money
-
7/27/2019 Basic Concepts of Marketing Iba
16/74
WHAT IS MARKETING MANAGEMENT ?
Marketing Management is the analysis,planning, implementation and control
of programs designed to create, buildand maintain beneficial exchanges andrelationships with target markets for thepurpose of achieving Organizationalobjectives.
-
7/27/2019 Basic Concepts of Marketing Iba
17/74
WHAT IS MARKETING MANAGEMENT ?
Marketing management is demandmanagement or it involves the task ofinfluencing the level, timing andcomposition of demand. At times theactual demand level may be below,equal to, or above the desired demand
level and the major task of marketingmanagement is to regulate the level ofdemand.
-
7/27/2019 Basic Concepts of Marketing Iba
18/74
STATE OF DEMAND AND MARKETING TASK
State of demand Negative Demand
No Demand
Latent Demand
Falling Demand Irregular Demand
Full Demand
Overfull Demand
Un-wholesomeDemand
Marketing task Conversional Mktg.
Stimulational Mktg.
Developmental
Mktg. Remarketing
Synchro-marketing
Maintenance Mktg.
Demarketing
Counter-marketing
-
7/27/2019 Basic Concepts of Marketing Iba
19/74
MARKETING TERMSMERKETING
SELLING
MERCHANDISING
DISTRIBUTION
PHYSICAL DISTRIBUTION
-
7/27/2019 Basic Concepts of Marketing Iba
20/74
Important definitions
Marketing is not any one activity, nor isit exactly the sum of several rather it is
the result of interaction of manyactivities.
As a philosophy, the marketing concept
is not useful if, it not translatedintoeffective action.
-
7/27/2019 Basic Concepts of Marketing Iba
21/74
MARKETING MIX
-
7/27/2019 Basic Concepts of Marketing Iba
22/74
Selling is one Part of Promotion
Advertising
Ingredientsof the
PromotionMix
Public Relations
Personal Selling
Sales Promotion
-
7/27/2019 Basic Concepts of Marketing Iba
23/74
EVOLUTION OF MARKETING MANAGEMENT
Marketing management has evolvedthrough following stages :
(1) Production Orientation Stage
(2) Sales Orientation Stage (3) Marketing Orientation Stage
(4) Social Responsibility & Human
Orientation Stage
-
7/27/2019 Basic Concepts of Marketing Iba
24/74
COMPANY ORIENTATION FOR MARKETING
ACTIVITIES
Marketing Management can be defined asthe effort to achieve desired EXCHANGEoutcomes with TARGET MARKETS.
Now the question arises :(1) What philosophy should guide themarketing activities?
(2) What weights should be given to theinterests of the organization, the customersand the society?
-
7/27/2019 Basic Concepts of Marketing Iba
25/74
MERCHANDIGING
-
7/27/2019 Basic Concepts of Marketing Iba
26/74
MARKETING CONCEPTS
There are FIVE competing conceptsunder which organizations conducttheir marketing activities:
The Production Concept
The Product Concept
The Selling Concept
The Marketing Concept
The Societal Marketing Concept
-
7/27/2019 Basic Concepts of Marketing Iba
27/74
Why is Marketing Important?
Marketings Role in Our Daily Lives
Popular Culture
Marketing and Myths Marketings Role in Society
Ethical Behavior is Good Business
Social and Ethical Criticisms of Marketing
-
7/27/2019 Basic Concepts of Marketing Iba
28/74
(1) THE PRODUCTION CONCEPT
Produce
SellConsumers
Company
Produce more & more
Practically sells itself
-
7/27/2019 Basic Concepts of Marketing Iba
29/74
THE PRODUCTION CONCEPT
Consumers will favour those productsthat are widely available and low in cost.
Therefore increase production and cutdown costs.
And build profit through volume.
-
7/27/2019 Basic Concepts of Marketing Iba
30/74
(2) THE PRODUCT CONCEPT
Produce
QualityProducts
SellConsumers
Practically sells itself,if
it gives most quality for
money
Buyers admire well-made products and canappraise product quality and performance.
-
7/27/2019 Basic Concepts of Marketing Iba
31/74
THE PRODUCT CONCEPT
Consumers will favour those productsthat offer the most quality, performance,
or innovative features.Therefore, improve quality, performance
and features.
This would lead to increased sales andprofits.
-
7/27/2019 Basic Concepts of Marketing Iba
32/74
(3) SELLING CONCEPT
Consumers have normal tendency to resist.
Produce
Sell it Consumers
Aggressive selling &
promotion efforts
Making sales becomes primary function andconsumer satisfaction secondary .
-
7/27/2019 Basic Concepts of Marketing Iba
33/74
THE SELLING CONCEPT
Consumers , if left alone , will not buyenough of companys products.
Therefore, promote sales aggressively.
Build profit through quick turnover.
-
7/27/2019 Basic Concepts of Marketing Iba
34/74
(4) MARKETING CONCEPT
LOVE THE CUSTOMER , NOT THE PRODUCT
ConsumersProduce it
Market it
Learn what theywant(MR)
Sell what they want(Satisfy
needs of customers)
-
7/27/2019 Basic Concepts of Marketing Iba
35/74
THE MARKETING CONCEPT
The key to achieving organizationalgoals consist in determining the needs
and wants of target markets anddelivering the desired satisfactionsmore effectively and efficiently thancompetitors.
And build profit through customersatisfaction and loyalty.
-
7/27/2019 Basic Concepts of Marketing Iba
36/74
(5) THE SOCIETAL MARKETING CONCEPT
It is Marketing Concept (+) Societys wellbeing.
Balancing of following three considerationswhile setting marketing policies :1. Customers want satisfaction2. Societys well being3. Companys profits
-
7/27/2019 Basic Concepts of Marketing Iba
37/74
.
A revised philosophy, calledthe societal marketing
concept, involves broadlydefining customer and
taking a long-term view of
customers satisfaction.
The Societal Marketing Concept
-
7/27/2019 Basic Concepts of Marketing Iba
38/74
THE SOCIETAL MARKETING CONCEPT
The organizations task is to determinethe
needs, wants, and interests of targetmarkets and:
Deliverthe desired satisfactions more
effectively and efficiently than Competitors Preserves or enhances the consumers and
the societys well being.
It addresses conflicts between consumers
and firms short run wants and long termwelfare.
-
7/27/2019 Basic Concepts of Marketing Iba
39/74
SELLING v/s MARKETING CONCEPT
Selling Concept
Starting point Focus Means Ends
Factory Products Selling and
Promoting
Profit through
Sales Volume
Marketing Concept
Target Market CustomerNeeds CoordinatedMarketing Profit throughCustomer
Satisfaction
-
7/27/2019 Basic Concepts of Marketing Iba
40/74
STRATEGIC CONCEPT OF MARKETING
Shifted the focus of Marketing fromProduct or customer to the CUSTOMER INTHE CONTEXT OF THE BROADER
EXTERNAL ENVIRONMENT .To succeed, marketers must know thecustomer in a context including thecompetition, Govt. Policy& regulation and
the broader economic, social and politicalmacro forces that shape the evolution ofmarket.
-
7/27/2019 Basic Concepts of Marketing Iba
41/74
STRATEGIC CONCEPT OF MARKETING Shifted the Marketing Objectives fromPROFIT TO STAKEHOLDER BENEFITS.
Stakeholders are individuals or groups who
have an interest in the activity of a company. They include-----The employees andmanagement, Customers, Society, Shareholders,Financiers/ Bankers, Government etc.
-
7/27/2019 Basic Concepts of Marketing Iba
42/74
STRATEGIC CONCEPT OF MARKETING Strategic Marketing Concept is Strategic
Management, which integrates marketing withthe other management functions. ( Major task
is Profit for Stakeholders benefits ).
-
7/27/2019 Basic Concepts of Marketing Iba
43/74
MARKETING SYSTEM
Marketing is concerned with the flow of goodsand services from the points of production tothe points of consumption. There is a
systematic arrangement of these functions ofmarketing to move the goods and services tothe needy persons. This system is essential tothe creation of time, place and possession
utilities.
-
7/27/2019 Basic Concepts of Marketing Iba
44/74
MARKETING SYSTEM
A dynamic marketing system must be willingto undertake the following specific activities
1. Define market area.2. Research consumer wants and needs.
3. Develop and redevelop product / service.4. Select, train, motivate and control
human resources.5. Develop sales approach and advertising
support.
-
7/27/2019 Basic Concepts of Marketing Iba
45/74
GOALS OF THE MARKETING SYSTEM
(1) MAXIMIZE CONSUMPTION
(2) MAXIMIZE CONSUMER SATISFACTION
(3) MAXIMIZE CHOICE
(4) MAXIMIZE LIFE QUALITY
-
7/27/2019 Basic Concepts of Marketing Iba
46/74
THREE BASIC PRINCIPLES OF MARKETING
The essence of marketing can besummarized in three great principles.
The first identifies the purpose and taskof marketing,
the second the competitive reality ofmarketing and
third the principal means for achievingthe first two.
-
7/27/2019 Basic Concepts of Marketing Iba
47/74
THREE BASIC PRINCIPLES OF MARKETING
(1) . The Customer Value and Value
Equation :
V=B/P Where; V=Value
B= Perceived BenefitsP= Price
(Value is increased by increasing the numeratorand/or reducing the denominator)
-
7/27/2019 Basic Concepts of Marketing Iba
48/74
THREE BASIC PRINCIPLES OF MARKETING
(2).Competitive or Differential Advantage :
The total offer must be more attractive thanthat of the competition in order to create a
competitive advantage.
(3).Focus or the Concentration of
Attention : The task of creating
Customer Value at a Competitive advantage.
-
7/27/2019 Basic Concepts of Marketing Iba
49/74
VALUE MAP
A
BCDE
Value Advantaged Area
Value
Disadvantaged Area
Customer Perceived Benefits
PerceivedPrice
-
7/27/2019 Basic Concepts of Marketing Iba
50/74
CUSTOMER AS THE CONTROLLING FUNCTION
Production Finance
Marketing Personnel
CUSTOMER
-
7/27/2019 Basic Concepts of Marketing Iba
51/74
MARKETING AS THE INTEGRATIVE FUNCTION
CUSTOMER
Production
Personnel Finance
Marketing
-
7/27/2019 Basic Concepts of Marketing Iba
52/74
THREE LEVELS OF MARKETING
Responsive Marketing
Anticipative Marketing
Need Shaping Marketing
-
7/27/2019 Basic Concepts of Marketing Iba
53/74
RESPONSIVE MARKETING
It is the form of marketing when some companydefines an existing clear need and prepare anaffordable solution.
(Recognizing that women wanted to spend lesstime for cooking and cleaning, led to theinvention of modern washing machine,microwave oven etc.)
-
7/27/2019 Basic Concepts of Marketing Iba
54/74
More About Ethics
Corporations are taking action to instillethical awareness in their employees by:
Avoiding unreasonable pressure onemployees to perform.
Communicating clearly what isexpected of employees.
Employing an Ethics Officer to advise
employees on ethical dilemmas. Rewarding only ethical performance.
-
7/27/2019 Basic Concepts of Marketing Iba
55/74
ANTICIPATIVE MARKETING
It is a form of marketing when a company
recognize an emergent or latent need, andcome out with an affordable solution. Evian,Perrier anticipated growing market for bottleddrinking water as the quality of water
deteriorated in many places.Anticipative marketing is more risky thanresponsive marketing; companies may comeinto market too early or too late, or may even
be totally wrong about thinking that such amarket would develop.(e.g. Dish washers inPakistan)
-
7/27/2019 Basic Concepts of Marketing Iba
56/74
NEED SHAPED MARKETING
The broadest level of marketing occurs when acompany introduces product that nobodyasked for and often could not even conceive of.
(e.g. Sony Walkman, Sony Compact Disc )
Late Akio Morita, founder and chairman ofSony, who introduced these and many othernew products, summarized his marketingphilosophy in these words: I dont serve
markets. I create them.
-
7/27/2019 Basic Concepts of Marketing Iba
57/74
MARKET- DRIVEN AND
MARKET- DRIVING COMPANY
Market-driving companies generate significantly new products, services
business formats and raise our sights and ourcivilization.
These companies are much more thancustomer-led.
They lead customer where they want to go,
but dont know yet.
MARKET DRIVEN AND
-
7/27/2019 Basic Concepts of Marketing Iba
58/74
MARKET- DRIVEN AND
MARKET- DRIVING COMPANY
Market-driven companies focus on researching current customers to identify
their problems,
gather new ideas,
develop products that result in incrementalimprovements, not radical innovations.
ECONOMY OF ABUNDANCE
-
7/27/2019 Basic Concepts of Marketing Iba
59/74
ECONOMY OF ABUNDANCE Abundance is the antithesis of scarcity.
Everyone has adequate health care, nutrition, education,
transportation, recreation, housing, self-expression, andpersonal security.
Does not mean that goods arefree. Abundance meansadequacy, not satiation. The level of adequacy is not
constant but is relative to theprogress made in thecommunity's joint stock of knowledge. In a Stone Agecommunity there is a lower level of adequacy than in aSpace Age community. The Space Age level of adequacy ishigher because such a higher standard is practical with a
larger joint stock of knowledge. Scarcity means that somemembers of the community suffer from inadequate healthcare, nutrition, education, transportation, recreation,housing, self-expression, or personal security.
-
7/27/2019 Basic Concepts of Marketing Iba
60/74
The paradox has forced countries to form
regional blocs
http://upload.wikimedia.org/wikipedia/en/4/43/ActiveBlocs.PNG -
7/27/2019 Basic Concepts of Marketing Iba
61/74
Functions of Marketing
These functions define marketing as it isapplied in business operations
Distribution
Financing
Marketing-Information Management
Pricing
Product/Service Management
Promotion
Selling
-
7/27/2019 Basic Concepts of Marketing Iba
62/74
Functions of Marketing
1. Distribution involves deciding where and to whomproducts need to be sold in order to reach the finalusers.
2. Financing is getting the money needed to pay for theoperation of a business.
3. Marketing-Information Management involves gettingthe necessary information to make sound businessdecisions.
4. Pricing dictates how much to charge for goods andservices.
5. Product/Service Management is obtaining, developing,maintaining, and improving a product.
-
7/27/2019 Basic Concepts of Marketing Iba
63/74
Functions of Marketing
5. Promotion is communicating withpotential customers to inform,persuade, or remind them about a
company.
6. Selling is providing customers withgoods and services they want.
-
7/27/2019 Basic Concepts of Marketing Iba
64/74
When Did Marketing Begin?
Product Orientation
Selling Orientation
Customer Orientation
Most Efficient Production &DistributionSellers Market
Satisfies Customers Needsand Wants
Total Quality
New Era Orientation Benefits to Customers, PlusFirms Employees,
Shareholders, and Communities.
Marketing as a Sales FunctionBuyers Market
l f k
-
7/27/2019 Basic Concepts of Marketing Iba
65/74
Evolution of Marketingmarketing has evolved from a production, to
a selling, to a marketing stage
in the production-orientation stage,emphasis was on making a better physical
product in the sales-orientation stage, the emphasiswas on how to sell that product
a marketing-oriented organization placesemphasis on satisfying the wants and needsof customers
Stages in the Evolution of Marketing
-
7/27/2019 Basic Concepts of Marketing Iba
66/74
Some industr ies and organizat ions remain at the
produ ct ion-or ientation stage.
PRODUCTION ORIENTATION
PRODUCTION ORIENTATION SALES ORIENTATION
Other indu str ies and o rganizat ions have progressed only to the
sales-or ientat ion stage.
Many indus tr ies and organizations have progressed to th e
marketing -or ientat ion stage.
PRODUCTION
ORIENTATION
SALES
ORIENTATION
MARKETING
ORIENTATION
Late 1800s Early 1930s Mid-1950s 1900s
g g
-
7/27/2019 Basic Concepts of Marketing Iba
67/74
The Marketing Concept
Objective is to produce long-termcustomer satisfaction and organizationalsuccess
The organizations planning and
operations are customer-orientedThe marketing activities of the
organization should be consistentlydesigned and delivered
All activities are intended to achieve thefirms organizational objectives
An Innovation Based on the
-
7/27/2019 Basic Concepts of Marketing Iba
68/74
An Innovation Based on theMarketing Orientation.
Relationship MarketingAn attempt to build personal, long-
term bonds with customers.
Relationship marketing has expandedto include all groups an organizationinteract with: suppliers, employees,
unions, government, and evencompetitors.
Drivers of
-
7/27/2019 Basic Concepts of Marketing Iba
69/74
Drivers of
Customer Satisfaction
getting the core product right is essentialmany services and systems support the
core
customers expect good technical
performance of the product or service they also expect to be treated well in face-
to-face interaction with employees
the company must also consider how itmakes the customer feel in many subtleways
-
7/27/2019 Basic Concepts of Marketing Iba
70/74
The Marketing Concept
Marketing Management is The Marketing Concept in Action
MARKETING CONCEPT
Customer
orientation
Profitable Sales
Volume
Coordinatedmarketing
activities
+
+
+ CustomersatisfactionOrganizational
success
-
7/27/2019 Basic Concepts of Marketing Iba
71/74
Difference between Marketing and Selling
Marketing is theprocess ofdeterminingcustomer wants .
Then developing aproduct to satisfythat need and still
yield a satisfactory
profit. It is externally
focused.
Selling is producing aproduct .
Then trying to
persuade customersto purchase.
It is infect, trying toalter consumer
demand. It is internally
focused
Q lit i M k ti
-
7/27/2019 Basic Concepts of Marketing Iba
72/74
Quality in Marketing quality in what an organization offers is a
major contributor to value and customersatisfaction
if the customer is satisfied with the quality, heor she is likely to return to buy again
quality is very much defined by the customer;it alsovaries across individuals and over time
quality, as perceived by the customer, isinfluenced not only byphysicalproducts but
by service as well requires a commitment from all staffto
deliver the highest quality possible
-
7/27/2019 Basic Concepts of Marketing Iba
73/74
Another Innovation:
Mass Customization
An attempt to provide affordableproducts customized to come as
close as possible to meeting theneeds of individual customers.
This is made possible because of
advances in informationtechnology.
-
7/27/2019 Basic Concepts of Marketing Iba
74/74
Ethics in MarketingMarketing is intended to influence the
behavior of customers and others. The use of marketing tools can create awide variety of ethical challenges.
There is disagreement over whatconstitutes ethical or unethical behavior.
Ethics are standards of behaviorgenerally accepted by society.
Ethics vary from society to society.