INTRODUCTION OF MARKETING

UNIT- I

INTRODUCTION:

MEANING & DEFINITION:• Acc. to William j.stanton “ A total system of interacting

business activities design to plan, promote, price and distribute want satisfying products and services to present and potential customers”

• Marketing management is the analysis, planning, implementation and control of programs designed to bring out desired exchanges with target audiences for the purpose of mutual or personal gain it relies heavily on adaptation and co-ordination of product, price, promotion and place for achieving effective response.” - PHILIP KOTLER.

SCOPE OF MARKETING:• Goods• Services• Experiences• Events• Persons• Places• Properties• Organizations• Information• Ideas.

Definition of marketing by American Marketing Association:

“ Marketing consists of the performance of business activities that direct the flow of goods and services from producers or suppliers to consumers/ end users”.

Definition by PHILIP KOTLER: “Marketing is defined as a social and managerial process by which is individual and groups what they want and need through creating and exchanging products and values with others”.

NATURE OF MARKETING:

• Marketing is both consumer oriented and competitor oriented.• It starts with consumers and ends with consumers by satisfying their needs.• Marketing is the most important function of management• The long term objective of marketing is profit maximization through customer satisfaction.• Marketing is an integrated process which is based on strategies and models.• Marketing must deliver goods and services in exchange of money.

• Marketing is a science as well as an art.• Marketing is a system. •Marketing is goal oriented.• Marketing is the guiding element of the business.• Modern marketing precedes and succeeds production.• Exchange process is the essence of marketing.

MARKETING AND OTHER FUNCTIONAL AREAS:

1. Marketing and manufacturing2. Marketing and financing3. Marketing and personnel.

APPROACHES TO THE STUDY OF MARKETING:

1. Product or commodity approach2. Institutional approach3. Functional approach4. Decision making or management approach5. Legal approach6. Economic approach7. Systems approach

MARKETING CONCEPTS:

• Production concept: The production concept holds that consumer will favor those products that are widely available and low in cost. Managers of production oriented organizations concentrate on achieving high production efficiency and wide distribution coverage.

• Product concept: The product concept holds that the consumer will favor that offer the most quality, performance and innovative features managers in these product oriented organizations focused their energy on making superior products.

• Selling concept: The selling concept holds that consumers, if left alone, will ordinary not buy enough of the organization’s products. The organization therefore, undertake aggressive selling and promotion effect.

• Marketing concept: Marketing concept holds that the key to achieving organizational goals consists in determining the needs and wants of target markets and delivering the desired satisfaction more effectively and efficiently than the competitors.

• Societal marketing concept: Societal marketing holds that the organization task is to determine the needs, wants and interest of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors in a way that preserves or enhances the consumers and the society’s well being.

society

consumers company

• Holistic marketing concept:

H.M

SOCIETAL CONCEPT

CORE MARKETING CONCEPT

RELATIONSHIPMARKETING

Role of marketing in economic development:

Any reduction in the cost of marketing is really a benefit to society. How prices are a boom to the entire population. The nation’s income is composed of goods & services which money can buy. Any increase in a lower cost of distribution, lower prices to consumers mean a real increase in the national income. Marketing process brings new varieties of useful & quality goods to consumers. This raises the standard of living of the people. Marketing provides wide employment opportunities. It is marketing which has converted yesterday’s luxuries into today’s necessities.

Marketing converts latent demand into effective demand. Marketing is the creation and delivery of standard of living.

Marketing myopia:• This term was given by prof. Theodore Levitt.• The disadvantage of excessive pre-occupation with the product or production or selling, ignoring the customer in the process. It means colored or crooked perception of marketing and short sightedness about business.• Excessive attention to production, product or selling aspects at the cost of the customer and his actual needs creates this myopia.

SELLING V/S MARKETING:Marketing Selling• Focuses on consumer needs • Focuses on seller’s needs

• Customer’s enjoy supreme importance

• Product enjoys supreme importance

• Product planning & development to match products

• High pressure selling to sell goods already produced.

• Integrated approach to achieveLong term goals

• Fragmented approach to achieve immediate gains

• Converting customer’s needs into products.

• Converting product’s into cash

• Market determines price • Cost determines price

• Profits through customer’s satisfaction

• Profits through sales volume

• Customer is the very purpose of the business

• Customer is the last link in the business

CONCEPTS STARTING POINT

FOCUS MEANS ENDS

Selling concept

Factory Products Selling & promoting

Profits through sales volume

Marketing concept

Market Consumer needs

Integrated marketing

Profits through customer satisfaction

SELLING V/S MARKETING:

RECENT INNOVATIONS IN MODERN MARKETING:

1. Social marketing2. De marketing3. Re marketing4. Over marketing5. Meta marketing It is synthesis of all, managerial, traditional, scientific,

social and historical prospective.

Marketing mix: {4p’s}

Marketing mix target consumers

PRICE:List priceDiscounts

AllowancesPayment periods

Credit terms

PLACE [DISTRIBUTION]:ChannelsCoverage

AssortmentsLocationsInventory

TransportationLogistics

PRODUCT:VarietyQualityDesign

FeaturesBrand name

Packagingservices

PROMOTION:Advertising

Sales promotionPersonal sellingPublic relations

Publicity

FOUR C’S:Product – customer solutionPrice – customer costPromotion – communicationPlace {distribution} – convenience

MARKETING MANAGEMENT TASK:

1. Sales & marketing analysis2. Determination of marketing goals3. Sales forecasting and marketing budget Formulation of marketing strategies, policies &

procedures

Evolving an appropriate marketing mix or program:

1. Organizing of all marketing activities like product wise, area wise, customer wise or acc. To specific requirements.

2. Assembling of necessary resources such as marketing personal, finance, physical facilities.

3. Active participation in the product planning & development to establish best co-relation between the product attributes and customer demands.

4. Management of distribution channels & physical distribution.

Effective communication, proper control and co-ordination of all marketing functions.

Post sales servicing during the warranty period e.g.: electronic items.

RURAL MARKETING:

Rural marketing:

740 million rural population acc. To 2001 censes almost 70% of total population.

Occupation pattern:• 27% agriculture labor – 50% depend on agriculture.• Remaining are petty traders, salary earner’s are negligible.• Income generation 70% is from agriculture

Location: 6,30,000 villages; 3700 towns & cities

Expenditure pattern:• 12,000 crores in rural areas• 6,000 crores in urban areas• Non-food items in rural area is 1.47 times more than urban area• 65,000 crore from FMCG [ fast moving consumer goods]• 5,000 crore on durables• 45,000 crores on agriculture inputs

Literacy level:• 80% literacy in urban area• 30 – 40% in rural areas

Land distribution:• 75% land holdings account for 25% of total cultivated area.• 25% land holding account for 75% of land.

Land usage pattern:• 70% of land is used for food crops• 30% used for commercial crops

Development programs:• IADP- Intensive agriculture district program• HYVP- High yielding varieties program• SFDA- Small farmers development agency• HADP- Hill area development program• IRDP- Integrated rural development program• Operation flood [ white revolution ]

Rural infra - structure:

70% of Indian villages are today connected through Road but 60% remain inaccessible during the monsoonSeason.

FEATURES RURAL URBAN

Demand pattern Seasonal demand Uniform demand

Spread Widely spread Concentrated

Literacy level Low High

Sources of supply Inadequate supply Adequate supply

Physical communication facilities

Poor Very good

Product knowledge Not – known Known

Awareness of needs Not – known Known

Sources of information Word of mouth, panchayaths, doordarshan

Any media

Timeliness of supply Un - timely Timely

Per – capita income Low High

Consumer protection Rarely available Easily available

PROBLEMS IN RURAL MARKETING:

Transportation

Ware – housing

Packaging

Media

Seasonal – marketing

Low – per capita income

Low level of literacy

RURAL MARKETING STRATEGIES:

I. Product strategies: Small unit packing Low quality products Brand name

II. Pricing strategies: Economy packs Low priced products Credit system works

III. Promotion strategies: TV Cinema Radio Print media

Wall paintings/ hoardings Direct marketing

IV. Place strategies [ distribution]: Local retail stores Fair price shops [ ration shops] Panchayaths Weekly markets Mobile distribution

DIRECT MARKETINGThree basic properties of direct marketing:

1. A definite offer to the consumer.2. All the necessary information is provided to make a decision.3. A mechanism to respond to the offer within this frame work

fall all direct marketing offers – sales letters, catalogues, tele – marketing, direct response , T.V advertisements & the internet

e.g.: Magazines, news letter publishers, mail order merchandiser, fund risers, book clubs.

Direct marketing is attractive for several reasons:

Investment required is low.

It does not required specialized skills.

All that is required is a data base with consumer profiles.

Returns are quick and its effectiveness can be measured to the last rupee.

Consumer reaction can be known immediately.

ADVANTAGES OF DIRECT MARKETING:

o Focused approach.o Cost effective.o Measurable & attributable.o Immediate & flexible.o Ability to test, measure the impact of single variables.o Easy international reach.o Tailored messages.o Alternative distribution channel.o Opportunity to built a data base..

DISADVANTAGES OF DIRECT MARKETING:

• May be seen as competing with existence intermediaries.

• May be seen as intrusive from consumers.

• Cost is high.

ONLINE MARKETING

Internet commerce is classified as follows:

B 2 C – Business to Consumer

C 2 C – Consumer to Consumer

C 2 B – Consumer to Business

G 2 B – Government to Business

B 2 B – Business to Business

ADVANTAGES:• Convenience – 24 Χ 7• Information• Fewer hassles• Quick adjustments to market conditions• Lower cost• Relationship building• Audience sizing• Both small & large firms can effort it• No real limit on advertising space, information access and

retrieval is fast• Any 1, at any place, ant time in the world can buy• Shopping can be done privately.

CONDUCTING ONLINE MARKETING :

• Electronic presence

• Corporate website { company website }

• Marketing website

CHALLENGES OF ONLINE MARKETING:• Limited consumer exposure & buying

• Skewed user demographics & psychographics

• Security

• Ethical concerns

• Confusion and clutter

MARKETING IN THE NEW MILLINIEUM:

• Rural markets raise high.

• Online marketing.

• More competition.

• Fittest will survive.

• Global competition.

• More consumer friendly.