CORE CONCEPT OF MARKETING

FACILITATOR: MS. SHEETAL ARORA

(ASSISTANT PROFESSOR)

LOTUS INSTITUTE OF MANAGEMENT, BAREILLY

MARKETING : CONCEPTSimply Put: Marketing is the delivery of

the customer satisfaction.

Goals: Attract new customers by promising superior values and keep grow current customers by delivering satisfaction.

Smallest definition of Marketing: Meeting needs profitability.

WHAT IS MARKETING??? It is the process of developing,

promoting and distributing products to satisfy customer’s wants and need.

Process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others.

Marketing starts before launching a product and it continues after selling the product.

DEFINITION OF MARKETING

According to American Marketing Association, "Marketing is an organisational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organisation and its stakeholders."OLD View

of Marketing:Making a Sale –

“Telling & Selling”

NEW View of Marketing:

Satisfying Customer Needs

DEFINITION CONT… A social and managerial process by which

individuals and groups obtain what they need and want through creating and exchanging products and value with others.

“…the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed then is to make the product of service available…”

Peter Drucker

NATURE OF MARKETING1) Marketing is everywhere.2) It is done between marketer and

prospects.3) It can be done formally or informally.4) Involves vast number of activities.5) Marketing of products or services.6) Continuous process.7) Core aim is customer satisfaction (not

selling.8) It is all about product, place, price and

promotion.

MARKETING MIX

the set of controllable marketing variables that the firm blends to produce the response it wants in the target market

4 Psproductpriceplacepromotion

THE 4 P’S AND 4 C’S OF MARKETING MIX

4 P’s

Product Price Place Promotion

4 C’s

Customer Satisfaction

Customer Cost Convenience Communication

PRODUCT

A product is anything that can be offered to a market for attention, acquisition, use, or consumption and that might satisfy a want or need.

It Includes:- Physical Objects- Services- Events- Persons- Places- Organization- Ideas- Combination of the above

WHAT IS SERVICE??

A SERVICE is a form of product that consist of activities, benefits or satisfactions offered for sale that are essentially intangible and do not result in the ownership of anything.

Examples includes:- Banking- Hotels- Tax preparation- Home repair service

PRICE

Price is what we pay for what we get.

Rent for home Tuition fees for education Fare for Airline, Taxi, Railway.

PLACE OR DISTRIBUTION CHANNEL

Set of interdependent organizations involved in the process of making a product or service available for use of consumption by the consumers or business users.

PROMOTION Our promotions are designed to create

demand.  PR, Online Marketing, Advertising, Direct

Marketing and Event Marketing. Why because promotion is the way in a

business makes its products known to the customers, both current and potential.

The main aim of promotion is to ensure that customers are aware of the existence and positioning of products.

SCOPE OF MARKETING

1. GOODS2. SERVICES3. EVENTS4. EXPERIENCES5. PERSONS6. PLACES7. PROPERTIES8. ORGANIZATIONS9. INFORMATION10. IDEAS

SCOPE OF MARKETING CONT…

1) Goods: A commodity, or a physical, tangible item that satisfies some human want or need, or something that people find useful or desirable and make an effort to acquire it.

2) Services: Activity or benefit offered for sale that is essentially intangible and does not result in ownership.

3) Experiences: The accumulation of knowledge or skill that results from direct participation in events or activities; "a man of experience"; "experience is the best teacher"

SCOPE OF MARKETING CONT…4) Events: Marketers promote time-based

events, such as major trade shows, artistic performances and company anniversaries.

5) Persons: Celebrity is a major business. Artists, musicians, CEOs, physicians, high profile lawyers and financiers all get help from celebrity marketers.

6) Places: Cities, states, regions and whole nations compete actively to attract tourists, factories and new residents. Example: Advertisement of Gujarat.

SCOPE OF MARKETING CONT…

7) Properties: A thing or things belonging to someone; possessions collectively. A building or buildings and the land belonging to it or them.

8) Organizations: Organization actively work to build a strong, favorable image in the mind of their publics. We see corporate identity ads by companies seeking more recognition and acceptance.

SCOPE OF MARKETING CONT…9) Information: Information is essentially

what books, schools and universities produce, market and distribute at a price to parents, students and communities.

10) Ideas: Every market offering includes a basic idea. Products and services are platforms fro delivering some idea or benefit.

WHAT IS MARKETING MANAGEMENT???

According to Philip Kotler,” Marketing Management is the process

of planning and executing the conception, pricing and promotion and distribution of goods services and ideas to create exchanges with target groups that satisfy customer and organizational objectives”.

OBJECTIVES OF MARKETING MANAGEMENT

1. Creating new customer.2. Satisfying the needs of the customer.3. To retain the existing customer.4. Enhancing the profitability of the

business.5. Raising the living standard of people.6. Determining the marketing mix.

PROCESS OF MARKETING MANAGEMENT

Setting Marketing Objectives

Analyzing Marketing Opportunities

Researching &Selecting Target Market

Designing Marketing Strategies

Planning Marketing Programmes

Organizing, Implementing & Controlling Marketing Effort

Step-1

Step-2

Step-3

Step-4

Step-5

Step-6

CORE MARKETING CONCEPTS

1. Segmentation, Targeting & Positioning2. Marketplace, Market Space, Meta Markets3. Marketers & Prospects4. Needs, Wants, Demands5. Offering and Brand6. Value and Satisfaction 7. Exchange and Transactions8. Marketing Channels

SEGMENTATION, TARGETING & POSITIONING Marketer can rarely satisfy every one in the

market.

Therefore marketers start by dividing the market into segments.

After segmentation marketers decide that which market is the target market for them.

And finally the correct positioning is done to convert the target market into customers.

MARKET PLACE, MARKET SPACE AND META MARKET Market Place is physical as when one goes

shopping in a store. Market Space is digital as when one goes

for shopping on the internet. Meta Market is a cluster of complementary

products and services that are closely related in the minds of consumer but are spread across a diverse set of industries.For eg: Maruti Suzuki India, through their website, helps buyers and sellers of second hand cars to sell, buy or exchange Maruti certified used vehicles.

MARKETER AND PROSPECTS

A marketer is someone seeking response (attention, a purchase, a vote, a donation ) from another party.

A prospects is a someone who gives response to marketer.

NEEDS, WANTS AND DEMANDS

Needs:- Needs are the basic human requirements. People need air, food, water, clothing and shelter to survive.

Wants:- These needs become wants when they are directed to specific objects which might satisfy the need. For eg. An American wants bread when he feels hungry while and Indian wants Chapati.

Demand:- Demands are wants fro specific products backed by an ability to buy.

BRAND AND OFFERING

An Offering is a set of benefits that companies offer to customer to satisfy their needs.

A brand is an offering from a known source. Eg. Mc Donald's carries many associations in people’s mind that make up a brand image.

VALUE AND SATISFACTION

The offering will be successful if it delivers value and satisfaction.

Value reflects the sum of the perceived tangible and intangible benefits and cost to customer. It is the combination of quality, service and price. Value increase with quality and services and decrease with price.

Satisfaction reflects to person’s judgment of a product perceived performance in relationship to expectations. If the performance falls short of expectation the customer is dissatisfied and vice-versa.

DETERMINANTS OF CUSTOMER DELIVERED VALUE

CUSTOMER DELIVERED

VALUE

Total Customer

Cost

Product Value

Total Customer

Value

Monetary Cost

Service Value Time Cost

Personnel Value

Energy Cost

Image Value Psychic Cost

GENERIC VALUE CHAIN

LEVI STRAUSS’ VALUE-DELIVERY NETWORK

Competition is between networks, not companies.The winner is the company with the better network.

Delivery

Sears(Retail)Sears

(Retail)Levi’s

(Apparel)Levi’s

(Apparel)

Order

Delivery

Order

CustomerCustomer

Delivery

Du Pont(Fibers)Du Pont(Fibers)

Order

Delivery

Order

Milliken(Fabric)Milliken(Fabric)

EXCHANGE AND TRANSACTION

EXCHANGE Exchange is the process of obtaining a

desired product from someone by offering something in return, exchange takes place where two parties can agree on terms that will leave both better off (or aleast not worst off) than before.

Get something (product/service) by offering something in return.Eg. Kind (barter) or money (value)

TRANSACTION Two parties are engaged in the

exchange if they are negotiating and when an agreement is reached, we say that transaction takes place.

Transaction is a trade of values between two or more parties.

Transaction involves several dimensions: at least two things of value, agreed upon conditions, time and place of agreement.

MARKETING CHANNELSMarketer uses three kinds of marketing channels: Communication Channels deliver and

receive message from target buyers and include newspapers, magazines, radio, television, on the internet etc.

Distribution Channels to display, sell or deliver the physical products or servicer(s) to the buyer or user. It includes distributors, wholesaler, retailers etc.

Service Channels to carry out transaction with potential buyer. It includes warehouse, transportation companies, bank and insurance companies to facilitate transaction.

SIMPLE MARKETING SYSTEM

MODERN MARKETING SYSTEM

FOCUS OF SELLING PHILOSOPHY

Production Selling Consumption

SELLING PHILOSOPHY Output “sold” to customer. Looks at individual, single customer. Seeks sales rather than profit Short- term goal orientation Concerned with current inventory

reduction Narrower view of customer needs Little adaption to environment Informal planning and feedback

FOCUS OF MARKETING PHILOSOPHY

Customer Need

Evaluation

Integrated Marketing

Effort

Customer Satisfaction

Achievements Of

Organizational Goals

FEEDBACK

MARKETING PHILOSOPHY Consumer Oriented. Stresses Research and Consumer

Analysis. Looks at Groups of Consumer. Profit Oriented. Directed to Long Range Goals. Two-Way Interactive Process. Appropriate Adaption to Marketing

Environment. Broad View of Consumer Needs. Integrated Planning and Feedback.

MarketIntegratedmarketing

Profits throughcustomer

satisfactionCustomer

needs

(b) The marketing concept

FactoryExistingproducts

Selling andpromotion

Profits throughsales volume

Startingpoint Focus Means Ends

(a) The selling concept

MARKETING AND SALES CONCEPT CONTRASTED

FUNCTIONS OF MARKETING MANAGEMENT

1) Functions of Exchange

Buying

Assembling Selling

2) Functions of Physical Supply•Transportation

•Storage•Choosing Channel

of Distribution

3) Facilitating Functions

•Financing•Pricing

•Risk-Bearing

•Standardization•Marketing Information

MARKETING MANAGEMENT PHILOSOPHIES

Product Concept

Production ConceptProduction Concept

Product ConceptProduct Concept

Selling ConceptSelling Concept

Marketing ConceptMarketing Concept

Consumers prefer products that are widely available and inexpensive

Consumers favor products that offer the most quality, performance,

or innovative features

Consumers will buy products only ifthe company aggressively

promotes/sells these products

Focuses on needs/ wants of target markets & delivering value

better than competitors

COMPANY ORIENTATIONS TOWARDS THE MARKETPLACE

MARKETING MANAGEMENT PHILOSOPHIES (CONT’D) Societal Marketing Concept

Delivering value to customers in a way that maintains or improves both the consumer’s and the society’s well-being

Inactive orex-customers

RELATIONSHIP MARKETINGCUSTOMER DEVELOPMENT

PartnersAdvocatesClientsRepeat

customersFirst-timecustomers

Suspects

Prospects

Disqualifiedprospects

The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction

LEVEL OF TRUST MAXIMUMMINIMUM

Marketing in Action

Focus on Customer Lifetime ValueTo keep customers coming back, Stew Leonard’s has

created the “Disneyland of dairy stores.”

Customers

Front-line people

Middle Management

TopManagement

TRADITIONAL ORGANIZATION CHART

CUSTOMER-ORIENTED ORGANIZATION CHART

Customers

Front-line people

Middle management

Topmanage-

ment

Customers Cus

tom

ers

Relationship of Marketing

with Other Functional Areas

EVOLVING VIEWS OF MARKETING’S ROLE

a. Marketing as anequal function

FinanceProduction

Marketing Humanresources

b. Marketing as a moreimportant function

Finance

Humanresources

Marketing

Production

EVOLVING VIEWS OF MARKETING’S ROLE

c. Marketing as themajor function

Marketing

Finance

Hum

an

resources

Production

d. The customer as thecontrolling factor

Customer

Human

reso

urces

FinanceProductio

n

Marketing

EVOLVING VIEWS OF MARKETING’S ROLE

e. The customer as the controllingfunction and marketing as the

integrative function

Customer

Marketing

Production

Hum

an

resources

Finance