MARKETING MANAGEMENT

INTRODUCTION TO MARKETING MANAGEMENT

• What is market?• The term ‘market’ owes its origin to the Latin word

‘marcatus’ having a verb ‘mercari’ implying ‘merchandize’ , ‘ware-traffic’, ‘trade’ or ‘ a place where business is conducted’.

• Originally market was a public place in a town or village, where household provisions and other objects were available for sale.

• Now the definition of market has expanded to a globalized world.

The Essentials of Market

• The essentials of a market are:

• Existence of a commodity or item which is to be dealt with.

• The existence of buyers and sellers.

• A place, be it a certain region, a country or the entire world or virtual place like the internet.

• Interaction between buyers and sellers to facilitate transactions.

Classification of Markets

• Market can be classified on various basis.

o On the basis of geographical area.o On the basis of nature of competition in the

market.o On the basis of nature of goods sold.

Classification of Markets

1. Geographical area as a basis• On the basis of geographical area, the market can be

classified as :o Local marketo Market place where the purchase and sale of

goods/services involve buyers and sellers of a small local area.

o National market When goods and services are exchanged all over the

country, it is called as national marketo Global or World market Many manufactured products and specialized services

are sold across the globe by many companies. Such market is called as global market.

Classification of Markets

2. On the basis of nature of competition in the market

Perfect market Imperfect market

Classification of Markets

3. On the basis of nature of goods soldConsumer goods market A consumer goods market is defined as a market where the final output of the firm goes for the consumption by individuals or institutions. These goods can be durables or non durables. Durables are also called as FMCG products.

Industrial goods marketA business market is defined as a market where output of one firm goes either as raw material, goods in process or as consumables of another industry.This market is also called as organizational or B2B marketThe demand for the product is derived demand.

Classification of Markets

Non-Profit and Government MarketThis market consists of non-profit organizations such as social service agencies, educational organizations, charitable organizations and Govt. Departments and agencies that need special skills to sell to them.These buyers have limited purchasing power. The Govt. which is a large buyer, make purchases on the basis of tenders, bids and negotiation.

MARKETING• Marketing is a set of business activities that

facilitate movement of goods and services from producers to consumers.

• It is an ongoing process that comprises the following:1. Discovering and translating consumer needs into

products and services2. Creating demand for them, serving the customer and

his demand through a marketing programme of promotion

3. Distribution to fulfill the company’s marketing goals in a competitive environment

MARKETINGDEFINITIONDEFINITION

• “Marketing is an organization function and a set of process for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stake holders” (American Marketing Association)

• “Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements, profitably. (Chartered Institute of Marketing)

THE EXCHANGE PROCESS• THE EXCHANGE PROCESS IN MARKETING

Barter System of Exchange• Marketing system evolves from simple barter

system through the stage of money economy to today’s complex marketing.

• But for transaction to take place between two parties, it was necessary that there be needs and wants on both sides.

THE EXCHANGE PROCESS• MONEY ECONOMY• The development of money came to act as a

common medium and the exchange process became very easy and convenient.

• The exchange process in money economy can be shown as follows:

THE EXCHANGE PROCESS

• Thus Exchange is an act of obtaining a desired product or service from someone by offering something in return.

PRODUCERS/ SELLERS

BUYERSMarketFlow of

Goods & Service

Flow of Money

THE EXCHANGE PROCESS• For an exchange process to take place between

two or more parties, the following conditions have to be met.

1.Each party has something that could be of value to other party.

2.Each party has desire, willingness and ability to exchange

3.Each party is capable of communicating and delivering

4.Each party has the freedom to accept or reject the offer.

Marketing Orientations(Marketing Management Philosophies)

• Marketing activity should be carried out under a well thought out philosophy of efficiency, effectiveness, and social responsibility.

• There are six competing concepts under which organizations conduct marketing activities. They are:

1. The production concept2. The product concept3. The selling concept4. The marketing concept5. The societal marketing concept

Marketing Orientations:1-PRODUCTION CONCEPT

Production Concept

Philosophy

Objective

How?

Quality products at affordable prices sell themselves

Quality products at affordable prices sell themselves

Minimize costs to lower prices, keep quality comparatively high

Minimize costs to lower prices, keep quality comparatively high

Focus on production & distribution efficiency to maximize sales and

revenue

Focus on production & distribution efficiency to maximize sales and

revenue

Marketing Concepts – Production Concept (Summary)

• The production concepts hold that consumers will prefer products that are widely available and inexpensive.

• Managers of production oriented companies concentrate on achieving high production efficiency, low costs and mass distribution.

• The company assumes that consumers are primarily interested in product availability and low prices.

• This concept holds good in those cases where the cost of production of the company is more than the cost of production of its competitors and the demand for the product exceeds its supply

Marketing Orientations : 2-Product Concept

2.Product Concept

• The product concept holds that consumers will favor those products that offer the most quality, performance or innovative features

• Managers in these organizations focus on making superior products and improving them over time

• The product concept can lead to what Theodore Levitt calls “marketing myopia”. Marketing myopia is the wrong concept about the product and its purchase by consumers

3. The Selling Concept

The Selling Concept

• The selling concept assumes that consumers and businesses, if left along, will ordinarily not buy enough of the organization’s products. The organizations must therefore undertake an aggressive selling and promotion effort.

PRODUCT PROMOTIONSALES

Selling Concept

• The selling concept is given below in detail

Starting Point Focus Means Ends

Factory ProductsAggressive

Selling & Promotion

Profit through sales volume

Selling Concept

• The selling concept is aggressively used for selling unsought goods, ie. Products that buyers normally do not think of buying. Eg. Insurance, encyclopedia, funeral plots etc

• The selling concept is aggressively used by political parties during the time of election

• Most firms practice selling concept when they have over capacity

4. Marketing Concept

Marketing Concept• The marketing concept holds that the key

to achieving the organization’s goals consists of the company being more effective than competitors in creating, delivering, and communicating superior customer value to its chosen target markets.

• This concept developed after 1950’s globally

Marketing Concept

• The marketing concept can be summarized as follows:

Starting Point Focus Means Ends

TARGETMARKET

CUSTOMERNEEDS

INTEGRATEDMARKETING

PROFITTHROUGH

CUSTOMER SATISFACTION

Marketing Concept

A.Target Market• The starting point of marketing concept is the target

customers. Target customers is the group of customers for whom the product is created and directed

B.Customer Needs• The focus of activity should be towards the needs of the

customers.• A company can define its target customers but fail to

correctly understand the customer’s needs.• Understanding customer need is not very easy. There can

be different types of customer needs such as:o Stated needs o Real needso Unstated needso Delight needso Secret needs

Marketing Concept

• While defining needs, a company should make a distinction between the following:o Responsive Marketing A responsive marketer finds a stated need and fills ito Anticipative Marketing An anticipative marketer looks ahead into what needs

customers may have in the near futureo Creative Marketing A creative marketer discovers and produces solutions

customers did not ask for but to which they enthusiastically respond

Marketing Concept

C.Integrated Marketing• When all the company’s departments work together

to serve the customer’s interest, the result is the integrated marketing.

• Integrated marketing takes place at two levels. They are:o The various marketing functions – sale force, advertising,

customer service, product management, marketing research – must work together

o The second is that the marketing must be embraced by the other departments . To foster teamwork among all departments, the company carries out internal and external marketing.

Marketing Concept• Under marketing concept, the company changes

the traditional organizational chart into modern customer oriented organization chart.

CUSTOMERS

Front-line People

Middle Management

Top Management

TopManagement

Middle Mgmt

Front-line Management

Customers

CUSTOMERS CUSTOMERS

Traditional Orgn Chart Modern Orgn Chart

Marketing Concept

• The integrated marketing concept as customer as the controlling function can be shown as follows:

Customer

Marketing

Human Resource

ProductionFinance

Marketing Concept:

Nike

Marketing Concepts : 5. The Social Marketing Concepts

SOCIETAL MARKETING CONCEPT

CUSTOMER SATISFACTIONCOMPANY

PROFITABILITY

SOCIETY’S WELFARE

SMP

The Societal Marketing Concept

• This marketing concept emphasizes that the key task of the company is not only to determine the needs and wants of the target markets and delivering the desired satisfaction, but also to preserve and enhance the consumers and society's overall well being

• This calls upon marketers to build social, ethical and environmental considerations into their marketing practices

IKEA : Societal Marketing Concept

The Holistic Marketing Concept

The Holistic Marketing Concept

The holistic marketing concept is based on the development, design and implementation of marketing programs, processes and activities that recognizes their breadth and interdependencies.

Holistic marketing recognizes that “everything matters” in marketing and that a broad, integrated perspective is often necessary.

The Holistic Marketing Concept

The holistic marketing concept is based on the development, design and implementation of marketing programs, processes and activities that recognizes their breadth and interdependencies.

Holistic marketing recognizes that “everything matters” in marketing and that a broad, integrated perspective is often necessary.