INTRODUCTION TO MARKETING

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Course: MBA-ISubject: MARKETING MANAGEMENT - 1Unit: I

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Marketing Management

Chapter 1

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What is Marketing? Marketing is the delivery of customer

satisfaction at a profit.

WHAT IS MARKETING ?

The essence of Marketing is a transaction - an exchange- intended to satisfy human needs and wants.There are three elements in the marketing process :

(A) MARKETERS (B)WHAT IS BEING MARKETED(C) TARGET MARKET

WHAT IS MARKETING ?

Marketing is a social process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others

PHILIP KOTLERThis definit ion includes following core concepts : NEEDS ,WANTS and DEMANDS --- PRODUCTS------VALUE & SATISFACTION---EXCHANGE & TRANSACTION---MARKETS & MARKETERS

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Needs, Wants, and Demands Needs: The most basic concept underlying marketing is that of human needs. Human needs are states of felt deprivation. Human have many complex needs:

Physical needs for food, clothing, warmth, and safety Social needs or belonging and affection Individual needs for knowledge and self – expression

Wants: Want are the form taken by human needs as they are shaped by culture and

individual personality. People have almost unlimited wants but limited resources. They want to choose products that provide the most value and satisfaction for

their money. Demands: When backed by buying power, wants become demands. Consumers view products as bundles of benefits and choose products that give

them the best bundle for their money.

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Products and Services Product: Anything that can be offered to a market to satisfy a

need or want. The concept of product is not limited to physical

objects – anything capable of satisfying a need can be called a product.

Services: In addition to tangible goods, products also include

services, which are activities or benefits offered for sale that are essentially intangible and do not result in the ownership of anything.

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Values, Satisfaction, and Quality Values: Customer value is the difference between the values the customer gains from

owning and using a product and the costs of obtaining the products. Customers often do not judge product value and costs accurately or objectively.

They act on perceived value.Satisfaction: Customer satisfaction depends on a product’s perceived performance in

delivering value relative to a buyer’s expectation. If the product’s performance falls short of the customer’s expectations, the

buyer is dissatisfied.Quality: Customer satisfaction is closely linked to quality. Quality has a direct impact on product performance. Quality can be defined as “freedom from defects”. TQM programs designed to constantly improve the quality of products, services,

and marketing processes.

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Exchange, Transactions, and Relationships

Exchange : The act of obtaining a desired object from someone

by offering something in return Transaction : A trade between two parties that involves at least two

things of value, agreed – upon conditions a time of agreement, and a place of agreement.

Relationship marketing : The process of creating, maintaining, and enhancing

strong, value – laden relationships with customers and other stakeholders

NEEDS,WANTS AND DEMANDS

NEED : A state of felt deprivation of some basic satisfaction ( Food, Clothing, Shelter, Belonging etc. )

WANTS : Wants are desires for specific satisfiers of the deeper needs. Needs are few and wants are many .

DEMANDS : are wants backed by ------Abil i ty to buy and Wil l ingness to buy

PRODUCTS / OFFERS / SATISFIERS / RESOURCES

Anything that can be offered to someone to satisfy a need or want is a product .

Product refers to physical object

Services refer to intangible object

VALUE AND SATISFACTION Value is the customers’ estimate of the

Product’s capacity to satisfy a set of goals Value is the rat io between what the customer

gets and what he gives (V=B/C) Customer gets benefits & assume costs WHEN :Customer Expectance=Performance

(satisf ied) Customer Expectance>Performance (dis-

satisf ied) Customer Expectance<Performance (Highly

satisf ied)

EXCHANGE AND TRANSACTION Exchange is the act of obtaining a

desired product by offering something in return .

Exchange takes place when 5 condit ions are satisf ied:

(a) Two part ies should be there

(b) Each party must have something of value to the other

(c) Each party is capable of communication & delivery

(d) Each party is free to accept or reject the offer

(e) Each party believes that i t is appropriate to deal with the other party

EXCHANGE AND TRANSACTION

Exchange is a process 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 MONETARY TRANSACTION ).

WHAT IS MARKETING ? Marketing is the management

process which identif ies, anticipates, and supplies customer requirements efficiently and profitably.

In other words, it is the process of understanding, creating, and delivering profitable value to targeted customers better than the competit ion.

WHAT IS MARKETING ?

Its aim is to establish, maintain, enhance long term relationship with customers at a profit so that the objectives of the parties involved are met.

In short marketing consists of attracting, developing, and retaining profitable customers.

BUSINESS IS MARKETING

Marketing can not be considered as a separate function , it is the whole business, seen from the point of view of its f inal results...... ..... ..... .that is profit,through customer satisfaction

PETER DRUCKER

WHAT IS MARKETING MANAGEMENT ?

Marketing Management is the analysis, planning, implementation and control of programs designed to create, build and maintain beneficial exchanges and relationships with target markets for the purpose of achieving Organisational objectives.

THREE LEVELS OF MARKETING

Responsive Marketing

Anticipative Marketing

Need Shaping Marketing

RESPONSIVE MARKETING

It is the form of marketing when some company defines an existing clear need and prepare an affordable solution.

(Recognizing that women wanted to spend less time for cooking and cleaning, led to the invention of modern washing machine, microwave oven etc.)

ANTICIPATIVE MARKETING

I t is a form of marketing when a company recognize an emergent or latent need, and come out with an affordable solution. Evian, Perrier anticipated growing market for bottled drinking water as the quality of water deteriorated in many places.

Anticipative marketing is more risky than responsive marketing;companies may come into market too early or too late,or may even be total ly wrong about thinking that such a market would develop.(eg. Dish washers in India)

NEED SHAPED MARKETING

The broadest level of marketing occurs when a company introduces product that nobody asked for and often could not even conceive of.

(e.g. Sony Walkman, Sony Compact Disc )

Late Akio Morita, founder and chairman of Sony, who introduced these and many other new products, summarized his marketing philosophy in these words: “ I don’t serve markets. I create them.”

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 incremental improvements, not radical innovations.

Market-driving companies generate signif icantly new products, services, business formats and raise our sights and our civi l izat ion. These companies are much more than customer-led. They lead customer where they want to go, but don’t know yet.

Importance/ Benefits Of Marketing Satisfaction of human needs & wants Profits & market reputation Facilitates specialisation division of labour Widens the market Improves standard of living Bring economic growth Creates new norms of social economic behaviour Provides channels of communication to business

firms Facilitates price control Develops social significance at. 24

References & Sources Philip Kotler (Book- marketing

Management , Chapter-1)

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