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Manufacturing Promoting and Pay attention toTechniques Distributing goods consumer needs and wants

Azad college

AZAD COLLEGE(Affiliated to Osmania University)

HIMAYATNAGAR, HYDERABAD

SUB: Marketing Research & Information Systems

Hand out by: Venkateswara rao. NUNIT-I

I. INTRODUCTION

Industrial 1930 1950 presentRevolution

Fig: - The evolution of marketing

MARKETING:

-Marketing is the final result from the whole business, from the customer point ofview.

-Business success is not determined by the producer, but by the customer.

-[Customer is the key to profitability.]

-[A customer is not dependent on us --- We are dependent on him.]

MANAGEMENT:

-The most vital function of management in an organization is to minimize risk anduncertainty through systematic Decision Making.

-Thus management can be regarded as a game of handling information.

Def: MARKETING MANAGEMENT:

It is the process of planning and executing the conception, pricing, promotion, anddistribution of goods, services and ideas to create exchanges with target groups thatsatisfy customer and organizational objectives.

II.CONCEPTS OF MARKETING

1.Production concept: -

The production concept holds that consumers will favor those products thatare widely available and low in cost.

Managers of production-oriented organization concentrate on achieving highproduction efficiency and wide distribution coverage.

2.Product concept: -

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

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Marketing eraSales eraProduction era

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Managers in these product-oriented organizations focus their energy onmaking superior products and improving them over time.

3.Selling concept: -

The selling concept holds that consumers, if let alone, will ordinarily not buyenough of the organization products.

The organization must therefore undertake an aggressive selling and

promotion effort.

4.Marketing concept: -

The marketing concept holds that the key to achieving organization goalsconsists in determining the needs and wants of target markets and delivering thedesired satisfactions more effectively and efficiently than competitors.

5.Societal Marketing concept: -

The societal marketing concept holds that the organization task is todetermine the needs, wants, & interests of target markets and to deliver the desiredsatisfactions more effectively and efficiently than competitors in a way thatpressures or enhances the consumers and societys well-being.

III. CORE CONCEPTS OF MARKETING

Def: - Marketing is a social and managerial process by which individuals and groupsobtain what they need and want through creating, offering and exchanging productsof value with others.

Def: - Marketing is the process of creating a product, then planning and carrying outthe pricing, promotion and placement of that product by stimulating buyingexchanges in which both buyer and seller profit in some way.

Needs, Wants Value, Cost Exchange, Marketing& Product/ & Transactions Markets &

Demands Service Satisfaction & MarketersRelationship

Fig: - core concepts of marketing

1.Need: - It is a state of felt deprivation (fundamental requirement) of some basicsatisfaction i.e., for food, air, water, cloth and shelter to survive.

Wants: - these are deeper needsi.e., needs clothing and wants suiting.

Demand (to strongly ask for): - These are wants for specific products. This issupported by purchasing power.

E.g.: - Mercedes Benz.

E.g.: - Need ------ to writeWant ------ penDemand ---- Parker

Demand states & Marketing tasks:

1.Negative Demand: - Major part of the market dislikes the product and may evenpay a price to avoid it.

E.g.: - Vaccinations

-The marketing task is to analyze why the market dislikes the product.

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2.No Demand: - Uninterested (or) indifferent to the product.E.g.: - Farmers -- new farming methods

-The marketing task is to find ways to connect the benefits of the product withperson's natural needs.3.Declining Demand: - Falling (or) decrease in sales-The marketing task is to change product features.

4.Irregular Demand: - Seasonal, daily or even hourly basis.

E.g.: - Museums --- prefer on holidaysCinema theatres --- Saturdays & SundaysUmbrellas --- rainy seasons

-The marketing task is to provide flexible price, promotion & otherincentives.

5.Full demand: - Increase in sales.-The organization must improve its quality or maintain to keep the same sales.

2.Product: - It is anything that can be offered to satisfy a need or want.Service: - A service is a intangible, not like a product. Buyer's can't see, feel,smell, hear or taste a service offering before buying

3.Value: - It is the consumer's estimate of the products overall capacity to satisfyhis needs or wants.

Value is the benefit that customers receive in term of their need forfunctionality, availability, case of possession in relation to the price they pay.

For e.g.: -Bicycle, Motorcycle, Auto, Bus ----- Product choice set.Speed, Safety, Ease & Economy ----- Need set.

4.Exchange: - Obtaining a desired product from someone by offering something inreturn.

Transaction: A trade between two parties that involves atleast two things of value,

agreed upon conditions, a time of agreement and a place of agreement.Monetary (deals with money)

Transaction:Barter (exchange with products)

Relationship: - Relationship marketing is the process of creating, maintaining andenhancing strong value-laden relationship with customers.

- Promising & delivering high quality, good service, fair prices.- Ultimate outcome of relationship marketing is the building- Unique company asset is called ---- Marketing network.

5.Market: - Consists of all the potential customers sharing a particular need or want

who might be willing and able to engage in exchange to satisfy that need or want.- Market is a collection of buyers.

Communication

Industry goods/services Market(a collection of ( a collection of

Sellers) money buyers)

Information

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Fig: - A simple marketing system

6.Marketing: - Human activity taking place in relation to markets.- Marketing means working with markets to actualize potential

changes for the purpose of satisfying human needs or wants.Marketers: - The marketer is seeking a response from the other party, either

to sell something or to buy something.

- Marketers can be a buyer or a seller.- For e.g.: - Several persons want to buy an attractive house and eachbuyer will try to market as a seller.

IV. MARKETING CONCEPTThe Marketing concept holds that the key to achieving organization goals consists indetermining the needs & wants of target markets and delivering the desiredsatisfactions more effectively and efficiently than competitors.

Starting point Focus Means Ends

Factory Products selling & Profits through

Promoting sales volume

a) Selling concept

Target Customer Coordinated Profits throughMarket needs marketing customer

Satisfaction

b) Marketing concept

1.Target market: - Finding customers to market is called target market (Audience).

So, these are carefully prepared.E.g.: - In car segment there are different target markets i.e., Cars for women,

sports cars, and luxury cars. The market has to focus individually in different targetmarkets

E.g.: - In Toys segment --- target market is according to age groups i.e., agebelow 1 Years, age between 1-2 Years, age greater than 2 Years, etc.

2.Customer needs: - Defining a target market is easy for each and every company,but it fails to fully understand customer needs.

E.g.: - Marketing a pen to illiterate is of no use i.e.,. There is no need forhim to buy it. So, it should be marketed to educators i.e., he need it.

[Find customer needs & fill them ---- marketer's job.] Types of needs (e.g.: - car)1. Stated needs ------- inexpensive car.2. Real needs --------- wants a car.3. Unstated needs ---- service provided by the car dealers.4. Delight needs ----- complimentary e.g.: - 200 Liter's of petrol is free.5. Secret needs ------- value-oriented (prestige issue).

3. Co-ordinated marketing: -

Customers

Front-line people

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MiddleManagement

TopMgt.

Coordination should be from the customer point of view with variousmarketing functions such as sales force, advertising, product management,marketing research, must be coordinated among themselves and other companydepartments.

4.Profitability: -- Purpose of marketing concept is to help organization achieve their goals.- Major goal is profit and objective is long-term profitability.- Make money by satisfying customer needs better than competitors can.

Differences between marketing & selling:

Selling is internally focused.Marketing is externally focused.

When a company makes a product and then tries to persuade customers tobuy it, thats selling.

When a firm finds out what the customer wants and develops a product thatwill satisfy that need and also yield a profit, thats marketing.

V. EVOLVING VIEWS OF MARKETING ROLE IN COMPANY

fig:1 fig:2 fig:3 fig:4 fig:5

fig:1 :- Marketing as an equal function.

2 :- Marketing as a more important function.

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SELLING MARKETING

1. Emphasis is on the product. 1. Emphasis is on customer's wants.2. Company first makes the product and 2. Company first determines

customersthen figures out hoe to sell it. Wants and then figures out how to

make and deliver a product to satisfythose wants.

3. Management is sales volumeoriented. 3. Management is profit-oriented.4. Planning is short run oriented, in terms 4. Planning is long-run oriented, in

todays products and markets. Terms of new products. Tomorrowsmarket and future market.

5. Needs of seller are stressed. 5. Wants of buyers are stressed.

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3 :- Marketing as the major function.4 :- The customer as the controlling function.5 :- The customer as the controlling function &

Marketing as the integrative function.

VI. MARKETING MIX (Controllable tactical marketing tools)

Def: - It is the set of marketing tools that the firm uses to pursue (to follow inorderto overtake or catch) it's marketing objectives in the target markets.-Company has to decide how to divide the total marketing budget among the variousMarketing Mix.

MarketingMix

* Product PlaceTarget

Market

Price Promotion

Product Price Place Promotion

Product variety List-price Channels Sales PromotionQuality Discounts Coverage AdvertisingDesign Allowances Locations Salesforce

Features Payment period Inventory Public relationsBrand name Credit terms Transport Direct marketingPackagingSizesServicesWarrantiesReturns

1. Product : - Firms tangible offer to the market.A product can be a service. E.g.: - dry-cleaning, mgt. Consultancy.

2. Price: - Amount of money that customer has to pay for the product.

3. Place: - Various activities to make the product accessible to target customers.Place to a marketer means getting the right goods in the right quantity to the rightplace, for the lowest possible cost. E.g.: - Food world4. Promotion: - To communicate and promote its products to the target market.

Short run -------- Change price, Salesforce, Advertising.Long run -------- New products, Distribution channels.According to ROBERT LAUTERBORN:

4 Ps 4 Cs

Product Customer needs & wantsPrice Cost of the customer

Place Convenience

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Promotion Communication

Thus winning companies will be those who can meet customers needs economicallyand conveniently with effective communication.

VII. MARKET SEGMENTATION:

Def: - Market segmentation is the process of dividing a large market into smaller subsets of

consumer or organizations that are similar in characteristics, behavior, wants or needsThe heart of modern strategicmarketing can be described as STP marketing ----Segmentation, Targeting & Positioning.

Market segmentation, is the way marketers respond to the fact that different groupsof customers have different wants and needs. A large homogeneous market is divided intosegments that share certain characteristics.

Steps:1. Identify segmentation variables and segment the market.2. Develop profiles of resulting segments.

Market consists of buyers, and buyers differ in one or more respects. They maydiffer in their wants, purchasing power, geographical locations, buying attitudes, and buyingpractices.

Different Segmentations of a Market (General approach to segment a market):

fig:1 fig:2 fig:3 fig:4 fig:5

fig:1 :- No Market Segmentation.2: - Complete Segmentation.

3: - Market Segmentation by income classes 1,2, and 3.4: - Market Segmentation by age classes A and B.5: - Market Segmentation by income-age class.

Patterns of Market Segmentation :-Consider any two product attributes by asking buyers.

For e.g.: - say sweetness and creaminess in the case of ice cream-This is to identify different preference segments. Three different patterns canemerge.

sweetness sweetness sweetness

(a) Homogeneous (b) Diffused (c) Clusteredpreferences preferences preferences

Market Segmentation procedure:

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1.Survey stage: - Researcher conducts Exploratory Interviews i.e.,. Formalinterview on attribute ratings, brand ratings, brand awareness, product usagepatterns, demographics & mediagraphics, etc,.2.Analysis stage: - Researcher applies following analysis:

a) Factor analysis: To remove highly correlated variables.b) Cluster analysis: To create maximally different segments.

3.Profiling stage: - Now each cluster is distinguished according to attitudes,

behavior, demographic and consumption habits.This Market Segmentation procedure must be reapplied periodically, becausemarket segments change.

LEVELS OF MARKETING SEGMENTATION:

No segmentation CompleteSegmentation

Fig: - Levels of marketing segmentation

1. Mass marketing : - Mass producing, mass distributing and mass promotingabout the same product in about the same way to all consumers.

E.g.: - Coca-Cola2. Segment marketing : - adapting markets by recognizing buyer needs,

perceptions and buying behaviors.E.g.: - General motors designed cars for different income & age groups

3. Niche marketing : - Marketers using a very narrow segment is niche (subsegments) marketing. [A strategy in which goods and services are tailored tomeet the needs of small market segment).

E.g.: - Sport vehicles

4. Micro marketing : - The practice of tailoring products and marketing programsto suit the tastes of specific individuals and locations, includes local marketingand individual marketing.

BASES FOR MARKET SEGMANTATION:There are different variables to segment consumer markets and they fall into

two broad groups.a) Consumer characteristics (Geographic, Demographic, & psychographic).

b) Consumer responses (quality, price ---- differ in Geographic, demographicand psychographic ).

The major Segmentation variables are:1. Geographic segmentation :Dividing market into several geographical units such as nations, regions,etc.

The company pays attention to local variations in geographical needs & preferences.The geographical variables are:

Country ------- India, China, Canada, etc.Region ------- Pacific, Atlantic, etc.Size ----------- under 5,000; 10,000 to 20,000; ---- etc,.Density ------- Urban, Suburban, RuralClimate ------- tropic, subtropics, temperate.

2. Demographic segmentation:

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MassMarketing

SegmentMarketing

NicheMarketing

MicroMarketing

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Loyalty status -------------- none, medium, strong, absolute.Readiness stage ------------ Unaware, aware, informed, interested.Attitude toward product --- positive, negative, indifferent, hostile.

Loyalty status:For e.g.; assume that there are five brands: A, B, C, D & E. Buyers can be

divided into four groups:

1.Hard-core Loyals: Consumers who buy same brand all the time.A, A, A, A, A, A, A.

2.Split Loyals: consumers who are loyal to 2 or 3 brands.A, A, B, B, A, B.

3.Shifting Loyals: Consumers shifting from one brand to another.A, A, A, B, B, B.

4.Switchers: Consumers who show no loyalty to any brand.A, C, E, B, D, B

VIII. MARKETING PLANNING:This is accomplished by making basic decisions on market expenditures,

market mix and market allocation.This includes setting goals and involves in deciding marketing strategies that

will help the company to attain its overall strategic objectives. A detailed marketingplan is needed for business, product or brand. Many organizations perform SWOTassessment.

(The tool for marketing planning is product-life cycle.)

Long Long

Short

Narrow BroadScope

Fig: - Levels of planning

1. Strategic marketing planning: -The process of exploring marketing opportunities, investing time and money

to pursue those opportunities and predicting the outcome of those investments.2. Tactical planning : -

Planning undertaken by middle management to examine the performanceover a relatively short period of time of specific products in a firm.3. Operational planning : -

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Planning undertaken by supervisory managers and that focuses on activitiesof narrow scope and short duration.

IX. MARKETING CONTROL:Marketing control can be done by the following types:

1. Annual-plan control:

It is the task of making sure that the company is achieving its sales,profits and other goals.a) Management must state well-defined goals in annual plan for each monthor quarter.b) Management must measure its ongoing performance in market place.c) Management must find gaps and corrective actions to close the gapsbetween goals and performance.

2. Profitability control:It is the task of measuring actual profitability of products, customer gaps,

trade channels and order size, it is not a simple task accounting system is seldomdesigned to report.

Marketing profitability analysis ------------- Tool to measure profit.

Marketing efficiency studies ---------------- to study various marketingactivities that could be carried out more efficiently.

3. Strategic control:It is the task of evaluating whether the companys marketing strategy is still

appropriate to the market conditions. Because of rapid changes in the marketingenvironment, each company needs to reassess periodically its marketingeffectiveness through a control instrument known as marketing audit.

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