1st chapter

1st Chapter -Marketing Management

Introduction to Marketing

By

Asst Prof. Venkatesh.N

Koshys Institute of Management Studies

04/12/2023 Koshys Institute of Management Studies by Venkatesh.N

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Meaning of Marketing

Meaning The word market is derived form the Latin word “Marcatus” meaning goods or trade or a place

where business is conducted. The term marketing is defined as a ‘business activity planned at satisfying to a reasonable extent, consumer or customer needs and wants, generally through an exchange process’.


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Definition of Marketing

• Marketing has been defined in various ways – the definition that serves our purpose best is as follows; Marketing is a social & managerial process by which individuals & groups obtain what they need & want through creating, offering, & exchanging products of value with others.


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Marketing Management

The American Marketing Association (AMA) – Marketing management is the process of planning and executing the conception, pricing, promotion, & distribution of ideas, goods, & services to create exchanges that satisfy individual and organizational goals.


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The Goal of Marketing is:

To attract new customer by promising superior value, and to keep current customers by delivering satisfaction.

• To satisfy the customer• To increase profits for the growth of the business:-

the marketing department is the only department which generates revenue for the business.

• To increase the quality of life of people.• To create good image.


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Contd…• Marketing, more than any other business

function, deals with customers.• To generate customer base for the business:-

the marketing manager must attract more and more customers to buy the firms products and services this will also result in to increased sales.


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Marketing Defined

• Many people think of marketing only as selling and advertising.

• Selling and advertising are only the tip of the marketing ice-berg.

• Marketing is one of three key core functions that are central to all organizations.

• Marketers act as the customers’ voice within the firm and marketers are responsible for many more decisions than just advertising or sales:


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Contd…

To explain marketing definition, we examine the following important terms : – Needs, wants, and demands– Products and services – Value, satisfaction and quality– Exchange, transactions, and relationships– Markets

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Figure 1-1:

Core Marketing Concepts


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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 deficiency.– Human have many complex needs: – Physical needs for food, clothing, and safety– Social needs or belonging and affection – Individual needs for knowledge and self –

expression


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Contd…

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 anything capable of satisfying a need

can be called a product. Services: • product is not limited to physical objects –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 frequently 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.


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Contd….

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(most wanted)

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.


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Contd…

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

enhancing strong, value – loaded relationships with customers and other stakeholders


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Markets

The set of all actual and potential buyers of a product or service

A simple marketing system

Industry (a collection of

sellers)

Market (a collection of

buyers)

Communication

Products / Services

Money

Information


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Push and Pull Strategies

PullAdvertising and

promotion

PushSales force and trade promotion


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Scope of Marketing

• It creates employment opportunities because sales and marketing is a people oriented activity.

• It improves the standard of leaving of the people• It satisfies the needs of the peoples by providing

the goods to the customers• It improves the transport and communication• It establishes a better relationship B/W the buyer

and the seller.• It makes goods available to all geographic location


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Contd…

• It increases revenue to the govt.• It enables to increase the profit.• It helps the top management to manage

innovations and changes• Maximize sales enables the firm to go for large

scale production.• Mass production reduces the cost per unit of

the product.


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Marketing Concept

The marketing management philosophy that holds that achieving organizational goals depends on determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors do.


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Concept of Marketing Management

Production Concept

Product Concept

Selling Concept

Marketing Concept

Societal Marketing Concept

Management Orientations


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Traditional

Production Concept:-This concept holds that consumers will favor products that are available and highly affordable and that management should focus on improving production and distribution efficiency.

This is one of the oldest concept. It is useful in two situations when the demand for a product exceeds the supply, management should look for ways to increase production and when the product cost is too high improved productivity is needed to bring down.


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Product Concept

This concept holds that consumers will favor products that offer the most quality, performance, and innovative features. Thus an organization should dedicate energy in making continuous product improvement.

A product will not sell unless the manufacturer designs packages and prices it attractively. and place it in convenient place.


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Selling Concept

This concept holds that consumers will not buy enough of the organization’s products unless the organization undertakes a large – scale selling and promotion effort.

Their aim is to sell what they make rather than to make what the market wants. Such marketing carries high risks.

It focus on creating sales transaction rather than on building long-term, relationship with customer.


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Societal Marketing Concept

The idea that the organization should determine the needs, wants, and interests of target markets and deliver the desired satisfactions more effectively and efficiently than competitors in a way that maintains or improves the consumer’s and society’s well – being.


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Factory Existing products

Selling and promoting

Profits through sales volume

Starting point Focus Means Ends

The selling concept

Market Customer needs

Integrated marketing

Profits through customer satisfaction

The marketing concept

The selling and Marketing Concepts Contrasted


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Three Considerations Underlying The Societal Marketing

Societal marketing

concept

Society(Human welfare)

Company(Profits)

Consumers(Want satisfaction)


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Modern Concept

• The market concept is customer orientation backed by integrated marketing aimed at generating customer satisfaction as the key to satisfy organizational goals.

• The marketing concepts holds that the key to achieve its organizational goals consists of the company being more effective than competitors in creating delivering and communicating customer value to its chosen target market


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Contd….

• The marketing concept has been expressed as follows.

• Meeting needs profitability• Find wants and fill them• Love the customer not the product• You are the boss• Partners for profit


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Components of modern concepts

• Customer orientation:- in modern concept the marketer will give first preference to the customer need and satisfaction according to his taste and preference the marketer will change or modify the product and give.


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Integrated Marketing

aimed at unifying(merged) different marketing methods such as mass marketing, one-to-one marketing, and direct marketing. Its objective is to complement and reinforce the market impact of each method, and to employ the market data generated by these efforts in product development, pricing, distribution, customer service, etc

http://www.businessdictionary.com/definition/marketer.html

http://www.businessdictionary.com/definition/method.html

http://www.businessdictionary.com/definition/mass-marketing.html

http://www.businessdictionary.com/definition/one-to-one-marketing.html

http://www.businessdictionary.com/definition/direct-marketing.html

http://www.businessdictionary.com/definition/objective.html

http://www.businessdictionary.com/definition/market.html

http://www.businessdictionary.com/definition/impact.html

http://www.businessdictionary.com/definition/employed.html

http://www.businessdictionary.com/definition/data.html

http://www.businessdictionary.com/definition/product-development.html

http://www.businessdictionary.com/definition/distribution.html

http://www.businessdictionary.com/definition/customer-service.html


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Profitable sales through customers satisfaction

• The main aim of every business is earning and

maximizing its profits. Manufacturer cannot ignore the wants and expectations of customers.

• Customer is the supreme and he determines the products to be produced by the manufacturer.

• Marketing starts with the generating of a product idea and continues until the customers wants are completely satisfied.


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Customer welfare

Consumer welfare refers to the individual benefits derived from the consumption of goods and services. In theory, individual welfare is defined by an individual's own assessment of his/her satisfaction, given prices and income. Exact measurement of consumer welfare therefore requires information about individual preferences.


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Characteristics of modern marketing concept

• According to this concept consumer is the king of the market

• Marketing is the entire process of understanding and satisfying the needs and wants.

• The main aim of marketing under the concept is not maximization of profits alone but by satisfying the consumer needs and wants.

• The concepts creates and delivers the standard of living to the society.


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Functions of marketing

• Merchandising Functions:-the process of the passing of goods to the customers hands is called the function of exchange. this process can be divided into

• Buying• Assembling• Selling


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Functions of marketing

• Physical distribution functions:-this function related to the process of transporting the goods from the place of seller to the place of buyer and includes two main function.

• Transportation-a good system of transportation increases the value of goods by the creation of place of utility


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Contd..

• Storage and warehousing :- goods must be stored for different reasons goods produced seasonally may be used throughout the year goods meant for use during the short period may be produced over the longer period, manufacturer store raw materials for ready supply are also stored in the hope of getting a higher price in future


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Facilitating functions • These functions make the marketing process easy and include.• Financing• Risk bearing• Standardization• Pricing • branding • Advertising • Salesmanship• Sales promotion • Packaging • Market information • Marketing research• Marketing intelligence


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Approaches to marketing

• The marketing expert came out with three fundamental approaches to the study of marketing namely.

• Commodity approach• Institutional approach• Functional approach• Decision making approach • System approach• Social approach• Holistic approach


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Commodity approach (product)

• This approach is studies marketing on commodity basis.

• This approach is also called as descriptive approach. • in this method the commodity serve as a focus around

which other aspects of marketing are studied and its journey from the original producer right up to the final consumer. In this we can locate the center of production people engage in buying and selling of the product mode of transportation and so on.

• Through such an approach we can find out the difference in marketing product, service and problems.


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Institutional Approach

• In this method descriptive and analysis of the different institutions engaged in marketing are undertaken. Here we study not the product but the producer, wholesaler's agents, retailers, transporters, storing institutions etc. different institutions serve as separate cells of the marketing body.


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Institutional approach

• This approach splits down the field of marketing into separate functions. These specific functions are buying, selling, transportation, storage, standardization, grading, financing, risk-taking and marketing research, etc…. We also concentrate our attention on the specialized service or functions or activates performed by marketer


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Management approach/decision making approach

• In this approach the focus of marketing study is on the decision making process involved in the performance of marketing functions at the level of the firm.

• the study involves discussions of important concept like devising alternative strategies, analyzing their relative importance determining the strengths and weakness of the company, techniques and methods of problems solving.

• (in this method the manager is taking decision to change the functional activities about the market like planning, executing, co-ordinating & controlling)


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Societal approach/legal approach

• Social approach is the study that emphasizes the fact that marketing is for society and hence, functions as directed by social norms set by the society. This method must bring maximum social well being or welfare.

• That is not only to provide a car, but less pollutant car, cigarette without smoke, medicines without side effects, holding high the social and cultural values and values adding to the life-style and living


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System approach

• Systems approach is an approach that entails analysis of problems and come up with a blend of solutions. It is a generally approach that involves tackling problems in an advanced disciplined manner keeping priorities in mind. It is a branch of systems thinking process.


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Holistic approach

• Holistic approach refers to the practice of looking at the health of an individual in a complete picture rather than isolating parts. It uses natural treatments to attempt to maintain balance.


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Distinction B/W Marketing and Selling

• Marketing• Marketing focus on customer

needs• Customer enjoys supreme

importance• Integrated approach to

achieve ling term goals• Converting customer needs

into products • Profit through customer

satisfaction• Let the seller beware

• Selling• Selling focus on the needs

of the seller.• Product enjoys supreme

importance.• Fragmented approaches to

achieve immediate goals• Converting customer needs

into products.• Profit through sales volume• Let the buyer beware.

Thank You

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1st chapter