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Basic concepts of Marketing
Dr M.Meher Karuna
DEFINING MARKETING Marketing is a societal process by which
individuals and groups obtain what they need and want through creating, offering and freely exchanging product and services of value with others
Marketing Management is the art and science of choosing target markets and getting, keeping and growing customers through creating, delivering, and communicating superior customer value.
Definition by AMA
Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.
THE SCOPE OF MARKETING
GOODSPhysical goods constitute the bulk of most countries productions and marketing effort
SERVICESAs economics advance, a growing proportion of their activities are focused on the production of service
EXPERIENCESBy orchestrating several service and goods, one can create, stage and market experiences
EVENTMarketers promote time-based events, such as the Olympics, company anniversaries, major trade shows, sports event and artistic performances
PERSONSCelebrity marketing has become a major business
PLACESPlaces (cities, states, regions and whole nations) compete actively to attract tourist, factories, company, headquarters and new residents
PROPERTIESProperties are intangible right of ownership of either real property (real estate) or financial property (stocks and bonds)
ORGANIZATIONSOrganizations actively work to build a strong, favorable image in the mind of their publics
INFORMATIONSInformation can be produced and marketed as a product
IDEASEvery market offering includes a basic idea at its core
Structure of Flows in a Modern Exchange Economy
Manufacturer Markets
Government Markets
Consumer Markets
Intermediary Markets
Resource Markets
Resources
Money
Resources
Money
Money
Goods and services
Money
Goods and services
Service, Money
Service, Money
Taxes, goods
Taxes, goods
Service, Money
Taxes, goods
Taxes
goods
CORE MARKETING CONCEPTS
Target Markets and Segmentations
Marketers and Prospects
Needs, wants and demand
Product or Offering Value and
Satisfication
Exchange and Transactions
Relationship and Networks
Marketing Channels Supply Chain Competition Marketing
Environment Marketing Mix
1. Target Markets and Segmentation2. Market Place, Market Space, Metamarket• Market Place: Physical Shopping• Market Space: Digital Shopping• Metamarket: Cluster of complementary
Products. Mohan Sawhney proposed a concept of
metamarket. Metamediaries to assist buyers to move
through these groups.
3. Marketers and Prospects: A marketer is someone who seeks a response from another party, called the prospect.
4. Needs, Wants, and Demand: A need can be defined as a felt state of deprivation of some basic satisfaction.
• Primary needs/physiological or biogenic needs.
• Secondary / acquired needs.
• Demand: ability and willingness to buy.
5. Product, Offering, and Brand: Product is a set of benefits companies
offer to satisfy needs. Offering: A combination of products,
services, information and experiences. Brand: an offering from a known source.6. Value and Satisfaction: Value: ratio between what the customer
gets and what he gives. Customer value triad: quality, service and
price (QSP).
Raise benefitsRaise benefits Reduce costsReduce costs Raise benefits and reduce costsRaise benefits and reduce costs Raise benefits by more than the raise in costs.Raise benefits by more than the raise in costs. Lower benefits by less than reduction in costs.Lower benefits by less than reduction in costs.
tPsychicCosEnergyCostTimeCoststMonetaryCo
enefitsemotionalbbenefitsFunctional
Costs
BenefitsValue
VALUE AND SATISFICATIONVALUE AND SATISFICATION
7.Exchange and Transactions• Exchange is the process of obtaining
a desired product from someone by offering something in return.
• Transaction is a trade of values between two or more parties.
8.Relationships and Networks Relationship marketing is building mutually
satisfying long-term relationship with key parties. (customers, suppliers, distributors)
Marketing network consists of the company and its supporting stakeholders (customers, employees, suppliers, distributors, retailers, ad agencies, university scientists and others) with whom it has built mutually profitable business relationships.
9. Marketing Channels: To reach the target market.
Communication channels: deliver and receive messages.
Distribution channels: display, sell, or deliver physical goods.
Service channels: to carry out transactions with potential buyers. Ex: warehouses, banks, transport, insurance etc.
10.Supply Chain: Longer chain from raw materials to components to final products that are carried to final buyers.
11.Competition: all the actual and potential rival offerings and substitutes that a buyer might consider.
Brand competition
Industry Competition
Form Competition
Generic Competition
MARKETING ENVIRONMENT
Competition represent only one force inthe environment in which the marketer operates. The marketing environment consist of the task environment and the broad environment
The broad environment consist of six component : demographic environment, economic environment, natural environment, technological environment, political-legal environment and social cultural environment
MARKETING MIX
Marketing mix is the set of marketing tools that the firm uses to pursue its marketing objectives in the target market
Four P : Product, Price, Place, Promotion Four C : Customer Solution, Customer Cost, Convenience,
Communication
COMPANY ORIENTATIONS TOWARD THE MARKETPLACE
THE PRODUCTION CONCEPT Holds that consumers will prefers product that are widely
available and inexpensive THE PRODUCT CONCEPT
Holds thats consumers will favor those product that offer the most quality, performance, or innovative features
THE SELLING CONCEPT Holds that consumers and businesses, if left alone, will
ordinarily not buy enough of the organization’s products. The organization must, therefore, undertake an aggressive selling and promotion effort
THE MARKETING CONCEPT Holds that the key to achieving its organizational goals
consist of the company being more effective than competitors in creating, delivering, and communicating customer value to its chosen target markets
Determinants of Customer Delivered Value
Factory Product Selling and Profits through Promoting sales volume
Target Customer Integrated Profits through market needs Marketing customer saticfaction
Starting Point
Focus Means Ends
A. The Selling Concept
B. The Marketing Concept
THE SOCIETAL MARKETING CONCEPT
• The societal marketing concept hold s that the organization’s task is to determine the needs, wants and interest of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors in a way that preserves or enchances the customer’s and the society’s well-being.
HOLISTIC MARKETING CONCEPT
Companies have new capabilities that can transform the way they have been doing marketing.
Companies can operate a powerful new information and sales channel.
Companies can collect fuller and richer information.
Companies can facilitate and speed up internal communication.
FOUR COMPONENTS
Relationship Marketing. Integrated Marketing. Internal Marketing. Social Responsibility Marketing. An approach to marketing that
attempts to recognize and reconcile the scope and complexities of marketing activities.
INTERNAL MARKETING
Internal marketing is the task of hiring, training, and motivating able employees who want to serve customers well.
It must take place at two levels1. Various marketing functions must be
integrated2.Marketing thinking must be so pervasive
throughout the company.
SOCIAL RESPONSIBILITY MARKETING
The cause and effects of marketing extend beyond the company and the customer to society.
Social responsibility also requires that marketers carefully consider the role that they are playing and could play in terms of social welfare.
Different names for this situation are humanistic marketing, ecological marketing and societal marketing concept. Also called as cause-related marketing.
HOW BUSINESS AND MARKETING ARE CHANGING
Company responses and adjustments Reengineering Outsourcing E-commerce Benchmarking Alliances Partner-suppliers Market Centered Global and local Decentralized
Marketers responses and adjustment Relationship marketing Customer lifetime value Customer share Target marketing Individualization Customer database Integrated marketing communications Every employee a marketer