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UNIT 1

MARKETING MANAGEMENT

NATURE OF MARKETING

Marketing as a process : Marketing is a process that marketing managers execute. In a number of instances, a marketing manager does not manage people, but manages the marketing process. A

product manager is an example of such a marketing manager; s/he manages the marketing processfor a product within a larger marketing organization. We, as consumers, see the results of that

process in the form of products, stores, shopping malls, advertisements, sales pitches, promotions, prices, etc. This process usually involves four phases.

1 Analysis : Markets must be understood, and this understanding flows from analysis. Marketingmanagers spend weeks analyzing their markets before they undertake the development of marketing

plans for influencing those markets.

2 Planning: Once a market is understood, marketing programs and events must be designed for influencing the market's customers and consumers, and even the firm's competitors.

3 Execution : The marketing events are executed in the markets,advertisements are run, prices areset, sales calls are made, etc.

4 Monitoring: Markets are not static entities and thus must be monitored at all times. After eventsexecute, they need to be evaluated. The planning assumptions upon which the upcoming events are

based must be continually tested; they they are not longer true then the events may needmodification.

The D Roles of a marketing manager

Marketing managers play many roles, and we can describe them with words that begin with theletter D:

Detective: The marketer is charged with understanding markets, and thus must spend considerabletime learning about consumers, competitors, customers, and conditions in the markets. Thislearning takes many forms: formal marketing research studies, analysis of market data, marketvisits, and discussions with people in the markets. The result of these studies include insights aboutmarket conditions, and the identification of problems and opportunities in the various markets.

Designer : Once a problem or opportunity has been identified, the marketer turns her/his attentionto designing marketing programs that solve the problems and/or capture the opportunities.

Decision maker : Marketing is a group process that involves many different people, each of whom may be designing marketing programs and events. Thus the marketer must make decisionsabout which programs to execute.

Decision Influencer : Marketers exist in corporate structures that require higher level executivesto approve the marketing plans, programs, and events that come out of the marketing group's work.Thus the marketer must influence the decisions of these senior executives.

Diplomat : Marketers design marketing events that others must execute: the sales force mustexecute the sales plan, the advertising agency must execute the advertisements, etc. These units donot usually "report to" the marketing managers, and they are undertaking tasks given to them by



multiple marketing managers. Thus, each manager must plays a diplomatic role while inducingthese units to execute his/her progam in a timely and high quality way.

Discussant : All of these roles require considerable discussion among many parties within andoutside the company. Thus the marketing manager spends most of his/her time in discussions withothers.

Managing the Marketing Mix

Marketing managers can control or influence four aspects of the firm's output: its products, promotions, prices, and the places that all of these are offered.

Product : Product management involves the design of the physical product along with its packagingand warranties, the positioning of that product in terms of the benefits it delivers, and thedevelopment of the product's brand identify.

Promotion : It is generally not true that consumers will beat a path to your door if you have asuperior product; they must be told about it and induced to buy it ... thus the need for promotion.

Promotion includes personal selling, advertising, sales promotions, and public relations.

Price : Pricing strategies and tactics must be determined for the product, and then followed to set prices for all the sizes and variants of the product. The result is usually a price schedule thatincludes the regular price, volume discounts, payment terms, seasonal prices, introductory prices,etc.

Place : Marketing managers are involved in decisions about where the product is offered to theconsumer in terms of the channels of distribution.

Operating within constraints

Marketing managers must undertake all of the above activities within various constraints, all of which start with the letter C. None of these constraints are under the direct control of the marketingmanagers; some can be influenced; all can be understood.

Competition: Other companies are competiting for the same consumers and channels of distribution.

Channels: Retail stores, electronic markets, communications media exist to serve the marketer. Inthe short run, they must be accepted as constraints; in the long run, the marketer can exert some

control over them ... even vertically integrate into the channels. Consumers: Consumers have needs and wants . The marketers must understand those needs beforethey can design marketing programs aimed at impacting consumer wants .

Conditions: Markets are not static but in constant evolution under the influences of the economy,changing tastes and fashions, population dynamics, etc.

Company: Company policies, procedures, practices, and cultures place constraints upon themarketing resources and programs that the marketer can deploy.

Marketing is Collaboration The nature of marketing requires marketing managers and professionals to work together on allaspects of marketing. It is common for the marketing manager to be at the center of a set of



activities being worked on by people within the company (sales force, promotion manager, productdevelopment teams, etc.) and outside the company (ad agencies, consultants, marketing reseachfirms, etc). Thus marketing managers must spend considerable time in consultation andcollaboration with other people.

IMPORTANCE OF MARKETING

Marketing Promotes Product Awareness to the Public

Getting the product or service recognized by the market is the primary goal of marketing. Varioustypes of marketing approaches can be utilized by an organization. All forms of marketing promote

product awareness to the market at large. Offline and online marketing make it possible for the people to be educated with the various products and services that they can take advantage of.

A company must invest in marketing so as not to miss the opportunity of being discovered. If expense is to be considered, there are cost-effective marketing techniques a company can embark on such as pay-per-click ads and blogging.

Marketing Helps Boost Product Sales : Apart from public awareness about a company’s productsand services, marketing helps boost sales and revenue growth. Whatever your business is selling, itwill generate sales once the public learns about your product through TV advertisements, radiocommercials, newspaper ads, online ads, and other forms of marketing. The more people hear andsee more of your advertisements, the more they will be interested to buy. If your company aims toincrease the sales percentage and double the production, the marketing department must be able tocome up with effective and strategic marketing plans.

Marketing Builds Company Reputation : In order to conquer the general market, marketers aim tocreate a brand name recognition or product recall. This is a technique for the consumers to easilyassociate the brand name with the images, logo, or caption that they hear and see in theadvertisements.

For example, McDonalds is known for its arch design which attracts people and identifies the imageas McDonalds. For some companies, building a reputation to the public may take time but there arethose who easily attract the people. With an established name in the industry, a business continuesto grow and expand because more and more customers will purchase the products or take advantageof the services from a reputable company.

Marketing plays a very essential role in the success of a company. It educates people on the latest

market trends, helps boost a company’s sales and profit, and develops company reputation. Butmarketers must be creative and wise enough to promote their products with the proper marketingtactics. Although marketing is important, if it is not conducted and researched well, the companymight just be wasting on expenses and time on a failed marketing approach.

Corporate orientations towards market place

The Production Concept

The production concept prevailed from the time of the industrial revolution until the early 1920's.

The production concept was the idea that a firm should focus on those products that it could produce most efficiently and that the creation of a supply of low-cost products would in and of itself create the demand for the products. The key questions that a firm would ask before producing a

product were:



• Can we produce the product?• Can we produce enough of it?

At the time, the production concept worked fairly well because the goods that were produced werelargely those of basic necessity and there was a relatively high level of unfulfilled demand.Virtually everything that could be produced was sold easily by a sales team whose job it was simplyto execute transactions at a price determined by the cost of production. The production concept

prevailed into the late 1920's.

The Sales Concept

By the early 1930's however, mass production had become commonplace, competition hadincreased, and there was little unfulfilled demand. Around this time, firms began to practice the

sales concept (or selling concept ), under which companies not only would produce the products, butalso would try to convince customers to buy them through advertising and personal selling. Before

producing a product, the key questions were:

• Can we sell the product?• Can we charge enough for it?

The sales concept paid little attention to whether the product actually was needed; the goal simplywas to beat the competition to the sale with little regard to customer satisfaction. Marketing was afunction that was performed after the product was developed and produced, and many people cameto associate marketing with hard selling. Even today, many people use the word "marketing" whenthey really mean sales.

The Marketing Concept

After World War II, the variety of products increased and hard selling no longer could be relied

upon to generate sales. With increased discretionary income, customers could afford to be selectiveand buy only those products that precisely met their changing needs, and these needs were notimmediately obvious. The key questions became:

• What do customers want?• Can we develop it while they still want it?• How can we keep our customers satisfied?

In response to these discerning customers, firms began to adopt the marketing concept , whichinvolves:

• Focusing on customer needs before developing the product• Aligning all functions of the company to focus on those needs• Realizing a profit by successfully satisfying customer needs over the long-term

When firms first began to adopt the marketing concept, they typically set up separate marketingdepartments whose objective it was to satisfy customer needs. Often these departments were salesdepartments with expanded responsibilities. While this expanded sales department structure can befound in some companies today, many firms have structured themselves into marketingorganizations having a company-wide customer focus. Since the entire organization exists to satisfycustomer needs, nobody can neglect a customer issue by declaring it a "marketing problem" -everybody must be concerned with customer satisfaction.

The marketing concept relies upon marketing research to define market segments, their size, andtheir needs. To satisfy those needs, the marketing team makes decisions about the controllable

parameters of the marketing mix.



MARKETING ENVIRONMENT:

It is very important for any business to scan and analyze their marketing environment bycontinuously monitoring what is going on in the marketing environment. Marketing decisionmakers must collect, analyze and diagnose information about the environment. These actions of marketing decisions are explained under:

Environment scanning -it is the process of collecting information about forces in marketingenvironment; environmental analysis-it is the process of assessing and interpreting the informationgathered through environment scanning;

Environmental scanning is a research process, in which businesses collect all types of relevantinformation that helps these businesses in making decisions regarding surviving, expanding or entering new markets. In simple words, it can be described as keeping a close eye on external or internal happenings and analyzing this information to know how it can be detrimental or beneficialfor the business. The information must be collected, arranged and disseminated among the companydirectors and managers. Mostly, environmental scanning is limited to external factors; however some businesses also carry out internal scanning. Environmental scanning is critical for the

management or decision makers, as this information helps in making well informed decisions andthat too, at the right time. These decisions include expansion, innovation, entering or leaving amarket.

Small businesses usually carry out environmental scanning only when starting; for the reason thattheir resources do not allow them to perform environmental scanning on continual basis. However,

big corporations are always scanning the macro environment factors to gain competitive advantageover their competitors, at the end of the day, it's all about spotting the opportunities (or threats)

before your competitors do. Something worth mentioning is that it is important to take immediateactions according to the situation or information, because environmental scanning is useful onlywhen followed by appropriate responses. Sitting and waiting for other businesses to respond before

you decide your future course of action is going to be of no use. Successful businesses are always born out of bold, timely decisions.

A business is affected by many external factors and it must monitor these factors all the time. For example, if you are entering into a new market, you must obtain information about the import andexport tariffs, rate of exchange or an idea of political stability in the region. Similarly, you should

base your business expansion (or contraction) decisions on the economic growth, income level or employment rate in the market. When introducing a new product or technology, you have got tohave an idea of how patent laws or copyrights work. Other legal factors include union laws,environmental protection or minimum wage laws. Similarly, observing the demographic factors like

population distribution, income or education level can help you identify the future trends andeventually opening up various new opportunities for your business. Internal scanning can includethe identification of resources in terms of workforce, capital, technology, strength and weaknesses.

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