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What is Marketing?1. “…meeting needs profitably!”2.American Marketing Association:

“Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and managing customer relationships in ways that benefits organization and its stake holders.”

3.Philip Kotler: 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.

4.Social definition: “Marketing is a societal process by which individuals and groups obtain what they need and want through creating offering and freely exchanging products and services of value with others.”

5.Managerial definition: The art off selling products

6. “Marketing deals with identifying and meeting human and social needs”04/10/23 2

What is Marketing?Marketing management takes place when at

least one party to a potential exchange thinks about the means of achieving desired responses from other parties.

The most important part of marketing is sellingThe aim of marketing is making selling

superfluous.

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not

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Exchange and transaction A person can obtain a product in one of

four ways Self-produce- Hunt, Fish, Gather fruits Use force Beg Exchange

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Exchange and transactions Exchange: The process of obtaining a desired

product from someone by offering something in return.

Transaction: A trade of values between two or more parties. When an agreement is reached we say transaction has happened.

Exchange is a value creating process because it normally leaves both parties better off.

For exchange potential five conditions must be satisfied

1. There are at least two parties2. Each party has something that might be of value to the other party3. Each party is capable of communication and delivery4. Each party is free to accept or reject the exchange offer5. Each party believes it is appropriate or desirable to deal with the

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A transaction involves At least two things of value Agreed upon conditions A time of agreement A place of agreement

A legal system supports and enforces compliance

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Transaction differs from transfer. In transfer A gives X to B but does not

receive any thing tangible in return Gifts, subsidies, charity Transfer expects something like gratitude,

changed behaviour, Thank-you notes, invitations, a business firm wants a purchase, a politician wants vote,

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Mahindra and Mahindra sales a tracter Farmer wants:

High quality equipment A fair price Timely delivery Good financial terms Reliable parts and service

Mahindra and Mahindra wants Good price for the tracter On-time payment Positive word of mouth

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What is Marketed?1. Goods 2. Services3. Events4. Experiences5. Persons6. Places7. Properties8. Organisations9. Information10. Ideas

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Cars, Trucks, Televisions, Machine Tools, Machines, Industrial chemicals, watches, cosmetics …….Airlines, Hotels, Car rental, barbers, beauticians, maintenance and repair, accountants, lawyers, doctors, consultants, service providers …… Trades shows, Artistic performances, Sporting events (Olympics, World Cup), Amusement park, water park, Multiplexes, Theme restaurentsCelebrity marketing, Stars selling themselves through agents, PR agencies etc.State ads like tourist or business destinations

Real Estate or financial property like stocks and bondsCompanies, Corporate, Universities …..

News channels, Encyclopedias ….Awareness about AIDS, Family planning, Discouraging smoking ….

Who Markets?A marketer is someone who seeks response from another party called prospect,

Eight demand states:1. Negative Demand: consumer dislikes the product and even pay

a price to avoid it2. Nonexistent Demand: consumers may be unaware or

uninterested in the product.3. Latent Demand: consumers may share a strong need that

cannot be satisfied by an existing product.4. Declining Demand: consumers begin to buy the product less

frequently or not at all.5. Irregular Demand: consumer purchases very on a seasonal,

monthly, weekly, daily or even hourly basis.6. Full Demand: consumers are adequately buying all products put

into the marketplace7. Overfull Demand: more consumers would like to buy the

product than can be satisfied.8. Unwholesome Demand: consumers may be attracted to

products that have undesirable social consequences.04/10/23 10

Collection of buyers and sellers who transact over a particular product or product class (e.g. the housing market or grain market)

Sellers: Constituting industry Buyers: Constituting markets

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Market

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GovernmentMarkets

IntermediaryMarkets

ManufacturerMarkets

ConsumerMarkets

Resource Markets

ResourcesResources

Goods & Services Goods & Services

MoneyMoney

Money Money

ServicesMoney

ServicesMoney

ServicesMoney

Services

Taxes,Goods

Taxes,Goods

Taxes

Taxes,Goods

Consumer markets Business markets Global markets Non-profit and Govt Markets

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Industry(Collection of sellers)

Market(collection of buyers)

Communication

Goods/ Services

Money

Information

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•Marketplace: is physical as you shop a store

•Marketspace: is digital as you shop on Internet

•Metamarket: is a cluster of complementary products and services that are closely related in the minds of consumers but are spread across a diverse set of Industries

Automobile metamarket: Automobile Manufactures

New car Dealers

Used car Dealers

Financing Companies

Insurance companies

MechanicsSpare part dealers

Service shops

Auto magazines

Classified Auto ads in newspapersInternet sites on Auto

How business and Marketing are changing?

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Changing TechnologyGlobalizationDeregulationsPrivatizationCustomer empowermentCustomizationHeighten competitionIndustry convergenceRetail transformationDisintermediation

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•The Production Concept

•The Product Concept

•The Selling concept

•The Marketing Concept

•The Holistic Marketing Concept

High production efficiency, Low cost and mass distribution

Total focus on product and no focus on other needs

Intention is to sell more and more

No HUNTING but GARDENING,Understanding EXPRESSED needs Reactive Market Orientation)Understanding LATENT needs (Proactive Market Orientation)And TOTAL Market Orientation

Relationship MarketingIntegrated MarketingInternal MarketingSocial Responsibility Marketing

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Internal Marketing

Integrated Marketing

SociallyResponsibleMarketing

RelationshipMarketing

HolisticMarketing

Marketing Department

SeniorManagement

Other Departments

Ethics

Environment LegalCommunity

Customers

Channel

Partners

Communications Products & Services Channels

Has a aim of building mutually satisfying long term relationships with key parties- Customers, Suppliers, Distributors and Other marketing partners- in order to earn and retain their business.

Marketing must not only do ‘customer relationship management’ (CRM) but also ‘partner relationship management’ (PRM)

Key constituents are• Customers• Employees• Marketing partners (channels, suppliers, distributors,

dealers, agencies)• Members of financial community (shareholders,

investors, analysts) Ultimate outcome is a Marketing Network

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Marketing Mix

Target Market

ProductsProduct varietyQualityDesignFeaturesBrand namePackagingSizesServicesWarrantiesReturns

PlaceChannelsCoverageAssortmentsLocationsInventoryTransport

PriceList priceDiscountsAllowancesPayment periodCredit terms

PromotionSales promotionAdvertisingSales forcePublic relationsDirect Marketing

Four P’s Four C’sProduct Customer solutionPrice Customer costPlace ConveniencePromotion Communication

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Core concepts:• Needs, wants and Demands• Target Markets, Positioning and

Segmentation (STP)• Offerings and Brands• Value and satisfaction• Marketing channels• Supply chain• Competition• Marketing Environment• Marketing planning

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1. Stated needs2. Real needs3. Unstated needs4. Delight needs5. Secret needs

1. Divide market into segments2. Profile distinct groups using

demographic, psychographic and behavioral differences

3. Decide segment with greatest opportunity

4. For chosen target market develop offering

A brand is an offering from a Known sourceValue reflects the perceived tangible and intangible benefits and costs to customers. Value can be seen as a combination of Quality, Service and

Price

1. Communication channels2. Distribution channels3. Service channels

Supply channel describes a longer channel from

Raw material toComponents toFinal products

Supply chain represents Value delivery system

Competition includes all the actual and potential rival offerings and substitutes that a buyer might

consider

Marketing Environment:1. Task Environment

CompanySuppliersDistributorsDealersTarget Customers

1. Broad EnvironmentDemographicEconomicPhysicalTechnologicalPolitical-legalSocial-cultural

Marketing PlanningAnalysing Marketing opportunitiesSelecting target marketDesigning marketing strategiesDeveloping marketing programmesManaging marketing efforts

Selling MarketingSelling is part of Marketing Marketing is much wider than selling

Selling revolves around the needs and interests of the seller

Marketing revolves around the needs and interests of the buyer

Selling starts with the existing products of the corporation and views business as a task of somehow promoting these products

Marketing on the contrary starts with the customers-present and potential-and views business as a task of meeting the needs of the customers by producing and supplying those products and services that would meet such needs

Selling seeks profits by ‘pushing’ the products on the buyers

Marketing too, seeks profits, but not through aggressive pushing of products but by meeting the needs of customers and by creating value satisfaction for them

Selling Marketing

Selling starts with the seller, Marketing starts with the buyer

Seller is the centre of the business universe

Buyer is the centre of the business

Emphasizes on saleable surplus available within the corporation

Emphasizes on identification of a market opportunity

Seeks to quickly convert ‘product’ into ‘cash’

Seeks to convert customer ‘needs’ into ‘products’

Views business as a ‘goods producing process’

Views business as ‘customer satisfying process’

Cost determines the cost Consumer determines price; price determines costs.

Sellers’ preference dominates the formulation of ‘marketing mix’

Buyer determines the shape, the ‘marketing mix’ should take

The firm makes the product first and then figures out how to sell it and make profit

What is to be offered as a product is determined by the customer

Selling Marketing