THE FIELD THE FIELD
OF OF
MARKETINGMARKETING
The Field of Marketing
Nature & Scope of Mktg
Evolution of Marketing
Marketing Concept
Ethics in Marketing
Quality in Marketing
Mktg. & Global Economy
NATURE AND SCOPE NATURE AND SCOPE OF OF
MARKETINGMARKETING
What is Marketing?“WE CAN NOT ESCAPES FROM DEATH, TAXES AND
SELLING”
“MARKETING IS ADVERTISING & SELLING”
“EVERYDAY WE ARE BOMBARED WITH TELEVISION COMERCIALS, NEWSPAPER ADS, DIRECT MAIL, & SALES
CALLS - EVERYONE TRYING TO SELL US SOMETHING”
The aim of mktg is to make selling a superfluous. The aim is to know & understand the customer so well that the product or service fits. ..and sell itself” …….Peter Drucker
But Selling & Advertising are only two important functions of Marketing, while Marketing is more than that……….
Roots of Marketing…Exchange & Transaction
Relationship Between Exchange & Marketing?
The root of marketing is in Exchange & Transaction
In broad sense …..
Marketing consist of activities designed to generate and facilitate exchanges intended to satisfy human needs or wants
What is Exchange
“Exchange is the act of obtaining a desired object from someone by offering something in return”
three Ways of Exchange:
If you want food ….. you can get it by yourself (by hunting, fishing or from plants) you can acquire it by theft or some form of coercion you can offer something of value against the product willingly
Conditions of Exchange:
a- two or more parties with need or wants to be satisfied
b- desire & ability to satisfy needs
c- each party have something of value for exchange
d- a way for the parties to communicate
Needs, Wants & Demand
Need - state of felt deprivation– Physical Needs - food, shelter, cloth, safety– Social Needs - belonging, affection, family– Individual Needs - Knowledge, Self expression, promotions
Wants - forms of need shaped by culture & individual personality
Demand - Human wants that are backed by buying power.
Marketers know our needs & wants more than any one….
What is transaction?
“Transaction is a trade between two parties that involves at least two things of value, agrees
upon conditions, a time of agreement and a place of agreement”
The process of transaction is …..
Marketer Environment Market
Marketer & Environment
Marketer
“take initiative in trying to stimulate & facilitate exchange”
Functions of Marketers Make plans and programs Implement it Evaluate & Review it
Environment
“is the place or situation where business activities occur
or the place where buyer & seller gather to exchange goods or services”
Market / Customer
“Market is a person or organizations to whom marketing programs are directed and have a right to accept or reject the offer of marketer”
or
“the set of actual & potential buyers of a product or services”
Roles of Market:
Decision Maker - has a authority to commit to the exchange
Consumer - actually use or consume the product
Purchaser - caries out transaction
Influencer - affect the decision b/c of their position, expertise & power
Definition of Marketing
“A social & managerial process by which individuals & groups obtain what they need & want through
creating & exchanging products & value with others”
“Marketing is a total system of business activities designed to plan, price, promote & distribute(place)
want-satisfying products to target markets to achieve organizational objectives”
“Marketing is anticipation, management, and satisfaction of demand through the exchange
process”
EVOLUTION EVOLUTION
OF OF
MARKETINGMARKETING
Evolution of Marketing
1- Production-orientation Stage (Late 1800s-1930s)
2- Sales-orientation Stage
(Early 1930s-1950s)
3- Marketing-orientation Stage
(Mid 1950 - 1990s)
4- Societal Marketing Concept
(1990s- onwards)What Marketing means?
Difference b/w Selling & Marketing
Production Orientation Stage
“production creates its own demand” concept was accepted
Focused on increasing outputs Mostly Engineers, Architects, manufacturer
shaped the strategies In that era demand exceeded the supply customers views less important no marketing but only selling department Main focus of Manufacturers, retailers &
wholesalers on efficiency & cost control rather customer satisfaction
Sales Orientation Stage
Focused on selling the outputs heavy reliance on promotional activities to sell a
product in an environment of so many choices “Hard selling or aggressive selling”concept
evolved in this era even today unsought goods like encyclopedia,
insurance, political party candidates use this concept to sell their goods or services
Marketing Orientation Stage
War changed the habits of customers– migrated family backed to the homelands– women came out of the homes for jobs– consumers became more knowledgeable– consumers had more choices & got choosy– technology developed during war used for manufacturing
goods & services in peace time companies started to find out the customers needs &
wants companies started to create a balance b/w demand &
supply
What does Marketing mean? Marketing doesn’t meant that every customer get everything
they want but must create a balance b/w value product & profit marketing means customer satisfaction marketing means meeting customers needs profitably don’t offer but ask customer what they want , you just figure out
how to supply it Marketing is a back bone of every organization means
everybody from top to bottom in organization know the importance of marketing
getting Mktg.. Heads, mktg. teams, mktg. research office doesn’t mean that the org. is mktg. stimulated but org must finely tuned to the changing customer needs & competitors strategies
Difference b/w Selling & Marketing
Marketing Selling
Emphasis is on product Emphasis is on customer'swants
Inside - Out process Outward - inside-outwardprocess
Management is salesvolume oriented
Management is profit oriented
Short-run planing Long-run planing
Needs of sellers arestressed
Wants of buyers are stressed
MARKETINGMARKETING
CONCEPTCONCEPT
The Marketing Concept
Nature & Rationale
Refinement of marketing concepts– Relationship Marketing– Mass customization– Value Creation– Return on Marketing investments– Societal Marketing Concept
Some Marketing oriented logos
Nature & Rationale of Marketing Concept
Three beliefs of Marketing Concepts: all planning & operations should be Customer
Oriented
Example: Frito-Lay- covers half US market & charge highest price says “We have to be perfect :after all , no one really needs a potato chip”
all marketing activities in an organization should be coordinated
essentiality to achieve organization’s performance objectives
1- Relationship Marketing “an on-going interaction b/w buyer & seller in which the
seller is continuously improves its understanding of the buyers needs, and the buyer become increasingly loyal to the seller because its needs are being so well satisfied”
the relationship is more like partnership focus to create goodwill & sense that firms cares for customer
example - In France during peak tourism period Nestle’s baby food division provides rest stops for families with young children, distributes Samples of Nestle products, free diapers, & trained hostesses offer assistance to parent
today relationship extended beyond customer to suppliers, employee, the government & even competitors example - IBM strategic alliance with Toshiba & Siemens to develop memory chips.
2- Mass Customization
“Developing, producing, and delivering affordable products with enough variety & uniqueness that nearly every
potential customer can have exactly what he or she wants”
by producing large quantity of products, firms keep the unit cost low & offer need satisfying products at attractive prices
this concept adopting rapidly worldwide because of tremendous advancement in information technology
the concept is not restricted to small items example - Automobile manufacturer offers many makes, models, accessories, options & color
2- Value Creation
“Customer perception of all benefits of a product weighed against all the costs of acquiring & consuming all the
product”
Marketer are taking a closer look at what customers value in a product
With better technology & consistent improvement can add value in the product
Two points: – value means much more to the buyer than the amount
of money for a product– The determination of value is distinctive for each
individual
3- The Societal Marketing Concept
“ companies are not only concerned of the buyers but also other people directly affected by its operations & with not
only tomorrow but also the long term”
it’s a revised/modern marketing concept focus is to maintain & improve the customer’s & society’s well
being Overlook possible conflicts b/w consumer’s short-run wants &
consumer’s long-run welfare function of Marketer become :
– satisfy customers wants– meet the social needs of other affected by the firms activity– achieve the company’s performance objectives
Some Marketing Concept - Oriented Logos of the Companies...
WE MAKE IT HAPPEN FOR YOU - MARRIOTT HOTELS
TO FLY TO SERVE - BRITISH AIRWAYS
WE ARE NOT SATISFIED UNTIL YOU ARE - GE
QUALITY, SERVICE, CLEANLINESS, VALUE - MC DONALDS
THERE IS ONLY ONE BOSS: THE CUSTOMER - WAL MART
THE POWER ON YOUR SIDE - ALLIANZ INSURANCE
LETS MAKE THINGS BETTER - PHILLIPS
ETHICS ETHICS
AND AND
MARKETINGMARKETING
Definition of Ethics
“are the rules we agree to play by” “are the standards of behavior generally accepted by a
society” “ethical behavior based /involves honest & proper
conduct of ‘What is right & what is wrong’”
Marketer has to perform a variety of functions (planning product, pricing, promoting & placing of product) and responsible of variety of groups (customer , suppliers, employees/co-workers, distributors & society) so the manner of behavior to communicate with all these gps of people is a challenge for marketer
What is ethical Behavior?Marketing Related Ethical Issues
1- Process related Mktg. Issues- unethical use of Marketing strategies & tactics
2- Product related Mktg. issues- appropriateness of Marketing of Product
example - tobacco, sugar coated cereals, political candidates
Legal Ethical Issues Defamation - Libel (written) and slander (oral) Individual privacy discrimination - gender, racial, ethical group or national origin Harassment - physical or mental Plagiarism - use of ideas or material of another by your own name
Instilling an Ethical Orientation
By workshops -e.g. Most of Multinational companies by ethics committees by ethical code of conduct - e.g. Hewlett Packard, Johnson &
Johnson by news letters & company magazines- e.g. Texas
Instruments by ethical officers - e.g. McDonnell Douglas Corp.
Focus -- to design & promote the suitable & acceptable standards of behavior for employees
Benefits of Ethical Behavior
Ethical behavior strengthen trust & relationship b/w suppliers, customers, employees, & other groups
provide a straight & direct way to employee Provide crystal clear working environment
Example - Johnson & Johnson - Tylenol Crisis - Eight people died because of tampered product, recently J & J admitted that employees has intentionally destroyed documents required by Govt..
Example - Procter & Gamble & Unilever MIS case- of haircare product of Unilever
QUALITY QUALITY
IN IN
MARKETINGMARKETING
Definition of Quality
freedom from defect
quality is something to do for customer but , if
the customer doesn’t like it, its defect”
acceptable level against competition
how well a product meets the expectation of the
customers
three Components of Quality definition
Three Components of Quality
First - meeting & striving to exceed the requirements of the customer
Second - absence of variation - consistently delivering of goods & services what it was designed to, without variation from one experience to another
Third - TQM - Total quality management - adopting processes & procedures that will provide customers with the right product at the right place.
Example : ISO 9000 Certification - ISO 9001, ISO 9002, ISO 9003 , ISO 9001-2000
Instilling Quality Benchmarking - studying competitors & non-
competitors to identify the highest performance in such areas as delivery delays & eliminating defects
Corporation work under the atmosphere of trust & co-operation
a commitment of employees to constantly search for better ways of performing their functions
forming partnership with suppliers & customers
Measuring quality & the resulting customer satisfaction
Importance of Importance of Marketing Marketing
and and
Global EconomyGlobal Economy
World is a global Village Recent 11th Sep 2001 incident European Union & Euro money Advancement of Information Technology Example
– MTV - US- MTV, Pan-European MTV, Latin American MTV, Asia -MTV, Japanese MTV
– Coca Cola - Serve world wide , faced difficulty in Arab countries & Germany but then became successful
– Toys R Us - 76 European stores , mostly in developed countries, In Japan faced many problems but first day 60,000 visitors visited the shop & opened 16 stores in two years.
Marketing & Global Economy