# Understanding the Marketplace and customer needs.

As a first step, marketers need to understand customer needs and wants and the marketplace within which they operate.

There are five core customer and marketplace concepts:

1. Needs, wants and demands.

2. Market offerings: Products, Service and experience

3. Customer value and satisfaction

4. Exchange and relationships

5. Markets

1. Customer Needs Wants and Demands:

Needs, Wants and Demand represents the language of marketing. They come under the core concept of marketing. They plays important role in marketing management. Because, by the help of these factors the marketing manager solves the problems related to marketing appeared in Business organization.

Needs: Need is a situation where a person felt deprivation of certain kind of Satisfaction.

Needs exist in the individual. They describe basic human requirements. They indicate a state of felt deprivation. Marketing does not create needs. They exist in the individuals automatically with the follow of time. Different people have different needs some of them are as follows:

• Physical needs: This types of need is related to food, clothing, warmth ,and shelter.

• Safety needs: Under this need, people want protection from physical harm and economic threat.

• Social needs: Under this need, they want love, friendship and belongingness.

• Self Esteem needs: They want knowledge, achievement and creativity. And Self actualization Needs.

Wants: When need becomes specific it becomes want.

Wants are the form, human needs takes as they are shaped by culture and individual personality. Wants are unlimited. Wants are shaped by one’s society and are described in the terms of objects that will satisfy needs.

Demand: They are wants for specific products. Wants backed by money and willingness to spend the money become demand.

2. Marketing Offering – Products, Services and Experience:

Product: according to Philips Kotler, “a product is anything that can be offered to a market for attention, acquisition, use or consumption. It includes physical objects, services, personalities, place, organization and ideas.”

Service: are activities or benefits offered for sale that are essentially intangible and do not result in the ownership of anything but experiences.

3. Customer Value and Satisfaction

Customers usually face a broad array of product and services that might satisfy a given need. Customers form expectations about the value and satisfaction that various market offerings will deliver and buy accordingly. Satisfied customers buy again and tell other about their good experiences. Dissatisfied customers often switch to competitors and spread negative word of mouth about product.

4. Exchanges and Relationships :

Exchange is the act of obtaining a desired object from someone by offering something in return. The marketer tries to bring about a response to some market offering.

Marketing consists of actions taken to build and maintain desirable exchange relationships with target audiences involving a product, service, idea, or other object. Marketers want to build strong relationships by consistently delivering superior customer value.

5. Markets:

The concept of exchange and relationships lead to the concept of a market. A market is the set of actual and potential buyers of a product. These buyers share a particular need or want that can be satisfied through exchange relationships

IMPORTANCE OF MARKETING

Marketing is a very important aspect in business since it contributes greatly to the

success of the organization. Production and distribution depend largely on marketing.

Many people think that sales and marketing are basically the same. These two concepts

are different in many aspects. Marketing covers advertising, promotions, public

relations, and sales. It is the process of introducing and promoting the product or

service into the market and encourages sales from the buying public. Sales refer to the

act of buying or the actual transaction of customers purchasing the product or service.

Since the goal of marketing is to make the product or service widely known and

recognized to the market, marketers must be creative in their marketing activities. In this

competitive nature of many businesses, getting the product noticed is not that easy.

Strategically, the business must be centered on the customers more than the products.

Although good and quality products are also essential, the buying public still has their

personal preferences.

Marketing Promotes Product Awareness to the Public

Reorganization of product or service by the market is the primary goal of marketing. No

business possibly ever thought of just letting the people find out about the business

themselves, unless you have already established a reputation in the industry. But For a

start-out company, the only means to be made known is to advertise and promote. Your

business may be spending on the advertising and promotional programs but the

important thing is that product and company information is disseminated to the buying

public.

Various types 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 products and services, marketing helps

boost sales and revenue growth. Whatever business is selling, it will generate sales

once the public learns about product through TV advertisements, radio commercials,

newspaper ads, online ads, and other forms of marketing. The more people hear and

see more of advertisements, the more they will be interested to buy.

If company aims to increase the sales percentage and double the production, the

marketing department must be able to come up with effective and strategic marketing

plans.

Marketing Builds Company Reputation

In order to conquer the general market, marketers aim to create a brand name

recognition or product recall. This is a technique for the consumers to easily associate

the brand name with the images, logo, or caption that they hear and see in the

advertisements.

For example, McDonalds is known for its arch design which attracts people and

identifies the image as McDonalds. For some companies, building a reputation to the

public may take time but there are those who easily attract the people. With an

established name in the industry, a business continues to grow and expand because

more and more customers will purchase the products or take advantage of 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. But marketers must be creative and wise enough to promote their

products with the proper marketing tactics. Although marketing is important, if it is not

conducted and researched well, the company might just be wasting on expenses and

time on a failed marketing approach.

The Marketing Management Philosophies

Marketing management can be described as carrying out the tasks that achieve desired exchanges, between the corporation, and its customers.

There are a number a different philosophies that guide a marketing effort.

Production Concept :

According to Philips Kotler, this concept holds that “consumers will favour those products that are widely available and low in cost.

He also emphasis on two counts:

1. This concept is related to uninterrupted product availability.

2. the low price at which the product is made available to the ultimate consumers.

These are based on the assumption that the consumers are primarily interested in getting quality products.

In Production concept:

o Demand for a product is greater than supply.

o To increase profit, focus on production efficiencies knowing all output can be sold. Also useful concept when increasing production raises economies of scale etc. to reduce price.

The production concept is still a useful philosophy in some situations. For example, computer maker Lenovo dominates the highly competitive, price-sensitive Chinese PC market through low labour costs, higher production efficiency and mass production.

Product Concept:

The Product concept holds that “consumers will favour those products that offer the most :

Quality

and Features

Performance

Managers focus their energy on making goods products and improving them over time.

The consumers do admire well made products. Quality and performance of the product make them willing to pay even more that what actually they are willing to pay in normal conditions.

Product oriented companies often design their products with little or no consumer input they trust their engineers can design exceptional products The product concept may leads to “marketing myopia” as it unduly concentrates on the product rather than need.

Selling Concept

The selling concept holds that “consumers, if left alone, will ordinarily not buy enough of the organisation’s products. The organization must, therefore, undertake an aggressive selling selling promotional effort.”

The product does not sell itself. The consumer has to be educated and convinced that it is this and this product only which will satisfy his need.

“Thus”, says Philips Kotler, “selling to be effective, must be preceded by several marketing activities such as needs assessment, marketing research, product development, pricing and distribution. if the market does a good job of identifying consumer needs, developing appropriate products, and pricing, distributing and promoting them effectively, these products will sell very easily.

In Selling Concept:

o Demand for a product is equal to supply.

o Emphasis is needed to sell the product to increase profits. Focus on advertising. .

o Dominant era: 1920's to Mid 1930's WWII to early 1950's

Marketing Concept

Philip Kotler says, “The marketing concept holds that the key to achieving organizational goals consists in determining the needs, needs, and interests of target markets and to delivering the desired satisfactions more effectively and efficiently than competitors.”

Supply for a product is greater than demand, creating intense competition among suppliers.

o Company first determines what the consumer wants, then produces what the consumer wants, and then sells the consumer what it wants.

o Dominant era: 1930's to WWII 1950's to present.

The Societal Marketing Concept:

According to the Philips Kotler, “ the societal marketing concept holds that the organizations tasks is to determine the needs, wants and interests of target markets and to deliver the desired satisfaction more effectively and efficiently than competitors.”

This concept holds that marketing strategy should deliver value to customers in way that maintains or improves both the customers and society well being.

Companies should balance three considerations in setting their marketing strategies: company profits, consumer wants and society interests.

Society (welfare)

Company (Profit) Consumer(Satisfaction)

Example: Johnson & Johnson does this well. Its concern for societal interests is summarized in a company document called “Our Credo” which stress honesty, integrity, and putting people before profits.

MARKET

The term ‘market’ originates from Latin noun ‘Marcatus’ which mean “a place where business is conducted”.

Market is generally known as the place or geographical area where buyers and sellers meet and enter into transactions involving transfer of ownership of goods, services, securities etc.

According to Philips Kotler,“ A market consists of all the potential customers sharing a particular need or want who might be willing and able to engage in exchange to satisfy that need or want.

In a market, buyers and sellers are connected by 4 flows

1) Goods & Services

2) Communication to the market

In turn, Seller receives

3)Money

4)Information

MARKETING

The term Marketing ha been derived from the word market. Marketing is the basic reason for the existence of a business organization. It is a powerful mechanism which alone can satisfy the needs & wants of consumers at the place and they desire.

According to Kotler, “ Marketing is a social and managerial process by which individuals and groups obtain what they need and want through

Creating, Offering & Exchanging

Products of value with others.

Marketing helps in having a good range of products in constant demand and suggests to the management the scope for improving and developing new products to satisfy the changing customer needs.

Customers is the king of the market. Customers decide what products suit their needs. Therefore, we can say marketing satisfies our needs providing :

Form Utility Time Utility

Person Utility Exchange Utility Place Utility

SELLERS BUYERS

SELLERS BUYERS

1. FORM UTILITY

Converting into

Understanding customer’s requirement

2. PERSON UTILITY

Establishing contacts

Understanding customer’s requirement

3. EXCHANGE UTILITY

Transfer goods to

as per the requirements of customers

4. PLACE UTILITY

Physical distribution

and logistics

as per convenience of customers

5. TIME UTILITY

making available goods when

Raw Materials Finished Goods

CustomersMarketer

Seller Buyers

SellerSeller

CustomersWarehousing

needed creating time utility

as per the requirements of customers

Marketing Mix

Marketing mix is the set of marketing tools that the firm uses to pursue its marketing objectives in the target market. McCarthy classified these tools into four broad groups that he called the four Ps of marketing: product, price, place, and promotion.

Management

Marketing Mix

ProductProduct varietyQualityDesignFeaturesBrand namePackagingSizesServicesWarranties

PriceList PriceDiscountsAllowancesPayment PeriodCredit Terms

PlaceChannelsCoverageAssortmentsLocationsInventoryTransport

PromotionSales promotionAdvertisingSales forcePublic relationsDirect marketing

Management is the organization and coordination of the activities of an enterprise in accordance with certain policies and in achievement of defined objectives.Management is often included as a factor of production along with machines, materials, and money.

Marketing Management:

Marketing management is the process of planning and executing the conception, pricing, promotion, and distribution of ideas goods , services to create exchanges that satisfy individual and organizational goals.

MM is the art and science of choosing target markets and getting, keeping and growing customers through creating, delivering and communicating superior customer value.