mm ch1 intro
TRANSCRIPT
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INTRODUCTION TO MARKETING
- MEANING/ DEFINITION- MARKET
- MARKETING
- DIFFERENCES BETWEEN MARKET,MARKETING, SELLING
- NATURE AND SCOPE
- IMPORTANCE OF MARKETING- APPROACHES
- TRADITIONAL AND MODERN CONCEPT
- FUNCTIONS OF MARKETING
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What is Market?Meaning / Definition
Market originated from Latin wordmercatus meaning trade, marketplace,
which is derived from
mercari meaning to trade,
which is derived from
from merc-, merx meaning merchandise
In layman term, Market refers to a particular place wheregoods are purchased and sold.
In management and economics Market is any region in
which buyers and sellers are brought into contact with one
another and facilitate price fixation.
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AREA
MARKET
PRICE
BUYERS AND
SELLERSA COMMODITY
What is Market?Components
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What is Market?Features
In the economic sense, Market is a system by which buyersand sellers come in contact with each other, bargain for the
price of a product, settle the price and transact their
business- buy or sell a product. Physical contact between
the buyers and sellers is not necessary.
M
A
R
K
E
T
Buyers and Sellers
Exchange ofGoods and/or Services
Meeting Place / Meeting ofMinds
Purchase Consideration (Price)
Existence offree competitionto sell
Exchange involves physicalandlegal
transfer ofownership ofgoods
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What is Market..ing?Meaning / Definition
Marketing is the human ACTIVITY directed atsatisfying needs and wants through an exchangeprocess. Philip Kotler
Marketing is the PROCESS of discovering andtranslating consumer needs and wants into product/service specifications, creating demand for these
products/services and then, in turn, expanding thedemand. - Harry Hansen
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Marketand MarketingNeeds
andWants Demands
Exchange ofMoney andTransactions
MARKET
MARKETING
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Distinction between Marketand Marketing
MARKET MARKETING
System: Is a system or anatmosphere or a mechanism
that facilitate such forces
leading to price fixation.
Activity: Marketing is the sumtotal of all activities that are
related to the free flow of goods
from the points of production to
the points of consumption
Outlet : It is an outlet to let out
the products. It is the key to the
engine of Marketing.
Means: Marketing is a gigantic
machinery facilitating
movements of goods.
Narrow Concept : Signifies
place and atmosphere wheretransaction takes place
Wider Concept: It represent the
entire process of distributionand the process prior to it.
Change Quickly : Buyers and
sellers change, demand and
supply change, prices change,
market characteristics change.
Consistent : As a philosophy, it
remains more constant, take
decades to change in response to
changes in environmental factors.
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MARKETING SELLING
Scope Wider : Involves thedesign of products
acceptable to customers .
Narrow: Involves obtainingorders from customers and
supplying them the products
Emphasis Focus is on satisfying
customer needs.
Is Customer oriented
Earn profits through
customer satisfaction
Focus is on selling the
products and get returns
Is Product Oriented
Earn profits through increase
in sales volume
Occurrence Begins before production
Continues after Sale
Begins after production
Comes to an end with SalePhilosophy Philosophical and Strategic
Long term perspective
Customer First
Routine and Tactical Activity
Short term perspective
Product First
Differences between Marketingand Selling
Semantics Marketing includes selling Selling is a part of Marketing
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Nature / Characteristics ofMarketing
1. Marketing is a Process of Exchange.
2. Is a Consumer Oriented Process.
3. Marketing starts and ends with the customer.
4. Marketing is a goal oriented process.
Achieve profits through customer satisfaction.5. Marketing is based on mutuality of benefits.
Quality goods to customer in return for profit
to business.
6. It covers both Profit and Non-Profit making
organisation.
7. It is Value driven.
8. It is proactive to the Environment.
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Nature / Characteristics ofMarketing
7. It is Value driven: Business values are reflected in Marketing
strategies. ITC's Core Values are aimed at developing a customer-focused,
high-performance organisation which creates value for all its
stakeholders. We are always customer focused and will deliver
wh
at th
e customer needs in terms of value, quality andsatisfaction.Ranbaxy's mission is Enriching lives globally, with quality and
affordable pharmaceuticals.
Values:
Achieving customer satisfaction is fundamental to our business.
Provide product andservices of the highest quality.
8. It is proactive to the Environment. Ranbaxy: Manage our operations withhigh concern for safety and
environment.
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Scope ofMarketing
Marketing is the great task of creating, promoting and
delivering goods and service to final consumers andbusiness buyers.
Scope of Marketing involves ten types of activities :
1. Goods
2. Services3. Experiences
4. Events
5. Persons
6. Places7. Properties
8. Organisations
9. Information
10. Ideas
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Scope ofMarketing1. Goods: All types of products (durable, non-durable;
Necessities/ Luxuries)2. Services : Unskilled to Skilled; Personal Services/ Group
Services; Financial and Non-financial Services
3. Experiences: Cruise Experience, Wild Life Experiences,
Walt Disneys EntertainmentExperience4. Events : Rock shows, Sports Events : Olympics, Trade
Shows
5. Persons: Celebrity Marketing- Amitabh Bachchan,
Magicians PC Sorcar, Musicians- Bryan Adams/Britney Spears Show
6. Places : Marketing of cities, states, region and even
the whole country, places of tourist interest.. Eg. Kerala
Gods Own Country, Incredible India!
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Scope ofMarketing
7. Properties : Marketing of properties include Real Estate
or Financial properties Stocks and Bonds.8. Organisations: Business Organisations, Private
Institutions, Govt. organisations market themselves.
Eg. Philips Lets make things better. IIPM- Think
BeyondIIMs
9. Information: Encyclopedias and non-fiction
publications are rich source of information. Periodicals
and Journals provide specialized information. Travel
Guides, Internet Search engines.
10. Ideas: Environmental protection, Antismoking, Blood
donations, Recycling.
For eg. WOW (Wealth out of Waste), Say No to Plastic
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Importance ofMarketing1. Marketing helps the organisation to achieve its
objectives.2. Helps the community to satisfy their economic and
social needs and thus raise their standard of living.
3. Helps in an efficient and productive utilization of
resources, both human and material, eliminating
wastages. Maximum efficiency at Minimum cost.
4. Helps the enterprise to adapt to the changing
conditions and circumstances.
5. Provides guidance to the organization on the
innovations to be adopted.
6. Ensures the economic growth of the enterprise which
results in growth and development of the country.
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Approaches to the study ofMarketing
1. Commodity Approach2. Functional Approach
3. Institutional Approach
4. Managerial / Decision-Making Approach5. Systems Approach
Other Approaches
6. Legal Approach7. Societal Approach
8. Economic Approach
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Approaches to the study ofMarketing1. Commodity Approach: Study the flow of a commodity
from the original producer up to the final customer.This study helps to locate :
Centre of production
People engaged in buying & selling of the product
Mode of transportation
Problems related to selling, advertising, financing
and storageEg. Marketing of agricultural products such as wheat, cotton etc.
2. Functional Approach: Involves study of marketing
functions such as buying, selling, storage, financing,
risk bearing, advertising and providing information.
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Approaches to the study ofMarketing
3. Institutional Approach: Centers around the marketing
institutions or agencies such as distributors,
wholesalers, retailers, transport companies, banks,
insurance companies etc. who participate in
discharging their responsibilities during the movement
of goods.
4. Managerial / Decision-Making Approach: It combines
certain aspects of commodity, institutional and
functional approaches. Focus is on the decision making
process. The study involves identification of decision
factors, alternative strategies, techniques and methods
of problem solving.
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Approaches to the study ofMarketing5. Systems Approach: Is an integrated approach that
includes:I. Objectives : are profitability through customer satisfaction
II. Inputs: Information from internal andexternal sources
III. Processor: Information is processed
IV. Output: Actions are taken w.r.t. the marketing activityV. Feedback:forms the basis for future change .
6. Legal Approach: Emphasis is on legislations related to
marketing system. Eg. Sale of Goods act, Carrier act etc.
7. Societal Approach: based on the belief that producersproduce and sell according to the desires projected by the
consumers in the society.
8. Economic Approach: focuses on market forces like
demand, supply , price etc.
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Marketing Concepts1. Production Concept : Consumers will favor those products
that are low in cost and are widely available. ProductionOriented Organisation work towards achieving production
efficiency (low cost) and wide distribution coverage (widely
available).
2. Product Concept: Consumers will favor those products thatoffer the best quality, performance or features. Product
Oriented Organisation work towards making superior and
innovative products. This orientation leads to Marketing
Myopia:
focus on product rather than on consumer needs.3. Selling Concept: Consumers need to be coaxed into buying
as they generally have buying inertia/ resistance to buying.
Selling Oriented Organisation undertake aggressive selling
and promotion effort to stimulate buying.
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Marketing Concepts4. Marketing Concept: Based on achieving profitability
through customer satisfaction more effectively andefficiently than the competition. The emphasis is on
understanding consumer needs and wants. Marketing
concept is based on the following premises:
Customer orientation: Understanding the needs anddesires of target customers.
Systems approach: All marketing activities are properly
integrated and coordinated to achieve the objectives
Marketing Information System:
Based upon adequate andaccurate information about customer and competition.
Dual Objective: Advocates serving the consumers and
maximizing profits at the same time. Guaranteed route to
profits is through customer satisfaction
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Marketing Concepts5. Social / Societal Marketing Concept : This is a new concept
that goes beyond understanding consumer needs andmatching the products accordingly. This concept cares for
not only customer satisfaction but for consumer or social
welfare. Concerns about Public welfare, better living
environment, better quality of life etc. make organisationsadopt socially responsible marketing policies. For eg. An
automobile not only fuel efficient but less polluting.
It requires the organisation to balance three considerations:
I. Company profitsII. Consumer Needs
III. Public Interest/ Social Welfare
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Traditional Concepts Modern Concepts
Production, Product and Sales
Concept are traditional concepts
of Marketing.
Customer Oriented and Societal
Marketing are modern concepts
of Marketing.
Takes inside-out perspective.
Starts with the factory, focuses
on products and advocates
heavy selling to get profitablesales
Takes outside-in perspective.
Starts with a well defined target
market, focuses on customer
needs and advocates customersatisfaction for higher profits.
Caveat Emptor : Buyer Beware Caveat Vendor: Seller Beware
Differences between
Traditionaland Modern Marketing Concepts
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Functions ofMarketingClark and Clark have classified the marketing functions into
the following three divisions:
I. Functions of Exchange
II. Functions of Physical Supply
III. Facilitating Functions
Functions ofExchange
i. Buying : involves procuring goods of required quality and
quantity at a satisfactory price. It Involves assembling goods
under a single ownership for production, resale or
consumption. Buying process may involve following activities:
Planning, Negotiating, Contracting and Assembling
ii. Selling : involves finding buyers to sell goods at a satisfactory
price. Selling process may involve following activities:
Planning, Prospecting, Creating demand/ inducing buyers,
Negotiating and contracting.
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Functions ofPhysical Supply
Function of exchange is effected only through the function of
physical supply. The function of Physical supply of goods fromthe producers to consumers involves:
I. Transportation : needs to be speedy, efficient, on-time,
hassle-free and safe delivery. Company has a choice of five
modes of transportation:
Rail, Road, Air, Waterways (Shipping) and Pipelines.
II. Storage and Warehousing: Goods are stored for different
reasons such as:
Goods produced seasonally may be used throughout the
year and vice versa. Manufacturers store raw materials for ready supply
Goods are also stored in the hope of getting a higher
price in future
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FacilitatingFunctions
1. Financing
2. Risk-taking3. Market Information
4. Standardization and Grading
5. Pricing6. Branding
7. Packing and Packaging
8. Sales Promotion
9. Personal Selling/ Salesmanship
10.Advertising
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FacilitatingFunctions
Facilitating Functions are:
1. Financing :Marketing department needs capital for Investing inland, buildings, furniture etc.; Maintaining inventory and
extending credit to customers. Acquiring funds for these
marketing purposes is known as financing.
2. Risk Taking: Marketing may face the risk of loss, fire, theft,
natural calamity, price fluctuations, exchange rate fluctuations
etc. Some of these risks may be insured wholly or partly or
borne by the businessman.
3. Market Information: The function of collecting, analyzing and
communicating information is also important in marketing.
Modern Marketing involves setting up an efficient Marketing
Information System and undertaking Market research.
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FacilitatingFunctions
4. Standardization and Grading: A standard is a measure of quality
consisting of specifications such as size, color, appearance,shape, chemical contents, flavour etc.. Standardization carries
the idea of uniformity.
When standardized goods are further subdivided into well
defined classes it is called grading. Grading may be done basis
quality, size etc. conforming to certain standards.
5. Pricing: Generates revenue, all other functions involve costs.
Pricing need to be right. Neither too high nor too low.
6. Branding: is the practice of giving a specified name to a product
or a group of products from one seller. Branding helps
Identify & differentiate products from those of competitors
Create Brand Image and Brand Equity
Build Brand loyalty and control over the market
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FacilitatingFunctions
7. Packing and Packaging : Almost every article has to be packed to
make a trip to the ultimate consumer. Packing provides handlingconvenience, maintains freshness and quality of the product and
prevent damages or adulteration of the product.
Packaging is much more than mere packing. It is advertising on
the shelf, an attractive display or an eye-catching appearance.
Packaging creates an image in the minds of the consumer.
8. Sales Promotion: are the short term promotion tools designed
to stimulate customers to buy and assist sales-force/ retailers in
their sales efforts.
9. Personal Selling/ Salesmanship: Personal Selling involves
salesman making direct contact with the buyer and negotiate for
the sale of the goods. Salesmanship is an art of persuading
people to buy.
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FacilitatingFunctions
10. Advertising:
is the backbone of modern marketing. It informs,guides, educates and protects buyers, so that they can take right
decisions on what to buy. It is beneficial to the manufacturer,
retailers, salesmen , consumers & to the community in general.
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Marketing Environment
Marketing Environment consist of all the internal and external
influences which affect marketing decision making and have animpact on its performance.
The components of Marketing Environment may be classified
into two categories:
Macro Environment : External Factors, Uncontrollable
Micro Environment : Internal Factors, Controllable
Macro / External Environment
1. Demography
2. Economic
3. Socialand Cultural4. Politicaland Legal
5. Scienceand Technology
6. Competition
7. Ecology/ Natural
8. International
Micro / Internal Environment
1. Organisation
2. Corporate Resources
3. Marketing Mix: 4Ps
4. Markets
5. Suppliers
6. Intermediaries
7. Employees
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Macro Environment
Macro / External Environment
1. Demography : is Understandingthe compositionanddistribution ofhuman
population. Demographic factors are:
Age Group
Gender
Education
Religionand Ethnicity
Birthand Deathrate, populationdensity, ruralandurban population
2. Economic: Marketers needs to understandnot onlythe population butalso
the purchasing power ofpeople. Purchasing Powerdepend on:
Income
Savings and Investment Inflation
Credit Availability
Interest Rate
Stage ofBusiness Cycle:
Prosperity, recession, boom, depression, recovery
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Macro Environment contd
3. Socialand Cultural : Society in which peoplelive in, shapetheir beliefs,
culturalvalues and socialnorms. Socialand Culturalfactors are
Socialand Cultural Values / Lifestyle : Influencefashion,youth
behaviour, Double Incomehouseholds, Nuclearfamilies/ jointfamily,
Time Pressureetc.
Social Problems: Child Labour, Awareness ofEnvironment pollution,
Workingand Living Conditions ofpeople
Social Trends: Consumerism, Ethical consciousness, socialresponsibility
ofbusiness,arethegrowingtrends thatthe organisationneedto payheedto.
4. Politicaland Legal: Marketing system areaffected bygovernment policies,
laws andregulations. Theseare:
MonetaryandFiscal Policies Taxes and Duties
Anti pollutionlaws
Drug Controlact,
MRTP act
Advertising Council ofIndia
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MARKET CLASSIFICATION
Criteria
1. By the Area :Manner in which buyers and sellers are located
Local, regional, national, International market
2. By the Nature of transactions:
Vegetable Market,
F
ish
Market, Stock Market : Spotmarket/Futures Market
3. By the Volume of Business:
Wholesale andRetail Markets
4. On the basis of Time
:
Very short period, short periodandlong periodmarket
5. By the Status of Sellers : Primary / Secondary Market
6. By the Nature of Competition : Buyer seller interaction
PerfectCompetition, Monopoly, Monopolistic, Oligopoly