Ch 1 Introduction to Marketing

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INTRODUCTION TO MARKETING

What is MARKETING ?


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MARKETING is a social and managerial process

by which

individuals and groups obtain what they need and want

through

creating, offering and exchanging products of valuewith others.


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Definition of MARKETING rests on the following corefactors :

1. Needs , wants and demands2. Products, goods, services and ideas

3. Value, cost and satisfaction

4. Exchange and transaction

5. Relationships and network

6. Markets and prospects


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Prime focus of MARKETING :

The entire system of business activities should becustomer oriented

The customers needs and wants must be

recognized and satisfied


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Duration of MARKETING as an activity:

The activity starts with an idea about a wantsatisfying product

The activity should not end until the customers

wants are completely satisfied

This may be sometime after an exchange is made


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MARKETS

The concept of exchange leads to the concept of a

market

Market consists of all potential customers sharing aparticular need or want

And who might be willing and able to engage inexchange to

Satisfy that need or want


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WHO IS A MARKETER ?


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MARKETER ?

Someone seeking one or more prospects who mightengage in an exchange of value

Who is a prospect ?


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Prospect ?

Someone who the marketer identifies as potentiallywilling and able to engage in an exchange of value

What is MARKETING MANAGEMENT?


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MARKETING MANAGEMENT?

The process of planning and executing theconception, pricing, promotion, and distribution

of

Ideas, goods and services

to

Create, exchanges that satisfy individual and

organizational goals


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CONCEPT OF EXCHANGE Exchange is a key concept in the definition of marketing

Exchange means people give up something to receivesomething they would rather have

People normally think of money as the medium ofexchange

People give up money to get the goods and servicesthey want

Do all exchange require money?

What is that exchange that does not require money?


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EXCHANGE that does not require money

BARTER

Two persons may barter or trade items

Olden days agriculturists bartered agriculturalproducts with

- utensils

- hand tools- garments etc.

with those manufacturing them

This represented the stage of the barter system


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EXCHANGE CAN TAKE PLACE ONLY IF THE FOLLOWING

FIVE CONDITIONS EXIST

1. There must be at least two parties

2. Each party has something that might be of value to the other

party3. Each party is capable of communication and delivery

4. Each party is free to accept or reject the exchange offer

5. Each party believes it is appropriate or desirable to deal with the

other party

Exchange however will not necessarily take place even if all the

above conditions exist

They are however necessary for exchange to be possible


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Marketing Management Philosophies Six competing philosophies strongly influence an

organizations marketing activities.

These philosophies are commonly referred to as1. Production Orientation

2. Product Orientation

3. Sales Orientation4. Market Orientation

5. Societal Marketing Orientation

6. The Marketing Concept


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Marketing Management Philosophies

PRODUCTION ORIENTATION

A philosophy that focuses only on the internal capabilities of thefirm

Does not focus on the needs of the market place or theconsumers

Production orientation means that management assesses its

resources and asks these questions :

1. What can we do best ?2. What can our engineers design ?3. What is easier to produce given the desired equipments ?


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PRODUCTION ORIENTATION In case of a service organization management asks the following

questions :

1. What services are most convenient for the firm to offer ?

2. Where do our talents lie ?

Experts have referred to this orientation as a field of dreamsorientation

Eg.: The furniture industry is infamous for its disregard ofcustomers and for its slow cycle times

This has always been a production oriented industry.


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PRODUCT ORIENTATION

Focus was on the quality and quantity of output of product

Assumption : Customers would buy reasonably priced and well

made products Managers with backgrounds in manufacturing and engineering

shape a firms strategy

In this philosophy demand of goods normally exceed supply

Finding customers is viewed as a relatively minor function Emphasis is on internal operations and focused on efficiency and

cost control

Customers wants is highly predictable

Customer spending is on necessities


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PRODUCT ORIENTATION

If a firm can make a good quality shoes inexpensively a market wouldalmost certainly exist

The term MARKETING is not in use

Need for existence of the sales department whose responsibility will beto supervise sales

Sales department can simply carry out the transactions at a pricedictated by the cost of production

The emphasis is mostly on products and operations


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INTRODUCTION TO MARKETINGMarketing Management Philosophies

SALES ORIENTATION

The world economic crisis of late 1920s (The Great Depression)changed perception and gave rise to this philosophy

As developed countries emerged from depression facts became clear

Main economic problem was no longer how to manufacture efficientlybut rather how sell the resulting output

Just offering a quality product was no assurance of success

Realization that consumers had limited resources and numerous optionsrequired substantial post production efforts

Thus SALES ORIENATION stage was characterized by heavy reliance onpromotional activity to sell products the firm waned to make


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SALES ORIENTATION

Advertising consumes a larger share of the firms resources

Sales executives started getting a lot of respect from Company Management

Along with responsibility came the expectation of performance

Unfortunately these pressures resulted in managers resorting to overlyaggressive selling

Hard sell and unscrupulous advertising tactics

Result : Selling has developed an unsavoury reputation in the eyes of many

Many firms believe in the hard sell approach to prosper


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SALES ORIENTATION

Fundamental problem : Lack of understanding of the needs and wants ofthe consumers

Companies often find that despite the quality of their sales force theycannot convince people to buy goods or services that are neither wantednor needed

Some companies lack understanding of what is important to their

customers

Eg.: Many companies that came into existence once the economy

was opened in the 90s are no longer there as they focused more

on the technology rather than on the customers


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MARKET ORIENTATION

Got prominence when strong pent up demand for consumer goods wascreated by war time shortages at the end of World War II

Result : Manufacturing plants turned out tremendous quantities of goodsthat the consumers required and were quickly purchased

Post war surge in consumer spending slowed down as supply caught up

with demand

Result :Many firms found out that they had excess production capacity

Sales were stimulated by aggressive promotional and sales activity of

the sales orientation era


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Marketing Management PhilosophiesMARKET ORIENTATION

However this time the sellers were less easily persuaded

War years changed the consumers because of exposure

War effort brought many women to the work force for the first time

Because of exposure consumers became more knowledgeable and less

nave and less easily influenced


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MARKET ORIENTATION

Technology started developing during the 2nd World War

This made it possible to produce much greater variety of goodswhen converted to peacetime activity

Thus the evolution of marketing continued

Companies started believing that they have to make idlecapacity to work

This could only be possible by making available what theconsumers wanted

In this stage companies identified what consumers needed andwanted and then went on to satisfy those


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MARKETING MYOPIA

Marketing myopia means a coloured or a crooked perception ofmarketing

Short sightedness about business

When marketers give excessive attention to1. products2. production3. and sellingand ignore the customer and his actual needs in the process, createsthis myopia.

It leads to a wrong or inadequate understanding of the marketand hence, failure in the market place.


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Marketing Management PhilosophiesSOCIETAL MARKETING ORIENTATION

A market-oriented organization may also choose not todeliver the benefits sought by customers

Reason being that these benefits may not be good for theindividual or the society

This philosophy is called the societal marketing orientation

Philosophy : An organization exists not only to satisfycustomers needs and wants and the organizationsobjectives but also to preserve or enhance individuals and

societys long term best interests


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Marketing Management PhilosophiesSOCIETAL MARKETING ORIENTATION

Many Companies marketing products in containers that are less toxic than normal,more durable, contain reusable materials

Duracell and Eveready battery companies have reduced the levels of mercury in theirbatteries and will eventually manufacture mercury free products

Turtle wax car wash products and detergents are biodegradable

Lubricants and Gear Oils are now biodegradable and are easily disposed

Factory waste management emphasizes that waste disposal should not affect theatmosphere and the earths crust

Pollution control board has been set up to ensure that pollutants do not pollute the

environment


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EMERGENCE OF THE MARKETING CONCEPT

The marketing concept came with the awareness that1. Marketing starts with the determination of the consumer needs

and wants2. Marketing ends with the satisfaction of these needs and wants

The concept stipulates that1. Any business should be organized around the marketing function

2. Business should anticipate, stimulate and meet customersrequirement

3. The customer and not the corporation has to be the centre of thebusiness universe


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DISTINGUISHING FEATURES OF THE MARKETING CONCEPT

Has four major distinguishing features

1. Consumer Orientation The emphasis is on the consumers and his needs

2. Integrated Management action Keeping marketing as a pivot all different functions of business has

to be integrated Essential as every department function has a bearing on the

consumers Aim is to see that every function leads to a favourable impact on the

consumer


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DISTINGUISHING FEATURES OF THE MARKETING CONCEPT

3. Consumer satisfaction Integrated management action is means and not an end in itself The aim is to fulfill the needs of the consumers The concept aims at satisfying the needs of the consumer

4. Realizing Organizational Goals Including Profits Concept does not preach that a firm must only generate consumer

satisfaction Aim is also to exercise control on costs ensuring quality, optimizing

productivity, maintaining a good organizational climatethereby meeting the goals and profits of the organization


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WHO BENEFITS FROM THE MARKETING

CONCEPT AND HOW ?

Marketing concept benefits the

1. Organization that practices it2. The consumers at whom it is aimed

3. And the society at large


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MARKETING QUIZ

An Organization being Marketing Orienteddoes not necessarily call for the MarketingDepartment to successfully run theOrganization. Keeping Marketing as a pivotall different functions of business has to beintegrated.

How would a Manager (Finance & Accounts)be Market Oriented?

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Ch 1 Introduction to Marketing

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