Introduction to Marketing Introduction to Marketing ConceptsConcepts

Dr.Sita MishraDr.Sita Mishra

Learning ObjectivesLearning Objectives Define marketing Outline the steps in the marketing

process. Identify the core marketplace concepts. Discuss the marketing management

orientations that guide marketing strategy. Describe the major trends and forces that

are changing the marketing landscape in this new age of relationships.

The New EconomyThe New Economy

– Increased buying power.Increased buying power.

– Greater variety of goods and services.Greater variety of goods and services.

– Increased information.Increased information.

– Enhanced shopping convenience.Enhanced shopping convenience.

– Greater opportunities to compare Greater opportunities to compare product information with others.product information with others.

The New EconomyThe New Economy

Websites can provide companies with powerful Websites can provide companies with powerful new information and sales channels.new information and sales channels.

Companies can collect fuller and richer Companies can collect fuller and richer information about markets, customers, information about markets, customers, prospects and competitors.prospects and competitors.

Companies can facilitate and speed up Companies can facilitate and speed up communications among employees.communications among employees.

Companies can have 2-way communication Companies can have 2-way communication with customers and prospectswith customers and prospects

The New EconomyThe New Economy

Companies can send ads, coupons, samples, Companies can send ads, coupons, samples, information to targeted customers.information to targeted customers.

Companies can customize offerings and Companies can customize offerings and services to individual customers.services to individual customers.

The Internet can be used as a communication The Internet can be used as a communication channel for purchasing, training, and channel for purchasing, training, and recruiting.recruiting.

Companies can improve logistics and Companies can improve logistics and operations for cost savings while improving operations for cost savings while improving accuracy and service quality.accuracy and service quality.

What is MarketingWhat is Marketing

Simple Definition: Marketing is managing Simple Definition: Marketing is managing profitable customer relationships.profitable customer relationships.

Goals: Goals: Attract new customers by promising Attract new customers by promising

superior value. superior value. Keep and grow current customers by Keep and grow current customers by

delivering satisfaction.delivering satisfaction.

The AMA managerial definition:The AMA managerial definition:

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

Marketing DefinedMarketing Defined

Kotler’s social definition:Kotler’s social definition: ““Marketing is a societal process by Marketing is a societal process by

which individuals and groups obtain which individuals and groups obtain what they need and want through what they need and want through creating, offering, and freely creating, offering, and freely exchanging products and services of exchanging products and services of value with others.”value with others.”

Core Marketing ConceptsCore Marketing Concepts

Needs, wants, Needs, wants, demandsdemands

Target markets Target markets and market and market segmentationsegmentation

Marketers & Marketers & prospectsprospects

•Product offering and Product offering and brandbrand•Value and satisfactionValue and satisfaction•Exchange and transactions•Relationship and networks•MarketMarket

This is a NeedThis is a Need

NeedsNeeds - state of felt - state of felt deprivation deprivation including physical, including physical, social, and social, and individual needs.individual needs.

Maslow’s Hierarchy of NeedsMaslow’s Hierarchy of Needs

This is a WantThis is a Want

WantsWants – Needs – Needs become wants become wants when they are when they are directed to directed to specific objects specific objects that might satisfy that might satisfy the need.the need.

This is DemandThis is Demand

WantsWants Buying Power

“Demand”

Need / Want FulfillmentNeed / Want Fulfillment

Needs and Wants Needs and Wants Fulfilled through a Fulfilled through a Marketing Offer Marketing Offer ::

Some combination of Some combination of products, services, products, services, information, or information, or experiences offered to experiences offered to a market to satisfy a a market to satisfy a need or want.need or want.

ProductsAnything that can be Offered to a Market to Satisfy a Need or Want

ProductsAnything that can be Offered to a Market to Satisfy a Need or Want

PersonsPersons PlacesPlaces OrganizationsOrganizations

IdeasIdeasInformationInformation

ServicesActivity or Benefit Offered for Sale That is Essentially

Intangible and Does Not Result in the Ownership of Anything

ServicesActivity or Benefit Offered for Sale That is Essentially

Intangible and Does Not Result in the Ownership of Anything

What Satisfies Consumers’ Needs and Wants?What Satisfies Consumers’ Needs and Wants?

ExperiencesExperiences EventsEvents PropertiesProperties

Product as an ideaProduct as an idea

Products do not have to be physical objects.Here the “product” is an idea—protectinganimals.

Core Marketing ConceptsCore Marketing Concepts

Target markets & segmentationTarget markets & segmentation

– Differences in needs, behavior, Differences in needs, behavior, demographics or psychographics are demographics or psychographics are used to identify used to identify segmentssegments..

– The segment served by the firm is The segment served by the firm is called the called the target markettarget market..

– The market offering is customized to The market offering is customized to the needs of the target market.the needs of the target market.

Marketplace, Marketspace,MetamarketsMarketplace, Marketspace,Metamarkets

The Marketplace is physical, as when one The Marketplace is physical, as when one goes for shopping in a storegoes for shopping in a store..

Marketspace is digital, as when one goes Marketspace is digital, as when one goes shopping on the internetshopping on the internet..

Metamarket is described as a cluster of Metamarket is described as a cluster of complementary products and services that complementary products and services that are closely related in the minds of are closely related in the minds of consumers but are spread across a diverse consumers but are spread across a diverse set of industries.set of industries.

Exchange & TransactionsExchange & TransactionsExchangeExchange is one of the four ways in which a person is one of the four ways in which a person

can obtain a product. It is a core concept of can obtain a product. It is a core concept of marketing. For exchange potential to exist, five marketing. For exchange potential to exist, five conditions must be satisfied : conditions must be satisfied :

At least two participants in the process. At least two participants in the process. Each party must offer something of value to the Each party must offer something of value to the

other.other. Both parties must want to deal with each other. Both parties must want to deal with each other. Both participants have the right to accept or to Both participants have the right to accept or to

reject the offer.reject the offer. Both groups must have the ability to communicate Both groups must have the ability to communicate

and deliver on the mutual agreement.and deliver on the mutual agreement.

Exchange what they want & Exchange what they want & needneed

TransactionTransaction

Transaction is a trade of values Transaction is a trade of values between two or more parties.between two or more parties.

It involves at least two things of It involves at least two things of value, agreed-upon conditions, a value, agreed-upon conditions, a time of agreement, and a place of time of agreement, and a place of agreement.agreement.

Value and SatisfactionValue and Satisfaction

How Do Consumers Choose Among Products and Services?

Value Gained From Owning a Product and Costs of Obtaining the Product is

Customer Value

Product’s Perceived Performance in Delivering Value Relative to Buyer’s Expectations is

Customer Satisfaction

Total Quality Management

Involves Improving the Quality of Products, Services, and Marketing Processes

ExchangesExchanges TransactionsTransactions

Relationships Relationships Building a Marketing

Network Consisting ofThe Company and All

Its SupportingStakeholders

How Do Consumers Obtain Products and Services?

Relationship MarketingRelationship MarketingFour key constituents for marketing are:Four key constituents for marketing are: CustomerCustomer Marketing Partners ( channel, suppliers, Marketing Partners ( channel, suppliers,

distributors, dealers and agencies)distributors, dealers and agencies) EmployeeEmployee Members of financial community (shareholders, Members of financial community (shareholders,

investors)investors)The development of strong relationships requires The development of strong relationships requires

an understanding of the capabilities and an understanding of the capabilities and resources of different groups, as well as their resources of different groups, as well as their needs, goals and desires.needs, goals and desires.

What is a Market?What is a Market? The set of actual and potential buyers The set of actual and potential buyers

of a product.of a product.

These people share a need or want These people share a need or want that can be satisfied through exchange that can be satisfied through exchange relationships.relationships.

UnexpectedSituational

FactorsEthical

Potential Buyers

Market – Buyers who

share a particular need or

want that can be

satisfied through

exchange or

relationships.

Actual Buyers

Who Purchases Products and Services?

People Who Exhibit Need

Resources to Exchange

Willingness to Exchange

What is Market?What is Market?A market consists of all the potential customers sharing A market consists of all the potential customers sharing

a particular need or want who might be willing and a particular need or want who might be willing and able to engage in exchange to satisfy that need or able to engage in exchange to satisfy that need or want.want.

Potential Market (have sufficient level of interest in a Potential Market (have sufficient level of interest in a market offer)market offer)

Available Market (who have interest, income and Available Market (who have interest, income and access to a particular offer)access to a particular offer)

Qualified available marketQualified available market

Target Market or Served Market (a co. can go for Target Market or Served Market (a co. can go for serving whole available market or can concentrate on serving whole available market or can concentrate on certain segments)certain segments)

Penetrated Market (set of buyers who are buying the Penetrated Market (set of buyers who are buying the co.’s product)co.’s product)

What do marketers do?What do marketers do?

Marketing MixMarketing Mix

7 P’s in Services Marketing7 P’s in Services Marketing3 additional P’s in services marketing3 additional P’s in services marketing People: Any person coming into contact with People: Any person coming into contact with

customers can have an impact on overall customers can have an impact on overall satisfaction. satisfaction.

Process: Process(es) involved in providing a Process: Process(es) involved in providing a service and the behaviour of people, which can be service and the behaviour of people, which can be crucial to customer satisfaction.crucial to customer satisfaction.

Physical evidence- The ability and environment in Physical evidence- The ability and environment in which the service is delivered. It includes both the which the service is delivered. It includes both the tangible goods that help to communicate and tangible goods that help to communicate and perform the service or intangible experience of the perform the service or intangible experience of the customers.customers.

Matching Mix Concepts (A & S)Matching Mix Concepts (A & S)

4 A’s 4 A’s 4 S’s4 S’s

Acceptability SolutionAcceptability Solution

Affordable SenseAffordable Sense

Accessible SpreadAccessible Spread

Awareness SupportsAwareness Supports

PACS MatrixPACS Matrix

Product Acceptability Customer Sol SolutionProduct Acceptability Customer Sol Solution

Price Affordable Cost SensePrice Affordable Cost Sense

Place Access Convenience SpreadPlace Access Convenience Spread

Promo Awareness Communicate SupportPromo Awareness Communicate Support

SIVA approachSIVA approach Solution: How appropriate is the solution to the Solution: How appropriate is the solution to the

customers problem/needcustomers problem/need

Information: Does the customer know about the solution, Information: Does the customer know about the solution, and if so how, who from, do they know enough to let them and if so how, who from, do they know enough to let them make a buying decisionmake a buying decision

Value: Does the customer know the value of the Value: Does the customer know the value of the transaction, what it will cost, what are the benefits, what transaction, what it will cost, what are the benefits, what might they have to sacrifice, what will be their reward?might they have to sacrifice, what will be their reward?

Access: Where can the customer find the solution. How Access: Where can the customer find the solution. How easily/locally/remotely can they buy it and take delivery.easily/locally/remotely can they buy it and take delivery.

This model was proposed by Chekitan Dev and Don SchultzThis model was proposed by Chekitan Dev and Don Schultz

Production ConceptProduction Concept

Consumers will favour those products Consumers will favour those products that are widely available and low in cost.that are widely available and low in cost.

Therefore increase production and cut Therefore increase production and cut down costs.down costs.

And build profit through volume.And build profit through volume.

The Production ConceptThe Production Concept

A customer can have any colour he likes for his car so long as it's black’

Henry Ford

Product ConceptProduct Concept

Consumers will favour those products Consumers will favour those products that offer the most quality, performance, that offer the most quality, performance, or innovative features.or innovative features.

Therefore, improve quality, performance Therefore, improve quality, performance and features.and features.

This would lead to increased sales and This would lead to increased sales and profits.profits.

Marketing MyopiaMarketing Myopia

Management’s failure to recognize a company’s Management’s failure to recognize a company’s scope of business.scope of business.

Sellers pay more attention to the specific products Sellers pay more attention to the specific products they offer than to the benefits and experiences they offer than to the benefits and experiences produced by the products.produced by the products.

They focus on the “wants” and lose sight of the They focus on the “wants” and lose sight of the “needs.”“needs.”

Marketing MyopiaMarketing Myopia

To overcome this-Be customer led-Whole company must have market orientation-Management must be visionary and pro-active

The Selling ConceptThe Selling Concept

Consumers , if left alone , will not buy Consumers , if left alone , will not buy enough of company’s products.enough of company’s products.

Therefore, promote sales aggressively.Therefore, promote sales aggressively.

And,build profit through quick turnover.And,build profit through quick turnover.

The Marketing ConceptThe Marketing Concept

The key to achieving organizational goals The key to achieving organizational goals consist in determining the needs and wants consist in determining the needs and wants of target markets and delivering the desired of target markets and delivering the desired satisfactions more effectively and efficiently satisfactions more effectively and efficiently than competitors.than competitors.

And build profit through customer And build profit through customer satisfaction and loyalty.satisfaction and loyalty.

Marketing and Sales Concepts ContrastedMarketing and Sales Concepts Contrasted

Customer NeedsCustomer Needs

Stated need, Real need ,Unstated need,Stated need, Real need ,Unstated need,

Delight need, Secret needDelight need, Secret need

-Responsive marketing (finding stated need -Responsive marketing (finding stated need and filling it)and filling it)

-Anticipative marketing (looking ahead into -Anticipative marketing (looking ahead into what needs consumer may have in future) what needs consumer may have in future)

- Creative marketing (discovering and - Creative marketing (discovering and producing solution consumers never ask for producing solution consumers never ask for but to which they respond enthusiastically)but to which they respond enthusiastically)

The Societal Marketing ConceptThe Societal Marketing Concept

The societal marketing concept holds that the The societal marketing concept holds that the organization’s task is to determine the needs, organization’s task is to determine the needs, wants, and interests of target markets and to wants, and interests of target markets and to deliver the desired satisfactions more effectively deliver the desired satisfactions more effectively and efficiently than competitors and efficiently than competitors in a way that in a way that preserves or enhances the consumer’s and the preserves or enhances the consumer’s and the society’s well being.society’s well being.

- It addresses conflicts between consumer’s and - It addresses conflicts between consumer’s and firm’s short run wants and long term welfare.firm’s short run wants and long term welfare.

The Societal Marketing ConceptThe Societal Marketing Concept

It calls for social and ethical considerations in It calls for social and ethical considerations in marketing. They must balance the conflicting marketing. They must balance the conflicting criteria of company profit, consumer want criteria of company profit, consumer want satisfaction and public interest.satisfaction and public interest.

Cause-related marketing (Activity by which a Cause-related marketing (Activity by which a company with an image, product or service to company with an image, product or service to market builds a relationship/partnership with a market builds a relationship/partnership with a cause/causes for mutual benefit.cause/causes for mutual benefit.

The Holistic Marketing ConceptThe Holistic Marketing Concept It is based on the development, design and It is based on the development, design and

implementation of marketing programmes, implementation of marketing programmes, processes and activities that recognises processes and activities that recognises their breadth and interdependencies. Four their breadth and interdependencies. Four components are:components are:

Relationship marketingRelationship marketing Integrated marketingIntegrated marketing Internal marketingInternal marketing Social responsibility marketingSocial responsibility marketing

Holistic Marketing

Integratedmarketing

Relationship Marketing

SocialResponsibility

Marketing

InternalMarketing

Marketing deptt

Senior

Mgt

Other Deptt Communications Products &

Services

Channels

Ethics

Environment

Community

Legal

Customers Partners

Channels

STATE OF DEMAND AND STATE OF DEMAND AND MARKETING TASKMARKETING TASK

State of demandState of demand Negative DemandNegative Demand No DemandNo Demand Latent Demand Latent Demand Falling Demand Falling Demand Irregular DemandIrregular Demand Full DemandFull Demand Overfull DemandOverfull Demand Un-wholesome Un-wholesome

DemandDemand

Marketing task•Conversional Mktg. •Stimulational Mktg.•Developmental Mktg.•Remarketing•Synchro-marketing•Maintenance Mktg.•De-marketing•Counter-marketing

Four Levels of CompetitionFour Levels of Competition

Brand competition

Industry competitionIndustry competition

Form competitionForm competition

Generic competitionGeneric competition

How Business and Marketing are Changing/ How Business and Marketing are Changing/

Marketing themes in the new economyMarketing themes in the new economy Changing TechnologyChanging Technology GlobalizationGlobalization Customer EmpowermentCustomer Empowerment CustomizationCustomization Customer relationship marketing Customer lifetime value Target marketing Integrated marketing communication Channels as partners Every employee a marketer

WHAT IS MARKETING WHAT IS MARKETING MANAGEMENT ?MANAGEMENT ?

Marketing Management is the analysis, Marketing Management is the analysis, planning, implementation and control of planning, implementation and control of programs designed to create, build and programs designed to create, build and maintain beneficial exchanges and maintain beneficial exchanges and relationships with target markets for the relationships with target markets for the purpose of achieving Organisational purpose of achieving Organisational objectives.objectives.

Shifts in Marketing ManagementShifts in Marketing Management From Marketing does the marketing toFrom Marketing does the marketing to

Everyone does the marketing Everyone does the marketing From organizing by product units toFrom organizing by product units to

organizing by customer segmentsorganizing by customer segments From making everything toFrom making everything to

buying more goods and services from outsidebuying more goods and services from outside From using many supplier toFrom using many supplier to

working with fewer suppliers in a partnershipworking with fewer suppliers in a partnership From relying on old market positions toFrom relying on old market positions to

uncovering new onesuncovering new ones From focusing on shareholders toFrom focusing on shareholders to

focusing on stakeholdersfocusing on stakeholders

Shifts in Marketing ManagementShifts in Marketing Management From emphasizing tangible assets toFrom emphasizing tangible assets to

emphasizing intangible assets emphasizing intangible assets From building brands through advertising toFrom building brands through advertising to

building brands through integrated building brands through integrated communicationcommunication

From offline to onlineFrom offline to online From mass market to target marketFrom mass market to target market From focusing on profitable transactions toFrom focusing on profitable transactions to

focusing on customer lifetime valuefocusing on customer lifetime value From focus on gaining market share toFrom focus on gaining market share to

focus on building customer sharefocus on building customer share From being local to being “Glocal”From being local to being “Glocal”

Other Concepts in MarketingOther Concepts in Marketing Green marketing Green marketing Neuro marketingNeuro marketing Ambush marketingAmbush marketing Permission marketingPermission marketing Contextual marketingContextual marketing Buzz marketing (WOM)Buzz marketing (WOM) Viral marketingViral marketing Stealth marketingStealth marketing Experiential marketing Experiential marketing Guerilla marketingGuerilla marketing Covert advertisingCovert advertising Surrogate advertisingSurrogate advertising