Introduction to Marketing, Evolution of Marketing

Basic Concepts of Marketing is covered here

1. Subject Code: 1.6
Subject Name : Marketing Management
Faculty Name:
Dr. Noor Firdoos Jahan
Professor, Department of Marketing, RVIM

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2. Module 1
INTRODUCTION TO
MARKETING ENVIRONMENT
Fundamentals of Marketing, Evolution of Marketing –
different orientations; The Need for analysis of the
marketing environment, Micro and Macro factors
impacting marketing, Situation analysis and market
opportunity identification; Designing and managing
services, New trends in marketing
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3. What is
Marketing?
Promotion
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4. WHAT IS MARKETING?
A Philosophy
An Attitude
A Perspective
A Management
Orientation
A Set of Activities,
including:
Products
Pricing
Promotion
Distribution / Place
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5. Definition Of Marketing
AMA : Marketing is an organizational
function and a set of processes for
creating, communicating, and
delivering value to customers and for
managing customer relationships in
ways that benefit the organization and
its stakeholders.
Kotler : A social and managerial
process whereby individuals and
groups obtain what they need and want
through creating and exchanging
products and value with others.


American Marketing
Association
Dr. Philip Kotler
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6. Simply put
Marketing is the delivery of customer
satisfaction at a profit.

Goals
Attract new customers by promising
superior value and keep and grow current
customers by delivering satisfaction.
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7. Core Marketing Concepts
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8. What are Consumers’
Needs, Wants, and Demands?
Needs - state of felt
deprivation including
physical, social, and
individual needs i.e hunger
Wants - form that a human
need takes as shaped by
culture and individual
personality i.e. bread
Demands - human wants
backed by buying power i.e.
money
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9. PRODUCTS / OFFERS / SATISFIERS / RESOURCES
•Anything that can be offered to someone to
satisfy a need or want is a product .

•Product refers to physical object

•Services refer to intangible object
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10. What is Marketed?
•Goods
•Services
•Events
•Experiences
•Persons
•Places
•Properties
•Organizations
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11. Who Markets?
•Marketers and Prospects
A marketer is someone who seeks a response-a
attention, a purchase, a vote, a donation from
another party called prospect. If two parties are
seeking to sell something to each other, we call
them both marketers.

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12. WHAT IS MARKET ?
•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.
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13. Key Customer Markets
•Consumer Markets
•Business Markets
•Global Markets
•Non Profit and Government Markets
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14. Marketplaces,
Marketspaces and
Metamarkets
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15. A SIMPLE MARKETING SYSTEM
Industry Market





Communication
Information/Feedback
Goods & Services
Money
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16. The Concept of Exchange
•Lamb : The idea that people give up something to receive
something they would rather have.
•Kotler : The act of obtaining a desired object from someone by
offering something in return.

Necessary Conditions
for Exchange
At Least Two Parties
Something of Value
Communication and Delivery
Freedom to Accept or Reject
Desire to Deal With Other Party
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17. Exchange may not take place even
if conditions are met;
An agreement must be reached; and
Marketing occurs even if exchange does
not take place.
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18. VALUE AND SATISFACTION
•Value is the customers’ estimate of the
Product’s capacity to satisfy a set of goals
•Value is the ratio between what the
customer gets and what he gives (V=B/C)
•Customer gets benefits & assume costs
•WHEN :Customer Expectance=Performance (satisfied)
•Customer Expectance>Performance (dis-satisfied)
•Customer Expectance<Performance (Highly satisfied)

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19. Customer Value
Customer Value

The ratio of benefits to the sacrifice necessary
to obtain those benefits
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20. Customer Value Requirements
•Offer products that perform
•Give consumers more than they expect
•Avoid unrealistic pricing
•Give the buyer facts
•Offer organization-wide commitment in service
and after-sales support
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21. Customer Satisfaction

The feeling that a product has met or exceeded
the customer’s expectations.
Customer Satisfaction
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22. Maintaining Customer Satisfaction
Meet or exceed customer’s expectations
Focus on delighting customers
Provide solutions to customer’s problems
Cultivate relationships,
NOT one-time transactions
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23. Relationship Marketing
Relationship Marketing

The name of a strategy
that entails forging long-term partnerships with
customers, both individuals and firms.
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24. Relationship Marketing



Requirements
for
Building
Relationships


Who are your customers
What do customers value
How do they prefer to interact
What do they want to buy
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25. Building Long-Term Relationships
Customer-oriented personnel

Effective training programs

Empowered employees

Teamwork
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26. IMPORTANCE OF MARKETING
- Society
1.Marketing helps to achieve, maintain and raise
the standards of living
-Marketing is means through which production and
purchasing power are converted into consumption.
-Better marketing  Mass production
-Mass production  Low cost
-Low cost  More buying power  Higher standard
of living
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27. 2.Marketing Increases employment opportunities
-Marketing involves various functions / sub-
functions (Buying, Selling, Transport, Warehousing,
Financing, Risk management etc)
-These functions create need for different
specializations
-About 30-40% population depends directly or
indirectly on marketing
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28. 3.Marketing increases national income
-More purchasing power  increase in national
income
4.Helps maintain economic stability &
development
-By maintaining demand supply balance

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29. 5.Link between producer & consumer
6.Removes imbalance of supply & demand by
transferring surpluses
7.Helps create utilities of time, place &
possession
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30. IMPORTANCE OF MARKETING
– Business Firms
1.Marketing Generates Revenue, by generating
sales & thereby profits
2.Marketing helps decision making process (what,
when & how much to produce, store or
transport)
3.Helps change management & innovations
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31. The Scope of Marketing
To prepare to be a marketer, you need to
understand:
•what marketing is
•how it works
•what is marketed, and
•who does the marketing.
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32. The New Marketing Realities
Major societal forces
•Network information technology
•Globalization
•Deregulation
•Privatization
•Heightened competition
•Industry convergence
•Consumer resistance
•Retail transformation
•Disintermediation
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33. The New Marketing Realities
New Consumer Capabilities
•A substantial increase in buying power
•A greater variety of available goods and
services
•A great amount of information about
practically anything
•Greater ease of interacting, placing and
receiving orders
•An ability to compare notes on products and
services
•An amplified voice to influence public opinion

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34. The New Marketing Realities
New Company Capabilities

•Internet
•Marketing research
•Internal communication
•External communication
•Personalization of messages
•Rewards and promotions
•Mobile marketing
•Personalization of products
•Savings from using the internet
•Online training products
More companies can produce
individually differentiated goods
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35. Company Orientation Toward
the Marketplace
•Given these marketing realities, what
philosophy should guide a company’s
marketing efforts?
•Increasingly, marketers operate consistent
with a holistic marketing concept, Let’s review
the evolution of earlier marketing ideas.
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36. WHAT IS MARKETING MANAGEMENT ?
•Marketing Management is the analysis,
planning, implementation and control of
programs designed to create, build and
maintain beneficial exchanges and
relationships with target markets for the
purpose of achieving Organisational
objectives.
•There are FIVE competing concepts under
which organizations conduct their marketing
activities. They are:

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37. Marketing Management Philosophies/Evolution of
Marketing

Production Concept

Selling Concept
Marketing Concept
Societal Marketing Concept
Focus on internal capabilities of the
firm.
Focus on satisfying customer needs
and wants while meeting objectives
Focus on satisfying customer needs
and wants while enhancing individual
and societal well-being

Product Concept

Focus on aggressive sales techniques
and believe that high sales result in
high profits

Focus on Quality of the products of
the firm.
There are FIVE competing concepts under which organizations conduct
their marketing activities:
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38. Production era


Sales era


Marketing concept era


SocietalMarketing era
1860 1880 19001920 1940 1960 1980 2000
Four different orientations in the history of business
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39. (1) THE PRODUCTION CONCEPT
Produce
Sell
Consumers
Company
Produce more & more
Practically sells itself
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40. THE PRODUCTION CONCEPT
•Consumers will favour those products that
are widely available and low in cost.

•Therefore increase production and cut down
costs.

•And build profit through volume.
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41. (2) THE PRODUCT CONCEPT

Produce
Quality
Products
Sell
Consumers
Practically sells itself,if
it gives most quality for
money
Buyers admire well-made products and can
appraise product quality and performance.
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42. THE PRODUCT CONCEPT
•Consumers will favour those products that
offer the most quality, performance, or
innovative features.
•Therefore, improve quality, performance and
features.
•This would lead to increased sales and
profits.
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43. (3) SELLING CONCEPT
•Consumers have normal tendency to resist.
Produce
Sell it Consumers
Aggressive selling &
promotion efforts
Making sales becomes primary function and
consumer satisfaction secondary .
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44. THE SELLING CONCEPT
•Consumers , if left alone , will not buy
enough of company’s products.

•Therefore, promote sales aggressively.

•And,build profit through quick turnover.
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45. (4) MARKETING CONCEPT
•“ LOVE THE CUSTOMER , NOT THE PRODUCT ”
Consumers
Produce it
Market it
Learn what they
want(MR)
Sell what they want(Satisfy
needs of customers)
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46. THE MARKETING CONCEPT
•The key to achieving organizational goals
consist in determining the needs and wants
of target markets and delivering the desired
satisfactions more effectively and efficiently
than competitors.
•And build profit through customer
satisfaction and loyalty.
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47. (5) THE SOCIETAL MARKETING CONCEPT
•It is Marketing Concept (+) Society’s well
being.
•Balancing of following three considerations while
setting marketing policies :
-Customer’s want satisfaction -Society’s
well being -Company’s profits


Less toxic products
More durable products
Products with reusable
or recyclable materials
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48. Review: Marketing Management
Philosophies
Production
Sales
Marketing
Societal
What can we make or do best?
How can we sell more aggressively?
What do customers
want and need?
What do customers want and need, and
how can we benefit society?
Orientation Focus
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49. Sales vs Market Orientation
Sales Orientation Market Orientation
(1) Organization Focus Inward –fulfill organization’s
needs.
Outward – fulfill wants and
preferences of customers.
(2) What type of business
organization is in?
Selling goods and services. Satisfying customers needs
and wants and delivering
superior value.
(3) To whom the product is
directed?
Everybody. Specific groups of people.
(4) Firm’s primary goal Achieve profit through
maximum sales volume.
Achieve profit through
customer satisfaction.
(5) Ways to achieve the
goal
Through intensive
promotion.
Through coordinated
marketing and inter-
functional activities.
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50. The Holistic Marketing Concept
The Holistic Marketing Concept recognizes that
‘everything matters’ in marketing, and that a
broad, integrated perspective is often
necessary.
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51. •The Holistic Marketing Concept


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52. Marketing Management Tasks
•Developing market strategies and plans
•Capturing marketing insights
•Connecting with customers
•Building strong brands
•Shaping market offerings
•Delivering value
•Communicating value
•Creating long-term growth
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53. Functions of CMOs
•Strengthening the brands
•Measuring marketing effectiveness
•Driving new product development based on
customer needs
•Gathering meaningful customer insights
•Utilizing new marketing technology
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54. The Marketing Environment
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55. •Challenges

•Shifting consumer lifestyles
•Low ratings of food and service
quality
•Atmosphere not upscale
•Image of being unclassy,
uncultured and uncool to younger
target markets

Case Study
McDonald’s – Challenges and Reactions


•Marketing Initiatives

•Focus on core competency of
consistent products and reliable
service
•Upscale alternative including McCafe
and Bistro Gourmet
•Healthier food options with
elimination of “supersize” and
introduction of Go Active! Adult
Happy Meal
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56. The Marketing Environment
•Marketing Environment:
• The actors and forces outside marketing that affect marketing
management’s ability to build and maintain successful
relationships with target customers
•Microenvironment
• Includes the actors close to the company
•Macroenvironment
• Involves larger societal forces
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57. 3 - 57


–Marketing must consider
other parts of the
organization including
finance, R&D, purchasing,
operations and
accounting
–Marketing decisions must
relate to broader
company goals and
strategies



Microenvironment
Actors
1.The company
2.Suppliers
3.Marketing
intermediaries
4.Customers
5.Competitors
6.Publics

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58. 3 - 58
–Marketers must watch
supply availability and
pricing
–Effective partnership
relationship management
with suppliers is essential



Microenvironment
Actors
1.The company
2.Suppliers
3.Marketing
intermediaries
4.Customers
5.Competitors
6.Publics

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59. 3 - 59


–Help to promote, sell and
distribute goods to final
buyers
–Include resellers, physical
distribution firms, marketing
services agencies and
financial intermediaries
–Effective partner relationship
management is essential



Microenvironment
Actors
1.The company
2.Suppliers
3.Marketing
intermediaries
4.Customers
5.Competitors
6.Publics

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60. 3 - 60


–The five types of
customer markets
•Consumer
•Business
•Reseller
•Government
•International



Microenvironment
Actors
1.The company
2.Suppliers
3.Marketing
intermediaries
4.Customers
5.Competitors
6.Publics

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61. 3 - 61


–Conducting competitor
analysis is critical for
success of the firm
–A marketer must monitor
its competitors’ offerings
to create strategic
advantage


Microenvironment
Actors
1.The company
2.Suppliers
3.Marketing
intermediaries
4.Customers
5.Competitors
6.Publics

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62. 3 - 62


–A group that has an
actual or potential
interest in or impact on
an organization
–Seven publics include:
•Financial
•Media
•Government
•Citizen-action
•Local
•General
•Internal



Microenvironment
Actors
1.The company
2.Suppliers
3.Marketing
intermediaries
4.Customers
5.Competitors
6.Publics

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63. 3 - 63
Macroenvironmental Forces
The Macroenvironment
•Demographic
•Economic
•Natural
•Technological
•Political
•Cultural
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64. 3 - 64
Demographic Environment
•Demographic Environment:
–The study of human populations in terms of size,
density, location, age, gender, race, occupation
and other statistics
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65. 3 - 65
•Changing age structure of the U.S.
population is the single most important
demographic trend
•Baby boomers, Generation X, and
Generation Y are the key groups


Demographic Environment
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66. 3 - 66
•Born between 1946 and
1964
•Represent 28% of the
population; earn 50% of
personal income
•Many mini-segments exist
within the boomer group
•Entering peak earning years
as they mature

Baby Boomers
Generation X
Generation Y
Key Generations
Demographic Environment
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67. 3 - 67
•Born between 1965 and 1976
•First latchkey children
•Maintain a cautious
economic outlook
•Respond to socially
responsible companies
•Will be primary buyers of
most goods by 2010
Baby Boomers
Generation X
Generation Y
Key Generations
Demographic Environment
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68. 3 - 68
•Born between 1977 and
1994
•72 million strong; almost as
large a group as their baby
boomer parents
•New products, services,
and media cater to GenY
•Challenging target for
marketers
Baby Boomers
Generation X
Generation Y
Key Generations
Demographic Environment
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69. 3 - 69
Natural Environment
•Natural Environment:
–Involves the natural resources that are needed as
inputs by marketers or that are affected by
marketing activities
•Trends
–Shortages of raw materials
–Increased pollution
–Increased government intervention
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70. 3 - 70
Technological Environment
–The most dramatic force shaping our destiny
–Rapidly changing force which creates many new
marketing opportunities but also turns many
existing products extinct
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71. 3 - 71
Political Environment
•Consists of laws, government agencies and pressure
groups that influence or limit various organizations
and individuals in a given society
–Legislation affecting businesses worldwide has increased
–Laws protect companies, consumers and the interests of
society
–Increased emphasis on socially responsible actions
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72. 3 - 72
Cause-Related Marketing
•Marketers create link between brand and charitable
organization
•Demonstrates social responsibility
•Helps build positive brand image
•Examples include General Mill’s Box Tops for
Education, Tang and Mothers Against Drunk Driving,
Eddie Bauer and local schools

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73. 3 - 73
Cultural Environment
•Made up of institutions and other forces that
affect a society’s basic values, perceptions,
preferences and behaviors.
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74. 3 - 74
Marketing Management


Themselves
Identify with
brands for self-
expression
Others
Recent shift from
“me” to “we”
society
Organizations
Trend of decline in
trust and loyalty
to companies
Society
Patriotism on the
rise
Nature
“lifestyles of health
and sustainability”
(LOHAS) consumer
segment
Universe
Includes religion
and spirituality


Cultural Environment
Includes people’s views of…
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75. 3 - 75
Responding to the
Marketing Environment
“There are three kinds of companies: those who make things
happen, those who watch things happen, and those who wonder
what’s happened.”


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76. Situation Analysis and
marketing opportunity
identification
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77. Situation Analysis
77
•The Market Situation analysis includes research and analysis of your
target market, competitors, business challenges, and your company’s
competitive differentiators. It should contain your best and most clear
description of the current state of the marketplace.

•This section should describe your company’s strengths and weaknesses,
as well as opportunities and threats you face.

•Your Market Situation section should be based on facts – not speculation,
guesses or hunches – gathered from research. To get these facts, make a
list of customer contacts and key employees to talk to, and pick their
brains. Also, gather any pertinent research about your industry from your
trade associations and local educational institutions.
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78. Scope of Situation Analysis
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Internal analysis
Strength
Weakness
External analysis
Opportunity
Threats

79. Internal Analysis
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The internal analysis is a thorough knowledge and
understanding of the strengths and weaknesses within an
organization.
These factors are seen in company culture and image,
organizational structure, staff, operational efficiency and
capacity, brand awareness, financial resources, etc.
Strengths are positive attributes, which can be tangible or
intangible, and are within the control of the organization.
Weaknesses are factors that may hinder the achievement of
the desired goal.

80. Internal Analysis is focused on:
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Corporate objectives
Size and power of company
Resources
The way the organization is operated: procedure
and practices
Stakeholders’ expectation
Position in market place

81. Areas of Internal Analysis
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Financial position
Product position
Marketing capabilities
Research and development capabilities
Organizational structure
Human resources
Facilities and equipment

82. Process of Internal Analysis
•Strategic Intent Identification (To know and
study vision,
•mission and goals of the firm)
•Strength and weakness analysis (Resource
audit)

•Analysis of competencies (Unique resources
and core competencies)
•Finding the strategic advantages
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83. External Analysis
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Opportunities and threats are measured as part of an
external analysis.
Both can occur when things happen in the external
environment that may require a change within the business.
These external changes can be attributed but not limited to
market trends, suppliers, partners, customers, competitors,
new technology and economic environment.
Opportunities present themselves as attractive factors that
can propel or positively influence the organization in some
way.
Threats are external factors that could place the
organization’s goal at risk.

84. Designing and
Managing Services

85. Nature of Services
The Service Industry includes the:
–Government sector
–Private nonprofit sector
–Business sector
–Manufacturing sector

86. Nature of Services
Service Mix Categories:
–Pure tangible good: no services
–Tangible good with accompanying
services
–Hybrid: equal parts service and goods
–Major service with accompanying minor
goods and services
–Pure service

87. Characteristics

Cannot be touched, seen,
tasted, heard, or smelled
before purchase
Intangibility
Lack of trial means
higher consumer risk
Inseparability
Variability
Consumers rely on cues
to draw quality
inferences
Perishability
Marketers must try to
“tangibilize the
intangible”
Nature of Services

88. Characteristics

Services are produced and
consumed at the same time
(air travel)
Intangibility
Inseparability
Variability
Service providers and
sometimes other
customers become part
of the service
(restaurant)
Perishability
Strong preferences for
service providers exist
Nature of Services

89. Nature of Services
Characteristics
Intangibility
Inseparability
Variability
Perishability


Service providers vary
with respect to attitudes,
skills, mood, etc. Even
the same provider may
give different service on
a different day.
Quality control is critical:
–Hiring the right people
–Standardizing service
–Monitoring satisfaction

90. Nature of Services
Characteristics

Intangibility
Inseparability
Variability
Perishability
Services can not be
inventoried or
otherwise stored
Capacity / demand
management is
critical:
–Demand side
strategies
–Supply side strategies

91. Nature of Services
Demand-side
strategies
–Use differential
pricing
–Cultivate nonpeak
demand
–Develop
complementary
services
–Install reservation
systems
Supply-side
strategies
–Hire part-time
employees
–Introduce peak-time
efficiency routines
–Increase consumer
participation
–Plan facilities for
future expansion
–Share services

92. Marketing Strategies
People, physical evidence, and process
must be considered in addition to the 4 “P’s”
when creating external marketing plans.
Successfully delivering a service often depends
on staff being trained via internal marketing
efforts.

93. Marketing Strategies
Interactive marketing refers to the
employees’ skill in serving the client.
Customers judge a service by its:
–Technical quality
–Functional quality
Search qualities, experience qualities
and credence qualities are evaluated
by customers.

94. Marketing Strategies
•Marketing Tasks

Managing
differentiation
Managing service
quality
Managing productivity
Can not differentiate
on price alone
Innovative features
Delivery system
–Reliability
–Resilience
–Innovativeness
Image and branding

95. Marketing Strategies
The service quality
model identifies
five gaps that can
cause service
delivery failure
Service companies
that successfully
address these gaps
follow common
practices

Marketing Tasks

Managing
differentiation
Managing service
quality
Managing productivity

96. Marketing Strategies


Consumer expectations and
management perceptions
Management perception and
service-quality specification
Service-quality specifications
and service delivery
Service delivery and external
communications
Service Delivery Failure Results
from Gaps Between:
 Service-quality specifications and service delivery

97. Marketing Strategies
A strategic concept
Commitment from
top-management
High standards
Firm and customer
monitoring systems
Well-Managed Service Firms
Share These Characteristics
Satisfaction of employees and
customers

98. Marketing Strategies
Marketing Tasks
Managing
differentiation
Managing service
quality
Managing
productivity
•Have service providers work more
skillfully
•Decrease service quality, increase
service quantity
•Industrialize the service Reduce
need for service
•Design a more effective service
•Give customers incentives to serve
themselves
•Use technology

99. Managing Product Support Services
Product support services are often
sources of competitive advantage
When designing service support
programs, marketers must consider
key customer concerns:
–Failure frequency
–Downtime duration
–Out-of-pocket expenses

100. Managing Product Support Services
Marketers must design appealing
and competitive service offerings
that will attract customers. Service
offerings should include:
–Facilitating services
–Value-augmenting services
–Optional service contracts

101. Trends in Marketing
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102. 2/3/2021 102

103. T.H.A.N.K Y.O.U F.O.R
U.N.D.E.R.S.T.A.N.D.I.NG
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