Marketing Concepts

Few Marketing Concepts and strategies to learn for MBA student

2. BASICMARKETING
CONCEPTS

3. WHATISMARKETING?
•ANY INTERPERSONAL AND
INTERORGANISATIONAL
RELATIONSHIP INVOLVING AN
EXCHANGE IS MARKETING .
WILLIAMJ.STANTON

4. WHATISMARKETING?
TheessenceofMarketingisatransaction!
anexchange!intendedtosatisfyhuman
needsandwants.Therearethreeelementsin
themarketingprocess:
(A)MARKETERS
(B)WHATISBEINGMARKETED
(C)TARGETMARKET

5. WHATISMARKETING?
Marketingisasocialprocessbywhich
individualsandgroupsobtainwhattheyneed
andwantthroughcreatingandexchanging
productsandvaluewithothers
PHILIPKOTLER
Thisdefinitionincludes)followingcoreconcepts(:(
NEEDS,WANTS'andDEMANDS'!!!
PRODUCTS!!!!!!VALUE&&&SATISFACTION!!!
EXCHANGE(&(TRANSACTION !!!MARKETS(&(
MARKETERS

6. NEEDS,WANTS ANDDEMANDS
!NEED:Astateoffeltdeprivationof#
some%basic%satisfaction%("Food,"
Clothing,Shelter,Belonging(etc.)
!WANTS:Wantsaredesiresforspecific'
satisfiers(of#the$deeper$needs.&Needs%
are$fewandwantsaremany.
!DEMANDS:arewants&backedby
!!!!!!AbilitytobuyandWillingnessto#
buy

7. PRODUCTS/OFFERS /SATISFIERS/ RESOURCES
!Anything(that(can$be$offered$to#someone&
tosatisfyaneedorwantisaproduct.
!Productrefers%tophysicalobject
!Servicesrefertointangibleobject

8. VALUEANDSATISFACTION
!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)
!Customergetsbenefits&assumecosts
WHEN:CustomerExpectance=Performance(satisfied)
CustomerExpectance>Performance/(dis!satisfied))
CustomerExpectance<Performance(Highlysatisfied)

9. EXCHANGE ANDTRANSACTION
!
!
Exchange)is#the$act$of$obtaining$a$desired$
productbyoffering(somethinginreturn.
Exchange)takes)place)when5conditions(aresatisfied:
(a)Twopartiesshouldbethere
(b)Eachpartymust%havesomethingofvaluetothe$other
(c)Eachpartyiscapableofcommunication&delivery
(d)Each%partyisfreeto#accept&orrejectthe$offer
(e)Each%party%believes%that$it$is$appropriate(to#deal%with%
theother&party

10. EXCHANGE ANDTRANSACTION
!Exchange)is)a"process'rather'than%event.&
It#is#a"value&creating&process&because'it#
normallyleavesbothpartiesbetter%off.
!A"transaction)is)a"trade&of&values&between&
two$or#more%parties%("A"BARTER"
TRANSACTION ORA"MONETARY"
TRANSACTION ).

11. WHATISMARKET?
!A"market'consists'of#all#the$potential)
customers)sharing)a"particular)need)or#
want%who$might&be&willing&and$able%to%
engage%inexchangetosatisfythat$needor#
want.

12. WHATISMARKETING?
!Marketing*is*the*management*process*
which%identifies,%anticipates,%and%
supplies'customer'requirements'
efficientlyandprofitably.
!In#other&words,'it#is#the$process'of#
understanding,creating,anddelivering)
profitable+value+to+targeted+customers+
betterthanthecompetition.

13. WHATISMARKETING?
!Its$aim$is$to$establish,$maintain,$enhance$
long%term%relationship%with%customers)at#a#
profit'so#that#the$objectives$of$the$parties$
involvedaremet.
!In#short&marketing&consists&of#attracting,)
developing,+and$retaining(profitable(
customers.

14. BUSINESSISMARKETING
!Marketing*can$not$be$considered)as#a#
separate'function',"it#is#the$whole&
business,seenfromthepointofviewof#
itsfinalresults.................thatis#
profit,throughcustomersatisfaction
PETERDRUCKER

15. ASIMPLEMARKETINGSYSTEM
Industry Market
Communication
Goods&Services
Money
Information/Feedback

16. WHAT ISMARKETING 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.

17. WHAT ISMARKETING MANAGEMENT?
!Marketing*management*is*demand*
management'or#it#involves#the$task%of%
influencing)the$level,%timing%and$
composition)of#demand.'At#times&the$
actual&demand&level&may$be$below,'
equalto,orabovethedesired&demand&
level$and$the$major$task$of$marketing$
management'is'to'regulate'the'level'of#
demand.

18. STATEOFDEMANDANDMARKETING TASK
!Stateofdemand
!NegativeDemand'
!No#Demand#
!Latent&Demand'
!Falling'Demand
!Irregular(Demand'
!Full$Demand'
!OverfullDemand
!Un!wholesomeDemand
!Marketingtask
!Conversional+Mktg.&
!Stimulational*Mktg.
!DevelopmentalMktg.
!Remarketing+
!Synchro!marketing*
!Maintenance(Mktg.
!Demarketing+
!Counter!marketing

19. EVOLUTION OFMARKETING MANAGEMENT
!Marketing*management*has*evolved*
through'followingstages&:
!(1)ProductionOrientationStage
!(2)SalesOrientationStage
!(3)MarketingOrientationStage
!(4)SocialResponsibility,&Human
OrientationStage

20. COMPANYORIENTATION FOR
MARKETING ACTIVITIES
!
!
Marketing*Management*can*be*defined*as#the$
effort&toachieve'desired'EXCHANGE'
outcomeswith%TARGETMARKETS.
Nowthequestionarises:
(1)What%philosophy%should%guide%the%
marketingactivities?
(2)What%weights%should%be%given%to#the$
interests'of'the'organisation,the'customers'
andthe$society?

21. MARKETING CONCEPTS
!ThereareFIVEcompeting*concepts*under*
which%organizations%conduct'their&
marketingactivities:
!
!
!
!
!
The$Production*Concept*
The$Product(Concept(
The$SellingConcept(
TheMarketingConcept
TheSocietal)MarketingConcept

22. (1)THEPRODUCTION CONCEPT
Produce
Sell
Consumers
Company
Producemore&more
Practicallysellsitself

23. THEPRODUCTION CONCEPT
!Consumers)will$favour'those&products)
thatarewidelyavailableand$lowincost.
!Thereforeincreaseproductionandcut$
downcosts.
!Andbuildprofitthroughvolume.

24. (2)THEPRODUCTCONCEPT
Produce
Quality
Products
Sell
Consumers
Practically sells itself,if
itgivesmostquality
formoney
Buyers admire well-made products and can
appraiseproductqualityandperformance.

25. THEPRODUCTCONCEPT
!Consumers)will$favour'those&products)
that$offer$the$most%quality,%performance,%
orinnovativefeatures.
!Therefore,(improve(quality,(performance(
and$features.
!This%would%lead%to#increased)sales)and$
profits.

26. (3)SELLINGCONCEPT
!Consumers)havenormaltendency'toresist.
Produce
Sellit
Consumers
Aggressiveselling&
promotionefforts
Makingsales becomesprimaryfunction and
consumersatisfactionsecondary .

27. THESELLINGCONCEPT
!Consumers),ifleftalone,willnotbuy$
enoughofcompany’sproducts.
!Therefore,promotesalesaggressively.
!And,buildprofitthroughquickturnover.

28. (4)MARKETING CONCEPT
!“LOVETHECUSTOMER ,NOTTHE$
PRODUCT”
Consumers
Produceit
Marketit
Learnwhatthey
want(MR)
Sell what they want(Satisfy
needsof customers)

29. THEMARKETING 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&
efficientlythancompetitors.
!Andbuildprofitthroughcustomer)
satisfactionandloyalty.

30. (5)THESOCIETALMARKETING CONCEPT
!It#isMarketingConcept(+)Society’swell$
being.
!Balancing(of#following(three%considerations+
while&setting'marketing'policies:
!Customer’swantsatisfaction
!Society’swellbeing
!Company’sprofits

31. THESOCIETALMARKETING CONCEPT
!
The$societal$marketing*concept'holds'that$the$
organization’s+task%is%to%determine(the(needs,(
wants,'and'interests'of#target&markets&and&to#
deliver'the'desired'satisfactions)more%
effectively)andefficientlythancompetitorsin#
a"way"that"preserves"or#enhances'the$
consumer’sandthe$society’swellbeing.
!It#addresses&conflicts)between&consumer’s*
and$firm’s'short&run$wants&and&long%term
welfare.

32. SELLINGANDMARKETING CONCEPT
CONTRASTED
Startingpoint Focus Means Ends
Factory ProductsSellingand
Promoting
Profitthrough
SalesVolume
SellingConcept
TargetMarket Customer
Needs
Coordinated
Marketing
Profitthrough
Customer
Satisfaction
MarketingConcept

33. STRATEGICCONCEPTOFMARKETING
!
Shifted(the(focus(of#Marketing*from*Product*
or#customer#to#the$CUSTOMER$IN#THE$
CONTEXT'OF'THE'BROADER EXTERNAL
ENVIRONMENT .
To#succeed,#marketers#must#know#the#
customer)in#a"context"including"the"
competition,*Govt.*Policy&*regulation*and*the*
broader'economic,'social'and'political(macro&
forces'that$shape$theevolutionofmarket.

34. STRATEGICCONCEPTOFMARKETING
!Shifted(the$Marketing*Objectives*from*
PROFIT'TOSTAKEHOLDER
BENEFITS.
!Stakeholders,are$individuals)or#groups'who'
have%aninterestinthe$activityofacompany(.(
Theyinclude!!!!!Theemployees(andmanagement,(
Customers,Society,Shareholders,Financiers/Bankers,)
Government)etc.

35. STRATEGICCONCEPTOFMARKETING
!Strategic)Marketing)Concept(is#Strategic#
Management,)which)integrates)marketing)
withtheothermanagementfunctions.
(""Major&task&is&Profit&for$Stakeholders’-
benefits().

36. MARKETING SYSTEM
!Marketing*is*concerned*with*the$flow$of#
goods%and$services$from$the$points'of'
productiontothepointsof#
consumption.+There%is#a"systematic)
arrangement(of#these%functions%of%
marketing*to#move%the%goods%and%
services'to#the$needy%persons.(This(
system&isessentialto#thecreationof#
time,placeandpossessionutilities.

37. MARKETING SYSTEM
!A"dynamic"marketing"system"must%be%willing&to&
undertake)the)following)specific)activities(:
1.Definemarketarea.
2.Research(consumer)wants)andneeds.
3.Developand$redevelopproduct/
service.
4."Select,train,motivate.andcontrol
humanresources.
5.Developsalesapproach'andadvertising

38. GOALSOFTHEMARKETING SYSTEM
(1)MAXIMIZECONSUMPTION
(2)MAXIMIZE'CONSUMER SATISFACTION
(3)MAXIMIZECHOICE
(4)MAXIMIZELIFEQUALITY

39. THREEBASICPRINCIPLESOFMARKETING
!The$essence%of#marketing*can*be#
summarized*in#three%great&principles.*
The$first$identifies$the$purpose$and$
task%of#marketing,+the$second$the$
competitive)reality(of#marketing*and$
third&the&principal&means&for&
achievingthefirst&two.

40. THREEBASICPRINCIPLESOFMARKETING
(1).The$Customer)Value)and)Value)
Equation:
V=B/PWhere%V=Value
B=PerceivedBenefits(
P=Price
(Value'is#increased)by#increasing)the)numerator)
and/orreducingthedenominator)

41. THREEBASICPRINCIPLESOFMARKETING
(2).Competitive)orDifferentialAdvantage:
The$total$offer%must%be#more%attractive(than%that%
ofthe$competitioninordertocreate&a&
competitive)advantage.
(3).Focus&or#the#Concentration*of*
Attention:Thetaskofcreating
CustomerValueataCompetitiveadvantage.

42. VALUEMAP
A
E
VEL
C
BD
ValueAdvantagedArea
Value
Disadvantaged
Area
CustomerPerceivedBenefits
Perceived
Price

43. THREELEVELSOFMARKETING
!ResponsiveMarketing
!AnticipativeMarketing
!NeedShapingMarketing

44. RESPONSIVEMARKETING
It#is#the$form%of#marketing*when*some*
company(defines(an#existing(clear(need(
and$prepare$an$affordablesolution.
(Recognizing*that$women&wanted&to#spend&
less$time$for$cooking$and$cleaning,$led$to#
theinventionofmodernwashing(
machine,microwaveovenetc.)

45. ANTICIPATIVEMARKETING
It#is#a"form%of#marketing*when%a%company(recognize)an)
emergent'or#latent&need,%and%come%out$with%an#
affordable)solution.)Evian,)Perrier%anticipated)growing)
market'for'bottled'drinking'water'as#the$quality$of#water&
deterioratedinmany%places.
Anticipativemarketingis#moreriskythan%responsive)
marketing*companies/may$come%into%market%too%early%
or#too#late,or(may$even$be#totally&wrong&about&thinking&
that$such$a$market'would'develop.(eg.'Dish'washers'
in#India)

46. NEEDSHAPEDMARKETING
The$broadest$level$of$marketing$occurs$when%a"
company(introduces(product(that(nobody&asked&
for$and$often$could$not$even$conceive$of.
(e.g.SonyWalkman,SonyCompact(Disc)
Late%Akio%Morita,(founder(and(chairman(of#Sony,
who$introducedtheseandmanyother&new$
products,*summarized*his*marketing*philosophyin
thesewords:
“"I"don’t"serve"markets.Icreate&them.”

47. MARKET-DRIVEN AND MARKET-
DRIVING COMPANY
!
!
Market!drivencompanies*focus*on#
researchingcurrent'customers)toidentify(
theirproblems,gathernewideas,'develop
products)thatresultin#incremental
improvements,,notradicalinnovations.
Market!drivingcompanies*generate
significantly+new+products,services,
business'formats'andraise&our$sights
andourcivilization.
These%companies*are*muchmore%thancustomer!
led.They%lead%customer)wherethey%want%togo,but
don’t&knowyet.