Marketing subject for MBA marketing introduction

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1. UNIT-1

2. INTRODUCTION Marketing is everywhere and it affects our day- to-day life in every possible manner. Formally or informally people and organizations engage in a vast number of activities that could be called as Marketing. Good marketing is no accident, but a result of careful planning and execution. It is both an art and science.

3. DEFINITION Marketing has been defined as all activities involved in the creation of place, time and possession utilities. Marketing is concerned with handling and transportation of goods from the point of production to the point of consumption. Marketing is the performance of business activities that direct flow of goods and services from producer to consumer.

4. IMPORTANCE OF MARKETING TO COMPANIES Sound marketing is critical to the success of the organisation in the following ways: Helps in income generation. Helps in planning and decision-making Helps in distribution. Helps in exchanging information. Helps to adapt to changing environment. Expands global presence. Helps to earn goodwill.

5. IMPORTANCE OF MARKETING TO CONSUMERS Provides quality products. Provides variety of products. Improves knowledge of consumers. Helps in selection. Consumer satisfaction. Protects from cheap products satisfies the needs and wants

6. IMPORTANCE OF MARKETING TO SOCIETY Marketing bridges the gap between firm and society. Provides employment. Raises standard of living. Creates utilities. Reduces costs. Solves social problems. Makes life easier. Enriches society.

7. IMPORTANCE OF MARKETING TO ECONOMY It stimulates research and innovation Saves the economy from depression. Increase in national income Economic growth. Ploughing back of resources

8. Functions of Marketing Functions of Exchange Functions of Physical supply Facilitating Functions -Product planning -Transportation -Financing -Buying and assembling -Storage -Risk taking -Selling and advertising -Warehousing -Collecting market information -Standardization and grading    

9. MARKETING CONCEPTS / MARKETING ORIENTATIONS Production Concept Marketing Concept Selling Concept Product Concept Societal Marketing Concept

10. Production Concept ( before 1930 ) Those companies who believe in this philosophy think that if the goods/services are cheap and they can be made available at many places, there cannot be any problem regarding sale. Keeping in mind the same philosophy these companies put in all their marketing efforts in reducing the cost of production and strengthening their distribution system. Continues…

11. In order to reduce the cost of production and to bring it down to the minimum level, these companies indulge in large scale production. This helps them in effecting the economics of the large scale production. Consequently, the cost of production per unit is reduced. The utility of this philosophy is apparent only when demand exceeds supply.

12. Product Concept : ( 1930- 1940 ) Those companies who believe in this philosophy are of the opinion that if the quality of goods or services is of good standard, the customers can be easily attracted. The basis of this thinking is that the customers get attracted towards the products of good quality. On the basis of this philosophy or idea these companies direct their marketing efforts to increasing the quality of their product. Continues…

13. It is a firm belief of the followers of the product concept that the customers get attracted to the products of good quality. This is not the absolute truth because it is not the only basis of buying goods. The customers do take care of the price of the products, its availability, etc. A good quality product and high price can upset the budget of a customer. Therefore, it can be said that only the quality of the product is not the only way to the success of marketing.

14. Selling Concept: ( 1940-1950 ) Those companies who believe in this concept think that leaving alone the customers will not help. Instead there is a need to attract the customers towards them. They think that goods are not bought but they have to be sold. The basis of this thinking is that the customers can be attracted. Continues….

15. Keeping in view this concept these companies concentrate their marketing efforts towards educating and attracting the customers. In such a case their main thinking is ‘selling what you have’. This concept offers the idea that by repeated efforts one can sell-anything to the customers. This may be right for some time, but you cannot do it for a long-time.

16. Marketing Concept :( 1950 after ) Those companies who believe in this concept are of the opinion that success can be achieved only through consumer satisfaction. The basis of this thinking is that only those goods/service should be made available which the consumers want or desire and not the things which you can do. In other words, they do not sell what they can make but they make what they can sell. Continues…

17. Keeping in mind this idea, these companies direct their marketing efforts to achieve consumer satisfaction. In short, it can be said that it is a modern concept and by adopting it profit can be earned on a long-term basis.

18. Societal Marketing Concept This concept stresses not only the customer satisfaction but also gives importance to Consumer Welfare/Societal Welfare. This concept is almost a step further than the marketing concept. Under this concept, it is believed that mere satisfaction of the consumers would not help and the welfare of the whole society has to be kept in mind. Continues…

19. For example, if a company produces a vehicle which consumes less petrol but spreads pollution, it will result in only consumer satisfaction and not the social welfare. Primarily two elements are included under social welfare-high-level of human life and pollution free atmosphere. Therefore, the companies believing in this concept direct all their marketing efforts towards the achievement of consumer satisfaction and social welfare.

20. Difference between Marketing and Selling S.NO SELLING MARKETING 1 Selling starts with the seller. Marketing starts with the buyers.   2 Selling emphasizes on profit Marketing emphasizes on identification of a market Opportunity.   3 Selling views business as a “Goods producing processes”. Marketing views business as a customer satisfying process 4 It over emphasizes the ‘exchange’ aspect It concerns primarily with the ‘vale satisfactions’   5 Seller’s convenience dominates the formulation of the ‘marketing mix’. Buyer determines the shape of the ‘marketing mix’.  

21. 6 The firm makes the product first the then decides how to sell it and make profit.   The customer determines what is to be offered as a ‘product’ and the firm makes a ‘total product customers. 7 Seller’s motives dominate marketing communications. Marketing communications acts as the tool for communicating the benefits/ satisfactions of the product to the consumers   8 Costs determine price. Consumer determines price. 9 There is no coordination among the different functions of the total marketing task. Emphasis is on integrated marketing approach   10 ‘Selling’ views the customer as the last link in the business. ‘ Marketing’ views the customer as the very purpose of the business.  

22. Marketing Mix Price Product Place Promotion

23. Marketing Mix Marketers use different tools in order to get the desired response from the customers or best satisfy their needs. These tools are known as The Marketing Mix. Marketing Mix is probably the most famous term in marketing. Marketing Mix is a combination of marketing tools that a company uses to satisfy their target customers and achieving organizational goals. Continues….

24. McCarthy classified all these marketing tools under four broad categories: Product Price Place Promotion These four elements are the basic components of a marketing plan and are collectively called 4 P’s of marketing. 4 P’s pertain more to physical products than services. Continues….

25. Below is an illustration for marketing mix. The important thing to note is that all these four P’s (variable) are controllable, subject to internal and external constraints of marketing environment. Marketers, using different blends of these variables, can target different group of customers having different needs. So, a customer may call marketing mix “the offering”.

26. Product: Product is the actual offering by the company to its targeted customers which also includes value added stuff. Product may be tangible (goods) or intangible (services). While formulating the marketing strategy, product decisions include: What to offer? Brand name Packaging Quality Appearance Functionality Accessories Installation After sale services Warranty

27. Price : Price includes the pricing strategy of the company for its products. How much customer should pay for a product? Pricing strategy not only related to the profit margins but also helps in finding target customers. Pricing decision also influence the choice of marketing channels. Continues…

28. Price decisions include:  Pricing Strategy (Penetration, Skim, etc ) List Price  payment period  Discounts  Financing  Credit terms Using price as a weapon for rivals is as old as mankind. But it’s risky too. Consumers are often sensitive for price, discounts and additional offers. Another aspect of pricing is that expensive products are considered of good quality.

29. Place : (Placement) it not only includes the place where the product is placed, all those activities performed by the company to ensure the availability of the product to the targeted customers. Availability of the product at the right place, at the right time and in the right quantity is crucial in placement decisions. Placement decisions include: Placement Distribution channels Logistics Inventory Order processing Market coverage selection of channel members

30. Promotion: Promotion includes all communication and selling activities to persuade future prospects to buy the product. Promotion decisions include: Advertising Media Types Message Budgets Sales promotion Personal selling Public relations D irect marketing

31. INDIAN MARKET & ITS ENVIRONMENT I t is difficult to analyze the environmental factors affecting Indian market. Ours is a vast country with various religions, caste, sub-caste, languages, culture, etc. Each of these factors operates at different levels & art different places. Vast Market : Rural Market : Cultural & Religion : Economic Conditions : 5.Government : 6.Intermediaries : 7.Press : 8.Technology:

32. Vast Market : The Indian market is the second largest in the world considering its population. If consumption is considered, it has one of the lowest levels of consumption. Hence, it can be said that majority of the market for various products has been left untapped. Region-wise, the Indian Market can be broadly classified into Four Parts: a. Northern Market b. Southern Market c. Western Market. d. Eastern Market

33. Rural Market : Majority of the Indians live in rural areas. Hence, rural markets have a significant influence on the company’s marketing strategy Cultural & Religion: India is a country with many religions each religion has its own culture & most of the Indians are religious. The culture affects the habits of people. Hence, it has to be considered before deciding what is to be sold. Eg : Jainism completely prohibits the consumptions of meat. Hence, it is difficult to sell meat where Jains are living

34. Economic Conditions : India is one of the fastest developing countries. The standard of living is increasing every year. This indicates that the marketing opportunities in our country are vast. Government : We are following the policy of mixed Economy i.e., Market is neither totally free (Capitalism) nor it is fully controlled (Socialism). The government encourages consumerism & hence he marketers are gradually accepting the marketing concept.

35. Intermediaries : Our country has two types of distribution system. They are: a. Public distribution system, where essential commodities are directly sold to the consumers through government agencies. b. Open distribution system, where the products are sold in the open market. Continues…

36. The open distribution system in our country is the traditional one. The chain of distribution is one of the most efficient chains of the world. Wholesalers, retailers, brokers, etc are the intermediaries operating in our country.

37. Press : Press in our country is not as sophisticated as in the developed countries. Most of the newspapers & magazines are controlled by big business houses. Technology : Most of the company/companies in our country import the technology from other countries. Investment in research is one of the lowest in the world.