Unit 1

Marketing in the Changing World

Marketing Management 1
 Marketing meaning & concept

What is Marketing?
• Marketing is all about identifying and meeting human and
social needs.

Simple Definition:
Marketing is managing profitable customer relationships.

Goals:
1. Attract new customers by promising superior value.
2. Keep and grow current customers by delivering satisfaction.
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 Marketing meaning & concept
Marketing is a social process by which
individuals and groups obtain what they
need and want through creating and
exchanging products and value with others
PHILIP KOTLER

Marketing Management 3
 Marketing meaning & concept

Marketing Defined:
process of planning and executing the conception, pricing,
promotion, and distribution of ideas, goods, and services to create
exchanges that satisfy individual and organizational goals–
American Marketing Association.

OLD View NEW

New View
View
of Marketing: of
ofMarketing:
Marketing:
Making a Sale – Satisfying
Satisfying
“Telling & Selling” Customer
customerNeeds
needs
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What is Marketed?
Goods
Services
Events & Experiences
Persons
Places & Properties
Organizations
Information
Ideas
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 Marketing System
Markets
• Relationship between the industry and the market

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 Core Marketing Concepts
Needs, Wants, and Demands
• Needs: Needs describe basic human requirements
such as food, air, water, clothing, and shelter.
• State of felt deprivation including physical, social,
and individual needs.
• Wants: Wants are desires for specific satisfiers of the
deeper needs. Needs are few and wants are many
• Demands: are wants backed by willingness and
Ability to buy
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 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

 VALUE AND SATISFACTION

• Customers’ estimate of the Product’s capacity to

satisfy a set of goals
• 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)
 EXCHANGE AND TRANSACTION

• Exchange is the act of obtaining a desired

product by offering something in return .
• Exchange takes place when 5 conditions are satisfied:
(a) Two parties should be there
(b) Each party must have something of value to the other
(c) Each party is capable of communication & delivery
(d) Each party is free to accept or reject the offer
(e) Each party believes that it is appropriate to deal with the
other party
 EXCHANGE AND TRANSACTION

• Exchange is a process rather than event. It is a

value creating process because it normally
leaves both parties better off.
• A transaction is a trade of values between two
or more parties ( A BARTER TRANSACTION OR
A MONETARY TRANSACTION ).
 Core Marketing Concepts
Segmentation, Target Markets, and Positioning
• Identify and profile distinct groups of buyers who might prefer
or require varying products and services mixes by examining
– Demographic information
– Psychographic information
– Behavioral information
• Target market
– Which market presents the greatest opportunity
• Positioning
– the act of designing the company’s offering and image to occupy a
distinctive place in the mind of the target market.

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 Core Marketing Concepts
• Marketing Channels
– Communication channels; Distribution
channels; Service channels; Supply Chain
• Competition
– All the actual and potential rival offerings and
substitutes a buyer might consider
• Marketing environment
– Microenvironment
– Microenvironment
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 Marketing Philosophies
Production Concept
• Philosophy if the goods/services are cheap and they can be made
available at many places, there cannot be any problem regarding sale.
• Focus was to produce more not on market
• The basic assumptions were:
– It is the consumer who look good product at the low price
– The consumer knows the prices of the competitive products and compare
them in terms of quality and price
– The consumer does not care about the difference among the rival
product, except in the case of price
– Main aim of the organisation is to improve efficiency of the production
and distribution while keeping the prices down, hence keep the customer

Consumer Behavior 14
 Product Concept
• If the quality of goods or services is of good standard,
the customers can be easily attracted.
• Direct their activities towards improving the quality
of the product
• Do not consider whether consumer want that feature
or not
• Results marketing myopia i.e. too much focus on the
product rather than consumers
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 Selling Concept
• Emphasis on selling and promotional activities
• Consumers needs to be persuaded to sell the product
• Gives emphasis to firms interest of selling what is
available
• Assumptions are;
– Customer normally tend to hold comparisons when buying
things they do not urgently need
– Through persuasion the consumer can buy more
– Organisation must have strong sales department
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 Marketing Concept
• Success can be achieved only through consumer
satisfaction
• Needs and wants of the specific target market
should be determined and deliver the desired
satisfaction
• they do not sell what they can make but they
make what they can sell
• Concept of consumer research
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 Societal Marketing Concept
• Managerial orientation that considers the essential
activity of the organisation to be:
– The determination of the needs and wants of the target
markets
– Achievement of the satisfaction more efficiently and
effectively and in the way that preserves or strengthens
integration between the consumer and society
• Public interest should be considered apart from
achieving consumer satisfaction
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Holistic Marketing Dimensions

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 The Holistic Marketing Concept
• Relationship Marketing
– Aims to build mutually satisfying long-term relationships with key
constituents in order to earn and retain their business
– A marketing network (Customers; Channel; Partners; financiers)
• Integrated Marketing
– Devise marketing activities and assemble fully integrated marketing
programs to create, communicate, and deliver value for the consumers.
– 4Ps and SIVA (Product – Solution; Promotion – Information; Price – Value;
and Place – Access)
• Internal Marketing
– The task of hiring, training, and motivating able employees who want to
serve customers well.
• Performance Marketing
– Social Responsibility Marketing
– Financial Accountability
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Marketing Starting point Main focus Means End Goal
Concept
Production factory Production Production of goods Profit through
orientation at affordable/low cost production
efficiency

Product factory Quality oriented Production of high Profit through

quality goods and quality assurance
better performance

Selling factory Seller’s need oriented Aggressive selling and Profit through
heavy promotion high sales volume

Marketing Target market Customer oriented Integrated marketing Profit through

customer
satisfaction
Societal Target society Society oriented IM with socially and Goal achievement
marketing ethically responsible through social
marketing responsibility
Holistic Target market All aspects of Application of Developing
marketing customer as well as IM,RM,>>. corporate culture
social needs and want in marketing

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 The New Marketing Realities
"The marketplace is not what it used to be."
• Major Societal Forces affecting Marketing:
A. Network information technology (development of ICT)
B. Globalization (going global)
C. Deregulation (more freedom to business community)
D. Privatization (very few govt. enterprises and reducing)
E. Heightened Competition (Many players, easy entry)
F. Industry Convergence (having few major player in the market)
G. Consumer Resistance (more information to customers)
H. Retail Transformation (power of retailer)
I. Disintermediation (direct customer thru non-traditional way)
toManagement
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• New Consumer Capabilities
A. A substantial increase in buying power
B. Greater variety of goods and services

The
C. Great deal of information available
D. Greater ease in interacting and placing orders

New
E. Ability to compare products and services

M
• New Company Capabilities

ark
A. Internet

etin
B. Research
C. Speed of internal information

Reag
D. Speed of external information “buzz’
E. Better target marketing

litie
F. Mobile marketing

s
G. Differentiated goods
H. Improved purchasing, recruiting, training,
Marketing and communications
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 Marketing management
• Planning production and control of entire
marketing activity of the firm or a division of a firm
including the formulation of marketing objectives,
policies, programs, strategies and reappraising
product development organization to carry out
their plans professional working operation and
controlling operations

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 Functions
• Planning
• Organizing
• Directing
• controlling

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• All elements within the control of the firm that
communicate the firm’s capabilities and image to
customers or that influence customer
satisfaction with the firm’s product and services:
– Product Ma
– Price rke
tin
– Place gM
– Promotion ix
– People
– Process
– Physical Evidence
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 4Ps of Marketing

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 Emerging Marketing Concepts
Guerilla Marketing
• Guerrilla marketing is an advertising strategy in which low-cost unconventional means
(graffiti, sticker bombing, flash mobs) are utilized, often in a localized fashion or large
network of individual cells, to convey or promote a product or an idea. The term guerrilla
marketing is easily traced to guerrilla warfare which utilizes atypical tactics to achieve a
goal in a competitive and unforgiving environment.
• The concept of guerrilla marketing was invented as an unconventional system
of promotions that relies on time, energy and imagination rather than a big-
marketing budget.
• Typically, guerrilla marketing campaigns are unexpected and unconventional,
potentially interactive, and consumers are targeted in unexpected places.
• The objective of guerrilla marketing is to create a unique, engaging and thought-
provoking concept to generate buzz, and consequently turn viral.
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 Emerging Marketing Concepts
Viral Marketing
• Marketing phenomenon that facilitates and encourages people to pass
along a marketing message.
– Viral marketing depends on a high pass-along rate from person to person. If a
large percentage of recipients forward something to a large number of
friends, the overall growth snowballs very quickly. If the pass-along numbers
get too low, the overall growth quickly fizzles.
– Viral marketing, viral advertising, referring to marketing techniques that use pre-existing  social
networks to produce increases in brand awareness or to achieve other marketing objectives (such
as product sales) through self replicating viral processes. It can be delivered by word of mouth or
enhanced by the network effects of the Internet.
– Viral marketing may take the form of  video clips, interactive Flash Games, advergames, ebooks,
brandable software, images, or text messages.
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 Emerging Marketing Concepts
Green Marketing
• Green marketing is the marketing of products that are presumed to be environmentally
safe. – AMA
• Thus green marketing incorporates a broad range of activities, including product
modification, changes to the production process, packaging changes, as well as
modifying advertising.
• Yet defining green marketing is not a simple task where several meanings intersect and
contradict each other; an example of this will be the existence of varying social,
environmental and retail definitions attached to this term.
• Other similar terms used are Environmental Marketing and Ecological Marketing.
• Green, environmental and eco-marketing are part of the new marketing approaches
which do not just refocus, adjust or enhance existing marketing thinking and practice,
but seek to challenge those approaches and provide a substantially different
perspective. Marketing Management 30
 Emerging Marketing Concepts
Meta Marketing
• An approach to the study of marketing and its relationship to
every aspects of life by focusing all social, ethical, scientific and
business experience on marketing, thus establishing a body of
knowledge based on the integration of every facet of
experience with the human personality. – Philip Kotler.
• Marketing of all complimentary products and services
that are closely related to a product in the consumer's
mind. E.g. when consumer buys a house, he needs
finance, furnishing, household goods, interior
designing etc.
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 Emerging Marketing Concepts
Mega Marketing
• The strategic co-ordination of economic, psychological, p0litical, and
public relations skills to gain the cooperation of a number of parties in
order to enter the market.
• Mega marketing is normally used by the large companies who are
trying to enter blocked markets. In this marketing approach, the
marketing efforts go beyond the 4ps of the marketing Ps. The
companies manages other P-factors such as politics and public opinion.
Micro Marketing
• The practice of tailoring products and marketing programs according to
the needs and wants of specific individuals and local customer groups.

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 Marketing Challenges
• Competitive position challenges
– Threat of new entrant
– Threat of substitute product
– Increased bargaining power of buyer
– Bargaining power of supplier
– Rivalry among competing firms in industry

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 Other challenges
• Information power of the consumer
• Demand for better quality and reliable product
• Customers needs wants and expectation are
changing rapidly
• New product are coming in the market more quickly
• Fragmented media and increase in media cost
• Global competition rather than local
• Increased accountability
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 Relationship marketing
• It is the process of creating maintaining and
enhancing strong value laden relationship
with consumers and other stakeholders
• It is building mutually satisfying long term
relationship with the key parties in order to
retain their business.

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 Importance of relationship marketing

• Long term relation

• Customer satisfaction
• Loyal customer
• Development of new partnership
• Long term profit
• Identification of strength and weakness
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 E-commerce marketing
• It refers to the buying and selling something electronically
• Features
– Individual communication
– Online selling
– Elimination of middlemen
– Data depositary
– Enhance promotion
– Global alliance
– Good relationship
– Need of electronic devices
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