Marketing Concepts

WHAT IS MARKETING ?
• ANY INTERPERSONALAND
INTERORGANISATIONAL
RELATIONSHIP INVOLVING AN
EXCHANGE IS MARKETING .
WILLIAM J.STANTON

WHAT IS MARKETING ?
The essence of Marketing is a transaction -
an exchange- intended to satisfy human
needs and wants.There are three elements in
the marketing process :
(A) MARKETERS
(B)WHAT IS BEING MARKETED
(C) TARGET MARKET

WHAT IS MARKETING ?
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
This definition includes following core concepts :
NEEDS ,WANTS and DEMANDS ---
PRODUCTS------VALUE & SATISFACTION---
EXCHANGE & TRANSACTION---MARKETS &
MARKETERS

NEEDS,WANTS AND DEMANDS
n NEED : A state of felt deprivation of
some basic satisfaction ( Food,
Clothing, Shelter, Belonging etc. )
n WANTS : Wants are desires for specific
satisfiers of the deeper needs. Needs
are few and wants are many .
n DEMANDS : are wants backed by
------Ability to buy and Willingness to
buy

PRODUCTS / OFFERS / SATISFIERS / RESOURCES
n Anything that can be offered to someone
to satisfy a need or want is a product .
n Product refers to physical object
n Services refer to intangible object

VALUE AND SATISFACTION
n Value is the customers’ estimate of the
Product’s capacity to satisfy a set of
goals
n Value is the ratio between what the
customer gets and what he gives
(V=B/C)
n Customer gets benefits & assume costs
WHEN :Customer Expectance=Performance (satisfied)
Customer Expectance>Performance (dis-satisfied)
Customer Expectance<Performance (Highly satisfied)

EXCHANGE AND TRANSACTION
n
n
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
n Exchange is a process rather than event.
It is a value creating process because it
normally leaves both parties better off.
n A transaction is a trade of values between
two or more parties ( A BARTER
TRANSACTION OR A MONETARY
TRANSACTION ).

WHAT IS MARKET ?
n 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.

WHAT IS MARKETING ?
n Marketing is the management process
which identifies, anticipates, and
supplies customer requirements
efficiently and profitably.
n In other words, it is the process of
understanding, creating, and delivering
profitable value to targeted customers
better than the competition.

WHAT IS MARKETING ?
n Its aim is to establish, maintain, enhance
long term relationship with customers at a
profit so that the objectives of the parties
involved are met.
n In short marketing consists of attracting,
developing, and retaining profitable
customers.

BUSINESS IS MARKETING
n Marketing can not be considered as a
separate function , it is the whole
business, seen from the point of view of
its final results.................that is
profit,through customer satisfaction
PETER DRUCKER

A SIMPLE MARKETING SYSTEM
Industry Market
Communication
Goods & Services
Money
Information/Feedback

WHAT IS MARKETING MANAGEMENT ?
n 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.

WHAT IS MARKETING MANAGEMENT ?
n 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,
equal to, or above the desired demand
level and the major task of marketing
management is to regulate the level of
demand.

STATE OF DEMAND AND MARKETING TASK
n State of demand
n Negative Demand
n No Demand
n Latent Demand
n Falling Demand
n Irregular Demand
n Full Demand
n Overfull Demand
n Un-wholesome Demand
n Marketing task
n Conversional Mktg.
n Stimulational Mktg.
n Developmental Mktg.
n Remarketing
n Synchro-marketing
n Maintenance Mktg.
n Demarketing
n Counter-marketing

EVOLUTION OF MARKETING MANAGEMENT
n Marketing management has evolved
through following stages :
n (1) Production Orientation Stage
n (2) Sales Orientation Stage
n (3) Marketing Orientation Stage
n (4) Social Responsibility & Human
Orientation Stage

COMPANY ORIENTATION FOR
MARKETING ACTIVITIES
n
n
Marketing Management can be defined as the
effort to achieve desired EXCHANGE
outcomes with TARGET MARKETS.
Now the question arises :
(1)What philosophy should guide the
marketing activities?
(2)What weights should be given to the
interests of the organisation,the customers
and the society?

MARKETING CONCEPTS
n There are FIVE competing concepts under
which organizations conduct their
marketing activities:
n
n
n
n
n
The Production Concept
The Product Concept
The Selling Concept
The Marketing Concept
The Societal Marketing Concept

(1) THE PRODUCTION CONCEPT
Produce
Sell
Consumers
Company
Produce more & more
Practically sells itself

THE PRODUCTION CONCEPT
n Consumers will favour those products
that are widely available and low in cost.
n Therefore increase production and cut
down costs.
n And build profit through volume.

(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.

THE PRODUCT CONCEPT
n Consumers will favour those products
that offer the most quality, performance,
or innovative features.
n Therefore, improve quality, performance
and features.
n This would lead to increased sales and
profits.

(3) SELLING CONCEPT
n Consumers have normal tendency to resist.
Produce
Sell it
Consumers
Aggressive selling &
promotion efforts
Making sales becomes primary function and
consumer satisfaction secondary .

THE SELLING CONCEPT
n Consumers , if left alone , will not buy
enough of company’s products.
n Therefore, promote sales aggressively.
n And,build profit through quick turnover.

(4) MARKETING CONCEPT
n “ LOVE THE CUSTOMER , NOT THE
PRODUCT ”
Consumers
Produce it
Market it
Learn what they
want(MR)
Sell what they want(Satisfy
needs of customers)

THE MARKETING CONCEPT
n 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.
n And build profit through customer
satisfaction and loyalty.

(5) THE SOCIETAL MARKETING CONCEPT
n It is Marketing Concept (+) Society’s well
being.
n Balancing of following three considerations
while setting marketing policies :
-Customer’s want satisfaction
-Society’s well being
-Company’s profits

THE SOCIETAL MARKETING CONCEPT
n
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 and efficiently than competitors in
a way that preserves or enhances the
consumer’s and the society’s well being.
- It addresses conflicts between consumer’s
and firm’s short run wants and long term
welfare.

SELLING AND MARKETING CONCEPT
CONTRASTED
Starting point Focus Means Ends
Factory Products Selling and
Promoting
Profit through
Sales Volume
Selling Concept
TargetMarket Customer
Needs
Coordinated
Marketing
Profit through
Customer
Satisfaction
Marketing Concept

STRATEGIC CONCEPT OF MARKETING
n
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 the evolution of market.

n Shifted the Marketing Objectives from
PROFIT TO STAKEHOLDER
BENEFITS.
n Stakeholders are individuals or groups who
have an interest in the activity of a company .
They include-----Theemployees and management,
Customers, Society, Shareholders, Financiers/ Bankers,
Government etc.

n Strategic Marketing Concept is Strategic
Management, which integrates marketing
with the other management functions.
( Major task is Profit for Stakeholders’
benefits ).

MARKETING SYSTEM
n Marketing is concerned with the flow of
goods and services from the points of
production to the points of
consumption. There is a systematic
arrangement of these functions of
marketing to move the goods and
services to the needy persons. This
system is essential to the creation of
time, place and possession utilities.

MARKETING SYSTEM
n
A dynamic marketing system must be willing to
undertake the following specific activities :
1. Define market area.
2. Research consumer wants and needs.
3. Develop and redevelop product /
service.
4. Select,train,motivate and control
human resources.
5. Develop sales approach and advertising

GOALS OF THE MARKETING SYSTEM
(1) MAXIMIZE CONSUMPTION
(2) MAXIMIZE CONSUMER SATISFACTION
(3) MAXIMIZE CHOICE
(4) MAXIMIZE LIFE QUALITY

THREE BASIC PRINCIPLES OF MARKETING
n 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
achieving the first two.

(1) . The Customer Value and Value
Equation :
V=B/P Where;; V=Value
B= Perceived Benefits
P= Price
(Value is increased by increasing the numerator
and/or reducing the denominator)

(2).Competitive or Differential Advantage :
The total offer must be more attractive than that
of the competition in order to create a
competitive advantage.
(3).Focus or the Concentration of
Attention : The task of creating
Customer Value at a Competitive advantage.

VALUE MAP
A
E
VEL
C
B D
Value AdvantagedArea
Value
Disadvantaged
Area
Customer PerceivedBenefits
Perceived
Price

THREE LEVELS OF MARKETING
n Responsive Marketing
n Anticipative Marketing
n Need Shaping Marketing

RESPONSIVE MARKETING
It is the form of marketing when some
company defines an existing clear need
and prepare an affordable solution.
(Recognizing that women wanted to spend
less time for cooking and cleaning, led to
the invention of modern washing
machine, microwave oven etc.)

ANTICIPATIVE MARKETING
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
deteriorated in many places.
Anticipative marketing is more risky than 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)

NEED SHAPED MARKETING
The broadest level of marketing occurs when a
company introduces product that nobody asked
for and often could not even conceive of.
(e.g. Sony Walkman, Sony Compact Disc )
Late Akio Morita, founder and chairman of Sony,
who introduced these and many other new
products, summarized his marketing philosophy in
these words:
“ I don’t serve markets. I create them.”

MARKET- DRIVEN AND MARKET-
DRIVING COMPANY
n
n
Market-driven companies focus on
researching current customers to identify
their problems, gather new ideas, develop
products that result in incremental
improvements, not radical innovations.
Market-driving companies generate
significantly new products, services,
business formats and raise our sights
and our civilization.
These companies are much more than customer-
led. They lead customer where they want to go, but
don’t know yet.

Marketing Concepts

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