Introduction to Marketing.

AGENDA 1. What is Marketing? 2. Four marketing management philosophies 3. The differences between sales and market orientations 4. What is Marketing process? 5. Reasons for studying marketing

What is Marketing?
Personal Selling? Advertising? Making products available in stores? Arranging displays, Maintaining inventories?

All of the above, plus much more!

Marketing has two facets A philosophy A process-A set of activities (process) to implement this philosophy.

What is Marketing?

A Philosophy An Attitude A Perspective A Management Orientation that stresses customer satisfaction

A Set of Activities, including: Products Pricing Promotion Distribution

A Set of Activities, including: Products Pricing Promotion Distribution This is Marketing Process

American Marketing Association Definition

Marketing is the 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. Marketing is an organisational function and set of processes For creating, communicating and delivering value to customers. For managing customer relationships in ways that benefit the organisation and its stakeholders.

The Concept of Exchange

The idea that people give up something to receive something they would rather have. Generally money is medium of exchange. We give up money to get goods or services we want. But, in old days exchange does not require money.

At Least Two Parties At Least Two Parties Something of Value Something of Value

Necessary Necessary Conditions Conditions for Exchange for Exchange

Communication and Delivery Communication and Delivery Freedom to Accept or Reject Freedom to Accept or Reject Desire to Deal With Other Desire to Deal With Other Party Party

Exchange may not take place even if conditions are met An agreement must be reached Marketing occurs even if exchange does not take place

Marketing Management Philosophies

Production Production Sales Sales

Competing Philosophie s

Market Market Societal Marketing Societal Marketing

Orientation Orientation
Production Production Sales Sales Market Market Societal Societal

Key Ideas
Focus on efficiency of internal operations Focus on aggressive sales techniques and believe that high sales result in high profits Focus on satisfying customer needs and wants while meeting objectives Focus on satisfying customer needs and wants while enhancing individual and societal well-being

The Production Concept

Focuses on the internal capability of the firm. Not on the desires and needs of the marker place. What can we do best? What can our engineers design? What is easy to produce given our equipments & resources? Assessing a firms capabilities should be major consideration. By chance sometimes what a firm can best produce exactly meet the needs of the market place. When competition is weak. When demand exceeds supply.

The Sales Concept

Idea that people will buy more goods & services if aggressive sales techniques are used. High sales lead to high profits. Even intermediaries are pushed to sell manufactured product more aggressively. Marketing means selling things & collecting things. Lack of understanding of needs & wants of customers. Despite quality sales force Customers can not be convinced of buying goods, which are not needed or wanted.

The Marketing Concept

The idea that the social and economic justification for an organizations existence is the satisfaction of customer wants and needs while meeting organizational objectives. Sales depend on customers decision to purchase. Not by aggressive selling. What business thinks it produces is not primary importance. But, what customer think they are buying- the perceived value defines the business. Focuses on customer wants and needs to distinguish products from competition Integrates all organizations activities to satisfy customer wants and needs Achieves organizations long-term goals by satisfying customer wants and needs

Achieving a Market Orientation

Obtain information about customers, competitors, and markets Examine the information from a total business perspective Determine how to deliver superior customer value Implement actions to provide value to customers Establishing & maintaining mutually rewarding relationship with customers. Understanding firms & its competitors strength and weaknesses. Assessing what existing or potential competitors might be intending to do tomorrow.

Societal Marketing Orientation

Sometimes market oriented organisation may choose not to deliver benefits sought by the customers. These benefits may not be good for individuals or society in long term. Marketing that preserves or enhances an individuals and societys long-term best interests Less toxic products More durable products Products with reusable or recyclable materials Sales vs. Market Orientations Organizations Firms Focus Business For Whom? Primary Profit Goal? Tools to Achieve

Sales

Inward

Selling goods and services

Everybody

Maximum Primarily sales volume promotion

Market

Outward

Satisfying wants and needs

Specific groups of people

Customer Coordinatesatisfaction d use of all marketing activities

The Organizations Focus

Persons in sales oriented firm focuses onSelling what organisation make rather than what market wants. Historic sources of competitive advantageTechnology, Innovation, Economies of scale. In todays world firms derive competitive advantage fromExternal market oriented focus Where customer is at the centre of their business. K MART

Key Issues in Key Issues in Developing Developing Competitive Competitive Advantage Advantage
Create Create Customer Customer Value Value
Customer Value
The ratio of benefits to the sacrifice necessary to obtain those benefits Strive to improve continually. It is not selling high quality product at high price. Or low quality product at low price.

Build Long-Term Build Long-Term Relationships Relationships

Maintain Maintain Customer Customer Satisfaction Satisfaction

 It is quality customer expect, sold at price they are willing to pay.

Customer Value Requirements

Offer products that perform Give consumers more than they expect Avoid unrealistic pricing Give the buyer facts & information Offer organization-wide commitment in service and after-sales support

Customer Satisfaction
The feeling that a product has met or exceeded the customers expectations. Evaluation in terms of whether product has met their need & expectation. Keeping current customer satisfied is just as important as attracting new customers. It is lot less expensive.

Maintaining Customer Satisfaction

Meet or exceed customers expectations Focus on delighting customers Provide solutions to customers problems Cultivate relationships, NOT one-time transactions

Building Relationship
Attracting new customer to business is only a start. Best companies view it as developing and enhancing long term relationship.

Market share of a firm can be increased in three ways Attracting new customers. Increasing business with existing customers. Retaining current customers.

Building Relationship addresses two points Repeat sales and referrals. Increase in sales, profits & market share. Costs also fall because serving existing customer is less expensive.

Building Long-Term Relationships

Relationship marketing Customer-oriented personnel Effective training programs Empowered employees Teamwork

Relationship Marketing

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

Who are your customers Who are your customers What do customers value What do customers value
Requirements for Building Relationships

What do they want to buy What do they want to buy How do they prefer to How do they prefer to interact interact

Customer oriented personnel

Employees attitude & actions must be customer oriented. In customers view employee is the firm, so all division, Deptt., persons should be customer oriented.

The role of Training

Leading companies recognise role of employee training in customer service. Companies with best training program do better than other companies of same industry.

Empowerment
Many companies are giving employees more authority to solve customer problems on spot. Employees develop ownership attitude Feeling that their expertise matters. Gives customers feeling that their concerns are being addressed.

Teamwork
Collaborative efforts of people are required to accomplish common objectives. Product value, customer satisfaction improve when Deptt. and groups begin assisting each other. Performance is enhanced when people of different areas such as production, sales practice teamwork.

 Ultimate goal is delivering superior customer value & satisfaction.

Defining a Firms Business

Benefits instead of goods/services People who spend money, time & energy expect to receive benefits. Not just goods & services. Ensures a customer focus. Avoid preoccupation with goods or firms internal needs. Encourages innovation. Reminding people that there are many ways to satisfy customer wants. Stimulates an awareness of changes in customer preferences. So that product offerings are more likely to remain relevant. Market orientation does not mean that customers will always receive everything they want.

Whom the product is directed

Sales oriented companies aims their product at every body or the average customer. Market oriented firm aims at specific groups of people. Recognises that different customer groups want different features or benefits. Market oriented firm analyses the market & divides it into groups of people who are fairly similar in some characteristics.

The firms primary goal

Sales oriented firms seeks to achieve profitability through sales volume. They give more importance to making sales than on developing a long term relationship. Market oriented firm make profits by creating customer value.

Tools the Organisation uses to achieve its goals

Sales oriented firms seeks to generate sales volume through intensive promotional activities. (Advertising & personal selling) Market oriented firm recognises that promotional activities as only one of the four basic marketing mix decisions.

Marketing Process Activities

Understand the organizations mission Understand the organizations mission Set marketing objectives Set marketing objectives Gather, analyze, interpret SWOT information Gather, analyze, interpret SWOT information Develop a marketing strategy Develop a marketing strategy Implement the marketing strategy Implement the marketing strategy Design performance measures Design performance measures Evaluate marketing efforts--change if needed Evaluate marketing efforts--change if needed
Why Study Marketing?
Plays an important role in society Vital to business survival, profits and growth Offers career opportunities Affects our life every day People are consumer of goods & services. By better understanding of marketing, we will become better informed customers. So, able to negotiate effectively with sellers. Better prepared to demand satisfaction. Marketing is far too important to be left only to the marketing department. --David Packard Hewlett-Packard

Fast route up the corporate ladder

Professional Selling Professional Selling Marketing Research Marketing Research Advertising Advertising Retail Buying Retail Buying Distribution Management Distribution Management Product Management Product Management Product Development Product Development Wholesaling Wholesaling

Better-informed consumers Demand for customer satisfaction