Marketing Overview

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CONCEPTS IN MARKETING

• OVERVIEW OF CONTEMPORARY MARKETING
• Prof P.C.Mehra
• Professor of Marketing
• International Management Institute

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What is marketing ?
Nothing but organized common sense !!
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EVOLUTION OF MARKETING

• Science of Marketing as old as mankind
• Barter of goods
• Concept of exchange
• Industrial revolution resulted in spurt in
  production
• Post war era resulted in manifold increase in
  availability
• Emerged concepts of todays marketing

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MARKETING IN THE LAST 50 YEARS
Era of the 50s Production driven What is made will be sold
60s to mid 80s Sales driven Somehow sell
Mid 80s to late 90s Customer Orientation Make what will satisfy customer needs wants
Now Customization Focus on the Individual as a customer
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The New Economy

• Substantial increase in buying power
• A greater variety of goods and services
• A greater amount of information about practically
  anything
• A greater ease in interacting and placing and
  receiving orders
• An ability to compare notes on products and
  services

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The New Economy

• Websites can provide companies with powerful new
  information and sales channels.
• Companies can collect fuller and richer
  information about markets, customers, prospects
  and competitors.
• Companies can facilitate and speed up
  communications among employees.
• Companies can have 2-way communication with
  customers and prospects

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The New Economy

• Companies can send ads, coupons, samples,
  information to targeted customers.
• Companies can customize offerings and services to
  individual customers.
• The Internet can be used as a communication
  channel for purchasing, training, and recruiting.
• Companies can improve logistics and operations
  for cost savings while improving accuracy and
  service quality.

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Adapting Marketing to the New Economy

• How Business Practices are Changing
• From organizing by product units to organizing by
  customer segments
• Shift focus from profitable transactions to
  customer lifetime value
• Shift focus from financial scorecard to also
  focusing on the marketing scorecard
• Shift focus from shareholders to stakeholders

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Adapting Marketing to the New Economy

• Everyone does the marketing
• Build brands through performance, not just
  advertising
• Customer retention rather than customer
  acquisition
• From none, to in-depth customer satisfaction
  measurement
• From over-promise, under-deliver to
  under-promise, over-deliver

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Adapting Marketing to the New Economy

• How Marketing Practices are Changing Customer
  Relationship Marketing
• Reduce rate of customer defection
• Increase longevity of customer relationship
• Enhance growth potential through cross-selling
  and up-selling
• Make low profit customers more profitable or
  terminate them

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Defining marketing

• Peter Drucker. the only valid purpose of
  business is the creation of a customer.
• Peter Doyle. Selling is making people want what
  youve got, while marketing is selling people
  what they want.
• Theodore Levitt.People buy solutions to
  problems, not products, and successful marketers
  are problem solvers.

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MARKETING Marketing is a societal process
by which individuals and groups obtain what they
need and want through creating, offering and
freely exchanging products and services of value
with others. -Philip Kotler
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MARKETING

• Marketing is getting the right goods services
  to the right people at the right time, at the
  right place, at the right price with the right
  communications promotions
• -- American Marketing Association

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The Scope of Marketing
Marketing of any or all of the following

• Places
• Properties
• Organizations
• Information
• Ideas

• Goods
• Services
• Experiences
• Events
• Persons

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IMPLICATIONS OF MARKETING

• Understanding consumer buying behaviour
• Designing products to satisfy customer needs
• Understanding the customers price sensitivity /
  threshold level
• Understanding planning for competition
• Identifying the relevant customer group(s)
• Creating visibility availability
• Constantly remaining in touch with the market

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Company orientations towards the market place
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PRODUCTION CONCEPT

• The production Concept holds that consumers will
  prefer products that are widely available and
  inexpensive
• Usually applicable in situations where demand
  outstrips supply
• Concentration on high production and low costs as
  also mass distribution

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PRODUCT CONCEPT

• The Product Concept holds that consumers will
  favour those products that offer the most
  quality, performance or innovative features.
• Indicates an obsession with the product
• Believes a good product will sell automatically
• Referred to as Marketing Myopia

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SELLING CONCEPT

• The Selling Concept holds that consumers
  businesses, if left alone, will ordinarily not
  buy enough of the organization's products. The
  organisation, must therefore, undertake
  aggressive selling and promotion.
• Companies aim to sell what they make rather than
  make what they sell
• Usually adopted by companies having excess
  capacity or unsought products.

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THE MARKETING CONCEPT

• The Marketing Concept holds that the key to
  achieving organisational goals depends on
  determining the needs wants of target markets
  and delivering the desired satisfactions more
  effectively and efficiently than competitors do.
• The Marketing Concept thus focuses on the
  customer - begins with the customer ( determining
  needs wants) and ends with the customer
  (ensuring customer satisfaction)

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SOCIETAL MARKETING CONCEPT

• The Societal Marketing Concept holds that
  organisational task is to determine needs, wants
  and interests of the target markets and to
  deliver the desired satisfaction more effectively
  efficiently than competitors in a way that
  preserves or enhances the consumers societys
  well being.

Society (Human welfare)
Company (Profits)
Consumers (want satisfaction)
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MARKETING PHILOSOPHIES a comparative analysis
Concept Focus Means End
Production Production Wide distribution Profit through low cost, high volume
Product Product Quality Profit through superior product
Selling Product Selling promotion Profit through volumes
Marketing Customer needs Integrated marketing Profit through customer satisfaction
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Product vs Market orientationMarketing is a
function which adds value to a business
Product Orientation Marketing Orientation
AVON We sell cosmetics We sell hope
XEROX We sell copiers We help improve office productivity
COLUMBIA PICTURES We make movies We market entertainment
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Marketing Myopia--Theodore Levitt

• There is no such thing as a growth industry.
  Companies are organized operated to create
  capitalize on growth opportunities. Companies
  must respond to market requirements must think
  of themselves as creators and satisfiers of
  customers rather than a producer of goods and
  services. The firm must adopt a broad and dynamic
  view of market opportunity.

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Selling Marketinga comparative analysis

• Theodore Levitt in his classic article Marketing
  Myopia says
• Selling focuses on the needs of the seller while
  marketing focuses on the needs of the buyer
• Selling is pre-occupied with the sellers need to
  convert his product into cash, while marketing is
  satisfying the needs of the customer by
  delivering value through a product
• In selling costs determine price, whereas in
  marketing customer determines price
• Selling has a short term orientation towards
  todays products markets, while marketing has a
  long term orientation with focus on emerging
  trends opportunities besides new products
  markets.
• The aim of Marketing is to make Selling
  superfluous .Peter Drucker

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Contrasts between the Selling concept and the
Marketing concept
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Traditional Organization Chart
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Customer-Oriented Organization Chart
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Core Concepts of Marketing
Target Markets Segmentation
Needs, Wants, and Demands
Product or Offering
Value and Satisfaction
Exchange TransactionsRelationships Networks
Marketing Channels
Supply Chain
Competition
Marketing Environment
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Evolving views of Marketings role
Production
Marketing
Customer
Human resources
Finance
The customer as the controlling function and
marketing as the integrative function
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Some core Marketing concepts

• Target market..implying market focus
• Customer needs.implying customer orientation
• Profitabilityimplying profit through customer
  satisfaction
• Integrated marketing.the entire organization
  THINKS customer first
• Marketing is far too important to be left
  only to the Marketing department..David
  Packard, Hewlett-Packard

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Assignment

• Think of your own organization from which you
  come from, and answer the following
• Was your organization marketing
  orientedillustrate ?
• Did it need to be ?
• If it was marketing oriented, how customer
  focused was itillustrate ?
• What was the effect of its marketing
  orientation.illustrate?
• If it was not, in retrospect, how could it have
  changed its orientation and to what effect?