Marketing Marketing ManagementManagement

Module- IModule- I

An overview of Marketing in relation to An overview of Marketing in relation to the environmentthe environment

PLANNINGAnalyze situationSet goalsSelect strategies and tactics

IMPLEMENTATIONOrganizeStaffDirect

EVALUATIONCompare performance with goals

Feedback, so management can adapt future plans and theirimplementation to the changing environment

The Management Process

Meaning, function & role of Marketing Management

• Philip Kotler has defined marketing as , Philip Kotler has defined marketing as , • “ “ Marketing is analysis, organizing, Marketing is analysis, organizing,

planning and controlling of the firm’s planning and controlling of the firm’s customer-impinging recourses, customer-impinging recourses, policies, activities with a view to policies, activities with a view to satisfying the needs and wants of satisfying the needs and wants of chosen customer groups at a profit”.chosen customer groups at a profit”.

• Marketing comprises both buying and sellingMarketing comprises both buying and selling• It is the performance of business activities that direct It is the performance of business activities that direct

the flow of goods and services from producer to the flow of goods and services from producer to consumer or userconsumer or user..

Functions of Marketing• 11.Merchandising functions.Merchandising functions : buying and assembling, : buying and assembling,

selling, selling, • 2, Physical Distribution2, Physical Distribution FunctionsFunctions: transportation, : transportation,

storage and warehousingstorage and warehousing• 3- Facilitating Functions3- Facilitating Functions: financing, standardization, : financing, standardization,

market information,risk bearing, pricing.market information,risk bearing, pricing.• Difference between Marketing & SellingDifference between Marketing & Selling::• Marketing is a total system of interacting business Marketing is a total system of interacting business

activities designed to plan, price, promote and activities designed to plan, price, promote and distribute want satisfying products and services to distribute want satisfying products and services to present and potential customerspresent and potential customers..

• Selling is normally concerned with the transfer of Selling is normally concerned with the transfer of goods and services to the customers or prospective goods and services to the customers or prospective customers for the exchange of moneycustomers for the exchange of money..

Market & its classifications

• The term ‘Market’ is derived from the Latin word ‘Mercatus’, meaning ‘to trade’.

• The market is a central point around which marketing activities revolve.

• A market , in general, may be described as a place where goods and services are offered for sale, buyers and sellers meet and the title to goods is transferred.

• The term ‘market’ is used differently in Economics and in Management as follows:

Classification of markets• A-On geographical Basis:• Local market, National Marker, International /World

Market• B- On Economic Basis:• 1-Perfect Market: in this , there is a group of buyers

and sellers who have full knowledge of other buyers and sellers , there is an effective or perfect competition b/w buyers and sellers. Hence only one price is prevalent in the market for commodity.

• A Perfect Market has 3 features :• (1)-a group of buyers and sellers,(2) Effective

competition b/w buyers and sellers,• (3) one price throughout the market for the same

commodity.

• 2-Imperfect Market : is a market which is not a perfect mkt, ie., in such a market buyers and sellers have no knowledge of other buyers and sellers.

• C- On time basis- • 1-Very Short Period Market : it refers to the existence of

mkt for a very short period, ie for a day at a particular place . They generally sells perishable goods.

• 2-short Period Mkt: exists in rural economies. weekly market held in the villages or fairs may be covered under this category.

• 3- Long Period Mkt: here, durable commodities are sold and purchased.

• D- On the basis of Business:

• (1)- wholesale Market,

• (2)Retail Market

• E- On the basis of Importance :

• 1-Primary Mkt: found in rural areas, mainly agricultural pdts are sold and purchased.

• 2- Secondary Mkt: here, semi-processed, semi-manufactured goods are sold and purchased. E.g.: Yarn mkt

• 3-Terminal Mkt : it is the market where final products are sold to ultimate consumers.

• F-On the basis of Nature of Goods:

• 1- Commodity market: deals consumer goods and industrial goods commodity mkt is divided as follows :

• 1)Produce Mkt- it deals with agricultural products such as wheat, cotton, rice etc the goods are required by consumers for ultimate consumption or by manufacturers for processing

• 2)Manufactured goods Mkt –it is the mkt where manufactured goods are purchased and sold.

• 3)Bullion Mkt – in this, transactions are made for the purchase and sales of precious metals like gold, silver etc. It is a sensitive mkt and is influenced by the happenings in any part of the world.

• 2) Capital market: these markets can be classified as follows:

• 1- money market : in this mkt , money is purchased and sold ie, lent and borrowed, also called as capital mkt. includes those institutions which provide short term funds to business.

• 2- Stock Mkt /Security Mkt: Known as Stock Exchange where shares, debentures, bonds and other securities are purchased and sold.

• 3- Foreign Exchange Mkt: in this mkt, currencies of different countries are purchased and sold., it plays an impt role in international trade and settlement of international debts.

• G- On the basis of Regulation : they may be divides as follows:

• 1- Regulated Market :

• these markets are regulated by statutory .

• Eg: stock Exchanges.

• 2- Unregulated or Free Markets-

• these markets are uncontrolled. They operate according to demand and supply of the commodity and have free hands in dealings.

Nature of Marketing

• Marketing activities– Buying

– Selling

– Transporting

– Storing

– Financing

– Researching

– Risk taking

– Grading/valuing

• Cost of marketing

Nature of Marketing

• Role of marketing– Production-oriented– Sales-oriented– Customer-oriented

• Market determination– Whom to serve– Where to serve– Target markets

Managerial functions of Marketing Management

• Determining marketing objectives• Planning• Organizing• Co-ordinating• Staffing• Operating and directing• Analyzing and evaluating• Controlling

Five Concepts of Marketing

• 1.Exchange Concept :

• It holds that the exchange of a product between the seller and the buyer is the central idea of marketing.

• 2.Production Concept

• Holds that customers prefer products widely available & inexpensive

• Used when company wants to expand the market

3.Product Concept

• Favor those products which offer high quality, performance and innovative features

• Designs product with no customer input

• Leads to marketing myopia

• Achieves marketing success through product features.

4.Selling Concept

• Used by firms having unsought goods that the customer doesn’t thinks of buying.

• Aim to sell what they make rather than make what the market wants.

• Believes in undertaking an aggressive selling and promotion effort.

5.Marketing Concept

• Emerged in 1950’s• Instead of product centered philosophy customer

centered philosophy is used• Holds the key to achieve organizations goals

including profits.• Consists of company being more effective than

competitors in creating, delivering & communicating customer value to its chosen target markets.

Holistic Marketing Concept

o Approach to marketing that attempts to recognize the scope and complexities of marketing activities

o Four Components: Relationship Marketing. Integrated Marketing Internal Marketing Social responsibility Marketing.

Objectives of Marketing Mgmt

• Determination of needs and wants of Determination of needs and wants of customerscustomers

• Market segmentationMarket segmentation

• Growth of the enterpriseGrowth of the enterprise

• Increase in sales volumeIncrease in sales volume

• Increase in net profitIncrease in net profit

• Increase in customer’s satisfactionIncrease in customer’s satisfaction

Marketing Management Tasks

• Developing marketing strategies and plans.• Capturing marketing insights.• Connecting with customers.• Building strong brands.• Shaping the market offerings.• Delivering value.• Communicating value.• Creating long term growth.• Developing marketing strategies and plans.• Capturing marketing insights.• Connecting with customers.• Building strong brands.• Shaping the market offerings.• Delivering value.• Communicating value.• Creating long term growth. (brief explanation follows…..)

1.Developing marketing strategies and plans

• Identify the potential long run opportunities given its market experience and core competency.

• Develop concrete marketing plans and specify the marketing strategies

2.Capturing marketing insights

• A reliable marketing information system is needed to closely monitor the marketing environment. (micro and macro).

• Marketing research have to be done.• Transform marketing strategies in to

marketing programs• Direct sales Vs Distributor sales• East coast market Vs West Coast market

3.Connecting with customers

• Create value for its chosen target markets and develop strong , profitable and long term relationships with the customers.

• Understand the markets.

• Needs well trained sales force presenting product benefits.

• Market segmentation.

4.Building strong brands

• Must understand the strengths and weakness of the firms brand with customers.

• Product strategy needs modification at different stages in the life cycle: introduction, growth, maturity, and decline.

• Must pay close attention to competitors anticipating its competitors moves and know how to react quickly and decisively.

4.Shaping the market offerings

• Heart of marketing program is the product which includes product quality, design, features, packaging.

• Support services provide competitive advantage in market place.

• Critical market decision relates to price. Price should be commensurate with the offers perceived value.

5.Delivering value

• Must determine to deliver the value embodied by the products and services to the target markets.

• Must identify, recruit and link various marketing facilitators to supply its products and services effectively to the target markets

6.Communicating Value

• Must communicate the value embodied by its product and services to the target market.

• Marketing communication activities are the means by which firms attempt to inform, persuade and remind customers directly and indirectly about the brands they sell.

• Set mass communication programs.• Set up more personal communication in the form

of direct and interactive marketing and must train and motivate the sales people.

7. Creating Long term growth• Must take a long term view of their products and brands and

how it profits should be grown.• Based on product positioning it must initiate new product

development, testing and launching.• Strategy must also take in to account changing opportunities

and challenges.• Need feedback and control.• Marketing evaluation and control processes are necessary to

understand the efficiency and effectiveness of marketing activities.

• Must take a long term view of their products and brands and how it profits should be grown.

• Based on product positioning it must initiate new product development, testing and launching.

• Strategy must also take in to account changing opportunities and challenges.

• Need feedback and control.• Marketing evaluation and control processes are necessary to

understand the efficiency and effectiveness of marketing activities.

Value Creation and Value Delivery

Three Characteristics

-source of competitive advantage which makes significant contribution to perceived customer benefits

- Has application in a wide variety of markets.

- Difficult for competitors to imitate

• .