Marketing Management UNIT-1

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Marketing

In general terms, marketing is the activity which helps in the selling and purchasing of goods and services but in wider tetms, it encompasses the entire process even the customer satisfaction.

Hence "marketing is the process which involves identification of consumers' needs and wants and fulfilling it to the extent till the customers are pleased and satisfied."

Marketing is a total system of interacting business activities designed to plan, price, promote and distribute want satisfying products and services to the present and potential customers.

Nature of marketing

Marketing is an integrated process instead of a sole activity.
Marketing involves too many activities within itself.
Marketing is always customer-oriented.
Marketing is a system which contains many other subsystems in order to attain the desired customer satisfaction.
Marketing is creative in nature.
Marketing is goal-oriented.
Marketing is universal as there is no field of business which does not require marketing.
Marketing is a science as well as an art.
Marketing is an exchange activity which involves exchange of technology, ideas, information and services.
Marketing is dynamic in nature.
Marketing is a continuous process.
Marketing involves selection of target markets.

Scope of marketing

Being the key function of any business organization marketing has it's main objective to attain customer satisfaction.

Some of the areas in which marketing has a wider scope are mentioned below:

Analyzing customers needs and wants
Analyzing consumer behavior
Product planning and development
Pricing decisions
Distribution promotion
Company analysis
Competitor analysis

Concepts of marketing

Marketing involves the following core elements which are described below:

1. Needs, wants and demands

Needs refer to the basic necessity. For example, shelter.

Wants refer to the desire for a particular thing. For example, a person is willing to buy a shelter in a clean locality.

Demands refer to the definite or specific want of any product which is supported by the willingness and ability to buy the product of a customer.

2. Goods and service continuum

Generally this means that organization has products which are a composition of goods and services. For example, traveling via airplane in which traveling is an experience and airplane is the tangible medium which an organization provides to its customer.

3. Product

It is anything that is offered for sale.

4. Utility

It is the need or want satisfying power of a commodity. It is generally of 4 types : form utility, time utility, place utility and ownership utility

5. Customer value

It refers to the worth or usefulness of goods or services perceived by the customer.

6. Cost, satisfaction and quality

Cost is the amount paid to buy a certain good or service.

Satisfaction is the attitude towards that particular product or service after consumption.

Quality is the attribute of a product or services which is perceived by the customer.

7. Exchange and transaction

Exchange is the process of acquiring desired product by giving goods or services of the same value in return. Exchange is a social concept. And when the exchange gets completed it is termed as transaction which is the act of exchanging goods and services between two parties.

8. Relationship marketing and networks

An integrated marketing activity that aims to identify, develop and manage with a large number of customers individually is known as relationship marketing.

A network is the channel of relationship between the organization and it's key stakeholders.

9. Market

Market is generally the ecosystem where potential buyers and consumers do perform the activity of exchanging goods and services against a certain value

Functions of marketing

Gathering market information
Research
Buying function (it is a very significant function because it involves the procurement of quality raw material for production function).
Market planning
Exchange function
Product designing and development
Production function
Promotion function
Standardization and grading of products.
Pricing of products
Distribution decisions
Packaging, labeling and branding
Customer support function

Importance of marketing

It provides financial success
Marketing is often the route to the top
It enhances sales
Develops company's image
It is the major component of product pricing
It avails global goods to the customers
It promotes product awareness
It creates higher utilities
It helps in protection against market depression
It creates new job opportunities

Marketing challenges in the era of globalization

1. Self Reference Criterion (SRC) and ethenocentrism

The phenomena of taking only one's knowledge, experience and beliefs into consideration while making a decision as known as SRC.

The perception of a person that his culture and his company teaches the best way of performing any activity is ethenocentrism.

And both these factors are the main challenges while entering the International market.

2. Market differences

Such as political and legal differences, economic differences, currency differences, language differences, infrastructure differences, trade practices differences, etc.

3. Management myopia

The company which does not want to be global is generally ethenocentric and narrow-minded. The concept of performing operathions in only native country is management myopia.

4. Brand history

The company may need to represent its brand in different countries with a new point of view to get succeeded in International market.

5. National controls and barriers

Such as import or export taxes, laws and order, etc.

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Marketing approaches / Marketing concept

Marketing concepts are the approaches which may be used by the organization towards the target market for the marketing of their products and services and enhancing the sales.

Marketing concepts are mentioned below:

1. Production concept

This concept was relevant in the 19th century and lasted for only few decades. This concept is based on the law that "supply creates its own demand" and it assumes that increase in production and distribution will increase the sale of goods and services.

2. Product concept

This marketing concept is all about providing good quality products and services with attractive features to consumers at reasonable prices. But the major problem of this concept is marketing myopia(explained above in marketing challenges).

3. Selling concept

This approach involves large scale selling and promotional activities related to products and services with the main aim of attracting larger number of customers. It believes that goods are not bought but they have to be sold and follows the philosophy of selling what do you have. But it is a short term concept and cannot be used to achieve a long term goals.

4. Modern marketing concept

Marketing orientation is a customer-oriented concept which is also known as modern marketing concept.

This concept states that the objective of an organization can only be achieved by acknowledging consumers' needs and want as well as fulfilling them. This concept is helpful in maximizing profits and it is completely customer focused.

5. Societal marketing concept

This marketing concept is associated with the philosophy of sustainable development and corporate social responsibility. It promotes goods and services keeping in mind the long term interest of the society and customers needs.

6. Transactional marketing concept

Transactional marketing concept is basically a marketing strategy which mainly focuses on the increment of sales and effectiveness of a company. It is based on 4Ps of marketing : product, pricing, placement and promotion.

But it does not gives any importance to creating and fostering customer relationships.

7. Holistic Marketing concept

In the 21st century all topmost organizations follow a new set of beliefs and practices when it comes to marketing strategies and this is known as holistic marketing which focuses on the 4 core areas which are needed to be marketed.

●Internal marketing

In this strategy employees are viewed as internal customers and their job or responsibilities are viewed as internal products. And hence, the focus is on increasing job satisfaction.

●Integrated marketing

This strategy is used to develop, connect and deliver significant customer value and strengthen buyer-consumer relationship.

●Performance marketing

It involves the evaluation of marketing activities along with the ethical, legal, environmental and social impact of those marketing activities.

●Relationship marketing

It is the strategy used to build long term relationship with the key participants or stakeholders of any organization. And marketing network is a unique company asset.

8. Relational marketing concept

This marketing concept can be defined as a strategy of developing mutual relationship between the organization and the consumers and on the basis of this mutual relationship, customers are bound to be loyal towards the organization to make purchases from them in today as well as in future.

Some of the main components of relational marketing concept are:

Trust the core element .
Bonding essential element for creating relations.
Communication for effective information exchange.
Shared value which believes in listening and learning instead of talking.
Empathy which is the capability to understand the feelings of the customer.
Reciprocity is the element offering exchange of favors and allowances between two parties.

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Marketing mix

Marketing mix is the term used to describe the combination of 4 inputs which are the core elements for any product of a company and that is 4 Ps of marketing, product, prising, promotion and place.

Marketing mix is a very basic and important concept of marketing management and it is also considered to be the heart of marketing function.

"Marketing mix deals with the set up of the combination of the 4Ps in order to increase the sale."

Elements of marketing mix

1. Product

The main aim of a product is customer satisfaction.

2. Price

It is the money value of a product or service paid by the customer.

3. Place(distribution)

This element refers to the channels of distribution which helps in providing the product or services in the right place, at the right time.

4. Promotion

It is the technique of communication and exchange of information with the customers about the product. It can be also stated as the ability of marketing managers to attract customers towards a product.

Factors affecting the marketing mix

1. Controllable factors

Product planning
Brand policy
Packaging policy
Personal selling
Special sales promotion policy
Physical distribution
Market research,etc

2. Uncontrollable factors

These are the external factors which are not in the control of the marketing department.

Consumers buying behavior
Market competition
Pattern of distribution system
Government controls

Importance of marketing mix

1. Linking channel

Marketing mix acts as a linkage between customers and organization as it emphasizes on the fulfillment of customers needs and want.

Thus, it is also a customer-oriented concept.

2. Improving sales

A perfect marketing mix can be proved as the best tool in increasing sales with a positive customer experience.

3. Creates balance among the elements of marketing

Marketing mix focuses on creating the right balance of 4Ps of marketing in order to get the positive outcomes.

4. Most helpful in fulfilling the needs of customers.

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Market segmentation

The market contains variety of products which may differ from each other in their specifications, type, quality, price, etc and same goes with the customers who also differ from each other in their purchasing habits, preferences, income, culture, hobbies.

In order to streamline the products and customers relevant to each other, we do market segmentation.

"Market segmentation means the division of market into smaller groups of customers having similar needs and products having similar qualities."

Market segmentation helps the company to modify the products or services to suit that different groups more effectively.

Bases for market segmentation

1. Geographical segmentation

This segmentation includes the market based upon the location, size, population density, climate, etc.

2. Demographic's segmentation

It includes the age and life cycle, gender and sexual orientation, marital status, income, social class, family size, occupation, education level, religion , etc of customers in a market.

3. Psychographic segmentation

This segmentation is usually not absolutely correct but it is considered in general means.

It involves lifestyles, personality, value and believe system of the customers while segmenting them.

4. Behavioral segmentation

This segmentation particularly focuses for their customers' attitude towards a product and how they respond towards a product and from the attitude shown by particular group of customers, behavioral segmentation derives following conclusions:

●Occasions

Customers usually prefer more to buy on occasions. Occasions can be of two tyres :

1. Regular occasions : The festivals which are fixed, for example, Republic day, Diwali, etc.

2. Special occasions : The occasions which are non-recurring in nature, for example, marriage, award-winning, promotion, etc

●User status

Market can also be segmented on the basis of status of the customers as following:

1. No-user

2. Potential user

3. 1st time user

4. Regular user

●Usage rate

Frequency of how many times a customer buys or uses a product can also be segmented as light, medium & heavy consumption.

●Buyer readiness stage

The customers who are definitely willing to buy a particular product are on the readiness stage.

●Loyalty status

Market can also be segmented on the basis of consumer loyalty as:

1. Hardcore loyals : Develop a sort of addiction to a particular brand and never switch.

2. Softcore loyals : Limit themselves within buying few brands.

3. Split loyals : These customers shift for a change.

4. Switchers : These customers never stick to a brand.

●Attitude

It is the principal driver for making a purchase by any consumer and hence, it should always be considered while market segmenting.

Requisites/Perks of sound market segmentation

The criterion for a sound market segmentation are discussed below:

1. Measurable

The consumers segmented in different groups should always be measurable.

2. Substantial

Segmentation made by the marketers should be substantial so that a suitable marketing strategy can be adopted.

3. Accessible

The product design should be compatible to the market segment in which the product is going to be launched which means it should comply its price with the financial status of that market.

4. Differentiative

Market segmentation should be done in such a way that one segment can be differentiated from the other easily and different strategies of marketing can be adopted.

5. Actionable

A well-defined market segmentation is always actionable on the part of consumers while making marketing strategies.

Process of market segmentation

1. Determining demand pattern/ Survey stage

Following demand patterns are usually encountered by the marketers during survey stage:

●Homogeneous preference

It is a marketplace where majority of the customers have similar taste and preference.

● Differed preference

In contrast to homogeneous preference, it is the marketplace where customers may vary greatly from each other in preference. This market holds the 1st mover advantage for the company

●Clustered preferences

In this marketplace, the 1st company or brand to enter the market can position itself in the center Or as the largest in market Or in a completely different way in order to survive.

Furthermore in depth interviews, group discussions and questionnaires are used in the survey stage for market segmentation.

2. Establishing possible basis of segmentation/ Analysis stage

According to marketing school of thought, segmentation is extensively considered as an art not as a science.

Customer needs are always the fundamental basis for any market segmentation and the analysis stage focuses on identifying the needs of a customer.

3. Identify potential market segments/ Profiling stage

This stage involves profiling each group of customer on the basis of their behavior, attitude, consumption pattern, demographics, etc.

Profiling stage becomes necessary when it comes to evaluate the whole market opportunities and estimate the profit which can be derived from that market.

Importance of market segmentation

●Adjustment of product and market appeals Marketing is itself a complex activity but segmentation simplifies marketing.

●Better position to spot marketing opportunities

Market segmentation helps to evaluate market opportunities more strategically.

●Allocation of marketing budget

●Understanding and meeting the needs of customer.

●Stronger positioning

Market segmentation helps the company to maintain a strong position in the market as the product is always sold to the targeted customer and hence, the efficiency of market segmentation enhances the efficiency of the marketing strategies.

●Provides competitive advantage

●Helps in market expansion

●Improves communication

●Increases profitability

●Identifies new markets

●Reduces the cost

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Marketing planning

Marketing planning is an essential element of an organization's strategic planning.

The success of any business lies in the fact that how effectively the customer base is created and retained by the organization because customer is the king of market.

Major challenge of marketing planning is that it is carried out in a business environment which keeps on changing continuously.

"Marketing management planning involves the development of forecast, objectives, policies, procedures, procedures, schedules and budget for marketing a particular product."

Concepts/Components of marketing

Mission

Mission acts as the driving force of the organization. It is considered as the long-term objective and it remains constant.

Objectives

It refers to the outcomes which have to be attained on daily, short term and long term basis.

Strategy

A series of planned steps for attaining success is known as strategy. It keeps on changing in reference to the changing business environment.

Policy

It refers to a set of guidelines for attaining the objectives of an organization.

Procedure

It is a series of steps that direct the marketing activities and helps in the implementation of the policies.

Program

A program refers to a concrete action plan for carrying out a certain task.

Schedule

It specifies the timeframe within which various activities have to be completed.

Budget

It refers to the statement of estimated outcomes for a given time period in the form of numerical figures.

Steps involved in marketing planning

Comprehensive marketing planning is carried out with a view to plan for two interrelated concepts, that is, strategic issues and implementation schemes.

Keeping these interrelated concepts in mind marketing planning follows the following steps:

Planning and organizing
Defining the planning premises
Determining company's objectives
Selecting the policies
Developing implementation plans
Coordination and control
Organization planning
Review and refinement

Importance of marketing planning

1. Plays the significant role of a guide

Marketing planning provides guidelines in written format to be followed by the marketers in the process of offering products and services to the potential customers.

2. Unites the entire organization

Planning of marketing efforts is not a sole task of marketing managers but it also involves coordination of every department in the company.

For example, finance department for budget making, sales department for selling goods or services, etc.

3. Helps in forecasting

It is this significant aspect of marketing planning that it helps in forecasting and estimating the sales.

4. Helps in assessing the product/service

An efficient marketing plan always helps in evaluating the goods and services from various perspective of a consumer

5. Helps in analyzing the pricing position

Marketing plan evaluates the price of a product in reference to the financial status of the targeted customer and hence, helps in deriving the best pricing strategies.

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Marketing Strategy

Every company has some marketing goals and objectives which indicates the position a company wants to attain and the road map of how to attain those marketing goals and objectives is known as marketing strategy.

Marketing strategy is a comprehensive but complex process of determining the ways to utilize different types of resources available for marketing a particular product or service.

Elements Of marketing strategy

1. Real customer

Marketing strategy should primarily focus upon the requirements or preferences of the present customers in the market for their product.

2. Clear target

It is the main component of marketing strategy which involves finding out the present and prospective customers and their requirements.

3. Brand identity

Brand recognition is essential for every business enterprise and hence, it is a constituent for prioritizing marketing strategy.

4. Establish marketing goals

A powerful and appropriate marketing strategy is always based upon realistic, measurable and attainable goals.

5. Strong message

While preparing the marketing strategy, it should be designed in such a way that customers derive a strong message from a particular good or service of a company.

6. Differentiating factors

It is very important to formulate a marketing strategy which makes the product of a company stand out in the market with a differentiating factor.

Process of developing marketing strategy

Marketing strategy is made by going through these following procedures:

Market segmentation
Selecting the target market
Positioning the offer
Assembling the marketing mix

Essentials of marketing strategy

●Consistency

A powerful marketing strategy should always compliance with the changing business environment.

●Suitability

An efficient marketing strategy should always be suitable to be adopted for the selected target market.

●Time horizon

An efficient marketing strategy should always be tied up with strict deadlines.

●Workability

A good strategy is always workable in normal situations.

●Resource-based

The marketing strategy should be made in compliance with the resources available within the company.

●Non-risky

Marketing strategy should be made in such a way that the risks involved are less than the rate of return estimated.

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