Unit I Introduction Marketing is the process of planning & executing the conception, pricing, promotion & distribution of ideas,

, goods & services to create exchanges that satisfy individual & organizational goals. - America Marketing Association Marketing is a special process by which individuals & groups obtain what they need & want through creating, offering, & freely exchanging products & services of value with others. - Philip Kotler Marketing is a societal process which encompasses all activities aimed at satisfying customer needs & wants through exchange relationships to achieve organizational objectives in a dynamic environment. Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods and services to create exchanges (with customers) that satisfy individual & organizational objectives. Satisfying customer needs (creating utility) through the exchange process. Create a Marketing Mix (4ps): Product, Price, Place (PD), Promotion

Relation of Marketing to Production Production & Marketing together provide the four basic economic utilities: Form, Time, Place & Possession utilities:

Form utility: it is provided when someone produces something tangible for e.g. a cricket bat. But, just producing something doesn't result in consumer satisfaction. The product must be something that the consumer wants - or there is no need to be satisfied, hence no utility.
Possession utility: it means obtaining a product & having the right to use or consume it. Time utility: it means having the product available when the consumer wants it. Place utility: it means having the product available where the consumer wants it.

The Role of Marketing in Economic Development Modern economies have advanced well-beyond the five-family village, but the same ideas still apply. The main purpose of the marketers & middlemen is to make exchange easier & allow greater time for production, consumption & other activities including recreation.

Effective marketing system is necessary Effective marketing systems are the result of greater economic development, & just the opposite is also true. An effective marketing system is necessary for economic development. Improved marketing may be the key to growth in lessdeveloped nations.
Breaking the Vicious Circle of Poverty Without an effective marketing system, the less developed nations may not be able to escape the vicious circle of poverty. Many people in these nations cant leave their subsistence way of life to produce for the market because there are no buyers for what they produce. And there are no buyers because everyone else is producing for their own needs. As a result, distribution systems and middlemen do not develop.

Breaking this circle of poverty may require major changes in the in efficient marketing systems that are typical in less-developed nations. At the least, more market-oriented middlemen are needed to move surplus output to markets where there is more demand. Marketing strategy planning Marketing strategy planning means finding attractive opportunities & developing profitable marketing strategies. Marketing strategy specifies a target market & a related marketing mix. A Target Market: a fairly homogenous group of customers to whom a company wishes to appeal. A Marketing Mix the controllable variables which the company puts together to satisfy this target group. The customer C is at the center of the circle surrounded by the controllable variables-the marketing mix. {The 4 Ps} A typical marketing mix includes some product, offered at a price, with some promotion to tell potential customers about the product, & a way to reach the customers place.

 Marketing Functions The universal functions of marketing are: Buying function means looking for & evaluating goods & services. Selling function involves promoting the product. It includes the use of personal selling, advertising & other direct and mass selling methods. Transporting function means the movement of goods from one place to another. Storing function involves holding goods until customers need them. Standardization & grading involves sorting products according to size & quality. Financing provides the necessary cash & credit to produce, transport, store, & buy products. Risk taking involves bearing the uncertainties that are part of the marketing process. Market information function involves the collection, analysis & distribution of all the information needed to plan, carry out & control marketing activities.

Marketing Concepts Production Concept Demand for a product is greater than supply. To increase profit, focus on production efficiencies knowing all output can be sold. Also useful concept when increasing production raises economies of scale etc. to reduce price. Henry Ford, "Doesn't matter what color car you want, as long as it is black."...A typical quote during the production era. Selling Concept Demand for a product is equal to supply. Emphasis is needed to sell the product to increase profits. Focus on advertising. Useful for unsought goods, i.e., encyclopedias, funeral plots. Political candidates, selling important, not post consumer satisfaction. Dominant era: 1920's to Mid 1930's WWII to early 1950's Marketing Concept Supply for a product is greater than demand, creating intense competition among suppliers.

Company first determines what the consumer wants, then produces what the consumer wants, then sells the consumer what it wants. Dominant era: 1930's to WWII 1950's to present. Societal Marketing Concept: Focus on other stakeholders, as well as the business and its customers. Need to balance 3 items Company profits Customer wants Society's interests The difference between short term consumer wants and long term consumer welfare. An example of a company adopting the Societal concept: Starkist...Dolphin Safe Tuna Actually more expensive than regular tuna, but is more appealing due to society's concerns.

Comparative features of Marketing Concepts

Starting Point
Factory

Focus
Production Orientation Product Quality Orientation Seller Needs Orientation Customer Needs Orientation Customer Needs & Values

Means
Mass Production Low Price Wide availability High quality Innovation Performance guarantee Aggressive selling Heavy promotion

Ends (Objectives)
Profit through production efficiency Profit through well-made products Profit through high sales volume Profit through customer satisfaction Profit through high customer share & loyalty

Factory

Factory

Market

Integrated marketing One-to-one Marketing Integration

Individual Customer

Societal Marketing Concept (aims at promoting social well-being

Market

Social Responsibility Orientation

Integrated marketing Protection of social wellbeing

Profit through customer & social well-being

DISTINCTION BETWEEN SELLING AND MARKETING

Emphasis is on the existing

product Company first makes the product and then figures out how to sell it. Management is sales volume oriented. Planning is short run oriented, in terms of todays products and markets. Needs of the seller are stressed.

Emphasis on customers

wants Company first determines customers wants and makes and delivers the product Management is profit oriented through customer satisfaction Planning is long run oriented, in terms of new products, tomorrows markets and future growth Wants of buyers are stressed.

The production concept This concept holds that customer who prefers widely available and low cost products. This is one of the oldest philosophies that guide sellers. This concept is useful in two conditions, first when the demand for a product exceeds the supply, and second when the product cost is too high and improved productivity is needed to bring down. This concept is production oriented and aims at selling what can be produced. High production and efficiency through improved technology, standardization and mass production. Mass distribution of product to facilitate wider availability. Under this concept, manager concentrates on increasing production volume, reducing cost and widening distribution network. This concept is useful to expand the market shares. But it leads to impersonal and poor quality service. The product concept This concept holds that customer favors the product that offers good quality, high performance and innovative features. Quality oriented which aims at improving the product through innovation. Well-made products at reasonable price, product excellence with performance guarantee, long lasting products, quality improvement over time to attract customer. No concern for customer need. Under this concept, the manager focuses their energy on making superior products and disregard customer

preferences. This concept can also lead to marketing myopia. They give excessive attention to produce. Changing customer preferences and technology makes the product absolute The selling concept This concept holds that customers should be persuaded into buying through aggressive selling and promotion effort (pushing the product). This concept is sales oriented which aims at selling what they make rather than make what the market wants .Customer persuasion in buying the existing product by using selling techniques. It focuses on creating sales transactions rather than on building long-term profitable relationship with customers. Under this concept, the manager focuses on stimulating sales through a battery of promotional tools like advertising, sales promotion, public relation and personal selling. The marketing concept The marketing concept holds that achieving organizational goals depends on determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors do. It has the concept that customer is the most important person who is not dependent on company, but the company itself is dependent on him. This concept is customer oriented which aims at

satisfying customer needs and wants under this concept manager focuses all activities at determining customer need in target market and then satisfying them through coordinated marketing efforts to achieve objectives. The societal marketing concept This concept holds that organizational objectives should be achieved through the satisfaction of consumer needs in a way that preserves or enhance the consumers and societys well being. The societal marketing concept is an emerging concept which must act responsibly and ethically towards consumer and society. Every organization has its own objectives to be achieved. Thus it is involved in the safeguard of the well-being at society. Marketing should be socially responsible. It should be accountable to society for its actions.