Introduction to
Marketing
Management
Vivek Singh Tomar
[email protected] What is Marketing?
It is a process of exchange that
is designed to deliver customer
satisfaction in the long run by
fulfilling needs and wants of
individuals and groups.
Marketing is a continuous, sequential process
through which management plans,
researches, implements, controls, and
evaluates activities designed to satisfy both
customers’ needs and wants and their own
organization’s objectives.
• Marketing is the total system of
business activities designed to plan,
price, promote, and distribute want-
satisfying products, services, and
ideas to target markets in order to
achieve organizational objectives
• Marketing means adopting a
customer focus for the organization;
keeping the customer’s needs in mind
all the time. It may not always mean
making an immediate sale.
The Marketing Concept
• objective is to produce long-term customer
satisfaction and organizational success
• all of the organization’s planning and
operations are customer-oriented
• all of the marketing activities of the
organization should be consistently
designed and delivered
• all activities are intended to achieve the
firm’s organizational objectives
In the Socioeconomic
System:
•Marketing creates
utilities: • Image utility is the
– Place utility makes a emotional or
product accessible to psychological
potential customers value that the
where they want it. customer attaches
to a product or
– Time utility makes a brand.
product available when
• Possession utility
they want it.
is created when
– Information utility is ownership is
created by informing transferred to the
prospective buyers that a buyer.
product exists.
What is Exchange?
At the heart of marketing is the concept of
exchange which exists when the following
criteria are met:
Minimum of two parties;
Each has something of value to the other;
There is communication between each other;
The two can act voluntarily.
A market is where the exchanges between the parties
take place i.e., where sellers sell and buyers buy!
Marketing revolves around the
following fundamental concepts:
• Exchange
• Needs, Wants, and value
• Quality Products, Services,
• Markets and Demand
• Transactions
• Satisfaction, Loyalty, and
Relationships
Debatable Issue: Need Vs. Want
• Are they the same?
• If not, what is the difference between
the two concepts?
• Are marketers creating either one or
both?
• Are there ethical issues in targeting
the two?
Needs/Wants/Desires + Money = Demand
What can you market?
• Products
• Services
• Ideas, causes, and concepts
• People and their positions
• Places
• Profit and non-profit
organizations
The Marketing Management
Exchange Equation
$ ≤
-Product
-Place
-Promotion
The Marketing Concept
• Customers are the Lifeblood of the
Organization
• “Customer is King”
Evolving Views of
Marketing’s Role
Production
Marketing
Customer
re
Hu ur
so
e
ma ces
n c
a
n
n
Fi
The customer as the controlling
function and marketing as the
integrative function
Traditional Organization
Chart
Top
Management
Middle Management
Front-line people
Customers
Customer-Oriented
Organization Chart
Customers
Front-line people
Middle management
C
s
us
er
m
t
Top
om
to
manage-
us
er
s
C
ment
Customer Development
Suspects
First-time Repeat
Prospects customers customers Clients Advocates Partners
Disqualified
prospects Inactive or
ex-customers
The Profit Triangle
Int
n
er
io
n
at
al
re
op
ec
er
lu
Profit
Profit
ati
Va
on
s
Competitive advantage
Marketing
Creating value
Customer value
and beneficial
relationships uct Pl
ac
rod e
P
Exchange
A B
Delivering Pr n Communicating
io
value
ice ot value
rom
P
1
Quality
•
Quality is the
totality of features
#1 and characteristics
of a product or
service that bear
on its ability to
satisfy stated or
implied needs.
Core Concepts of Marketing
Target Markets & Segmentation
Needs, Wants, and Demands
Product or Offering
Value and Satisfaction
Exchange and Transactions
Relationships and Networks
Marketing Channels
Supply Chain
Competition
Marketing Environment
Understanding
The Field of
Marketing
The Nature of Marketing
• What is the Purpose of Marketing?
Satisfaction
Satisfaction
is a person’s feelings of pleasure or
disappointment resulting from
comparing a product’s perceived
performance (or outcome) in relation
to his or her expectations.
The Nature of Marketing
• What is the Purpose of Marketing?
Satisfaction
• Functional Satisfaction
The Nature of Marketing
–What is the Purpose of Marketing?
Satisfaction
• Functional Satisfaction
• Psychological Satisfaction
Adding Degrees of
Satisfaction
o n Possession utility To
ti tal
fac Sa
t i s Place utility tis
Sa f ac
tal ti on
To Time utility
Form utility
Oriental rug
Store has it in
stock
Delivered to your
home
Pay with your VISA
card
Simple Marketing System
Communication
Goods/services
Industry Market
(a collection (a collection
of sellers) Money of Buyers)
Information
Levi Strauss’
Value-Delivery Network
Order Order Order Order
Du
Du Pont
Pont Milliken
Milliken Levi’s
Levi’s Sears
Sears Customer
(Fibers)
(Fibers) (Fabric)
(Fabric) (Apparel)
(Apparel) (Retail)
(Retail) Customer
Delivery Delivery Delivery Delivery
Competition is between networks, not companies.
The winner is the company with the better network.
Basic Marketing Functions
Transactional Functions
Creating Utilities
Logistical Functions
Facilitating Functions
Importance of Marketing
to Organizations
• The basic reason for firm’s existence
is customers want satisfaction.
• Marketing is the only revenue-
producing activity for the firm.
• Marketing has become increasingly
important for service firms and not-
for-profit organizations.
The Global Importance
of Marketing
• Nations depend upon marketing to sell
their raw materials and industrial
output to other countries.
• Companies now compete in markets
all over the world.
• Honda and Toyota now build cars in
Canada, starting from nothing 15
years ago.
The Importance of Marketing
in Your Life
• Marketing is a large part of your daily
life. Consumers are exposed to 3,000
commercial messages a day.
• Studying marketing will make you a
better-informed customer.
• Marketing probably relates -- directly or
indirectly -- to your career aspirations.
Key Words in the
Marketing Definition
• total system: not an ad hoc approach
• business activities: but not just for businesses
• plan, price, promote, distribute: the marketing
mix
• want-satisfying: meeting customers’ needs
• products, services, ideas: not just products
• target markets: not a broad-brush approach
• organizational objectives: not just profits
The Focus of Marketing
• marketing involves the exchange of
things of value
• much of marketing’s focus today is on the
creation of value for customers
• we must develop a good understanding of
customer needs and wants
• ultimately, successful companies develop
a close customer relationship
Evolution of Marketing
• marketing has evolved from a production, to
a selling, to a marketing stage
• in the production-orientation stage,
emphasis was on making a better physical
product
• in the sales-orientation stage, the emphasis
was on how to sell that product
• a marketing-oriented organization places
emphasis on satisfying the wants and needs
of customers
Evolution of the field of Marketing
Product concept / era (roughly 1800 – 1900s)
Production concept / era (1900s – 1920s)
Selling concept / era (1920s – 1950s)
Marketing concept / era (1960s – 1980s)
Societal concept / era (1980s – 1990s)
Relationship concept / era (1990s – present)
Stages in the Evolution of Marketing
PRODUCTION ORIENTATION
Some industries and organizations remain at the
production-orientation stage.
PRODUCTION ORIENTATION SALES ORIENTATION
Other industries and organizations have progressed only to the
sales-orientation stage.
PRODUCTION SALES MARKETING
ORIENTATION ORIENTATION ORIENTATION
Many industries and organizations have progressed to the
marketing-orientation stage.
Late 1800s Early 1930s Mid-1950s 1900s
The Marketing Concept
• objective is to produce long-term customer
satisfaction and organizational success
• all of the organization’s planning and
operations are customer-oriented
• all of the marketing activities of the
organization should be consistently
designed and delivered
• all activities are intended to achieve the
firm’s organizational objectives
An Innovation Based on the
Marketing Orientation.
Relationship Marketing
– An attempt to build personal,
long-term bonds with
customers.
– Relationship marketing has
expanded to include all groups
an organization interact with:
suppliers, employees, unions,
government, and even
competitors.
Drivers of
Customer Satisfaction
• getting the core product right is essential
• many services and systems support the
core
• customers expect good technical
performance of the product or service
• they also expect to be treated well in face-
to-face interaction with employees
• the company must also consider how it
makes the customer feel in many subtle
ways
The Difference Between
Marketing and Selling
• Marketing is the process of
determining customer wants and then
developing a product to satisfy that
need and still yield a satisfactory
profit. It is externally focused.
• Selling is producing a product and
then trying to persuade customers to
purchase it -- in effect, trying to alter
consumer demand. It is internally
focused.
Review: Sales vs. Market
Orientations
Organization’s Firm’s For Primary Tools to
Focus Business Whom? Profit Achieve
Goal?
Sales Inward Selling Everybody Maximum Primarily
Orientation goods and sales promotion
services volume
Market Outward Satisfying Specific Customer Coordinated
Orientation wants and groups of satisfaction use of all
needs people marketing
activities
3
How Should Marketing Be
Defined?
Company Product-Oriented Marketing-
Oriented
Kodak We make cameras We help preserve
and film. beautiful
memories.
Amazon.com We sell books and ?
recordings.
Hewlett- We make computer ?
Packard printers.
Levi Strauss We make blue jeans ?
Caterpillar We make ?
construction
machinery.
The Marketing Concept
MARKETING CONCEPT
Customer
orientation + Coordinated
Customer Organizational
+ marketing
satisfaction success
Organization’s activities
performance +
objectives
The Societal
.
Marketing Concept
A revised philosophy,
called the societal
marketing concept,
involves broadly defining
customer and taking a
long-term view of
customers satisfaction.
Quality in Marketing
• quality in what an organization offers is a
major contributor to value and customer
satisfaction
• if the customer is satisfied with the quality,
he or she is likely to return to buy again
• quality is very much defined by the customer;
it also varies across individuals and over time
• quality, as perceived by the customer, is
influenced not only by physical products but
by service as well
• requires a commitment from all staff to
deliver the highest quality possible
Another Innovation:
Mass Customization
– An attempt to provide affordable
products customized to come as
close as possible to meeting the
needs of individual customers.
– This is made possible because of
advances in information
technology.
The
Marketing
Mix
C
The Four Ps of the Marketing Mix
Product Place
C
Price Promotion
Marketing Mix Variables
Goods, services, or ideas that satisfy
Product customer needs
The ready, convenient, and timely
Distribution availability of products
Activities that inform customers about
Promotion the organization and its products
Decisions and actions that establish
Pricing pricing objectives and policies and set
product prices
Strategy Decision Areas
Organized by the Four Ps
Product Place Promotion Price
Physical Goods Objectives Objectives Objectives
Service Channel Type Blend Flexibility
Features Market Exposure Salespeople Level over PLC
Quality Level Kinds of Kind Geographic
Accessories Middleman Number Terms
Installation Kinds and Selection Discounts
Instructions Locations of Training Allowances
Warranty Stores Motivation
Product Lines How to Handle Advertising
Packaging Transporting Targets
Branding and Storing Kinds of Ads
Service Levels Media Type
Recruiting Copy Thrust
Middlemen Who Prepares?
Managing Sales Promotion
Channels Publicity
The Marketing Mix
• Blend of the mix depends upon:
• Marketing objectives
• Type of product
• Target market
• Market structure
• Rivals’ behaviour
• Global issues – culture/religion, etc.
• Marketing position
• Product portfolio
– Product lifecycle
– Boston Matrix
The 4 P’s or 4 C’s
Place -
Product / Service - Customer
Customer Solution Convenience
Target
Target
Market
Market
Promotion - Price -
Customer Customer
Communication Cost
Beyond the 4 P’s and 4 C’s
Some marketers and academic researchers
have added other elements such as
packaging, politics, etc. to the mix. While
others have argued for more fundamental
changes in the marketing thought process.
For instance, Lusch and Vargo recently
opined that consumers do not necessarily
buy physical goods instead they buy
services and the embedded knowledge.
They maintain that:
•Goods are actually distribution mechanisms
for services;
•Applied knowledge is the basic unit of
exchange rather than goods;
•Customers are co-producers of value; and
•A company only makes a value proposition
but not establish the value of the service.
(Journal of Marketing, January 2004).
A CLOSING THOUGHT:
"The secret to our enduring brand
lies in delivering an experience
rather than just a collection of
products and services."
- Harley-Davidson Annual Report
