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Marketing Management

Chapter 1

Marketing Definition:

Marketing is the process of planning and executing the conception, pricing, promotion,
and distribution of ideas, goods, and services to create exchanges that satisfy individual
and organizational goals.
Source: The American Marketing Association (AMA)

Marketing is the management process responsible for identifying, anticipating, and


satisfying customer requirements profitably.
Source: The Chartered Institute of Marketing (CIM) (UK)

"Marketing is the combination of activities designed to produce profit through


ascertaining, creating, stimulating, and satisfying the needs and/or wants of a selected
segment of the market."
Eldridge (1970)

"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."
Kotler (2000)

Nature of Marketing:1. Marketing is an Economic Function


Marketing embraces all the business activities involved in getting goods and services ,
from the hands of producers into the hands of final consumers. The business steps
through which goods progress on their way to final consumers is the concern of
marketing.
2. Marketing is a Legal Process by which Ownership Transfers
In the process of marketing the ownership of goods transfers from seller to the purchaser
or from producer to the end user.

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Prof. Abhishek A Khadtare

Marketing Management

Chapter 1

3. Marketing is a System of Interacting Business Activities


Marketing is that process through which a business enterprise, institution, or organisation
interacts with the customers and stakeholders with the objective to earn profit, satisfy
customers, and manage relationship. It is the performance of business activities that direct
the flow of goods and services from producer to consumer or user.
4. Marketing is a Managerial function
According to managerial or systems approach - "Marketing is the combination of
activities designed to produce profit through ascertaining, creating, stimulating, and
satisfying the needs and/or wants of a selected segment of the market."
According to this approach the emphasis is on how the individual organisation processes
marketing and develops the strategic dimensions of marketing activities.
5. Marketing is a social process
6. Marketing is a philosophy based on consumer orientation and satisfaction
7. Marketing had dual objectives - profit making and consumer satisfaction

Scope of Marketing:1. Study of Consumer Wants and Needs


Goods are produced to satisfy consumer wants. Therefore study is done to identify consumer needs and
wants. These needs and wants motivates consumer to purchase.
2. Study of Consumer behavior
Marketers perform study of consumer behavior. Analysis of buyer behavior helps marketer in market
segmentation and targeting.
3. Production planning and development
Product planning and development starts with the generation of product idea and ends with the product
development and commercialization. Product planning includes everything from branding and packaging
to product line expansion and contraction.
4. Pricing Policies
Marketer has to determine pricing policies for their products. Pricing policies differs form product to
product. It depends on the level of competition, product life cycle, marketing goals and objectives, etc.

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Marketing Management

Chapter 1

5. Distribution
Study of distribution channel is important in marketing. For maximum sales and profit goods are required
to be distributed to the maximum consumers at minimum cost.
6. Promotion
Promotion includes personal selling, sales promotion, and advertising. Right promotion mix is crucial in
accomplishment of marketing goals.
7. Consumer Satisfaction
The product or service offered must satisfy consumer. Consumer satisfaction is the major objective of
marketing.
8. Marketing Control
Marketing audit is done to control the marketing activities.

The Core Concepts Of Marketing:

Needs, wants and demands;


Products;
Value and satisfaction;
Exchange
Markets.

Needs, Wants And Demands


A human need is a state of felt deprivation of some basic satisfaction. People require foods, clothing,
shelter, safety, belonging, esteem etc. these needs exist in the very nature of human beings.
Human wants are desires for specific satisfiers of these needs.
For example, cloth is a needs but Raymonds suiting may be want. While peoples needs are few, their
wants are many.
Demands are wants for specific products that are backed up by an ability and willingness to buy them.
Wants become demands when backed up by purchasing power.
Products
Products are defined as anything that can be offered to some one to satisfy a need or want.
Value and Satisfaction
Consumers choose among the products, a particular product that give them maximum value and
satisfaction.
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Marketing Management

Chapter 1

Value is the consumers estimate of the products capacity to satisfy their requirements.
Exchange and Transactions
Exchange is the act of obtaining a desired product from someone by offering something in return. A
transaction involves at least two thing of value, conditions that are agreed to, a time of agreement and a
place of agreement.
Market
A market consist of all the existing and potential consumers sharing a particular need or want who might
be willing and able to engage in exchange to satisfy that need or want.
Thus, all the above concepts finally bring us full circle to the concept of marketing.

Importance Of Marketing:1.
2.
3.
4.
5.
6.
7.
8.

Marketing process brings goods and services to satisfy the needs and wants of the people.
It helps to bring new varieties and quality goods to consumers.
By making goods available at al places, it brings equipment distribution.
Marketing converts latent demand into effective demand.
It gives wide employment opportunities.
It creates time, place and possession utilities to the products.
Efficient marketing results in lower cost of marketing and ultimately lower prices to consumers.
It is vital link between production and consumption and primarily responsible to keep the wheel

of production and consumption constantly moving.


9. It creates to keep the standard of living of the society.

Concept of Marketing:Production Concept


In this approach, a firm is considered as the central point and all goods and commodities produced were
sold in the market. The major emphasis was on the production process and control on the technical
perfections while producing the goods.
The production concept holds that consumers will favor those products that are widely available and low
in cost. Management in production oriented organization concentrates on achieving high production
efficiency and wide distribution coverage.
Marketing is a native form in this orientation and it was assumed that a good product sells by itself. Only
distribution and selling were considered to be marketing. The technologists thoughts that amenability

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and low cost of the products due to the large scales of production would be the right Marketing Mix for
the consumers.
But, they do not the best of customer patronage. Customers are in fact motivated by a variety of
considerations in their purchase. As a result, the production concept fails to serve as the right marketing
philosophy for the enterprise.
Product Concept
The product concept is somewhat different from the production concept.
The product concept holds that consumer does will favor those products that offer the most quality,
performance and features. Management in these product-oriented organizations focuses their energy on
making good products and improving them over time.
Yet, in many cases, these organizations fail in the market. They do not bother to study the market and the
consumer in-depth. They get totally engrossed with the product and almost forget the consumer for whom
the product is actually meant; they fail to find our what the consumers actually need and what they would
accept.
Sales Concept
The sales concept maintains that a company cannot expect its products to get picked up automatically by
the customers. The company has to consciously push its products. Aggressive advertising, high-power
personal selling, large scale sales promotion, heavy price discounts and strong publicity and public
relations are the normal tools used by organization that rely on this concept. In actual practice, these
organizations too do not enjoy the best of customer patronage.
The selling concept is thus undertaken most aggressively with unsought goods, i.e. those goods that
buyers normally do not think of buying, such as insurance, encyclopedias. These industries have perfected
various techniques to locate prospects and with great difficulty sell them as the benefits of their products.
Evidently, the sales concept too suffers from marketing myopia.
Marketing Concept
The Marketing concept was born out of the awareness that marketing starts with the determination of
consumer wants and ends with the satisfaction of those wants. The concept puts the consumer both at the
beginning and at the end of the business cycle. The business firms recognize that there is only one valid
definition of business purpose: to create a customer. It proclaims that the entire business has to be seen
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from the point of view of the customer. In a company practicing this concept, all departments will
recognize that their actions have a profound impact on the companys to create and retain a customer.
Every department and every worker and manager will think customer and act customer.
The marketing concept holds that the key to achieving organizational goals consists in determining the
needs and wants of the target markets and delivering the desired satisfactions efficiently, than
competitors. In other words, marketing concept is a integrated marketing effort aimed at generating
customer satisfaction as the key to satisfying organizational goals.
It is obvious that the marketing concept represents a radically new approach to business and is the most
advanced of all ideas on marketing that have emerged through the years. Only the marketing concept is
capable of keeping the organization free from marketing myopia.
The salient features of the marketing concept are:
1.
2.
3.
4.

Consumer orientation
Integrated marketing
Consumer satisfaction
Realization of organizational goals.

Societal Marketing concept


Now the question is whether the marketing concept is an appropriate organizational goal in an age of
environmental deterioration, resource shortages, explosive population growth etc. and whether the firm is
necessarily acting in the best long run interests of consumers and society. For example, many modern
disposable packing materials create problem of environmental degradation Situations like this, call for a
new concept, which is called Social Marketing Concept.
The societal marketing concept holds that the organizations task is to determine the needs, wants and
interests of target markets and to deliver the desired satisfaction more effectively and efficiently than
competitors in a way that preserves or enhances the consumers and the societys well being.
Tata Tea advertisement of social awareness (about voting) as well as product.
The societal marketing concept holds that the organizations task is to determine the needs, wants and
interests of target markets and to deliver the desired satisfaction more effectively and efficiently than
competitors in a way that preserves or enhances the consumers and the societys well being.
Tata Tea advertisement of social awareness (about voting) as well as product.

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Marketing Management

Chapter 1

Society
(Human welfare)

Company
(Profits)

Consumers
(Need/Want satisfaction)

Societal Marketing Concept


Societal

Marketing Concept

The societal marketing concept calls upon marketers to balance three considerations in setting their
marketing policies namely firms profits, consumer want satisfaction and society interest.

Holistic Concept:Holistic Concept: this is the most recent concept of marketing which is based on the development, design
and implementation of marketing programs processes and activities from a broad integrated perspective.
It is the integration of internal marketing, integrated marketing, relationship marketing and performance
marketing concept.

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Marketing Management

Chapter 1

(a) Internal Marketing Concept: This concept holds the idea to satisfy the internal people or employees
within the organization, so that they work for the satisfaction of the customers. The first step to satisfy the
customers is to satisfy the internal people first or to motivate them first.
(b) Integrated Marketing Concept: It refers to an approach where all the departments of the
organization work in a coordinated manner to support and serve the customers. Any single section cannot
serve the customers without the help of other sections. The customers satisfaction is achieved when all
the departments have the common goals and intention to serve the customers.
(c) Relationship Marketing Concept: It refers the long-term relationship with the customers. It
emphasizes on creating, maintaining and developing a long term value laden or value based relationship
with the target customers benefits and costs.
(d) Performance marketing: Holistic marketing incorporates performance marketing and understanding
the returns to the business from marketing activities and programs as well as their legal, ethical, social,
and environmental effects. Performance marketing thus includes: Financial accountability and Social
responsible marketing.

Products &
Senior Management
Other departments CommunicationsServices
Channels
Marketing Department
Internal
Marketing

Integrated Marketing

Holistic
Marketing

Performance
Sales revenue
Marketing
Brand & customer equity
Ethics

Relationship Marketing

Community

Environment

Customers Channel

Holistic Marketing Dimensions


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Prof. Abhishek A Khadtare

Partners

Marketing Management

Chapter 1

Difference between Selling and Marketing:Starting Point

Factory

Focus

Existing
Products

Means

Ends

Selling and
Profits through Sales volume
Promoting

The Selling Concept

Starting Point

Market

Focus

Means

Ends

Customer NeedsIntegrated
Profits through Customer Satisfaction
Marketing

The Marketing Concept

Figure 4: Contrast between selling concept and marketing concept


The marketing and selling are considered synonymously. But there is great of difference between the two.
Theodore Levitt in his sensational articles Marketing Myopia draws the following contrast between
marketing and selling.
Selling focuses on the needs of the seller; marketing on the needs of the buyer. Selling is preoccupied
with the sellers need to convert his product into cash; marketing with the idea of satisfying the needs of
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Prof. Abhishek A Khadtare

Marketing Management

Chapter 1

the customer by mean of the product and the whole cluster of thing associated with creating delivering
and finally consuming it.
Selling
Selling starts with the seller, Selling

Marketing
Marketing starts with the buyers. Marketing

focuses with the needs of the seller.

focuses on the needs of the buyer. Buyer is the

Seller is the center of the business

centre of the business universe. Activities

universe. Activities start with sellers

follow the buyer and his needs.

existing products.
Selling emphasizes on profit. It seeks to

Marketing emphasizes on identification of a

quickly convert products into cash;

market opportunity. It seeks to convert

concerns itself with the tricks and

customer

techniques of pushing the product to the

emphasizes on fulfilling the needs of the

buyers.
Selling views business as a goods

customers.
Marketing views business as a customer

producing processes.
It over emphasizes the exchange aspect

satisfying processes.
It concerns primarily

without

satisfactions that should flow to the customer

6.

caring

for

the

value

satisfactions to the buyers.


Sellers convenience dominates

the

needs

into

products

with

the

and

vale

from the exchange


Buyer determines the shape of the marketing

formulation of the marketing mix.

mix.

The firm makes the product first the then

The customer determines what is to be offered

decides how to sell it and make profit.

as a product and the firm makes a total


product offering that would match the needs

Emphasizes

accepting

the

existing

of the customers.
Emphasiss on innovation of adopting the most

technology and reducing the cost of

innovative technology.

production.
Sellers motives dominate marketing

Marketing communications acts as the tool for

communications.

communicating the benefits/ satisfactions of

Costs determine price.

the product to the consumers


Consumer determines price.

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Transportation,

8.

storage

and

other

distribution functions are perceived as

They are seen as vital services to provide


convenience to customers.

mere extensions of the production


function.
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Marketing Management
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There is no coordination among the

Chapter 1

Emphasis is on integrated marketing approach.

different functions of the total marketing


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task.
Different departments of the business

All departments of the business operate in a

operate separately.

highly integrated manner with view to satisfy


consumers.

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14.

The

firms

which

practice

selling

The firms which practice marketing concept,

concept, production is the central

marketing is the central function.

function.
Selling views the customer as the last

Marketing views the customer as the very

link in the business.

purpose of the business.

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Prof. Abhishek A Khadtare

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