MARKETING CONCEPT MODULE 1 (3 Hours) Introduction: Nature and scope of Marketing, Evolution, Various Marketing orientations, Marketing Vs Selling

concept, Consumer Need, Wants and Demand concepts. DEFNITION The Marketing concept is a point of view on business. It enumerates that any bus iness is essentially a need satisfying process. It also enunciates that all the g oals of the organization including profit be realized three customer orientation. Integrated management action and generation of customer satisfaction.

CONCEPTS OF MARKETING.

THE EXCHANGE CONCEPT The exchange concept of marketing, as the very name indicates ,holds that the ex change of a product between the seller & the buyer is the central idea of market ing. While exchange does form a significant part of marketing as a mere exchange process would amount to a gross undermining of the essence of marketing. A prop er scrutiny of the marketing process would readily reveal that marketing is much broader than exchange. Exchange, at best, covers the distribution aspect and th e price mechanism involved in marketing. The important aspects of marketing, suc h as concern for customer, generation of value satisfaction creative selling & i ntegrated action for serving the customer, get completely overshadowed in the ex change concept of marketing. THE PRODUCTION CONCEPT It is one of the oldest concepts of business. The production concept holds that consumers will prefer products that are widely available and inexpensive. Manage rs of production-oriented businesses concentrate on achieving high production ef ficiency, low costs, mass-distribution. They assume that consumers are primarily interested in product availability and low prices. This orientation makes sense in developing countries, where consumers are more interested in obtaining the p roduct than in its features. It is also used when a company wants to expand the market. Some service organizations also operate on production concept. Many medical & d ental practices are organized on assembly-line principles, as are some governmen t agencies. Although this mgt orientation can handle many cases per hour, it is open to charges of impersonal and poor-quality service.

THE PRODUCT CONCEPT The product concept is somewhat different from the production concept. Whereas t

he production concept seeks to win markets & profits via high volume of producti on and low unit costs, the product concept seeks to achieve the same result via product excellence- improved products, new products and ideally designed & engin eered products. It also emphasis on quality assurance. Managers in these organiz ations focus on making superior products & improving them overtime. They assume that buyers admire well-made products and can evaluate quality & performance. Mg t might commit the Better-mousetrap fallacy, believing that it will lead people to beat a path to its door. Example:- web T V

THE SELLING CONCEPT The selling concept holds that consumers and businesses, if left alone, will ord inarily not buy enough of the organizations products. The organization must, ther efore, undertake an aggressive selling and promotion effort. This concept assume s that consumers typically show buying inertia or resistance & must be coaxed in to buying. It also assumes that the co. has a whole battery of effective selling and promotion tools to stimulate more buying. The selling concept is s, goods that buyers normally do opedias, and funeral plots. It is ers, college admission offices, & practiced most aggressively with unsought good not think of buying, such as insurance, encycl also practiced in non-profit area by fund rais political parties.

THE MARKETING CONCEPT

This concept emerged in mid-1950 and challenged the preceding concepts. The MARK ETING concept was born out of the awareness that marketing starts with determina tion of consumer wants & ends with the satisfaction of those wants. The concept puts the customer at both the beginning and the end of business. It stipulates t hat the company should be organized totally around the marketing function, antic ipating, stimulating & meeting customers requirements. The concept rests on the realization that a business cannot succeed by supplying products and services that ae not properly designed to serve their needs. Every depart. & every worker and every manager will THINK CUSTOMER &ACT CUS TOMER. Evidently, the concept represent a radically new approach to business. Marketing concept represents essentially a change in orientation on the part of mgt towards business. The marketing concept rests on four pillars: 1. Target market- EX:TERRA LYCOS 2. Customer needs-EX:NOKIA & SONY ERRICSON 3. Integrated marketing4. Profitability-EX:DISNEY, WALL-MART

THE CUSTOMER CONCEPT The ability of a company to deal with customers one at a time has become practic al as a result of advances in factory customization, computers, the internet, & database mktg software. In this concept the companies hope to achieve profitable growth through capturing a larger share of each customers expenditures by buildi ng high customer loyalty & focusing on customer lifetime value. The required inf ormation collection hardware, and software may exceed payout. It works for best co. that normally collect a great deal of individual customer information, carry a lot of products that can be cross-sold, carry products that need periodic re placement or upgrading, & selling products of high value. THE SOCIETAL MARKETING CONCEPT

... make marketing decisions by considering consumers wants, the companys requireme nts, consumers long-run interests and societys long-run interests. Principles of Marketing by Kotler/Armstrong, Prentice Hall s Societal marketing blends social, company and customers wants. The Societal Marketing Concept. This concept holds that the organizations task is to determine the needs, wants, and interests of target markets and to deliver t he desired satisfactions more effectively and efficiently than competitors (this is the original Marketing Concept). Additionally, it holds that this all must be done in a way that preserves or enhances the consumers and the societys well-be ing. Unfortunately, satisfying customers short-term needs may not be compatible with societys needs. For instance, your customers may prefer large automobiles, d isposable diapers, hamburgers, no-deposit bottles, etc. Society is better off if we drive small cars, use cloth diapers, and eat soy burgers. Should a firm worr y about its customers short-term needs, or consider what is best for society?. The modern time is the time of information, peoples are more aware of sens itive issues which the earlier generations did not know, like shortage of resour ces, health issues, environmental deterioration. And the reason of this well learned society is ubiquity of information, through the means of electronic media and print media, and internet now is playing very important part in providing up to date information at the rate of just one click . So this generation have developed the ability to judge any marketing strategy, whether it is correct or not? The societal marketing concept calls upon marketers to build social & eth ical considerations into their mktg practices. They must balance and juggle the often conflicting criteria of company profits, consumer want satisfaction, & pub lic interest.

This orientation arose as some questioned whether the Marketing Concept is an appropriate philosophy in an age of environmental deterioration, resource shortages, explosive population growth, world hunger and poverty, and neglected social services. Are companies that do an excellent job of satisfying consumer wants necessarily acting in the best long-run interests of consumers and society? The marketing concept possibily sidesteps the potential conflicts among consumer wants, consumer interests, and long-run societal welfare.: : EXAMPLE: The fast-food hamburger industry offers tasty but unhealthy food. The hamburgers have a high fat content, and the restaurants promote fries and pies, two produc ts high in starch and fat. The products are wrapped in convenient packaging, wh ich leads to much waste. In satisfying consumer wants, these restaurants may be hurting consumer health and causing environmental problems. Societal marketing, argues Kotler, P. (1972, p. 837) should generate consumer sa tisfaction as well as the long term well-being of the consumer, society and thei r ecology. As Christians this is a definition that fits well within our ethic, a nd within the Christian mission. So marketing can accept the Church why has the Church not embraced marketing management as the basis of its missionary strategy ?

Extending the Principles of Marketing As noted above, the principles of marketing are being extended to such areas as the marketing of ideas, political marketing, and even marketing the volunteer ar my. Whenever there is some type of exchange, it is important to understand mark eting. Politicians, for instance, understand that they must segment voters and select a target market(s). A good politician does research to learn what voters want (jobs, increase in social security, homeland security, health insurance, s trengthening the traditional family, etc.). Direct mail and Internet marketing with different messages for different groups is one tool being used by shrewd po liticians. One interesting fact that is being studied after the 2004 Presidenti al election is the fact that 97 out of 100 of the fastest growing counties mainly exurbs voted Republican. Exurbs are too far from urban areas to be considered s uburbs but too large to be considered rural. Even libraries have started using marketing. Libraries are being defined as a p lace to find information, not only books. (If they define themselves solely as a place to borrow books they are suffering from marketing myopia.) This is why li braries have numerous computers and wireless networks so that anyone with a lapt op can access the Internet. Libraries also have DVDs since they are almost as im portant as books. Incidentally, there is a revolution in the area of book publi shing, a new kind of book is the eBook. Libraries are also places where young children whose mothers work can do their homework after school. Colleges are also using sophisticated marketing tools to attract students. This is becoming a hot area since colleges find themselves competing for students. R esearch shows that students choose schools based on reputation, convenience, and course offerings. Hospitals are also becoming marketing-oriented. Patient satis faction is becoming very important to hospitals. Customer satisfaction is very important in marketing (indeed, that is what the marketing concept is all about) . Today, hospitals and colleges are learning about the importance of satisfying

patients and students, respectively. Do you think this college has done a good job satisfying you? Can marketing help a church expand its membership? Read "The Soul of the New Ex urb" by Jonathan Mahler (New York Times Magazine, March 27, 2005, pp. 30-50) to learn how Pastor Lee McFarland built a mega-church (weekly attendance of 2,000+) in the exurb of Surprise, Arizona; weekly attendance is 5,000. Before building the church, McFarland did some marketing research and asked only two questions: "What s your favorite radio station?" "Why do you think people don t go to chu rch?" What he found was that the people living in Surprise liked rock music; t hey did not go to church because they did not own fancy clothing, did not like t o be asked for money, and felt that the church sermons they heard in the past we re not relevant to their lives. His church has no crosses or other religious ic ons; no stained glass and it looks like a mall. Krispy Kreme doughnuts are serve d ($16,000 a year spent on the doughnuts), the dress code is lax, and Pastor McF arland wears a T-shirt and jeans. Half of each service is devoted to Christian rock. McFarland s "sermons" deal with what he calls "successful principles of li ving." People are attracted to the church for various reasons including aerobi cs classes, child care, counseling, financial planning, etc. Radiant has small g roups for all kinds of people: widows, divorced, etc. This is known as getting people in through the side door (going to church for Sunday sermon = front door ). Small groups allow people to share their pains and hopes. Outdoor advertise ment for the church: "Isn t It Time You Laughed Again?" with a picture of happy family. The church has a branch of Celebrate Recovery, a Christian program for recoverin g addicts that is similar to the 12-step program of Alcoholics Anonymous. Recov ering addicts can feel comfortable talking about their Christian beliefs at the Celebrate Recovery meetings. CASE STUDY PROBLEM STATEMENT : In order for McDonalds to reach its goal of "par excellence", it must use the ful l meaning and definition of marketing. Marketing is giving the target market wha t they want, when and where they want it, at a price they are willing to pay for it. REFLECTION / OPINION For McDonalds to achieve its "par excellence", they must focus on the fact that t here is an ever changing market and that the wants and needs of consumers are co nstantly changing. Since McDonalds has been around for forty-one years, it is saf e to say that they are the father of the fast food industry and that they have s et an example for others to follow. When Ray Kroc bought the first McDonalds in 1955, he focused on what people wante d. With this focus came the utilization of Mr. Krocs theory of QSC ( quality, ser vice, and cleanliness ). QSC successfully got McDonalds off the ground, but as times changed, the company saw many more market segments and opportunities. In the 1970s and 1980s once again McDonalds lead the way in the fast food industry. The changes we saw included, f or example, the fact that women were now a major part of the work force and dual income families were becoming a more common occurrence. McDonalds became a maste rmind of marketing toward specific markets by pioneering ideas such as breakfast menus, healthier choices and alternatives, and "adult" foods. McDonalds has trul y evolved into a world power by paying attention to the needs and wants of the c hanging market and adjusting to these needs. LINKING THEORY : Ray Kroc saw early on what needed to be done. He changed what was at one time a product orientation, into a marketing orientation. Back in 1955, this was still a new type of management. From the beginning, Kroc was already in the forefront of marketing. Marketing orientation focuses on the customer and what they want in a product, r

ather than product orientation which focuses on the product itself. McDonalds has taken every aspect of marketing orientation and utilized the philosophy to its fullest. McDonalds has focused in on the customer needs and wants, sometimes even putting the ideas into the consumers mind before they even knew what they wanted or expected. McDonalds could deliver! They have done extensive market analysis a nd product development based on this analysis. They have packaged their food and priced it exactly to the market segment which they have targeted. Showing McDonalds innovations in marketing even further, is its early adaptation of societal marketing. Societal marketing takes into account the overall concern s of the target market, the environment, for example. McDonalds got rid of their one time innovative styrofoam packaging and replaced it with more environmentall y sound paper packaging. They stress the fact that they are environmentally awar e, by reminding us not to litter, etc., on their various forms of packaging. Ano ther example if societal marketing is the Ronald McDonald House. This is probabl y McDonalds largest community service project. It demonstrates the way that McDon alds is willing to give something back to the very communities that support the c ompany. These examples as well as the various events that McDonalds promotes, suc h as the Olympic Games, puts their name worldwide. This makes it difficult for u s ever to forget of the existence of McDonalds. McDonalds also uses a theory referred to as relationship marketing. Relationship marketing is defined as marketing to protect the customer base. The customer is viewed as an asset and the companys marketing goal is to attract, maintain, and e nhance customer relationships. There are five main criteria that must be met for a successful relationship mark eting strategy and they are as follows : 1) There needs to be an ongoing and periodic desire for the product or service b y the customer. 2) The service customer controls the selection of the service supplier. 3) There are alternative suppliers of the service. 4) Customer loyalty is weak and switching is common and easy. 5) Word of mouth is an especially potent form of communication about the product . All of these criteria are met by the fast food industry, and McDonalds has genera lly had a very successful relationship marketing strategy, especially through th e implementation of the QSC program. McDonalds has definitely exceeded the definition of success. How many other busin esses can say they have served billions and billions? McDonalds has done an incre dible job taking an intangible product and virtually dissipating any perception of risk associated with service products. Whether someone orders a burger, McNug gets, or a fish fillet, they know that their expectations will be met every time . SOLUTION : A clear solution for McDonalds to continue its success is to stay focused. For ye ars, McDonalds has had the unique ability to adapt to the changing market, and th at, along with their QSC program and innovative product development, has kept th em on top. As long as McDonalds seems to make our lives easier, by giving us a co nsistent, valued product, the company will always be in existence. Example: 1 Proctor & Gamble Pakistan has introduced the brand of fat free oil to prevent the growing ratio of heart disease. Various automobile manufacturers are focusing mo re on producing CNG cars that is not only environmental friendly but it is also very economical. So this trend is getting popular very quickly. One can verify i t by observing the increasing number of CNG stations. There are various companies that are favoring the use of recycled paper to aid more life to trees. But, Pakistan is an under develop country, there are 35% Pakistanis that are livi ng below the poverty line, Availability of Clean water, High Standard Education, Pollution are the big concerns for Pakistan consumers.

White collar person in Pakistani society can not buy a bottle of mineral water fo r its supper unless it is in his economical range. Virtual University could not b e successful if it had a same fee criteria as that of others institutions. People would not use CNG cars if it was expansive.

EXAMPLE-2 PATAGONIA world-class climber yvon chouinard founded Patagonia in 1966 by sellin g rock climbing hardware from the trunk of his car. By the time the company chan ged its focus to selling soft goods & apparel in mid-1970, Patagonia was committ ed to two main goals: providing the highest quality gear for outdoor enthusiasts , & implement[ing] solutions to the environmental crisis. The co. gave an earth ta x of one percent of sales or ten percent of pre tax profits (whichever is greate r) to activists who take radical and strategic steps to protect habitat, wilderne ss, & biodiversity. however, as Patagonia expanded, many aspects of its operation s contributed to the environmental pollution the company worked so hard to count er. After an internal study in 1990s the company sought to use materials & fabric s that would minimize its impact on the environment, such as synchilla fleece ma de from recycled plastic bottles and the 100 percent organic cotton used in ever y cotton product. The corporate culture avidly supports activism, as evidenced b y a company program through which employees receive pay to work up to two months in an organization. Patagonia sent 70 of its 900 employees abroad on such trips in 1999. Patagonia is practicing a form of the societal marketing concept called caus e-related marketing. EXAMPLE-3 A FAST FOOD restaurant offers tasty but unhealthy food. These foods have fat con tent & the restaurant promotes fried stuff. These are high in fat. The products are wrapped in convenient packaging. In satisfying consumer wants, these restaur ants may be hurting the consumer health.

Companies see cause-related marketing as an opportunity to enhance their corpora te reputation, raise brand awareness, customer loyalty, build sales,& increase p ress coverage. They believe that customers will increasingly look for signs of g ood corporate citizenship that go beyond supplying rational & emotional benefits .

Concepts for the Nineties Philip Kotler Lean Marketing o Prestige Marketing - More for More o Value marketing - More for the same o Supervalue marketing - More for less e.g.,Walmart, Dell, Lexus Concepts Customized marketing o Segments o Niche o Customized e.g., Schwinn Bicycles, Bank Services Concepts

 o o o

Relationship Marketing The product is all you get We provide a hotline if you want to reach us We want to create continuous value for you

BENEFITS OF MARKETING CONCEPT CONCEPT BENEFITS IN THE ORGN: Concept enables the organization to deep abreast of changes. Long term success is assured to an enterprise only if it recognizes that the nee ds of the market are paramount. Concept gives great importance to planning, research and innovation and its deci sions are no longer based on lunch, but on reliable data relating to the consume rs. It enables the firm to move more quickly to capitalize on market opportunities Greater attention is given to the product planning and development to that merch andising can become more effective. Demand side of the equation of exchange is honoured more and supply is adjusted to changing demand. Hence more emphasis is given to research and innovation. Marketing system based on the marketing concept assures integrated view of busin ess operations and indicated interdependence of different departments of a busin ess organization. Interests of the enterprise and society can be harmonized as profit through serv ice is emphasized. CONCEPT BENEFITS OF CUSTOMER. Low price, better quality and ready stocks at convenient locations are some of t he benefits that accuse to the customers. He can chose, he can bargain, he can complain and the complaint will be attended to. He can buy on cash or on credit or on installments. He can even return it materi al if he is not satisfied with it. CONCEPT BENEFITS TO THE SOCIETY If a guarantee that only products that are required by the consumers are produce d there by it ensures that the countrys economic resources are channelized in the right direction. If acts as a change agent and a value adder is society. It makes economic planning more meaningful and more relevant to the life of the people. It creates good entrepreneurs and managers in the society and also improves the standard of living.

DIFFERENCES BETWEEN SELLING & MARKETING SELLING G Selling is sales oriented. oriented. Selling starts with seller. buyer & on the needs of buyer. Selling converts product umer into cash. oduct. Selling has a short term term goals. Goals . In selling activity produneeds, ct is the prime concern. s prime . Selling views business ss as as goods producing pross. cess In selling cost determineice; es price. mines costs. Selling views customer as ose Last link in business. Selling focuses on sales dentifyVolume growth. portunities. Of the business. Marketing focuses on i Ing profit making op Price deter Customer is the very purp Marketing views busine customer satisfying poce needs into pr Marketing has a long & strategies In marketing consumers Wants & performance i concern Marketing converts cons Marketing is customer Marketing starts with Focuses MARKETIN

Consumer determines pr

DISTRIBUTION OF CHANNELS INTRODUCTION Of the four elements of marketing mix viz., product, price, promotio n and distribution, distribution [i.e., the channels of distribution and physica l distribution] is the most important element. The success or failure of a firm depends largely upon the efficiency of distribution

CHANNELS OF DISTRIBUTION MEANING The term channel is derived from the French word canal meaning artifici al water way for transportation or irrigation so, channel of distribution refers to the pathway, path or route taken by goods as they flow or move from the poin t of production to the point of consumption or use. In the words of Prof. W. Stanton channel of distribution is the rout e taken by the goods as they move from the producer to the ultimate consumer or industrial user According to Philip kotler every producer seeks to link together the set of marketing intermediaries that best fulfill the firms objective. This set of marketing intermediaries is called the marketing channel [also trade channel or channel of distribution] ROLES OF CHANNELS OF DISTRIBUTION Distribution channel have a distinctive role in the successful impl ementation of marketing plans and strategies. These channels perform the followi ng marketing function in the machinery of distribution. 1. The searching out of buyer and seller [contacting] 2. Matching goods to the requirements of the market [merchandising] 3. Offering products in the form of assortments or packages 4. Persuading and influencing the prospective buyer to favour a certain pro duct and its maker [personal selling / sales promotion] 5. Implementing pricing strategies in such a manner that would be acceptabl e to the buyers and ensure effective distribution 6. Looking after all physical distribution functions 7. Participating actively in the creation and establishment of market for a new product 8. Offering pre and after-sale services to customers 9. Transferring of new technology to the users along with the supply of pro ducts and playing the role of change agents eg. in the agriculture green revolut ion in our country 10. Providing feedback information, marketing intelligence and sales forecas ting services for their regions to their supplier 11. offering credit to retailers and consumer 12. Risk-bearing with reference to stock holding transport

CHANNEL FUNCTION AND FLOWS A marketing channel performs the work of moving goods from producer s to consumers. It over comes the time, place, and possession gaps that separate goods and services from those who need or want them. Members of the marketing c hannel perform a number of key functions. o They gather information about potential and current customers, competiti on, and other actors and forces in the marketing environment o They develop and disseminate persuasive communication to stimulate purch asing o They reach agreement on price and other terms so that transfer of owners hip or possession can be effected o They place orders with manufactures o They acquire the funds to finance inventories at different levels in the marketing channels o They assume risks connected with carrying out channel works o They provide for the successive storage and movement of physical product s o They oversee actual transfer of ownership from one organization or perso

n to another CONFLICT AND CONTROL IN CHANNELS To manage distribution channels effectively require an understanding of both conflict and control, including technique to (1) Decrease conflict, or at least its negative effects, and (2) Increase a firms control within a channel Channel conflict exists when one channel member perceives another channel member to be acting in away that prevents the first member from achieving its distribu tion objectives. Firms in one channel often compete vigourously with firms in ot her channels; this represents horizontal conflict. Even within the same channel, firms disagree about operating practices and try to gain control over other mem bers actions; this illustrates vertical conflict. HORIZONTAL CONFLICT Horizontal conflict occurs among firms on the same level of distr ibution. Basically horizontal conflict is a form of business competition. It may occur among: o Middlemen of the same type: Mary vale hardware (an independent retailer) Versus Freds Friendly Hardware (another independent retailer) o Different types of middlemen on the same level Freds Friendly Hardware (a n independent retailer) Versus Lowes points area (a single department in a store within a giant chain A primary sources of horizontal conflict is scrambled merchandising, in which mi ddlemen diversify by adding product lines not traditionally carried by their typ e of business VERTICAL CONFLICT Vertical conflict typically occurs between producer and wholesaler or between producer and retailer PRODUCER VERSUS WHOLESALER A producer and a wholesaler may disagree about aspects of their relationship Why do conflicts arise? Basically, manufacturers and wh olesalers have differing point of view on the one hand, manufacturers think that wholesalers neither promote products aggressively nor hold sufficient inventori es On the other hand, wholesalers believe that producers e ither expect too much, such as requiring an extensive inventory of the product, or do not understand the wholesalers primary obligation to customers. To bypass wholesalers, a producer has two alternatives o Sell directly to consumer: producers may employ door to door, mail-orde r, or online selling. They may also establish their own distribution centers in various areas or even their own retail store in major markets o Sell directly to retailers: under certain market and product condition, selling directly to retailers is feasible and advisable. An ideal retail market for this option consists of retailers that buy large quantities of a limited lin e of products To avoid being bypassed in channels, wholesalers need to improve their competiti on position o Improve internal performance: many wholesalers have modernized their ope rations. Functional, single-story warehouse have been built outside congested do wn town areas and mechanized materials- handling equipment has been installed o Provide management assistance to customers: wholesalers have realized th at improving customers operation benefits all parties. Thus many of them offer p rograms to assist their customers in areas such as layout, merchandise selection

, promotion and inventory control o Form a voluntary chain: in this form of vertical marketing system a whol esaler contractually agrees to furnish management services and volume buying pow er to a group of retailers. In turn, the retailers promise to buy all, or almost all, their merchandise from the wholesaler o Develop middlemens brands: some large wholesalers have successfully estab lished their own brands. Super value has developed its Favorite brand for grocer ies and super chill for soft drinks. A voluntary chain of retailers provides a b uilt in market for the wholesalers brands Producer versus Retailer Conflict between manufacturers and retailers- in fact between any two p arties is likely during tough economic times. Conflict is also bound to occur wh en producers complete with retailers by selling through producers owned stores o r over the internet. Producer and retailer may also disagree about terms of sale or conditi ons of the relationship between the two parties. In recent years large retail ch ains have demanded not only lower price but also more service from suppliers. Pr oducers sometimes find it costly, if not nearly impossible, to comply with the r etailers new policies Both producers and retailers have methods to gain more control. Manufacturers ca n 1. Build strong consumer brand loyalty: meeting and surpassing customers exp ectations is a key in creating such loyalty 2. Establish one or more forms of a vertical marketing system: Procter and gamble uses the administered types of VMS whenever possible 3. Refuse to sell to uncooperative retailers: this tactic may not be defens ible from a legal stand point 4. Arrange alternative retailers: squeezed by large retail chains, some pro ducers are building their distribution strategy around smaller specialty store 5. Develop store loyalty among consumers: skillful advertising and strong s tore brands are means of creating loyal customers 6. Improve computerized information system: information is power. Knowing w hat sells and how fast it sells is useful in negotiating with suppliers 7. form a retailer co-operation : in this type of vertical marketing system , group of relatively small retailers brands together to establish and operate a wholesale warehouse WHO CONTROLS CHANNELS? Every firm would like to regulate the behavior of the other members in i ts distribution channel. A company that is able to do this has channel control. Channel power is the ability to influence or determine the behavior of another c hannel member. There are various sources of power in distribution channel. They inclu de: o Expertise: for example, possessing vital technical knowledge about the product or valuable information about customers o Rewards: providing financial benefits to co-operative channel member. o Sanctions: penalizing un co-operative firms or even removing them from t he channel

IMPLEMENTATION OF MARKETING CONCEPT

Marketing implementation is the process that turns marketing strategies and plan s into marketing actions in order to accomplish strategic marketing objectives. Implementation involves day to day, month to month activities that effectively p ut the marketing plan to work. CUSTOMER ORIENTATION The concept enable the industrial and business firms to understand the nature an d the mission of their business form the point of view of customer. By storing and analyzing data supplied by customers, gathered from third parties , and collected form previous transactions, a marketer is able to better underst and a customers needs and preferences. Marketers have discovered that ensuring relationships are built on trust and mut ual commitment, require a lot of time and effort to create and maintain and are not appropriate for every exchange situation. A typical description of the importance of the consumer as per the marketing con cept is seen in the words of Peter F Drucker The purpose of any business is to create a customer it is a customer who determines what a business is. With the adaptation of the marketing concept the consumer became the focal point of the business Basically companys sale each period come from 2 group: new customers and repeat c ustomers. It always costs more to attract new customers than to retain current c ustomers. E.g. Motorcycle Company Harley- Davidson has created a club (the Harley owners g roup) for bike owners. It offers more than 650000 members insurance, travel pla nning, roadside emergency service, free safety lessons, etc. INTEGRATED MANAGEMENT ACTION Integrated management action simply means that all the different management func tions in the business must be tightly integrated with one another, keeping marke ting as the pivot. All the activities should lead to a favorable impact on the consumer and for thi s to happen, all functional areas of the business have to be properly aligned wi th marketing. In organization that do not practice integrated management the different functio ns/depts. of the organization are preoccupied with the optimization of their spe cific activities often at the cost of optimization of the overall result. In organizations that practice integrated management marketing, the management i nsists on absolute coordination of all company actions keeping marketing custome r as the focus. E.g. Sony, Honda. CONSUMER SATISFACTION The marketing concept believes that it is not enough if a firm has customer orie ntation it is essential that such an orientation lead to consumer satisfaction. The concept believes that it is not enough if a firm markets its products succes sfully in the short run. It must keep growing, keeping consumer satisfaction as the foundation of its growth.

The concept effectively contracts the temptations of short sighted management at titudes by its emphasis on consumer satisfaction. E.g. REALISING ORGANISATIONAL GOALS If a firm has succeeded in generating customer satisfaction, if basically implie s that a firm has given a quality product and company has offered competitive pr ice and prompt service. Only when these factors act and interact, complementary and supporting one anoth er, will a product with all the attendant features necessary to satisfy the cons umers emerge. MARKETING CONCEPT DEFNITION The Marketing concept is a point of view on business. It enumerates that any bus iness is essentially a need satisfying process. It also enunciates that all the g oals of the organization including profit be realized three customer orientation. Integrated management action and generation of customer satisfaction.

BENEFITS OF MARKETING CONCEPT CONCEPT BENEFITS IN THE ORGN:

Concept enables the organization to keep abreast of changes. Long term success is assured to an enterprise only if it recognizes that the nee ds of the market are paramount. Concept gives great importance to planning, research and innovation and its deci sions are no longer based on lunch, but on reliable data relating to the consume rs. It enables the firm to move more quickly to capitalize on market opportunities Greater attention is given to the product planning and development to that merch andising can become more effective. Demand side of the equation of exchange is honored more and supply is adjusted t o changing demand. Hence more emphasis is given to research and innovation. Marketing system based on the marketing concept assures integrated view of busin ess operations and indicated interdependence of different departments of a busin ess organization. Interests of the enterprise and society can be harmonized as profit through serv ice is emphasized. CONCEPT BENEFITS OF CUSTOMER.

Low price, better quality and ready stocks at convenient locations are some of t he benefits that accuse to the customers. He can chose, he can bargain, he can complain and the complaint will be attended to. He can buy on cash or on credit or on installments. He can even return it materi

al if he is not satisfied with it. CONCEPT BENEFITS TO THE SOCIETY

If a guarantee that only products that are required by the consumers are produce d there by it ensures that the countrys economic resources are channelized in the right direction. If acts as a change agent and a value adder is society. It makes economic planning more meaningful and more relevant to the life of the people. It creates good entrepreneurs and managers in the society and also improves the standard of living.

IMPORTANCE OF MARKETING: CREATING UTILITY: A Customer purchases a product because it provides satisfaction. The want satisfying power is called its utility. it comes in many forms. It is throu gh marketing that much of a products utility is created. There are different kind s of utilities:Form utility: R.M Converted to Finished product. Understand customers Requirements Form utility is primarily associate with production- the physical o r chemical changes that make a product more valuable. Eg: Lumber is made into furniture is an example of form utility. Place Utility Channel Distribution Physical Distribution Customer As per customers Requirement Place utility exists when a product is readily accessible to potential customer s. An auction on the net can increase the number of buyers and sellers, but once products are purchased they still have to be delivered quickly and in condition . Physically moving a purchased item to a successful bidder in an essential elem ent of its value. Time Utility Warehouse making available goods customer When needed As per customers Requireme nt

Person Utility: Marketer Established Contact Customer Understand Customers Requirements Exchange Utility Seller Transfer Goods to Buyer as per Customers Requirement

MARKETING FUNCTIONS The scope of marketing is very wide. A number of functions are inherent in any m arketing on the basis of various utilities like (in II) time and place utility a nd (III) possession utility. I FUNCTION OF EXCHANGE II FUNCTION OF PHYSICAL DISTRIBUTION 1.Buying Function 2.Assembly Function 3.Selling Function. 1.Transporation 2.Inventory Management 3.Ware Housing 4.Material Handling 1.Financing 2.Risk Taking 3.Standardization 4.After Sales Service

III FUNCTION OF FACILITIES

(I)

FUNCTIONS OF EXCHANGE

a) BUYING FUNCTION: A Manufacturer is required to buy raw material for production purposes similarly a wholesaler has to buy good from manufacturer for selling it to retailer. A re tailer sell the goods to the customers. The function to buying has to be done at various levels. Buying involves transfer of ownership form seller to buyer. b) ASSEMBLY FUNCTION: Goods purchased form various sources and assembled at one place to suit the requ irement of the buyer. c) Selling Function: Selling function involves sales of goods from seller to buyer. Selling function is very important to all organizations due to the fact the selling has to be don e against severe competition. II FUNCTION OF PHYSICAL DISTRIBUTION: a. TRANSPORATION: This include mode of transport selection of transporter or carrier freight consi deration like freight paid or to pay routing, scheduling, processing claim in ca se of transit damage etc., b. INVENTROY MANAGEMENT: This includes: 1. Short term fore casting 2. Product size and location of warehouse 3. Just in time 4. Push or pull strategy adoption. 5. c. WARE HOUSING: The following functions are included: 1. Space requirement 2. Suitability of location 3. Layout design 4. Physical arrangement

d. MATERIAL HANDING: This includes: 1. Equipment Selection 2. Equipment Replacement 3. Storage methods 4. Receipts and issue (F I F I or L I F O ) III FUNCTIONS OF FACILITIES: a. FINANCING : This means extending credit facilities during selling. It an organization has to do this. It must have adequate working capital. Marketer has to plan. a. b. Short term finance Long term finance

This financiers are provided by a. Banks like nationalized or b. Financial institutions like ICICI, IDBI c. Credit societies d. Government agencies like KIDB, KSFC etc., b. RISK TAKING There are innumerable risk. Which a marketer has to bear while marketing a produ ct. Risk arises due to unforeseen circumstances. Risks can be insured also. Eg. Risks due to fire and accidents. But some risks cannot be insured. Eg. Changes due to Govt. policies, risks due to increased Competition, technological risks and business cycle risks. c. STANDARDIZATION: Buyers refer standardized goods. This will prevent the buyer form wasting his ti me in inspecting or examining the goods. Standardization and growing is a part o f marketing function. Standardization is a process of setting up standards to ma nufacture products which confirms to a set of Specifications. Standardization, S ize, shape, dimension colour etc., Grading is also a part of standardization. It is a process of sorting our goods into a number of graded, according to some characteristics such as quality and s ize grading is usually necessary for those products over which the producer cann ot exercise any control in terms of physical properties. Example: Food Grains, Fruits etc., d. AFTER SALES SERVICE This is very important in case of industrial products whether final product or a n intermediate. Hence, arrangement of after sales service has become an increasi ngly important function. Therefore, marketer has to plan for after sales servic e. Eg. Repairs, replacement, maintenance, etc. OTHER FUNCTIONS OF MARKETING In addition to the above, marketing has several other functions as follows: 1. 2. 3. Product planning and development Packaging Pricing

4. 5.

Market Research. Promotion etc.,

1.Product Planning: A Product planning is something which is a business offers to customers. Hence p roduct planning, product improvement, product development, product diversificati on are all parts of product management, profitability depends on product mix pla nning. Product planning involves adding dropping a modifying a product. Sometime s product line planning may have to be undertaken by marketer. 2. PACKAGING: Provides protection and improves aesthetic appeal. This enable the marketer to s ell more. The two important aspects of packaging are: a. Labeling b. Branding 3. PRICING: Pricing is nothing but the value of the product in terms of money. It is the amo unt paid by the buyer to the seller. Profitability is decided by the price. Mark eter need to formulated pricing strategies. 4. MARKET RESEARCH : Market research involves systematic gathering recording and analyzing of data ab out relating to the marketing of goods and services. However different authors describe marketing function in different ways. Above w e have mentioned one of those methods. Another way of classification of marketin g function is as follows Mc.Garrv. Classified marketing function in to 6 categories. a. Contractual: Buyers Sellers are brought together for marketing transacti on. b. Merchandizing: This is concerned with making products acceptable to the market. c. Pricing : d. Propaganda: Buyers are informed about the activities of organizations. e. Physical distribution: Consisting of transportation storage etc., f. Termination: This is the end of marketing activity. MARKETING MANAGEMENT INTRODUCTION : The word MARKETING is originated from the Latin noun MORCATUS, whic h means A place where business is conducted. It is a place where buyers and seller s meet, and exchange goods and services for money. Evolution of Marketing: The stage of Barter: Agriculturists and craftsmen were the main producers of this era. After meeting his own requirements the sulphur were disposed in their immediate neighbors. There was no elaborate distribution system as the habits and needs of the people and the prevailing technology did not demand such a system. Marketing under those conditions meant a task of producing the basic necessities

of life and exchanging them with known consumer groups in the immediate neighbo rhood. This represented the stage of barter in the evolution of marketing. The stage of Money Economy: In this next stage of evolution money came into picture. The change was limited to the replacement of the barter system by the money s ystem with the result that pricing became the chief mechanism of marketing. The stage of Industrial Competition: Far reaching changes took place in this stage. This stage introduced new products, new systems of manufacture, new modes o f transportation and methods of communication. This stage brought about changes in the physical and economic environment o f man. Mass production became the order of the day and variety of low-priced goods became available in abundance. The industrial revolution also generated the income revolution that sustain ed the mass production and mass distribution unleashed by the industrial revolut ion. The Stage of Competition: The ever increasing number and size of the producing firms generated the pheno menon of competition, which was not known in the agriculture and handicrafts eco nomy or in the early stage of Industrial Evolution. The main task of the industrial firms was disposal or distribution of whate ver they produced. In the subsequent stage, meeting competition became the chief issue. The situation demanded a conscious effort to face the competitors and the f irms had to ensure that their products were accepted in preference to those of t heir competitors. The Emergence of Marketing: After the Second World War there war there was a substantial increase in population. New industrial concerns sprang up rapidly and a great variety of new prod ucts and services strengthened the consumer market. Consumer had abundant choices and consumer began to occupy a place of uni que importance. The businessmen who got consumers who are well educated and endowed with a good discretionary income realized that it was not enough if they made a oneti me sale of their products to the consumers. They had to make available their products at a price that was advantageous to th e consumer. They also had to ensure that complaint from the consumer about the p roduct was attended to promptly and if required after sales servicing had to be provided and that led to the emergence of marketing.

MARKETING MIX In marketing Planning we use marketing information to assess the situation. We h ave to select specific marketing targets in the form of market segments. For eac

h segment or sub division of the market we have formulate a combination of a num ber of devices or types of marketing activities that are integrated into single marketing programme to reach a particular target or market segment. The combinat ion of these marketing methods or devices is known as the marketing mix. A successful marketing strategy must have a marketing mix as well as a target market for whom the marketing mix is prepared. The elements or variables that make up a marketing mix are only four: 1. Decisions on product or service. 2. Decisions on price. 3. Decisions on promotion. 4. Decisions on distribution. These four Ingredients are closely interrelated. In the simplest manner, the basic marketing mix is the blending of four inputs o r sub mixes which form the core of the marketing system. 1. 2. 3. 4. Product Mix Price Mix Distribution Mix Promotion Mix.

The outputs are optimum productivity and satisfaction. PRODUCT 1. 2. 3. 4. 5. 6. 7. 8. 2. 3. 4. 5. 6. MIX PRICE MIX BRAND COLOUR STYLE DESIGN PRODUCT LINE PACKAGE WARRANTY SERVICE 1. PRICING STRATEGY PRICING POLICY BASIC PRICE TERMS OF CREDIT DICOUNTS ALLOWANCES

MARKETING STRATEGY MARKETING MIX FOCUSSED ON TRAGET MARKET PROMOTION MIX PLACE MIX 1. PERSONAL SELLING 2. ADVERTISING 3. PUBLICITY 4. SALES PROMOTION a) DELERS AIDS b)CONSUMBER AIDS DISTRIBUTION CHANNELS 1. WHOLESALERS 2. RETAILERS 3. MERCANTILE AGENTS

PHYSICAL DISTRIBUTION 1. TRANSPORT 2. WARE HOUSING 3. INVENTORY

MARKETING MIX STRATEGY PROMOTION MIX SALES PROMOTION OFFERING MIX TION PRODUCTS TARGET SERVICES CONSUMERS PRICES ADVERTISING DISTRIBU SALES FORCE CHANNELS

PUBLIC RELATIONS DIRECT MAIL TELE MARKETING AND INTERNET The above figure shows the company preparing an offering mix of Products, Servic es, Prices and utilizing a Promotion Mix of Sales Promotion, Advertising, Sales Force, Public Relations, Direct Mail, Tele Marketing and Internet to teach the t rade channels and the target customers. Robert Louterborn suggested that the sellers four Ps correspond to the customers four Cs FOUR Ps Product n Price Place Promotion PRODUCT MIX A Product Mix (also called Product Assortment) is the set of all products and it ems that a particular seller offers for sales. Customer Cost Convenience Communication. FOUR Cs Customer Solutio

The word Product Mix is used to describe the assortment of different product types that a company produces and markets. The Product line is the number of brands o r related Products in each Products type. Example: Have four major Product Lines: Detergents, Toothpastes, Soaps. Fo r each line there are a number of brands and the number of different brands repr esents the length of Product Line and the numbers of different lines represents the width of the Product Mix. HINDUSTAN LEVER LTD., has a Product Line consisting of Soaps, Detergents, Cosmet ics etc., PHILIPS has a wide range in audio systems and home appliances. BRANDS : A brand is a name, term, sign, symbol or design or a combination of Thom, intend ed to identity the goods or services of one seller or group of sellers and to di fferentiate Thom form those of competitors. PACKAGE : Includes the activities of designing and producing the container for a product. The container is called the package and it might include up to three levels of m aterial, Old Spice after shave lotion is in a bottle that is in a cardboard box that is in a corrugated box (shipping Package) containing six dozen of Old Spice . Example : MAURTHI UDYOG LTD MARUTHI 1000 MARUTHI UDYOG LTD., has a product Maruthi 1000 designed to have the following at tributes. Superior Road Grip Added Safety Luxurious Interiors Eco Friendly PRICE MIX : Price is an important consideration in buying decisions price also denotes Quali ty in the consumers mind a Psychological factor. For same products, when many ide ntical brands are competing with each other for consumer preference, the price m ay be important influencing factor price is the basic vehicle for telling the co nsumer about the value and associated conditions of a particular product. Price is an important element of marketing mix. It may be defined as the value o f product attributes expressed in monetary terms, which a consumer pays or expec ted to pay in exchange. Pricing is a marketing function, pricing influences the profit level, the operational level etc., the following factors determine the pr ice of a product. Pricing Objectives Demand for a Product or Services Competition Profitability Distribution channels Example: 1. Price of PEUGEOT 309 The Premier Peugeot Limited plans to use the mark et based pricing where it well exploit the market fully aiming at charging a pr ice that will be close to Maruthis 1000, which is priced at Rs: 4 lakhs approxima

tely. The company plans to attack the market of Maruthis 1000 by an after of a be tter product for a little more. 2. Price of ACCENT The Hyundai Motor Company plans to follow the market p enetration pricing, initially pricing the car at lower or same price to attract a larger number of customer, preferably permanent ones. It plans to offer of som ething more for the same price. Price of ACCENT Rs: 5 lakhs. PLACE MIX : The marketer has the responsibility of making his product available near the pla ce of consumption so that the consumers can easily buy it. If the brand preferre d by the consumer is not easily available at the convenient lactation, he may bu y some other brand. Thus a marketer has to ensure that his product is available to the target consumers whatever required. There are two major areas in place mi x: 1. 2. Marketing channels Physical distribution

It is true that channel decisions affect other marketing mix elements, and invol ve a relatively long-term commitment of resources. It may take a marketer year t o build up relations with the intermediaries and sometimes these are contractual . As we know, intermediaries are independent organizations and therefore, their needs must be taken into account while evaluating carious channel alternatives. In fact, the success of a companys marketing effort depends to a larger extent on the soundness of its distribution network, physical distribution involves trans portation, warehousing, material handling and bulk packaging among others, same of theses activities will also be performed between the various links in the cha nnel in order to get the optimum results. For many years, physical distribution was a neglected area of marketing management, but now companies have become gene rally conscious of its importance in the overall marketing strategy. Example : HM-MITSUBISHI CARS IN INDIA. The company plans to use both one X zero level of channels of distributi on. The company launched: LANCER in the four metropolitan cities, viz., Delhi, Mu mbai, Calcutta and Chennai besides Cochin also. The total number of dealers appointed in India is 135. The dealer will b e provided training and help under the corporate identity programme. The present widespread dealer network of the Hindustan Motors will handl e sales, services, and spare parts activities. The dealer and engineers will be trained under the company in house prog rammers in India as well as abroad. PROMOTIONAL MIX : Marketing promotion is a management process through which an organization develo ps, presents and evaluates a series of messages to an identified audience so, ef fective promotion depends on : The The The The nature of communication target audience environment in which it is received medium used to transmit the message.

Example :1. OPELASTRA Car in India. The tools and media used. The company will use various strategic tools and media to tap the potential cust omers and keep the current ones. Advertising in print media (newspapers, Magazines and dailies), using tele media like Television, Videotapes and also through outdoor advertising are a few of t he tools used by the company besides other like exhibits and fairs, demonstratio n etc.,

The company has a database of 20,000 likely buyers to whom direct mailers have b een sent. The company has also conducted Car Clinics for over two months to gauge the custo ers response in an effort to balance quality and price. Example :2. Hyundai Motor Company Car in India. The tools and media used. The company uses massive communication using tools and media like print, T.V. , Outdoor advertising, Exhibition and fairs, Video tapes etc., The global theme used is Commitment of customer satisfaction The Company however may not use newspaper as on advertising media on large scale , except where it is the most popular print media and only way to reach the cust omer. PRODUCT MIX: Product is the thing possessing utility. It has four components: 1. Product range 2. Service after Sale 3.Brand 4.Package. The product management evolves product mix in consultation with marketing manage r. PRICE MIX: Price is the valuation placed upon the product by the offerer. It has to cover p ricing, discounting, allowances and terms of credit. It deals with price competi tion. PLACE MIX : Distribution is the delivery of the product and right to consume it. It includes channels of distribution, transportation, warehousing and inventory control. PROMOTION MIX : Promotion is the persuasive communication about the product by the offerer to th e prospect. It covers advertising, personal selling, sales promotion, publicity, public relations, exhibition etc.,

INTEGRATED MARKETING: When all the companys departments work together to serve the customers interests t he result is integrated marketing. Integrated marketing takes places on two levels.

First, the various marketing functions- sales force, advertising, customer servi ce, product management, marketing research must work together too often the sale s force thinks product managers set prices or sale quotas :too high, or the adv ertising campaigns. All these marketing functions must be coordinated form the c ustomers print of view. Second: marketing must be embraced by the other departments; they must also think customer marketing is far too important to be left only to the marketing departm ent. Marketing is not a department so much as a company wide orientation. Xerox goes so far as to include in every job description an explanation know that cust omer attitudes are affected by Xerox billing accuracy and promptness in returni ng calls. The various marketing functions like sales, advertising, customer service, marke t research must work together. Secondly other departments like manufacturing, en gineering, all departments must work together. Sometimes engineer complains that sales/marketing people are always protecting the customer and not thinking of co mpanys interest, he went on to blast customer for asking for too much, this feeling should be removed, if we have to practice integrated marketing. In fact todays m arketing concepts shown in the diagram. CUSTOMERS FORNT LINE PEOPLE MIDDLE MANAGEMENT TOP AMANGEMENT

Modern Customer oriented organization chart.

At the top are customer, next in level are the frontline people who meet and sat isfy the customer. Under them are the middle managers, whose job is to support t he front line people to serve to customers. NEEDS Needs are basic satisfaction of human beings. Food , clothing, shelter et c are the basic needs of human needs MEANING OF MARKET A market is a physical place where buyer and sellers gathered to exchange goods Economists describe a market as a collection of buyers and sellers who transact over a particular product or product class. Business people often use the term market to cover Various Groupings of customer s

MEANING OF MARKETING Marketing is a social and managerial process by which individuals and groups att ain what they need and want through creating, offering and exchanging products o f value with others A System of interacting business activities designed to plan, price, promote and distribute want, satisfying products and services to present and potential cust omers.

Marketing is the performance of business activities that directs the flow of good s and services form the producer to the consumer. Marketing is designed to bring about desired exchange with target audiences for p urpose of mutual gain.

MODERN DEFINITION OF MARKETING A total system of business, an ongoing process of (1) Discovering and transactin g consumer needs and desires into products and services (through planning and pr oducing the planned demand) 2. Creating demand for these products (through promotion and pricing) 3. Serving the consumer demand through planned physical distribution (with the h elp of marketing channels and then 4. Expanding the market even in the face of keen competition. DEFINITION FOR MARKETING MANAGEMENT Marketing management is the process of planning and executing the conception, pri cing, promotion and distribution of ideas, goods, services to create exchanges t hat satisfy individual and organizational goals. THE SCOPE OF MARKETING Marketing is typically seen as the flash of creating promoting, and delivering g oods and services to consumers and businesses. In fact marketing people are invo lved in marketing types of entities goods services, experiences, event, person, places. Properties, organization information and ideas. 1. Goods : physical goods constitute the bulk of most countries production and marketing effort in developing nations, goods- particularly food, commoditie s clothing and housing are the mainstay of the economy. 2. Services: At economies advance a growing proportion of their activities are focused on production of services. The US economy today consists of a 10-30 services to good mix. Service include the work of airlines, hotels can rental fi rms, barbers and beauticians, maintenance and repair people, dog kennels and dog therapists, as well as professionals working with in or for companies, such as accounts lawyers, engineers, doctors, software programmers and management consul tants. 3. Experiences: by orchestrating several services and goods, one can create , stage, and market experiences. There is a market for different experiences, s uch as spending a week at a base ball camp playing with some retired baseball gr eats, playing to conduct the Chicago symphony orchestra for five minutes, or cli mbing mount Everest. 4. Events: Marketers promote time based events such as the Olympics, compan y anniversaries, major trade shows, sports events, and artistic performances, th ere is a whole profession of meetings planners who work out the details of an ev ent and stage it to come off perfectly. 5. Persons: Celebrity marketing has become a major business. Years ago some one seeking same would hire a press agent to plant stories in newspapers and ma gazines. Today artists, musicians, CEOs, physicians high profile lawyers and fina nciers, and other professionals are drawing help from celebrity marketers. 6. Places : cities, states, regions, whole nations compete actively to attr act tourists, factories, lump any head quarters and new residents. Ireland has p erformed as an outstanding place marketer, having attracted more than 500 compan ies to locate their plants in Ireland.

7. Properties : Properties are intangible rights of ownership of either rea l property or financial property. Properties are brought and sold, and this occa sions a marketing effort. 8. Organizations: Organizations actively work to build a strong, favorable image in the mind of their publics. We see corporate identity ads by companies s eeking more public recognition. Philips puts out ads with the tag line lets make t hings better. Universities, museum and performing arts organization all lays plan s to boost their public image to compete more successfully for audiences and fun ds. 9. Information: Information can be produced and marketed as a product. This is essentially what schools and universities produce and distribute at a price to parents, students, and communities. Encyclopedias and most notification books , market information. We buy CDs and visit the internet for information. 10. Ideas: Every marketing offering includes a basic idea at its core. marke ters search hard for the core need they are trying to satisfy. A church example, must decide whether to market itself as a place of worship or a community cente r. NEEDS, WANTS, & DEMAND NEEDS: NEED is a state of felt deprivation of some basic satisfaction. People re quire food, clothing, shelter, safety belonging, esteem and a few other things t o survival. These NEEDS are not created by their society or by marketers.

WANTS: WANTS are desires for specific satisfiers of these deeper needs. For example: if a person needs a vehical to travel to his office he can go for t wo wheelers, but if he specifically buys a car or a FOUR WHEELER that becomes a want.

DEMAND: DEMANDS are wants for specific products that are backed up by an ability & willingness to by them. For example: . PUSH AND PULL STRATEGY: (Kotler) In managing its intermediaries, the firm must decide how much effort to devote t o push versus pull marketing. A Push strategy involves that manufacturer using i ts sales force and trade promotion money to induce intermediaries to carry, prom ote and sell the product to end users. Push strategy is appropriate where there is low brand loyalty in a category, brand choice is made in the store, the produ ct is an impulse item, and product benefits are well understood. A pull strategy involves the manufacturer using advertising and promotion to ind uce consumers to ask intermediaries for the product, thus inducing the intermedi aries to order it. Pull strategy is appropriate when there is high brand loyalty and high involvement in the category, when people perceive differences between brands, and when people choose the brand before they go to the store. Companies in the same industry may differ in their emphasis on push or pull. Designing a channel system involves four steps: 1. analyzing customer needs, 2. establishing channel objectives 3. identifying major channel alternatives, and 4. Evaluating major channel alternatives.

Promotion- push and pull strategies "Push or Pull"? Marketing theory distinguishes between two main kinds of promotional strategy "push" and "pull". PUSH: A push promotional strategy makes use of a company s sales force and trade promoti on activities to create consumer demand for a product. The producer promotes the product to wholesalers, the wholesalers promote it to retailers, and the retailers promote it to consumers. A good example of "push" selling is mobile phones, where the major handset manuf acturers such as Nokia promote their products via retailers such as Carphone War ehouse. Personal selling and trade promotions are often the most effective promo tional tools for companies such as Nokia - for example offering subsidies on the handsets to encourage retailers to sell higher volumes. A "push" strategy tries to sell directly to the consumer, bypassing other distri bution channels (e.g. selling insurance or holidays directly). With this type of strategy, consumer promotions and advertising are the most likely promotional t ools. PULL: A pull selling strategy is one that requires high spending on advertising and cons umer promotion to build up consumer demand for a product. If the strategy is successful, consumers will ask their retailers for the produc t, the retailers will ask the wholesalers, and the wholesalers will ask the prod ucers. A good example of a pull is the heavy advertising and promotion of children s toy s mainly on television. Consider the recent BBC promotional campaign for its new pre-school programme the Fimbles. Aimed at two to four-year-olds, 130 episodes of Fimbles have been made and are featured everyday on digital children s channe l CBeebies and BBC2. As part of the promotional campaign, the BBC has agreed a deal with toy maker Fi sher-Price to market products based on the show, which it hopes will emulate the popularity of the Tweenies. Under the terms of the deal, Fisher-Price will deve lop, manufacture and distribute a range of Fimbles products including soft, plas tic and electronic learning toys for the UK and Ireland. In 2001, BBC Worldwide (the commercial division of the BBC) achieved sales of 90m from its children s brands and properties last year. The demand created from br oadcasting of the Fimbles and a major advertising campaign is likely to pull deman d from children and encourage retailers to stock Fimbles toys in the stores for Christmas 2002. Promotion To sell an offering you must effectively promote and advertise it. There are two basic promotion strategies, PUSH and PULL. The PUSH STRATEGY maximizes the use of all available channels of distribution to "push" the offering into the marketplace. This usually requires generous discou nts to achieve the objective of giving the channels incentive to promote the off ering, thus minimizing your need for advertising. The PULL STRATEGY requires direct interface with the end user of the offering. U se of channels of distribution is minimized during the first stages of promotion and a major commitment to advertising is required. The objective is to "pull" t he prospects into the various channel outlets creating a demand the channels can not ignore. Using Push-Pull Strategy In Public Relations Push-Pull Strategy is not a new concept; it s been around for a while. Its two c omponents - Push Strategy and Pull Strategy - can be utilized either exclusively or in combination, and it is probably more useful to discuss each separately, b ecause Push-Pull simply is the combination of the two. Although often thought of as marketing tools, Both push and pull principles fit very well into the public

relations model and are used in strategic campaigns to determine the efficacy o f persuasive methods. One of the earliest definitions of public relations I learned was, "Public relat ions is doing good things and talking about it." You could say that Pull Strateg y has "doing good things" at its heart, and that Pull Strategy is more concerned with the "talking about it" element. PULL STRATEGY involves talking directly to your primary audience with the expres s purpose of persuading them to take a specific action favorable to your organiz ation. It depends on your organization s ability to "pull" the target audience i nto the fold, and is most powerful when you have developed a solid reputation as a leader in the field. In other words, an organization s strength and exemplary actions are used to att ract supporters. Consistent, exemplary action leads to people trusting your organization. This ea rned trust boosts your credibility, and when people can believe you, this in tur n solidifies your company s reputation in society. And, it is this reputation th at serves as your operational foundation and determines the image that people ha ve of you. I call this the Action-Image Continuum. All of this smoothes the way for acceptance of your message and your calls for s upport. In short, exemplary action pulls your potential supporters toward you an d makes it easier to persuade them to take action on your behalf. A good example would be a member of your organization personally taking a potential member by the hand and walking him or her through the recruitment process. PUSH STRATEGY uses the benefiting organization s communications channels and inf luencing audiences to convince potential supporters that it s in their best inte rest to join your organization or support its causes. You generally will be communicating with a large group of potential supporters, and will choose from a gamut of communications tools in Push Strategy. It s ever ything from brochures to direct mail, from newsletters to phone calls, from spee ches to exhibits, from email to websites. Basically, the purpose of push is to get the word out about your organization or cause. However, you must give something of value to the audience - something that will push them, that will nudge them toward you, that will position them to be enligh tened by your organization s good name and image, that will break through the in ertia and get them to do something on your behalf. That something of value could be entertainment, knowledge, expertise, "how to" or "did you know" tips, perhap s even samples. PUSH-PULL STRATEGY is a combination of the two strategies - planning and timing your "pull" initiatives with your "push" initiatives. You use persuasive methods directly with your primary audience (pull), while at the same time, you utilize existing or new targeted communications tools (push). A good example of "push-pull" would be a college-level pre-professional organiza tion whose members are often "lost in the cracks" before they join the sponsorin g professional association. The pre-professional organization can "talk up" and "push" professional membership until their faces turn blue, but once their membe rs leave the fold (graduate), it then becomes the responsibility of the sponsori ng association to latch on to them and "pull" them into the professional group. Question: What are marketers talking about when they say Push vs. Pull? ________________________________________ Answer: "Push" tactics are typically promotions directed at re-sellers or other members of the distribution channel. Again, there are different types, including training programs, trade allowances, cooperative advertising, and the provision of point-of-purchase displays. These are intended to provide incentives to the channel to "push" a firms product toward the customer. A "Pull" strategy is usually advertising directed at the end consumer. It works to increase end demand, thus "pulling" a product through the distribution channe

l. Push-Pull strategy . The business terms push and pull originated in the marketing and advertising wor ld, but are also applicable in the world of electronic content and supply chain management. The push/pull relationship is that between a product or piece of inf ormation and who is moving it. A customer "pulls" things towards themselves, whi le a producer "pushes" things toward customers. Content In a "push" system the consumer does not request the product to be developed; it is "pushed at" the end-user by promotion. An example of this is a perfume produ ct. Women do not request to smell a fragrance they never smelled before; it is s imply "pushed" at them, through the right advertisement. In a "pull" system the consumer requests the product and "pulls" it through the delivery channel. An example of this is the car manufacturing company Toyota. To yota only produces cars when they have been ordered by the customers. Supply chains With a push-based supply chain, products are pushed through the channel, from th e production side up to the retailer. The manufacturer sets production at a leve l in accord with historical ordering patterns from retailers. It takes longer fo r a push-based supply chain to changes in demand, which can result in overstocki ng or bottlenecks and delays (the bullwhip effect), unacceptable service levels and product obsolescence. In a pull-based supply chain, production and distribution are demand driven so t hat they are coordinated with actual customer orders, rather than forecasted dem and. A supply chain is almost always a combination of both push and pull, where the i nterface between the push-based stages and the pull-based stages is known as the push-pull boundary. An example of this would be Dell s build to order supply ch ain. Inventory levels of individual components are determined by forecasting gen eral demand, but final assembly is in response to a specific customer request. T he push-pull boundary would then be at the beginning of the assembly line. At th is point on the supply chain timeline, it is typically coordinated through a buf fer inventory. Push Then Pull Marketing Marketing is like rowing. You pull hard on the oars to go forward, then lift the m out of the water and push them back to finish the stroke and get ready for the next pull. Once you ve got the sequence of the stroke right, you and your boat slip forward through the water and build speed and momentum. If you push when yo u should be pulling, the boat goes backwards, or, even worse, you lose your bala nce and fall into the bottom of the boat. One of the biggest mistakes people make in marketing their services is to simply PUSH information about their services and themselves out to prospects and hope that this will result in attracting prospects. Unless you are already a househol d name and in such demand that your phone is ringing off the hook, this approach rarely attracts the numbers of new clients you want. The result is that most ma rketing falls into the bottom of the boat instead of propelling your business fo rward. An alternative to the typical push and hope approach to marketing is to PULL pro spects in and then in the context of a growing relationship, PUSH useful informa tion out to them. If you want prospects to remember your firm when they have a n eed for your services, start by attracting their interest. Generate interest by focusing on what your potential clients want and the proble ms they need solved. Use this client centered marketing strategy to pull prospec ts in so you can push your expertise out to them. Give them ideas they can apply instead of information about credentials, or past clients. Like rowing your boa t, you won t move very far unless you repeat the sequence again and again. Are you pulling prospects in or just pushing your information out? Review your m

arketing materials to see if you have the sequence right. Take a look at your we b site, brochures, newsletters, correspondence and proposals. PULL TACTICS - Client Centered Do your marketing materials 1. Begin with a clear identification of the niche market(s) you work with? 2. Lead with client problems and concerns? 3. Use the two elements above to create a picture that your target market c an identify with? 4. Provide useful ideas that your target market can use and that demonstrat es your expertise? PUSH TACTICS - You Centered Do your marketing materials 1. Focus on you, your services and staff? 2. Focus on glowing testimonials and your client list? Which works best? Both. The challenge is getting the emphasis and order right. T he pull then push marketing sequence that works to move your business forward in volves the following: 1. Create resources that pull prospects to you and your firm 2. Get prospects to give you their contact information (Most firms let over 99% of the people who see their information go away and never follow up) 3. Push useful information out to self-selected prospects on a regular basi s. (Remember the majority of buyers won t make a purchase until they ve had a mi nimum of 5-6 contacts with your firm.) When your prospects have a compelling need, they will turn to the firm that they ve had regular communication with, know and trust. At some point prospects will want more details about your services, credentials and testimonials. But this i s often the last information you need to provide. Use the pull then push strategy to get your marketing moving. You ll be amazed a s you watch both your prospect and client lists grow and your business gains mom entum. SERVICE MARKETING: Definition: Services are defined as identifiable, intangible, activities that are th e main object of a designed to provide want-satisfaction to customers. For marketing purposes, services are separated into two categories: Services that are main purpose or object of transaction. Eg: You rent a car from enterprise. The company makes a car available (A tangible good). But what you are purchasing is accessibility to transportatio n. Because you are buying the use of the car, not the car itself, this is a serv ice transaction. Service that support or facilitate the sale of good or any other service. Eg: When you rent a car from enterprise, you can also obtain collis ion insurance, the use of a cellular phone, and an electronic navigational devic e. These are called supplementary or support services because you obtain them on ly in conjunction with renting a car. NATURE AND IMPORTANCE OF SERVICES:

Services are the major source of employment more than 80% of the non-farm labor force is employed in service industries. The industries in which job growth will be the fastest are data and information and management, institutional and in ho me health care education and financial services. The services account for over one half of consumer expenditures is impressive, b ut is still grossly understates the economic importance of services. And hence

spending for business services. And hence spending for business services will co ntinue to grow. As commerce has become increasingly complex and competitive , managers have foun d that calling on specialized service providers is effective and efficient. This is resulting in many tasks formerly performed by regular employees, from resear ch and training to advertising and distribution are increasingly being Outsourced to specialists. SCOPE OF SERVICES Scope of services can be recognized both for Profit and non business ser vices organizations for profit services firms sell to consumers or other busines s with profitable operations as a primary goal. This category is classified by industry: _ Housing & other structures: Rental of offices, warehouses, hotels, motels, a partments, houses & firms _ Household operations: House maintenance & repairs, security, landscaping & household cleaning _ Recreation & Entertainment: Theatres, Spectator sports, amusement parks, participating sports, restaurant meals & resorts. _ Personal care: Laundry, dry cleaning, spas _ Medical & Health care: Physical & Mental medicinal services, dental, nursing , Physiotherapy _ Private Education: Vocational schools, nursery schools, continuing education programs _ Professional business services: Legal, accounting, advertising, marketing re search, public relations & Management consulting _ Financial services: Personal & business insurance, banking, credit & loans s ervice, Brokerage service & investment councelling. Non business service organizations are of two types. One type is not for profit Service organization which have a profit goal because growth & continued existen ce depend on generating revenue in excess. However PROFIT is secondary to the N-F -Ps primary objective. In many cases N-F-Ps operate in a fashion very similar to for -profit businesses eg. _ Educational: Private grade schools, High schools, Colleges & Universities _ Healthcare: Hospitals, Nursing homes, Health research organizations _ Professional & Trade: Labor unions, Certificate groups, professional associa tions, trade associations & lobbying groups

_ Social concerns: Organizations dealing with family planning, civil rights, t ermination of smoking, environmental concerns. The second type of non-business organization is a non-profit organizatio n which provides services but does not have a profit or surplus objective, eg. Federal, State & Local Govt. agencies. The provide services, often charging for them & may even operate in competition with for-profit businesses, eg. U.S. National part service competes with private forms of outdoor recreation. CHARACTERISTICS OF SERVICES There are 4 characteristics that differentiate services from goods. The y are: Intangibility Inseparability Heteroginity Perishability INTANGIBILITY As services are intangible, it is impossible for prospective customers to sampl e- feel, see, hear, taste or smell i.e a service before the buy it. Four promot ional strategies that may be used to suggest service benefits & reduce the effo rt of intangibility are: Visualization eg. Carnival cruise lines depicts benefits of cruises

Association eg. Connecting service with tangible goods. Prudential Insurance suggests stab ility & security with its rock of Gibralter. Merrill Lynch Physical representation Eg. American Express uses colour gold or platinum for the credit card services to symbolize wealth & prestige. Documentation There are 2 forms of documentation: i) Past performance eg. A hospital can document its past performance by pointing out in its ads how many babies have been born & cared for in its obstetrics department. ii) Future capability eg. A hospital chooses to stress its capability by highlighting the specia lized equipment it has if an emergency arise during the delivery of a baby . Websites are a vulnerable tool in reducing the intangibility of a service. They make it possible for marketers to present extensive information, use animation & sound & answer a site visitors specific questions via e-mail. Eg. Royal Carribbean Cruise line.

Inseparability Services cannot be separated from the seller of the service. Many services are created , dispensed and consumed simultaneously . Eg: Dentists create and dispense almost all their services at the same time and they require the presence of the consumer for the services. Service Inseparability means that service providers are involved concurrently in the production and marketing efforts. Eg: One physician can treat only so many medical patien ts in a day. From a marketing standpoint inseparability limits distribution. It frequently me ans that direct sale is the only possible channel of distribution and an individ ual sellers services can be sold only when direct contact is possible. An exception in this feature is some services are sold by a person wois represe nting the creator-seller. Eg: Travel agent , insurance broker etc. HETEROGENITY It is difficult if not impossible for a service firm , or even an individual sel ler of services to standardize output. Each unit of the service is some what dif ferent from every other unit of the same service because of an factor in produc tion and delivery. Eg : Delta airlines does not give same quality of service on each flight, or even to each passenger on the same flight. PERISHABILITY As a market commodity a service has a high degree of perishability. Time element assumes unique importance. If a service is not used today it is lost for ever. It cannot be stored. It cannot be carried forward. Utilized services are econom ic losses . Eg: A building unoccupied , a person unemployed , credit not u tilized , empty rooms in a 5 star hotel represents perishable nature of services . DIFFERENCES BETWEEN SELLING & MARKETING SELLING Selling is sales oriented. MARKETING Marketing is customer oriented.

Selling starts with seller. Marketing starts with buyer & Focuses on the needs of buyer. Selling converts product into cash. Selling has a short term Goals . In selling activity product is the prime concern. Selling views business as goods producing process Marketing converts consumer needs into product. Marketing has a long term goals. & strategies In marketing consumers needs, Wants & performance is prime concern. Marketing views business as customer satisfying pocess.

In selling cost determinees price. Selling views customer as Last link in business. Selling focuses on sales Volume growth.

Consumer determines price; Price determines costs. Customer is the very purpose Of the business. Marketing focuses on identifyIng profit making opportunities.

CONCEPTS OF MARKETING.

THE EXCHANGE CONCEPT The exchange concept of marketing, as the very name indicates ,holds that the ex change of a product between the seller & the buyer is the central idea of market ing. While exchange does form a significant part of marketing as a mere exchange process would amount to a gross undermining of the essence of marketing. A prop er scrutiny of the marketing process would readily reveal that marketing is much broader than exchange. Exchange, at best, covers the distribution aspect and th e price mechanism involved in marketing. The important aspects of marketing, suc h as concern for customer, generation of value satisfaction creative selling & i ntegrated action for serving the customer, get completely overshadowed in the ex change concept of marketing. THE PRODUCTION CONCEPT It is one of the oldest concepts of business. The production concept holds that consumers will prefer products that are widely available and inexpensive. Manage rs of production-oriented businesses concentrate on achieving high production ef ficiency, low costs, mass-distribution. They assume that consumers are primarily interested in product availability and low prices. This orientation makes sense in developing countries, where consumers are more interested in obtaining the p roduct than in its features. It is also used when a company wants to expand the market. Some service organizations also operate on production concept. Many me dical & dental practices are organized on assembly-line principles, as are some government agencies. Although this mgt orientation can handle many cases per hou r, it is open to charges of impersonal and poor-quality service.

THE PRODUCT CONCEPT The product concept is somewhat different from the production concept. Whereas t he production concept seeks to win markets & profits via high volume of producti on and low unit costs, the product concept seeks to achieve the same result via product excellence- improved products, new products and ideally designed & engin eered products. It also emphasis on quality assurance. Managers in these organiz ations focus on making superior products & improving them overtime. They assume that buyers admire well-made products and can evaluate quality & performance. Mg

t might commit the Better-mousetrap fallacy, believing that it will lead people to beat a path to its door. Example:- web T V THE SELLING CONCEPT The selling concept holds that consumers and businesses, if left alone, will ord inarily not buy enough of the organizations products. The organization must, ther efore, undertake an aggressive selling and promotion effort. This concept assume s that consumers typicallyshow buying inertia or resistance & must be coaxed int o buying. It also assumes that the co. has a whole battery of effective selling and promotion tools to stimulate more buying. The selling concept is s, goods that buyers normally do opedias, and funeral plots. It is ers, college admission offices, & THE MARKETING CONCEPT This concept emerged in mid-1950s and challenged the preceding concepts. The MARK ETING concept was born out of the awareness that marketing starts with determina tion of consumer wants & ends with the satisfaction of those wants. The concept puts the customer at both the beginning and the end of business. It stipulates t hat the company should be organized totally around the marketing function, antic ipating, stimulating & meeting customers requirements. The concept rests on the realization that a business cannot succeed by supplying products and services that ae not properly designed to serve their needs. Every depart. & every worker and every manager will THINK CUSTOMER &ACT CUS TOMER. Evidently, the concept represent a radically new approach to business. Marketing concept represents essentially a change in orientation on the part of mgt towards business. The marketing concept rests on four pillars: 1. Target market- EX:TERRA LYCOS 2. Customer needs-EX:NOKIA & SONY ERRICSON 3. Integrated marketing4. Profitability-EX:DISNEY, WALL-MART THE CUSTOMER CONCEPT The ability of a company to deal with customers one at a time has become practic al as a result of advances in factory customization, computers, the internet, & database mktg software. In this concept the companies hope to achieve profitable growth through capturing a larger share of each customers expenditures by buildi ng high customer loyalty & focusing on customer lifetime value. The required inf ormation collection hardware, and software may exceed payout. It works for best co. that normally collect a great deal of individual customer information, carry a lot of products that can be cross-sold, carry products that need periodic re placement or upgrading, & selling products of high value. THE SOCIETAL MARKETING CONCEPT It holds that the organizations task is to determine the needs , wants, & interes ts of target markets & deliver the desired satisfaction more effectively & effic iently than competitors in a way that preserves or enhances the consumers & socie tys well-being. practiced most aggressively with unsought good not think of buying, such as insurance, encycl also practiced in non-profit area by fund rais political parties.

The societal marketing concept calls upon marketers to build social & e thical considerations into their mktg practices. They must balance and juggle th e often conflicting criteria of company profits, consumer want satisfaction, & p ublic interest. EX: PATAGONIA, BEN &JERRYS