Introduction to Marketing

Definitions of Marketing

There are many definitions of marketing. The better definitions are focused upon customer orientation and satisfaction of customer needs.

“Marketing is the social process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others.”
– Philips Kotler

“Marketing is the management process that identifies, anticipates and satisfies customer requirements profitably.”
– The Chartered Institute of Marketing (CIM)

The CIM definition looks not only at identifying customer needs, but also satisfying them (short-term) and anticipating them in the future (long-term retention).

“Marketing is a total system of business activities which is design to plan, price, promote and distribute the want satisfying products or services to the target market in order to satisfy their needs and demands.”
– Williams J. Stanton

“The right product, in the right place, at the right time, at the right price-”
– Adcock

This is a snappy and realistic definition that uses McCarthy’s Four Ps.

The Philosophy of Marketing and the Marketing Concept

The marketing concept is a philosophy. It makes the customer, and the satisfaction of his or her needs, the focal point of all business activities. It is driven by senior managers, passionate about delighting their customers.

“Marketing is not only much broader than selling, it is not a specialized activity at all It encompasses the entire business. It is the whole business seen from the point of view of the final result, that is, from the customer’s point of view. Concern and responsibility for marketing must therefore permeate all areas of the enterprise.
– Drucker

“This customer focused philosophy is known as the ‘marketing concept’. The marketing concept is a philosophy, not a system of marketing or an organizational structure. It is founded on the belief that profitable sales and satisfactory returns on investment can only be achieved by identifying, anticipating and satisfying customer needs and desires.”
– Barwell

Now that you have been introduced to some definitions of marketing and the marketing concept, remember the important elements contained as follows:

1. Marketing focuses on the satisfaction of customer needs, wants and requirements.
2. The philosophy of marketing needs to be owned by everyone from within the organization.
3. Future needs have to be identified and anticipated.
4. There is normally a focus upon profitability, especially in the corporate sector. However, as public – sector organizations and not-for-profit organizations adopt the concept of marketing; this need not always is the case.
5. More recent definitions recognize the influence of marketing upon society.

Evolution of Marketing

Evolution of Marketing “OR” Marketing Orientation

In subcontinent, marketing was introduced in 18th century with the British colonies.

The following are the concepts about the marketing orientation.

Production Orientation:

The production concept prevailed from the time of the industrial revolution until the early 1920’s. The production concept was the idea that a firm should focus on those products that it could produce most efficiently and that the creation of a supply of low-cost products would in and of itself creates the demand for the products. The key questions that a firm would ask before producing a product were:

Can we produce the product?

Can we produce enough of it?

At the time, the production concept worked fairly well because the goods that were produced were largely those of basic necessity and there was a relatively high level of unfulfilled demand. Virtually everything that could be produced was sold easily by a sales team whose job it was simply to execute transactions at a price determined by the cost of production. The production concept prevailed into the late 1920’s.

The Production Concept has been around for years. That concept simply suggests that customers

prefer inexpensive products that are readily available. In effect, “if we make it, they will come.”

Product Orientation:

The Product Concept suggests that companies that build the “better mousetrap” will gain

favor. The thinking here is that customers want products that have higher quality, that offer better performance or do something unique.

Sales Orientation:

By the early 1930’s however, mass production had become commonplace, competition had increased, and there was little unfulfilled demand. Around this time, firms began to practice the sales concept (or selling concept), under which companies not only would produce the products, but also would try to convince customers to buy them through advertising and personal selling. Before producing a product, the key questions were:

Can we sell the product?

Can we charge enough for it?

The sales concept paid little attention to whether the product actually was needed; the goal simply was to beat the competition to the sale with little regard to customer satisfaction. Marketing was a function that was performed after the product was developed and produced, and many people came to associate marketing with hard selling. Even today, many people use the word “marketing” when they really mean sales.

The Marketing Concept:

After World War II, the variety of products increased and hard selling no longer could be relied upon to generate sales. With increased discretionary income, customers could afford to be selective and buy only those products that precisely met their changing needs, and these needs were not immediately obvious.

The key questions became:

What do customers want?

Can we develop it while they still want it?

How can we keep our customers satisfied?

In response to these discerning customers, firms began to adopt the marketing concept, which involves:

– Focusing on customer needs before developing the product

– Aligning all functions of the company to focus on those needs

– Realizing a profit by successfully satisfying customer needs over the long-term

When firms first began to adopt the marketing concept, they typically set up separate marketing departments whose objective it was to satisfy customer needs. Often these departments were sales departments with expanded responsibilities. While this expanded sales department structure can be found in some companies today, many firms have structured themselves into marketing organizations having a company-wide customer focus. Since the entire organization exists to satisfy customer needs, nobody can neglect a customer issue by declaring it a “marketing problem” – everybody must be concerned with customer satisfaction.

The marketing concept relies upon marketing research to define market segments, their size, and their needs. To satisfy those needs, the marketing team makes decisions about the controllable parameters of the marketing mix.

Societal Marketing:

The societal marketing concept can be defined as the organizations task which tries to identify the needs and interests of the consumers and delivers quality services or products as compared to its competitors and in a way that consumer’s and society’s well being is maintained. In other words organizations have to balance consumer satisfaction, company profits and long term welfare of society.

This is a new marketing philosophy and tries to reduce the inequalities at various levels. This theory emphasizes that organizations should not only think of cut-throat policies to achieve targets and jump ahead of competitors but should have ethical and environmental policies and then back them up with action and regulation.

Mega Marketing:

Management activity that involves (in addition to the typical marketing activities) other elements of a firm’s external environment such as government, media, and pressure groups is Mega marketing. The term was coined by the US marketing academic Philip Kotler who suggests that a market mix must have two more P’s: public-relations, and power.

Concepts of Marketing

Core Concepts of Marketing

Need is a state of self deprivation or neediness.

The objects that will satisfy the need are wants.

When wants are supported by the buying power of the customer its demand.

Marketing Offers:
Marketing offers are all the objects (products and services) which have the capacity to fulfill the requirements of customers’ needs, wants and demand.

Channel of Intermediaries:
All those parties or individuals who transfer the finished goods from producer to the consumers are channel of intermediaries.

Wholesaler: Deals in the bulk quantities.
Distributor: Distribute the products to end users.
Retailer: Sell the product in small quantities to the final consumers.
Agent: Provides services on behalf of the producer or manufacturer.

Exchange of desired object with something in return is transaction. A transaction is made when a) Parties are agreed upon b) Time and place is specific c) some benefit should be transferred.

What benefits the customer is expecting from the product, and when the product’s value will match will the expectation of the customer then it’s up to their expectation.

The want satisfying ability of a product is the quality of that product.

Difference between cost of obtaining any product and the benefit the customer is taking from that product is the value. If cost is less than benefit then it’s valuable and if the product’s perceived performance match with the customer’s expectation then it’s up to the mark.
– If the performance of the product is equal to the expectation of the customer then customer will be satisfied.
– If performance is greater than the expectation then customer will be delighted.
And if the performance will be less than the expectation then customer will be dissatisfied.

Customer Relationship Mgt.

Customer Relationship Management

It is a single strongest weapon you have as a manager to ensure that customers become and remain loyal.

“CRM is a comprehensive approach for creating, maintaining and expanding customer relationships.”

By comprehensive we mean that this approach should be applicable to the whole organization, it does not imply only to a specific department or part of organization.

An approach is a way of dealing or treating with some one. So here we mean that there should be a clear plan or strategy to create, maintain or expand relationships with customers.

Customers want to do business with organizations that understand what they want and need.

CRM is about managing relationships effectively.

In order to maintain a successful business, the business must understand and maintain a positive relationship with its customers. Customer Relationship Management (CRM) is the process of bringing the customer and the company closer together. There are many different areas in which Customer Relationship Management can be implemented. The goal of CRM is to help a company maintain current customers, as well as gain new customers.

CRM describes a strategy used to manage and report customer/prospect/partner/contact interactions with enterprise contacts including inside and outside sales, marketing, billing, shipping and customer service and support.

Using CRM, a business can:
·Provide better customer service
·Increase customer revenues
·Discover new customers
·Cross sell/Up Sell products more effectively
·Help sales staff close deals faster
·Make call centers more efficient
·Simplify marketing and sales processes