Chapter-1 MARKETING

MODULE 1

Introduction: Nature and scope of Marketing, Evolution, Various Marketing orientations, Marketing Vs Selling concept, Consumer Need, Wants and Demand concepts.

Definitions: Concept of Exchange: An exchange arises when one person gives something of Value , in return for something of value from another person. Olden days: Barter system.

Condition necessary: At least two parties must be involved. Each party must have something that interests others. Voluntary exceptions of each other. Each party must communicate and deliver the product. Each party must be free to accept or reject any offer from the other party.

 American

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

Concept of Needs & wants: Need constitute the basic requirements for the existence of life whereas want arises when basic needs are satisfied.

Concept of Economic utility: Goals of marketing & selling systems: To provide utility to the customer i.e.; the extent to which a product satisfies customer needs and wants is called utility.

Utility includes:
Providing

product to the customer at right place. At right price. At right time. At right form.

Evolution of Marketing

It took many years to realize that satisfying customers is the key for making sales and profits in the long run. Production Era: It came into existence in 17th century which continued till the late 1920s. Says law supply creates its own demand.

Sales Era:

1920-1950. The economic depression of 1920s proved that producing the goods was not every thing but it should also sold. Companies realized the need for product promotion and distribution. Many of them created the market research departments.

Marketing Era: Began in the mid of 1950s. Companies identified consumers needs and wants in the exchange process between the buyer and seller rather than pushing products down to the customers.

Marketing Concept:

Aims at matching the companys offering with customer needs to achieve the desired level of customer satisfaction and generate profits for the company. Consumer orientation: To keep pace with ever changing customer preferences and desires.

Long term profitability Functional integration: The mktg. department should be well coordinated with R&D, finance, personnel and manufacturing.

Societal Marketing concepts (SMC) Societal marketing managers believe that companies that acts in socially responsible manner gain goodwill apart from reaping profits. Examples: Hindustan Lever Ltd.: Asha Daan: A home for destitute, handicapped children and people suffering from AIDS. This is run by Missionaries of charity.

In Assam, is a center for physically and mentally challenged childrens. HLL plantation at Coimbatore in Tamil Nadu started Kappagam (shelter) a center for education of mentally and physically challenged children providing shelter and therapies. In Karnataka, HLL, undertook Project shakti in the rural areas to create income generating opportunities for rural women, health and hygiene problems

Marketing Myopia:
Theodore levitt used the term Myopia, which refers to short sightedness. Example: When small cars were introduced in the US market by the Japanese companies they became a hit. Again Levitt has devised ways to overcome marketing myopia by: Customer orientations. Market orientations. Managers need not be proactive but visionary.

Marketing Dynamics

This includes marketing challenges for 21st century. Company and Marketer Responses and Adjustments: Technological advancement is bringing about a rapid change in the market place and cause intense competition among firms. Marketers are trying to cope with the increasing competition by devising strategies like customizing their products, identifying target markets and long term customer relationship.

Company responses and adjustments:

Sl Company 1. Reengineering Action & processes Reasons This is a process of Companies redesigning the reengineer organization their structure business processes processes and when they associated systems perform to achieve an poorly in improvement in financial business terms. performances.

Example:(2007) FORD

Endeavour

Fiesta

Fusion

Ikon

Mondeo

2. Outsourcing Companies started focusing on the activities in which they are strong.

This helped companies to reduce their costs and improve organizational performances with utilization of organizational resources.

15 global car makers - including GM, Ford, DaimlerChrysler, Mercedes-Benz, Audi and Nissan have set up outsourcing offices in the country, with a combined budget of approximately $1.5 billion. joint venture.

3 Bench marking

Earlier companies use to set their benchmarks and measure their performances.

But now the market leaders performance usually becomes the benchmark for other industries.

4 Suppliers

Buying raw The problem of materials or semi storage, finished goods fromuneconomic order a small number of timing can be supplier helps the eliminated. company maintains a close relationship with them.

Example:

India's auto industry will continue to make its presence felt, primarily because it is one of the few countries the global auto industry cannot ignore. "Two-thirds of a car is built from suppliers. That's a big cost item and companies can cut costs to a large extent in places like India and China," According to industry estimates the cost of automotive design in Europe ranges as high as $800 per hour, and even higher in the US, costs are as low as $60 per hour in India for equivalent quality.

Global and Companies are no local longer catering only markets to their domestic markets.

Globalization has opened the ways to global markets.

Decentraliza All powers are vested Employees are tion & delegated to the given more employees. autonomy and initiative.

Examples:

Thomas Friedman has said that today globalization is farther, faster, cheaper, and deeper.

Customization

Marketers are Companies are providing better seeking ideas form utility by from customers creating customized and designing products to suit more suitable individual needs. products.

Examples:AMUL

Mauritius, UAE, USA, Bangladesh, Australia, China, Singapore, Hong Kong and a few South African countries

Building a good Market tries to relationship with attract and retain customers. the existing customers.

Company builds a long term relationship with the existing customers.

Examples:

Target Marketing

Advances in internet, television, radio e.t.c. has made it possible to easily target the consumers.

Identification of target markets and promoting such markets has helped market to increase profits.

Customer data Warehouses: stores With this they can base information about develop specific the preferences and strategies buying habbits of catering the taste, individual needs and wants consumers. of consumers.

Integrated marketing communication

Marketers use Marketers should different means of ensure that there communication to is no conflict reach their target between customers.eg: Cell communication phone efforts. technologies.

SIGNIFICANCE OF MARKETING:

Competition has created a great challenge for marketers. Marketing plays a significant role in the sustainability of an organization. Example: Airline Industry Banking Industry Education Industry

Airline Industry

The airline is regulated by the MINISTRY OF CIVIL AVIATION , in the domestic market and by a system of bilateral service agreement in the international market. Characteristics of airline industry: Airline industry is highly competitive. profit route in India Linked to economic growth.

Profitability increases when flight capacity is more and less time is spent on ground. Marketing of Air Lines: Jet Blue: provides live satellite TV. Sahara India:Had given a Discount of Rs 600 to Rs 1000 on all routes in April 1999. Indian Airlines 50% off for government employees on evening flights.

Banking Industry

Some private and public banks are cutting edge technology.e.g: SBI, ICICI, HDFC, UTI are some of the banks which have adopted modern technologies. In India: 10,000 ATMS. Internet banking is the most effective channels of delivery with a transaction cost of around Rs 8. It has some value added features like: Bill payments are also being bundled with other banking products to create value proposition for the customers.

Marketing Strategies: Marketing tie-ups with travel agents . Provide discount packages. Enter into a trade alliances with other businesses.

ABN Amro use mobile devices to transmit alerts when customers use their credit cards. Banks also uses newer technologies like GPS (Global Positioning System), Multimedia Messaging Services (MMS) to help customers locate the nearest ATMs.

Education service can be provided through:

Contact programs Distance mode Educational services must be promoted to build awareness about the course offered by an institute. Educational institutions try to gain market share by providing better facilities, subsidiary products like study material, library etc.