Introduction to Marketing

Introduction to

MARKETING
Gururaj Phatak B.Sc, MBA (PhD)

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What is Market?

• “Market” is a public place in a town or village,
where household provisions are and other objects
are available for sale.
• The Essentials of Market are:
• A Commodity/Item/ Good which is dealt with.
• The existence of Buyers & Sellers
• A Place; be it a certain region
• Interaction between Buyers And Sellers to
facilitate transactions

Classification of Markets
Market

On the basis of On the basis of Nature of
On the Basis of
Nature of Goods Sold:
Geographic Area:
Competition :
Local Market Consumer Good Market i.e.
Perfect Market FMCG
Regional Market
Imperfect Market: Industrial Good Market
National Market
Monopoly B2B
International Market
Oligopoly Non Profit Market
Government Market

 Classification of Markets:
On the Basis of Geographical Area:
 Local Market: is the place where purchase and sale of goods/services involve
buyers and sellers of a small local area
 The example of local market is a village or a town, market.
 In this market day today requirement like vegetables, fruits, etc are sold

 Regional Market: where the purchase and sale of goods involve buyers and sellers
of a region, such as large town market catering to needs of a group of villages or
towns, such market is common in wholesale/retail sale of food grains.

 National Market: when a purchase and sale of goods involve both buyers and
sellers of the entire nation then it is called as national market. This type of market
in the case of commodities such as Cotton and Textiles Market located in Mumbai.
Tea Market located at Kolkata. With the advance of IT this concept getting
obsolete, you can operate in any market sitting in your town or city

 International Market: when the purchase and sales of goods involve buyers and
sellers of many nations it is said as International Market

Classification of Markets:
On the basis of nature of Competition:
Perfect Market: There is equal numbers of Buyers & Sellers
Imperfect Market: Difference between numbers of Buyers & Sellers
This involved three types Monopoly Monopolistic And Oligopoly
( these concepts are discussed in detail in “ PRICING” unit)

On the basis of nature of Goods Sold:
Consumer Market: a consumer goods market is defined as a market where the final
output of the firm goes for the consumption of individual household.
Industrial Good Market: a business market is defined as a market where output of
one firm goes either raw material, goods in process or as consumables of another
industry.
Non profit Organization: such as Social Service organizations, Educational
Institutions,
Government Market: Government which is a large buyer, makes purchases on the
basis of tenders, bids etc

Defining Marketing:

According to American Marketing Association (AMA)
Marketing is defined as:
“Marketing is an organization function and a set of process
for creating, communicating and delivering value to
customers and for managing customer relationships in ways
that benefit the organization and its stakeholders”

The Exchange Process:

Rs 1200/-

FLOW OF MARKET FLOW
PRODUCERS
GOODS
AND
&
Place of of
SELLERS
SERVICES Exchange MONEY

The process of obtaining a desired Product
from Someone (Producers and Sellers) by
offering something in return (Money). BUYERS

-Philip Kotler or
CONSUMERS

Conditions of Exchange PROCESS

Each party has something that could be value to other
party.
Each party has desire, willingness & ability to exchange.
Each party is capable of communicating and delivering.
Each party has the freedom to accept or reject the offer.

THE CORE
CONCEPTS OF MARKETING

1. NEED
2. WANT
3. DEMAND
4. PRODUCT AND SERVICES
5. VALUE AND SATISFACTION
6. QUALITY
7. RELATIONSHIP(CRM)
8. STP

Need:

Needs are the human basic requirements of food, clothing, shelter, water,
and air.
We can distinguish among 5 types of needs.
Stated needs: the customer wants an inexpensive car.
Real needs: the customer wants a car whose operating cost, not just its
initial price is low.
Unstated needs: the customer expects good service from the dealer
Delight needs: the customer would like the dealer to include an onboard
navigation system.
Secret needs: the customer wants to be seen by friends as savvy
consumer

Wants:

Wants are the specific objects might satisfy the need.
Ex: when a person is hungry.
Need- food,
Want: simple meal in home, or pizza from
or a burger.
“Marketer create wants rather than needs”

Demands:
Demand for a commodity or a product implies:
Desire to acquire it,
Willingness to buy,
Ability to pay for it.
In market if price of a product increases demand for the same
product decreases and vice versa.
Ex: KSRTC Bus rates increases the demand for travelling in
bus decreases. The consumer prefer trains rather than bus
Hubli to Gadag Bus fare is 35 but for train is 10 rupees
respectively.

Product and services:

Product: A product is anything that can be
offered to a market for attention, acquisition, use,
or consumption that might satisfy a want or need.
Ex:

Service: any act or performance that one party can offer to
another party is essentially intangible and does not result in
the ownership of anything

Value and Satisfaction:
Value is primarily function of Quality, Service and cost

Customer Value:

Is the total difference between Total Benefits Received and Total Cost
incurred by him/her in acquiring product or services.

Customer Value = T.B.R - T.C.

Ex: Apple Inc Products.

Satisfaction:

“A Person’s feelings of pleasure or disappointment resulting from
comparing products perceived performance or a outcome in relation to
his or her expectations.”

Levels of satisfaction: My satisfaction level about suits.

1. If a product/service meets his/her expectation : Satisfied
2. If a product/service does not meets his/her expectation: Dissatisfied
3. If a product/service exceeds his/her expectation : Delighted

1.ex: 3. ex:

2.ex:

Target Market:

A part of the qualified available market the company decides to
pursue is known as Target Market.

Ex:

Quality: In marketing what customer says about
product or service that is your quality.

Ex:

Marketing Information,
Functions of Marketing Research
& Information
MR& Projects,
Segmentation, Distribution
Marketing Cost Analysis

Management Product & Product Research, NPD,
Pricing Packaging, branding,
pricing, warranties,
After sales services

Department Sales Forecasting,
of Planning & Marketing Mix,
Marketing Control Annual Marketing Plans,
Management Budgeting &control

Management Development
Promotion & Sales Force control,
Advertising and Publicity,
(Marketing Management of Public and
communication) Government Relations

Channel Choice & Decisions,
Transport, Warehousing, Insurance,
Distribution Order Processing, Protective
Packaging, Inventory Control

The Product Concept:
The consumers will prefer those products that offer Quality,
Performance or Innovative features.
Managers in such companies focus on developing superior products
and improving existing product lines by devoting time to innovations.

Concept of Marketing Myopia :
A company wants to sell and market to their segment audience and From
tries to get them to buy their product through marketing practices but
fail to make the audience realize how that product is going to improve
their lives or businesses by purchasing it. It is a short-term approach
to marketing and lacks long term vision.

Marketing Myopia is the failure to define an organization's purpose in
terms of its function from the consumers' point of view. For example,
railway companies that define their markets in terms of trains, rather
than transportation, fail to recognize the challenge of competition
from cars, airlines, and buses. It is therefore necessary to define the
needs of the consumer in more general terms rather than product-
specific terms.
Marketing Myopia is the short sighted look of the managers in
wrongly identifying the category and goals of the company, not
looking at the whole industry of the product neglecting the fields of
opportunities in their area of industry, not listening to the customer's
real needs.

Production Concept:
One of the oldest concepts of the marketing.

It assumes that consumers will prefer those products and services that are
easily affordable.

Companies which adopt this philosophy for their marketing should focus on
production and distribution efficiency.

Selling Concept:

It assumes that consumers generally will not buy a company’s products unless aggressive
selling and promotion efforts are undertaken.
The problem with this approach is the belief that the customer will certainly buy the
product after persuasion and will not complain even if dissatisfied.
In reality this does not happen and companies pursuing this concept fail in business.
This approach is applicable in Insurance, Vacuum Cleaners that buyers do not think of
buying only.

Marketing Concept:

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.

This starts with Identifying from Market research, exacts needs & wants of the target
market.
The Differences between Selling and Marketing Concepts:

Selling Concept: Marketing Concept:
 Emphasis on Product.  Emphasis on customer needs and
wants
 Goal is to sell what is to produced.  Goal is to produce what is needed by
the customer
 Aggressive sales & Promotion is used  All departments of the company work
together for serving the customers
 Objective is profit through sales  Objective is profit through customer
volume satisfaction

Social Responsibility Marketing (CSR)
Or
Societal Marketing Concept:

 This marketing concept emphasizes that the key
task of the company is not only determine the
needs and wants of the target market and
delivering the desired satisfaction but also to
preserve and enhance the consumers and
society’s overall well being.

 This concept call upon marketers to build
social, ethical, and environmental considerations
in to their marketing practices.

 Green Marketing:
 The concept of marketing which deals with
eco-friendly products to fulfill the needs of the
society.

 Ex: in 1994 branded its “Earthlight”,
Eco-friendly, energy saving, fluorescent bulbs.

Holistic Marketing Concept:

A concept based on the development, design and implementation of marketing programs,
processes and activities that recognizes their interdependencies.
Marketing
Department,
INTERNAL Senior
MARKETING Management,
Other Departments.

Holistic Marketing Communications
INTEGRATED Product
Concept &
MARKETING
Services,
Channels.

Customers,
Channel,
RELATIONSHIP Partners.
MARKETING

Internal Marketing:

It is the task of hiring, training, and motivating able employees who want
to serve customers well.

Internal Marketing takes place at two levels:

1. Various Marketing Functions:

Sales Force, Advertising, Customer Service, Product Management,
Market Research.

2. Coordinating with Other Departments:

“ Think Customer” Philosophy.

Integrated Marketing:

Mixing and Matching Marketing Activities to Maximize their individual and Collective Efforts.

What is Marketing Mix:

According to McCarthy :

“ The set of Marketing tools the firms uses to pursue its Marketing Objectives”

According to him 4Ps of
Marketing are:

Product 4Cs
Price 4Ps
Promotion Product Customer Solution
Place
Price Customer Cost
Promotion Communication
Place Convenience

Relationship Marketing: The Concept of Marketing Which
emphasis on building mutually
satisfying long term relationships with
key parties in order to earn and retain
their business.

CRM PRM Its has 2 Major Parts:

Customer Relationship Management

Partner Relationship Management

Is about acquiring, Activities of the firm This leads to Build,
developing and retaining undertakes to build
mutually satisfying long Marketing Network:
satisfied loyal customer,
term relations with key
achieving profitable partners such as
growth and creating suppliers, distributors, ad The company and its supporting
economic value in agencies, and marketing stakeholders(customers, employees,
company's brand. research suppliers.
suppliers, distributors, retailers, ad
agencies, university scientists and
others)with whom it has built mutually
profitable relationships.

Introduction to Marketing

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