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Akash Saxena
By Akash saxena
Marketing: What is it
The American Marketing Association (AMA) defines marketing as “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 definition needs further explanation
On the part of marketers, they need to
•Plan and execute
•The marketing mix (product, price, place and promotion)
•Of their offerings (Kotlar has suggested ten type of entities, includes
ideas, goods, services, places, individuals etc)
•To create exchanges (marketing is exchange oriented)
•That satisfy individual and organizational goals.
By Akash saxena
What is Marketing?
Marketing in its most basic form is
a societal
“ Process by which individuals and groups
obtain what they need and want through
creating and exchanging products and
value with others .”
More simply : Marketing is the delivery
of customer satisfaction at a profit .
By Akash saxena
The genesis of marketing
Man is a social animal.
Society is based on sharing needs and
solutions
At the very basic marketing is the
process of identifying a need and
satisfying it.
By Akash saxena
An example
Food is a basic need.
There are people and
organizations who produce
variety of food stuff to meet this
need while earning profits.
McDonalds produce tasty burgers
to satisfy appetite of people while
earning soaring profits every
year.
By Akash saxena
David Packard, Cofounder
H.P.
“Marketing is too important
to be left only to the
marketing department”
By Akash saxena
Core Marketing Concepts
Needs , Product
wants , s
and demands and
Service
s
Markets
Exchange , Value ,
transactions , satisfaction ,
and relationships and quality
By Akash saxena
What Motivates a Consumer
to Take Action?
Needs - state of felt deprivation for
basic items such as food and clothing
and complex needs such as for belonging .
i . e . I am thirsty
By Akash saxena
What Will Satisfy Consumer ’ s
Needs and Wants?
Products –
anything that can be offered to a market for
attention , acquisition , use or consumption and
that might satisfy a need or want .
Services –
activities or benefits offered for sale that are
essentially intangible and don ’ t result in the
ownership of anything .
By Akash saxena
Types
A physical good {Soap, Cereal etc}
Service {Airline, Insurance, Banking}
Person {Amitabh Bacchan, Sonia
Gandhi}
Organization {Nonprofit, Trade
Organization}
Place {Bareilly, U.P., India}
Idea {Vote for BJP, Education of girl
child}
Properties (DLF, Unitech)
Information (News, Databases)
Experiences (Disney World, Space
Tourism)
By Akash saxena
Events (Olympics, ICC World Cup,
1. Physical Goods
By Akash saxena
2. Services
TATA
AIG
Life
Insuran
ce
Indian
Rail
Promotion
al Offers
By Akash saxena
3. Person
By Akash saxena
4. Organization
By Akash saxena
5. Place
By Akash saxena
6. Idea
By Akash saxena
7. Information
By Akash saxena
8. Properties
By Akash saxena
9. Event
By Akash saxena
10. Experience
By Akash saxena
Classifying Products
Consumer Products
Products purchased to satisfy
personal and family needs
Business Products
Products bought to use in an
organization’s operations,
to resell, or to make
other products
(raw materials and
components)
By Akash saxena
Consumer Products
By Akash saxena
Consumer Products
Convenience Products
Relatively inexpensive, frequently
purchased items for which buyers exert
minimal purchasing effort
Characteristics
Marketed through many retail outlets
Relatively low per-unit gross margins
Little promotional effort at the retail level
Packaging is important marketing mix element
By Akash saxena
Consumer Products (cont’d)
Shopping Products
Items for which buyers are willing to
expend considerable effort in planning
and making purchases
Characteristics
Do not have brand loyalty appeal
Expected to last a long time; less frequently
purchased
Require fewer retail outlets
Inventory turnover is lower
Gross margins are higher
More amenable to personal selling
Supported (servicing and promoting the product) by
both the producer and channel members
By Akash saxena
Consumer Products (cont’d)
Specialty Products
Items with unique characteristics that buyers
are willing to expend considerable effort to
obtain
Characteristics
Are preselected by the consumer
Have no close substitutes or alternatives
Are available in a limited number of retail outlets
Purchased infrequently and represent a significant
and expensive investment
Have high gross margins
and low inventory
turnover
By Akash saxena
Consumer Products (cont’d)
Unsought Products
Products purchased to solve a sudden
problem, products of which the customers
are unaware, and products that people do
not necessarily think about buying
Characteristics
Speed and problem resolution of the utmost
importance
Price and other features not considered
No consideration of substitutes
or alternatives
Purchased infrequently
By Akash saxena
Business Products
Installations
Facilities and nonportable major equipment
Office buildings, factories and warehouses,
production lines, very large machines
Accessory Equipment
Equipment used in production
or office activities
File cabinets, small motors,
calculators, and tools
By Akash saxena
Business Products (cont’d)
Raw Materials
Basic natural materials that become part of
a physical product such as ores, water,
lumber, grains, and eggs
Component Parts
Items that become part of the physical
product
Finished items ready for assembly
Items needing little processing
before assembly
Computer chips, engine blocks,
girders, and paints
By Akash saxena
Business Products (cont’d)
Process Materials
Materials that are not readily identifiable
when used directly in the production of
other products such as screws, knobs,
and handles
MRO Supplies
Maintenance, repair, and operating items
that facilitate production and do not
become part of the finished product such
as cleaners, rubber bands, and staples
By Akash saxena
Business Products (cont’d)
Business Services
The intangible products that many
organizations use in
their operations such as cleaning, legal,
consulting, and repair service.
By Akash saxena
How Do Consumers Choose
Choose Among Products and
Services?
Customer Value –
benefit that the customer gains from owning and using a product
compared to the cost of obtaining the product.
Value = Benefits/costs
Customer Satisfaction –
depends on the product’s perceived performance in delivering value
relative to a buyer’s expectations. Linked to Quality and Total Quality
Management (TQM).
By Akash saxena
How do Consumers Obtain
Products and Services?
By Akash saxena
The following conditions must exist for a marketing
exchange to take place:
•Two or more social units – people or organizations – must
be involved, and each must have wants to be satisfied. If
you totally self sufficient in one area there is no need to
exchange.
•The parties must be involved voluntarily (no force). Each
party believes that it is appropriate or desirable to deal
with the other party
•Each party must have something of value to contribute in
the exchange.
•The parties must be capable of communication & Delivery
of the product or the service.
By Akash saxena
•Each party must be free to accept or reject any offer
Transactions –
Relationships –
By Akash saxena
Transfer
When one person/party offers
something to other party and gets
nothing in return.
Gifts, Subsidies and charitable
contributions are all transfers
Marketers have broaden the concept of
marketing to include the study of
transfer behavior as well as
transaction behavior
By Akash saxena
Contd…
In most generic sense, marketers seek to draw
a behavioral response from another party.
Business firm – purchase
Political candidate – vote
Church – active member
Social action group – a passionate
adoption of some cause
Marketing consists of actions undertaken
By Akash saxena
What is marketed
Kotler has suggested 10 types of
marketable entities –
Goods, services, events, experiences,
persons, places, properties, organizations,
information, ideas
By Akash saxena
Who markets
A marketer is someone who seeks a
response (attention, a purchase, a vote, a
donation) from another party called
prospect
By Akash saxena
Economic Utilities
How marketing relates to production ?
Together, production and marketing provide the four basic economic
utilities.
Form Utility, Time utility, place utility and possession utility
}
Time
Utility
Value that comes from
satisfying human needs
place
possession
Provided by marketing
By Akash saxena
Who Purchases Products
and Services?
Market
Market -- buyers
buyers
who Actual
Actual
who share
share aa
particular
particular need
need
Buyers
Buyers
or
or want
want that
that
can
can
be
be satisfied
satisfied by
by
aa Potenti
Potenti
company’s
company’s al
al
products
products Buyers
Buyers
or
or services.
services.
By Akash saxena
market
Grouping of customers
By Akash saxena
Type of markets
Consumer markets
Business Markets
Global markets
Non profit & Government markets.
By Akash saxena
Type of markets (another
perspective)
Market places – Physical – A store
Market spaces – Digital – Internet
store
Meta Market (Mohan Sawhney)-
consists of all related aspects to a
product market – Ex. Auto
manufacturers, new & used car
dealers, Insurance companies,
repairs, parts, registration,
accessories etc all fall under
automobile meta market.
By Akash saxena
By Akash saxena
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Modern Marketing System
A Short History of marketing
Era Time period Prevailing attitude
By Akash saxena
Evolution of Business Models and the role of Marketing
By Akash saxena
Modern Day perspectives of
Production concept
Managers of production oriented firms
concentrate on achieving high
production efficiency, Low costs, and
mass distribution
This orientation makes sense in
developing countries such as china.
Companies like Lenovo & Haier take
advantage of country’s huge and
inexpensive labour pool to dominate
the market.
Marketers also use the production
concept when a firm wants to expand
By Akash saxena
Product Concept
The concept proposes that “Consumers
favor products that offer the most quality
performance; or innovative features”
Manager’s Focus: Making superior product
and improving them over time. (However
these managers are sometimes caught up
in a love affair with their products
“MARKETING MYOPIA”)
The better mousetrap fallacy, believing that
a better mousetrap will lead people to
beat a path to their door.
However, a new and improved product will
not Bynecessarily
Akash saxena
successful unless it is
Marketing Myopia (Theodore
Levitt)
By Akash saxena
By Akash saxena
ed till mid 1950s
proved that producing the goods was not everything, a compan
n processes
he main objective
gained significance
By Akash saxena
Marketing Concept:
During the sales era, companies ignored consumer wants and needs.
They simply focussed on selling their products
•By the early 1950s companies begun to realise that they would fail
if they did not satisfy consumer needs.
•Marketing era begun in the mid 1950s
•Here the stress is on consumer orientation
•Coordinated marketing management (customer orientation and
profitability)
•It embraces all the activities of a firm.
•Aims at matching the company’s offering with customer needs to
achieve the desired level of customer orientation and generate
profits for the company.
•Long term profitability
•Functional integration
By Akash saxena
Marketing and selling concepts (Contrasted)
Selling Profits
Existing
Factory and through
Products
Promoting Volume
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By Akash saxena
Societal Society
Society
Marketing (Human
(Human Welfare
Welfare))
Concept
Societal
Societal
Marketing
Marketing
Concept
Concept
Consumers
Consumers Company
Company
(Wants)
(Wants) (Profits)
(Profits)
By Akash saxena
Societal Marketing concept:
ØThe customer and society are interrelated
ØHelp maintain society’s well being
ØEnvironmental and social concerns
ØThe concept calls for striking a balance between the company’s
profits, the customers wants and society’s interest.
ØExamples:
Kodak – which is concerned for the environment for a very long
period of time (recycling, reusing and recreating)
ØCustomers react unfavorably to those who practice otherwise
HLL – Various social initiatives
By Akash saxena
Sony Environmental Vision for an Environmentally Sustainable Society
The Sony Group Environmental Vision presents a vision and basic
approaches for environmental management activities throughout
the global Sony Group with the aim of creating a sustainable
society. It utilizes eco-efficiency to manage progress towards the
target.
Basic Approach to Creating a Sustainable Society
Ethical Globalization
Concerns
Changing
World
Economy
By Akash saxena
By Akash saxena
By Akash saxena
By Akash saxena