Unit-1 Introduction to Marketing Management

Introduction, meaning and definition of Market Introduction The word Market is derived from a Latin word Marcatus which means a place of trade, wares, traffic or merchandise(goods bought and sold). In olden days, buying and selling was done by coming together in periodical fairs, huts held at specifics places and on particular dates. The intending sellers took their commodities there and buyers used to buy them according to their needs. In those days, Barter system was common and there by most of the buying and selling was done through Barter system. People having surplus goods used to exchange with the goods they needed. The invention of money as a means of exchange revolution the market- system and gave birth to present marketing. Meaning The market is a center around which marketing activities revolve. A market in general may be described as place where goods and services are offered for sale, buyers and sellers meet the title to goods is transferred. Definitions The term market should not be restricted to physical place but buyer sell deal directly or indirectly with each other. H.E.Mejeal Market is a place where buyers and sellers can exchange goods and services.

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What is marketing? There are several definitions on marketing provided by noted marketing authors. Some of the important definitions are as follows: Marketing is a human activity directed at satisfying needs and wants through exchange process. Philip Kotler

Marketing is 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 objectives. American Marketing Association

Characteristics of Marketing
(1) Marketing is a Process: Marketing is a process of planning and implementing the production, and distribution of goods and services. It consists of various activities such as marketing research assembling, branding, packaging, advertising etc. Such activities are needed for the smooth flow of goods and services from the producer to the purchaser. (2) Consumer Needs and Wants: The core of marketing is the identification of consumers needs and wants. The marketers must constantly try to find out the problems or needs and wants of the consumers. A proper analysis of consumer problems will result into effective solution. The solution is nothing but designing such goods and services that provide a fitting answer to the consumer problems or needs. Modern marketing adopts a total consumer oriented approach.

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(3) Goods, Services and Ideas: Marketing is basically concerned with the distribution of goods from the producers to the buyers. Marketing is also connected with the exchange of services such as hotel services, insurance services, banking services, etc. Now-adays marketing is used not only to exchange goods and services but it also facilitates the exchange of ideas. (4) Target Markets: Marketing is concerned with target markets. One cannot sell everything to everyone at all times. Therefore, one has to be selective. In other words, one has to produce goods and services to a particular target audience or target market. This is because of intense competition in the business. (5) Marketing Mix: Marketing is the sum total of 4Ps-Product, Price, Promotion and Physical Distribution. All the 4Ps are directed at the prospect. To succeed and survive in this competitive business world, there must a proper marketing-mix. Marketing therefore, means producing the right product, charging the right price, adopting the right promotion and providing to right prospects. (6) Organizational Goals: Marketing activities are undertaken in order to achieve or accomplish companies objectives. This includes a fair return of profits, growth and diversification, improving market share, etc. There can be no marketing without definite objective of the firm.

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(7) Marketing is an integrated Approach: Marketing coordinates with other functional areas in a business organization. Such areas include production, finance and personnel. Such integration or coordination is necessary for the accomplishment of goal of enterprise. IMPORTANCE OF MARKETING The importance of marketing is explained as follows (1) Effective movement of Goods: Marketing helps to move the goods from the producers to the consumers. This is made possible with the help of various marketing functions, such as packaging, advertising, distribution etc. (2) Accomplishment of Firms Objectives Marketing helps a business firm to achieve its objectives. By producing products that satisfy customers wants, the company can increase its sales. This enables the organization to achieve its goals objectives. The goals can be expressed in many ways such as a certain percentage increase in profits, increase in sales, increase in market share and so on. (3) Marketing widens market Marketing enables to widen the markets with the help of advertising and other sales promotion techniques. Thus, marketers can expand their market from local to regional to national and even at international level.

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(4) Introduction of New products: Well known companies can easily introduce new products in the market. This is because they enjoy confidence and support of the consumers. Satisfied consumers are always willing to buy products and services of those companies in whom they have trust or faith. (5) Information for Decisions Marketing department collects valuable information through marketing research, reports from various sources and by other means. Such information is required to produce the goods and services as per the requirements of the target market. (6) It generates Employment Marketing creates a number of jobs in the country, either directly or indirectly. Employment is generated because of job opportunities in the production, distribution, advertising, and other areas of marketing. (7) It improves quality and Reduces cost Marketing makes it possible to improve quality of the products because of Research & Development. It also facilitates reduction in prices because of stiff competition in the market and also due to the economics of large scale production and distribution. To this extent the consumers are benefited. (8) Improves standard of Living Because of marketing, consumers can enjoy new and better varieties of goods and services. Members of the society can get the benefit of new and varied types of goods because of constant Research & Developments undertaken by well established companies. PROF PRAMOD THAPLIYAL SPKM BBA MBA COLLEGE

(9) Enhances the economic growth Marketing ensures optimum utilization of resources. Through effective production and distribution, marketing enhances speedy economic growth and well being of nation. Marketing has been define as creation of time place and possession utilities OR Modern marketing concept is not perfect market philosophy OR

The Marketing Concepts

The marketing concept is the philosophy that urges organization to focus on their customers needs. Analyzing their needs and making such decisions that satisfy those needs in a better way than competitors. To have a better understanding of marketing concept, its worthwhile to review the other philosophies that once were dominated and are still being practiced by some of the firms. The Production Concept (Industrial revolution 1920s) The basic idea behind production concept was: The firms will produce what they can produce efficiently. This will ensure enough supply of the products at lowcost and demand will be created by itself. Production concept prevailed into late 1920s because most of the products being produced were the basic necessities and there was a huge unfulfilled demand for them. This concept is the oldest of the concepts in business. It holds that consumers will prefer products that are widely available and inexpensive. Managers focusing on this concept concentrate on achieving high production efficiency, low costs, and mass distribution. They assume that consumers are PROF PRAMOD THAPLIYAL SPKM BBA MBA COLLEGE

primarily interested in product availability and low prices. This orientation makes sense in developing countries, where consumers are more interested in obtaining the product than in its features. The Product Concept. Consumers will favour those products that offer the best quality or higher performance. Under this concept there is shift from marketing low cost products to high quality products. There is more stress on product excellence. Product-oriented companies go about designing a high quality product, without considering whether the product would fit the needs and wants of the people or whether it would solve the problems of the consumers. They adore their product rather than their customer. This orientation holds that consumers will favor those products that offer the most quality, performance, or innovative features. Managers focusing on this concept concentrate on making superior products and improving them over time. The Selling Concept. By early 1930s, competition had increased in production and on the other hand there was less unfulfilled demand. So, all the firms turned towards sales concept. Now the companies were not only producing the product but also sell it to customers through personal selling and advertisement. There was no concept of need identification, firms were just interested in beating competition by selling more but neglecting customers satisfaction. We can call it hard selling. The Selling Concept. This is another common business orientation. It holds that consumers and businesses, if left alone, will ordinarily not buy enough of the selling companys products. The organization must, therefore, undertake an aggressive selling and promotion effort. This concept assumes that consumers typically show buying inertia and must be coaxed into buying. It also assumes that the company has a whole battery of effective selling and promotional tools to stimulate more buying. Most firms practice the selling concept when they have overcapacity. Their aim is to sell what they make rather than make what the market wants.

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The Marketing Concept After World War II, there was a variety of products available in the market and customers having discretionary income could make choices and purchase what really fulfill their needs. In that situation, firms were forced to think about what their customers need , when they need it and how to keep them satisfied which is the Marketing Concept. The main focus of all the firms turned from hard selling towards Identification of customer needs, making decision to fulfill those need and maintaining long-term relation with customers by satisfying their changing needs. The Marketing concept resulted in a separate marketing department in organization and today we can see many organization have structured themselves as marketing organization where every employee is contributing towards customer satisfaction whether or not hes a marketing person. So, The marketing concept totally relies upon marketing research that helps in identification of segments, their sizes, needs, target market and then by using the right Marketing Mix, marketing teams makes such decisions that results in customers satisfaction. The Societal Concept The 1980s and the 1990s saw the emergence of Societal Concept of Marketing. The Societal concept holds that the organizational task is to (i) Determine the needs, wants and interests of target markets, (ii) Deliver, the desired satisfaction more efficiently and effectively than competitors, and (iii) Preserve and enhance, the customers and societies well being. The societal concept of marketing insists that organizations while framing their marketing policies should balance three considerations. Consumer Satisfaction+ Company Profits+ Public Interest.

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The companies should not just make a consumer satisfying goods but also environment friendly and consumer health-oriented products. It is not enough to make the customer happy but to make him more active and alive by offering such goods that not only make him happy but also enable him to live a healthy life.

Difference between selling concept vs. Modern concept of Marketing Diff between Traditional vs. Modern concept of marketing
Traditional Concept Modern Concept

(1) The traditional concept is not Customer-oriented but it is more Of Producer oriented (2) It follows an approach of Sell What you can make
(3)

(1) The modern concept follows Customer-oriented marketing philosophy. (2) It follows the approach of Make what you can sell. (3) This philosophy lays emphasis not only on low cost and high quality of products but also on Environment friendly&consumer Health oriented products.

This concept holds the view that Given a chance, the consumer will Favour Products which are easily Available, low in Cost, and of high Quality.

(4)The main objective of a firm is to Earn profits.

(4) This concept make balance Between Customer Public+ Welfare+ Companys Profits.

(5) This philosophy does not place emphasis on social responsibility Of the firm.

(5) This philosophy places a lot of emphasis on the social Responsibility of firm.

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(6)

In order to induce the customer to Buy, the marketing efforts adopted this philosophy are advertising and Salesmanship. This is no emphasis Marketing research and after saleService.
(7) This

(6) In order to induce the customer to buy, the marketing efforts adopted under this philosophy are marketing research, advertising, salesmanship, after Sale-service and other promotion Tools. (7) This philosophy is gaining a lot of importance in present day Competitive business world.

philosophy is losing grounds in Modern competitive business world.

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