Introduction to Marketing

What is marketing?
A social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging value with others. Understanding the market place and consumer needs: Marketing process begins, continues and ends with customers.

 Needs: human needs are states of felt deprivation. This includes basic physical needs, social needs and individual needs. Wants : are human needs which are shaped by culture and individual personality. Wants are shaped by ones society and described in terms of objects that will satisfy ones needs. Demand: Human wants backed with buying power .People Demand for products with benefits which add up to the value and satisfaction. Marketing Offer: some combination of products, services, information or experiences offered to the market to satisfy the needs and wants.

 Value and Satisfaction: consumers usually face a broad array of products and services that might satisfy the given needs. How do they choose? Consumers make choices based on their perception of the value and satisfaction that various products and services deliver. They also form expectations about the value of various marketing offers and buy accordingly

Exchange, Transactions and Relationships:

Exchange is the act of obtaining a desired object from someone by offering something in return.

Transaction is marketing unit of measurement. It consists of a trade values between two parties.

 Relationships : marketing consists of actions taken to build and maintain desirable exchange relationships with the target audiences involving a product or service.. It is beyond attracting the new customers , the goal is to retain its existing ones .
Markets: the concepts of exchange and relationship leads to the concept of markets. A market is a set of all actual and potential buyers of a product and services. The size of the market depends on the number of people who exhibits their needs, have resources to engage in exchange and are willing to exchange these resources for what they want.

Nature of marketing Marketing is an economic function of exchange It is a legal process by which ownership is transferred. It is a system of interacting business activities
It is a managerial function of organizing and directing business activities that facilitates the movement of goods from producers to consumers.

(cont.)
It is a philosophy based on consumer orientation and satisfaction. It has dual objectives- profit making and consumer satisfaction

It is a social process by which the society gets goods and services for the satisfaction of needs

Scope of marketing Study of consumer wants and needs. Study of buyer behavior Product planning and development Pricing policies Distribution Promotion

Consumer satisfaction

Study of consumer wants and needs:-

Goods are produced to satisfy human wants. Therefore the marketers has to study the wants and needs of consumers. These wants and needs motivate consumers to purchase goods and services

Study of buyer behavior:-

Modern marketing emphasizes on the study of buyer behavior. Analysis of the behavior pattern of the customers is helpful for the market segmentation and targeting.

 product planning and development:product is the core of marketing . Product planning starts with the generation of product idea and ends with the development and commercialization of the product. Product planning covers the decisions like branding, packaging, labeling, grading etc. and expansion or contraction of existing product lines.

Distribution :Study of marketing channels is one of the major areas of marketing. Goods are to be distributed at the minimum possible cost, to the largest number of consumers. Thus suitable distribution channels should be selected
Promotion:It includes advertising, sales promotion and personal selling. These promotional activities are very essential for the accomplishments of the marketing goal.

Consumer satisfaction :-

in the modern world consumer is the king. The prosperity of the business depends on the consumer. Therefore every marketer should give importance to consumer satisfaction.

Importance of Marketing
Marketing is a very important aspect in business since it contributes greatly to the success of the organization. Production and distribution depend largely on marketing. Many people think that sales and marketing are basically the same the goal of marketing is to make the product or service widely known and recognized to the market, marketers must be creative in their marketing activities

Marketing Promotes Product Awareness to the Public Marketing Helps Boost Product Sales

Marketing Builds Company Reputation

Marketing Environment

A companys marketing environment consists of the actors and forces outside marketing that affect marketing managements ability to build and maintain successful relationships with target customers

 The environment keeps changing rapidly Marketers must be the trend trackers and opportunity seekers The marketing environment is made up of Microenvironment and Macroenvironment. Microenvironment consists of actors close to the company that affects its ability to serve its customers the company , suppliers , marketing intermediaries , customer markets, competitors and publics.

The company

Suppliers

Marketing intermediaries

Customers

Competitors

Public

The company

In designing marketing plans the marketing management takes other company groups into account top management, finance, R&D, purchasing, operations and accounting. These interrelated groups or departments form the internal environment Top management sets the company mission, plans and strategies and so on. The marketing management makes the decision within the strategies and the plans made by the top management.

Suppliers

Suppliers form an important link in the companys overall customer value delivery system. Supplier problems can seriously affect marketing. Marketing managers must watch supply availabilitysupply shortages or delays, labor strikes and other events can cost the sales in the short run and damage the customer satisfaction in the long run. Rising supply costs may force price increase that can harm the companys sales volume.

Marketing intermediaries
Marketing intermediaries are firms that help the company to promote, sell and distribute its goods to final buyers; they include resellers, physical distribution firms, marketing service agencies and financial intermediaries Resellers:- are distribution channel firms that help the company find customers or make sales to them. These include wholesalers and retailers Physical Distribution :- are firms which helps the company to stock and move goods from their point of origin to their destinations Marketing services agencies: are marketing research firms, advertising agencies, media firms and marketing consulting firms that help the company target and promote its products in the right market

Financial intermediaries: include banks, credit companies, insurance companies and other businesses that helps finance transactions or insure against the risks associated with the buying and selling of goods.

customers
The company needs to study five types of consumer markets closely 1. Consumer markets: consists of individuals and households that buy goods and services for personal consumption. 2. Business markets: buy goods and services for further processing or for use in their production process. 3. Reseller markets: buys goods and services to resell at a profit. 4. Government markets: are made up of government agencies that buy goods and services to produce public services or transfer the goods to others who need them. 5. International markets: consists of these buyers in the other countries , including consumers, producers, resellers and governments.

competitors

The marketing concept states that to be successful , a company must provide greater customer value and satisfaction than its competitors. They must gain strategic advantage by positioning their offerings strongly against competitors offerings in the minds of the consumers. Each firm should consider its own size and industry position compared to those of its competitors

Public

Any group that has an actual or potential interests in or impact on the organizations ability to achieve its objectives. A company can prepare a marketing plan for its major publics as well as for its customer markets . For example a company wants a specific response from a particular public such ass goodwill, favorable word of mouth or donation of time and money. The company would have to design an offer to this public that is attractive enough to produce desired response.

The companys Macro environment

Demographic Environment

Is the study of human populations in terms of size, density, location, age, gender , race ,occupation and other statistics.

The demographic environment is of major interest to the marketers because it involves people and people make up the markets

Economic environment

Markets require buying power as well as people. The economic environment consists of factors that affect consumer purchasing power and spending patterns.

Countries vary greatly in their levels and distribution of income.

Some countries have subsistence economies and some have industrial economies. subsistence economies: they consume most of their own agricultural and industrial output. These countries offer few market opportunities. Ex - Ethiopia, Tanzania, Ireland, and Finland

 Industrial economies: which constitute rich markets for different kinds of goods. Marketers must pay close attention to major trends and consumer spending patterns both across and within their world markets.

Natural environment

This involves the natural resources that are needed as inputs by marketers or that are affected by marketing activities . In many cities around the world, air and water pollution have reached dangerous levels. Marketers should be aware of several trends in the natural environment. 1. Growing shortages of raw materials:- air and water are the main raw materials which are in long run danger. Air and water pollution are already causing problems in the world.

 Renewable sources such as forest and food should be used wisely. Nonrenewable sources like oil, coal and various minerals pose a serious problems. Firms making products that require these scarce resources face increase in costs even if the materials are available. 2. Increased pollution :- most of the industries damage the quality of the natural environment. They damage by disposal of chemicals, nuclear wastes, quantity of chemical pollutants in the soil, littering the environment with non biodegradable bottles , plastics etc.

3. Increased government interventions in natural resource management:- the government of different countries vary their concern and efforts to promote a clean environment. Therefore the marketers should help develop solutions to the material and energy problems facing the world. Companies should respond to consumer demands with ecologically safer products, recyclable or biodegradable packaging etc.

Technological environment

Are forces that create new technologies, creating new products and market opportunities. Technology has released wonders such as antibiotics , notebooks, computers and the internet.

It has also released horrors such as nuclear missiles , chemical weapons and assault rifles.
Technology changes rapidly and therefore the marketer should watch the technological environment closely because the companies which do not keep up with the technological change soon will find their products outdated and will miss new product and market opportunities.

Political environment

Is the laws , government agencies and pressure groups that influence and limit various organizations and individuals in a given society.

marketing decisions are strongly affected by the developments in the political environment.
Even the most liberal advocates of free market economies agree that the system works better with some regulations

 Well conceived regulations can encourage competition and ensure fair markets for goods and services. Thus governments develop public policy to guide commerce set od laws and regulations that limit business for the good of the society. Examples- child protection act (1966) bans sale of hazardous toys and articles sets standards for child resistant packaging nutrition labeling and education act (1990)- requires that food product labels provide detailed nutrition information.

Cultural environment

Is made up of institutions and other forces that affect the societys basic values, perceptions, preferences and behaviours. people grow up in a particular society that shapes their basic beliefs and values . They accept a world view that defines their relationship with others

Functions of marketing