Understanding the customer and his needs.

Marketing Concept Distinction between Marketing & Selling Market Problem Market Information Market Assessment Distribution Channel

Marketing Concept

It is A total system of interacting business activities designed to plan, price, promote, distribute- Satisfying product & service to present & potential customer

The main Features are:

1.

Customer Orientation- Customer rather than product is the focus of attention

2. Marketing Research: In order to understand the customer & their need, regular & systematic research is carried out. 3. Integrated Marketing: Marketing mix is designed & implemented to meet the needs & desire of the customers

Market Concept requires:

Identification & assessment of the target market 2. Formation of appropriate market strategy 3. Integration of all business activities to achieve the desired goal 4. Evaluation & action to ensure desired level of customer satisfaction
1.

Distinction between marketing & Selling

Marketing: Consumer Oriented Long term goal (mutual satisfaction between buyer & seller). It begin before goods are produced & it continues. Selling: It being after goods are produced & finished after transfer of ownership.

Focus

Means

Objective

Selling Concept

Product

Selling & promotion

Profit through Sales Volume

Marketing Concept

Consumer Needs

Integrated Market

Profit through Customer Satisfaction

Marketing
Focus on Customer need Customer enjoys importance

Selling
Focus on Seller needs Product is important

Product planning & development is Pressure for selling the goods to be matched with market already produced Integrated approach to achieve long Approach to achieve immediate term goal gain Converting customer need into product

Converting product into cash

Profit through customer satisfaction Profit through sales

Market Problems of Small Business Units SSI cannot withstand stiff competition with large units in terms of quality, cost etc Most of SS entrepreneurs have less appreciation for marketing concept & strategy. SS entrepreneurs are unable to understand the market trends quickly & accurately.

Case Study Observation(50 SS units)

Competition from large/Medium enterprise, e.g. copper work, Carpet weaving. Lack of Sales Promotion: SS have to pay heavy commission to the dealer as their products are not branded. Weak Bargaining Power: No payment to dealer if sale is at manufacturing place.

Market Information
Price policy, Type of product, Channel of distribution & Sales Promotion may be work out with right market information Large Unit carried out Market researchCollection of data, Analysis of data problem relating to sales Small scale unit- Collect information from personal contact with their dealer

Secondary source

Press Govt. Publication Publication of Financial Institutions Foreign Govt & International agenciesUNO, IMT, World bank, ILO etc. Publication by trade union Private concern & research instituteFICCI (Private) IIFT, IAMR

Primary Sources
Customer Dealer Salesman

Market Assessment

Survey Method: Information is collected from dealer, Sales person & expert- Analyzed and demand is calculated Statistical method: Say 10% increase every year for past 10 years than 10% increase for next 10 years (Time series Analysis) Under Regression analysis- demand is estimated on the basis of established relationship with some variable e.g. per capita income

Contd..

Leading Indicator Method: Say production of vehicles are up then the related item- petrol & diesel demand will be up

Market Segmentation
Market consist of heterogeneous customer in terms of their need, Preferences & buying capacity. Different approach is required for each group of customer. Total market is divided into different segment of different group. small scale unit should focus on segment market

Geographic Segmentation
Urban Rural Backward Export market : different requirement than domestic.

Demographic Segmentation

Age Sex Martial status Children Manufacture of toys, Toffes & comics focus on children

Socio Economic Variable

Income level influence the quality and quantity of the product- Peter England, Apple Mobile phone

Psychological Variable
Personality, Lifestyle, Attitude etc also used for Market Segmentation

Market Mix
It is systematic & balanced combination of product, price, place (physical distribution) and promotion

Product

Price

FIRM
Place

Promotion

Product: Product design, Brand name, Package, Warranties, after sales service. Price: Basic price, discount, terms of credit etc Promotion: Advertisement, Sales Place: Middlemen, Transportation, Inventory etc of the product

Consumer
1.

Convenience goods Staple- Bread, butter, groceries Impulsive--Razor blade, cosmetic Emergency- Ambulance service 2. Shopping: Shoes, dress material, mixer grinder etc 3. Specialty goods: Fancy dress, Jewellery, automobiles, costly camera etc.

Industrial Goods
Raw Material: Mineral, Agriculture product, Dairy product Fabricated material: Leather into shoes, yarn into clothes, pig iron into steel Operating supplies: Lubricant, heating fuel, office stationary etc Installation: Land & building, Heavy production m/c Accessories: Welding set, hand tools etc.

Channel of Distribution
Distribution channel is a channel by which product moves from producer to customer Manufacture to customer

Producer

consumer

e.g BATA (own retail store), door to door selling Fast, shortest route & economical

Manufacturer- Wholesaler- Customer

Producer Retailer consumer

Manufacturer sell to big chain of stores who sell to customer. It is very popular e.g. TV set, refrigerator, washing m/c etc.

Manufacturer- Wholesaler- Retailer-Customer For small products e.g. drugs, cosmetics

Market scheme- GPP