2Marketing function Four P’s in marketing Different concepts in marketingProduction conceptProduct conceptSelling conceptMarketing conceptSocietal and holistic concept
3Marketing demand Method of demand fprecasting Survey of buyers’ intentionSales force opinionExpert opinionMarket testTime series analysisStatistical demand analysis
4Market segmentation Meaning Importance Different bases of market segmentation with reference to consumer product and industrial product
5What is Marketing ?Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering and freely exchanging products and services of value with others.
6What is Marketing management ? Marketing Management is the art and science of choosing target markets and getting, keeping and growing customers through creating, delivering and communicating superior customer value.
13Different concepts in marketing The Production ConceptThe Product ConceptThe Selling ConceptThe Marketing ConceptThe societal and holistic Concept
14The Production Concept Oldest concept in businessConsumer prefer products that are widely available and inexpensiveBusinesses concentrate on achieving high production efficiency, low costs and mass distributionsApplicable for developing countries and also in expanding marketE.g. inexpensive toys, electronics
15The Product ConceptProducts with high quality, performance or innovative featuresManagers focus on superior products and improving them over the timeLittle or no customer inputRarely examine competitor’s productFor success it’s necessary to be perfectly priced, distributed, advertise and sold properlyLeads to marketing myopiaE.g HMT, ambassador car
16Marketing myopia Ignoring the demand, taste and liking of consumer Looking into mirror than looking outColored and crooked perception of marketingShort sightedness about businessExcessive attention to productionObsession with the productInadequate understanding of market
17The Selling ConceptConsumers and businesses if left alone will not buy enoughIt undertake an aggressive selling and promotion effortThe selling concept is practiced most aggressively with unsought goods that buyers normally don't think of buying such as insurance.Sell more stuff to more people for more profitMany use it at the time of over capacity or competitionE.g. consumer durables
18The Marketing Concept Customer – centric concept Reactive market orientation and proactive marketing orientationMore effective than competitors in creating, delivering and communicating superior customer valueFulfilling buyer’s needsHP and Motorola have made a practice of researching latent need through a :Probe – and – learn” process.
20Distinction between marketing and selling Focuses on customer’s needsCustomer enjoys supreme importanceProduct planning and development to match products with marketsIntegrated approach achieve long term goalsConverting customer’s needs into productsFocuses on seller’s nee dsProduct enjoys supreme importanceHigh pressure selling to sell goods already producedFragmented approach to achieve immediate gainsConverting products into cash
21Marketing Selling Let the seller beware principle is followed Profits through customer satisfactionLet the buyer beware principle is followedProfits through sales volume
22The societal and and holistic Concept The societal marketing concept calls upon marketers to build social and ethical considerations into their marketing practices. They must balance and juggle the often conflicting criteria of company profits, consumer want satisfaction, and public interest. Yet a number of companies have achieved notable sales and profit gains by adopting and practicing the societal marketing concept.
24To determine the needs, wants and interest of the target market and deliver the desired satisfaction that preserves the society’s well beingThey see it as affording an opportunity for companies to enhance their corporate reputation, raise brand awareness, increase customer loyalty, build sales, and increase press coverage. They believe that customers will increasingly look for demonstrations of good corporate citizenship. Smart companies will respond by adding “higher order” image attributes than simply rational and emotional benefits.Environment deterioration
25Marketing demand Method of demand fprecasting Survey of buyers’ intentionSales force opinionExpert opinionMarket testTime series analysisStatistical demand analysis
26Demand forecastingDemand forecasting means expectations about the future course of the market demand for the product.
27Survey of buyer’s intention method A firm can determine the demand for its products through a market survey. It may launch a new products, if the survey indicates that there is a demand for that particular product in the market.For example, Coke in India expanded its product range beyond carbonated drinks, after the company conducted a nation wide survey. The survey revealed that about 80% of the youth preferred to drink tea or coffee rather than carbonated drinks at regular intervals. The remaining 20% preferred to have milk products while only 2% preferred to drink carbonated drinks like coke.The company is now trying to bring tea and coffee brands to India by installing vending machines. It is also planning to introduce a coconut flavored drink in kerala and a black currant in Tamilnadu named portello.
28Merits of survey of buyer’s intention method The forecast comes straight from the horse’s mouth – the customer himself and hence more reliable.It gives readymade forecast user-wise and user industry-wise.
29Demerits of survey of buyer’s intention method It is expensive.It is time consuming.
30Sales force opinion method Sales forecasts are made on the basis of the opinion of the salesmen or top management in the respective areas.Salesmen are more in personal contact with the customers, their opinions and estimates can be more reliable.
31Merits of salesforce opinion method Demerits of salesforce opinion methodIt is easy and simple.As salesmen’s opinions are used for sales forecasting they do feel that their importance is accepted by the management.The forecasts developed by this method have greater stability and reliability because of the largeness of the sample.Their opinions cannot be of much use if their knowledge is limited.Salesmen are certainly not experts in forecasting, they cannot use sophisticated techniques.
32Expert Opinion methodThe expert opinion method, also known as “EXPERT CONSENSUS METHOD”, is being widely used for demand forecasting.This method utilizes the findings of market research and the opinions of management executives, consultants, and trade association officials, trade journal editors and sector analysts. When done by an expert, qualitative techniques provide reasonably good forecasts for a short term because of the expert’s familiarity with the issues and the problems involved.DELPH I METHOD:- The Delphi method is primarily used to forecast the demand for “NEW PRODUCTS”.
33Merits of expert opinion method Demerit of expert opinion method As expert’s knowledge is used, forecasting will be accurate.It is also suitable where past record of sales is not available or a new product is to be introduced.It is time consuming.It is expensive.
34Market Test methodIn this case, a test area is selected, which should be a representative of the whole market in which the new product is to be launched. A test area may include several cities and towns, or a particular region of a country or even a sample of consumers.More than one test area can be selected if the firm wants to assess the effects on demand due to various alternative marketing mix.Advertising or packaging can be done in various market areas. Then the demand for the product can be compared at different levels of price and advertising expenditure. In this way, consumer’s response to change in price or advertising can be judged.
35Demerits of market test method The test experiments are that they are very costly and much time consuming.If in a test market prices are raised, consumer may switch to the competitor’s products.It may be difficult to regain lost customers even if the price is reduced to the previous level. Moreover, it is often difficult to select an area, which accurately represents the potential market.
36Time series analysis method 1)TREND:- Past data is used to predict the future sales of firm .2)SEASONAL VARIATIONS:- It is taken into account the variations in demand during different seasons.Eg:- The sale of cotton dresses increases in summer. The sale of Woolen clothes increases in winter.3)CYCLICAL VARIATIONS:- This variations in demand due to the fluctuations in the business cycle – Boom, recession and depression.4) RANDOM FLUCTUATIONS:- It may happen due to Natural calamities like flood, earthquake, etc. which cannot be predicted accurately.
38Statistical demand analysis If two variables are correlated in a definite manner, the behaviour of one of them can be predicted on the basis of the data about the other variable.For example, in many developed countries sales of toothbrush clearly seem to be related with the size of population.Thus if any two variables are correlated and if reliable data about one of them is available, the value of the other variable can be predicted with accuracy.Demerit of this method is that it depends too much on the past events.
39Importance of advertising To producers and tradersMeeting competition- by creating brand loyaltySteady demand e.g. hot and cold coffeeeHigher sales volumeIntroduction of new productsEconomies of scaleGoodwillEmployee morale- product is known to customers so task of salesmen becomes easy
40To customersConvenienceEducation of consumersFair pricesBetter qualityTo societyEmploymentStandard of livingSustain the pressStimulates research and developmentIncentive to progressArt and culture
41Market segmentation Meaning Importance Different bases of market segmentation with reference to consumer product and industrial product
42Meaning of market segmentation The concept of market segment is based on the fact that the market of commodity are not homogeneous but they are heterogeneous. Market represent a group of customer having common characteristics but two customers are never common in their nature, habits, hobbies, income and purchasing techniques.
43According to Philip kotler, “Market segmentation is sub-dividing a market into distinct and homogeneous subgroups of customers where any group can conceivably be selected as a target market to be met with distinct marketing mix.”Dividing large market into small groupEach group should have common characteristic
44Importance of market segmentation Facilitates consumer-oriented marketingFacilitates introduction of suitable marketing mixFacilitates introduction of effective product strategyFacilitates the selection of promising marketsFacilitates exploitation of better marketing opportunitiesFacilitates selection of proper marketing programme
45Facilitates effective advertising Provides proper direction to marketing effortsProvides special benefits to small firmsFacilitates optimum use of resources
46Different bases of market segmentation of consumer product DemographicGeographicPsychographicBehavioral
47Demographic segmentation Age and life-cycle stageGenderIncomeGenerationSocial class
48Geographic segmentation RegionCityRural and semi-urban areas