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Principles of Marketing

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1 Principles of Marketing
Introduction

2 Meaning and definition of marketing
Marketing is a social process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others PHILIP KOTLER This definition includes following core concepts : NEEDS ,WANTS and DEMANDS --- PRODUCTS------VALUE & SATISFACTION---EXCHANGE & TRANSACTION---MARKETS & MARKETERS

3 WHAT IS MARKETING ? Marketing is the management process which identifies, anticipates, and supplies customer requirements efficiently and profitably. In other words, it is the process of understanding, creating, and delivering profitable value to targeted customers better than the competition.

4 WHAT IS MARKETING ? Its aim is to establish, maintain, enhance long term relationship with customers at a profit so that the objectives of the parties involved are met. In short marketing consists of attracting, developing, and retaining profitable customers.

5 BUSINESS IS MARKETING Marketing can not be considered as a separate function , it is the whole business, seen from the point of view of its final results that is profit,through customer satisfaction PETER DRUCKER

6 Core marketing concepts
NEED : A state of felt deprivation of some basic satisfaction ( Food, Clothing, Shelter, Belonging etc. ) WANTS : Wants are desires for specific satisfiers of the deeper needs. Needs are few and wants are many . DEMANDS : are wants backed by Ability to buy and Willingness to buy

7 Market: A market consists of all the potential customers sharing a particular need or want who might be willing and able to engage in exchange to satisfy that need or want. Satisfaction: It is the customers’ perceived performance from a product in relation to the expectations.

8 Core Concepts of Marketing
Needs, wants demands Products Utility, Value & Satisfaction Markets Marketing & Marketers Xchange, Transaction Relationships

9 A SIMPLE MARKETING SYSTEM
Communication Goods & Services Market Industry Money Information/Feedback

10 WHAT IS MARKETING MANAGEMENT ?
Marketing Management is the analysis, planning, implementation and control of programs designed to create, build and maintain beneficial exchanges and relationships with target markets for the purpose of achieving Organisational objectives.

11 WHAT IS MARKETING MANAGEMENT ?
Marketing management is demand management or it involves the task of influencing the level, timing and composition of demand. At times the actual demand level may be below, equal to, or above the desired demand level and the major task of marketing management is to regulate the level of demand.

12 Evolution of marketing concepts (1) THE PRODUCTION CONCEPT
Company Produce more & more Produce Consumers Sell Practically sells itself

13 THE PRODUCTION CONCEPT
Consumers will favour those products that are widely available and low in cost. Therefore increase production and cut down costs. And build profit through volume.

14 Profit through production efficiency
Production Concept Profit through production efficiency - Low price - Mass distribution Mass Production Factory Starting Point Focus Means Ends

15 (2) THE PRODUCT CONCEPT Practically sells itself,if it gives most quality for money Produce Quality Products Consumers Sell Buyers admire well-made products and can appraise product quality and performance.

16 Therefore, improve quality, performance and features.
THE PRODUCT CONCEPT Consumers will favour those products that offer the most quality, performance, or innovative features. Therefore, improve quality, performance and features. This would lead to increased sales and profits.

17 Product Concept Starting Point Focus Means Ends
Profit through well made products - High quality - Innovation - Performance guarantee Product quality Factory Starting Point Focus Means Ends

18 Consumers have normal tendency to resist.
(3) SELLING CONCEPT Consumers have normal tendency to resist. Aggressive selling & promotion efforts Produce Sell it Consumers Making sales becomes primary function and consumer satisfaction secondary .

19 Consumers , if left alone , will not buy enough of company’s products.
THE SELLING CONCEPT Consumers , if left alone , will not buy enough of company’s products. Therefore, promote sales aggressively. And,build profit through quick turnover.

20 Selling Concept Starting Point Focus Means Ends - Aggressive selling
Profit through high sales volume - Aggressive selling - Heavy promotion Product of seller’s choice Factory Starting Point Focus Means Ends

21 “ LOVE THE CUSTOMER , NOT THE PRODUCT ”
(4) MARKETING CONCEPT “ LOVE THE CUSTOMER , NOT THE PRODUCT ” Learn what they want(MR) Produce it Consumers Market it Sell what they want(Satisfy needs of customers)

22 And build profit through customer satisfaction and loyalty.
THE MARKETING CONCEPT The key to achieving organizational goals consist in determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors. And build profit through customer satisfaction and loyalty.

23 Profit through customer satisfaction
Marketing Concept Profit through customer satisfaction Integrated marketing Consumer needs Target market Starting Point Focus Means Ends

24 (5) THE SOCIETAL MARKETING CONCEPT
It is Marketing Concept (+) Society’s well being. Balancing of following three considerations while setting marketing policies : Customer’s want satisfaction -Society’s well being -Company’s profits

25 THE SOCIETAL MARKETING CONCEPT
The societal marketing concept holds that the organization’s task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors in a way that preserves or enhances the consumer’s and the society’s well being It addresses conflicts between consumer’s and firm’s short run wants and long term welfare.

26 Societal Marketing Concept
Profit through customer & social well-being Protecting & supporting consumer & social well- being Social needs Target market Starting Point Focus Means Ends

27 Difference between selling and marketing concept
Selling Concept Marketing concept 1. Emphasis is on the product 1. The emphasis is on customers’ needs & wants 2. Company first makes product & figure out how to sell 2. Company first determines customers’ wants & figure out how to satisfy them 3. Management is sales-volume oriented 3. Management is profit oriented through customer satisfaction 4. Planning is short-run oriented, in terms of today’s products & markets 4. Planning is long-run oriented in terms of new products, future market & growth 5. Stresses needs of seller 5. Stresses wants of buyers

28 6) The Holistic Marketing Concept
This concept explains that there are so many categories of customers, including individuals and organizations or individual consumers and society as well, whose needs and wants are unlimited and are not identifiable at all times. The major means and tools of holistic marketing are : 1. Internal marketing: Focuses on involving the internal system of a company in marketing activities. It means making all the company staffs including managers and subordinates customer oriented.

29 2. Integrated marketing: Focuses on utilizing the available resources more effectively and efficiently. It includes coordinating marketing tools, activities, channels and establishing inter-departmental relation. 3. Relationship marketing: Developing long-term relationship with the customers, channels, partners etc. 4. Performance marketing: Emphasis on higher level performance from all level of managements focusing the financial and social aspect of the organization.

30 The Holistic Marketing Concept
Goal achievement by developing the corporate culture in marketing. Application of – Internal marketing - Integrated marketing - Relationship marketing -Performance marketing All aspects of customers’ as well as social needs Target market Starting Point Focus Means Ends

31 Basic principles of the production concept
First of all, start business by establishing the factory to produce the desired product; Give focus on producing the desired goods as much as possible; Means of maximizing the sale of goods should be through maintaining comparatively the low cost of the products so that many people feel affordable in buying goods; The goal of the marketer should be to maximize profit through bringing production efficiency.

32 Basic principles of the product concept
Start business by establishing the factory to produce goods; Give main focus on product quality; Means of pushing the sale of goods should be through maintaining the quality of the product to meet the needs of quality-conscious people; The ultimate goal of the marketer should be to maximize profit through quality assurance to the people.

33 Basic principles of the selling concept
Start business by establishing a factory to produce goods; Focus on producing the goods as per the marketer; The means of maximizing the sale of goods should be through the use of aggressive promotion tools as much as possible; The ultimate goal of the marketer should be to maximize profit through mass sales volume.

34 Basic principles of the marketing concept
First of all, identify the suitable target market that the marketer wants to deal with; All planning and operation should be customer-focused i.e. the organization and its employees should be focused on determining and satisfying customers’ needs and wants; The means of achieving the desired goal is to integrate or coordinate all marketing activities; The main goal of the organization should be to earn profit through customer satisfaction.

35 Basic principles of the societal marketing concept
Identify the target social group that the marketer wants to deal with; Identify and understand the basic needs, wants and problems of the target social group; The means of fulfilling the social needs should be through integrating or coordinating the socially acceptable marketing tools; The ultimate goal of the organization should be survive or sustain business by providing social welfare and well-being and accepting social responsibility.

36 Basic principles of the holistic marketing concept
Marketing starts with the identification of target markets; The main focus is on the identification of needs and wants of the customer groups; all needs and wants are placed as much important as possible; The important means for satisfying needs and wants may include all possible marketing efforts and tools. Over emphasis is not given to any single effort or tool.

37 Meaning and tasks of marketing management
“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.” – American Marketing Association “The process of planning, implementing and controlling marketing activities or practices to achieve the desired organizational goal.” – Philip Kotler

38 Tasks of Marketing Management
Components of Marketing Management Marketing Planning Implementing the marketing plans and programs Marketing control

39 Marketing Planning It is the process of making a coordinated set of decision that constitute a marketing strategy for one or more target market. It involves following jobs: Situational analysis: Assessing or scanning the environmental forces prevailed in the market, which have greater effect on company’s performance and achievement of desired goal. SWOT analysis: A SWOT analysis gives a summary of the strengths and weaknesses of the company together with the opportunities and threats it faces. Establishing the marketing goal or target to be achieve over the time. Designing the marketing programs which include product design, price mechanism, distribution system, promotional blend, service delivery process etc. Allocation of resources for each marketing program. Determining supervising style and setting performance standard.

40 Implementing the Marketing Plans and Programs
It means executing or putting the plans and programs into action in a coordinated manner. To implement plans following actions are taken: Develop a properly matched marketing organization structure; Recruitment and selection of appropriate manpower and assign them the right jobs; Create efficient work-teams and assure effective participation of the team members to execute the assigned jobs effectively; Develop an effective communication system; Develop an effective leadership and maintain motivation among the staff.

41 Marketing Control Marketing control is a process of establishing standards, measuring actual performance, identifying deviations and taking corrective action. Following are the methods of marketing control: Annual plan control: It aims to control the results of the annual plan such as sales, market share, marketing expenses etc. Profitability control: It aims to measure and control long-run profit of the company in terms of products, territories, customer-group etc. Efficiency control: It aims to measure and control the efficiency of sales force, advertising and sales promotion, distribution system etc. Strategic control: It aims to measure and evaluate the entire marketing system within the given environmental problems.

42 Marketing Challenges of 21st Century
Customers are being more savvy or informative than the marketers. Customers are increasingly demanding better quality and reliability in the products and services they buy. Customer wants, needs and expectations are changing more rapidly. New products and services are coming to market more quickly than in the past. Competitors have introduced multiple brands and competition for sales is intense. Medias are being more fragment and expensive. Global competition Significant impact of internet in business practices. Increased accountability of marketers towards customers.

43 Firms’ Responses to Marketing Challenges
Developing marketing plans that are designed to build long-term profitability. Developing cogent arguments to protect, or increase the investment in marketing. Development of framework that creates a good balance between the needs of the customer and those of the organization. Developing effective strategies that engage those outside of marketing that were crucial to deliver the promise to customers. Developing right metrics to monitor progress and provide accountability. Motivating others to be passionate about data quality, as ‘fit for purpose’ data is vital in direct, digital and CRM based marketing.

44 Relationship Marketing
Relationship marketing has the aim of building mutually satisfying long term relations with key parties –customers, suppliers, distributers in order to earn and retain business. Relationship marketing’s focus is not on immediate sales, rather it is directed at building a large group of satisfied and loyal customers. Customers retention and winning back lost consumers are the key strategy in relation marketing . In a competitive market , it is not enough to build relationship only with customers, it is equally important to establish relationship with the vendors , intermediaries, and other influence group as well as the stakeholders.

45 Strategies for relationship marketing
Quality assurance Economic benefits Social benefits Technical benefits

46 Customer Development Process
Prospects First-time Customer Repeat Customer Clients Advocates Partners Customer Development Process Suspects Disqualified Prospects Inactive or Ex-Customers

47 Level of Company Investment in Customer-Relationship Building
Philip Kotler has identified following five different levels of company investment in customer-relationship building: Basic marketing: Salesperson simply sells the product; do not care about other aspects. Reactive marketing: Salesperson sells the product and encourages customer to call if any queries. Accountable marketing: Company salesperson makes calls to the customer after the sale to check whether product is working properly. Proactive marketing: Salesperson contacts the customer time to time with suggestions and others. Partnership marketing: The company works continuously with the customer to find out the ways to affect customer savings or help the customer perform better.

48 Contribution of Relationship Marketing
Helps building harmonious relationship not only with customers, but also with the distributors, stakeholders, and other segments of the society. Encourages understanding the complaints and dissatisfactions of the customers and makes salespersons accountable to satisfy them. Help understanding the actual need and desire of the customers. Help developing committed customers for the marketer.

49 Green Marketing Green marketing refers to the process of selling products and/or services based on their environmental benefits. Such a product or service may be environmentally friendly in itself or produced and/or packaged in an environmentally friendly way.

50 Main points in the concept of green marketing
It is environment- friendly, that does not increase pollution. It considers environmental awareness of marketing. It develops the sense of green responsibility in marketing. It promotes awareness among consumers and business people to protect environment. It advocates legislation for environment-friendly marketing.

51 Requirements for Green Marketing
Manager from top to bottom has to make strong commitment to protect environment. Pollution like land , water , air , noise should be controlled. All kinds of wastage should be safely disposed. Green marketing requires latest and new technology to prevent pollution; for this robotic and digitalization is used. Green marketing requires to use recyclable materials. Green marketing requires to follow legal framework to protect environment. Consumer consciousness campaigns should be launched.

52 Reasons for Adopting Green Marketing
To enjoy opportunities or competitive advantage; To fulfill corporate social responsibilities; To follow government pressures; To avoid and minimize competitive pressure; To maintain cost of profit.

53 E-Marketing/Internet Marketing
E-commerce basically is a type of business model that connects firms and customer over an electronic network in conducting various business related activities. Today almost every product or service related transaction can be done via e-commerce. As per Mr. Anton, Director of Singer Ltd., Sri Lanka “ E-commerce has indeed been an impetus to globalization. In this part of the world, most big companies and a fair amount of smaller companies have their own websites and are actively engaged in the transactional aspects of e-commerce, both within the country and overseas.”

54 Categories of Electronic Commerce
Meaning Examples 1. Business to consumer(B2C) E-commerce This type of e-commerce involves retailing products and services directly to individual shoppers. sells water tanks, water pumps, geysers to individual consumers. 2. Business to business(B2B) E-commerce This type of electronic commerce involves in selling of goods and services among businesses. Milpro.com is Milacron Inc.’s web auction site that is used for selling cutting tools, grinding wheels, and metal working fluids to more than 100,000 small machining businesses. 3. Consumer to consumer(C2C) E-commerce This type of electronic commerce involves consumers selling directly to consumers a Nepali website, allows people to sell their goods to other consumers by posting about their product and service in the website.

55 Exploring International Markets through Internet
Internet today is a key component of business. Different business firms use internet for exploring international market. Gather market information worldwide: It is the good source of information about markets, competitors, and customers. Through internet we can conduct market research, posting bidding requests, identifying strategic partners via web sites etc. Provide basic communications: The internet is used to provide the basic interactive communications world wide through and other applications. Deliver valuable services: Through internet valuable services can be delivered for e.g. commercial training, tele-health services, web-site design, graphic design, multimedia, language translation, news broadcasting etc. Generating sales: On the internet, business communities and the customers can find not only trade partners; they can also negotiate business and generate sales.

56 Features of E-commerce Individual communication:-Through e-commerce an organization can make direct relation with customer as a result customer can be selected carefully.

57 No middleman:- E-commerce do not entertain any type of middleman it is also direct marketing. So goods and services can be distribute through direct relation as a result goods will be cheap.

58 Data depository :- Internet is data bank
Data depository :- Internet is data bank. Plenty of data stored through internet and according to requirement it can be used and transfer.

59 Good relationship:- E-commerce can make and maintain intimate and good relation with customer and stakeholders. And long term relation can be maintained with profitable customers.

60 Marketing Mix (4p’s) Product Price Place Promotion
The marketing mix principles are controllable variables which have to be carefully managed and must meet the needs of the defined target group. All elements of the mix are Linked and must support each other. The major components or elements of marketing mix are Product, Price, Promotion, and Place mixes.

61 Marketing Mix (4p’s) Product Product Decisions Branding Quality
Features Benefits offered We must remember that Marketing is fundamentally about providing the correct bundle of benefits to the end user, hence the saying ‘Marketing is not about providing products or services it is essentially about providing changing benefits to the changing needs and demands of the customer’ (P.Tailor 7/00). It includes product along with services, branding, design, quality, labelling, features etc.

62 Components of product mix
Variety Quality Design Features Brand name Packaging Sizes Warranties

63 Marketing Mix (4p’s) Pricing Pricing Strategies
Penetration Skimming Competition Product Line Bundle Psychological Pricing is the only mix which generates a turnover for the organisation. The remaining 3p’s are the variable cost for the organisation. It costs to produce and design a product, it costs to distribute a product and costs to promote it. Price must support these elements of the mix. Pricing is difficult and must reflect supply and demand relationship. The price mix includes pricing objective, pricing technique, sales term, credit terms, discounts and allowances, price discrimination etc.

64 Components of price mix
List price Discounts Allowances Payment period Credit terms

65 Marketing Mix (4p’s) Promotion Promotional Mix
Advertising Public Relations/Publicity Promotional Mix Sales Promotion Personal Selling A successful product or service means nothing unless the benefit of such a service can be communicated clearly to the target market. An organisations promotional mix can consist of: Direct Mail Internet/ E-commerce

66 Marketing Mix (4p’s) Place Indirect Distribution Direct Distribution
Manufacturer Consumer Retailer Direct Distribution Indirect Distribution Management needs to distribute products to the right place by selecting and managing channels and by developing an efficient distribution system. A right place is one where maximum demand for its products exists and maximum of product is consumed. Place mix encompasses channels of distribution, channel structure, role and power of marketing channels, channel conflicts and techniques of resolving them, channel system etc.

67 Components of place mix
Channels Coverage Locations Inventory transport

68 Supportive Components (3Ps) For Service Products
People mix: It deals with the idea that all the marketing activities are done by the people and for the people. It encompasses: - Service personnel - Customers When there is highly competitive environment and marketing activities shift from tangibility to intangibility then recruitment, selection, motivation, and training of the right service personnel become more important because they are the people who provide service to customers. Similarly in the competitive market customers are aware enough and expect better service from the marketer which result from the proper integration of the behavior of all managers and subordinates.

69 2. Process mix: Increasingly, service organizations are innovative and the operations management ideas are now an essential input to their control of costs, systems improvements, and levels of customer services. All the marketing activities are developed as a whole system having different processes and every processes' thirst is meeting the needs and wants of customers. It has two aspects: Degree of customer contact Quality control standards

70 3. Physical evidence/environment: Physical evidence describes keeping office premises resourceful and comfortable to motivate the clients or customers. It also improves the level of efficiency of office personnel in their work performance. It consists of office-room conditions, furnishings, layouts, and goods associated with the service.


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