Module 1: Nature and Scope of

Marketing
1. The Field of Marketing

2. The Dynamic Marketing Environment

3. Global Markets and Marketing

1. The Field of Marketing
 Introduction
• Introduction - Self
• Introduction – Students
– Name, Roll No
– Educational background – Degree,
College
– Home Town
– Photograph
– Why came to this college
– Career aims and objectives
• Group Formation
 Who makes what?
List A. Products
1. Air Conditioners 11. Biscuits
2. Hamam soap 12. Cement
3. Washing machines 13. Office furniture
4. Power generators 14. Shoes
5. Sunsilk shampoo 15. Bicycles
6. Lux Soap 16. Computer Software
7. Safety Locks 17. Computer Hardware
8. Dove 18. Cooking Oil
9. Refrigerators 19. Tooth Paste
10.Laptops 20. Detergent Powder
List B. Companies
ITC, Godrej, BHEL, Videocon, Voltas, HP, Britannia, L&T,
Atlas, Bata, HLL, Wipro, Microsoft, P&G
What does a Marketer Do?
What does a Marketer Do?
Why
Why Bike
Bike Bike
Bike Type
Type
(Analyze
(Analyze Needs)
Needs) (Product
(Product Plan)
Plan)

Which
Which people?
people? What
What Quantity?
Quantity?
(Segment)
(Segment) (Demand
(Demand Forecasting)
Forecasting)

Where
Where toto Sell?
Sell? What
What to
to Charge?
Charge?
(Distribution)
(Distribution) (Price)
(Price)

What
What &
& how
how to
to inform?
inform? Who
Who all
all will
will compete
compete
(Promotion)
(Promotion) (Analyze
(Analyze Competitors)
Competitors)

What
What ifif problem?
problem?
(Warranty)
(Warranty)
 Marketing, Defined

Business activities
Business activities designed
designed to
to

Plan
Plan
Price
Price
Promote
Promote
Distribute (Place)
Distribute (Place)

Want-satisfying products
Want-satisfying products to
to target
target markets
markets

to achieve
to achieve
organizational objectives
organizational objectives
 Exchange – at the heart of
Marketing

Exchange
Exchange –– the
the essence
essence of
of Marketing
Marketing

Between
Between Organizations
Organizations Marketers
Marketers and
and Markets
Markets
and/or
and/or Individuals
Individuals

Tangible/
Tangible/ Intangible
Intangible
goods,
goods, Services,
Services, Ideas,
Ideas,
places,
places, people
people
 Conditions of Exchange

22 or
or More
More parties
parties Voluntary
Voluntary participation
participation

Each
Each has
has something
something ofof Parties
Parties must
must
value
value for
for the
the other
other party
party communicate
communicate
 Marketing Defined

Business activities
Business activitiesdesigned
designed to
to

Plan
Plan
Price
Price
Promote
Promote
Place(Distribute)
Place (Distribute)

Want-satisfying products
Want-satisfying products to
to target
targetmarkets
markets

toachieve
to achieve
organizational objectives
organizational objectives
 Stages of the Evolution
of Marketing
Product-Orientation
Product-Orientation Increase
Increase Supply
Supply
Stage
Stage Produce
Produce Efficiently
Efficiently

Sales-Orientation
Sales-Orientation Promote
Promote through
through
Stage
Stage Sales
Sales and
and Advertising
Advertising

Market-Orientation
Market-Orientation Long-Run
Long-Run
Stage
Stage Customer
Customer Satisfaction
Satisfaction
 How Should a Business Be
Defined?
Company Product oriented Market oriented
answer answer
We make We help Preserve
Kodak Cameras and Films Beautiful Memories.

We make and sell

HLL ??
Soaps & Detergents

We make
IBM ??
Computer

We provide
SSIM ??
MBA Degree
 Marketing Concept

A
A business
business philosophy
philosophy that
that makes
makes
Customer
Customer Satisfaction
Satisfaction asas focal
focal point
point of
of all
all
the
the activities
activities of
of the
the business
business

Customer
Orientation
& Customer
Coordinated Organization's Satisfaction &
Marketing Performance Organizational
Activities Objectives Success
Implementing the Marketing
Concept (Customer
Orientation)

Relationships
Customer Relationship Management
(CRM)

Mass Customization
Produce products with variety and
uniqueness
 Implementing the Marketing
Concept (Coordinated Marketing
Activities)

Quality
Total Quality Management

Value Creation
Benefits vs. Costs
Implementing the Marketing
Concept
(Organizational Objectives)
Performance Metrics
Return on the marketing investment

Societal Marketing Concept

Fulfill firm’s social responsibility
Marketing Program (A Market)

People
People Needs
Needs
or
or to
to
Organizations
Organizations Satisfy
Satisfy

Market
Market
Money
Money Willingness
Willingness
to
to to
to
Spend
Spend Spend
Spend
 Marketing Program
(Market Segments)
Segments
Segments are
are subgroups
subgroups
of
of the
the market
market with
with similarities
similarities

Buying
Buying
Wants
Wants Preferences
Preferences

Product
Product
Use
Use
Marketing Program (Target
market)
A
A market
market segment
segment atat which
which the
the firm
firm
directs
directs its
its marketing
marketing program
program

Market Market Market

Segment Segment Segment
A B C

TARGET
MARKET
 Marketing Program
(Position)
Strategiesand
Strategies andtactics
tacticstotoestablish
establishaaunique
uniqueposition
position
in the
in theprospect’s
prospect’smindmind so
sothe
theproduct
product isis
viewedin
viewed inaa distinctive
distinctiveand
andattractive
attractive way
way

PRODUCT PRICE
TARGET
MARKET

DISTRIBUTION PROMOTION
Ethics and Marketing

ETHICS
CONFLICTS
Standards
Challenges from
accepted by a
conflicting goals
society

TRUST
Builds
CODE
Business OF
Relationships ETHICS
 Importance of Marketing

Globally

Domestically

Organizationally

Personally
 Creating Utility

Form utility Place utility

Time utility Information utility

Possession utility
 Further references

• Visit www.nordstrom.com to check how they

have been able to restore their position by
further innovation.
• Visit www.harleydavidson.com to check what
they do to work out a long term relationship
with customers.
• Visit www.johndeere.com to check how they
implement mass customization.
• Visit www.tatamotors.com and check how
the company create value.
Key Terms and Concepts
• Exchange
• Marketing
• Product-Orientation Stage
• Sales-Orientation Stage
• Market-Orientation Stage
• The Marketing Concept
• Customer Relationship Management
(CRM)
• Mass customization
• Total Quality Management (TQM)
• Value
• Societal Marketing Concept
• Market
• Market segments
• Target market
• Positioning
• Marketing mix
• Ethics
• Creating Utility
2. The Dynamic Marketing Environment
 Levels of External Forces

Macro Level
Influences that affect all firms

Micro Level
Influences that affect a particular firm
External Macroenvironment
Forces

Economic Competition
conditions
Natural
Demo- Environment
Company’s
graphics
Marketing
Program
Social &
Technology
Cultural
Forces Political
and Legal
Forces
 Demographics

People Make
Make Characteristics of
Characteristics of
People
Markets Populations
Populations
Markets

Size
Size

Distribution
Distribution Growth
Growth
Key Demographics of India

>1 billion
billion
2 dd largest
nn
2 largest
>1
Population
Population Market
Market
growing @
growing @ 2%
2% (next to
(next to China)
China)

Life Expectancy
Life Expectancy
>62 Years
>62 Years

Literacy 65% Over 3.5

Over 3.5 Million
Million
Literacy 65% Engineers&&
Engineers
(1951––17%)
(1951 17%)
Scientists
Scientists
 Economic Factors

People with
People with
Stage of
Stage of the
the
Money to
Money to Spend
Spend
Business
Business
and Willing
and Willing toto
Cycle
Cycle
Spend itit
Spend

Interest
Interest
Inflation
Inflation Rates
Rates
 Key Economic Facts (Indian
Environment)

Significant FDI,
Significant FDI,
Economy
Economy
Vibrant Capital
Vibrant Capital
Growing
Growing
Market, High
Market, High
@8-9.5%
@8-9.5%
FE Reserve
FE Reserve

Inflation Interest Rates

Interest Rates
Inflation
(Moderate––High)
(Moderate High) (High)
(High)
 Competition

Brand
Brand
Rivals
Rivals Competition
Competition
for Customers’
for Customers’
Limited
Limited
Buying Power
Buying Power Every
Substitute
Substitute Every
Products
Products Company
Company

Differential Advantage
Differential Advantage
Social and Cultural Forces

Socio-cultural
Socio-cultural
People Make
People Make Patterns
Patterns
Markets
Markets Changing Quickly
Changing Quickly

Lifestyles
Lifestyles
Values
Values
Beliefs
Beliefs
 Key socio-cultural facts of India

Many Cultures,
Many Cultures, Tradition
Tradition
bound (Changing
bound (Changing fastfast due
due
to exposure
exposure to
to lifestyle,
lifestyle, 77 Religions
Religions
to 17 Languages
Languages
Media, Globalization)
Globalization) 17
Media,

Changing role
Changing role of
of More Health
More Health Conscious,
Conscious,
Women (Housewife
Women (Housewife Working Harder/Longer,
Working Harder/Longer,
-Employed women)
-Employed women) Premium on
Premium on time
time
Political and Legal Forces

Type of
Type of
Monetary
Monetary
Governance
Governance and
and
and
and Fiscal Policies
Fiscal Policies
Direction
Direction

Governmental
Governmental Legislation --
Legislation
Relationship
Relationship Social &
Social & Related
Related
with
with to Marketing
to Marketing
Industries
Industries
 Key facts of India's Political &
Legal Environment

Political consensus
Political consensus To operate
operate
To
on
on within legal
legal
within
Economic Growth
Economic Growth framework of of laws
laws
framework
related to
related to
Corporate affairs,
Corporate affairs,
Economic
Economic Consumer protection,
Consumer protection,
Reforms, Moving
Reforms, Moving Employee protection,
Employee protection,
rapidly to
rapidly to Market
Market MRTP etc
MRTP etc
economy
economy
Key facts of India's Natural
Environment
Rich natural
Rich natural Good rainfall,
rainfall,
resources Good
resources Has strong
Has strong
(iron, coal,
(iron, coal, rare
rare network of
of rivers
rivers
minerals, network
minerals,
ocean wealth)
ocean wealth)

Tropical climate
Tropical climate In energy,
In energy,
favours
favours costs are
costs are
agriculture
agriculture constantly
constantly
and industry
and industry on rise
on rise
 Technology

Impacts lifestyles,
Impacts lifestyles, Affects How
How
Affects
consumption patterns,
consumption patterns, Marketing is
is
Marketing
economic well-being
economic well-being Carried Out
Out
Carried

Starting
Starting
New
New
Industries
Industries Altering
Altering
Existing
Existing
Industries
Industries Stimulates Markets
Markets
Stimulates
and
and
Other Industries
Other Industries
 External Microenvironment of
a
Company’s Marketing Program

Marketing Company’s Marketing

The
Suppliers Interme- Marketing Interme-
Market
diaries Program diaries

Value Chain
Internal Environment

Internal Environment Affecting a

Company’s Marketing Activities
 t ion
e ti ral
p t u nt
ic om N a me
Econ o m C on
v i r
con d it io ns En

y
log
Demo-

no
ch
graphics

Te
Marktg Marktg
Market Market
Intrmdries Intrmdiaries

Soc

l
i

rce gal
Cul al &

an litica
tura

s
e
dL
For l
Po
ces

Fo
Firm’s Marketing
Key Terms and Concepts
• Environmental monitoring.
• Demographics.
• Economic Environment
• Business Cycle
• Inflation.
• Interest rates
• Differential advantage
• Suppliers.
• Marketing intermediaries
• Channels of distribution.
• Value Chain
3. Global Markets and Marketing
 Lesson Objectives

• The significance of marketing to firms and

countries
• The attractiveness of foreign markets
• The challenges of designing international
marketing strategies
• The alternative organizational structures
• The international marketing mix issues
and concepts
Reasons for International
Trade

Access to products

Comparative Advantage
Role of Export Trade in Selected
Countries

INSERT TABLE 3.1

International Trade

Balance of Payments
Accounting record of all
Transactions between countries

Trade Balance
Difference between
imports and exports
Factors Affecting International
Trade

Consumer
Technology
Preferences

Marketing Trade
Capability Barriers

Subsidized
Tax Structure
Industries
Why International Marketing?

Potential Market
Demand Saturation

Customer
Expectations
 Strategic Planning for
International Marketing

Global
Strategy
Regional
Strategy

Local
Strategy
 Market Demand

Number Ability
of to
people buy

Buying behavior
Social and Cultural
Environment

Family

Customs and Behavior

Education

Language Differences
 Economic Environment

Level of Economic
Development
Infrastructure

Competition
 Political and Legal Forces

Trade Barriers
• Tariff • Standards and
• Import quota certification
• Local-content law • Boycott
• Local operating laws
 Political and Legal Forces

Trade Agreements
WTO
EU
NAFTA
World Trade Organization
APEC
European Union
North American Free Trade Agreement ASEAN

Asia-Pacific Economic Cooperation forum MERCOSUR

Association of Southeast Asian Nations

Common Market of the South
 Structures for Operating
in Foreign Markets
Exporting
Directly, Contract Joint
or Manufact Venture Wholly Multinat
through Compan Licensin -uring by s Owned ional
Import- y g Foreign and Subsidi Corpora
Export Sales Foreign Producer Strategi a-ries t-ions
Middleme Branche Product s c
n s s Alliance
s
Low High
involveme involveme
nt nt
abroad abroad
 Designing the Marketing
Mix
•Product extension
•Product adaptation
•Data availability
•New invention
•Infrastructure, etc Market Research •Branding
•Labeling
•Language
•Format
•Media etc Product
Planning
Advertising

Pricing
Distribution Systems
•Cost Plus
•Export/Import Agents •Dumping
•Export Merchant •Countertrade or Barter
•Gray Marketing
 Key Terms and Concepts
• Balance of Payments • Local-content law
• Trade balance • Local operating laws
• International marketing • Standards and certification
• Global Strategy • Boycott
• Regional strategy • World Trade
Organizations
• Local strategy
• European Union
• Infrastructure
• North American Free
• Trade barriers Trade Agreement
• Tariff
• Import quota
 Key Terms and Concepts
• Asia-Pacific Economic • Contracting
Cooperation forum • Licensing
• Association of Southeast • Contract manufacturing
Asian Nations • Franchising
• Common Market of the • Direct foreign investment
South • Joint venture
• Exporting • Strategic alliance
• Export merchant • wholly owned subsidiary
• Export agent • Multinational corporation
• Company sales branch
Key Terms and Concepts
• Trademark infringement
• Dumping
• Price differential
• Foreign exchange
• Countertrade or barter
• Cartel
• Gray marketing
• Bribes