Principles of Marketing

MKT 201

1
 Chapter-1

UNIT-1

Definition of marketing –evolution of marketing-core concepts of marketing-

importance of marketing - marketing management - demand states - market
-changes in marketing landscape- marketing mix and elements - Defining
strategic marketing planning - planning new business - intensive –
integration - diversification - SWOT analysis - marketing plan.
 Definition of Marketing
They ( company )create relationship with
customers
American Marketing Association
Definition of Marketing
The process by which Marketing is the activity, set of
companies create value institutions, and processes for
for customers and build creating, communicating,
strong customer delivering, and exchanging
relationships in order to offerings that have value for
capture value from customers, clients, partners,
customers in return. and society at large.
Porpoise
Page:4-6
 Development of Marketing Science

Consumer (goods) marketing

Major areas of marketing focus
Industrial marketing

Non-profit & societal marketing

Relationships
Services marketing And
Customer
Customer Satisfaction, Global Retention
Marketing, DirectMarketing

Online one-to-one
marketing

1950’s 1960’s 1970’s 1980’s 1990’s 2000’s

 Evolution of Marketing
The idea that consumers
will favor products that are
available and highly The idea that consumers The idea that a company’s
affordable and that the will not buy enough of the marketing decisions should
organization should firm’s products unless it consider consumers’ wants, the
therefore focus on undertakes a large-scale company’s requirements,
improving production and selling and promotion effort. consumers’ long-run interests,
distribution efficiency
and society’s long-run interests.

Production Product Selling Marketing Societal

concept concept concept concept concept

The idea that consumers will A philosophy that holds that

favor products that offer the most achieving organizational goals
quality, performance, and features depends on knowing the needs and
and that the organization should wants of target markets and
therefore devote its energy to delivering the desired satisfactions
making continuous product better than competitors do.
improvements.

Page- 10-13
 Main Concepts of Marketing

• Social Interaction
• Managerial Process
• Satisfaction
• Needs, Wants and Demand
• Exchange
• Product
• Value
Core MarketingConcepts

Products
Needs, wants,
and demands

Core
Marketing
Concepts
Markets Value,
satisfaction,
and quality
Exchange, transactions,
and relationships
 Core Concepts of Marketing
Social
Communication

Products and Services

Industry Market
(a collection (a collection
of sellers) of buyers)
Money

Information

A simple Marketing System

 Marketing System
Environment

Company
(marketer)
Marketing End
Suppliers inter- user
mediaries market
Competitors

Environment
Core Concepts of Marketing-Managerial
Concept

Staffing
 Core Concepts of Marketing

• Satisfaction(page-7 and 8)
• Need, Wants & Demand(Page-6)
• Exchange, Transaction & Transfer(Page-8)
• Product
• Value
• Needs States of felt deprivation.
• Wants The form human needs take as they are shaped by culture and individual
personality.
• Demands Human wants that are backed by buying power.
• Market offerings Some combination of products, services, information, or
experiences offered to a market to satisfy a need or want.
• Marketing myopia The mistake of paying more attention to the specific
products a company offers than to the benefits and experiences produced by
these products.
• Exchange The act of obtaining a desired object from
someone by offering something in return.
• Market The set of all actual and potential buyers of a product or service.
 DEMAND MARKETING SOME
STATE TASK ACTIONS

➢ Negative demand disabuse demand changed attitudes?

➢ No demand create demand? connect attributes &
needs, AIOs
➢ Latent demand develop demand develop product
➢ Faltering demand revitalise demand “add blue beads..”
➢ Irregular demand synchronise ‘red spot specials’
➢ Full demand maintain demand measure
performance
➢ Overfull demand reduce demand demarket
➢ Unwholesome demand destroy demand “kissing a smoker is
like licking the
bottom of an
ashtray”
 Exchange

At Least Two Parties

Something of Value

Conditions for
Communication and Delivery
Exchange

Freedom to Accept or Reject

Desire to Deal with Other Party

Importance of Marketing
 Definition of Marketing Management

The art and science of choosing target

markets and building profitable relationships
with them.

Page-9 and 10
Marketing Management also called as Demand
Management
Different Types of Demand
• Negative (avoidance of a product)
• Nonexistent (lack of awareness or interest in a product)
• Latent demand (a strong need that cannot be satisfied by existing products)
• Declining (lower demand)
• Irregular (demand varying by season, day, or hour)
• Full (a satisfying level of demand)
• Overfull (more demand than can be handled)
• Unwholesome demand (demand for unhealthy or dangerous products)
Page-9-10
 What is Market ? Page-8

The set of all actual and potential buyers of a

product or service.

Target Market
A specific group of consumers at
which a company aims its
products and services is called a
target market. Your target
customers are those who are
most likely to buy from you.
 Changes in Marketing Landscape

• Digital Age
• Rapid Globalization New
Nonprofit
• Call for more Ethics and Marketing
Landscape
Marketing
Social Responsibility
• Growth of Not-for-Profit Emerging
Challenges
Ethical
Marketing Concerns
Globalisation

Changing
World Economy
Page:24-28
 Marketing Mix and Elements

The set of tactical marketing tools—product, price, place, and

promotion—that the firm blends to produce the response it
wants in the target market.
• Product means the goods-and-services combination the company offers to
the target market.
• Price is the amount of money customers must pay to obtain the product.
• Place includes company activities that make the product available to
target consumers.
• Promotion means activities that communicate the merits of the product
and persuade target customers to buy it.

Page-52-53
 The 4 P’s of Marketing explained

Product Promotion Place Price

1. Is there a demand 1. Making customers 1. Distribution is 1. How much are
for the product or aware of a product getting the right customers willing
service? 2. Advertising product to the to pay?
2. How to make the 3. Coupons right place at the 2. Is the price
product appeal to 4. Rebates right time in the competitive with
consumer 5. Sales right amount and other products?
3. Packaging— 6. Free give aways in the right 3. Can the company
includes the 7. Publicity condition make a profit?
design, color, size, 2. Storage
and brand names 3. Warehousing
4. Transporting
 Define Strategic Planning

The process of developing and

maintaining a strategic fit between the
organization’s goals and capabilities and
its changing marketing opportunities

Marketing strategy
The marketing logic by which the
company hopes to create customer value
and achieve profitable customer
relationships.
Page-37
• Market segmentation Dividing a market into distinct groups of buyers
who have different needs,
characteristics, or behaviors, and who might require separate products or
marketing programs.
• Market segment A group of consumers who respond in a similar way to
a given set of marketing efforts.
• Market targeting The process of evaluating each market segment’s
attractiveness and selecting
one or more segments to enter.
• Positioning Arranging for a product to occupy a clear,
distinctive, and desirable place relative to competing products in the minds of
target consumers.
 Strategic Planning

Happens at:

•Corporate level (TATA Headquarters/Head office)

•Division Level (TATA Automobiles, Hotels, Jewelry etc.)
•Business Level ( Within TATA Automobiles: TATA Trucks,
TATA Buses, TATA Car)
•Product Level (Within TATA Car: Indica Indigo etc)
 Strategic Planning-(Growth Strategies)

Planning new businesses, downsizing older businesses:

• Intensive growth (Market development Company growth by identifying and developing new
market segments for current company products.)

• Integrative growth (Product development Company growth by offering modified or new

products to current market segments. .)

• Diversification growth (Diversification Company growth through starting up or acquiring

businesses outside the company’s current products and markets.)

Page 43-46
 The Strategy Hierarchy
Corporate Strategy
Corporate • Mission and vision
Level • Objectives
• Business portfolio strategy
• Resource development
• Corporate values

Strategic SBU Strategy

SBU • Business definition SBU
Business Unit Strategy
Level Strategy • Objectives
• Product market portfolio
• Competitive strategy
• Resource allocation and management
Functional
Level of
SBU Marketing Strategy
R&D Strategy Production Finance and
Marketing
Technology and operation administration Human resources
objectives
Product strategy Strategy Strategy
Product markets
development
strategies
 Steps in Strategic Planning
Defining the
Corporate Level Company Mission

Defining Company
Objectives and Goals

Designing the
Business Portfolio

Business Level Planning, Marketing and

Other Functional Strategies
 Corporate, Business and Marketing
Strategy Model
• Business portfolio Corporate Strategy
• Capital investments and
• Building core competencies Focus Shareholder
resource allocation
Value
• Corporate culture
Economic
• Corporate structure
value added

• Product/market portfolio Business Strategy

• Resource allocation Focus
• Distinctive competencies Business
• Product-markets
• Developing competitive Value
• Business culture Economic
position
• Strategic cost value added
• Competitive advantage
management

• Markets Marketing Strategy

• Products and services Focus
• Developing market Customer
• Profit-yielding strategies position Customer value Value
• Brand management • Customer satisfaction creation, maintenance
• Profit improvement and defence
SWOT Analysis Page-54
 Marketing Plans
A Marketing plan will consist of the following

1. Executive Summary

2. Current Marketing Situation

3. SWOT

4. Objectives and Issues

5. Marketing Strategy

6. Action Programs

7. Budgets

8. Controls
Page 55
 End of Chapter 1

Important Notes
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