MARKETING MANAGEMENT

UNIT -1

In today's world of marketing, everywhere you go you are being marketed to in

one form or another. Marketing is with you each second of your walking life.
From morning to night you are exposed to thousands of marketing messages
every day. Marketing is something that affects you even though you may not
necessarily be conscious of it.
Definition of Marketing
According to American Marketing Association (2004) - "Marketing is an
organizational function and set of processes for creating, communicating and
delivering value to customers and for managing relationships in a way that
benefits both the organization and the stakeholder."
AMA (1960) - "Marketing is the performance of business activities that direct
the flow of goods and services from producer to consumer or user."

According to Eldridge (1970) - "Marketing is the combination of activities

designed to produce profit through ascertaining, creating, stimulating, and
satisfying the needs and/or wants of a selected segment of the market."

According to Kotler (2000) - "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."

Nature of Marketing
1. Marketing is an Economic Function
Marketing embraces all the business activities involved in getting goods and
services, from the hands of producers into the hands of final consumers. The
business steps through which goods progress on their way to final consumers is
the concern of marketing.

2. Marketing is a Legal Process by which Ownership Transfers

In the process of marketing the ownership of goods transfers from the seller to
the purchaser or from producer to the end-user.
3. Marketing is a System of Interacting Business Activities
Marketing is that process through which a business enterprise, institution, or
organization interacts with the customers and stakeholders with the objective to
earn a profit, satisfy customers, and manage relationships. It is the performance
of business activities that direct the flow of goods and services from producer to
consumer or user.

4. Marketing is a Managerial Function

According to the managerial or systems approach - "Marketing is the
combination of activities designed to produce profit through ascertaining,
creating, stimulating, and satisfying the needs and/or wants of a selected
segment of the market."

According to this approach, the emphasis is on how the individual organization

processes marketing and develops the strategic dimensions of marketing
activities.

5. Marketing is a Social Process

Marketing is the delivery of a standard of living to society. According

to Cunningham and Cunningham (1981) societal marketing performs three
essential functions: -

1. Knowing and understanding the consumer's changing needs and wants;

2. Efficiently and effectively managing the supply and demand of products
and services; and
3. Efficient provision of distribution and payment processing systems.

6. Marketing is a philosophy based on consumer orientation and

satisfaction

7. Marketing had dual objectives - profit-making and consumer satisfaction

Scope of Marketing
1. Study of Consumer Wants and Needs
Goods are produced to satisfy consumer wants. Therefore, the study is done to
identify consumer needs and wants. These needs and wants motivate the
consumer to purchase.
2. Study of Consumer Behaviour
Marketers perform a study of consumer behaviour. Analysis of buyer behaviour
helps marketers in market segmentation and targeting.

3. Production Planning and Development

Product planning and development starts with the generation of product ideas
and ends with product development and commercialization. Product planning
includes everything from branding and packaging to product line expansion and
contraction.
4. Pricing Policies
The marketer has to determine pricing policies for their products. Pricing
policies differ from product to product. It depends on the level of competition,
product life cycle, marketing goals, and objectives, etc.

5. Distribution
The study of distribution channels is important in marketing. For maximum
sales and profit, goods are required to be distributed to the maximum consumers
at minimum cost.

6. Promotion
Promotion includes personal selling, sales promotion, and advertising. The right
promotion mix is crucial in the accomplishment of marketing goals.

7. Consumer Satisfaction
The product or service offered must satisfy the consumer. Consumer
satisfaction is the major objective of marketing.

8. Marketing Control
The marketing audit is done to control the marketing activities.

Various Marketing Orientation

Marketing orientation, also known as market orientation, is a business approach

that focuses on meeting the needs and wants of customers through the delivery
of superior value. It is a philosophy or mind set adopted by a company, where
the primary goal is to understand, anticipate, and satisfy customer requirements
more effectively than competitors.
Types of Market Orientation

1- Customer Orientation: This type of market orientation places a strong

emphasis on understanding and meeting the specific needs and desires of
customers. Companies adopting a customer orientation approach strive to
develop deep insights into customer preferences, behaviours, and expectations
2- Competitor Orientation: Companies with a competitor orientation focus on
monitoring and analyzing the activities, strategies, and strengths of their
competitors. They aim to gain a competitive advantage by differentiating their
offerings and outperforming rivals in the market.
3- Interfunctional Orientation: Interfunctional orientation emphasizes
collaboration and coordination among different departments and functions
within a company to create customer value. It recognizes the importance of
cross-functional teamwork and integration in delivering superior products and
services.

Marketing Mix

The term Marketing Mix was introduced by Neil H. Borden in his article -
"The Concept of Marketing Mix". He learned about it in a research bulletin on
the management of marketing costs, written by his associate, Prof. James
Culliton. in 1948. In this study of manufacturers' marketing costs, he described
the business executive as a "decider," an "artist" - a "mixer of ingredients,"
who sometimes follows a recipe prepared by others, sometimes prepares his
own recipe as he goes along, sometimes adapts a recipe to the ingredients
immediately available, and sometimes experiments with or invents ingredients
no one else has tried.

Definition of Marketing Mix

According to Philip Kotler - "Marketing Mix is the combination of four
elements, called the 4P's (product, Price, Promotion, and Place), that every
company has the option of adding, subtracting, or modifying in order to create
a desired marketing strategy"

According to Principles of Marketing, 14e, Kotler and Armstrong,

2012 - "The Marketing Mix is the set of tactical marketing tools - Product,
Price, Promotion, and Place - that the firm blends to produce the response it
wants in the target market."

Meaning of Marketing Mix

The Marketing Mix is a marketing tool used by marketing professionals. It is
often crucial when determining product or brand's offering, and it is also called
as 4P's (Product, Price, Promotion, and Place) of marketing. However, in case
of services of different nature the 4 P's have been expanded to 7P's or 8P's.

In recent times, giving more importance to customer a new concept have been
introduced, i.e. Concept of 4C's. The Concept of 4C's is more customer-driven
replacement of 4P's. According to Lauterborn's the 4C's are - Consumer, Cost,
Communication, and Convenience. According to Shimizu's the 4C's are -
Commodity, Cost, Communication, and Channel.

4P's - Producer-oriented Model of Marketing Mix

 Product - Products are offerings that a marketer offers to the target
audience to satisfy their needs and wants. Product can be tangible good or
intangible service. Tangible products are goods like - cellphone,
television, or motor car, whereas intangible products are services like -
financial service in a bank, health treatment by a doctor, legal advice of a
lawyer.
 Price - Price is the amount that is charged by marketer of his offerings or
the amount that is paid by consumer for the use or consumption of the
product. Price is crucial in determining the organization's profit and
survival. Adjustments in price affects the demand and sales of the
product. Marketers are required to be aware of the customer perceived
value of the product to set the right price.
 Promotion - Promotion represents the different methods of
communication that are used by marketer to inform target audience about
the product. promotion includes - advertising, personal selling, public
relation, and sales promotion.
 Place - Place or distribution refers to making the product available for
customers at convenient and accessible places.

In case of services, the producer-oriented model of marketing mix is consists of

7P's. Including the above 4P's there are additional 3P's - Physical
Evidence, People, and Process. Physical evidence refers to elements like
uniform of employees, signboards, and etc. People refers to the employees of
the organization comes in contact with the customers in the process of
marketing. Process refers to the systems and processes followed within
organization.

4C's - Consumer-oriented Model of Marketing Mix

 Consumer - In this model the Product is replaced by Consumer.

Marketers focuses more on consumer satisfaction. The product is
designed and produced keeping in consideration the requirements of
consumer.
 Cost - Price is replaced by Cost. Here the cost refers to the total cost of
owning a product. It includes cost to use the product, cost to change the
product, and cost of not choosing the competitor's product.
 Communication - Promotion is replaced by Communication.
Communication includes advertising, public relation, personal selling,
and any method that can be used for proper, timely, and accurate
communication between marketer and consumer.
 Convenience - Place is replaced by Convenience. it focuses on ease of
buying, convenience in reaching to the store/product, and convenience in
getting product information.

Customer value

Customer value refers to the perceived benefits and advantages that customers
gain from purchasing and using a product or service. It represents the worth,
satisfaction, and utility that customers perceive in relation to the price they pay
or the resources they invest. Customer value is subjective and can vary from
person to person based on their needs, preferences, and expectations.

Value Delivery Process:

1- Customer Understanding: This involves gathering insights about

customers, their demographics, behaviours, and preferences. It includes market
research, customer surveys, interviews, and other methods to gain a deep
understanding of customer needs.

2- Value Creation: Based on customer insights, companies create offerings that

provide the desired benefits and solve customer problems. This involves
product or service design, innovation, and development, taking into account
factors such as quality, features, functionality, and aesthetics.
3- Value Communication: Once the offerings are developed, the company
needs to effectively communicate the value proposition to customers. This
includes marketing and promotional activities, branding, advertising, and other
communication channels to convey the benefits and unique selling points of the
product or service.

4- Value Delivery: This stage involves making the product or service available
to customers through various distribution channels. It includes supply chain
management, logistics, inventory management, and ensuring timely and
efficient delivery to meet customer expectations.

5- Value Consumption: Customers acquire and use the product or service,

experiencing the value that was promised during the communication stage. The
ease of use, functionality, performance, and overall customer experience
contribute to the perceived value at this stage.

6- Value Feedback: Companies need to gather feedback from customers to

assess their satisfaction and identify areas for improvement. Feedback can be
collected through surveys, customer reviews, social media monitoring, and
direct interactions, helping companies refine their offerings and enhance the
value delivered in the future.

Buying Motive

A buying motive refers to the underlying reason or motivation that drives a

person to make a purchase. Understanding the buying motives of consumers is
crucial for businesses as it helps them tailor their marketing strategies and
product offerings to meet the needs and desires of their target audience.

Importance of Buying Motive

Understanding buying motives is crucial for businesses because it allows them

to tailor their marketing strategies, develop relevant products, set competitive
pricing, enhance customer satisfaction and loyalty, gain a competitive
advantage, and adapt to changing consumer preferences. It helps businesses
connect with their target audience and effectively meet their needs, ultimately
driving sales and long-term success.
Types of Buying Motives

1-Functional Motive: This motive relates to the basic needs and requirements
that product or service fulfils. Consumers buy products to satisfy their
fundamental needs, such as food, clothing, and shelter.

2- Emotional Motive: Emotional motives are based on consumers’ desires to

fulfil their emotional needs or desires. These motives are driven by feelings
such as happiness, excitement, nostalgia, or love. For example, purchasing a
luxury item to experience a sense of prestige or buying a gift to express
affection.

3- Social Motive: Social motives are influenced by consumers’ desire for social
interaction, acceptance, and belonging. People may purchase products or
services to fit in with a particular group, gain social approval, or enhance their
social status.

4- Rational Motive: It means Consumers carefully evaluate the features,

benefits, quality, and price of a product or service before deciding to buy. They
make choices based on what makes the most sense for them in terms of value
and functionality

Consumer Buying Decision Process

BUYING HABITS

Buying habits refer to the regular and repeated patterns of consumer

behavior when it comes to purchasing products or services. These
habits are formed based on a combination of personal preferences,
needs, lifestyle, and past experiences. Buying habits can vary
significantly from one individual to another and may change over time.
Stages in Consumer Buying Decision Process:

Stage 1- Needs/ Requirements: This is when a consumer becomes

aware of a need or desire that prompts them to consider making a
purchase. It can be triggered by internal factors (e.g., running out of a
product) or external factors (e.g., seeing an advertisement).

Stage 2- Information Search: After recognizing a problem, consumers

gather information about potential solutions. They may seek information
from various sources, such as friends, family, online reviews, or directly
from the company. The extent of the information search depends on the
complexity of the purchase and the consumer’s level of involvement.

Stage 3- Evaluation of Alternatives: Consumers evaluate different

options available to fulfil their needs. They compare the features,
benefits, prices, and other attributes of the products or services under
consideration. This stage involves weighing the pros and cons of each
alternative.

Stage 4- Purchase Decision: In this stage, consumers make their final

decision to purchase a specific product or service. Factors influencing
this decision include price, brand reputation, personal preferences, and
perceived value. The purchase decision may also be influenced by
external factors such as discounts or promotions.

Stage 5- Post-Purchase Evaluation: After making the purchase,

consumers assess their satisfaction with the chosen product or service. If their
expectations are met or exceeded, they are likely to feel satisfied and may
become repeat customers. If their expectations are not met, they may
experience dissatisfaction and may seek alternatives or share negative
feedback.
Factors Influencing Buying Behaviour:

1-Personal Factors: Personal factors are the individual characteristics

that influence consumer behavior. Age, Gender can also play a role in
shaping consumer choices, as men and women may have different
preferences for certain products. Other personal factors like income,
occupation, education, and lifestyle also impact purchasing decisions.

2- Psychological Factors: Psychological factors refer to the thoughts,

motivations, perceptions, attitudes, and beliefs that influence consumer
behavior. Motivation plays significant role, as consumers are driven by
various needs and desires, such as the need for status, security, or
belonging. Perception is how consumers interpret and make sense of
information about products or brands, which can be influenced by
factors like advertising or personal experiences.

3- Social Factors: Social factors encompass the impact of society,

culture, and social interactions on consumer behavior. Consumers from
different cultures may have distinct preferences and expectations when
it comes to products and services. Reference groups, such as family,
friends, and colleagues, influence consumer decisions through their
opinions and behaviours.

4- Situational Factors: Situational factors are external circumstances

that influence consumer behavior in a specific situation. The purchase
context, such as the physical environment of a store or the ease of
online shopping, can impact consumer decisions. Time and urgency also
affect purchasing behavior, as limited-time offers or time-sensitive
promotions can drive impulse purchases.