PRINCIPLES OF MANAGEMENT

Prof. M Roy
 Concepts of marketing,
 Role of Marketing,
 Marketing Process,
 Marketing Environment,
 Consumer behavior,
 Business buying behavior,
 According to kotler: “Marketing is the science and art of exploring,
creating,and delivering value to satisfy the needs of a target market
at a profit.
 According to American management association: “Marketing is
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 objectives”.
 Marketing Management is a social and managerial process by
which individuals or firms obtain what they need or want through
creating, offering, exchanging products of value with each other. the
total marketing can be fulfilled the core concepts of business.
 Marketing: organizational function and a set of
processes for creating , communicating, and delivering
value to customers and for managing customer
relationships to benefit the organization
 Objective: choose target market and create superior
customer value
 Task of organization: determine needs, wants of target
market and satisfy them more effectively and enhance
consumers’ and society’s long-term wellbeing
Evolution of marketing concept

 Main concepts of marketing: Studies reveal

that different organizations have different
perception of marketing and these different
perception have led to the formation of different
concept of marketing
 1. Production Concept
 2. Product Concept
 3. Selling Concept
 4. Marketing Concept
 5. Societal
Production concept
 Production concept: Companies who believe in this
philosophy think that if goods/services are cheap and
there is no problem regarding sale.Consumers prefer
products which are widely available and inexpensive

 Companies concentrate on achieving high production

efficiency, low costs and mass distribution and expand
market. Marketing efforts focus on reducing the cost of
production and strengthening their distribution system by
achieving economies of scale .
Product concept
 Product concept: Consumers favor products
offering the most quality, performance , or
innovative features.
 Companies who believe that if the quality of goods or

services is of good standard, the customers can be

easily attracted.
 Basic philosophy is that customers prefer good

quality products
 Companies direct their marketing efforts to

increasing the quality of their product.

Selling concept
 Selling concept : Firms with overcapacity aim to
sell what they make, rather than make what the
market wants.
 Companies who believe in this concept think that

there is a need to attract the customers towards them.

They think that products are not bought but they have
to be sold.
Marketing concept
 Marketing concept: emerged in 1950s as a
customer-centered, sense-and—respond
philosophy
 Focus: need of buyer, Companies who believe in

this concept think that success can be achieved only

through consumer satisfaction.
 Find not the right customers for the product, but

right product for customers

Societal Marketing Concept
 Societal Marketing Concept: The concept gives focus not onlyon
the customer satisfaction but also on Consumer Welfare/Societal
Welfare.
 Focus is on the welfare of the whole society
 Marketing process: Marketing Process of a company typically
involves identifying the viable and potential marketing opportunities
in the environment, developing strategies to effective utilize the
opportunities, evolving suitable marketing strategies, and
supervising the implementation of these marketing efforts.

 Marketing process involves ways that value can be created for the
customers to satisfy their needs.
Steps in Marketing Process

 Situation Analysis: Analysis of situation to identify opportunities, understand

firms own capabilities, and environment in which the firm is operating in order to
satisfy unfulfilled customer needs.
 Marketing Strategy : After identifying the marketing opportunities a strategic
plan has to be developed to pursue the identified opportunities
 Marketing Mix Decision:Detailed tactical decisions made for the controllable
parameters of the marketing mix. It includes - product development decisions,
product pricing decisions, product distribution decisions, and product promotional
decisions.
 Implementation and Control: Finally, the marketing plan is implemented and
 results of marketing efforts are monitored to adjust the marketing mix according to
changes in market environment.
Market environment
 Environmental analysis is a strategic tool to identify all
the external and internal elements and assess the level
of threat or opportunity of Businesses
 There are many strategic analysis tools that a firm can
use, but some are more common.
 The most used detailed analysis of the environment is
the PESTLE analysis.
Consumer behaviour
 Modern marketing management : Focus to understand
the latest consumer needs and tastes.
 Consumer behavior for any product is of vital importance
to marketers in shaping the fortunes of their
organizations.
 Consumer behavior Models : Many models have been
developed describing the buying process where
consumer is treated as a decision maker and his buying
process has been discussed through consumer
behaviors models.
Consumer behavior Models
 Economic model: “purchasing decision are the result
of largely rational and conscious economic calculations.
The individual buyer seeks to spend income on goods
where utility (satisfaction) to his tastes is highest.
 Sociological model: The model has been explained by
sociologists studying the behaviors of a group of
individuals and the manner in which it influences the
behaviors of an individual.
 Harvard sheath model – This model assumes problem-
solving approach in buying and assumes input output
approach in buying behavior.
General classification of consumers

 Personal Consumers: Individual consumer who buy finished

products or services for own use, or for family, or for household use
and in small quantities.
 Organizational Consumers: Consumers (a business, government,
profit or non-profit organization, or agency) who purchases goods or
services for organization to function or for resale purpose either in
the form of raw-materials that are processed to finished goods and
offered for sale to other consumers.
 Impulse Consumers: Consumer do unplanned purchases what
seems good at the time. Purchasing a particular product was not a
priority, but when the consumer encounter that product, he makes
swift buying decision.
 Need Based Consumer: Consumer driven by a specific
need has a specific intention to purchase a particular
type of product.
 Discount Driven Consumers: Consumers do
purchases when they get some lucrative offer or
discount.
 Habitual Consumers: Person who is habitual to the
usage or consumption of a kind of product
Consumer decision making
process
 Problem or Need Recognition ------ Information
Search--------- Alternatives Evaluation ------- Purchase
Decision ------ Post-purchase Use and Evaluation
 Problem or Need Recognition: Consumer decision
making process begins with an unsatisfied need or
problem
 Information Search :Information search is done to
know about product or service, price, place and so on.
 Alternatives Evaluation :At this step the buyer
identifies and evaluates different alternatives to choose
from. It is not possible to examine all the available
alternatives.
 Purchase Decision : In the decision evaluation stage, the
consumer forms preferences among the brands in the choice set.
The consumer may also form a purchase intention and lean towards
buying the most preferred brand.
 Post-purchase Use and Evaluation : Once the buyer makes a
decision to purchase a product or service there can be several
types of additional behavior associated with that decision such as
decisions on product uses and decision on services related to the
product purchased.
Customer value analysis

Customer value analysis consists of five steps:
 Identifying Major Product Attributes:
 Assigning Weight to Attributes:
 Evaluating Company’s Performance:
 Comparing Company’s Performance for each of the
Attributes:
Market Segmentation
 Market consists of buyers and buyers differ in the wants, resources, geographical,
location, buying attitudes and buying practices and these variable can be used to
segment a market.
 Types of market segmentation:
 Homogeneous preferences: A market where all consumers have roughly the
same preference.

Existing brands would be similar and located in the center of the preferences. .
 Clustered preference: The market might reveal district
preference cluster, called natural market segments.
 The first firm in this market has three options.
 It might position itself in the center hoping to appeal to all the
groups (undifferentiated marketing).
 It might position itself in the largest market segment
(consummated marketing).
 It might marketing several brands, each positioned in a
different segment(differentiated marketing)
Bases for segmenting consumer
market
 Geographic segmentation ,Demographic segmentation ,
Psychographics segmentation, Behavioral segmentation
 Geographic segmentation: - Geographical segmentation for
dividing the market into
 different geographical units such as nations, states, regions,
countries, citizen of neighbor hoods.
 The company can decide to operate in one or a few demographic
areas of operate in all but pay attention to variations in geographic
needs and preferences.
 Ex: General foods Maxwell house ground coffee is sold nationally
but is flavored regionally. Its coffee is flavored stronger in the west
than the east
 Demographic segmentation:
 Demographic segmentation consists of dividing the market into groups
on the basis of demographic variables such as age, sex, family
size,family life cycle, income, occupation, education, religion, race and
nationality.
 Demographic variables are the most popular bases for distinguishing
customer groups.
 3. Psychographics segmentation:
 In psychographics segmentation, buyers are divided into different
groups on the basis of their social class life style and or personality
 characteristics.
 People with in the same demographic groups can exhibit very different
 Psychological profiles.
 Behavioral segmentation:
 In behavioral segmentations buyers are divide into groups on the
basis of their knowledge ,attitude to use a product
 Many marketers believe that behavioral attributes are critical for
constructing market segments.
 A) Occasions
 B) Benefits
C) User status
D) Usage rate
E) Loyalty status
F) Buyer readiness stage: -
Target Market

 TARGETING : Once the firm has identified its market-segment

opportunities, it has to decide how many and which ones to
target.
 Single-segment Concentration:The company may select a
single segment. Volkswagen concentrates on the small-car
market and Porsche on the sports car market.
 Through concentrated marketing the firm gains a strong
knowledge of the segment’s needs and achieves a strong market
presence. Furthermore, the firm enjoys operating economies
through specializing its production, distribution, and promotion.
 If it captures segment leadership, the firm can earn a high
return on its investment.
 M1 M2 M3
P
P1

P2

P3
Selective specialization

 Here the firm selects a number of segments each objectively

attractive and appropriate.
 There may be little or no synergy among the segments, but each
segment promises to be a market.
 This multi segment coverage strategy has the advantage of
diversifying the firm’s risk.
M1
M2
M3
Product specialization :

 Firm specializes in making a certain product it sells to several

segments.
 An example would be a microscope manufacturer that sells
microscope to university laboratories, government
laboratories, and commercial laboratories.
 The firm makes different microscopes for different customers
groups but does not manufacturer other instruments that
laboratories might use.
 Through a product specialization strategy, the firm builds a
strong reputation in the specificproduct area. The downside
risk is that the product may be supplemented by an entirely
new technology.
P P P
Market specialization
 Here the firm concentrates on serving many needs of a
particular customer group. An example would be a firm that
sells an assortment of products only

M2
M2

M2
Full Market Coverage
 Here a firm attempts to serve all customer groups with
all the products they might need. Only very large firms
can undertake a full market coverage strategy.
 Examples include I B M, General Motors, and Coca-
Cola.
 Large firms can cover a whole market in two broad
ways: through undifferentiated marketing or
differentiated marketing.
Product Life Cycle.

 Products, like people, have a certain length of life, during which they
pass through different stages.
 For some the life cycle may be as short as a month, while for other
it may last for quite a sufficiently long period.
 The PLC is an attempt to recognize distinct stages in the sales
history of the product.
 Products have a limited life.
 Product sales pass through distinct stages each posing different
challenger to the seller
 Product profits rise and full at different stages of the
PLC.
 Products require different marketing, financial,
manufacturing, purchasing and personnel strategies in
the different stages of their life cycle.
 PLC Stages:- PLC life being with its market introduction
next it goes through a period during which its market
grows rapidly. Ultimately it reaches marketing maturity
offer which its market declines and finally the product
dies.
 It is worth noting that the duration each stage is different
among products. Some take years to pass through the
Introduction stage
 During this stage of the products life cycle, it is put in the
market with full-scale production and marketing program.
 The company is an innovator-may be the whole industry.
 The entire product may be new or the basic product may
be well known but a new feature or accessory is in the
introduction stage.
Four marketing strategies
Price Promotion High Low

High Rapid skimming Slow skimming

Strategy Strategy

Low Rapid penetration Slow penetration

Strategy Strategy
 2. Growth stage: - In this stage the product is produced in the sufficient quantity
and put in the market without delay.
 The demand generally continues to outpace supply.
 The sales and profit curves rise, often at a rapid rate.
 Competitors enter in the market in large number if the profit out look appears to be
very attractive.
Strategies in growth stage
 • Improve product quality and add new product features
and improved styling.
 • Add new models and flanker products ( products of
different sizes, flavors ).
 • Enter new market segments.
 • Increase its distribution coverage and enter new
distribution channels.
 • Lower prices to attract the next layer of price-sensitive
buyers.
 • Shift from product-awareness advertising to product-
preference advertising.
Maturity stage
 During this stage, sales continue to increase but at a decreasing
rate,while the sales curve is leveling off the profits of both the
manufacturer
 Retailers are starting to decline because of rising expenditure and

lowering of prices.
 Strategies to be followed:

Market Modification:
 Expand number of users : Convert non-users, Enter new market

segments, Win competitors’ customers

 increase annual usage : More frequent use, More usage per

occasion, New and more varied uses

 Product Modification
 • A strategy of quality improvement aims at increasing the
product’s functional performance - its durability, reliability,
speed, taste.
 • A strategy of feature improvement aims at adding new
features ( for example - size,weight, materials, additives,
accessories ) that expand the product’s versatility, safety, or
convenience.
 • A strategy of style improvement aims at increasing the
product’s aesthetic appeal.
 The periodic introduction of new car models amounts to style
competition
Market decline stage:
 This stage is characterized by either the products
gradual placement by some new innovation or by an
evolving change in consumer buying behavior.
 The buyers do not buy as much as they did before.
 New and superior products are being introduced to the
market many of which meet the consumer’s demand and
need more effectively.
Strategies in decline stage

 Continuation Strategy :Increasing the firm’s

investment ( to dominate the market or strengthen the
competitive position ).
 Concentration Strategy :- Decreasing the firm’s

investment level selectively, by dropping unprofitable

customer groups, while simultaneously strengthening
the firm’s investment in lucrative niches.
 Harvesting Strategy :- Divesting the business quickly by disposing
of its assets as advantageously as possible.
 The Drop Strategy- When a company decides to drop a product, it
faces further decisions.
 If the product has strong distribution and residual goodwill, the
company
 can probably sell it to another firm.
 If the company can’t find any buyers, it must decide whether to
liquidate the brand quickly or slowly.
Social responsible marketing,

 In today's world of cut throat competition every organisation is

investing heavily in advertising.
 Advertising is necessary to make a new product popular in the
market and to increase the sales of existing brands.
 Advertising plays an important role in brand building and informing
public about available products so that they can make informed
choice among different products or brands.
 Advertising is a powerful medium of mass communication. As
advertising is a form of mass communication and thus just like other
popular forms it too have some social responsibilities associated
with it.
 Advertisements are meant for the masses and people relate themselves with this
medium.
 For understanding its responsibilities towards the public, its positive and the
negative aspects
 needs to understood.
 Positive and Negative Aspects of Advertising:
 As like any other medium of mass communication, advertising also have positive as
well as negative aspects.
 Advertising increases sales, advertising makes the product popular, advertising
helps in brand formation, advertising makes the public aware with the available
brands or products.
 Advertising is the largest financial source for mass media.
 Many of the advertisements are criticized as deceptive or manipulative.
 Other criticism focus on the social or environmental impact of advertising, the
effect of advertising on our value system, commercial clutter, stereotypes, and
offensiveness.
 Ethics in Advertising:Ethics means a set of moral principles which govern a
person’s behaviour or activities.
 Ethics in advertising means a set of well defined principles which govern the ways
of communication taking place between the seller and buyer.
 Advertising benefits advertisers in many ways, similarly it makes the public aware
with the available brands so that they can make informed choice among the
available products or brands.
 Some of the advertisement doesn't match the ethical norms of advertising, such
 ads causes political, cultural, or moral harm to society.
 Ethical ad is one which is in the limit of decency, make no false claims, and
doesn't lie.
 Nowadays advertisements are highly exaggerated and a lot of puffing is used. .
Ethical and Moral principles of Advertising

 Advertisers must have sufficient knowledge of ethical norms and principles, so that
they can understand and decide what is correct and what is wrong.
 We can identify several ethical and moral principles that are particularly
 relevant to advertising.
 We are speaking briefly of three as follows:-
 1. Truthfulness in advertising;
 2. The dignity of the human person; and
 3. Social responsibility.
 Truthfulness in Advertising:Truth in advertising
promotes a highly efficient, functioningeconomy by:
 Discouraging deceptive business practices;
 Encouraging the provision of accurate and truthful

information;
 Enhancing competition by ensuring a level playing field
 Enabling informed consumer choice.
The Dignity of the Human Person

 The dignity of human beings should be respected;

 Advertisements should not insult the dignity of human beings;
 Different cultures and ethnic groups should be presented in advertising as equal
with the majority of the population;
 Special care should be given to weak and vulnerable groups like - children, poor
people, or elderly people.
Advertising and Social Responsibility

 Advertising has a strong social responsibility,

independent of its known commercial responsibility.
 Advertisers should have a deeper sense of social

responsibility and should develop their own set of

ethical and social norms taking into consideration the
values of their society.