MARKETING CONCEPTS

MARKETING, MARKET & MARKETING MANAGEMENT• Marketing: Understanding and satisfying the needs of the customer

profitably.

• Philip Kotler defines marketing as 'satisfying needs and wants

through an exchange process.

• Market: Place or space or an environment where actual sellers and

potential buyers meet.

• Marketing management: Marketing management is the process of

planning, organizing, directing and controlling the activities relating

to the marketing of goods and services to satisfy the

customers wants.

NEED

• A state of felt deprivation.

• They include basic Physical needs - food, clothing, warmth

and safety; Social needs - belongings and affection; Individual

needs- self-expression and knowledge

• Example: An American, British or Asian needs food as lunch.

WANT

• The form taken by a human need as shaped by culture and

individual personality.

• Wants are shaped by culture and individual personality.

• Example: An American/British needs food as lunch but his/her

wants are Hamburger, fries and drinks.

• An Asian needs food but his/her wants are 'Chicken Korma,

rice and drinks'

DEMAND

• Human wants that are backed by buying power.

• Human want to choose products that provide the most value

and satisfaction for their money. When backed by buying

power, wants become demands.

• Example: Whenever the American, British or Asian person

have sufficient money to afford those wants, that would be

their demand.

TARGET MARKET

• Philip Kotler defines a target market as

“A well-defined set of customers whose needs the

organization plans to satisfy.”

• He suggests that the target market may be the total focus of

the organization or it may be viewed as only a starting point

for later expansion to other market segments

MARKETING Vs. SELLING• Marketing: Anticipating and satisfying customer needs• Identifies appropriate prospects• Effectively communicates image and capabilities of the firm• Creates awareness of, and emphasizes an appeal—a differentiation factor—

about the firm• Perfects customer service• Requests feedback from clients on a regular basis• Anticipates and meets needs Marketing often necessitates cultural changes

at every level in the firm• Selling: Selling is offering to exchange an item of value for a different

item or money. Includes: • Proactive seeking of prospects• Interacting to qualify prospects• Effective acknowledgment of the prospect’s concerns• Closing the sale—getting hired• Following up and staying in contact when not hired

VALUE PROPOSITION

• A value proposition is a clear statement of the tangible or

intangible results a customer gets from using your products or

services.

• It’s outcome focused and stresses the business value of your

offering.

VALUE DELIVERY

• It is the process of

• Choosing the value: Identifying the customers needs which are

fulfilled by the existing products or services in the market.

• Providing the value: Creating a product or service that offers the

value.

• Communicate Value: Creating the awareness about the product

or service in the market through advertising and promotion.

POTENTIAL MARKET & PENETRATED MARKET• Potential Market: Aggregate of all individuals, firms, and

organizations in a particular market who have some level of

interest in a particular product.

• Penetrated Market: A set of customers or clients who are already

using a particular product or service.

• A penetrated market means that the potential users of a product

or service are aware of it, and in many cases are active consumers

of it.

• Markets that are not penetrated may be called potential markets,

available markets, or target markets.

MARKET DEMAND & MARKET SHARE• Market Demand: The total demand of every individual willing and

able to buy a good.

• Market demand is found by combining the individual demands of

everyone willing and able to buy a particular good.

• Market Share: Market share is your percentage of total sales to a

given market.

• Market share can be measured in unit sales (for example, 225,000

units out of a total market of 1,000,000 units), or in purchasing units

(225,000 people out of the total market of 1,000,000 buy your

product)

MICRO & MACRO ENVIRONMENT• Micro Environment: Factors or elements in an organization's immediate area of

operations that affect its performance and decision-making freedom.

• These factors include competitors, customers, distribution channels, suppliers,

and the general public.

• Macro Environment: The major external and uncontrollable factors that influence

an organization's decision making, and affect its performance and strategies.

• These factors include the economic factors; demographics; legal, political, and

social conditions; technological changes; and natural forces.

• Specific examples of macro environment influences include competitors, changes

in interest rates, changes in cultural tastes, disastrous weather, or government

regulations.

MARKETING INTELLIGENCE SYSTEMS• A set of procedures and sources used by managers to obtain everyday information

about developments in the marketing environment.

• Marketing managers collect marketing intelligence by reading books, newspapers,

and trade publications; talking to customers, suppliers, and distributors; monitoring

"Social Media" on the internet via online discussion groups; e-mailing lists and blogs

and meeting with other company managers.

• Example:

• Market Reports (From agencies like Neilsen or Forrester)

• Competitive information (Competitors’ brochures, products, websites, etc.)

• Internal Databases (Customer databases)

• Competitive intelligence (SWOT analysis)

MARKETING INFORMATION SYSTEMS• People, equipment, and procedures to gather, sort, analyse, evaluate, and

distribute needed, timely, and accurate information to marketing decision

makers.

• Marketing information systems are designed specifically for managing the

marketing aspects of the business.

DEMOGRAPHIC ENVIRONMENTAL FACTORS• Demography is the study of human populations in Technological terms

of size, density, location, age, sex, race, occupation, and other statistics.

• It is of major interest to marketers because it involves people and people make

up markets.

• Demographic trends are constantly changing.

• For example:

• Population (China because of its largest population offers a location for low cost

production)

• Age structure ( Japan with largest percentage of people above 50 years and India- with

two thirds of its population within 30 years)

• Generation (Baby bloomers , Echo boomers, etc)

TECHNICAL ENVIRONMENTAL FACTORS• The speed of technological advances means that existing electronic equipment,

IT processes and systems will quickly become dated.

• To remain competitive a business must ensure that its processes and systems

support innovation and creativity for itself and its customers.

• Example: Cloud Computing

POLITICAL FACTORS

• A political system is basically the system of politics and government in a country. It governs a complete

set of rules, regulations, institutions, and attitudes.

• A main differentiator of political systems is each system’s philosophy on the rights of the individual

and the group as well as the role of government.

• Examples:

• How stable is the government?

• Is it a democracy or a dictatorship?

• If a new party comes into power, will the rules of business change dramatically?

• Is power concentrated in the hands of a few, or is it clearly outlined in a constitution or similar national legal

document?

• How involved is the government in the private sector?

• Is there a well-established legal environment both to enforce policies and rules as well as to challenge

them?

• How transparent is the government’s political, legal, and economic decision-making process?

LEGAL FACTORS

• Legal factors that affects the business conditions.

• Three main kinds of legal systems—common law, civil law, and religious or theocratic

law. Most countries actually have a combination of these systems, creating hybrid

legal systems.

• For example, in Islamic law, business is directly impacted by the concept of interest.

According to Islamic law, banks cannot charge or benefit from interest. This provision

has generated an entire set of financial products and strategies to simulate interest—

or a gain—for an Islamic bank, while not technically being classified as interest. if a

company wants to borrow money from an Islamic bank, it would sell its assets or

product to the bank for a fixed price. At the same time, an agreement would be

signed for the bank to sell back the assets to the company at a later date and at a

higher price. The difference between the sale and buyback price functions as the

interest

ECONOMIC ENVIRONMENTAL FACTORS• The economy is made up of several components, such as wealth, income,

interest, employment and productivity.

• Any of these economic environment components can change and affect the

others, whether positively or negatively.

• Examples:

• Income

• Inflation

• Recession

• Interest Rate

• Exchange Rate

MARKETING RESEARCH

• According to Kotler, “Systematic problem analysis, model-building and fact-

finding for the purpose of improved decision-making and control in the

marketing of goods and services.”

• It is the systematic design, collection, analysis, and reporting of data and

findings relevant to a specific marketing situation facing the company

• 4 steps in marketing research:

• Defining the Problem

• Defining the Research plan

• Collect information

• Final Report

FOCUS GROUPS

• A carefully planned series of discussions designed to obtain perceptions on

a defined area of interest in a permissive, non-threatening environment.

• Give information on

• How groups of people think or feel about a particular topic

• Give greater insight into why certain opinions are held

• Help improve the planning and design of new programs

• Provide a means of evaluating existing programs

• Produce insights for developing strategies for outreach.

EXPERIMENTAL RESEARCH

• Experimental research is a phrase that refers to a kind of research that is

guided by hypotheses (or several hypotheses) that states the anticipated

relationship between two or more variables.

• Example:

• It is based on a methodology that meets three criteria:

• Random assignment—the subjects (or other entities)

• Experimental control—all features of the treatments are identical except

for the independent variable.

• Appropriate measures—the dependent measures are appropriate for

testing the research hypothesis.

MARKETING METRICS

• Marketing metrics are statistical measurements by which

companies judge the effectiveness of their individual

marketing efforts.

• These metrics vary depending upon the size and type of

marketing campaign initiated and the goals of the company

for the specific campaign.

SALES FORECAST

• Projection of achievable sales revenue, based on

historical sales data, analysis of market surveys and trends,

and salespersons' estimates.

• Also called sales budget, it forms the basis of a business

plan because the level of sales revenue affects practically every

aspect of a business.

• May be:

• Short term

• Medium term

• Long term

REFERENCE

• Philip Kotler, Principles of Marketing A South Asian

Perspective, 13th edition, Pearson Publishers.

• A set of procedures and sources used by managers to

obtain everyday information about developments in the

marketing environment accessed 28 August 2013,

<http://2012books.lardbucket.org/books/international-

business-opportunities-and-challenges-in-a-flattening-world/

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