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8/9/2019 Marketing Management Chapter 01
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SHH Kazmi, 2007
Excel BooksMarketing Management Text and Cases,S H H Kazmi1-1
Introduction to Marketing
Marketing Management Text and Cases
Excel Books1-1
International
context ofbusiness
1Chapter
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Introduction to Marketing
MarketA market can be viewed as any person, group, or organisation with
which an individual, group, or organisation has an existing or potential
exchange relationship. We can distinguish four broad markets:
1. Consumer markets.
2. Business markets.
3. Global or international markets.
4. Non-profit and governmental markets.
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Introduction to Marketing
Defining Marketing
Marketing starts with customers and ends with customers.
The American Marketing Association defines marketing as:
Marketing is an organisational function and a set of processes for creating,
communicating, and delivering value to customers and for managing customer
relationships in ways that benefit the organisation and its stakeholders.
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Introduction to Marketing
Needs, Wants, and Demand
A need can be defined as a felt state of deprivation of some basic
satisfaction.
The specific satisfier that an individual looks for defines thewant.
When the want is backed by purchasing power, it is called the demand.
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Introduction to Marketing
The Concept of Exchange
The concept of exchange is the essence and central to marketing thinking.
Unless there is actual or potential exchange, there is no marketing.
Something of Value
(Goods, Service, Ideas, etc.)
Both Parties Freely Agree tothe
Terms and
Conditions ofExchange
(Money, Credit, Goods, Labour)
Something of ValueMarketer
Marketer Customer
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Introduction to Marketing
Customer Value and SatisfactionCustomer value is the ratio of perceived benefits and costs that the
customer has to incur in acquiring that product or service.
Satisfaction
Depends on
Customer's
Perceived Total
Costs and
Value
Produc
t
Value ServiceValue ImageValue PersonalValue T
otalValue
Monetary
Cost
Time
Cost
Psychic
Cost
Energy
Cost
Total
Cost
Customer
Delivered
Value
Customers generally experience satisfaction when the performance level
meets or exceeds the minimum performance expectation levels. Similarly,
when the performance level far exceeds the desired performance level, the
customer will not only be satisfied but will also most likely be delighted.
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Introduction to Marketing
Marketing Tasks
1. Negative Demand: This situation is faced when a major part of thetarget market dislikes the product and may even pay a price to avoid it.
The marketing task is to unearth and analyse the reasons for this state,
and to learn if a product redesign or change in marketing mix elements
can help.
2. No Demand: The customers may be unaware or indifferent towardsthe product. The remedy is to create product awareness and connect
product benefits to customers needs and wants.
3. Dormant Demand: This may occur when the currently available
products fail to satisfy the strong needs that customers feel. To meetthe latent demand more effectively, the marketing task is to develop
product or service if the market size is favourable.
Cont
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Introduction to Marketing
7. Excess Demand: At this demand level, the company is unable tomeet the demand level. The only option usually available is to find
ways to decrease demand temporarily or permanently. Generally,
marketing seeks to discourage overall demand through demarketing,
either by increasing prices or reducing promotion and services.
Selective demarketing involves reducing demand from those markets
that are less profitable.
8. Unwholesome Demand: This concerns managing demand forharmful products. The marketing task is to make the public aware
about the dangers and harmful effects caused through misuse or overuse of such products by using appropriate degree of fear appeals,
price hike, or reduced availability.
Marketing Tasks
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Introduction to Marketing
Evolution of Marketing Concept
The Production Concept
The Selling Concept
The Marketing Concept
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Introduction to Marketing
Relationship Marketing
The term relationship marketing refers to long-term and mutually
beneficial arrangements wherein both buyer and seller focus on value
enhancement through the creation of more satisfying exchanges.
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Introduction to Marketing
The Societal Marketing Concept
Societal marketing concept is a management philosophy that takes into
account the welfare of society, the organisation, and its customers.
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Introduction to Marketing
Marketing Mix4 Ps: Product, Price, Place (distribution) and Promotion
Marketing Mix Elements (4Ps)
Product Price Place Promotion
Decisions Decisions Decisions Decisions
Brand name Pricing strategy Distribution
Functionality Suggested retail channels (push, pull, etc.)
price
Styling Wholesale price Market coverage Adver tising
Quality Various discounts - intensive Sales pr omotion
Safety Seasonal pricing - selective Personal selling
Packaging Bundling - exclusive PR / publicity
Repairs & support Price flexibility Inventory Pr omotional budget
Warranty Price discrimination Warehousing
Accessories and Order pr ocessing
Services Transportation
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Introduction to Marketing
Product (Customer Benefit)
A products anything that can be offered to a market for attention,
acquisition, use, or consumption that might satisfy a need or want.
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Introduction to Marketing
Promotion (Marketing Communications)
Promotion is a key element of marketing programme and is concerned
with effectively and efficiently communicating the decisions of marketing
strategy, to favourably influence target customers perceptions to
facilitate exchange between the marketer and the customer that maysatisfy the objectives of both customers and the company.
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Introduction to Marketing
Distribution (Customer Convenience)Decisions with respect to distribution channel focus on making the
product available in adequate quantities at places where customers are
normally expected to shop for them to satisfy their needs.
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Introduction to Marketing
Price (Customer Cost)Price variable such as dealer price, retail price, discounts, allowances,
credit terms, etc., directly influence the development of marketing
strategy, as price is a major factor that influences the assessment of
value obtained by customers.