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The Marketing Concept
Evolving Perspectives
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Who makes what?
List B. CompaniesITC, Godrej, BHEL, Videocon, Voltas, HP, Britannia, L&T,Atlas, Bata, HLL, Wipro, Microsoft, P&G
List A. Products
1. Air Conditioners2. Hamam soap3. Washing machines4. Power generators5. Sunsilk shampoo6. Lux Soap7. Safety Locks8. Dove9. Refrigerators
10.Laptops
11. Biscuits12. Cement13. Office furniture14. Shoes15. Bicycles16. Computer Software17. Computer Hardware18. Cooking Oil19. Tooth Paste
20. Detergent Powder
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SECTION 2.1
The Marketing Concept
The marketing conceptstates that
businesses must satisfy customers' needsand wants in order to make a profit.
The Basic Concept
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SECTION 2.1
The Marketing Concept
Customersbuy a product.
Consumersuse the product.
Example:Parents who buy video games
from retailers are customers. The kids who
play the video games are the consumers.
Customers vs. Consumers
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SECTION 2.1
The Marketing Concept
A marketis all potential customers who
share common needs and wants and whohave the ability and willingness to buy the
product.
What is a Market?
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What is a Market?
The set of actual
and potential buyers
of a product.
These people share
a need or want that
can be satisfied
through exchange
relationships.
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What Is Marketing?
Simple Definition: Marketing ismanaging profitable customerrelationships.
Goals:
1. Attract new customers by promisingsuperior value.
2. Keep and grow current customersby delivering satisfaction.
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What is Marketing?
American Marketing AssociationDefinition:
The process of planning and executingthe conception, pricing, promotion anddistribution of ideas, goods and servicesto create exchanges that satisfyindividual and organizational goals.
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Evolving Views of
Marketings Role
e. The customer as the controlling function and
marketing as the integrative function
Customer
Marketing
Production
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What does a Marketer Do?
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What does a Marketer Do?
Why Bike
(Analyze Needs)
Bike Type
(Produ ct Plan)
Which people?
(Segment)
What Quantity?
(Demand Forecast ing)
Where to Sell?
(Distr ibut ion)
What to Charge?
(Price)
What & how to inform?(Promot ion) Who all will compete(Analyze Compet itors)
What if problem?
(Warranty)
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Marketing, Defined
Business activities designed to
Plan
Price
Promote
Distribute(Place)
Want-satisfying products to target markets
to achieve
organizational objectives
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xc ange a e ear oMarketing
Between Organizations
and/or Individuals Marketers and Markets
Exchangethe essence of Marketing
Tangible/ Intangible
goods, Services, Ideas,
places, people
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Conditions of Exchange
Voluntary participation2 or More parties
Each has something of
value for the other party
Parties must
communicate
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Stages of the Evolutionof Marketing
Promote through
Sales and AdvertisingSales-Orientation
Stage
Increase Supply
Produce Efficiently
Product-Orientation
Stage
Market-Orientation
Stage
Long-Run
Customer Satisfaction
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Four Eras in the History of Marketing
Production Era Prior to 1920s
Production orientation
Business success often defined solely interms of production victories
Sales Era
Prior to 1950s
Customers resist nonessential goods andservices
Personal selling and advertisings task is to
convince them to buy
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Marketing Era
Since 1950s Marketing Concept Emerges
Shift from sellers to buyers market
Consumer orientation
Marketing Concept Companywide consumer orientation
Objective of achieving longrun success
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Marketing Concept
A business philosophy that makes Customer
Satisfaction as focal point of all the activities of
the business
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Marketing Management Philosophies
Production Concept
Product Concept
Selling Concept
Marketing Concept
Societal Marketing Concept
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The Production Concept
The idea that consumer will favour products that
are available and highly affordable and that the
organisation should therefore focus on improving
production and distribution efficiency.
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The Product concept
The idea that consumers will favour products that
offer the most quality, performance, and features and
that the organisationshould therefore devote its energy
to making product improvement.
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Marketing and Sales Concepts Contrasted
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Societal Marketing Concept
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This Is a Need
Needs- state of felt
deprivationincluding physical,
social, and
individual needs.
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Maslows
Hierarchyof Needs
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This Is a Want
Wants- form that
a human needtakes, as
shaped by
culture andindividual
personality.
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Need / Want Fulfillment
Needs and Wants
Fulfilled through a
Market ing Offer : Some combination of
products, services,
information, or
experiences offered to amarket to satisfy a need
or want.
What Satisfies Consumers
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Products
Anything that can be Offered to a Market to Satisfy a Need or Want
Persons Places Organizations
IdeasInformation
What Satisfies Consumers
Needs and Wants?
ServicesActivity or Benefit Offered for Sale That is Essentially
Intangible and Does Not Result in the Ownership of Anything
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Marketing Myopia
Sellers pay more
attention to the specific
products they offer than
to the benefits andexperiences produced
by the products.
They focus on the
wants and lose sight
of the needs.
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This Is Demand
Demand
Wants Buying Power
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Segmentation and Target Marketing
Market Segmentation:
Divide the market intosegments of customers
Target Marketing:
Select the segment tocultivate
#1 #2
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Customer Satisfaction
Dependent on the
products perceived
performance relative
to a buyersexpectations.
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Value and Satisfaction
Expectation Performance
810
If performance is lower than expectations, satisfaction is low.
If performance is higher than expectations, satisfaction is high.
Expectation Performance
108
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Loyalty and Retention
FinancialBenefits
SocialBenefits
StructuralTies
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C t L lt & R t ti
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Customer Lifetime Value The entire stream of
purchases that the customer
would make over a lifetime of
patronage.
Share of Customer
The share a company
gets of the customerspurchasing in their
product categories.
Customer Loyalty & Retention
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Simple Marketing System
ndustry(a collection
of sellers)
Market(a collection
of Buyers)
Goods/services
Money
Communication
Information
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Difference Between - Sales & Marketing ?
Salestryingto get the customer to want what the
companyproduces
Marketingtrying to get the company produce what the
customer wants