THE PRODUCTION CONCEPT: The production concept is one of the oldest concepts guiding sellers. The production concepts holds that consumers will favour those products that are widely available and low in cost. Managers of Production-oriented organizations concentrate on achieving high production efficiency and wide distribution coverage . The assumption that consumers are primarily interested in product availaility and low price holds in at least two types of situations. The first is where the demand for a product exceeds supply, as in many Third World countries. Here consumers are more intersted in obtaining the product than in its fine points. The suppliers will concentrate on finding ways to increase production. The second situation is where the product's cost is high and has to be brought down through
THE PRODUCT CONCEPT: The product concept holds that consumers will favour those products that offer the most quality, performance, or innovative features.
Managers in these product-oriented organizations focus their energy on making superior products and improving them over time.These managers assume that buyers admire well-made products and can appraise product quality and performance. These managers are caught up in a love affair with their product.Product-oriented companies often design their products with little or no customer input.
The product concept leads to "Marketing myopia" a focus on the product rather than on the customer's need.
THE SELLEING CONCEPT: The selleing concept or sales concept is another common approach many firms take to the market. The selling concept holds that consumers ,if left alone, will ordinarily not buy enough of the organizations products . The organization must there fore undertake an aggressive selling and promotional effort.
The concept assumes that consumers typically show buying resistance or inertia and have to be coaxed into buying , and that the company should have a whole battery of effective selling and promotion tools to stimulate more buying. The selling concept is practiced most aggressively with "unsought goods ," those goods that buyers normally do not think of buying things such as insurance, encyclopedias, and funeral plots. These industries have perfected various sales techniques to locate prospects and hard-sell them on the product benefits.
Most firms practise the selling concept when they have overcapacity . Their aim is to sell what they make rather than what the market wants.Therefore , people are surprised when they are told that the most important part of marketing is not selleing . selleing is only the tip of the marketing iceberg.
NATURE AND SCOPE OF MARKETING
Marketing is typically seen as the task of creating , promoting , and delivering goods and services to consumers and business. Marketers are skilled in stimulating demand for a company's products, but this becomes limited view of the tasks marketers perform. Just as production and logistics professionls are responsible for supply management,marketers are responsible for demand management.Marketing managers seek to influence the level, timing, and composition of demand to meet the organization's objectives. There are eight different states of demand and the corresponding tasks faced y marketing managers. They are as follows:
1.Negative Demand: when the markets dislike the products and avoid them, negative demand gets generated. The task of marketing managers, is to analyze why the markets dislike the products and whether a marketing program consisting of Product redesign, lower prices, and more positive promotion can change beliefs and attitudes.
2.No Demand:The target consumers may be unaware or uninterested in the product. The marketing task is to find ways to connect the benefits of the products with people's natural needs and interests.
3.Latent Demand: Consumers may share a strong need that cannot be satisfied by the existing Products.The marketing task is to measure the size of the potential market and develop goods and services to satisfy the market.
4.Declining Demand:The demand for certain goods and services over a period of time starts declining. The marketer should analyze the causes of the decline and should determine whether demand could be re stimulated.
5.Irregular Demand:Demand may vary on a seasonal, daily , or even hourly basis. The marketing task called Synchromarketing is to find ways to alter the pattern of demand through flexible pricing ,promotion and other incentives.
6.Full Demand:Organizations face full demand when they are pleased with their volume of business . The marketing task is to maintain the current level of demand in the face of changing consumers preferences and increasing competition.
7.Overfull Demand:Organizations may face a demand level that is higher than they can or want to handle. The marketing task called de marketing requires finding ways to reduce demand temporarily or permanently.
8.Unwholesome Demand:Unwholesome products will attract organized efforts to discourage their consumption. The marketing task is to get people who like something to give it up. Example: Campaign against drugs, large families etc.
Marketing people are involved in marketing a variety of entities like goods, services, experiences, events, persons, places, properties, organizations, information and ideas.
1.Negative Demand: when the markets dislike the products and avoid them, negative demand gets generated. The task of marketing managers, is to analyze why the markets dislike the products and whether a marketing program consisting of Product redesign, lower prices, and more positive promotion can change beliefs and attitudes.
2.No Demand:The target consumers may be unaware or uninterested in the product. The marketing task is to find ways to connect the benefits of the products with people's natural needs and interests.
3.Latent Demand: Consumers may share a strong need that cannot be satisfied by the existing Products.The marketing task is to measure the size of the potential market and develop goods and services to satisfy the market.
4.Declining Demand:The demand for certain goods and services over a period of time starts declining. The marketer should analyze the causes of the decline and should determine whether demand could be re stimulated.
5.Irregular Demand:Demand may vary on a seasonal, daily , or even hourly basis. The marketing task called Synchromarketing is to find ways to alter the pattern of demand through flexible pricing ,promotion and other incentives.
6.Full Demand:Organizations face full demand when they are pleased with their volume of business . The marketing task is to maintain the current level of demand in the face of changing consumers preferences and increasing competition.
7.Overfull Demand:Organizations may face a demand level that is higher than they can or want to handle. The marketing task called de marketing requires finding ways to reduce demand temporarily or permanently.
8.Unwholesome Demand:Unwholesome products will attract organized efforts to discourage their consumption. The marketing task is to get people who like something to give it up. Example: Campaign against drugs, large families etc.
Marketing people are involved in marketing a variety of entities like goods, services, experiences, events, persons, places, properties, organizations, information and ideas.
MARKETING PROGRM
The marketing program consists of numerous decisions on the mix of marketing tools to use. The marketing mix is the set of marketing tools the firm uses to pursue its marketing objectives in the target market. McCarthy classified these tools into four groups.that he called the four Ps of marketing: Product,Price, Place, and Promotion.
THE FOUR 'P's OF MARKETING MIX:
1.The first P that is Product represents
Product variety,
Product Quality,
Product Design,
Product Features,
Product brandname,
Packaging services , Warranties,returns etc.
2.The second P i.e ., Price represents
list price,
discounts,
allowances,
payment period,
credit terms etc.
3.The third P i.e., Promotion represents
sales promotion,
advertising,
sales force,
public relations,
direct marketing etc
4.The fourth P i.e, Place represents
channels,
coverage,
assortments,
locations,
inventory
transport.
Marketing-mix decisions must be made for influencing the trade channels as well as the final customers. The four Ps represent the sellers view of the marketing tools available for influencing the buyers. From a buyer's point of view , each marketing tool is designed to deliver a customer benefit . Robert Lauterborn suggested that the sellers' four Ps correspond to the customers' four Cs
Four Ps Four Cs
Product Customer solution
Price Customer Cost
Place Convenience
Promotion Communication
THE FOUR 'P's OF MARKETING MIX:
1.The first P that is Product represents
Product variety,
Product Quality,
Product Design,
Product Features,
Product brandname,
Packaging services , Warranties,returns etc.
2.The second P i.e ., Price represents
list price,
discounts,
allowances,
payment period,
credit terms etc.
3.The third P i.e., Promotion represents
sales promotion,
advertising,
sales force,
public relations,
direct marketing etc
4.The fourth P i.e, Place represents
channels,
coverage,
assortments,
locations,
inventory
transport.
Marketing-mix decisions must be made for influencing the trade channels as well as the final customers. The four Ps represent the sellers view of the marketing tools available for influencing the buyers. From a buyer's point of view , each marketing tool is designed to deliver a customer benefit . Robert Lauterborn suggested that the sellers' four Ps correspond to the customers' four Cs
Four Ps Four Cs
Product Customer solution
Price Customer Cost
Place Convenience
Promotion Communication
MARKET
Market:
The concept of exchange leads to the concept of a market.
A market consists of all the potential customers sharing a particular need or want who might be willing and able to engage in exchange to satisfy that need or want.
Thus the size of the market depends upon the number of persons who exhibit the need , have resources that interest others , and are willing to offer these resources in exchange for what they want.
Originally the term market stood for the place where buyers and sellers gathered to exchange their goods. Such as a village square . Economists use the term market to refer to a collection of buyers and sellers who transact over a particular product or product class ; hence the housing market , the grain market , and so on .
Marketers , however , see the sellers as constituting the industry and the buyers as constituting the market. The sellers send goods and services and communications to the market ; in return they receive money and information.
Business people use the term markets colloquially to cover various groupings of customers. They talk about need markets( such as the diet-seeking market); product markets (such as the shoe market); demographic markets (such as the youth market); and geographic markets (such as the French market). Or they extend the concept to cover non customer groupings as well , such as voter markets , labour markets , and donor markets.
The fact is that modern economies operate on the principle of division of labour where each person specializes in the production of something, receives payment , and buys needed things with this money.
Essentially, manufacturers go to resource markets (Raw- material markets , labour markets , money markets , and so on)buy resources , turn them into goods and services , sell them to middlemen , who sell them to consumers.
The consumers sell their labour , for which they receive money income to pay for the goods and services they buy. The government is another market that plays several roles. It buys goods from resource manufacturer , and middlemen markets; It pays them; it taxes these markets (including consumers markets); and it returns needed public services.
Thus each nation’s economy and the whole world economy consist of complex interacting sets of markets that are linked through exchange processes.
The concept of exchange leads to the concept of a market.
A market consists of all the potential customers sharing a particular need or want who might be willing and able to engage in exchange to satisfy that need or want.
Thus the size of the market depends upon the number of persons who exhibit the need , have resources that interest others , and are willing to offer these resources in exchange for what they want.
Originally the term market stood for the place where buyers and sellers gathered to exchange their goods. Such as a village square . Economists use the term market to refer to a collection of buyers and sellers who transact over a particular product or product class ; hence the housing market , the grain market , and so on .
Marketers , however , see the sellers as constituting the industry and the buyers as constituting the market. The sellers send goods and services and communications to the market ; in return they receive money and information.
Business people use the term markets colloquially to cover various groupings of customers. They talk about need markets( such as the diet-seeking market); product markets (such as the shoe market); demographic markets (such as the youth market); and geographic markets (such as the French market). Or they extend the concept to cover non customer groupings as well , such as voter markets , labour markets , and donor markets.
The fact is that modern economies operate on the principle of division of labour where each person specializes in the production of something, receives payment , and buys needed things with this money.
Essentially, manufacturers go to resource markets (Raw- material markets , labour markets , money markets , and so on)buy resources , turn them into goods and services , sell them to middlemen , who sell them to consumers.
The consumers sell their labour , for which they receive money income to pay for the goods and services they buy. The government is another market that plays several roles. It buys goods from resource manufacturer , and middlemen markets; It pays them; it taxes these markets (including consumers markets); and it returns needed public services.
Thus each nation’s economy and the whole world economy consist of complex interacting sets of markets that are linked through exchange processes.
EXCHANGE,TRANSACTIONS,AND RELATIONSHIPS
Exchange:
Marketing emerges when people decide to satisfy needs and wants through exchange. Exchange is one of four ways people can obtain products.
• The first way is self-production . People can relieve hunger through hunting , fishing , or fruit gathering . They need not interact with anyone else. In this case , there is no market and no marketing.
• The second way is coercion. Hungry people can wrest or steal food from others. No benefit is offered to the others except that of not being harmed.
• The third way is begging. Hungry people can approach others and beg for food. They have nothing tangible to offer except gratitude.
• The fourth way is exchange. Hungry people can approach others and offer a resource in exchange , such as money , another good , or a service.
Marketing arises from this last approach to acquiring products. Exchange is the act of obtaining a desired product from someone by offering something in return. For exchange to take place , five conditions must be satisfied:
1. There are at least two parties.
2. Each party has something that might be of value to the other party.
3. Each party is capable of communication and delivery.
4. Each party is free to accept or reject the offer.
5. Each party believes it is appropriate or desirable to deal with the other party.
If these conditions exist , there is a potential for exchange. Whether exchange actually takes place depends upon whether the two parties can agree on terms of exchange that will leave them both better off (or at least not worse off) than before the exchange . This is the sense in which exchange is described as a value-creating process ; that is , exchange normally leaves both parties better off than before the exchange.
Exchange must be seen as a process rather than as an event. Two parties are said to be engaged in exchange if they are negotiating and moving toward an agreement . If an agreement is reached, it means that a transaction has taken place. Transactions are the basic unit of exchange. A transaction consists of a trade of values between two parties. It is possible to say : A gave X to B and received Y in return. A gave Rs.14000/- to B and obtained a television set. This is a classic monetary transaction. Transactions , however , do not require money as one of the traded values. A barter transaction would consist of A giving a refrigerator to B in return for a television set. A barter transaction can also consists of the trading of services instead of goods , as when a lawyer writes a will for a physician in return for a medical examination.
To conduct sucessful exchanges , the marketer analyzes what each party expects to give and get. Simple exchange situations can be mapped by showing the two actors and the wants and offers flowing between them. Suppose the process of trying to arrive at mutually agreeable terms is called negotiation. Negotiation leads to either mutually acceptable terms or a decision not to transact.
Transaction marketing is part of a larger idea, that of relationship marketing. Smart marketers try to uild up long-term , trusting, "win-win" relationships with valued customeres , distributors , dealers , and suppliers . That is accomplished by promising and delivering high quality goods, good service, and fair prices to the other parties over time. It is accomplished by building strong economic,technical,and social ties with the other parties. Relationship marketing cuts down on transaction costs and time ;in the best cases , transactions move from being negotiated each time to being routinized.
The ultimate outcome of relationship marketing is the building of a unique company asset called a marketing network. A marketing network consists of the company and its suppliers, distributors , and customers with which it has built solid, dependable business relationships. Increasingly, marketing is shifting from trying to maximize the profit on each individual transaction to maximizing mutually beneficial relationships with other parties. The operating principle is to build good relationships , and profitable transactions will follow.
Marketing emerges when people decide to satisfy needs and wants through exchange. Exchange is one of four ways people can obtain products.
• The first way is self-production . People can relieve hunger through hunting , fishing , or fruit gathering . They need not interact with anyone else. In this case , there is no market and no marketing.
• The second way is coercion. Hungry people can wrest or steal food from others. No benefit is offered to the others except that of not being harmed.
• The third way is begging. Hungry people can approach others and beg for food. They have nothing tangible to offer except gratitude.
• The fourth way is exchange. Hungry people can approach others and offer a resource in exchange , such as money , another good , or a service.
Marketing arises from this last approach to acquiring products. Exchange is the act of obtaining a desired product from someone by offering something in return. For exchange to take place , five conditions must be satisfied:
1. There are at least two parties.
2. Each party has something that might be of value to the other party.
3. Each party is capable of communication and delivery.
4. Each party is free to accept or reject the offer.
5. Each party believes it is appropriate or desirable to deal with the other party.
If these conditions exist , there is a potential for exchange. Whether exchange actually takes place depends upon whether the two parties can agree on terms of exchange that will leave them both better off (or at least not worse off) than before the exchange . This is the sense in which exchange is described as a value-creating process ; that is , exchange normally leaves both parties better off than before the exchange.
Exchange must be seen as a process rather than as an event. Two parties are said to be engaged in exchange if they are negotiating and moving toward an agreement . If an agreement is reached, it means that a transaction has taken place. Transactions are the basic unit of exchange. A transaction consists of a trade of values between two parties. It is possible to say : A gave X to B and received Y in return. A gave Rs.14000/- to B and obtained a television set. This is a classic monetary transaction. Transactions , however , do not require money as one of the traded values. A barter transaction would consist of A giving a refrigerator to B in return for a television set. A barter transaction can also consists of the trading of services instead of goods , as when a lawyer writes a will for a physician in return for a medical examination.
To conduct sucessful exchanges , the marketer analyzes what each party expects to give and get. Simple exchange situations can be mapped by showing the two actors and the wants and offers flowing between them. Suppose the process of trying to arrive at mutually agreeable terms is called negotiation. Negotiation leads to either mutually acceptable terms or a decision not to transact.
Transaction marketing is part of a larger idea, that of relationship marketing. Smart marketers try to uild up long-term , trusting, "win-win" relationships with valued customeres , distributors , dealers , and suppliers . That is accomplished by promising and delivering high quality goods, good service, and fair prices to the other parties over time. It is accomplished by building strong economic,technical,and social ties with the other parties. Relationship marketing cuts down on transaction costs and time ;in the best cases , transactions move from being negotiated each time to being routinized.
The ultimate outcome of relationship marketing is the building of a unique company asset called a marketing network. A marketing network consists of the company and its suppliers, distributors , and customers with which it has built solid, dependable business relationships. Increasingly, marketing is shifting from trying to maximize the profit on each individual transaction to maximizing mutually beneficial relationships with other parties. The operating principle is to build good relationships , and profitable transactions will follow.
PRODUCT
Products:
People satisfy their needs and wants with goods and services. The term product is used to cover both. A product is defined as anything that can be offered to satisfy a need or want.
The importance of physical products lies not so much in owning them as in obtaining the services they render. A car is not bought just for its appearance but because it supplies transportation services . A Microwave oven is not just bought to admire but because it supplies a cooking services.
Thus physical products are really vehicles that deliver services to us.
In fact , services are also supplied by other elements , such as persons , places , activities , organizations , and ideas. Generally the term product is used to cover physical products , service products , and other things that are capable of delivering satisfaction of a want or need.
Manufacturers often make the mistake of paying more attention to their physical products than to the services produced by these products. They see themselves as selling a product rather providing a solution to a need. Yet a woman isn’t buying lipstick ; she is buying “hope”. A carpenter isn’t buying a drill ;he is buying a “hole”. A physical object is a means of packaging a service. The marketer’s job is to sell the benefits or services built into physical product s rather than just describe their physical features.
VALUE , COST , AND SATISFACTION:
How do comsumers choose among the many products that might satisfy a given need?
Assuming that a person needs to travel eight km a day to work a number of products could satisfy this need: a bicycle , a motorcycle , an automobile , an auto , and a bus. These alternatives constitute his product choice set. The person may also consider other factors ,namely speed , safety , ease , and economy . These are called his need set . Now each product has a different capacity to satisfy his various needs. Thus a bicycle will be slower , less safe , and more effortful than an automobile , but it will be more economical. The person has to decide which product will deliver the most total satisfaction .
The guiding concept is customer value. The person would arrive at an estimate of the capacity of each product to satisfy his set of needs.He might rank the product from the most need-satisfying to the least need-satisfying . Value is the consumer’s estimate of the product’s overall capacity to satisfy his or her needs.
Suppose the person is primarily interested in the speed and ease of getting to work. Since each product involves a cost , he will not necessarily buy the automobile. The automobile costs substantially more than , say , a bicycle. The person will have to give up more of other things (represented by the cost ) to obtain the car. Therefore , he will consider the product’s value and price before making a choice. He will choose the product that will produce the most value for the money he is paying.
People satisfy their needs and wants with goods and services. The term product is used to cover both. A product is defined as anything that can be offered to satisfy a need or want.
The importance of physical products lies not so much in owning them as in obtaining the services they render. A car is not bought just for its appearance but because it supplies transportation services . A Microwave oven is not just bought to admire but because it supplies a cooking services.
Thus physical products are really vehicles that deliver services to us.
In fact , services are also supplied by other elements , such as persons , places , activities , organizations , and ideas. Generally the term product is used to cover physical products , service products , and other things that are capable of delivering satisfaction of a want or need.
Manufacturers often make the mistake of paying more attention to their physical products than to the services produced by these products. They see themselves as selling a product rather providing a solution to a need. Yet a woman isn’t buying lipstick ; she is buying “hope”. A carpenter isn’t buying a drill ;he is buying a “hole”. A physical object is a means of packaging a service. The marketer’s job is to sell the benefits or services built into physical product s rather than just describe their physical features.
VALUE , COST , AND SATISFACTION:
How do comsumers choose among the many products that might satisfy a given need?
Assuming that a person needs to travel eight km a day to work a number of products could satisfy this need: a bicycle , a motorcycle , an automobile , an auto , and a bus. These alternatives constitute his product choice set. The person may also consider other factors ,namely speed , safety , ease , and economy . These are called his need set . Now each product has a different capacity to satisfy his various needs. Thus a bicycle will be slower , less safe , and more effortful than an automobile , but it will be more economical. The person has to decide which product will deliver the most total satisfaction .
The guiding concept is customer value. The person would arrive at an estimate of the capacity of each product to satisfy his set of needs.He might rank the product from the most need-satisfying to the least need-satisfying . Value is the consumer’s estimate of the product’s overall capacity to satisfy his or her needs.
Suppose the person is primarily interested in the speed and ease of getting to work. Since each product involves a cost , he will not necessarily buy the automobile. The automobile costs substantially more than , say , a bicycle. The person will have to give up more of other things (represented by the cost ) to obtain the car. Therefore , he will consider the product’s value and price before making a choice. He will choose the product that will produce the most value for the money he is paying.
Introduction to Marketing Management
INTRODUCTION:
The word marketing is derived from the latin word ‘Marcatus’ which means merchandise ware,
Traffic, trade or a place where business is conducted.
According to Peter F.Drucker,” Marketing is not a function of business,but a view of the entire business,seen as the economic organ to provide goods and services.” In order to understand the role of marketing in an organization,it is essential to understand the meaning of needs,wants and demands.
Objectives:
You should be in a position to:
• Define Needs , Wants and Demands
• Explain the Nature and Scope of Marketing
• Explain various concepts of Marketing
The word marketing is derived from the latin word ‘Marcatus’ which means merchandise ware,
Traffic, trade or a place where business is conducted.
According to Peter F.Drucker,” Marketing is not a function of business,but a view of the entire business,seen as the economic organ to provide goods and services.” In order to understand the role of marketing in an organization,it is essential to understand the meaning of needs,wants and demands.
Objectives:
You should be in a position to:
• Define Needs , Wants and Demands
• Explain the Nature and Scope of Marketing
• Explain various concepts of Marketing
Need of Marketing Management
NEEDS,WANTS,DEMANDS:
Marketing thinking starts with the fact of human needs and wants. People need food, air, water, clothing, and shelter to survive. Beyond this, people have a strong desire for recreation, education and other services. They have strong preferences for particular version and brands of basic goods and services.
Need:
A human need is a state of felt deprivation of some basic satisfaction. People require food , clothing , shelter , safety , belonging , esteem , and a few other things for survival. These needs are not created by their society or by marketers; they exist in the very texture of human biology and the human condition.
Want:
Wants are desires for specific satisfiers of these deeper needs. Human wants are continually shaped and reshaped by social forces and institutions , such as churches , schools , families , and business corporations.
Demand:
Demands are wants for specific products that are backed by an ability and willingness to buy them. Wants become demands when supported by purchasing power. Many people want a Mercedes car ; only a few are able and willing to buy one. Companies must therefore measure not only how people want their product but , more important , how many would actually be willing and able to buy it.
Marketing thinking starts with the fact of human needs and wants. People need food, air, water, clothing, and shelter to survive. Beyond this, people have a strong desire for recreation, education and other services. They have strong preferences for particular version and brands of basic goods and services.
Need:
A human need is a state of felt deprivation of some basic satisfaction. People require food , clothing , shelter , safety , belonging , esteem , and a few other things for survival. These needs are not created by their society or by marketers; they exist in the very texture of human biology and the human condition.
Want:
Wants are desires for specific satisfiers of these deeper needs. Human wants are continually shaped and reshaped by social forces and institutions , such as churches , schools , families , and business corporations.
Demand:
Demands are wants for specific products that are backed by an ability and willingness to buy them. Wants become demands when supported by purchasing power. Many people want a Mercedes car ; only a few are able and willing to buy one. Companies must therefore measure not only how people want their product but , more important , how many would actually be willing and able to buy it.
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