m1 marketing introduction

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Marketing Introduction

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Contents

Types of Markets ......................................................................................................... 2

Marketing Management ................................................................................................ 4

Why Marketing Research .............................................................................................. 4

Market Segmentation .................................................................................................. 5

Seven ‘P’s of Services Marketing ................................................................................. 10

Service .................................................................................................................... 12








Marketing Trainee Guide - 1

Talent Sprint| © Copyright 20131

Marketing Introduction

A layman's concept of marketing is that of selling the products or services but the idea is

much broader. It is essentially related to customer satisfaction.

Marketing is both a concept and a practice; an approach to exchange relationships, which

provides the driving force for formulation of strategies of every type of organization. It is

an important socioeconomic activity. Marketing is not limited to business activity alone, but

it also applies to other activities like social services, elections etc.

Market

The word market generally refers to the place where goods can be bought or sold. A

market consists of customers sharing a particular need or want who might be able to

engage in exchange to satisfy that need or want.

Market Implies:

a) A situation where buyers and sellers of a commodity interact.

b) Coming together of buyers and sellers of the same or similar commodities.

It is possible for sellers to be dealing in one variety of soap and the buyers being interested

in another variety, which can be substituted by the one available with sellers.

Market is not necessarily a geographical area. Groups of buyers and sellers can be located

wide apart from each other. With the advanced and developed communication and

transport facilities, the buyers and sellers can easily contact each other even if they are

physically at long distances.

A market may comprise:

1) One Seller and many Buyers

2) Many sellers and One Buyer

3) Many sellers and Many Buyers

4) Few sellers and Many Buyers

5) Many Sellers and Few Buyers










Types of Markets

Basis of Classification Types of Market

Geographical Area

(a) Local Market

(b) Regional Market

(c) National Market(d) World/ Global Market

Product

(a) Cotton/Vegetable/Tea Market

(b) Share Market

(c) Bullion Market

(d) Capital Market

(e) Real Estate Market

Nature of Transaction

(a) Cash/Spot Market

(b) Futures Market

Volume of Transaction(a) Retail Market

(b) Wholesale Market

Marketing has been defined in several ways:

1. Meeting needs profitably.

2. The process of determining consumer demand for a product or service, motivating its

sale and distributing it into ultimate consumption at a profit.

3. Creation and maintenance of mutually satisfying exchange relationships etc.

From several definitions given world‐wide it can be interpreted that:

1. Focus of marketing is on consumer.

2. A human need is a state of deprivation of some basic satisfaction, which results in

desire for specific satisfiers of these needs, namely wants. Wants for specific

products backed by an ability and willingness to buy them results in demand.

3. The concept has become more comprehensive - moving from assessing and fulfilling

consumer demand, to identifying needs and wants and determining products and

services. Indeed in the present age, marketing includes not only anticipating the

consumer needs but also kindling needs and providing new products and services to

fulfill them.










Marketing as a Management Function

From one perspective it is a functional area of management and is within the firm using

various developed techniques for achieving specific objectives. Its major role is to identify

the current and future needs and wants of specifically defined target markets. The

organization acts upon this information to produce goods and services to satisfy customerrequirements. Marketing provides entrepreneurship by identifying opportunities in customer

requirements and driving mobilization of resources to capitalize on them. Marketing forms

interface with the existing and potential customers.

Marketing vs. Selling:

Marketing is the management process, which identifies, anticipates and satisfies customer

needs, expectations and profitably.

From another perspective marketing is much more than a management function. It is a

way of thinking about business and a way of working running through every aspect of thefirm's business. It is a customer and profit-oriented approach permeating the entire

business. It is, therefore, an attitude of mind and hence an overall business philosophy.

Marketing is a broader concept than selling.

Firms sell their goods or services to the customers who buy them. Marketing relates to

producing or creating goods or services needed by the customers. In the former case, the

objective is to sell whatever is available with the firms. While in case of marketing, the

objective is to meet the customer's need.

Marketing function starts much before actual selling of products.

Selling is an operational activity, whereas marketing is a total management concept

comprising identification of customer needs, developing suitable products to meet those

needs, delivering (selling) the products to the customers and facilitating their consumption

Selling Marketing

Orientation Product CustomerOutlook Short Term Long Term

Benefit Self Mutual










for ultimate satisfaction of those needs. Thus selling is a part of marketing.

Selling is product focused whereas marketing is customer focused.

Selling is oriented to the needs of seller (the firms) where as marketing is oriented to the

needs of the buyer (the customers).

Selling aims at earning profits by maximizing sales volume. Marketing aims at earning

profits by maximizing customer satisfaction.

Marketing converts customer needs into profitable opportunity, whereas selling en-cashes

such opportunities.

Marketing Management

It is the process of planning and executing the conception, pricing, promotion and

distribution of goods, services and ideas to create exchanges with target groups that satisfy

customer and organizational objectives. It comprises four key functional aspects, viz.,

Analysis, Planning, Implementation and Control.

The significance of marketing has been realized by all organizations whether in service or

trade. Banks are also not an exception to this. Highlights of the Bank Marketing can beattributed to the following points:

1. All Organizations provide Services

2. Aim to satisfy Customer needs and wants of specific nature.

3. The nature of needs and wants of the customer are generally financial, while some

may be incidental to or related these

4. 4The Competitive element, efficiency and effectiveness are major factors in this

process.

5. Organizational objectives are still the driving force.

Why Marketing Research

To Identify the Needs and Wants

To Intensify the Marketing Operations due to Continuous Feedbacks.

To Evaluate the Marketing Operations and its Effectiveness vis‐à‐vis the Expectations

To Reduce the Risk of Failures

To Save Cost and Time










Types of Marketing Research

Financial Research: Banking, Securities, Credit Card, Insurance, and Mutual Funds.

Automotive Research: Vehicles, Components, and Tyres.

Media Research

Consumer Products Research Durables and FMCG.Industrial Research: Chemicals and Plastics Packaging, Textiles, Engineering, Bulk

Drugs, Metals and Minerals, Oil and Gases.

Healthcare Research: Consumers, Doctors, Chemists, Hospitals, Patients and Pharma

companies.

STP Process

Market Segmentation

1. Identify segmentation variables & segment the

market.

2. Develop Profiles of resulting segments.

Market Targeting 3. Evaluate the attractiveness of each segment.

4. Select the target segments.

Market Positioning

5. Identify possible positioning concepts for each

target segment.

6. Select, develop, and communicate the chosen

positioning concept

Market Segmentation

Dividing a market into distinct groups with distinct needs, characteristics, or behavior who

might require separate products or marketing mixes.

Market

Segmentation

More Precise

Definition of

Customer Needs &

More Accurate

Marketing

Objectives

Improved

Resource

Better

Marketing










Market Segmentation Procedure

• Survey Stage, starts with exploratory to gain insights into consumer motivations,

attitudes and behavior, used to collect data on attributes, brand awareness, product

usage patterns, attitudes, demographics.

• Analysis, factor analysis and cluster analysis.

• Profiling stage, each cluster is now profiled in terms of its distinguishing attitudes,

behavior, demographics, psychographics, and media-consumption habits. Each

segment is given a name.

Bases for Segmenting Consumer Markets

Differences between Selling and Marketing

Marketing is the management process, which identifies, anticipates and satisfies customer

needs, expectations and profitably.

Marketing Strategy

Understand Customers – Needs and Expectation

Position Products & Services

Communicate

Deliver Effectively

Marketing Mix

Marketing is an ongoing process of planning and executing the marketing mix (Product,

Price, Place, Promotion) for products, services or ideas to create exchange between

individuals and organizations.

Marketing tends to be seen as a creative industry, which includes advertising, distribution

Selling Marketing

Orientation Product Customer

Outlook Short Term Long Term

Benefit Self Mutual










and selling. It is also concerned with anticipating the customers' future needs and wants,

which are often discovered through market research.

Essentially, marketing is the process of creating or directing an organization to be

successful in selling a product or service that people not only desire, but are willing to buy.

Therefore good marketing must be able to create a "proposition" or set of benefits for the

end customer that delivers value through products or services.

Marketing mix is the set of marketing tools that a firm uses to pursue its marketing

objectives in the target market.

The 4 P's of General Marketing

Marketing decisions generally fall into the following four controllable categories:

Product

Price

Place (distribution)

Promotion

The term "marketing mix" became popularized after Neil H. Borden published his 1964article, The Concept of the Marketing Mix . Borden began using the term in his teaching in

the late 1940's after James Culliton had described the marketing manager as a "mixer of

ingredients". The ingredients in Borden's marketing mix included product planning, pricing,

branding, distribution channels, personal selling, advertising, promotions, packaging,

display, servicing, physical handling, and fact‐finding and analysis. E. Jerome McCarthy

later grouped these ingredients into the four categories that today are known as the 4 P's

of marketing.

These four P's are the parameters that the marketing manager can control, subject to the

internal and external constraints of the marketing environment. The goal is to make

decisions that center the four P's on the customers in the target market in order to create

perceived value and generate a positive response.

Product Decisions

The term "product" refers to tangible, physical products as well as services. Here are some










examples of the product decisions to be made:

Brand name

Functionality

Styling

QualitySafety

Packaging

Repairs and Support

Warranty

Accessories and services

Price Decisions

Some examples of pricing decisions to be made include:

Pricing strategy (skim, penetration, etc.)

Suggested retail price

Volume discounts and wholesale pricing

Cash and early payment discounts

Seasonal pricing

Bundling

Price flexibilityPrice discrimination

Distribution (Place) Decisions

Distribution is about getting the products to the customer. Some examples of distribution

decisions include:

Distribution channels

Market coverage (inclusive, selective, or exclusive distribution)

Specific channel members

Inventory management

Warehousing

Distribution centers

Order processing

Transportation

Reverse logistics










Promotion Decisions

In the context of the marketing mix, promotion represents the various aspects of

marketing communication, that is, the communication of information about the product

with the goal of generating a positive customer response. Marketing communicationdecisions include:

Promotional strategy (push, pull, etc.)

Advertising

Personal selling & sales force

Sales promotions

Public relations & publicity

Marketing communications budget

Limitations of the Marketing Mix Framework

The marketing mix framework was particularly useful in the early days of the marketing

concept when physical products represented a larger portion of the economy. Today, with

marketing more integrated into organizations and with a wider variety of products and

markets, some authors have attempted to extend its usefulness by proposing a fifth P, such

as packaging, people, process, etc. Today however, the marketing mix most commonly

remains based on the 4 P's. Despite its limitations and perhaps because of its simplicity,

the use of this framework remains strong and many marketing textbooks have been

organized around it.

Marketing Decision Variables

Marketing decision variables are those variables under the firm's control that can affect the

level of demand for the firm's products. They are distinguished from environmental and

competitive action variables that are not totally and directly under the firm's control.

The four marketing decision variables are:

Price Variables

Allowances and deals

Distribution and retailer mark‐ups

Discount structure

Product Variables










Quality

Models and sizes

Packaging

Brands

Service

Promotion Variables

Advertising

Sales promotion

Personal selling

Publicity

Place Variables

Channels of distribution

Outlet location

Sales territories

Warehousing system

From a buyer's point of view the 4 Cs that correspond to 4 Ps are as follows:

Customer's needs and wantsCost to the customer

Convenience

Communication

Characteristics of Service Marketing

Intangible

Inseparable

Variable (Heterogeneity)

Perishable

No Ownership

Seven ‘P’s of Services Marketing

Product

Customer oriented










Features

Attractive Name

Innovation

Price Financial Costs

Interest cost

Service charges

Transportation

Opportunity cost

Non-financial Costs

Time,

Energy

Psychic costs

Comparative

Hidden

Place or Physical Distribution

Location of branches

Alternate Channels Distribution

ATM

Internet Banking

D.S.A’s

Marketing Teams

Mobile Banking

Business Correspondents

Promotion

Advertising

Publicity

Sales Promotion

Personal selling

Public Relations & Image Building










People

Selection

Training

Positive Attitude

Visible & Invisible Contact

Process

Simple Documentation

Customer Orientation

Mechanization

New technology

Physical Evidence

Ambience

Interior Layout, Logo, Jingle ( Advertising)

Standardization of ATM premises

Service

A Service is any act or performance that one party can offer to another that is essentially

intangible and does not result in the ownership of anything. Its production may or may not

be tied to a physical product.

A service is an activity or series of activities of more or less intangible nature that normally,

not necessarily, takes place in interactions between the customer and service employees

and / or physical resources or goods and/or systems of the service provider, which are

provided as solutions to customer problems.

Following are the important features:

Services are by and large activities

As a result the services are intangible.

They take place in the interaction between the customer and service provider, which

means that the services are produced and consumed simultaneously

Services now account for more than 70% of employment and GNP of most industrialised

nations. But as far there is no exact distinction between goods and services.










Characteristics of Services :

The main characteristics of services are Intangibility, Inseparability, Heterogeneity,

Perishability.

Intangibility refers to the aspects not associated with any physical form or characteristics.

It is very much pronounced in the pure service element like the lecture given by a

Professor.

Inseparability refers to the fact that production and consumption of the services are

inextricably intertwined.

Heterogeneity or Variability is a result of the fact that Services are usually delivered by

Human beings, whose performance is necessarily variable; quality control is extremely

difficult. It makes it difficult to standardize the output of certain services.

Perishability means that the service "units" cannot be stopped. If a seat is unfilled when a

plane leaves or the play starts it cannot be stored and sold on next day or next week. The

revenue is lost forever.






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