Week 1
Introduction to Marketing & Its Environment
Lecture Outline
Marketing, Modern Definition, Nature & Scope of Marketing
Different Concepts of Marketing
Various functions & Functional Areas of Marketing
The Nature of Marketing Environment & Importance of Environmental
Analysis
External Uncontrollable forces
Important Macro environment developments
Influence of Society upon Business
Learning Outcomes
To gain an Overview & understand the scope of Marketing
To know how Marketing Management has changed over a period of time
Understand the tasks necessary for successful marketing.
To understand the various environmental factors affecting marketing.
To understand and use the components for effective environmental analysis.
Marketing Defined
Marketing is buying and selling of goods and services. Or it can be said that is
about identifying and meeting human and social needs.
Marketing is buying and selling of goods profitably.
Marketing is business activity designed to plan, price, promote and distribute
wants satisfying goods and services to present and potential consumers
According to American Marketing Association
Marketing is an organizational function and a set of processes for creating,
communicating, and delivering value to customers and for managing customer
relationships in ways that benefit the organization and its stakeholders.
Societal Definition of Marketing
Marketing is a societal process by which individuals and groups obtain what they need
and want through creating, offering and freely exchanging products and services of values
with others
Or putting it simply Marketing is the art of giving the right product and services to the
right consumers at the right time and at a right price. For example: Sony PlayStation3
games, Apple iPod digital music, Toyota Prius hybrid automobile and Tata ACE
Many of you will regard marketing as selling but it is not so as selling is only the tip of the
marketing iceberg.
Marketing Management
Is the art and science of choosing target markets and getting, keeping, and growing
customers through creating, delivering, and communicating superior customer value.
What is Marketed?
Goods
Services
Events & Experiences
Persons
Places & Properties
Organizations
Information
Ideas
Selling a Place
Kerala Tourism has successfully branded the destination with a brand name,
logo, and the tagline Gods Own Country as a natural beauty of land as a brand
to protect the brand equity , demonstrating the economic rationale of branding in
pure service industry. One of the most recognized tourism brands in India
Marketing Can Promote Ideas
Who Markets?
A Simple Marketing System
The above fig shows the relationship between the industry and the market.
Sellers and buyers are connected by four flows. The inner loop shows an
exchange of money for goods and services; the outer loop shows an exchange of
information.
Key Customer Markets
Consumer Markets
Business Markets
Global Markets
Nonprofit/ Government Markets
Core Marketing Concepts
Needs, Wants & Demands
Target Markets, Positioning & Segmentation
Offerings & Brands
Value & Satisfaction
Marketing Channels
Supply Chain
Competition
Marketing Environments
The marketplace isnt what it used to be
The New Marketing Realities
Information technology
Globalization
Deregulation
Privatization
Competition
Convergence
Consumer resistance
Retail transformation
New Consumer Capabilities
A substantial increase in buying power
A greater variety of available goods and services
A great amount of information about practically anything
Greater ease in interacting and placing and receiving orders
An ability to compare notes on products and services
An amplified voice to influence public opinion
Marketing Concepts
Production Concept
Product
Selling
Marketing
Societal Marketing
Holistic Marketings
Holistic Marketing Dimensions
The Four Ps: Integrated Marketing
Marketing Environments
All the actors and forces influencing the companys ability to transact business
effectively with its target market.
At the same time the changing environment has provided opportunities to many
companies to aggressively venture into some other new areas & market.
They do so because of the ability to scan the operating environment and spot
market trends.
Includes:
Microenvironment - forces close to the company that affect its ability to
serve its customers.
Macroenvironment - larger societal forces that affect the whole
microenvironment.
How They Get this Vital Information ?
Marketers of the organizations are responsible for collecting the information from
the environment in which operations is being carried out. WHY?
Otherwise firms have developed MIS Marketing Information Systems that
provides vital information relating to buyers, their wants, taste, preferences,
behavior, consumption pattern across various regions and even in different
countries etc. For examples different states in India show different consumption
pattern & taste
Therefore, A MIS consists of people , equipment, and procedures to gather, sort,
analyze, evaluate and distribute needed, timely, and accurate information to
marketing decision makers. MIS has three components:
Internal Company Records
Marketing Intelligence System
Marketing Research
Internal Records
Internal records basically are reports generated within the company pertaining to
orders, sales, prices, costs, inventory levels, receivables, payables and so on.
By analyzing all these company can have a feel about the probable happenings and
can easily sense and spot the opportunities and problems within.
Order to Payment Cycle
It is regarded as the heart of the internal records system. Sales representatives,
dealers and customers send orders to the firm.
The sales department prepares invoices, transmit copies to various departments,
and back order out of stock items.
Shipped items generate shipping and billing documents that go to various
departments
Latest trends are Internets and extranets which are used heavily to perform these
steps quickly and accurately.
Sales Information Systems
Timely information and accurate reports on current sales are needed by the
marketing managers.
Technological gadgets are revolutionizing the sales information systems and
allowing representatives to have information instantly. For Example Reliance
Petrochemicals were using hand held billing machines. Pantaloon and Big Bazaar.
This help them to have up to date information and improve the performance of the
concerned person.
Databases, Data Warehousing and Data Mining
Companies organize
their information into databases- customer databases,
product, salesperson etc. they then combine data from the different databases to
derive certain information's.
RFM: Purchase Recency, frequency and Monetary Value.
Marketing Intelligence System
It is a set of procedures and sources managers use to obtain everyday information
about developments in the marketing environments
The internal records system supplies results data and marketing intelligence
system supplies happenings data.
It may be done by reading newspapers, trade publications, talking to customers,
suppliers and distributors, emails, blogs, informal meetings and even internet for
online chat. This Intelligence system can be improved by:
Training & motivating the sales force to spot & report new developments
To motivate intermediaries to pass important information. Mystery Shoppers and
Research Agency are also hired.
Network Externally : The firm can purchase competitors products, attend open
houses and trade shows, published reports, meetings, talking to employees, dealers,
distributors, suppliers and agents.
On field information & Consulting group on fact finding trip.
Set Up Customer Advisory Panel: Customers on important advisory panels,
alumni and recruiters on panels for feedback and advices.
Government databases: Census of India, NSSO, CSO, UNDP, NCAER etc
Purchase information from outside suppliers: AC Nielson, ORG MARG, KPMG,
PWC & E&Y.
Using Online customer feedback system.
Analyzing the Macro Environment
Needs & Trends:
Unmet Needs: Needs to be satisfied
Fads: Unpredictable, short-lived and without social, economic and political
significance. For example: Pager, Management education earlier.
Trends: Direction or sequence of events that has some momentum and durability.
For example social structure of a family.
Megatrends: Large social, economic, political and technological changes that are
slow to form, and once in place, they influence us for some time seven to ten years
or even longer. For Example: emails, weekends holidays etc.
Marketing Environment
Demographic
Company
Economic
Cultural
Publics
Political
Company
Competitors
Suppliers
Customers
Intermediaries
Technological
Natural
Micro Environment
Forces Affecting a Companys Ability to Serve Customers
Publics: Any group that perceives itself having an interest in a companys
ability to achieve its objectives.
Company: Functional areas such as top management, finance, and
manufacturing, etc.
Competitors: Those who serve a target market with similar products and
services.
Customers: Five types of markets that purchase a companys goods and
services.
Suppliers : Provide the resources needed to produce goods and services.
Intermediaries: Help the company to promote, sell, and distribute its goods to
final buyers.
Markets
Consumer
Markets
Business Markets
Reseller Markets
Global Markets
Non
Profit/Government
Markets
Macro Environment
Forces that Shape Opportunities and Pose Threats to a Company
Demographic : Monitors population in terms of age, age mix, literacy levels,
sex, race, occupation, location and other statistics.
Economic: Factors that affect consumer buying power and patterns, income
distribution.
Natural: Natural resources needed as inputs by marketers or that are affected
by marketing activities. CNG, Recyclable products, Environment safety, Water
Conservation ( RWH projects by Coca Cola)
Political: Laws, agencies and groups that influence or limit marketing actions.
Cultural: Forces that affect a societys basic values, perceptions, preferences,
and behaviors.
Technological: Forces that create new product and market opportunities.
Natural Environment
Factors Affecting the Natural Environment
More Government Intervention
Higher Pollution Levels
Shortage of Raw Materials
Increased Costs of Energy
Technological Environment
Issues in Technological Environments
High R & D Budgets
Focus on Minor Improvements
Rapid Pace of Change
Increased Regulation
Political Environment
Key Trends in the Political Environment
Changing Enforcements
Increased Legislation
Greater Concern For Ethics
CPA has recognized six rights of consumers:
Safety
Information
Choice
Representation
Redressal
Consumer Education
Cultural Environment
Of The Universe
Of Oneself
Of Others
Of Nature
Of Organization
Of Society
