Marketing and Marketing

Environment
[Link] to Marketing and
Marketing Management
[Link] in the
Contemporary World
[Link] Mix
[Link] Environment
1. Introduction to Marketing and Marketing
Management
Meaning of Marketing
Marketing is a social process . Its activities are
designed to meet the needs and expectations of the
society.
The performance of business activities that direct the
flow of goods and services from the producer to
consumer or user.
Marketing is the process of planning and executing
the conception, pricing, promotion and distribution of
ideas, goods and services to create exchanges that
satisfy individual and organizational objectives.
Philip Kotler’s definition
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 value with others.
This focuses on 5 aspects:-
 Marketing is a societal process.
 It satisfies needs and wants.
 It creates satisfying products and services.
 Products are exchanged for value in a transaction that provides
mutual benefits to sellers and buyers.
 Exchange takes place freely without any external imposion or
compulsion.
What is Marketing
Marketing is managing profitable customer
relationships. For ex. Mc Donald’s fulfills its “I’m
lovin’ it” motto by being our customer favorite place
and way to eat”.

It should not be understood in old sense of making a

sale – “telling and selling”- but in a new sense of
satisfying customer needs.
Cont…..
Marketing is a process by which
companies create value for
customers and build strong
customer relationships in order to
capture value from customers in
return.
Marketing Process

Construct
Understandi Capture
an Build
ng the Design a value from
integrated profitable
market place customer customer to
marketing relationship
and driven create
program and create
customers marketing profits and
that delivers customer
needs and strategy customer
superior delight
wants equity
value
1. Understanding the market place and
customer needs
Needs, wants and demands
Market offerings (Product, services and
experiences)
Value and satisfaction
Exchanges and relationships
Markets
Cont……
Needs, wants and demands
Needs:- state of felt deprivation.
Wants:- the form human needs take as they are shaped
by culture and individual personality.
Demands:- human wants that are backed up by buying
power.

Market offerings
Some combination of products, services, information, or
experiences offered to a market to satisfy a need or want.
Cont…..
Customer value and satisfaction.

Exchange and relationship

Exchange:- the act of obtaining a desired object from
someone by offering something in return.
Relationships

Markets
The market is the set of all actual and potential buyers
of a product or service.
[Link] a customer driven marketing
strategy
Marketing management:- the art and science of choosing target
markets and building profitable relationships with them.

Selecting customers to serve

Market segmentation
Target marketing

Choosing a value proposition

A brand’s value proposition is the set of benefits or values it
promises to deliver to consumers to satisfy their needs.
Cont…..
Marketing management orientations
Production concept
Product concept
Selling concept
Marketing concept
Societal marketing concept
Cont….
Production concept:- the idea that consumers will favor
products that are available and highly affordable therefore
the organization should focus on improving production
and distribution efficiency.
Product concept:- the idea that consumers favor products
that offer the most quality, performance and features and
so the organization should devote its energy to making
continuous product improvement.
Selling concept:- the idea that consumers will not buy
enough of the firm’s product unless the firm undertakes a
large scale selling and promotion effort.
Cont…..
Marketing concept:- philosophy in which achieving
organizational goals depends on knowing the needs
and wants of target markets and delivering the desired
satisfaction better than competitors do.
Societal marketing concept:- the idea that a company’s
marketing decisions should consider consumer’s
wants, company’s requirement, company’s long run
interests and society long run interests.
[Link] an integrated marketing plan
and program
Product
Price
Place
Promotion.
4. Building customer relationships
Customer relationship management:- the overall process of
building and maintaining profitable customer relationships by
delivering superior customer value and satisfaction.
Relationship building blocks: customer value and satisfaction
The changing nature of customer relationships
 Relating with more carefully selected customer
 Relating more deeply and interactively.
 Customer managed relationships
 Customer generated marketing
Partnership relationship management:- working closely with
partners in other company departments and outside the company
to jointly bring greater value to customers.
5. Capturing value from customers
Creating customer loyalty and retention
 Customer life time value:- the value of the entire
stream of purchases a customer makes over a lifetime
of patronage.
Growing share of customer:- the portion of customer’s
purchasing that a company gets in its product
categories.
Building customer equity:- the total combined
customer lifetime values of all of the company’s
customers.
 Cont…..
Building the right relationship with right customer.

Butterflies True friends

high

Poten
Strangers Barnacles
tial
profit
ability

low
Short Long
term term
Projected loyalty
Company- Wide Strategic Planning: defining
marketing’s role
Company’s wide strategic planning guides the
company’s marketing strategy and planning. Like
marketing strategy the company’s broader strategy
must be customer focused.
Strategic planning:- the process of developing and
maintaining a strategic fit between the organization’s
goals and capabilities and its changing marketing
opportunities.
Steps in strategic planning

Setting Planning
Defining the Designing the
company marketing and
company business
objectives and other functional
mission portfolio
goals strategies
1. Defining the company mission
Mission statement:- a statement of the organization’s
purpose- what it wants to accomplish in the larger
environment.
Defining a market oriented mission

Company Product oriented Market oriented definition

definition
Facebook We are an online social We give people the power to
network share and make the world more
open and connected

Ritz- carlton We rent rooms We create experience

hotels and
resorts
2. Setting company objectives and
goals
The company needs to turn its
mission in to detailed supporting
objectives for each level of mgmt. Each
manager should have objectives and be
responsible for reaching them.
3. Designing the business portfolio
Business portfolio:- the collection of
businesses and products that make up the
company.
Analyzing the current business portfolio
Portfolio analysis:- the process by which
management evaluates the products and
businesses that make up the company.
Cont …. Growth share matrix

High Star Question mark

Mar
ket
gro
wth
rate Low Cash cow Dog

High low

Relative market
share
Growth Strategies
Existing Product New Product

Existing Penetration Product Development

Market strategies strategies

New Market Diversification

Market Development strategies
strategies
Growth Strategies
Penetration strategies:
the firm seeks to achieve growth with existing products in their current
market segments, aiming to increase its market share.
Market development:
the firm seeks growth by targeting its existing products to new market
segments.
New geographical market
New demographic market
New product use.

Product development:
the firms develops new products targeted to its existing market segments.
Diversification:
 the firm grows by diversifying into new businesses by developing new
products for new markets.
Backward integration
Forward integration.
Horizontal integration.
4. Planning marketing: partnering to build
customer relationships
Partnering with other company departments
 Value chain:- the series of internal departments that
carry out value creating activities to design, produce,
market, deliver and support a firm’s products.
Partners with others in the marketing system
 Value delivery network:- the network made up of the
company, its suppliers, its distributors, and ultimately
its customers who partner with each other to improve
the performance of the entire system.
Marketing strategy and the marketing mix
Marketing strategy:- the marketing logic by which the
company hopes to create customer value and achieve
profitable customer relationships.
Customer driven marketing strategy:- it involves-
 Market segmentation
 Market targeting
 Differentiation
 Positioning
Cont….developing an integrated marketing
mix
Marketing mix:- the set of tactical marketing tools-
product, price, place and promotion- that the firm
blends to produce the response it wants in the target
market.

4 P’s 4 C’s
Product Customer solution
Price Customer cost
Place Convenience
Promotion Communication
 Product
Variety , quality, Price
design, features, List price, discounts,
brand name , allowances, credit
packaging, terms

Target customer

Promotion
Advertising, personal Place
selling, sales Channels, coverage,
promotion , public locations, inventory,
relations transportation
Managing the marketing effort
Managing the marketing process requires the 4
marketing management functions:-
1. Analysis
2. Planning
3. Implementation
4. Control.
Marketing analysis
SWOT analysis
Weaknesses
Strengths
Internal limitations
Internal capabilities
interfere with a co.
that may help a co.
ability to achieve its
reach its objectives
objectives

Threats
Opportunities
Current and emerging
External factors that
external factors that
the co. may be able to
may challenge the co.
exploit to its objectives
performance
Marketing planning
It involves choosing marketing
strategies that will help the
company attain its overall
strategic objectives.
Marketing implementation
Turning marketing
strategies and plans in to
marketing actions to
accomplish strategic
marketing objectives.
Marketing control
Measuring and evaluating the results
of marketing strategies and plans and
taking corrective action to ensure that
the objectives are achieved.
Operating control
Strategic control.
Measuring and managing return on
marketing investment
Return on marketing investment (or
marketing ROI):- the net return from a
marketing investment divided by cost
of the marketing investment.
 Marketing investments

Marketing returns

Improved customer value and satisfaction

Increased customer Increased customer Cost of

attraction retention marketing
investmen
t
Increased customer lifetime values and customer
equity

Return on marketing investment

Marketing In the Contemporary World
The Digital Age
Rapid Globalization
The call for more ethics and social responsibility.
The growth of non-for –profit marketing.
 Relationship Marketing

is a philosophy of doing business that focuses on

keeping and improving current customers
does not necessarily emphasize acquiring new
customers
is usually cheaper (for the firm)--to keep a current
customer costs less than to attract a new one
goal = to build and maintain a base of committed
customers who are profitable for the organization
thus, the focus is on the attraction, retention, and
enhancement of customer relationships
Goals of Relationship Marketing
The primary goal of relationship marketing is to build and
maintain a base of committed customers who are profitable for
the organization. Others are:-
To create word of mouth.
To create loyal customer.
To make prevailing customer buy more product.
To represent growth potential .
To make them buy other services and products as well.
To make them buy new products.
To become “exclusive supplier”
We can sum up how customer evolve from strangers to partners.
Cont…
Evolution Means Goals
of customer
Stranger Attract Acquiring
Acquaintanc Satisfy Satisfying
e
Friend Trust Retaining
partner Commitmen Enhancing
t
Figure 6-1

Customer Goals of
Relationship Marketing

Enhancing

Retaining

Satisfying

Getting
Benefits for the firm (company) from
Relationship Marketing
Increase revenues over time due to regular customers.
Reduces marketing and administrative costs due to
saving of attracting , training and educating costs of
new customers.
Ability to maintain margins without reducing price.
Saves start up cost like advertisement, promotional cost
etc.
Reduce problems and questions inquiring handling
cost since old customer have less inquires and
problems.
Cont…..
Generate good word of mouth.
Help to retain employees since employees like to work with
satisfied customer .
If company has good relationship with customer, customer
helps, cooperates with and encourage other newer customers.

So we can say that there are :-

 Economic benefits
 Customer behavior benefits
 Human resource management benefits
Benefits for customers from customer-firm
relationship
Confidence benefits:- Confidence is feeling of trust
in the service provider. Relationship reduces anxiety
that comes due to uncertainty. If the customer has
trust on the firm it saves time as the customer do not
have to search information regarding the firm.
Saves different costs:-switching cost (searching
other alternatives, travelling to other company etc.)
psychological cost (fear of uncertainty regarding
new product) time related cost (traveling time).
Cont…
Social benefits:- it brings familiarity and social
relationship with the company so the customer can
enjoy social gathering , holiday trips etc.
Service provider keeps total information about
customers and able to serve customized services
accordingly.
Special treatment benefits:- Given special dealer price,
preferential treatment to the regular customer..
Saves start up cost to customer too like form cost,
admission cost, installation cost etc.
Green marketing
Green marketing refers to the process of selling products
and/or services based on their environmental benefits. Such a
product or service may be environmentally friendly in itself or
produced in an environmentally friendly way, including:
Being manufactured in a sustainable fashion
Not containing toxic materials or ozone-depleting substances
Able to be recycled and/or is produced from recycled
materials
Being made from renewable materials (such as bamboo, etc.)
Not making use of excessive packaging
Being designed to be repairable and not "throwaway"
E-marketing
Digital marketing is an umbrella term for the marketing of
products or services using digital technologies, mainly on
the internet, but also including mobile phones, display
advertising, and any other digital medium.
The way in which digital marketing has developed since the
1990s and 2000s has changed the way brands and businesses
utilize technology and digital marketing for their
marketing. Digital marketing campaigns are becoming more
prevalent, as digital platforms are increasingly incorporated
into marketing plans, and as people use digital devices
instead of going to physical shops.
Pyramid (C2C) marketing
Customer to customer (C2C) markets are innovative
ways to allow customers to interact with each other.
While traditional markets require business to
customer relationships, in which a customer goes to
the business in order to purchase a product or service.
In customer to customer markets the business
facilitates an environment where customers can sell
these goods or services to each other. Other types of
markets include business to business (B2B) and 
business to customer (B2C).
Rural marketing
Rural marketing is now a two-way marketing process.
There is inflow of products into rural markets for
production or consumption and there is also outflow
of products to urban areas. The urban to rural flow
consists of agricultural inputs, fast-moving consumer
goods such as soaps, detergents, cosmetics, textiles,
and so on. The rural to urban flow consists of
agricultural produce such as rice, wheat, sugar, and
cotton. There is also a movement of rural products
within rural areas for consumption.
The main reason why the companies are
focusing on rural market 
1. Large and scattered population
2. Higher purchasing capacity
3. Market growth
4. Development of infrastructure
5. Low standard of living
6. Traditional outlook
7. Marketing mix
Marketing Environment
Marketing environment
The actors and forces outside
marketing that affect marketing
management’s ability to build and
maintain successful relationships
with target customer. It consists of
Micro environment
Macro environment
MICRO AND MACRO ENVIRONMENT
Micro environment:- the actors
close to the company that affects its
ability to serve its customers.
Macro environment:- the larger
societal forces that affect the micro
environment.
Micro environment
The actors close to the company that affects its ability to serve
its customers.
It includes:-
 The company
 Suppliers
 Marketing intermediaries
Resellers
Physical distribution firms
Marketing services agencies
Financial intermediaries
 Competitors
Cont….
 Publics
Financial public
Media public
Govt. public
Citizen action public
Local public
General public
Internal public
 Customers
Macro environment
It consists of broader forces that affects the actors in
the micro environment.
It consists of:-
 The demographic environment
 Economic environment
 Natural environment
 Technological environment
 Political and social environment
 Cultural environment.
Cont…
Demographic environment:- the study of human population in terms of
size, density, location, age, gender, race, occupation and other statistics.
 Increasing population
 A growing middle class
 Deprived households
 Aspirers
 Seekers
 Strivers
 Growth in the rural population
 A changing family system
 Changing role of women
 A better educated, more white collared, more professional population
Cont…
Economic environment:- economic factors that affect
consumer purchasing power and spending patterns.
 Industrial economies
 Subsistence economies
Cont….
Natural environment:- natural resources that are
needed as inputs by marketers or that are affected by
marketing activities
 Increased pollution.
 Government intervention
 Environmental sustainability.
Technological environment:- forces that create new
technologies, creating new product and market
opportunities.
Cont….
Political and social environment.
Political environment:- laws, govt. agencies and pressure groups that
influence and limit various organizations and individuals in a given
society.
Legislation regulating business
 Protect companies from each other
 Protect customers from unfair business practices.
 Protect the interest of the society against unrestricted business
behavior.
Increased emphasis on ethics and socially responsible actions.
 Socially responsible behavior
 Cause-related marketing
Cont….
Cultural environment:- institutions and other forces that affect
society’s basic values, perceptions, preferences and behaviors.
[Link] persistence of cultural values
[Link] in secondary cultural values
People’s view of themselves
People’s view of others
People’s view of organization
People’s view of society
People’s view of nature
People’s view of universe.
Responding to the marketing environment:- Reactive & Proactive
Marketing
1. Reactive marketing: views marketing environmental factor
as uncontrollable and difficult to predict. This is passive
approach, where organization tries to adjust marketing mix
according to change in the environment. The adjustment
takes place only after changes occur in the environment.
2. Proactive Marketing: it adopt the environmental changes.
Proactive marketing believes that although many of the
environmental forces such as demography, economic,
culture etc are not controllable, the environmental forces
such as politics, law and technology can be influenced by
correct and calculated moves. It uses political, psychological,
economic and public relations skills influence the
environmental forces to the organizations benefits.

3 - 64
Marketing environment in Nepal

Political: The major setback for any business in Nepal concerned with the political
aspect is the lack of strong and consistent government. For many decades the Nepal
hasn’t been able to have a strong and consistent government hence the rise in
corruption, unclear foreign policies, minimal economic development, etc affecting the
marketing ability of foreign as well as national business organizations.

Economic: Nepal, an under-developed nation, has since the past many decades not
been able to lift its economic status. Due to various factors the economic performance
of our nation has been below par. There is and increasing gap between rich and poor,
heavy dependence on remittance which will affect the performance of the economy in
the long run. The slow economic growth and increasing unemployment negatively
affects the marketing environment of Nepal.
Cont…
Social-cultural: The major portions of Nepalese population live in rural areas with
very small markets. High numbers of population are uneducated. There is an
increasing trend of domestic and international migration. Major religion being
Hindu and with joint family structure the major number of population are very
traditional in thinking which affects the marketing strategies of businesses.

Technological: Nepal is far behind in use of contemporary technologies. the level of
research and development is poor with very minimal level of technological transfer.
There is heavy dependence on manual labor and older technologies.

Legal: the major fault in Nepalese legal system is the lack of clarity in many laws,
rules and regulation. Nepal has a very poor legislative and administrative system.

Environmental: in Nepal the is very minimal attention given to the environment by
stake holders. The positive aspect to this is the emerging concepts of corporate social
responsibility in a few companies and regulatory bodies.