An Overview of Marketing and

Marketing Management
MARKETING
 Marketing and Its Core Concepts
Marketing is meeting customers’ needs and wants profitably.

Marketing is the economic process by which goods and services are

exchanged between the producer and the consumer and their values are
determined in terms of money (prices). All of us engage in marketing in
one or another way.

E.g. Searching a job & trying to convince customers

• Many people think that marketing and selling mean the same thing.
Others think that marketing is the same as selling and advertising.
• Still others have a notion that marketing has got something to
do with making products available in the stores, arranging,
displays and maintaining inventories of products for future sales.
• Marketing is a key function of management. It brings success to
business organization.
• A business organization performs two key functions (i.e.
producing goods and services and making them available to
potential customers for use.)
Definition of Marketing
Marketing can be defined as “the performance of business activities
that directs the flow of goods and services from producer to
consumers/final users. It is a process of transacting goods and services form
the producer to consumers”.

According to William J. Stanton, Marketing is a system of business

activities designed to plan, price, promote and distribute want satisfying
goods and services to present and potential customers.

The Chartered Institute of Marketing defines Marketing as:

“Marketing is the management process for identifying, anticipating &
satisfying customer requirements profitably.”
 Core concepts of Marketing
Marketing has been defined in various ways. The definition that serves our
purpose best is that, According to Philip Kotler, “Marketing is a Social and
Managerial process by which individuals and groups obtain what
they need and want through creating, offering, and exchanging
products of value with others”.
This definition of marketing rests on the following core concepts: needs,
wants, and demands; products (goods, services, and ideas); value,
cost and satisfaction, exchange and transactions; markets, and
marketers.
Needs –Marketing starts with human needs and wants. A human need is
a state of felt deprivation of some basic satisfaction; people require
food, clothing, shelter, safety, belonging, and esteem.
Wants – Wants are desires for specific satisfiers of needs. Wants are shaped
by society, culture and individual personality. In different society, wants can be
satisfied in different ways. For e.g. an Ethiopian needs food and wants "Injera" &
"wet", and an American needs food and wants “hamburger”.
Demands – are human wants for specific products that are backed by an
ability and willingness to buy them. Wants become demands when supported
by purchasing power.
Product (Goods, Services, and Ideas): People satisfy their
needs and wants with products. A product is anything that can be offered to
satisfy a need or want. It can be physical goods, services, ideas or a combination
of physical product along with services.
For example, a computer manufacturer is supplying goods (computer, monitor,
and printer), services (delivery, installation, training, maintenance and repair)
and an idea (computational power).
Value and satisfaction:
Consumers usually face a broad array of products and services that might
satisfy a given need.
Customer value is the difference between the value customer gains from
owning & using a product and the cost of obtaining the product.
Customer Satisfaction depends on a product’s perceived performance in
delivering value relative to buyers’ expectation.
CUSTOMER SATISFACTION (3 Types)
Dissatisfied (Bad word of mouth communication)- P<E
Satisfied (Good word of mouth communication)- P=E
Delighted- P>E
Outstanding marketing companies do out of their way to keep their
customers satisfied
Exchange:
Marketing occurs when people decide to satisfy needs and wants through
exchange.
is the act of obtaining a desired product from someone by offering
something in return. It is only one of the ways that people can obtain what
they need. A person may get what he needs by begging others, hunting,
robbing etc.
Exchange must be seen as a process rather than as an event. Two parties
are engaged in exchange if they are negotiating and moving toward an
agreement. When an agreement is reached, we say that a transaction
takes place.
A transaction consists of a trade off values between two parties.
Market:
A market consists of all the potential and actual 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 on:
the number of people who exhibit the need or want,
have resources that interest others, and
are willing and able to offer these resources in exchange for what they
want.
Here, unlike the Economics approach that considers market as a collection of
buyers and sellers, we shall consider market as a collection of buyers only and
the sellers are considered as industry.
 Marketer:
• is a party that seeks a resource from the other party and in return
willing to offer something valuable to the other party and the
party with whom the marketer needs to make exchange is known
as prospect.
• In the event that both the parties actively seek an exchange, we
say that both of them are marketers and call the situation as
reciprocal marketing.
 Marketing Management
According to American Marketing Association, marketing management is
defined as the process of planning and executing the conception, pricing,
promotion, and distribution of ideas, goods and services to create exchange that
satisfies individual and organizational goals.
In light with this, marketing manager is the one who is responsible for all the
activities related to the aforementioned aspects and there by enhances the
demand (acceptability) of the company’s products in the market. That is why
some times marketing management is considered as demand management.

At any point in time, there may be no demand, adequate demand, irregular

demand or too much demand and marketing management must find ways to
deal with these different demand states. Hence, marketing management has
the task of influencing the level, timing, and composition of demand in a way
that will help the organization achieve its objectives by doing the activities
involved in marketing properly.
 Marketing Management Philosophies
1. The Production Concept
The production concept, one of the oldest in business, holds that consumers
prefer products that are widely available and inexpensive.
Managers of production-oriented businesses concentrate on achieving high
production efficiency, low costs, and mass distribution.
This orientation makes sense in two types of situations, where consumers are
more interested in obtaining the product than in its features(demand is
greater than supply) taking this advantage the company concentrates on
building production volume .
It is also used when a company wants to expand the market(production
cost is high). The company upgrading technology in order to bring costs down,
leading to lower prices and expansion of the market.
Texas Instruments is a leading exponent of this concept with philosophy of
“GET-OUT-PRODUCTION, CUT THE PRICE”.
2. The Product Concept:
The product concept holds that the consumers will favor those products that
offer the most quality, performance or innovative features.
Managers in these organizations focus their energy on making superior
products and improving them over time.
They assume that buyers admire well-made products and can appraise
product quality and performance. However, these managers are sometimes
caught up in a love affair with their product and do not realize what the
market needs.
Product-oriented companies often design their products with little or no
customer input, trusting that their engineers can design exceptional
products.
3. The Selling Concept
The selling concept holds that consumers and businesses will not buy
enough of the firm’s products unless it undertakes an aggressive selling
and promotion effort.
The selling concept is practiced most aggressively with unsought goods—
goods that buyers normally do not think of buying, such as insurance,
blood donations and funeral plots.
Most firms practice the selling concept when whom they have
overcapacity. Their aim is to sell what they make rather than make
what the market wants.
Moreover, prospects are bombarded with TV commercials, newspaper
advertisements, direct mail and sales calls.
 Marketing based on hard selling carries high risks.
It assumes that customers who are coaxed(persuaded) into
buying a product will like it, and even if they do not like it,
they will not bad-mouth it or complain to consumer
organizations and will forget their disappointment and buy it
again.
These are indefensible assumptions because one study showed
that dissatisfied customers may bad-mouth the product to 10
or more acquaintances; bad news travels fast.
4. The marketing concept
The marketing concept holds that achieving organizational goals
depends on knowing the needs and wants of target markets and
delivering the desired satisfactions better than competitors do.
Under the marketing concept, customer focus and value are the paths
to sales and profits.
Instead of a product-centered “make and sell” philosophy, the
marketing concept is a customer-centered “sense and respond”
philosophy.
It views marketing not as “hunting,” but as “gardening,” The job is not
to find the right customers for your product, but to find the right
products for your customers.
 Cont’d
• The selling concept takes an inside-out perspective. It starts
with the factory, focuses on the company’s existing products, and
calls for heavy selling and promotion to obtain profitable sales.
• It focuses primarily on customer conquest – getting short-term sales
with little concern about who buys or why.
• In contrast, the marketing concept takes an outside-in
perspective. The marketing concept starts with a well-defined
market, focuses on customer needs, and integrates all the
marketing activities that affect customers. In turn, it yields profits by
creating lasting relationships with the right customers based on
customer value and satisfaction.
Table: Marketing concept compared with the selling concept

Starting Focus Means Ends

point

Selling Factory Existing Selling and Profit through

concept products promoting sales
volume

Marketing Target Customer Integrated Profit through

concept Market Needs marketing Sales volume &
customer
satisfaction
5. The Societal Marketing Concept
The Societal marketing concept questions whether the pure
marketing concept overlooks possible conflicts between consumer
short-run wants and consumer long-run welfare.
Is a firm that satisfies the immediate needs and wants of target
markets always doing what’s best for consumers in the long run?
A socially responsible company must take into account the long-run
consumer and societal welfare.
The drawback of marketing concept is that it ignores the long-run
societal welfare and focuses only on the short-run benefits. For
example, a product, which gives short-run consumer satisfaction, may
have adverse effects in the long- run. Cigarette factories and
automobile companies which causes environmental problem are
good examples for this.
 Cont’d
• It has, therefore, been felt that the marketing concept be revised
incorporating the long-run societal welfare.
• The societal marketing concept holds that marketing strategy
should deliver value to customers in a way that maintains or
improves both the consumer’s and the society’s well-being.
 Scope of Marketing

• Marketing Research
• Pricing
• Advertising and Sales Promotion
• Channels of Distribution
• Financing
• After-Sales Service
Marketing Research
Market research helps with marketing mix decisions. Research must be done to determine
client needs, tastes and preferences, interests, economic status, paying capacity, and
advertising efficacy. Data is collected, tabulated, codified, evaluated, and presented to
determine what customers will buy, why, and how much. Market research adapts items to
buyer needs. Customers are often surveyed. Marketing managers must participate in research
to utilize results.
Pricing
Pricing influences a company's sales and profitability. Cost of manufacturing, customer
paying capacity, industry demand, rival prices, and goal profit margin must all be considered
when setting a product's price. The price pays for the marketing mix's elements'
contributions. The marketing manager must assess and reconcile the many price-influencing
variables before deciding on an optimal price policy. Good pricing attracts customers.
Advertising and Sales Promotion
In this day of fierce competition, sales promotion and advertising have
become elements of marketing. It raises client awareness, piques his interest,
and boosts purchases. There are several sources of sales promotion and
advertising, and marketing management must decide which to use.
Channels of Distribution
Bringing together the buyer and seller and facilitating their exchange is the
essence of marketing. Distribution channels are an integral part of a complex
system that has evolved from cultural and social patterns in order to facilitate
exchange transactions. Marketers must decide what methods are best for
distributing their particular products. There are various media of distribution
like the retailers, wholesalers, department stores, chain stores, super markets,
etc
Financing
Without appropriate and affordable financing, marketing is tough. Money or
credit lubricates the marketing machine, as modern marketing requires
tremendous resources. Budgeting for marketing, getting funding for
operations, and offering financial aid to clients are all examples of financing.
In an era of global competitiveness, customer financing is a key marketing
strategy. To enhance sales, marketers must offer multiple financing options.
Commercial banks, cooperative credit societies, government organizations,
etc. provide marketing financing. Trade credit underpins modern business.
After-Sales Service
Customer satisfaction depends on after-sales service. After-sales service
includes free repairs, product returns or exchanges during the warranty period,
etc.
 Importance of Marketing
• It enables the customers purchasing the item at all
• It has incredible benefits and our economy would collapse
without it.
• It employs many people directly or indirectly
Not only does it employ the people who make advertisements
and get the word out there, but it employs many people
indirectly.
• It increases competition, and it leads to better products.
Without marketing, only the company that is well known will
get business, while the other companies don't stand a chance.
• It is an essential part of the capitalist society.
 The goals of marketing System
The marketing system generally has four goals.
Maximizing consumption- marketing stimulates maximum demand.
Maximum consumption inter maximize production, employment and
wealth.
Maximizing Satisfaction- owning one product gives sense when it
maximized satisfaction to customers.
Marketing systems maximize satisfaction by creating and providing –
quality products --variety products etc.
Maximizing choices— marketing system provides varieties. As a result
the consumer will find products that fit to their exact test.
Maximizing life quality— the participation of marketing system in
environmental protection maximize the quality of life of consumer. As a
result of this the life style consumers leads to quality of life achieved.
THANK YOU!!!