Marketing Management

MARKETING MANAGEMENT

UNIT – I

DEFINITION OF MARKETING - MARKETING MANAGEMENT- MARKETING CONCEPT – MEANING IMPORTANCE OF MARKETING IN DEVELOPING COUNTRIES - FUNCTIONS OF MARKETING – MARKETING ENVIRONMENT: VARIOUS ENVIRONMENTAL FACTORS AFFECTING THE MARKETING FUNCTION.

DEFINITION OF MARKETING:

Definition of American Marketing Association Marketing (Management) 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 goals.

The Chartered Institute of Marketing define marketing as 'The management process responsible for identifying , anticipating and satisfying customer requirements profitably'

Philip Kotler defines marketing as 'satisfying needs and wants through an exchange process'

Within this exchange transaction customers will only exchange what they value (money) if they feel that their needs are being fully satisfied, clearly the greater the benefit provided the higher transactional value an organisation can charge.

Marketing objectives, goals and targets have to be monitored and met, competitor strategies analysed, anticipated and exceeded. Through effective use of market and marketing research an organisation should be able to identify the needs and wants of the customer and try to delivers benefits that will enhance or add to the customers lifestyle, while at the same time ensuring that the satisfaction of these needs results in a healthy turnover for the organisation.

MARKETING MANAGEMENT:

Marketing management - the process allocating the resources of the organization toward marketing activities

Marketing management takes place when at least one party to a potential exchange thinks about the means of achieving desired responses from other parties.

Marketing management has the task of influencing the level, timing, and composition of demand in a way that help the organization achieve its objectives. Marketing management is essentially demand management.

The planning, Organizing, Implementing and Controlling the marketing activities to facilitate and expidite exchanges effectively (NEED TO ACHIEVE ORGANIZATIONAL OBJECTIVES) and efficiently (MINIMIZING ORGANIZATIONAL RESOURCES). Therefore to facilitate highly desirable exchanges and to minimize the cost of doing so. Effective planning reduces/eliminates daily crises.

According to Philip Kotler, “Marketing Management is the process of planning and executing the conception, pricing, promotion and distribution of goods and services and ideas to create exchanges with target groups that satisfy customer and organizational objectives”.

To make this definition,

• Marketing Management is goal directed. It attempts to satisfy the needs of customers by offering them want satisfying products and generate revenue for the business.
• Marketing Management is a functional area of management. As a managerial function, it includes analysis, planning, implementation and control of activities concerned with development and distribution of products for satisfying the needs of customers.
• Marketing Management is a specialized job. Efficient handling of marketing activities require specialized knowledge of markets, products, consumers tastes and behavior, government policies and business environment.
• Marketing Management determines the appropriate marketing mix of the firm. Product design, its promotion, its pricing, its pricing and its distribution are properly harmonised so that goods are accepted by the customers.
• Marketing Management is the marketing concept in action. It includes all activities which are necessary to know the needs of customers and suppliers goods and services to satisfy the needs of the customers. The marketing concept is based on the philosophy that all activities of the business enterprises should be oriented towards the satisfaction of the requirements or needs of the customers.

OBJECTIVES OF MARKETING MANAGEMENT:

Marketing Management is concerned with all those activities which are essential to determine and satisfy the needs of customers so as to achieve the objectives of business. Thus, the prime objective of marketing management is to achieve the objectives of business. A business predominantly aims at earning reasonable long-term profits by satisfying the needs of the customers. The objectives of marketing management are,

1. To satisfy the customers: The marketing management must scientifically study the demands of customers before offering them any goods or services. Selling the goods or services is not that important, as the satisfication of the customer’s needs. Modern marketing always begins and ends with the needs of customers.
2. To increase profit for the growth of business: The marketing department is the only department which generates revenue for the business. Sufficient profits must be earned as a result of sale of want-satisfying products. If the firm is not earning profits, it will not be able to survive in the market. Moreover, profits are also needed for the growth and diversification of the firm.
3. To generate customers base for the business: The marketing manager must attract more and more customers to buy the firms products and services. This will result into increased sales.
4. To determine marketing mix that will satisfy the needs of the customers. Product, pricing, promotion and physical distribution should be so planned as to meet the requirements of different kinds of customers.
5. To increased the quality of life of people. Marketing management attempts to increase the quality of the life of the people by providing them better products at reasonable prices. It facilities production and distribution of a wide variety of goods and services for use by the customers.
6. To create good image. To build up the public image of firm over a period is another objective of marketing. The marketing department provides quality products to the customers at reasonable price and thus creates its impact on the customers. The marketing manager attempts to increase the goodwill of the business by initiating image building activities. If a firm enjoys goodwill in the market, it will increase the morale of its sales-force. They will show greater loyalty and will develop a sense of service to the customers. This will further enhance the reputation of the business.

MARKETING CONCEPT:

According to Kotler the “Marketing concept is the key to achieving organizational goals consist in determining the needs and wants of target markets and delivering the desired satisfaction more effectively and efficiently than competitors”.

Marketing concept is “a way of thinking” or “management philosophy” about an organization’s total marketing activities. When the philosophy is adopted, it affects not only marketing activities but also all the organization’s activities-including planning of action, control, objectives, follow-through etc., finance and other activities which are geared toward satisfying customer’s needs, wants and desires.

Marketing concepts means “developing a strategy to get the product in front of customers so they have the opportunity to buy it.. determining scientifically what product or services to make and how best to market them to meet consumers needs”. Planning, developing strategy systematically and scientifically selecting

among available alternatives and controlling the operation in order to provide customer satisfaction are relatively new implications in the marketing concept. The marketing concepts are.,

Financial Measures

Dynamics of Marketing Concept

Ingredients or Components of Marketing Concept:

The marketing concept has the following main basic features;

(i) Adoption of a predominantly market or customer orientation.

(ii) A coordinated set of activities that allows the organization to achieve the goals.

(iii) Result oriented marketing.

(1) Market Orientation:

This is the principal element in the concept. Its meaning would be clear from the following objectives accepted by a company.

“Our objective is to increase profitability….to produce maximum long-term profit growth consistent with the balanced best interest of customers. Shareholders, employees, suppliers and society at large…. In achieving this goal we will…. Recognize that the primary purpose of our business is to perform a necessary economic service by creating, stimulating and satisfying customers”.

Marketing originates with the recognition that a need exists and terminates with the satisfaction of that need by the delivery of a usable product; at the right place and at an acceptable price. Marketing starts with the determination of consumer wants and ends with the satisfaction of these wants. Consumer oriented firm also recognizes the need to monitor the post purchase behavior of its customers by determining who purchased the product, whether the product was satisfactory, and what changes in the firm’s market offering would offering would make its products more successful.

(2) Integration of Management Function:

This element aims at integrating and coordinating the diverse functions of marketing- viz., such activities as product development, physical distribution, control, forecasting, pricing, advertising, selling and marketing research. To carry on these activities successfully, their integration is a must. These activities must also be coordinated closely with other functional areas of a business like finance, personnel, administration, research, advertising and other departments. This means, in other words, the formulation of a set of company goals to which individual goals are subordinated, intending thereby that the company exists to achieve something as a company rather than as a collection of uncoordinated individual departments. For eg; achieving a certain percentage of profit on a certain investment may be the company goal. In working towards the achievement of this goal, the finance department decides how much and from which source the needed capital is to be raised. The personnel department lays down the personnel policies for all departments on personnel matters. Research and development will take up only one project at a time. The production department is made aware that obtaining low manufacturing costs is not enough, quality improvement will also be needed. The marketing department will see that less emphasis is placed on “ high sales volume”. And more on “ making profitable sales”. The advertising department will launch a campaign for a new product when it is a definite that the production department has a adequate stock. Thus, an integration and coordination of different functions become necessary.

(3) Result-Oriented Marketing:

The new concept assumes that marketing must be result oriented. The traditional concept was that the measure of marketing success is an increase in sales volume. Under the new concept, sales are made more profitable by dropping unprofitable products, territories or consumers; or devising better methods of marketing and closely matching these to the profit potential of a particular market.

It may be stated that marketing concept constitutes the three basic ingredients, customer orientation, integrated effort, and result direction. This is the modern concept of marketing.

Marketing concept assumes that “the purpose of the business is to create the satisfied customer and that profit is not a meaningful objective by itself but rather the reward for delivering customer satisfaction. It recognizes that marketing is more than selling, it is the total business seen from the customers view point”. It brings customer’s needs into all areas of business decision-making as the major criterion of business action and effectiveness. It is based on a realization that short-term sales volume objectives are most easily achieved when all other elements of the marketing mix have been integrated with in a longer term view of business purpose. In Ansoff’s Phraseology, “the marketing concept takes the firm from lagged response to anticipatory or self-triggered responses to environmental change”.

Planning, developing strategy, systematically and scientifically selecting among available alternatives, and controlling the operation in order to provide customer satisfaction is also an important and essential element of marketing concept.

Other Key Marketing Concepts:

Further, Kotler has highlighted the following concepts for carrying marketing activity and these are the (i) Production concept, (ii) Product concept, (iii) Selling concept, and (iv) Societal-marketing concept.

(1) The Production Concept:

The production concept is one of the oldest concepts guiding the sellers.

The production concept holds that consumers will favour those products that are widely available and low in cost. Managers of production-oriented organizations concentrate on achieving high potential efficiency and wide distribution coverage.

This orientation of organization is practiced in situation where demand exceeds supply or product cost is low due to mass production.

(2) The Product Concept:

The product concept hold that consumers will favour those products that offer most quality performance, or innovative features. Managers in these product-oriented organization form their energy on making superior products and improving them over time.

These managers follow the assumption that buyers admire well-made products and can appraise product quality performance. A simple love affair with the product, without adopting to the market situation, would fail to appreciate that the market for the product might be less receptive to the new products that are tagged with high price, but not easily available, or customer does know about them.

The product concept leads to “Marketing Myopia”, focus on the product rather than on the customer’s need.

(3) The Selling Concept:

The selling concept holds that consumers, if left alone, will ordinarily not biuy enough of the organization’s product. The organization must therefore undertake an aggressive selling and promotion effort.

The selling concept is practiced most aggressively with “unsought goods,” those goods that buyers normally do not think of buying such as donations for voluntary organization, club membership, credit card, insurance, etc.,

(4) The Societal Marketing Concept:

The societal marketing concept holds that the organisation’s task is to determine the needs, wants and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors in a way that preserves or enhances the consumer’s and the society’s well-being.

In recent years the emphasis is on bringing balance into three consideration in marketing policies namely: company profits, consumer’s want satisfaction and public interest.

Marketing Management process in the Marketing Philosophies

MEANING IMPORTANCE OF MARKETING IN DEVELOPING COUNTRIES:

There is following importance of marketing in developing countries.

1. Marketing impact on people: there is no doubt all over the world that making

activities are affected by people’s beliefs, lifestyles, consumption pattern, purchase behavior, income ,etc., Marketers help organization and businesses to develop products, promote, price and distribute them. Consumer’s satisfaction or dissatisfaction with these products and activities will go a long way in determining their consumption behavior. The importance of marketing can, therefore, be felt by the extent to which it affects mentioned demographic variables.

2. Improved Quality of Life: the activities performed by marketers and others in the

economy of most countries, especially developed ones, help to identify and satisfy consumer’s needs. This is because most consumers can always trace their knowledge and persuasion stimuli as advertising, personal selling, E-commerce, sales promotion, etc., by presenting consumers with new, better and different brands, and option of products which can meet their needs, and helping them to easily obtain and safely enjoy these products. Marketers principally and functionally help to improve consumers awareness and quality of life.

3. Improved Quality of product: the importance of marketing is not being over-

emphasized, because contemporary firms and multinationals have now seen the need to produce quality products. The business climate is quite different from what it used to be in the past. Competition has become more intense, such that only fast moving companies and multinational are surviving the heat. This is because they have really capitalized on quality improvement in products to enhance the dynamic consumers quest for goods and services. The advertising of own brands which began some years back is fast becoming vogue, and compels manufactures to improve on the quality of their products, or be prepared to be extinct.

4. Contribute to Gross National product: the strength of any economy is measured in

terms of its ability to generate the required income within a given fiscal year or period. Thus such a country’s GNP must appreciate overtime. Marketing is the pivot and life-wire of any economy, because all other activities of an organization generate costs, and only marketing activities bring in the much needed revenues. Available data showed that advanced countries accounted for 69.1% of world output while developing countries accounted 30.9%.

5. Acceleration of Economic Growth: marketing encourages consumption by