UNIT-4

Definition of marketing
Definition of Marketing
Marketing is the management process through which goods and services move from concept to the
customer.
It involves coordinating the four elements known as the 4 P's of marketing: product, price, place, and
promotion
The 4 P's of Marketing
Product: Identification, selection, and development of a product that meets customer needs.
Price: Determination of the pricing strategy based on factors like cost, competition, and perceived value.
Place: Selection of distribution channels to ensure the product reaches the target customers efficiently.
Promotion: Development and implementation of strategies to communicate the value of the product to the
customers and stimulate demand.
 Definition of marketing
Example: Apple Products
New Apple products are developed with improved features and capabilities to
satisfy customer needs.
Apple uses different pricing tiers to cater to different segments of customers
based on their preferences and budget.
Distribution channels include Apple stores, online platforms, and authorized
retailers to ensure accessibility.
Promotion strategies involve showcasing products at tech events, extensive web,
and television advertisements to create buzz and generate demand.
 Definition of marketing
Marketing vs. Selling

- Marketing focuses on understanding and satisfying customer needs, whereas selling is primarily concerned with transactional exchange.

- Marketing involves a holistic approach to the entire business process, including discovering, creating, arousing, and satisfying customer
needs.

- Theodore C. Levitt highlights that marketing goes beyond just selling products; it's about developing demand and fulfilling customer
needs.

Key Principles of Marketing

- Customer Orientation: Putting the customer at the center of all business decisions.

- Integrated Marketing: Coordinating all elements of the marketing mix to deliver a cohesive message.

- Value Creation: Creating value for customers through products, services, and experiences.

- Relationship Building: Fostering long-term relationships with customers to drive loyalty and repeat business.
Definition of marketing
Conclusion

- Marketing plays a crucial role in understanding customer needs, creating demand, and delivering
value.

- By effectively utilizing the 4 P's and adopting customer-centric strategies, businesses can succeed
in today's competitive marketplace.
Function of marketing
1. Marketing Information Management

- Understanding customer needs through market research, sales team feedback, and surveys.

- Monitoring product review sites and social media for consumer insights.

2. Distribution

- Determining how and where customers can obtain products.

- Direct sales to business customers or distribution through local distributors or retail outlets.
Function of marketing
3. Product/Service Management

- Incorporating customer needs into product development.

- Identifying opportunities for product range extension or entry into new sectors.

4. Pricing

- Setting prices strategically to ensure market success and profitability.

- Differentiating products to overcome price competition and offer unique value.

Function of marketing
5. Promotion

- Making customers aware of products and the company through advertising, direct marketing, etc.

- Communicating product benefits to build preference.

6. Selling

- Marketing creates awareness and preference, supporting sales efforts.

- Generating leads for sales teams to follow up.

Function of marketing
7. Financing

- Marketing activities generate revenue to fund business operations.

- Strengthening customer loyalty for long-term revenue.

- Offering alternative payment methods to facilitate sales.

8. Importance of Marketing

- Marketing helps increase revenue and profit by meeting customer needs effectively.

- Every employee should understand customer needs to develop the right products and provide high-
quality customer service.
Function of marketing
9. Integration of Functions

- Marketing functions work together to achieve business objectives.

- Coordination and alignment of marketing efforts are essential for success.

10. Conclusion

- Marketing plays a vital role in identifying successful products, promoting them effectively, and
meeting customer needs.

- Understanding and managing the seven functions of marketing are crucial for business success.
Marketing Mix
1. Introduction to the Marketing Mix

- The marketing mix consists of four key elements that are essential for making strategic decisions
before launching a new product.

- These elements are also known as the 4 P's of marketing: Product, Price, Place, and Promotion.

2. Product

- Focuses on what the company is manufacturing.

- Includes product design, features, quality, branding, packaging, and variety.

- Key decisions involve product development, innovation, and differentiation to meet customer needs
effectively.
 Marketing Mix
3. Price

- Concerns the pricing strategy used by the company.

- Involves determining the price point that customers are willing to pay while ensuring profitability.

- Factors influencing pricing decisions include costs, competition, perceived value, and pricing objectives.

4. Place

- Deals with where the company is selling its products.

- Involves selecting distribution channels, locations, and logistics to ensure products are available to customers
when and where they need them.

- Decision-making also includes inventory management and supply chain optimization.

Marketing Mix
5. Promotion

- Focuses on how the company is promoting the product.

- Includes advertising, sales promotion, public relations, direct marketing, and personal selling.

- Aimed at creating awareness, generating interest, and persuading customers to purchase the product.

6. Integration of the Marketing Mix

- The elements of the marketing mix are interconnected and should be aligned with each other.

- Decisions made in one area of the marketing mix can impact other areas, requiring a cohesive strategy.
Marketing Mix
7. Strategic Decisions

- The marketing mix helps firms make strategic decisions necessary for the successful launch and
management of products.

- By carefully considering each element, companies can develop a comprehensive marketing strategy to
achieve their objectives.

8. Conclusion

- The marketing mix serves as a framework for making strategic decisions related to product, price, place,
and promotion.

- Understanding and effectively managing these elements are crucial for the smooth running and success of
any product or organization.
 The Four P's of marketing
1. Introduction

- The Four P's of marketing (Product, Price, Place, and Promotion) play a crucial role in shaping the strategy of an
organization.

- They are fundamental elements that influence decisions in marketing plans and business plans.

2. Integration with Segmentation, Targeting, and Positioning (STP)

- The marketing mix decisions affect segmentation, targeting, and positioning strategies.

- Segmentation and targeting are based on product offerings, while positioning can be determined by pricing strategies.

- Decisions in one area of the marketing mix impact others, emphasizing the interconnectedness of STP and the Four P's.

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 The Four P's of marketing
3. Using the Four P's in Strategy Development

- Identify the product or service to analyze.

- Answer the 4 P's questions: Product, Price, Place, and Promotion.

- Challenge your offer with "why" and "what if" questions to refine your strategy.

- Test the overall offer from the customer's perspective by asking customer-focused questions.

- Keep iterating and refining your marketing mix until it's optimized based on available information.

4. Customer-Focused Testing

- Evaluate if the product meets customers' needs.

- Assess if customers can find the product where they shop.

- Determine if the price is favorable to customers.

- Ensure that marketing communications effectively reach the target audience.

The Four P's of marketing
5. Continuous Review and Optimization

- Regularly review the marketing mix as products, services, and markets evolve.

- Adapt and make changes to the marketing mix to remain competitive in a dynamic environment.

6. Conclusion

- The Four P's of marketing are integral to developing an effective marketing strategy.

- By systematically analyzing and optimizing the marketing mix, organizations can enhance their
market offerings and achieve strategic objectives.
 Difference Between Selling &
Marketing
1. Focus

- Selling has a product focus and is mostly producer-driven.

- Marketing revolves around the needs and interests of the consumer and is customer-driven.

2. Goal

- Selling aims for short-term goals of achieving market share and maximizing profits through sales
maximization.

- Marketing aims for long-term goals of building brand value, creating customer loyalty, and
satisfying consumer needs.
Difference Between Selling &
Marketing
3. Approach

- Selling involves aggressive sales methods to meet short-term sales targets, often taking customer needs
and satisfaction for granted.

- Marketing takes a more holistic approach, considering the entire process of meeting and satisfying
consumer needs from product planning to feedback on consumer satisfaction.

4. Scope

- Selling is a subset of marketing and focuses solely on converting the product into cash for the company.

- Marketing consists of all activities associated with product planning, pricing, promoting, and distributing
the product or service, starting from identifying consumer needs to feedback on consumer satisfaction.
Difference Between Selling &
Marketing
7. Consumer Orientation

- Selling revolves around the needs and interests of the seller or producer.

- Marketing revolves around the needs and interests of the consumer, with consumer needs being the
guiding force behind all activities.

6. Value Creation

- Selling focuses on the exchange of cash for products and does not prioritize value satisfaction for
the consumer.

- Marketing aims to create value-satisfying goods and services that consumers will want to buy, with
the product being a consequence of the marketing effort.
Difference Between Selling &
Marketing
7. Activities

- Marketing activities include consumer research, product development, advertising, and pricing to
generate interest in the product and create leads or prospects.

- Sales activities involve directly interacting with prospects to persuade them to purchase the product
and focus on converting prospects into paying customers.

8. Audience - Marketing tends to focus on the general population or a large set of people.

- Sales tends to focus on individuals or a small group of prospects.

 SELLING MARKETING
1 Emphasis is on the product 1 Emphasis on consumer needs wants.
2 Company Manufactures the product first. 2 Company first determines customers’ needs and
wants and then decides out how to deliver a product
to satisfy these wants.
3 Management is sales volume oriented. 3 Management is profit oriented.
4 Planning is short-run-oriented in terms of 4 Planning is long-run-oriented in today’s products
today’s products and markets. and terms of new products, tomorrow’s markets and
future growth.
5 Stresses needs of seller. 5 Stresses needs and wants of buyers.
6 Views business as a good producing process. 6 Views business as consumer producing process
satisfying process.
7 Emphasis on staying with existing technology 7 Emphasis on innovation on every existing
and reducing costs. technology and reducing every sphere, on providing
better costs value to the customer by adopting a
superior technology.

8 Different departments work as in a highly 8 All departments of the business integrated manner,
separate water tight compartments. the sole purpose being generation of consumer
satisfaction.
9 Cost determines Price. 9. Consumer determine price, price determines cost.

10 Selling views customer as a last link in 10. Marketing views the customer last link in
business. business as the very purpose of the business.
 Interface of Marketing With other
Department
1. Types of Organizational Structures

- Functional Marketing Organization: Marketing functions are divided into specialized areas such as marketing research,
advertising, sales promotion, sales management, marketing logistics, and marketing administration.

- Geographical Area Based Organization: Branch sales offices and regional sales offices are established for companies selling
across the nation.

- Product Based Organization (Brand Management): Each product or brand has a dedicated manager responsible for its marketing
activities.

2. Importance of Coordination

- Each business function has an impact on customer satisfaction, highlighting the need for coordination between marketing and
other departments.

- The marketing department not only manages its own functions but also coordinates marketing specialist activities with operations,
finance, and other functions within the organization.
 Interface of Marketing With other
Department
3. Marketing as a Communicator

- Marketing acts as a communicator between the company and the outside world, focusing on meeting customer needs and
expectations.

- Systemic interaction with other departments is fundamental for achieving organizational goals.

4. Coordination with Other Departments

- Finance/Management: Marketing provides financial information for new and existing products, supports investment decisions, and
offers sales forecasts under different marketing strategy scenarios.

- Production/Operational Department: Marketing assists in estimating product/service demand, stimulates market response to match
production constraints, and influences demand levels and timing.

- R&D: Marketing assists in new product development from ideation to implementation, providing insights into marketable products
and customer preferences.

- Sales: Marketing offers inputs to enhance profitability and cultivates relationships with clients to make sales more effective.
 Interface of Marketing With other
Department
5. Benefits of Coordination

- Enhanced decision-making: Collaboration between marketing and other departments improves decision-making processes by
integrating diverse perspectives.

- Improved efficiency: Coordination streamlines processes and ensures alignment with organizational objectives, leading to
improved efficiency and effectiveness.

- Greater customer satisfaction: By working together, departments can better understand and fulfill customer needs, resulting in
higher customer satisfaction and loyalty.

6. Conclusion

- Coordination between marketing and other departments is essential for achieving organizational goals, enhancing customer
satisfaction, and driving business success.

- By collaborating effectively, departments can leverage their strengths to create value for both the organization and its customers.
 Customer Life Time Value
1. Definition of CLV

- CLV represents the total net profit a company makes from any given customer over their entire relationship with the business.

- It factors in the value of the customer relationship over time, considering both revenue gained and costs incurred.

2. Importance of CLV

- CLV helps in determining how much money a company should spend on acquiring new customers and how much repeat
business it can expect from existing customers.

- It assists in optimizing customer acquisition and retention practices by focusing on efficient spending.

3. Calculation of CLV

- CLV is calculated by subtracting the cost of acquiring and serving a customer from the revenue gained from the customer.

- Various methods, such as average revenue per user, cohort analysis, and individualized CLV, can be used to calculate CLV.
 Customer Life Time Value
4. Uses and Advantages of CLV

- Management of customer relationships as an asset.

- Monitoring the impact of management strategies and marketing investments on the value of customer assets.

- Determination of the optimal level of investments in marketing and sales activities.

- Encouragement of focusing on the long-term value of customers.

- Implementation of sensitivity analysis to determine the impact of additional spending on each customer.

- Optimal allocation of resources for ongoing marketing activities to achieve maximum return.

- Basis for selecting customers and decision-making regarding customer-specific communication strategies.

- Decision criterion for automating customer relationship management systems.

- Measurement of customer loyalty through various metrics.

Customer Life Time Value
5. Advantages of CLV

- CLV allows businesses to assess the appropriateness of customer acquisition costs.

- It is used to calculate customer equity and assess the profitability of acquiring additional customers.

- CLV enables businesses to monitor the impact of management strategies and marketing investments on customer
value.

- It encourages a focus on long-term customer value and efficient spending on customer acquisition and retention.

6. Disadvantages of CLV

- Disadvantages may arise from incorrect application rather than the concept itself.

- Proper modeling and interpretation are essential to avoid inaccuracies and misinterpretations of CLV data..
New Product Development
1. Idea Generation

- Systematic search for new product ideas.

- Sources include internal sources, customers, competitors, distributors, and suppliers.

- Companies incentivize employees and gather feedback from customers to generate ideas.

2. Idea Screening

- Purpose is to pare down a large pool of ideas to those worth pursuing.

- Methods include product review committees and formal market research.

- Ideas are rated based on factors required for successful market launch.
New Product Development
3. Concept Development and Testing

- Attractive ideas are developed into product concepts.

- Product concepts are tested with consumers, either symbolically or physically.

- Consumers' responses help determine which concept has the strongest appeal.

4. Marketing Strategy Development

- Strategy statement includes target market, product positioning, sales goals, pricing, distribution,
and marketing budget.

- Long-term sales, profit goals, and marketing mix strategy are outlined.
New Product Development
5. Business Analysis

- Evaluation of projected sales, costs, and profits to determine if they meet company objectives.

- If satisfactory, the product moves to the product development stage.

6. Product Development

- R&D or engineering develops the product concept into a physical product.

- Prototypes are developed, tested, and refined to ensure safety, effectiveness, and customer
satisfaction.
New Product Development
7. Test Marketing

- Product and marketing program are introduced to a realistic market setting.

- Opportunity to adjust the marketing mix before full launch.

- Test marketing varies in scope depending on the product type.

8. Commercialization

- Introducing the product to the market, facing high costs for manufacturing and advertising.

- Timing and location of launch are crucial decisions based on risk, distribution network, and market reach.

- Companies may adopt a simultaneous development approach to increase speed to market.

Unethical Issues In Marketing
1. False, Exaggerated, or Unverified Claims

- Making untrue statements or exaggerated benefits to compel customers to buy.

2. Distortion of Facts

- Misleading or confusing potential buyers by distorting facts about products or services.

3. Concealing Side Effects

- Hiding potential side effects or negative aspects of products or services from consumers.
Unethical Issues In Marketing
4. Bad-Mouthing Rival Products

- Emphasizing the drawbacks of competitor products rather than focusing on your own product's merits.

5. Use of Sex Symbols

- Utilizing half-naked models or sexual imagery unrelated to the product being advertised.

6. Fear Tactics

- Pressuring potential buyers by instilling fear of missing out on limited-time offers or price increases.
Unethical Issues In Marketing

7. Plagiarism of Marketing Messages

- Copying competitors' marketing messages instead of developing original content.

8. Exploitation

- Charging significantly more for a product or service than its actual value.
Unethical Issues In Marketing

9. Demeaning References

- Using discriminatory language or references to race, age, sex, religion, or nationality in marketing materials.

10. Spamming

- Sending unsolicited emails or messages to potential customers without their consent.

These unethical practices can damage brand reputation, erode consumer trust, and may even lead to legal consequences.
It's important for businesses to prioritize ethical marketing practices to maintain credibility and foster positive
relationships with customers.