Concept of Marketing, P's of Marketing, Product Life Cycle.

1. UNIT - IV
MARKETING MANAGEMENT
BY NISHANT

2. Concept of Marketing
Management
 Marketing is a business function that identifies consumer needs,
determines target markets and applies products and services to
serve these markets. It also involves promoting such products and
services within the marketplace.
 Marketing is integral to the success of a business, large or small, with
its primary focus on quality, consumer value and customer
satisfaction. A strategy commonly utilised is the “Marketing Mix". This
tool is made up of four variables known as the "Four P's" of
marketing. The marketing mix blends these variables together to
produce the results it wants to achieve in its specific target market.

3. Five orientations philosophical concepts to the marketplace have
guided and continue to guide organizational activities:
1. The Production Concept
2. The Product Concept
3. The Selling Concept
4. The Marketing Concept
5. The Societal Marketing Concept

4.  The Production Concept-
 This concept is the oldest of the concepts in business. It holds that consumers will prefer
products that are widely available and inexpensive. Managers focusing on this concept
concentrate on achieving high production efficiency, low costs, and mass distribution. They
assume that consumers are primarily interested in product availability and low prices. This
orientation makes sense in developing countries, where consumers are more interested in
obtaining the product than in its features.
 The Product Concept
 This orientation holds that consumers will favour those products that offer the most quality,
performance, or innovative features. Managers focusing on this concept concentrate on
making superior products and improving them over time. They assume that buyers admire
well-made products and can appraise 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. Management might commit the “better-mousetrap” fallacy, believing that a
better mousetrap will lead people to beat a path to its door.
 The Selling Concept
 This is another common business orientation. It holds that consumers and businesses, if left
alone, will ordinarily not buy enough of the selling company’s products. The organization
must, therefore, undertake an aggressive selling and promotion effort. This concept assumes
that consumers typically sho9w buyi8ng inertia or resistance and must be coaxed into
buying. It also assumes that the company has a whole battery of effective selling and
promotional tools to stimulate more buying. Most firms practice the selling concept when
they have overcapacity. Their aim is to sell what they make rather than make what the
market wants.

5.  The Marketing Concept
 This is a business philosophy that challenges the above three business orientations. Its central
tenets crystallized in the 1950s. It holds that the key to achieving its organizational goals
(goals of the selling company) consists of the company being more effective than
competitors in creating, delivering, and communicating customer value to its selected target
customers. The marketing concept rests on four pillars: target market, customer needs,
integrated marketing and profitability.
Distinctions between the Sales Concept and the Marketing Concept:
1. The Sales Concept focuses on the needs of the seller. The Marketing Concept
focuses on the needs of the buyer.
2. The Sales Concept is preoccupied with the seller’s need to convert his/her product
into cash. The Marketing Concept is preoccupied with the idea of satisfying the
needs of the customer by means of the product as a solution to the customer’s
problem (needs).
3. The Marketing Concept represents the major change in today’s company
orientation that provides the foundation to achieve competitive advantage. This
philosophy is the foundation of consultative selling.
4. The Marketing Concept has evolved into a fifth and more refined company
orientation: The Societal Marketing Concept. This concept is more theoretical and
will undoubtedly influence future forms of marketing and selling approaches.

6.  The Societal Marketing Concept
 This concept holds that the organization’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 (this is the original
Marketing Concept). Additionally, it holds that this all must be done in a
way that preserves or enhances the consumer’s and the society’s well-
being.
 This orientation arose as some questioned whether the Marketing Concept is
an appropriate philosophy in an age of environmental deterioration,
resource shortages, explosive population growth, world hunger and poverty,
and neglected social services.
 Are companies that do an excellent job of satisfying consumer wants
necessarily acting in the best long-run interests of consumers and society?
 The marketing concept possibly sidesteps the potential conflicts among
consumer wants, consumer interests, and long-run societal welfare. Just
consider:

7. P’s of Marketing
 Product
 Products are the goods and services that your business provides for sale to your target
market. When developing a product you should consider quality, design, features,
money dollars covering costs expenses packaging, customer service and any
subsequent after-sales service.
 Place
 Place is in regards to distribution, location and methods of getting the product to the
customer. This includes the location of your business, shop front, distributors, logistics
and the potential use of the internet to sell products directly to consumers.
 Price
 Price concerns the amount of money that customers must pay in order to purchase
your products. There are a number of considerations in relation to price including price
setting, discounting, credit and cash purchases as well as credit collection.
 Promotion
 Promotion refers to the act of communicating the benefits and value of your product
to consumers. It then involves persuading general consumers to become customers of
your business using methods such as advertising, direct marketing, personal selling and
sales promotion.

8. Product Life Cycle
The product life cycle has 4 very clearly defined stages, each with its own
characteristics that mean different things for business that are trying to
manage the life cycle of their particular products.
 Introduction Stage –
 This stage of the cycle could be the most expensive for a company
launching a new product. The size of the market for the product is small,
which means sales are low, although they will be increasing. On the other
hand, the cost of things like research and development, consumer testing,
and the marketing needed to launch the product can be very high,
especially if it’s a competitive sector.
 Growth Stage –
 The growth stage is typically characterized by a strong growth in sales and
profits, and because the company can start to benefit from economies of
scale in production, the profit margins, as well as the overall amount of
profit, will increase. This makes it possible for businesses to invest more money
in the promotional activity to maximize the potential of this growth stage.

9.  Maturity Stage –
 During the maturity stage, the product is established and the aim for the
manufacturer is now to maintain the market share they have built up.
This is probably the most competitive time for most products and
businesses need to invest wisely in any marketing they undertake. They
also need to consider any product modifications or improvements to
the production process which might give them a competitive
advantage.
 Decline Stage –
 Eventually, the market for a product will start to shrink, and this is what’s
known as the decline stage. This shrinkage could be due to the market
becoming saturated (i.e. all the customers who will buy the product
have already purchased it), or because the consumers are switching to
a different type of product. While this decline may be inevitable, it may
still be possible for companies to make some profit by switching to less-
expensive production methods and cheaper markets.

10. Here is the example of watching recorded television and the various
stages of each method:
 Introduction - 3D TVs
 Growth - Blueray discs/DVR
 Maturity - DVD
 Decline - Video cassette

11. Market Segmentation
 Marketing segmentation is the identification of portions of the market that are
different from one another. Segmentation allows the firm to better satisfy the needs of
the potential customers.
Need of Market Segmentation
 The marketing concept calls for understanding customers and satisfying their needs
better than the competition. But different customers have different needs, and it
rarely is possible to satisfy all customers by treating them alike.
 Mass marketing refers to treatment of the market as a homogenous group and
offering the same marketing mix to all customers. Mass marketing allows economies
of scale to be realized through mass production, mass distribution, and mass
communication. The drawback of mass marketing is that customer needs and
preferences differ and the same offering is unlikely to be viewed as optimal by all
customers. If firms ignored the differing customer needs, another firm likely would
enter the market with a product that serves a specific group, and the incumbent
firms would lose those customers.
 Target marketing on the other hand recognizes the diversity of customers and does
not try to please all of them with the same offering. The first step in target marketing is
to identify different market segments and their needs.

12. Requirements of Market Segments
In addition to having different needs, for segments to be practical they should
be evaluated against the following criteria:
 Identifiable: the differentiating attributes of the segments must be
measurable so that they can be identified.
 Accessible: the segments must be reachable through communication and
distribution channels.
 Substantial: the segments should be sufficiently large to justify the resources
required to target them.
 Unique needs: to justify separate offerings, the segments must respond
differently to the different marketing mixes.
 Durable: the segments should be relatively stable to minimize the cost of
frequent changes.

13. Consumer Market Segmentation
A basis for segmentation is a factor that varies among groups within a market, but that is
consistent within groups. One can identify four primary bases on which to segment a
consumer market:
 Geographic segmentation is based on regional variables such as region, climate,
population density, and population growth rate.
 Demographic segmentation is based on variables such as age, gender, ethnicity,
education, occupation, income, and family status.
 Psychographic segmentation is based on variables such as values, attitudes, and
lifestyle.
 Behavioural segmentation is based on variables such as usage rate and patterns,
price sensitivity, brand loyalty, and benefits sought.

14. Business Market Segmentation
While many of the consumer market segmentation bases can be
applied to businesses and organizations, the different nature of
business markets often leads to segmentation on the following bases:
 Geographic segmentation - based on regional variables such as
customer concentration, regional industrial growth rate, and
international macroeconomic factors.
 Customer type - based on factors such as the size of the
organization, its industry, position in the value chain, etc.
 Buyer behaviour - based on factors such as loyalty to suppliers,
usage patterns, and order size.

15. THANK YOU