Marketing Introduction

Contents

Types of Markets ......................................................................................................... 2

Marketing Management ................................................................................................ 4
Why Marketing Research .............................................................................................. 4
Market Segmentation .................................................................................................. 5
Seven Ps of Services Marketing ................................................................................. 10
Service .................................................................................................................... 12

Marketing Trainee Guide - 1

Marketing Introduction
A layman's concept of marketing is that of selling the products or services but the idea is
much broader. It is essentially related to customer satisfaction.
Marketing is both a concept and a practice; an approach to exchange relationships, which
provides the driving force for formulation of strategies of every type of organization. It is
an important socioeconomic activity. Marketing is not limited to business activity alone, but
it also applies to other activities like social services, elections etc.
Market
The word market generally refers to the place where goods can be bought or sold. A
market consists of customers sharing a particular need or want who might be able to
engage in exchange to satisfy that need or want.
Market Implies:
a) A situation where buyers and sellers of a commodity interact.
b) Coming together of buyers and sellers of the same or similar commodities.
It is possible for sellers to be dealing in one variety of soap and the buyers being interested
in another variety, which can be substituted by the one available with sellers.
Market is not necessarily a geographical area. Groups of buyers and sellers can be located
wide apart from each other. With the advanced and developed communication and
transport facilities, the buyers and sellers can easily contact each other even if they are
physically at long distances.
A market may comprise:
1) One Seller and many Buyers
2) Many sellers and One Buyer
3) Many sellers and Many Buyers
4) Few sellers and Many Buyers
5) Many Sellers and Few Buyers

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Types of Markets
Basis of Classification

Types of Market
(a) Local Market

Geographical Area

(b) Regional Market

(c) National Market
(d) World/ Global Market
(a) Cotton/Vegetable/Tea Market
(b) Share Market

Product

(c) Bullion Market

(d) Capital Market
(e) Real Estate Market

Nature of Transaction
Volume of Transaction

(a) Cash/Spot Market

(b) Futures Market
(a) Retail Market
(b) Wholesale Market

Marketing has been defined in several ways:

1. Meeting needs profitably.
2. The process of determining consumer demand for a product or service, motivating its
sale and distributing it into ultimate consumption at a profit.
3. Creation and maintenance of mutually satisfying exchange relationships etc.
From several definitions given worldwide it can be interpreted that:
1. Focus of marketing is on consumer.
2. A human need is a state of deprivation of some basic satisfaction, which results in
desire for specific satisfiers of these needs, namely wants. Wants for specific
products backed by an ability and willingness to buy them results in demand.
3. The concept has become more comprehensive - moving from assessing and fulfilling
consumer demand, to identifying needs and wants and determining products and
services. Indeed in the present age, marketing includes not only anticipating the
consumer needs but also kindling needs and providing new products and services to
fulfill them.

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Marketing as a Management Function

From one perspective it is a functional area of management and is within the firm using
various developed techniques for achieving specific objectives. Its major role is to identify
the current and future needs and wants of specifically defined target markets. The
organization acts upon this information to produce goods and services to satisfy customer
requirements. Marketing provides entrepreneurship by identifying opportunities in customer
requirements and driving mobilization of resources to capitalize on them. Marketing forms
interface with the existing and potential customers.
Marketing vs. Selling:
Selling

Marketing

Orientation

Product

Customer

Outlook

Short Term

Long Term

Benefit

Self

Mutual

Marketing is the management process, which identifies, anticipates and satisfies customer
needs, expectations and profitably.
From another perspective marketing is much more than a management function. It is a
way of thinking about business and a way of working running through every aspect of the
firm's business. It is a customer and profit-oriented approach permeating the entire
business. It is, therefore, an attitude of mind and hence an overall business philosophy.
Marketing is a broader concept than selling.
Firms sell their goods or services to the customers who buy them. Marketing relates to
producing or creating goods or services needed by the customers. In the former case, the
objective is to sell whatever is available with the firms. While in case of marketing, the
objective is to meet the customer's need.
Marketing function starts much before actual selling of products.
Selling is an operational activity, whereas marketing is a total management concept
comprising identification of customer needs, developing suitable products to meet those
needs, delivering (selling) the products to the customers and facilitating their consumption

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for ultimate satisfaction of those needs. Thus selling is a part of marketing.

Selling is product focused whereas marketing is customer focused.
Selling is oriented to the needs of seller (the firms) where as marketing is oriented to the
needs of the buyer (the customers).
Selling aims at earning profits by maximizing sales volume. Marketing aims at earning
profits by maximizing customer satisfaction.
Marketing converts customer needs into profitable opportunity, whereas selling en-cashes
such opportunities.
Marketing Management
It is the process of planning and executing the conception, pricing, promotion and
distribution of goods, services and ideas to create exchanges with target groups that satisfy
customer and organizational objectives. It comprises four key functional aspects, viz.,
Analysis, Planning, Implementation and Control.
The significance of marketing has been realized by all organizations whether in service or
trade. Banks are also not an exception to this. Highlights of the Bank Marketing can be
attributed to the following points:
1. All Organizations provide Services
2. Aim to satisfy Customer needs and wants of specific nature.
3. The nature of needs and wants of the customer are generally financial, while some
may be incidental to or related these
4. 4The Competitive element, efficiency and effectiveness are major factors in this
process.
5. Organizational objectives are still the driving force.
Why Marketing Research

To Identify the Needs and Wants

To Intensify the Marketing Operations due to Continuous Feedbacks.
To Evaluate the Marketing Operations and its Effectiveness visvis the Expectations
To Reduce the Risk of Failures
To Save Cost and Time

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Types of Marketing Research

Financial Research: Banking, Securities, Credit Card, Insurance, and Mutual Funds.
Automotive Research: Vehicles, Components, and Tyres.
Media Research
Consumer Products Research Durables and FMCG.
Industrial Research: Chemicals and Plastics Packaging, Textiles, Engineering, Bulk
Drugs, Metals and Minerals, Oil and Gases.
Healthcare Research: Consumers, Doctors, Chemists, Hospitals, Patients and Pharma
companies.
STP Process
1. Identify segmentation variables & segment the
Market Segmentation

market.
2. Develop Profiles of resulting segments.

Market Targeting

3. Evaluate the attractiveness of each segment.

4. Select the target segments.
5. Identify possible positioning concepts for each

Market Positioning

target segment.
6. Select, develop, and communicate the chosen
positioning concept

Market Segmentation
Dividing a market into distinct groups with distinct needs, characteristics, or behavior who
might require separate products or marketing mixes.

Market
Segmentation

More Precise

More Accurate

Definition of

Marketing

Customer Needs &

Objectives

Wants

Improved
Resource
Allocation
Better
Marketing
Results
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Market Segmentation Procedure

Survey Stage, starts with exploratory to gain insights into consumer motivations,
attitudes and behavior, used to collect data on attributes, brand awareness, product
usage patterns, attitudes, demographics.
Analysis, factor analysis and cluster analysis.
Profiling stage, each cluster is now profiled in terms of its distinguishing attitudes,
behavior,

demographics,

psychographics,

and

media-consumption

habits.

Each

segment is given a name.

Bases for Segmenting Consumer Markets
Differences between Selling and Marketing
Selling

Marketing

Orientation

Product

Customer

Outlook

Short Term

Long Term

Benefit

Self

Mutual

Marketing is the management process, which identifies, anticipates and satisfies customer
needs, expectations and profitably.
Marketing Strategy
Understand Customers Needs and Expectation
Position Products & Services
Communicate
Deliver Effectively
Marketing Mix
Marketing is an ongoing process of planning and executing the marketing mix (Product,
Price, Place, Promotion) for products, services or ideas to create exchange between
individuals and organizations.
Marketing tends to be seen as a creative industry, which includes advertising, distribution
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and selling. It is also concerned with anticipating the customers' future needs and wants,
which are often discovered through market research.
Essentially, marketing is the process of creating or directing an organization to be
successful in selling a product or service that people not only desire, but are willing to buy.
Therefore good marketing must be able to create a "proposition" or set of benefits for the
end customer that delivers value through products or services.
Marketing mix is the set of marketing tools that a firm uses to pursue its marketing
objectives in the target market.
The 4 P's of General Marketing
Marketing decisions generally fall into the following four controllable categories:
Product
Price
Place (distribution)
Promotion
The term "marketing mix" became popularized after Neil H. Borden published his 1964
article, The Concept of the Marketing Mix. Borden began using the term in his teaching in
the late 1940's after James Culliton had described the marketing manager as a "mixer of
ingredients". The ingredients in Borden's marketing mix included product planning, pricing,
branding, distribution channels, personal selling, advertising, promotions, packaging,
display, servicing, physical handling, and factfinding and analysis. E. Jerome McCarthy
later grouped these ingredients into the four categories that today are known as the 4 P's
of marketing.
These four P's are the parameters that the marketing manager can control, subject to the
internal and external constraints of the marketing environment. The goal is to make
decisions that center the four P's on the customers in the target market in order to create
perceived value and generate a positive response.
Product Decisions
The term "product" refers to tangible, physical products as well as services. Here are some

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examples of the product decisions to be made:

Brand name
Functionality
Styling
Quality
Safety
Packaging
Repairs and Support
Warranty
Accessories and services
Price Decisions
Some examples of pricing decisions to be made include:
Pricing strategy (skim, penetration, etc.)
Suggested retail price
Volume discounts and wholesale pricing
Cash and early payment discounts
Seasonal pricing
Bundling
Price flexibility
Price discrimination
Distribution (Place) Decisions
Distribution is about getting the products to the customer. Some examples of distribution
decisions include:
Distribution channels
Market coverage (inclusive, selective, or exclusive distribution)
Specific channel members
Inventory management
Warehousing
Distribution centers
Order processing
Transportation
Reverse logistics

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Promotion Decisions
In the context of the marketing mix, promotion represents the various aspects of
marketing communication, that is, the communication of information about the product
with the goal of generating a positive customer response. Marketing communication
decisions include:
Promotional strategy (push, pull, etc.)
Advertising
Personal selling & sales force
Sales promotions
Public relations & publicity
Marketing communications budget
Limitations of the Marketing Mix Framework
The marketing mix framework was particularly useful in the early days of the marketing
concept when physical products represented a larger portion of the economy. Today, with
marketing more integrated into organizations and with a wider variety of products and
markets, some authors have attempted to extend its usefulness by proposing a fifth P, such
as packaging, people, process, etc. Today however, the marketing mix most commonly
remains based on the 4 P's. Despite its limitations and perhaps because of its simplicity,
the use of this framework remains strong and many marketing textbooks have been
organized around it.
Marketing Decision Variables
Marketing decision variables are those variables under the firm's control that can affect the
level of demand for the firm's products. They are distinguished from environmental and
competitive action variables that are not totally and directly under the firm's control.
The four marketing decision variables are:
Price Variables
Allowances and deals
Distribution and retailer markups
Discount structure
Product Variables
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Quality
Models and sizes
Packaging
Brands
Service
Promotion Variables
Advertising
Sales promotion
Personal selling
Publicity
Place Variables
Channels of distribution
Outlet location
Sales territories
Warehousing system
From a buyer's point of view the 4 Cs that correspond to 4 Ps are as follows:
Customer's needs and wants
Cost to the customer
Convenience
Communication
Characteristics of Service Marketing
Intangible
Inseparable
Variable (Heterogeneity)
Perishable
No Ownership
Seven Ps of Services Marketing
Product
Customer oriented

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Features
Attractive Name
Innovation
Price
Financial Costs
Interest cost
Service charges
Transportation
Opportunity cost
Non-financial Costs
Time,
Energy
Psychic costs
Comparative
Hidden
Place or Physical Distribution
Location of branches
Alternate Channels
Distribution
ATM
Internet Banking
D.S.As
Marketing Teams
Mobile Banking
Business Correspondents
Promotion
Advertising
Publicity
Sales Promotion
Personal selling
Public Relations & Image Building

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People
Selection
Training
Positive Attitude
Visible & Invisible Contact
Process
Simple Documentation
Customer Orientation
Mechanization
New technology
Physical Evidence
Ambience
Interior Layout, Logo, Jingle ( Advertising)
Standardization of ATM premises
Service
A Service is any act or performance that one party can offer to another that is essentially
intangible and does not result in the ownership of anything. Its production may or may not
be tied to a physical product.
A service is an activity or series of activities of more or less intangible nature that normally,
not necessarily, takes place in interactions between the customer and service employees
and / or physical resources or goods and/or systems of the service provider, which are
provided as solutions to customer problems.
Following are the important features:
Services are by and large activities
As a result the services are intangible.
They take place in the interaction between the customer and service provider, which
means that the services are produced and consumed simultaneously
Services now account for more than 70% of employment and GNP of most industrialised
nations. But as far there is no exact distinction between goods and services.
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Characteristics of Services :
The main characteristics of services are Intangibility, Inseparability, Heterogeneity,
Perishability.
Intangibility refers to the aspects not associated with any physical form or characteristics.
It is very much pronounced in the pure service element like the lecture given by a
Professor.
Inseparability refers to the fact that production and consumption of the services are
inextricably intertwined.
Heterogeneity or Variability is a result of the fact that Services are usually delivered by
Human beings, whose performance is necessarily variable; quality control is extremely
difficult. It makes it difficult to standardize the output of certain services.
Perishability means that the service "units" cannot be stopped. If a seat is unfilled when a
plane leaves or the play starts it cannot be stored and sold on next day or next week. The
revenue is lost forever.

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