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Principles of Marketing

PRINCIPLES OF MARKETING:Introduction of Marketing, How is Marketing Done? Next >>>
 
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Principles of Marketing ­ MGT301
VU
Lesson ­ 1
MGT - 301
PRINCIPLES OF MARKETING
Overview of Course:
This subject/course is designed to teach the basic principles of Marketing to diverse
audience/students, including those who are studying this as a supporting subject for their bachelor
degree program. This course is designed to provide you the foundations of Marketing whether you
intend to work in field of the marketing or not.
Marketing is part of all of our lives and touches us in some way every day. To be successful each
company that deals with customers on a daily basis must not only be customer-driven, but
customer-obsessed. The best way to achieve this objective is to develop a sound marketing
function within the organization.  To be understandable and lively means that we need to
communicate you. We start every chapter with learning objectives. The most important thing you
will get out of this course is the basic skills required to succeed in today's competitive environment.
Marketing is defined as a social and managerial process by which, individuals and groups obtain what they need
and want through creating and exchanging products and value with others. Marketing is a key factor to
business success. The marketing function not only deals with the production and distribution of
products and services, but it also is concerned with the ethical and social responsibility functions
found in the domestic and global environment.
Introduction of Marketing
What image comes to mind when you hear the word "marketing"? Some people think of
advertisements or brochures, while others think of public relations (for instance, arranging for
clients to appear on TV talk shows). The truth is, all of these--and many more things--make up
the field of marketing. The Knowledge Exchange Business Encyclopedia defines marketing as
"planning and executing the strategy involved in moving a good or service from producer to
consumer."
With this definition in mind, it's apparent that marketing and many other business activities are
related in some ways. In simplified terms, marketers and others help move goods and services
through the creation and production process; at that point, marketers help move the goods and
services to consumers. But the connection goes even further: Marketing can have a significant
impact on all areas of the business and vice versa.
Understanding Marketing:
Marketing: It is the process of creating consumer value in the form of goods, services, or ideas
that can improve the consumer's life.
Marketing is the organizational function charged with defining customer targets and the best way
to satisfy needs and wants competitively and profitably. Since consumers and business buyers face
an abundance of suppliers seeking to satisfy their everyday need, companies and nonprofit
organizations cannot survive today by simply doing a good job. They must do an excellent job if
they are to remain in the increasingly competitive global marketplace. This is what we say that
survival of the fittest. Many studies have demonstrated that the key to profitable performance is to
know and satisfy target customers with competitively superior offers. This process takes place
today in an increasingly global, technical, and competitive environment.
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Principles of Marketing ­ MGT301
VU
What is Marketing?
Marketing is not only restricted to
selling  and  advertising  as  is
ons
Catal
oti
g
ogue
rtisin
Prom
perceived but is More than it
s
Adve
Co
advertising  it  identifies  and
up
Sal
on
What is
es
s
satisfies  customers  needs.  it
Public
functions  revolve  around  wide
Marketing,
relation
e
s
Servic
variety and range of tasks and
anyway?
activities mostly termed as functions
erce
mm
related to 4ps i.e. Product, price,
E-co
ry
Delive
place and promotion. Marketing is:
ing
Shopp  s
Retai
Spon
ling
el
s
orshi
chann
a. Creating customer value and
ps
ing
Pric
satisfaction are at the very
il
ct ma  Res
e
heart of modern marketing
Billb Dir
Pack
ear
aging
oard
thinking and practice.
ch
s
b. A very simple definition of
marketing is that it is the delivery of customer satisfaction at a profit.
c. Sound marketing is critical to the success of every organization.
Marketing can also be defined as process of planning and executing the conception, pricing,
promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual
and organizational objectives."
Simple Marketing System
S im p le M a r k e tin g
The concept of Marketing System
brings one full circle to the concept of
S y s te m
marketing.
Simple marketing system comprises of
Communication
different actors and factors like
producer/seller,
product/service
Product/Service
something valuable to exchange in
Producer/Seller
Consumer
Money
return of product/service (money),
consumer/customer, communication
process
to
have
two
way
Feedback
communication  like  to  provide
information about product or service
to customer or consumer and to have
feedback in same regard from the customer. Fig presents an example of a very simple marketing
system. Marketing system has following basic activities:
1)
Sellers must search for buyers, identify their needs, design good products and services, set
prices for them, promote them, and store and deliver them.
2)
A modern marketing system includes all of the elements necessary to bring buyers and
sellers together. This might include such activities as product development, research,
communication, distribution, pricing, and service..
3)
Each of the major actors in a marketing system adds value for the next level of the system.
There is often critical interdependency among network members.
To learn more about marketing fist we should learn about some basics that are some time termed
as 4ps(Product, price, place, promotion) and some times even 6 or 7ps (Product, price, place
promotion, position, personal relations, people and profit) lets have some definitions in this regard:
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Principles of Marketing ­ MGT301
VU
Product--what are you selling? (It might be
a product or a service.)
Price
Product
 Price--what is your pricing strategy?
 Place  or  distribution--how  are  you
distributing your product to get it into the
Customers
marketplace?
 Promotion--how
are
you
telling
consumers in your target group about your
Place
Promotion
product?
Positioning--what place do you want your
product to hold in the consumer's mind?
Personal relationships--how are you building relationships with your target consumers?
People: public who can have impact on organization or can be affected by organization.
Profits: the basic objective of organization that to have something valuable in return of
product or service mostly it is in form of money.
Marketing assumes that it will proceed in accordance with ethical actives. It Identifies the 4
marketing variables i.e. product, price, promotion, and distribution it also states that the public, the
customer, and the client determine the marketing program. Marketing mainly emphasizes on
creating and maintaining relationships and applies for both non-profit organizations and profit-
oriented businesses. Major activities that are performed in marketing process include:
Personal selling Advertising, Making products available in stores and Maintaining inventories. Any
thing like goods, services, experiences, events, persons, places, organizations, information and
ideas can be marketed to the customers in return of something of value.
How Does an Organization Create a Customer?
Organizations (producer/ seller) can create the customers by Identifying customer needs,
designing goods and services that meet those needs than communicating information about those
goods and services to prospective buyers Making the goods or services available at times and
places that meet customers' needs Pricing goods and services to reflect costs, competition, and
customers' ability to buy and finally providing for the necessary service and follow-up to ensure
customer satisfaction after the purchase
Costs
Careers
About 25 to 33% of
About 50% of total
How is Marketing Done?
the work force hold
product costs are
According to Peter F. Drucker If we want to
marketing positions.
marketing costs
know what a business is, we have to start
with its purpose. And its purpose must lie
outside the business itself. In fact, it must lie
in society since a business enterprise is an
Why Study
organ of society.
There is one valid
Marketing ?
definition of business purpose: to create a
customer.
Contributions to Society
Reasons for Studying Marketing:
Marketing decisions affect
Contributions to
Marketing is part of all of our lives and  Individual Organizations
the lives of individual
touches us in some way every day. To be  Critical to the success
consumers and society as
of a firm
a whole
successful each company that deals with
customers on a daily basis must not only be customer-driven, but customer-obsessed. The best
way to achieve this objective is to develop a sound marketing function within the organization.
Major reason to study marketing is:
 Marketing plays an important role in society
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Principles of Marketing ­ MGT301
VU
 It is Vital to business
 Marketing offers outstanding career opportunities
 Marketing effects your life every day
What do Marketers think about?
To have clearer concept in this regard lets consider an example of Opening a Book Shop on
campus. To do so we have to answer different questions like:
1. Is there a need? (Of having book shop)
2. What is my target market? (Who will be buying products from your book shop)
3. What is my product?(Basic items to be sold)
4. How can I produce and deliver a "product" better than my competitors?
5. How shall I promote my product?
6. How can I insure customer loyalty?
Mostly before starting any activity of above-mentioned type marketer performs an analysis termed
as SWOT (Strength, Weakness, Opportunity and Threat). Marketing is a process of getting the
right products to the right people at the right price and at the right place and time with the right
promotion. But this requires solution to certain simple question: like
Simple Questions, Hard Answers
1. Who are our customers? (Target Market)
2. What important & unique benefits do we provide? (Product/service)
3. Are these benefits sustainable? (Long-term competitive advantage)
These questions are apparently very simple but are very difficult to be answered theses questions
like it is really difficult to define basic characteristics to be produced in product and services as per
demands and requirements pf the customers; and then to precisely define your target market and
to have long-term competitive advantage through customer satisfaction.
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Table of Contents:
  1. PRINCIPLES OF MARKETING:Introduction of Marketing, How is Marketing Done?
  2. ROAD MAP:UNDERSTANDING MARKETING AND MARKETING PROCESS
  3. MARKETING FUNCTIONS:CUSTOMER RELATIONSHIP MANAGEMENT
  4. MARKETING IN HISTORICAL PERSPECTIVE AND EVOLUTION OF MARKETING:End of the Mass Market
  5. MARKETING CHALLENGES IN THE 21st CENTURY:Connections with Customers
  6. STRATEGIC PLANNING AND MARKETING PROCESS:Setting Company Objectives and Goals
  7. PORTFOLIO ANALYSIS:MARKETING PROCESS,Marketing Strategy Planning Process
  8. MARKETING PROCESS:Analyzing marketing opportunities, Contents of Marketing Plan
  9. MARKETING ENVIRONMENT:The Companyís Microenvironment, Customers
  10. MARKETING MACRO ENVIRONMENT:Demographic Environment, Cultural Environment
  11. ANALYZING MARKETING OPPORTUNITIES AND DEVELOPING STRATEGIES:MIS, Marketing Research
  12. THE MARKETING RESEARCH PROCESS:Developing the Research Plan, Research Approaches
  13. THE MARKETING RESEARCH PROCESS (Continued):CONSUMER MARKET
  14. CONSUMER BUYING BEHAVIOR:Model of consumer behavior, Cultural Factors
  15. CONSUMER BUYING BEHAVIOR (CONTINUED):Personal Factors, Psychological Factors
  16. BUSINESS MARKETS AND BUYING BEHAVIOR:Market structure and demand
  17. MARKET SEGMENTATION:Steps in Target Marketing, Mass Marketing
  18. MARKET SEGMENTATION (CONTINUED):Market Targeting, How Many Differences to Promote
  19. Product:Marketing Mix, Levels of Product and Services, Consumer Products
  20. PRODUCT:Individual product decisions, Product Attributes, Branding
  21. PRODUCT:NEW PRODUCT DEVELOPMENT PROCESS, Idea generation, Test Marketing
  22. NEW PRODUCT DEVELOPMENT:PRODUCT LIFE- CYCLE STAGES AND STRATEGIES
  23. KEY TERMS:New-product development, Idea generation, Product development
  24. Price the 2nd P of Marketing Mix:Marketing Objectives, Costs, The Market and Demand
  25. PRICE THE 2ND P OF MARKETING MIX:General Pricing Approaches, Fixed Cost
  26. PRICE THE 2ND P OF MARKETING MIX:Discount and Allowance Pricing, Segmented Pricing
  27. PRICE THE 2ND P OF MARKETING MIX:Price Changes, Initiating Price Increases
  28. PLACE- THE 3RD P OF MARKETING MIX:Marketing Channel, Channel Behavior
  29. LOGISTIC MANAGEMENT:Push Versus Pull Strategy, Goals of the Logistics System
  30. RETAILING AND WHOLESALING:Customer Service, Product Line, Discount Stores
  31. KEY TERMS:Distribution channel, Franchise organization, Distribution center
  32. PROMOTION THE 4TH P OF MARKETING MIX:Integrated Marketing Communications
  33. ADVERTISING:The Five Mís of Advertising, Advertising decisions
  34. ADVERTISING:SALES PROMOTION, Evaluating Advertising, Sales Promotion
  35. PERSONAL SELLING:The Role of the Sales Force, Builds Relationships
  36. SALES FORCE MANAGEMENT:Managing the Sales Force, Compensating Salespeople
  37. SALES FORCE MANAGEMENT:DIRECT MARKETING, Forms of Direct Marketing
  38. DIRECT MARKETING:PUBLIC RELATIONS, Major Public Relations Decisions
  39. KEY TERMS:Public relations, Advertising, Catalog Marketing
  40. CREATING COMPETITIVE ADVANTAGE:Competitor Analysis, Competitive Strategies
  41. GLOBAL MARKETING:International Trade System, Economic Environment
  42. E-MARKETING:Internet Marketing, Electronic Commerce, Basic-Forms
  43. MARKETING AND SOCIETY:Social Criticisms of Marketing, Marketing Ethics
  44. MARKETING:BCG MATRIX, CONSUMER BEHAVIOR, PRODUCT AND SERVICES
  45. A NEW PRODUCT DEVELOPMENT:PRICING STRATEGIES, GLOBAL MARKET PLACE