The Place of Marketing in the Organization of Business Units

Opening Case

It was the early 1930s when a physician–turned textile trade in rural Karnataka found his business getting interrupted for want of regular supplies of cloth from the weavers. When he enquired with weavers about the reason for their irregularity, he was told that there was no working capital available to them. There were no banks in the area. The one located in the town was not interested in lending to small operators, particularly in the rural area.

Local money lenders used to charge very high rates of interest; borrowing at those rates had ruined the same in the past. The weavers, therefore, have developed a habit of working intermittently as and when their own money from sales comes in.

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Introduction

Opening Case

The trader, therefore, had to find a way to ensure an uninterrupted supply of goods in his shop, without which his own business was not viable.

He thought of bringing the good from Mumbai but found that the process was very expensive and time-consuming, and the area did not have any direct road /rail links with Mumbai. Besides, transporters were not all reliable. Introduction Marketing occupies an important position in the organization of business units. Any business is likely to be successful when a strong marketing viewpoint or philosophy permeates the thinking and guides the decision and actions of everyone in the business.

Introduction

A business exists only to serve people, and marketing is the function that primarily determines - what the product or services shall be How it shall be presented, promoted, and distributed How it shall be priced?

What is Marketing?

1. Classical Definitions ( Product Oriented View) “ The performance of business activities that directs the flow of goods and services from producer to consumer or user” “ Marketing consists of those efforts which affect transfers in the ownership of goods and services and provide for their physical distribution”
2. Modern Definitions ( Customer Oriented View) “ Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others”. According to the American Marketing Association, “ Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas and services to create exchanges that satisfy individual and organizational goals”.

What is Marketing Management?

Marketing Management is the art and science of choosing the target market and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value” “ Marketing Management is the marketing concept in action”.

What is Marketed?

Goods Services Events & Experiences Persons Places & Properties Organizations Information Ideas A Brief History of Marketing 3 Areas Production Economies of scale. Simple products 1945 Birth of the mass consumer market 1950 Sales Development of sales forces to distinguish products in competitive markets. Sold what companies wanted to sell.

Evolving distribution channels 1960 Increasing diversity of media & technologies Marketing Rapidly increasing competition the fight for customers. A Brief History of Marketing 1960s A Brief History of Marketing Massive rise in customer expectations Increasing competition Massive growth in advertising Growth in ‘direct’ marketing Much easier for customers to switch business Proliferation of channels, dictated increasingly by customers …a growing need for 2-way dialogue between business & The 4 Ps Product (goods, services, knowledge) Price Promotion Place The dominant marketing template for the last 40 years But... notice something curious….

Where is the customer mentioned?

Consumers prefer products that are widely available and inexpensive Managers of production–oriented businesses Concentrate on achieving high production efficiency, Low costs, and mass distribution.

Consumers favor products that offer the most quality, performance, or innovative features. Managers in product-oriented organizations focus their energy on making superior products and improving them over time. To improve quality and innovation companies gave importance to product engineering. Sometimes the product concept leads to marketing myopia. Marketing myopia means – focusing on the product rather than on customers' needs.

Selling Concept

The selling concept holds that consumers and businesses if left alone, will ordinarily not buy enough of the organizational products. Consumers will buy products only if the company aggressively promotes/sells these products. The selling concept is practiced most aggressively with unsought goods that buyers normally do not think of buying such as insurance, encyclopedias, etc. Firms practice the selling concept when they have over capacity. It gives more importance to the seller's needs

The selling concept Marketing Concept Focuses on the needs/ wants of target markets & delivering value better than competitors. The Marketing concept holds that the key to achieving its organizational goals consists of the company being more effective than competitors in creating delivering and communicating superior customer value to its chosen target markets.

The Marketing concept

Marketer first makes the product and then figures out how to sell it. Importance selling to aggressive Focuses on the needs of buyer Profit through customer satisfaction Planning is long-term oriented Marketer first determines the needs and wants of the customers and then delivers the product to satisfy those needs and wants.

Societal Marketing Concept

The Societal Marketing concept holds that an organization’s task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfaction more effectively and efficiently than competitors in a way that preserves the customer's and society’s well-being. It calls upon marketers to build social and ethical considerations into their marketing practices. There should be a balance between company profits, customer satisfaction, and public interest.

Core Concepts of Marketing are a combination of products, services, information, or experiences that satisfy a need or want. Offer may include services, activities, people, places, information, or ideas.

Depending on a single customer is risky because it may place a company in a poor bargaining position. Suppliers help to create and deliver customer value.

International Competitors

In general, competitors are those who sell the goods and services of the same and similar products in the same market. A firm's competitors include not only the other firms which are marketing the same products but also those who compete for the discretionary income of the consumer. Successful companies provide better customer value than the competition. Size and industry position help to determine the competitive strategy.

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