STRATEGIC PLANNING AND MARKETING PROCESS

STRATEGIC PLANNING AND MARKETING PROCESS

1. Strategic planning
                                  The process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities is called Strategic planning. Planning is basically concerned with what are we going to do and how are we going to do it? Organizations, which are not able to perform the effective planning, are actually planning for failures. To meet changing conditions in their industries, companies need to be farsighted and visionary, and must develop long-term strategies. Strategic planning involves developing a strategy to meet competition and ensure long-term survival and growth. The marketing function plays an important role in this process in that it provides information and other inputs to help in the preparation of the organization’s strategic plan. Planning is performed to:

• Address changing environment and consumers

• Develop shared goals within organization

• Address competitive threat

• To anticipate the future

• Determine actions that are needed to achieve objectives

Strategic planning is mainly of three types:

(a) Strategic Planning: 
                                      Major activities in strategic planning process include developing the company's goals and plans. Typically strategic planning focus on long-term issues and emphasize the survival, growth, andoverall effectiveness of the organization.

(b) Tactical Planning: 
                                    Tactical planning is concerned with translating the general goals and plans developed by strategic managers into objectives that are more specific and activities. These decisions, or tactics, involve both a shorter time horizon and the coordination of resources.

(c) Operational Planning: 
                                             Operational planning is used to supervise the operations of the organization. It is directly involved with non-management employees, implementing the specific plans developed with tactical managers.This role is critical in the organization,  because operational managers are the link between management and non-management personnel. Your first management position probably will fit into this category.

2. Characteristics of a Strategic Plan
                                                              Strategic planning consists of developing a company mission (to give it direction), objectives and  goals (to give it means and methods for accomplishing its mission), business portfolio (to allow management to utilize all facets of the organization), and functional plans (plans to carry out daily operations from the different functional disciplines). Since most companies are interested in growth, this chapter explores several growth alternatives within the context of strategic planning and portfolio analysis. The product/market expansion grid shows four avenues for growth: market penetration, market development, product development, and diversification. Many companiesoperate without formal plans. However, formal planning can provide many benefits:

1). It encourages management to think ahead systematically.

2). It forces managers to clarify objectives and policies.

3). It leads to better coordination of company efforts.

4). It provides clearer performance standards for control.

5). It is useful for a fast-changing environment since sound planning helps the company

anticipate and respond quickly to environmental changes and sudden developments.

3. Strategic planning Process:

                                                  It is defined as the process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities.

1). Strategic planning sets the stage for the rest of the planning in the firm.

2). There are four steps to the strategic planning process:

a). stating a clear company mission.

b). Setting supporting company objectives.

c). Designing a sound business portfolio.

d). Planning and coordinating marketing and other functional strategies.

a. Defining the Company’s Business and Mission

An organization exists to accomplish something. When management senses that the organization is

drifting, it is time to renew its search for purpose by asking:

1). What is our business?

2). Who is our customer?

3). What do customers value?

4). What should our business be?

The first step in the strategic planning process is defining the company mission.

1). A mission statement is a statement of the organization’s purpose—what it wants to

accomplish in the larger environment.

2). A clear mission statement acts as an “invisible hand” that guides people in the organization.

3). Market definitions of a business are better than product or technological  definitions. Products and technologies can become outdated, but basic market needs may last forever.

4). A market-oriented mission statement defines the business in terms of satisfying basic customer needs.

The mission statement must avoid being too narrow or too broad. Mission statements must:

1). Be realistic.

2). Be specific.

3). Fit the market environment.

4). Indicate distinctive competencies.

5). Be motivating.

b. Setting Company Objectives and Goals

The company’s mission needs to be turned into detailed supporting objectives for each level of

management. This second step in the strategic planning process requires the manager to set

company goals and objectives and be responsible for achieving them.

1). The mission leads to a hierarchy of objectives including business and marketing

objectives.

2). Objectives should be as specific as possible.

c. Designing the Business Portfolio

The third step in the strategic planning process is designing the business portfolio.

1). The business portfolio is a collection of businesses and products that make up the

company.

2). The best business portfolio is the one that best fits the company’s strengthsand weaknesses to opportunities in the environment.

b. In order to design the business portfolio, the business must:

1). Analyze its current business portfolio and decide which business should receive more, less, or no investment

2). Develop growth strategies for adding new products or businesses to the portfolio. Analyzing the Current Business Portfolio In order to analyze the current business portfolio, the company must conduct portfolio analysis (a tool by which management identifies and evaluates the various businesses that make up the

company). Two steps are important in this analysis:

1). The first step is to identify the key businesses (SBUs). The strategic business unit

(SBU) is a unit of the company that has a separate mission and objectives and which can be

planned independently from other company businesses.

2). The SBU can be a company division, a product line within a division, or even a single

product or brand.

3). The second step is to assess the attractiveness of its various SBUs and decide how much

support each deserves. The best-known portfolio planning method is the Boston Consulting

Group (BCG) matrix:

1). Using the BCG approach, where a company classifies all its SBUs according to the

growth-share matrix.

a). The vertical axis, market growth rate, provides a measure of market attractiveness.

b). The horizontal axis, relative market share, serves as a measure of company strength

in the market.

2). Using the matrix, four types of SBUs can be identified:

a. Stars

b. Cash Cows

c. Question Marks

d. Dogs

a). Stars are high-growth, high-share businesses or products (they need heavy

investment to finance their rapid growth potential).

b). Cash Cows are low-growth, high-share businesses or products (they are established,

successful, and need less investment to hold share).

c). Question Marks are low-share business units in high-growth markets (they require

a lot of cash to hold their share).

d). Dogs are low-growth, low-share businesses and products (they may generate enough

cash to maintain themselves, but do not have much future). Once it has classified its SBUs, a

company must determine what role each will play in the future. The four strategies that can be

pursued for each SBU are:

1). The company can invest more in the business unit in order to build its share.

2). The company can invest enough just to hold at the current level.

3). The company can harvest the SBU.

4). The company can divest the SBU.

As time passes, SBUs change their positions in the growth-share matrix. Each has its own life

cycle. The growth-share matrix has done much to help strategic planning study; however, there are

problems and limitations with the method.

1). They can be difficult, time-consuming, and costly to implement.

2). Management may find it difficult to define SBUs and measure market share and growth.

3). They focus on classifying current businesses but provide little advice for future planning.

4). They can lead the company to placing too much emphasis on market-share growth or

growth through entry into attractive new markets. This can cause unwise expansion into hot, new,

risky ventures or giving up on established units too quickly. In spite of the drawbacks, most firms

are still committed to strategic planning.

Rapid Globalisation

Rapid Globalization

Technological and economic developments continue to shrink the distances between countries.

World is becoming global village due to advancement in the connecting technologies. The world is

shrinking rapidly with the advent of faster communication, and transportation, and financial flows.

In the Twenty-First century, firms can no longer afford to pay attention only to their domestic

market, no matter how large it is. Many industries are global industries, and those firms that

operate globally achieve lower costs and higher brand awareness. At the same time, global

marketing is risky because of variable exchange rates, unstable governments, protectionist tariffs

and trade barriers, and other prohibitive factors

Global Marketing into the Twenty-First Century:

a. The world is shrinking rapidly with advent of faster communication, transportation, and

financial flows.

c. Domestic companies never thought about foreign competitors until they suddenly found

them in their backyard. The firm that stays at home to play it safe might not only lose its chance to

enter other markets but also risks losing its home market.

d. Although some companies would like to stem the tide of foreign imports through

protectionism, this response would be only a temporary solution and, in the long run, would raise

the cost of living and protect inefficient firms.

e. The longer that companies delay taking steps toward internationalizing; the more they risk

being shut out of growing global markets.

h. A global firm, is a firm that, by operating in more than one country, gains marketing,

production, R&D, and financial advantages in its costs and reputation that are not available to

purely domestic competitors.

• C. The Changing World Economy

Even as new markets open to rising affluence in such countries as the "new industrialised" pacific

rim, poverty in many areas and slowed economies in previously industrial nations has already

changed the world economy. The New Economy presents many new challenges and opportunities

for the marketer. The most important point is that the New Economy assuredly places the

customer more firmly in the driver’s seat for decisions on her/his product and service choices

(customization and customerization). In addition, there have been and will be many changes in

business and marketing practices as both consumers and businesses have virtual and real-time

access to literally millions of products, offers, options, prices, people, competitors, and sources of

information that did not exist until recent years. As a result, the marketing mix will change as

marketers and firms identify new uses for intangible assets and effective customer relationship

management that is more than a marketing term. We can assume that this increasingly rapid

growth and rate of change will continue, and despite the dot-com bust, recession, and other major

social, political, and economic adjustments, the Internet and the New Economy have changed

marketers and marketing for the long-term future.

• D. The Call for More Ethics and Social Responsibility

The greed of the 1980's and the problems caused by pollution in Eastern Europe and elsewhere

has spurred a new interest in ethical conduct in business. Social and ethical issues in marketing:

Connections with our values and social responsibilities--as the worldwide consumerism and

environmentalism movements mature, today’s marketers are being called upon to take greater

responsibility for the social and environmental impact of their actions. The social responsibility and

environmental movements will place even stricter demands on companies in the future. Those

that resist will be forced into compliance by legislation or consumer outcries.

1. High Prices High Costs of Distribution can be misleading. Among other reasons, consumers

want to know about products, it is expensive to advertise and promote, brands provide

psychological benefits and quality standards, and distribution costs include delivering the product

not just promoting it. High Advertising and Promotion Costs are determined in a competitive

marketplace where consumers often have real choices. Excessive Markups are the exception rather

than the rule and are more likely in uncompetitive industries. Ethics can influence strategic

decisions on such pricing decisions as market penetration versus market skimming

2. High costs of distribution. It is often argued that middlemen are greedy and mark up

prices beyond the value of their services. A comprehensive implementation of marketing ethics

should include policies and guidelines for defining the company's relationship with distributors

3. High advertising and promotion costs. Modern marketing is also accused of pushing

prices up to cover the costs of heavy advertising and sales promotion. When considered in light of

increasing activism among consumer groups to regulate advertising, marketers have a unique

opportunity to proactively address the needs for strong advertising ethical standards. While

protecting free speech, marketers could adopt a statement on ethics in advertising that promotes

accurate information exchange, encourages creative and innovative message generation.

4. Excessive middlemen gross profit margins. Critics say that middlemens gross margins

are excessive.

5. Deceptive Practices Deceptive pricing includes practices such as falsely advertising "factory"

or "wholesale" prices or a large price reduction from a phoney high list price. Deceptive promotion

includes practices such as overstating the product's features or performance, luring the customer to

the store for a bargain that is out of stock, or running rigged contests. Deceptive packaging includes

exaggerating package contents through subtle design, not filling the package to the top, using

misleading labeling, or describing size in misleading terms.

6. High-Pressure Selling People are free to not respond to selling tactics. Moreover, most

states have "cooling off" periods that allow buyers to return products or back out of a

purchase for large ticket items.

7. Unsafe Products Dangerous products are most often illegal.

Corporate marketing policies can provide broad guidelines that everyone in the organization must

follow

8. Product Development. Product development may be influenced by ethical codes seeking

more desirable products or changes is salutary product concepts to make them more desirable.

• E. The New Marketing Landscape

The new marketing landscape is a dynamic, fast-paced and evolving function of all these changes

and opportunities. More than ever there is no static formula for success. Customer is known as the

king in the marketing and all efforts of the organization rate directed towards the customer

satisfaction this provides new landscape to the marketing and development of the connecting

technologies are playing primary role in this concern.

MARKETING CHALLENGES IN THE 21st CENTURY

MARKETING CHALLENGES IN THE 21st CENTURY

The marketing concept has changed dramatically over the last several decades, and recently the

focus has increasingly moved to customers (versus products and selling) marketing globally and the

various technology issues that impact the market. In addition, there is renewed emphasis in

marketing on creating and innovating with new and better products and services rather than just

competing against other firms and following the marketing patterns established by competitors.

A. Porter’s 5 Forces Model of Competition:

Marketing is facing different challenges in the 21st century to meet these Before entering the

business Porter model can be used to analyze the environment both for new and existing business

and can be used to overcome and meet the challenges.

• Threat of New Entrants Ratio of new entrants in the industry greater the ratio greater will be intensity of competition

• Bargaining Power of Buyers: When competition is intense and number of manufacturer is greater the buyer have more options for product switching over this will increase the buying power of buyer

• Threat of Substitute: As obvious from the term greater the threat of new entrants will result in greater higher

completion that in tern will result in increase in the number of substitutes

• Bargaining Power of Suppliers: Greater number of the supplier will provide the stronger buying power to the manufacturer/customer and vice versa

• Rivalry Among Competing Firms in Industry: Larger number of the manufacturers and greater number of product variety increases the rivalry among the competitors, which demands for more quality and customer satisfy9ng products in order to meet the competition.

• A. The information technology revolution

The information age, particularly the advent of the Internet is having a major impact on the

direction of marketing science and practice.

Digitalization and Connectivity: The flow of digital information requires connectivity Intranets,

Extranets, and the Internet are key drivers of the “new economy

• Technologies for Connecting:

b. The major force behind the new connectedness is technology.

c. The boom in computer, telecommunications, and information technology, as well as the

merging of these technologies, has had a major impact on the way businesses bring value to their

customers.

1). Using today’s powerful computers, marketers create detailed databases and use them to

target individual customers with offers designed to meet their specific needs and buying patterns.

2). Cell phones; fax machines, and CD-ROM to interactive TV are just a few of the tools

being used to make connections.

a). Electronic commerce allows consumers to shop and buy without ever leaving home.

b). Virtual reality displays, virtual shopping, and virtual salespeople are just a few of the

changes that consumers seem to be embracing. The Information Superhighway (and its backbone--

the Internet) will link customers to companies in ways that were unimagined only a few years ago.

The Internet is a vast and burgeoning global web of computer networks, with no central

management or ownership. The user-friendly World Wide Web has changed us all.

1). The Internet has been hailed as the technology behind a new model for doing business.

2). New applications include:

a). Internet--connecting with customers.

b). Intranets--connecting with others in the company.

c). Extranets--connecting with strategic partners, suppliers, and dealers.

3). Marketplaces have now become market spaces.

2). However, new opportunities abound.

•  Connections with Customers

Today, most marketers are realizing that they don’t want to connect with just any customers.

Instead, most are targeting fewer, potentially more profitable customers.

1). Greater diversity and new consumer connections have meant greater market

fragmentation.

a). Marketers have responded by moving to more segmented marketing where they

target carefully chosen sub markets or even individual buyers.

2). At the same time, companies are analyzing the value of the customer to the firm. What

value does the customer bring to the organization? Are they worth pursuing?

a). Connect with those that will be bring in profits.

h. Connect for a customer’s lifetime.

1). Rather than always looking for new customers, the focus has now shifted to keeping

current customers and building lasting relationships based on superior satisfaction and value.

2). Long-term profits have superseded short-term gain.

3). Companies are spending more time considering “share of customer” and less time

worrying about “share of market.”

a). Employees are being trained in cross-selling.

b). Up-selling is now a common practice.

Today, beyond connecting more deeply, many companies are also taking advantage of new

technologies that let them connect more directly with their customers.

1). Products are now available via telephone, mail-order catalogs, kiosks, and electronic

commerce.

2). Business-to-business purchasing over the Internet has increased even faster than online

consumer buying.

3). Some firms sell only via direct channels (Example: Dell Computer,

Amazon.com).

4). Other firms use a combination of traditional selling and direct selling methods.

Direct marketing is redefining the buyer’s role in connecting with sellers.

1). Buyers are now active participants in shaping the marketing offer and process.

2). Some companies allow buyers to design their own products online.

3). Some marketers have hailed direct marketing as the “marketing model of the next

millennium.”

•  Connections with Marketing’s Partners

Connecting inside the company--traditionally, marketers have played the role of intermediary,

charged with understanding customer needs and representing the customer to different company

departments, which then acted upon these needs.

1). Marketing no longer has sole ownership of customer interactions.

a). Now, every employee must be customer-focused.

b). Companies are reorganizing their operations to align them better with customer

needs.

c). Teams coordinate efforts toward the customer.

Connecting with outside partners--most companies today are networked companies, relying heavily

on partnerships with other firms.

1). Supply chain management--the supply chain describes a longer channel, stretching from

raw materials to components to final products that are carried to final buyers. Each member of

the supply chain creates and captures only a portion of the total value generated by the supply

chain.

2). Supply chain management allows all partners to strengthen relationships for mode of

payment and delivery.

3). Strategic alliances--companies need strategic partners.

a). Many strategic alliances take the form of marketing alliances--can be product or

service oriented in which one company licenses another to produce its product, or two companies

jointly market their complementary products.

b). Alliances could be promotional, logistical, or even pricing in nature.

c). Companies must be careful when choosing partners so as to complement strengths

and offset weaknesses.

•  Connections with the World Around Us

Marketers are taking a fresh look at how they connect with the broader world around them.

1). Global connections--geographical and cultural differences and distances have shrunk

dramatically in the last decade.

2). Today, almost every company, large or small, is touched in some way by global

competition.

a). Firms are challenged by international competitors in their once safe domestic

market.

b). Companies are not only exporting, but buying more components and supplies from

abroad.

c). Domestically purchased goods and services are hybrids (with components coming

from many international sources).

d). The secret for business success in the next century will be to build good global

networks.

• The New Connected World of Marketing

Smart marketers of all kinds are taking advantage of new opportunities for connecting with their

customers, marketing partners, and the world around them.

1). The old marketing thinking saw marketing as little more than selling or advertising. It emphasized:

a). Customer acquisition.

b). Short-term profit.

c). Goal--sell products.

•  The new marketing thinking believes that improving customer knowledge and customer connections is a corporate goal.

a). Target profitable customers.

b). Find innovative ways to capture and keep these customers.

c). Form direct connections and build lasting customer relationships.

• Use targeted media.

• Integrate communications.

• Use technologies to provide connections.

• View suppliers and distributors as partners, not adversaries.

• Deliver superior value.

MARKETING IN HISTORICAL PERSPECTIVE AND EVOLUTION OF MARKETING

MARKETING IN HISTORICAL PERSPECTIVE AND

EVOLUTION OF MARKETING

The marketing concept is a matter of increased marketing activity, but it also implies better marketing programs and implementation efforts. In addition, the internal market in every company (marketing your company and products to and with the employees of the company) has become as challenging as the external marketplace due to diversity and many other social/cultural issues.
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. 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. Lets discuss some Marketing Basics In introductory marketing you learned some basics—first the four P’s, and then the six P’s:
• Product—What are you selling? (It might be a product or a service.)
• Price—What is your pricing strategy?
• Place or distribution—How are you distributing your product to get it into the
marketplace?
• Promotion—How are you telling consumers in your target group about your
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?
Marketing management is the conscious effort to achieve desired exchange outcomes with target
markets. The marketer's basic skill lies in influencing the level, timing, and composition of demand
for a product, service, organization, place, person, idea or some form of information.There are several factors that participated role to evolution of marketing like:

•  Changes in Consumer Behavior

There have been many major marketing shifts during the last few decades that have shaped
marketing in the 21st century. There is a view among professional marketers that there is no longer
the substantial product loyalty that existed over the last few decades. Product and brand loyalty,
many argue, has been replaced by something more akin to a consumer decision that is based on the
absence of a better product or service. In addition, there are major changes in the way customers
look at market offerings. During the 1980s customers were optimistic, and in the early 1990s they
were pessimistic. Later in the 1990s, consumers appeared rather optimistic, but still cautious at
times. The following chart demonstrates some of the major shifts that have occurred to the
present:
Increasingly it is clear that while the 4 Ps (product, price, promotion, and place) have value for the
consumer, the marketing strategies of the 21st century will use the four “4 Cs” as added critical
marketing variables:
1. Care: It has replaced service in importance. Marketers must really care about the
way they treat customers, meaning that customers are really everything.
2. Choice: Marketers need to reassess the diversity and breadth of their offerings into a manageable good-better-best selection.
3. Community: Even national marketers must be affiliated, attached to neighborhoods wherever they operate stores.
4. Challenge: The task of dealing with the ongoing reality of demographic change.

•  End of the Mass Market

During the late 1990s, we witnessed the death of the concept of mass market. Regardless, some
marketers continue to argue that database marketing will never replace mass marketing for most
products. The view is that communicating with users by e-mail, Web site, mail, telephone, or fax
will never become cost-efficient enough to justify the return. However, the success of the Internet
provides considerable evidence that one-to-one marketing is and will be appropriate for many
packaged goods and other high- and low-involvement products that in the past sold almost
exclusively with brand advertising.
Through the 1970s, only high-end retailers and personal-service firms could afford to practice oneto-
one marketing. For the most part, they did it the old-fashioned way with personal selling and
index-card files.
During the 1990s, bookstore chains, supermarkets, warehouse clubs, and even restaurants began to
track individual purchase transactions to build their “share of the customer.” Many of these
programs now run on Personal Computers platforms or workstation environments much more
powerful than the most capable mainframes of the 1970s. It is possible today to track 5 or 6
million customers for the same real cost as tracking a single customer in 1950. With Internet-based
databases and remote access, this capability literally has exploded in the last few years.
The situation will become even more interesting as one-to-one marketing becomes even
increasingly pervasive. With an increasingly powerful array of much more efficient, individually
interactive vehicles, the options are virtually unlimited, including on-site interactivity, Web site
connections, fax-response, e-mail, and interactive television.
Most households today either have direct Internet access, or with TV sets that also provide realtime
interactivity through the Internet. We are closing rapidly on the time where individuals will
interact with their television and/or computer simply by speaking to it. Via various Web sites,
computers work for us to enable us to remember transactions and preferences and find just the
right entertainment, information, products, and services. Likewise, online capabilities enable
providers to anticipate what a consumer might want today or in the future. Unfortunately, the
system has been slower to protect consumers from commercial intrusions that they may not find
relevant or interesting.
The increasing level of market definition and refinement (and resulting opportunities for
marketers) is possible through the massive social, economic, and technological changes of the past
three decades. Some of the important demographic shifts have been:
• Increasing diversity of the population. The United States has always been an immigrant
nation. However, large numbers of immigrants from Latin America and Asia have
increased the proportion of minorities in the country to one in three, up from one
in five in 1980. This diversity is even more noticeable in the younger market.
• Changing family and living patterns. There has been a substantial rise in the divorce rate,
cohabitation, non-marital births, and increased female participation in the labor
force. In addition, married couples with one earner make up only 15 percent of all
households. Dual-earner households have become much more common—the
additional income is often necessary for the family to pay their bills. Thus, older
have replaced the stereotypical family of the 1950s, working parents with much less
time available.
• Emergence of a new children’s market. Minorities are over-represented in the younger
age brackets due to the higher fertility and the younger population structure of
many recent immigrants. The result is that one in three children in the United
States is black, Hispanic, or Asian. In addition, nearly all of today’s children grow
up in a world of divorce and working mothers. Many are doing the family shopping
and have tremendous influence over household purchases. In addition, they may
simply know more than their elders about products involving new technology such
as computers.
• Income and education increases are two other important demographic factors impacting
the marketing management arena. Generally, income increases with age, as people
are promoted and reach their peak earning years, and the level of education
generally has increased over the last few decades. Family units today often have
higher incomes because they may have two earners. Accordingly, there is an
increased need for products and services because they likely have children and are
homeowners.
In sum, the need for market analysis and marketing decision-making, and managers to perform
those tasks has never been greater. But, as the course will demonstrate, the complexities of, and
analytical tools required for, these activities have never been greater. Be prepared for a challenging
experience.

•  Marketing Management Philosophies:

There are several alternative philosophies that can guide organizations in their efforts to carry out
their marketing goal(s). Marketing efforts should be guided by a marketing philosophy. Decisions
about the weight, given the interests of the organization, customers, and society need to be
made by marketing managers. There are five alternative concepts under which organizations conduct their marketing activities.
a. The Production Concept
The production concept holds that consumers will
favor products that are available ad highly
affordable and that management should,
therefore, focus on improving production and
distribution efficiency. This is one of the oldest
philosophies that guide sellers. The production
concept is useful when:
1). Demand for a product exceeds the supply.
2). The product’s cost is too high and improved productivity is needed to bring it down.
The risk with this concept is in focusing too narrowly company operations. The production
concept holds that consumers will favor products that are affordable and available, and therefore
management’s major task is to improve production and distribution efficiency and bring down prices.
b. The Product Concept
The product concept holds that consumers favor quality products that are reasonably priced, and
therefore little promotional effort is required. The selling concept holds that consumers will not
buy enough of the company’s products unless they are stimulated through a substantial selling and
promotion effort. The product concept states that consumers will favor products that offer the most
quality, performance, and features, and that the organization should, therefore, devote its energy to
making continuous product improvements. The product concept can also lead to “marketing myopia,” the failure to see the challenges being presented by other products.
c. The Selling Concept
Many organizations follow the selling concept. The selling concept is the idea that consumers will not
buy enough of the organization’s products unless the organization undertakes a large-scale selling
and promotion effort.
1). This concept is typically practiced with unsought goods (those that buyers do not normally
think of buying e.g. insurance policies).
2). To be successful with this concept, the organization must be good at tracking down the
interested buyer and selling them on product benefits.
3). Industries that use this concept usually have overcapacity. Their aim is to sell what they
make rather than make what will sell in the market.
4). There are not only high risks with this approach but low satisfaction by customers.
d. The Marketing Concept
The marketing concept holds that achieving organizational goals depends on determining the needs
and wants of target markets and delivering the desired satisfactions more effectively and efficiently
than competitors do. The marketing and selling concepts are often confused. The primary
differences are:
1). The selling concept takes an “inside-out” perspective (focuses on existing products and uses heavy promotion and selling efforts).
2). The marketing concept takes an “outside-in” perspective (focuses on needs, values, and
satisfactions). Many companies claim to adopt the marketing concept but really do not unless they
commit to market-focused and customer-driven philosophies:
• Customer-driven companies research current customers to learn about their desires, gather
new product and service ideas, and test proposed product improvements.
• Such customer-driven marketing usually works well when there exists a clear need and
when customers know what they want.
• When customers do not know what they want, marketers can try customer driving
marketing--understanding customer needs even better than customers themselves do, and
creating products and services that will meet existing and latent needs now and in the
future.
e. The Societal Marketing Concept
The societal marketing concept holds that the organization should determine the needs, wants, and
interests of target markets. It should then deliver the desired satisfactions more effectively and
efficiently than competitors in a way that maintains or improves the consumer’s and the society’s
well being.
1). The societal marketing concept is the newest of the marketing philosophies.
2). It questions whether the pure marketing concept is adequate given the wide variety of
societal problems and ills.
3). According to the societal marketing concept, the pure marketing concept overlooks
possible conflicts between short-run consumer wants and long- run consumer welfare.
4). The societal concept calls upon marketers to balance three considerations in setting their
marketing policies:
a). Company profits.
b). Customer wants.
c). Society’s interests.
5). It has become good business to consider and think of society’s interests when the
organization makes marketing decisions.
4. Evolving Views of Marketing’s Role:
As expressed in figures initially the Marketing was considered to play equal function as other departments of the organization. But with the passage of times and growing importance of the customers marketing department attained more importance and attained the central part in the organization. Afterwards the customer is now the main actor that is controlling almost all functions and efforts of the marketing department, because the success of any organization in today’s competitive era depends upon the level of
satisfaction provided by the company. Nowadays the marketing department is acting, as integration department to provide integration among the functions performed by the company and customer is acting as controlling factor in the organization

Customer Relationship Management

Customer Relationship Management

Before going in the detail of customer relationship marketing first we should know that what is

relationship marketing? It is basically Establishing a long-term continuous relationship with the

customer, initiated and managed by the firm. This relationship must provide value to both parties.

If a customer is lost, not only is that particular transaction lost, but perhaps all future transactions

throughout the life of that customer.

As discussed earlier that 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 every 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. 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. When marketing helps everyone in a  firm really meet the needs of a customer both before and after a purchase, the firm doesn’t just get a single sale. Rather, it has a sale and an ongoing relationship with the customer. That’s why we

emphasize that marketing concerns a flow of need-satisfying goods and services to the customer. Often, that flow is not just for a single transaction but rather is part of building a long-lasting  relationship that is beneficial to both the firm and the customer.

•  CRM Customer relationship management:

“CRM is the overall process of building and maintaining profitable customer relationships by

delivering superior customer value and satisfaction.” CRM Customer relationship management can

be defined: as strategies focused on increasing customer satisfaction, loyalty, and profitability by

leveraging superior customer knowledge acquired, stored, and acted upon with the aid of

information technology.

•  The basic goals of the CRM are:

Customer relationship marketing provides the key to retaining customers and involves providing

financial and social benefits as well as structural ties to the customers. Companies must decide how

much relationship marketing to invest in different market segments and individual customers, from

such levels as basic, reactive, accountable, proactive, and full partnership. Much depends on

estimating customer lifetime value against the cost stream required to attract and retain these

customers.

Total quality marketing is seen today as a major approach to providing customer satisfaction and

company profitability. Companies must understand how their customers perceive quality and how

much quality they expect. Companies must then strive to offer relatively higher quality than their

competitors. This involves total management and employee commitment as well as measurement

and reward systems. Marketers play an especially critical role in their company’s drive toward

higher quality. The basic goals of CRM are:

• The idea of CRM is that it helps businesses use technology to gain insight into the behavior

of customers and the value of those customers. If it works as hoped, a business can:

• Provide better customer service

• Make call centers more efficient

• Help sales staff close deals faster

• Simplify marketing and sales processes

• Discover new customers Enable companies to provide excellent real-time customer service

by developing a relationship with each valued customer through the effective use of

individual account information

• Based on customer attributes, companies can customize market offerings, services,

programs, messages, and media

• Reduces the rate of customer defection

• Increases the longevity of the customer relationship

• Enhances the growth potential of each customer through “share of wallet,” cross-selling,

and up-selling

• Makes low-profit customers more profitable or terminates them

• Focuses disproportionate effort on high value customers

CRM is mainly based upon the customer loyalty that is of great importance for the marketer

because firms have realized the value of customer retention. Winning a new customer is usually 5-

10 times more costly than retaining an existing customer Customers are usually more profitable the

longer you keep them. The value of loyalty goes beyond single customer for the reason that loyal

customers provide more and more credible referrals but the angry gossip of disloyal customers can

devastate a firm.

•  Building Profitable Customer Relationships

Managing demand means managing customers because:

1. A demand comes from new customers and repeat customers.

2. Today, besides making efforts to attract new customers, marketers are going all out to

retain and build relationships with existing customers. It costs five times as much to attract

a new customer as it does to keep a current customer satisfied.

3. Because of changing demographics, a slow-growth economy, more sophisticated

competitors, and overcapacity in many industries, many markets and market shares are

shrinking. The key to successful customer retention is superior customer value and

satisfaction.

Marketing Functions

Marketing Functions

There are eight Universal functions that are performed in marketing these are as shown in fig these

are Buying, selling, transporting, storing, standardizing and grading, financing and finally risk taking

now lets discuss these one by one:

•  Buying: (Raw material to produce goods and services and to purchase finished goods or services as retailer or whole seller to sell them again for final customers and consumers). It is a function that ensures that  product offerings are available in sufficient quantities to meet customer demands
•  Selling: The function to be performed to sell the products/services/idea to satisfy customer needs or wants. Using advertising, personal selling, and sales promotion to match goods and services to customer needs
•  Transporting: Function related to create the availability of product or services. It is used for moving products from their points of production to location convenient for purchases
•  Storing: Warehouses are used to store the products for further distribution.
•  Standardizing and grading: To provide more quality products and services without variation in the quality. Ensuring that product offerings meet established and grading quality and quantity control standards of size, weight, and other product variables
•  Financing: Providing the financial resources to carry out different function e.g. promotion of product and providing credit for channel members (wholesalers retailers) or consumers
•  Risk taking: Marketer takes a risk specifically when any new product is introduced in a market because there are equal chances of success and failure. Dealing with uncertainty about consumer purchases resulting from creation and marketing of goods and services that consumers may purchase in the future
•  Securing Marketing Information: Collecting information about consumers, competitors, information and channel members (wholesalers, and retailers) for use in making marketing decisions Almost all marketing functions are based on information acquired from external environment and information distributed out of organization. Marketer seeks information to find out customer needs and wants which are to be satisfied than after producing goods and services awareness about the availability is required so that consumer can purchase the available goods and services.

Marketing Management:

Marketing management is “the art and science of choosing target markets and building profitable

relationships with them.” Creating, delivering and communicating superior customer value is key.

Marketing management is the conscious effort to achieve desired exchange outcomes with target

markets. The marketer’s basic skill lies in influencing the level, timing, and composition of demand

for a product, service, organization, place, person, idea, or some form of information.

Marketing Management is defined as the analysis, planning, implementation, and control of

programs designed to create, build, and maintain beneficial exchanges with target buyers for the

purpose of achieving organisational objectives. Which are:

Demand Management - marketing management is concerned with increasing demand, as well as

changing or even reducing demand. Marketing management is concerned not only with finding and

increasing demand, but also with changing or even reducing it.

1.  Demarketing: Marketing to reduce demand temporarily or permanently; the aim is not todestroy demand but only to reduce or shift it. Demarketing’s aim is to reduce demand temporarilyor permanently (move traffic away from a popular tourist attraction during peak demand times).
2.  In reality, marketing management is really demand management.
3. Building Profitable Customer Relationships - Beyond designing strategies to attract newcustomers, marketing organizations also go all out to retain current customers and build lasting customer relationships. 

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Core Marketing Concepts

Core Marketing Concepts

To have more clear view about the marketing and to understand the marketing process first we

should discuss the some basic concepts, which we will be discussing in the coming Lessons and

what is the main essence of the marketing process and we can say that the marketing revolves

around theses concepts.

• Needs, wants, and demandsNeeds Human

needs are the most basic concept underlying marketing. A human need is a state of felt deprivation.

1). Humans have many complex needs.

a). Basic, physical needs for food, clothing, warmth, and safety.

b). Social needs for belonging and affection.

c). Individual needs for knowledge and selfexpression.

2). These needs are part of the basic human makeup.

Wants A human want is the form that a human need takes as shaped by culture and individual

personality.

Demands are human wants that are backed by buying power.

1). Consumers view products as bundles of benefits and choose products that give them

the best bundle for their money.

2). People demand products with the benefits that add up to the most satisfaction.

Outstanding marketing companies go to great lengths to learn about and understand their

customer’s needs, wants, and demands. The outstanding company strives to stay close to the

customer.

•  Products and Services

A product is anything that can be offered to a market to satisfy a need or want.

A service is an activity or benefit offered for sale that is essentially intangible and does not result

in the ownership of anything.

1). The concept of product is not limited to physical objects and can include experiences,

persons, places, organizations, information, and ideas.

2). Be careful of paying attention to the product and not the benefit being satisfied.

3). “Marketing myopia” is caused by shortsightedness or losing sight of

underlying customer needs by only focusing on existing wants.

• Value, satisfaction, and quality

Customer value is the difference between the values that the customer gains from owning and

using a product and the costs of obtaining the product. Customers do not often judge product

values and costs accurately or objectively--they act on perceived value.

Customer satisfaction depends on a product’s perceived performance in

Delivering value relative to a buyer’s expectations. If performance exceeds expectations, the buyer

is delighted (certainly a worthy goal of the marketing company).

1). Smart companies aim to delight customers by promising only what they can deliver, then

delivering more than they promise.

2). The aim of successful companies today is total customer satisfaction.

3). Customer delight creates an emotional affinity for a product or service, not just a

rational preference, and this creates high customer loyalty.

4). Quality has a direct impact on product or service performance. Quality is defined in

terms of customer satisfaction.

The term total quality management (TQM) is an approach in which all the

company’s people are involved in constantly improving the quality of products,

services, and marketing processes.

1). In the narrowest sense, quality can be defined as “freedom from defects.”

2). Quality has a direct impact on product or service performance. Quality is

defined in terms of customer satisfaction.

3). The fundamental aim of today’s total quality movement has become total

customer satisfaction.

• Exchange, transactions, And relationships

Marketing occurs when people decide to satisfy needs and wants through exchange.

Exchange is the act of obtaining a desired object from someone by offering something in return.

Exchange is only one of many ways to obtain a desired object. Exchange is the core concept of

marketing. Conditions of exchange include:

1. At least two parties must participate.

2. Each must have something of value to the other.

3. Each must want to deal with the other party.

Each must be free to accept or reject the other's offer Whereas exchange is a core concept of marketing, a transaction (a trade of values between two parties) is marketing’s unit of measurement. Most involve money, a response, and action.

Transaction marketing is part of a larger idea of relationship marketing. Beyond creating shortterm

transactions, marketers need to build long- term relationships with valued customers,

distributors, dealers, and suppliers. Ultimately, a company wants to build a unique company asset

called a marketing network (the company and all its supporting stakeholders). The goal of

relationship marketing is to deliver long-term value to the customer and thereby secure

customer satisfaction and retention of patronage.

1). Competition is increasingly between networks.

2). Build a good network of relationships with key stakeholders and profits will follow.

e. Markets

The concepts of exchange and relationships lead to the concept of a market. A market is

the set of actual and potential buyers of a product.

Marketing Process

Marketing Process

Process by which individuals and groups obtain what they need and want through creating and

exchanging products and value with others is termed as marketing process. The marketing process

consists of four steps: analyzing market opportunities; developing marketing strategies; planning

marketing programs, which entails choosing the marketing mix (the four Ps of product, price,

place, and promotion); and organizing, implementing, and controlling the marketing effort.

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 every 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. 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.

The concept of markets brings one full circle to the concept of marketing.

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.

There are certain factors that can influence the marketing process directly or indirectly termed as,

“actors and forces in marketing system”. Let’s have brief explanation of these actors and forces:

Company or Marketing Organization -marketing plans must accommodate the needs of other

functional areas of the firm to coordinate product/service delivery effectively.

Suppliers - are the firms and persons that provide the resources needed by the company and

competitors to produce goods and services.

Marketing Intermediaries - include various middlemen and distribution firms as well as

marketing service agencies and financial institutions.

Customers -usually consist of consumer, industrial, reseller, government, and international

markets.

Competitors - are usually considered those companies also serving a target market with similar

products and services, although broader definitions may apply.

Publics - may consist of any group that perceives itself having an interest in the actions of the

firm. Publics can have positive as well as negative influences on the company's objectives.

Other than factors above there are certain macro environmental factors that can have impact or

that can affect the marketing process. These forces and environmental factors will be discussed in

more detail in coming Lessons. As described in a fig: important connections with customers,

connections with marketing partners, and connections with the World around us are to be made in

order to perform the marketing process. The main connections required in this regard are

connecting with marketing partners: (These connections occur by (a) connecting with other

marketing departments, (b) connecting with suppliers and distributors, and (c) connecting through

strategic alliances). Marketing companies do not operate in a vacuum. They have to be interacting

with intermediaries that have information to share, ideas to explore, and experiences that are

invaluable. New technologies can bring this information to the decision maker in new rapid ways.

Finally companies need to have information about the competitors and other environmental

factors and are need to have updated knowledge because for success, change adoption with change

occurrence is required otherwise company will not able to stay in this completive era.

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 because as we have discussed in our last Lesson that marketing is more than

just advertisement or promotion. 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. Lets have discussion on some basics of

marketing:

• Product—What are you selling? (It might be a product or a service.)

• Price—What is your pricing strategy?

• Place or distribution—How are you distributing your product to get it into the marketplace?

• Promotion—How are you tellingconsumers in your target group aboutyour 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? So

based upon all this discussion marketing process can be defined as a social and managerial

process by which individuals and groups obtain what they need and want through creating,

offering and exchanging products of value with others

The sum of the above is called the marketing mix. It is important to have as varied a mix as

possible in marketing efforts, since each piece plays a vital role and boosts the overall impact.

Let’s take a closer look at the basic P’s of marketing and particularly at how they might affect what

you do in business.

•  Product

Marketers identify a consumer need and then provide the product or service to fill that need. The

marketer’s job is to pinpoint and understand existing needs, expand upon them, and identify new

ones. For example, because there are more singles and small families these days than in years past,

marketers might see a need for products to be sold in smaller quantities and offered in smaller

packages.

How can this impact other professionals in the business/marketing process? Let’s say your

company has developed a new product that generates enormous consumer demand. Your

marketing department may ask you to find a way to speed up the workflow in order to crank out

more products faster. A year after the product is introduced, however, the market might be

flooded with cheap imitations. Since one marketing strategy is to keep products price-competitive,

a marketer may then ask you to find a way to make the product less expensively.

This relationship works both ways. There may be production and industrial engineers who may see

a way to change the work process that would create additional options for consumers. Those

engineers will also be instrumental in design and development of products for which human

factors and ergonomics are important considerations. Maybe there’s room to add another product

line. For instance, that product X is still blue but new product Y is red. You can suggest this to

your marketing department; it, in turn, would do research to gauge potential consumer demand for

the new line.

•  Price

Ideally, a marketer wants to be proactive in setting price rather than simply react to the

marketplace. To that end, the marketer researches the market and competition and plots possible

price points, looking for gaps that indicate opportunities. When introducing a new product, the

marketer needs to be sure that the price is competitive with that of similar products or, if the price

is higher, that the consumers perceive they’re getting more value for their money.

Various other technical professionals can have an important impact on marketers’ pricing

decisions. Again, you may be asked to determine if productivity can be enhanced so that the

product can be manufactured and then sold—for a lower price.

•  Place or distribution

What good is a product if you can’t get it to people who want to purchase it? When marketers

tackle this issue, they try to figure out what the optimum distribution channels would be. For

example, should the company sell the product to distributors who then wholesale it to retailers or

should the company have its own direct sales force?

Marketers also look at where the product is placed geographically. Is it sold regionally, nationally,

and internationally? Will the product be sold only in high-end stores or strictly to discounters? The

answers to all of these questions also help shape how a product can be distributed in the best way.

Such distribution questions are potentially of great significance to many professionals, including

industrial and other types of engineers in a company. For instance, whether a product will be

marketed regionally or internationally can have enormous implications for package design as well

as obvious areas of the supply chain: logistics, transportation, distribution, and warehousing.

•  Promotion

Promotion encompasses the various ways marketers get the word out about a product—most

notably through sales promotions, advertising, and public relations.

Sales promotions are special offers designed to entice people to purchase a product. These can

include coupons, rebate offers, two-for-one deals, free samples, and contests.

Advertising encompasses paid messages that are intended to get people to notice a product. This

can include magazine ads, billboards, TV and radio commercials, Web site ads, and so forth.

Perhaps the most important factor in advertising success is repetition. We’re all bombarded with

an enormous number of media messages every day, so the first few times a prospective customer

sees an ad, it usually barely makes a dent. Seeing the ad over and over is what burns the message

into people’s minds. That’s why it’s good to run ads as frequently as possible.

Public relations refer to any non-paid communication designed to plant a positive image of a

company or product in consumers’ minds. One way to accomplish this is by getting the company

or product name in the news. This is known as media relations, and it’s an important aspect of

public relations.

As with price, changes in demand created by promotions can have a direct impact on the work of

many other professionals.

•  Positioning

By employing market research techniques and competitive analysis, the marketer identifies how the

product should be positioned in the consumer’s mind. As a luxury, high-end item? A bargain item

that clearly provides value? A fun product? Is there a strong brand name that supports how the

image is fixed in the consumer’s mind? Once the marketer answers these kinds of questions, he or

she develops, through a host of vehicles, the right image to establish the desired position.

This, too, can affect the work you do. If an upscale image is wanted, the materials used in the

product and packaging are likely to be different from those used in a bargain product—a fact that

could make the workflow significantly more complex. On the other hand, with your engineering

knowledge, you may be able to suggest alternative materials that would preserve the desired image

but be easier or less expensive to use.

•  Personal Relationships

In recent years, personal relationships have come to the forefront of marketing programs. Now

even the largest companies want their customers to feel that they have a personal relationship with

the company. Companies do this in two ways: They tailor their products as much as possible to

individual specifications, and they measure customer satisfaction.

The firm’s contribution can significantly impact the area of personal relationships. If the work

processes the firm creates cannot meet the customer time frames, the relationship will be damaged.

If the firm develops manufacturing lines that cannot be tailored to fit individual customer needs, it

will be difficult for the company to give consumers the perception of personal commitment. If

salespeople promise delivery by a certain date, but the product cannot be produced on schedule,

consumers will not be happy.

How Does an Organization Create a Customer?

How Does an Organization Create a Customer?

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 

How is Marketing Done?

According to Peter F. Drucker If we want to 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 organ of society. There is one valid definition of business purpose: to create a customer.

Reasons for Studying Marketing:

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.

Major reason to study marketing is:

• Marketing plays an important role in society

• It is Vital to business

• Marketing offers outstanding career opportunities

• Marketing effects your life every day

What is Marketing?

What is Marketing?

Marketing is not only restricted to selling and advertising as is perceived but is More than it advertising it identifies and satisfies customers needs. it functions revolve around wide variety and range of tasks and activities mostly termed as functions related to 4ps i.e. Product, price, place and promotion. Marketing is:
a. Creating customer value and satisfaction are at the very heart of modern marketing thinking and practice.
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 

The concept of Marketing System brings one full circle to the concept of marketing.

Simple marketing system comprises of different actors and factors like producer/seller, product/service

something valuable to exchange in return of product/service (money), consumer/customer, communication process to have two way  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:
• Product—what are you selling? (It might be a product or a service.)
• Price—what is your pricing strategy?
• Place or distribution—how are you distributing your product to get it into the marketplace?
• Promotion—how are you telling consumers in your target group about your 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 profitoriented
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.

Introduction of Marketing

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. 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".

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.

BusinessCommunication Question 4

Q.4 Differentiate between formal and informal language?

Ans:

Formal language: Informal Language:

• It is the language spoken in office, business and other formal places.
• Proper and standard words are used.
• It consists of specific purpose words like manager, supervisor, owner, employer etc.
• It is used comparatively less than informal language.
• It is used when the speaker is relaxed.

It is the language spoken at home or with friends.

• Improper words and slangs are used.
• It has all purpose words like “boss” that stands for various personalities.
• It is used in daily life.
• It is used when speaker is in a hurry/

Business Communication Question 3

Q. Define communication. What is the importance of communication
 for an individual and for an organization?

COMMUNICATION:-
Definition: “Communication is the process by which information is transmitted between
individuals and organization, so that an understanding response results”.
OR
 “Communication is the process which involves transmission and accurate replication of
ideas, ensured by feedback for the purpose of eliciting action which will accomplish organizational
goals”.

IMPORTANCE OF COMMUNICATION FOR AN INDIVIDUAL

(1) Helps in getting a desired job:-
 Getting a desired job is not an easy task. It requires a person to be excellent, especially in
terms of communication abilities. Communication abilities can be classified into five categories that is
reading, writing, speaking, listening and observing. If a candidate is a good reader of not only text
books and reference books but also of newspapers and magazines, this would help him developing Q. Define communication. What is the importance of communication
 for an individual and for an organization?

COMMUNICATION:-
Definition: “Communication is the process by which information is transmitted between
individuals and organization, so that an understanding response results”.
OR
 “Communication is the process which involves transmission and accurate replication of
ideas, ensured by feedback for the purpose of eliciting action which will accomplish organizational
goals”.

IMPORTANCE OF COMMUNICATION FOR AN INDIVIDUAL

(1) Helps in getting a desired job:-
 Getting a desired job is not an easy task. It requires a person to be excellent, especially in
terms of communication abilities. Communication abilities can be classified into five categories that is
reading, writing, speaking, listening and observing. If a candidate is a good reader of not only text
books and reference books but also of newspapers and magazines, this would help him developing

Business Communiaton Question No 2

Q. Discuss the role of effective business communication within and
 outside the organization OR
 Q.Why Business Communication is called, “Life blood” of an
 organization? OR

Ans: A business Organization is a group of people associated to earn profit. Various kinds of
activities have to be performed by the people of an organization so as to earn profit. These activities
need an effective and systematic communication. Without efficient communication, one can not even
imagine to do work and hence will be unable to earn profit. Since the aim of business organization is to
earn profit, the organization will die without profit and this death is a result of the absence of
communication. This is why communication is called life blood of a business organization. We can
prove this statement in the following manner.

COMMUNICATION INSIDE AN ORGANIZATION:
 Different employees and officials in an organization need to communicate to each other.
This internal communication with its importance is shown in the following way:
1. Setting goals and Objectives:-
 Mostly, the organizations have a variety of formal and informal objectives to accomplish.
These objectives may be financial results, product quality, market dominance, employees satisfaction,
or service to customers. So the communication enables all the persons in an organization to work
towards a common purpose.
2. Making and Implementing decision:-
 In order to achieve the objective, people in a business organization collect facts and
evaluate alternatives, and they do so by reading, asking questions, talking or by plain thinking. These
thoughts are put into a written form. Once a decision has been made, it has to be implemented which
requires communication.

3. Appraisal:- 

 Having implemented the decision, management needs to determine whether the desired 

outcome is being achieved. Statistics on such factors as cost, sales, market share, productivity and 

inventory levels are compiled. This is done through computers, manual papers, memos or reports. 

4. Manufacturing the products:- 

 Getting an idea for a new product out of someone’s head, pushing it through the production 

process and finally getting the product also require communication. Designing the plan regarding 

product, introducing the workers, purchasing raw material, marketing and distributing the product all 

require effective communication. 

5. Interaction between employer & employee:- 

 Employees are informed about policies and decisions of employers through circulars, 

reports, notices etc. Employers also get in touch with employees through application, complaint etc. 

So, communication plays a vital role in the interaction of employer and employee. 

EXTERNAL COMMUNICATION: 

1. Hiring the employees:- 

 If a company wants to hire some one, it advertises the vacancy, receives applications, calls 

the candidates, takes the interview and then offers job to the successful candidates. The whole process 

requires communication. 

2. Dealing with customers:- 

 Sales letters and brochures, advertisements, personal sales calls, and formal proposals are 

all used to stimulate the customer’s interest. Communication also plays a part in such customer related 

functions as credit checking, billing, and handling complaints and questions. 

3. Negotiating with suppliers and financiers:- 

 To obtain necessary supplies and services, companies develop written specification that 

outlines their requirement. Similarly, to arrange finance, they negotiate with lenders and fill out loan 

applications. 

4. Informing the investors:- 

 Balance sheet, income statement, and ratio analysis are used to inform the investors 

regarding performance of business. 

5. Interacting with Govt.:- 

 Government agencies make certain rules to regulate the economy. These rules are communicated to organizations through various papers. These organizations try to fulfill, these 

requirement like filling taxation form and other documents.