WHAT IS MARKETING
1.The shortest definition of Marketing Management is “Meeting Needs Profitably”.
2.The American Marketing Association’s formal definition – “Marketing is an organisational function and a set of processes for creating, communicating and delivering value to customers and for managing customers’ relationship in ways that benefit the organisation and its stock holders”.
3.General definition – “Marketing Management as the art and science of choosing target markets and getting, keeping and growing customers thru creating, delivering and communicating superior customer value”.
4.Social definition – “Marketing is a societal process by which individuals and groups obtain what they need and want thru creating, offering and freely exchanging products and service of value with others”.
WHAT IS MARKETED
Marketing people are involved in marketing 10 types of entities –
1.Goods – physical products, consumer products, consumer durables
2.Services – transport, repair & maintenance, legal, financial, consultancy, hotel, specialised skills
3.Experiences – theatres, opera, Disney-world, ocean cruise, cinema, music concerts
4.Events – trade shows, sports, world cups, vintage car rally, fashion shows, artistic performance shows
5.Persons – celebrity marketing, film stars, politicians, artists, performers, advertisers
6.Places – cities, states, countries for tourism, leisure & place for industrialisation & business
7.Properties – ownership of tangible properties like real estate, house, apartment, farm house, precious metals and intangible properties like financial portfolio of various securities
8.Organisations – building up identity, image, reputation, and value in the minds of consumers
9.Information – can be packaged & marketed as a product – text books, encyclopaedias, magazines & journals on literature, science, technology, medicine space, now available thru internet
10.Ideas – concept regarding a utility, business opportunity, advertising / marketing ideas, scientific & technical, social, financial, psychological etc.
WHO IS A MARKETER
A marketer is someone who seeks response (attention, a purchase, a vote, a donation) from another party called the prospect. If two parties are seeking to sell something to each other we call them both marketers. Marketers are skilled in stimulating demand for a company’s products and they are also responsible for demand management. Marketing managers seek to influence the level, timing, and composition of demand to meet the organisation’s objectives. The following states of demands are possible :
1.Negative demand – consumers dislike the product and may even pay a price to avoid it.
2.Non-existent demand – consumers may be unaware or uninterested in the product.
3.Latent demand – consumers may share a strong need that cannot be satisfied by an existing product.
4.Declining demand – consumers begin to buy the product less frequently or not at all.
5.Irregular Demand – consumer purchases vary on a seasonal, monthly, weekly, daily or even hourly basis.
6.Full demand – consumers are adequately buying all products put into the market place.
7.Overfull demand – more consumers would like to buy the product than can be satisfied.
8.Unwholesome demand – consumers may be attracted to products that have undesirable social consequences.
9.In each case marketers must identify the underlying causes of the demand state and then determine a suitable plan of action to shift the demand to a more desired state.
MARKETS
The word “MARKET” or “MARKETS” is used in two basic contexts throughout this series of articles. They are as follows :
1.Traditionally a market is a physical place where sellers & buyers meet to sell & buy goods etc. This is normally referred to as “MARKET PLACE”.
2.In another view the market consists of two major groups – the sellers constitute “Industry”, or the “Company”. And the buyers constitute the “Market”. Thus the market consists of the current customers, potential customers, new & old customers and so on.
Other groups are based on need – labour, donor, voter etc. The relationship between the Industry & Market includes four flows :
1.The sellers send (1) goods & services, and (2) communication to the buyers; and
2. In return they receive (1) Money and (2) information from them.
The following are the types of key customer markets :
1.Consumer markets – where consumer products, consumer durables, FMCG, etc. are traded.
2.Business markets – are the organisations having well trained & informed professional buyers.
3.Global market – is where marketing in other countries as exporters, licensees, JV Partners, contract manufacturer etc., take place.
4.Non profit & Governmental markets – are the NGOs, Religious bodies, Charitable trusts, Universities, & other public services.
MARKETING CONCEPTS
The competing concepts under which organisations have conducted marketing activities include :
1.Exchange Concept – exchange of goods and services between two agencies called buyer and seller, or exchange of goods and services for money or barter system. During the days when there was no monetary system, people used trade whatever they had in surplus for whatever they needed.
2.After the monetary system was developed, then money was exchanged for goods.
3.In the process of any transaction, the following conditions must be fulfilled as : At least two parties need to be there, both have something to offer of value to the other, capable of communication & delivery, free to accept or reject, and having faith in one another.
4.Production Concept – As the result of industrial revolution, the products started being widely available, and the process of production became slowly inexpensive, giving rise to higher production efficiency. Here, the emphasis was given to the “Production” in terms of quantity & cost.
5.Product Concept – Slowly, the products were refined in quality, and added with several attributes like performance, utility, innovative features etc. Here, the emphasis was given to the “Products” in terms of quality, performance & other appealing attributes.
6.Selling Concept – This is basically aggressive selling and promotion effort. The purpose of marketing during those times was to sell more stuff to more people more often for more money in order to make more profit. Whosoever achieved that, was considered to be the most successful marketer.
7.Marketing Concept – Slowly, during the 1950s, the “Products/Production/Selling” oriented concept (make & sell) changed to “Consumer” oriented concept (sense & respond). Instead of “hunting” marketing has become “gardening”. The job of the marketer is not to find the right customer for the products, but the right products for the customers. The perceptive contrast between the selling and marketing concepts – selling focuses on the needs of the seller, marketing on the needs of the buyer.
8.The latest marketing concept is the Holistic Marketing Concept which is based on the development, design and implementation of marketing programs, processes and activities that recognise their breadth and interdependencies. (Pls. refer to my article on “Holistic Marketing” in AC)
The cause and effects of marketing clearly extends beyond the company and the consumer to society as a whole. The phenomenon of Marketing Myopia devised by Prof. Theodore Levitt is the disadvantage of excessive preoccupation of production / product concept, ignoring the Customer in the process.
In short the Marketing Concept essentially represents a shift in orientation as :
1.From production orientation to marketing orientation
2.From product orientation to customer orientation
3.From supply orientation to demand orientation
4.From sales orientation to satisfaction orientation
5.From internal orientation to external orientation
Under the “Marketing” and “Holistic Marketing” the “Consumer” has become a central entity for studies and research. The concept of consumer segmentation became the norm and organisations actively researched the taste and preference of the target segment of consumers before production. This approach thus leads to the origin and development of the field of “Consumer Behaviour”.
CONSUMER BEHAVIOUR
(Pls refer to the Introduction to Consumer Behaviour in my earlier article “Consumer Behaviour”)
Consumer Behaviour (or Buyer Behaviour) is defined as :
1.The acquisition, consumption and disposition of products, services, time and ideas by decision making units.
2.It is the body of knowledge which studies various aspects of purchase and consumption of products and services by individuals with various social and psychological variables at play.
3.The behaviour that the consumers display in searching for, purchasing, using, evaluating and disposing of products and services that they expect will satisfy their needs.
4.The study of consumer behaviour involves search, evaluation, purchase, consumption and post purchase behaviour of the consumers and includes the disposal of purchased products keeping environment and personal characteristics in mind.
The major areas of the study of consumer behaviour are :
1.Consumer Research,
2.Consumer as an Individual,
3.Consumer as an Organisational Buyer,
4.Consumer as a Decision Maker,
5.Consumer as a part of various Groups,
6.Market segmentation,
7.Relationships between Consumer & marketer.
The Role of Marketing Research : Consumer research describes the process and tools to study consumer behaviour. Broadly there are two theoretical perspectives that guide the development of consumer research methodology :
1.The positivist approach – tends to be objective and empirical to seek causes for behaviour and to conduct research studies that can be generalised to larger populations. Consumer research designed to provide data to be used for strategic managerial decisions falls into this category.
2.The interpretivist approach – tends to be the calculative and based on small samples. Although they tend to view each consumption situation as unique and non-predictable, interpretivists seek to find common patterns of operative values, meanings & behaviour across consumption situations.
“Consumer Behaviour” describes basically two types of Consuming entities :
1.Personal / Individual Consumers – Who buy goods & services for their own use, use of household or as gift for a friend, i.e., for final use by individuals who are referred to as end users.
2.Organisational / Business Buyers – These are profit and not for profit businesses Govt. agencies (local state & national), and institutions (schools, hospitals, prisons), who must buy product equipment & services in order to run their organisations.
Definition of some relevant TERMS :
1.User / End user / Ultimate Consumer – is a person who actually uses or consumes or utilises the product or services.
2.Buyer / Purchaser – is a person who actually pays for that product on behalf of the user -Ex. A bath soap is used by all the family members of the family, but bought by the head of the family who runs the family. The capacity to pay for the goods or services is also an important criterion to be a buyer.
3.Consumer – is a person or an organisation that needs the goods and services repeatedly and is more serious about the purchase. In contrast a buyer may be casual or one time buyer
4.Customer – is actually a consumer individual or organisational, who shows a definite pattern of thought process and behaviour in choosing the marketer, time, place, quality, quantity, price of the goods and services. In general, the customer is a total entity who is a target of all marketing activities and responds in a favourable way. The customer also shows some kind of objectivity (rational thinking) or subjectivity (emotional inclination).
5.Clients – This term is generally referred to the highly loyal customers for services & niche products.
Example – In case of an organisation the following people are identified as :
1.Customer – the organisation
2.Consumer – the concerned section / department where the goods / services are used
3.Buyer / Purchaser – the head of the Purchasing Department
4.User / End user – the employees / machines who / which use these goods / services
One of the aims and target of the marketer is to make a “Customer” out of Consumer, Buyer / Purchaser, User / End user in steps.
Organisational Buyers : Just like Individual buyers the Organisational Buyers have also needs to fulfil, albeit for a different purpose like :
1.Simply reselling, trading, or merchandising the same goods & services without any alteration to earn a profit
2.For manufacturing some other goods & services (usually known as end / intermediary products) using these as raw materials, capital goods, etc.
3.Use as consumables in the manufacturing process or to be used by the employees : as spare parts & inventory in the manufacturing process, and as tools, tackles, safety devices etc.
Understanding Consumer Behaviour
There are the three major sections of factors that have been identified as the most important general influences on consumer behaviour. Imagine three concentric circles, one at the outer most, one in the middle & one at the inner most, and they represent the following :
1.External Environmental Variables Influencing Behaviour : The external environments are six basic or specific influences (outer circle):
1.Culture, and Sub-culture,
2.Social Class, and Social Group,
3.Family, and Personal Influences,
4.Other Influences (which are not categorised by any of the above six).
2.Individual Determinants of Behaviour : Major individual determinants of consumer behaviour are portrayed in the middle ring. These variables influence how the consumer proceeds thro’ a decision process regarding products & services. They are :
1.Personality & Self-concept,
2.Motivation & Involvement,
3.Perception & Information Processing,
4.Learning & Memory,
5.Attitudes.
3.The Consumer Decision Process : The inner most circle denotes the consumer decision process regarding products & services, whose major steps are :
1.Problem Recognition,
2.Information Search,
3.Evaluation of Application,
4.Purchase Decision,
5.Post-purchase Behaviour.
(Pls. refer to my earlier article Chapter-0 of Consumer Behaviour)
Evolution of Consumer Behaviour
The consumer or the customer is sovereign – means he is independent in his decision of purchase and has absolute control over it. A new product must satisfy the customer’s needs, and not the needs & expectations of a management team. It corroborates the basic principle that the consumer is sovereign.
Understanding and adopting to consumer motivation and behaviour is not an option, rather it’s an absolute necessity for competitive survival. The editors of Fortune in a lead article of a 1993 special edition has the following to say about the “Tough new Customer” to the marketers :
“Meet the new customer, and smile when you do – because this is your boss. It may not be the person you thought you knew. Instead from choosing from what you have to offer, the new customer tells you what it wants. You figure out how to supply it.”
Influencing consumer behaviour : Consumer sovereignty presents a formidable challenge, but skilful marketing can affect both motivation & behaviour if the product or service offered is designed to meet consumer needs & expectations
References :
1.Consumer Behaviour & Marketing Action, Thomson India Edition, 6th Edition, 2006.
2.Consumer Behaviour & Marketing Research, Suja R Nair, Himalay Publishing House, 1st. Edition, 2004.
3.Consumer Behaviour & Marketing Strategy, J Paul Peter, Jerry C Olson, 2nd. Edition, IRWIN, 1990.
4.Consumer Behaviour : Basic Findings and Management Implications, G Zaltman and M Wallendorf, John Wiley & Sons, 1983.
5.Consumer Behaviour in Marketing Strategy, John A Howard, Prentice Hall, 1989.
6.Consumer Behaviour, David L Loudon & Albert J Della Bitta, TMGH, 4th. Edition, 2006.
7.Consumer Behaviour, ICFAI University, May – 2005.
8.Consumer Behaviour, James F Engel, Roger D Blackwell, Paul W Miniard, 8th. Edition, The Dryden Press, 1995.
9.Consumer Behaviour, Leon G. Schiffman & Leslie Lazar Kanuk, PHI – EEE, 9th. Edition, 2006.
10.Consumer Behaviour, Roger D Blackwell, Paul W Miniard, & James F Engel, Thomson India Edition, 10th Edition, 2007.
11.Marketing Management – Planning, Implementation & Control, Global Perspective, Indian Context, V S Ramaswamy & S Namakumari, MacMillan India Ltd., 3rd. Edition, 2003.
12.Marketing Management, 12th. Edition, by Philip Kotler & Kevin Lane Keller.
13.Marketing Management, Philip Kotler, PHI – EEE, 11th. Edition, 2003.
14.Marketing Research, G C Beri, TMGH, 3rd. Edition, 2000.
Pls refer to the Authos’s earlier Articles :
1.Holistic Marketing –
http://www.associatedcontent.com/article/1061316/holistic_marketing.html?cat=35
2.Consumer Behaviour –
http://www.associatedcontent.com/article/1064450/consumer_behaviour.html?cat=35
© Himansu S M / Written : 09-Oct-2008
Suggestions for improvements & enhancements are welcome. Please write to : hisema@gmail.com or hisema@yahoo.co.in
