Marketing Management

Marketing Management: 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.

Marketing management seeks to affect the level, timing, and nature of demand in a way that helps the organisation achieve its objectives. In other word marketing management is demand management. Demarketing is one of the tool of marketing management.

Demarketing: Marketing to reduce demand temporarily. The aim is not to destroy demand, but only to reduce or shift it.

e.g. Advertising to reduce the use of electricity or gas.

Marketing Management Philosophies:

there are five alternative concepts under which organisations conduct their marketing activities. They are-

Production, Product, Selling, Marketing and societal marketing concepts.

Production Concept:

The philosophy that consumers will favour products that are available and highly affordable and that management should therefore focus on improving production and distribution efficiency.

e.g. Henry Ford's whole philosophy was to perfect the production of the Model T so that its cost could be reduced and more people could afford it.

Product Concept:

The idea that consumers will favour products that offer the most quality, performance, and features and that the organisation should therefore devote its energy to making continuous product improvements. A detailed version of the new-product idea stated in meaningful consumer terms.

 

Figure: Selling and Marketing concepts contrasted

Selling Concept:

The idea that consumers will not buy enough of the organisation's products unless the organisation undertakes a large-scale selling and promotion effort.

Most firms practice the selling concept when they have overcapacity. Their aim is to sell what they make rather than make what the market wants.

Marketing Concept:

The marketing management philosophy that holds that achieving organisational goals depends on determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors do.

Societal Marketing Concept:

The idea that the organisation should determine the needs, wants and interests of target markets and deliver the desired satisfactions more effectively and efficiently than do competitors in a way that maintains or improves the consumer's and society's well being.

Figure: Societal Marketing Concept

Market

Market: The set of all actual and potential buyers of a product or service.

The size of market depends on the number of people who exhibit the need, have resources to engage in exchange and are willing to offer these resources in exchange for what they want.

A simple marketing system consists of sellers and buyers. Sellers and the buyers are connected by four flows (see the figure below). 

Figure: A simple marketing system

- The seller sends products, services and communications to the market (buyer), 

- The market (buyer) sends money and information to the seller.

Marketers are keenly interested in markets. Their goal is to understand the need and wants of specific markets and to select the markets that they can serve vest. In turn, they can develop products and services that will create value and satisfaction for customers in the respective markets, resulting in sales and profits for the company.

Exchange, Transactions and Relationships

Exchange, Transactions and Relationships:

Exchange: The act of obtaining a desired object from someone by offering something in return.

e.g. 

Hungry people could find food by hunting, fishing, or gathering fruit. They could beg for food or take food from someone else. Or they could offer money, another good, or a service in return for food.

Transaction: A trade between two parties that involves at least two things of value, agreed-upon conditions, a time of agreement, and a place of agreement.

e.g.

One party gives X to another party and gets Y in return. Sara pays 600 Pound to "Currys" to purchase a television.

Relationship marketing: The process of creating, maintaining, and enhancing strong, value-laden relationships with customers and other stakeholders.

Beyond creating short-term transactions, marketers need to build long-term relationship with valued customers, distributors, dealers, and suppliers. They want to build strong economic and social connections by promising and consistently delivering high-quality products, good service,and fair prices to maximise profit. A marketing network is required for better relationship marketing.

Marketing Network: It consists of the company and all its supporting stakeholders: customers, employees, suppliers, distributors, retailers, ad agencies, and other with whom it has built mutually profitable business relationships.

Customer value, satisfaction and quality

Customer Value, Satisfaction and Quality:

Customer Value: The difference between the values the customer gains from owning and using a product and the costs of obtaining the product.

e.g. 

McDonald's is an well known brand for it's fast paced service. For buying McDonald's food, customer will think about food content, and the values against the money, effort and compare McDonald's with BurgerKing and Subway - and select the one that gives them the greatest delivered value.

Customer Satisfaction: The extent to which a product's perceived performance matches a buyer's expectations. Customer might be dissatisfied or satisfied.

-         If the product's performance falls short of expectations, the buyer is dissatisfied. 

-         If performance matches or exceeds expectations, the buyer is satisfied or delighted.

Customer satisfaction depends on a product's perceived performance in delivering value relative to a buyer's expectation. Smart companies aim to delight customers by promising only what they can deliver, then delivering more than they promise.

e.g.

A customer of McDonald's expects quality food within short period of time after placing their order. If they get their food in hand within their expected time then they become satisfied. Otherwise, dissatisfied.

Total Quality Management: Programs designed to constantly improve the quality of products, services, and marketing processes.

  

A company achieves total quality only when its products or services meet or exceed customer expectations. Thus the fundamental aim of today's total quality movement has become total customer satisfaction. Quality begins with customer needs and ends with customer satisfaction.

Product and service

Products and Services:

Product: Anything that can be offered to market for attention, acquisition, use or consumption that might satisfy a want or need. It includes physical objects, services, persons, places, organisations, and ideas.

The concept of product is not limited to physical objects- anything capable of satisfying a need can be called a product. In addition to tangible goods, products include services.

e.g. Mobile phone, Laptop, banking, airline, home repair services, etc.

Service: Any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership or anything.

          e.g. Banking, airline, home repair services, etc.

Need, Want, Demand

Need, Want, Demand

Need: A state of felt deprivation.

         

      They include basic Physical needs   - food, clothing, warmth and safety; 

                                     Social needs       - belongings and affection;

                                     Individual needs- self-expression and knowledge

       

          e.g. An American, British or Asian needs food as lunch. 

Want: The form taken by a human need as shaped by culture and individual personality.

           Wants are shaped by culture and individual personality.

e.g. 

An American/British needs food as lunch but his/her wants are 'Hamburger, fries and drinks'

An Asian needs food but his/her wants are 'Chicken Korma, rice and drinks'

Demand: Human wants that are backed by buying power.

Human want to choose products that provide the most value and satisfaction for their money. When backed by buying power, wants become demands.

e.g. Whenever the American, British or Asian person have sufficient money to afford those wants, that would be their demand.

Example: 

Suppose 'Nora' is thirsty and her choice is water. Hence, her need is water.

She was thinking of 'Flavoured water' of M&S to drink. Hence, her want is 'Flavoured water' of M&S.

She checked her wallet to make it sure that she had sufficient money to afford 'Flavoured water' of M&S. Nora went to M&S to buy 'Flavoured water'. Hence, her demand is 'Flavoured water'.

Marketing

Marketing Definition:
"A social and managerial process whereby individuals and groups obtain what they need and want through creating and exchanging products and value with others".(Kotler and Armstrong, 2003)

Understanding, creating, communicating and delivering customer value and satisfaction are at the very heart of modern marketing thinking and practice.

The simplest definition of marketing is- the delivery of customer satisfaction at a profit.

To understand the definition it is important to understand the terms: 
- Need, want, demand; 
- Products and service; 
- Value, satisfaction and quality; 
- Exchange, transactions and relationships; and 
- Market.
these are also called 'Core Marketing Concepts'.

                 Figure : Core marketing concepts (Kotler & Armstrong, 2003, p-6)