Marketing and
Services
Management
For 2nd Semester B.Com (Bangalore University students)
Vipin Srinath
1/1/2014
Professor Vipin 2014
Unit 1
Introduction to Marketing
Definition
Marketing is the process of communicating the value of a product or service to customers.
Marketing can sometimes be interpreted as the art of selling products, but selling is only a small
fraction of marketing.
Marketing can be looked at as an organizational function and a set of processes for creating,
delivering and communicating value to customers, and managing customer relationships in ways
that benefit the organization and its shareholders. Marketing management is the art of choosing
target markets, as well as acquiring and keeping customers through providing superior customer
value.
"Marketing is the set of human activities directed at facilitating and consummating exchanges." Philip Kotler
Goals of Marketing



Increasing Sales & Profits: One major goal of any company's marketing strategy is increasing
sales and profits. Your first step in increasing sales and profits is to set a target and time
frame for increasing them. For example, you may want to increase sales and profits by 5
percent each in the current quarter. Subsequently, you will need to determine how to
increase sales and profits by 5 percent. You could set higher quotas for your sales reps;
another option is increasing your advertising expenditures by a certain percentage.
Increasing Brand Awareness: Another goal of marketing strategies is increasing awareness of
your company or brand, according to a writer on the Resources for Entrepreneurs website.
Consumer products companies often run extensive advertising campaigns to build brand
awareness or consumers' awareness of the names of their products. There are two types of
brand awareness: aided and unaided. Aided awareness means you recognize a brand name
when someone mentions it. Unaided brand awareness is when you think of a particular
brand when you need a product. Use advertising, coupons and small giveaways to build the
consumers' awareness of your brand.
Increasing Market Share: Companies also create various marketing strategies to increase
market share, which is the percentage of unit and dollar sales a company wields in their
industry. One way to build market share is by using a lower pricing strategy, especially when
introducing new products. The objective of a lower pricing strategy is to get as many
customers as possible to try your product. After that, you offer the best quality and service
possible to retain them. Consequently, you can entrench yourself in the market with the
lower pricing and gain market share. You will eventually have to raise prices to increase your
profit margins. However, gradual pricing increases will still draw customers, and you may
have earned numerous loyal customers by that juncture.
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
Countering Competitive Strategies: There are times when your goal will be to counter a
competitive strategy. For example, a plumbing competitor may be aggressively adding lots
of new lavatories and vessels to its product line to gain more exposure in kitchen and bath
showrooms. Consequently, you will need to combat your competitor's strategies by adding
your own new products. Monitor your competitors on a continuous basis. Encourage your
sales reps to report any new competitive activity in the market. Keep abreast of news in your
industry so you have time to create your own counter-strategies.
Evolution of Marketing Concept
1. Production Orientation Philosophy: till 1930s, it was believed that a good product, provided
the price was reasonable always means that there is an automatic consumer response and
leads to good sales. There were little or no promotion requirements. The assumptions of this
concept are:
i)
Anything produced can be sold
ii)
Cost of production should be low and must be maintained so by the management.
iii)
The company must produce only basic products.
Good
Product
Good
Sales
2. Sales Oriented Philosophy: the failure of the Product oriented philosophy in the 1930s led to
the sales oriented philosophy in the 1940s. It said that even the best product made by a firm
requires some aggressive salesmanship. This philosophy holds good even today. Effective
promotions, advertising and public relations are very important. The assumptions of this are
as follows:
i)
Producing best possible product
ii)
Finding a buyer for the product
iii)
Goal of the management is to convince the buyers.
Product
Promotion
Sales
3. Customer orientation philosophy: It was brought in during the 1950s and points out that the
fundamental task of a business is to study and understand the needs, wants, desires and
values of potential consumers and manufacture goods that satisfy the needs of the
consumers. This represented a move from ‘Caveat Emptor’ and ‘Caveat Vendor’. The process
starts with the consumer and ends with the requisite product. The assumptions of the
theory are:
i)
The firm should produce the product desired by the consumer
ii)
The management must integrate all its activities and direct them to develop
programs that satisfy consumer wants.
iii)
Management is guided by long term profit goals rather than quick sales.
Customer
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Research
Product
Promotion
Sales
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4. Social Orientation Philosophy: This is a further refinement of the above concept that came
about in the 1970s and 1980s. The new concept goes beyond understanding the consumer
needs and matching products accordingly. This concept introduces the idea of social welfare.
Social welfare included improving the quality of human life and the environment. The
assumptions are:
i)
The firm should produce the product desired by the consumer
ii)
Management is guided by long term profit goals rather than quick sales.
iii)
Management must integrate all its activities and direct them to develop programs
that satisfy consumer wants and social welfare as well.
iv)
Customer
Research
R&D
Product
Promotion
Sales
Approaches to the study of marketing
1. Commodity Approach: focuses on the flow of a commodity from the producer to the final
customer. In such a study, we can locate the centre of production, people engaged in
buying and selling the product, problems in financing it and storage. Through this approach
we can find the differences in marketing producers, services and problems. Marketing of
agricultural products represents this commodity approach.
2. Functional Approach: Here we focus on the attention on specialized services or functions or
activities performed by marketers. The study of marketing functions like buying, selling, risk
bearing, transport, financing and providing information represents the functional approach.
3. Institutional Approach: In this we focus on the marketing institutions or agencies such as
wholesalers, retailers, transport undertakings, banks and insurance companies. The study is
to understand how these business institutions and agencies work together.
4. Managerial or Decision Making Approach: It is of recent origin and combines the above 3
approaches. Focus is on underlying concepts, decision influencing factors, alternative
strategies and techniques of problem solving.
5. The Systems Approach: A system is a set of interacting or interdependent groups that are
organized to accomplish a set of objectives. This approach consists of:
a. Objective – Direct the process
b. Inputs – are processed into outputs
c. Processor – Refers to the unit that converts inputs into outputs
d. Outputs – finished products and services
e. Feedback – gives information on internal and external sources that bring future change.
Recent Trends in Marketing
1. E-Business (E-Commerce): Electronic business, commonly referred to as "eBusiness" or "ebusiness", or an internet business, may be defined as the application of information and
communication technologies (ICT) in support of all the activities of business. Commerce
constitutes the exchange of products and services between businesses, groups and
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individuals and can be seen as one of the essential activities of any business. Electronic
commerce focuses on the use of ICT to enable the external activities and relationships of the
business with individuals, groups and other businesses.
Electronic business methods enable companies to link their internal and external data
processing systems more efficiently and flexibly, to work more closely with suppliers and
partners, and to better satisfy the needs and expectations of their customers.
In practice, e-business is more than just e-commerce. While e-business refers to more
strategic focus with an emphasis on the functions that occurs using electronic capabilities, ecommerce is a subset of an overall e-business strategy. E-commerce seeks to add revenue
streams using the World Wide Web or the Internet to build and enhance relationships with
clients and partners and to improve efficiency.
2. Telemarketing: is a method of direct marketing in which a salesperson solicits prospective
customers to buy products or services, either over the phone or through a subsequent face
to face or Web conferencing appointment scheduled during the call
Telemarketing can also include recorded sales pitches programmed to be played over the
phone via automatic dialling. Telemarketing has come under fire in recent years, being
viewed as an annoyance by many.
The sub categories of telemarketing are:
 Lead Generation, the gathering of information and contacts
 Sales, using persuasion to sell a product or service
 Outbound, proactive marketing in which prospective and preexisting customers are
contacted directly
 Inbound, reception of incoming orders and requests for information. Demand is
generally created by advertising, publicity, or the efforts of outside salespeople.
3. M-Commerce (M-Business): The term m-commerce is short for mobile commerce, and
recognizes that the transactions may be conducted using cell phones, personal digital
assistants and other hand held devices that have operate with Internet access. While still in
its infancy, the concept of m-commerce has been refined in recent years and is beginning to
become more popular.
One of the basic examples of m-commerce has to do with receiving sales promotions via the
hand held device. The most common application would involve the service provider sending
text messages to the subscriber that promote new product offerings, free trials on additional
services, or other types of promotional campaigns. The subscriber is not charged a fee for
the text message, and often can respond with a return text message without incurring any
type of fee.
4. Green Marketing: According to the American Marketing Association, green marketing is the
marketing of products that are presumed to be environmentally safe.
Thus green marketing incorporates a broad range of activities, including product
modification, changes to the production process, packaging changes, as well as modifying
advertising.
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The idea behind green marketing is to find ways to connect consumers who want to live a
lifestyle that is as ecologically responsible as possible. This involves identifying the proper
mediums to reach those consumers.
For example, a green marketing campaign may involve the use of online advertising, since
this approach does not require the use of paper products to create hard copy ads in
newspapers or magazines. In the event that print media is used for advertising, the green
marketing campaign may choose to place ads only in printed publications that make use of
recycled paper.
5. Relationship Marketing: Relationship marketing is a strategy that is aimed at cultivating,
maintaining, and growing strong business relationships between buyers and sellers. The idea
is that instead of using an approach that attracts the buyer for a one-time sale, the company
focuses efforts on earning the business of that buyer for an extended period of time,
resulting in a steady flow of sales from the same client. While the term itself was only coined
in the second half of the 20th century, the general concept of relationship marketing has
been around for centuries.
One of the essentials of effective relationship marketing is to understand the needs and
general expectations of the client. To this end, the marketing effort will involve learning all
that is possible about the customer.
Along with general data that would apply to a specific customer type, relationship marketing
involves looking beyond the obvious and identifying specifics about the goals, aims, and
circumstances that apply to the specific customer. This makes it possible to identify specific
ways that the business can aid the customer in fulfilling those needs, and thus begin the
process of establishing rapport.
6. Customer Relationship Marketing / Management (CRM): is the practice of using marketing
activities to establish, develop, and maintain successful long-term customer relationships.
CRM has numerous implications for market planning, employee training, advertising,
promotion, public relations, direct marketing, package design, and more.
Customer relationship marketing incorporates the cutting-edge method of building brands
while simultaneously performing up-to-the-minute market research. Every consumer wants
to be heard, and they will reward companies who show an interest in building strong client
relationships. Using consumer data to evolve and develop with the marketplace will allow
your company to build your brand and increase market share at an astonishing pace.
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