Treetop Forest Products Ltd

Marketing: In business, firm marketing generates the revenues that the financial people manage and the production people use in creating goods and services. The challenge that faces marketing is to generate those revenues by satisfying customers’ wants at a profit and in a socially responsible manner. However, marketing is not limited to business organizations.

Whenever we try to persuade somebody to do something: donate to RED CROSS, not to litter the highways, save energy, vote for candidate, we are engaging in marketing; thus marketing has a broad societal meaning and it is applicable not only for profit making but also for not profit organizations. Many scholars define marketing as follows: 1. According to American Marketing Association, marketing is defined as the performance of business activities that direct the flow of goods and services from producers to consumers or users. . According to William J. Stanton, Marketing is a system of business activities designed to plan, price, promote and distribute want satisfying goods and services to present and potential customers. 3. According to Evans and Berman, Marketing is the anticipation, stimulation, facilitation, regulation and satisfaction of consumer and public’s demand for products, services, organizations, people, places, and ideas through the exchange process. 4.

According to Philip Kotler, Marketing is 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. Generally, the definition of marketing can be grouped in to two: classical (narrow) definition and modern (broad) definition. Classical Definition: In classical terms marketing can be defined as the performance of business activities that direct the flow of goods and services from producers to consumers. This definition is too narrow to describe marketing.

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Marketing includes anticipating demand, which requires a firm to do customer research on a regular bases so that it develops and introduces products that are desired by consumers, Management of demand which consists of stimulation, facilitation, and regulation of tasks; and satisfaction of demand which involves actual performance, safety, availability of options, after sale service and other factors. From the above discussions, we can conclude the following about marketing: a. Marketing is the business activity concerned with the flow of goods and services from producers to consumers. . Marketing generates and facilitates exchange c. The concept of marketing lies on needs, wants, and demands of customers. d. Marketing is greater than selling. e. Marketing is an integrated activity. f. Marketing is concerned with customer satisfaction. MARKETING FUNCTIONS The following are the basic marketing functions: 1. Environmental Analysis and Marketing Research: Involves monitoring and adapting to external factors that affect success or failures, such as the economy and competition; and collecting data to resolve specific marketing issues. 2. Consumer Analysis:

Involves examining and evaluating customer characteristics, needs, and purchase processes and selecting the group of consumers at which to aim marketing efforts. 3. Product Planning: ( including goods, services and ideas) Involves developing and maintaining products, product assortments, product images, brands, and packaging, and optional features; and deleting faltering products. 4. Distribution Planning: Involves establishing relations with distribution-channel intermediaries, physical distribution, inventory management, warehousing, transportation, the allocation of goods and services, wholesaling and retailing 5.

Promotion Planning: Involves communicating with customers, the general public and others through some form of advertising, publicity, personal selling, and/or sales promotion. 6. Price Planning: Involves determining price levels and ranges, price techniques, terms of purchase, price adjustments, and the use of price as an active or passive factor. 7. Broadening the organizations’ /individuals’ scope: Involves deciding on the emphasis to place, as well as the approach to take, on international marketing, service/ -non-profit marketing and societal issues. 8. Marketing Management:

Involves planning, implementation, and controlling the marketing program (strategy) and individual marketing functions; and appraising the risks and benefits in decision making. According to W. J. Stanton and McKarthy, there are eight economic activities in marketing that are broadly classified into three: 1. Exchange: -Buying -Selling 2. Physical Distribution – Transportation – Storage 3. Facilitating /Auxiliary/ – Financing – Marketing research and information – Risk bearing – Product standardization 1) Exchange: It is the process by which parties provide something of value to one another to satisfy the needs of each.

The seller provides a needed product Goods Services Seller Buyer Money Credit The buyer offers something in return a) Buying: It is acquisition and procurement of goods for eventual resale or for production of other goods or rendering of services. b) Selling: It is not only just to make sales but also to find buyers, stimulate them, and provide advice and service to buyers. It involves advertisement, personal selling, customer service, publicity, etc. 2) Physical Distribution: Refers to handling and movement of goods from production area to market center.

It consists of a) Storage: It provides proper handling and storage of goods until they are demanded and sold. b) Transportation: It is the shipment and movement of goods from their manufacturing place to the market center /place of sale/. It enables to make goods reachable to the consumers. 3) Facilitating Function /Auxiliary Function: these are functions that facilitate and assist the proper performance of other functions of marketing. It encompasses a) Financing: To carry out business operations smoothly, it requires finance or money. Marketing as a major business activity, leads us to the need for money or finance.

Without it, organizations are unable to schedule their operations. The activity of financing involves the proper handling and management of the inflow and outflow of money. Accordingly, finance is defined as the management function, which involves effectively obtaining and using money. Sources of finance include revenue from sale of company products and services, rental of business properties, from sale of stock, or from loan and credit agencies. b) Market Research and information: Managers of businesses do not make decisions on the basis of common sense or intuition. They require information.

Therefore, to make marketing decisions and to design effective marketing policies, managers should get information regarding tests, preferences, attitudes and needs of customers; position of competitors, capacity of suppliers and creditors. For the success of business, market research is an important activity that involves gathering, analyzing, and interpretation of data collected regarding the needs of consumers. c) Risk Bearing: Business organizations when they are established, it is with the objective of getting profit, expansion, growth, etc. Nevertheless, they fail to achieve their objectives because of uncertainty of the future.

Hence, the chance or the possibility of loss that business face is known as RISK. d) Product standardization and Grading: These are facilitating functions that are used to identify the quantity and quality of production. When goods are standardized and graded neither the buyer nor the seller is required to check each and every part of the product. It saves the time of both buyers & sellers. Standardization enables customers to know that there is always definite or standard quality in a particular package; and grading indicates that a package labeled with grades A, B, or C are always uniform and the same everywhere and ever time.

The field of marketing is a crucial one for several reasons: it stimulates demand; a large number of people are employed on marketing positions; it supports entire industries such as advertising and marketing research; all people are consumers in some situations; it is necessary to use scarce resources efficiently; it impacts on people’s beliefs and life styles; and it influences the quality of our lives. The scope of marketing is quite broad and diversified. To perform the marketing functions, marketing Performers are required and they are organizations or individuals that undertake one or more marketing functions.

They include manufacturers, service providers, wholesalers, retailers, marketing specialists, and organizational and final consumers. Each performer has a different role. One party usually does not perform all the functions. This is due to costs, assortment requirements, specialized abilities, company size, established methods of distribution, and consumer interests. TASKS OF MARKETING MANAGEMENT Marketing managers in different organizations might face any of the following states of demand. The marketing task is to manage demand effectively. The various states of demand and the corresponding marketing management task according to P.

Kotler are the following: 1. Negative demand: This is a state in which all or the major parts of the society, dislikes the product and may even pay a price to avoid it. Examples are vaccination, alcoholic employees, dental work, and seat belts. The corresponding marketing task is to analyze why the market dislikes the product and whether product redesign, lower price, or more positive promotion can change the consumer attitudes. This marketing task or activity is known as CONVERSIONAL marketing which tries to change people’s want rather than serve their wants. . No demand: This is a case where target customers may be uninterested in or indifferent to a particular product. For example, farmers may not know about a new farming method; college students may not be interested in taking foreign language courses. Marketing managers are concerned with finding ways to connect the product’s benefits with the user’s needs and interests. This marketing task is known as STIMULATIONAL marketing; it tries to stimulate a want for an object in people who initially have no knowledge or interest in the product 3.

Latent demand: Consumers have a want that is not satisfied by any existing product or service. This state of demand where many customers share a strong need for something that does not exist in the form of actual product is called LATENT demand. Examples include the need for harmless cigarettes, more fuel-efficient cars, etc. In this case, marketing managers respond by trying and developing effective goods and services that will satisfy the demand through analysis and measurement of the potential market.

The marketing task is called DEVELOPMENTAL marketing and its task is to measure the size of the potential market and trying to develop a new product or service that would satisfy the demand. 4. Falling demand: Sooner or later, every organization faces falling demand for one or more of its products. For example, churches have seen their membership decline, and private colleges have seen fewer applications. The marketer must find the causes of market decline and re-stimulate demand by finding new markets, changing product features, or creating more effective communication and the marketing task is REMARKETING. . Irregular demand: It is a state in which the timing pattern of demand is marked by seasonal and volatile fluctuations causing problems of idle capacity and overworked. For example museums are under-visited during weekdays and overworked during weekends. The corresponding marketing task is SYNCHROMARKETING, i. e. , to find ways to alter the time pattern of demand through flexible pricing, promotion and other incentives so that it will better match the time pattern of supply. 6. Full demand: The organization has just the amount of demand it wants and can handle.

It is a state where the current level and timing of demand is equal to the desired level and timing of demand. The marketing task is MAINTENANCE marketing and is designed to maintain the current level of demand against changing consumer preferences. The organization maintains quality, and continually measures satisfaction to make sure it is doing a good job. 7. Overfull demand: It is a state in which demand is higher than the company can or wants to handle. The marketing task is called DEMARKETING and its task is finding ways to reduce the demand temporarily, or permanently.

De-marketing involves such actions as raising prices and reducing promotion and service. It does not aim to destroy demand, but only to reduce it. It calls for using normal marketing tools in reverse. 8. Unwhole-Some demand: Unwholesome products such as cigarettes, alcohol, and hard drugs will attract organized effort to destroy the demand or interest in particular product or service. The corresponding marketing task is known as COUNTERMARKETING it is a difficult task in that the aim is to get people who like something to give it up. Marketing manager cope with these tasks by arrying out marketing research, planning, implementation and control. The demand levels and corresponding marketing tasks are summarized as follows: State of demand| Marketing task| Formal Name| 1. | Negative demand| Disabuse demand| Conversional marketing| 2. | No demand| Create demand| Stimulation Marketing| 3. | Latent demand| Develop demand| Developmental marketing| 4. | Falling demand| Revitalized demand| Remarketing marketing| 5. | Irregular demand| Synchronize demand| Synchro-marketing| 6. | Full demand| Maintain| Maintenance marketing| 7. Overfull demand| Reduce demand| Demarketing marketing| 8. | Unwholesome demand| Destroy demand| Counter marketing| 2. 3. MARKETING MANAGEMENT CONCEPTS We have described marketing management, as the conscious effort to achieve desired exchange outcomes with target markets. Now we ask what philosophy should guide these marketing efforts? What weights should be given to the interests of the organization, the customers and society? Very often these interests conflict. Clearly, marketing activities should be carried out under a clear philosophy of efficient, effective, and responsible marketing.

There are five competing concepts under which organizations conduct their marketing activity. 1. The production concept: This concept holds that consumers will favor those products that are widely available and low in cost. Management of production oriented organization concentrates on achieving high production efficiently and wide distribution coverage. Organizations that appreciate this concept assume that consumers like products that are widely available and accessible at low cost. The production concept is one of the oldest concepts guiding sellers.

The assumption that consumers are primarily interested in product availability and low price holds in at least two types of situations. The first is where the demand for a product exceeds supply as in many Third World countries. Here consumers are more interested in obtaining the product than in its fine points. The suppliers will concentrate on finding ways to increase production. The second situation is where the product’s cost is high and has to be brought down through increased productivity to expand the market.

Texas instruments provides a contemporary example of the production concept: Texas Instruments is the leading American exponent of the “get-out production, cut the price” philosophy. Ford put all of his talent into perfecting the mass production of automobile to be down their instruments all of its efforts in building production volume and improving technology in order to bring down costs. It uses its lower costs to cut process and expand the market size. It strives to achieve the dominant position in its markets.

To Texas Instruments, marketing primarily means one thing bringing down the price to buyers; this orientation has also been a key strategy of many Japanese companies. 2. The product concept: Under this concept, marketing managers assume that consumers will prefer those products that offer (provide) the most quality, performance, with good features. Managers in this product-oriented organizations focus their energy on making quality products and improving them over time. These managers assume that buyers admire well-made products and can select, purchase and appreciate product quality.

Products oriented companies often design their product with little or no customer input. These managers are caught up in a love affair with their product and fail to appreciate that the market may be less “turned on. ” They trust that their engineers will know how to design or improve the product. Too often they will not even examine competitors products because “they were not invented here. ” A General Motors executive said years ago” “How can the public know what kind of car they want until they see what is available? ” GM’s designers would develop plant for a new car. Then manufacturing would make it.

Then the finance department would price it. Finally, marketing and sales would try to sell it. GM failed to ask customers what they wanted and never brought in the marketing people at the beginning to help figure out what kind of car would sell. The product concept leads to “marketing myopia” a focus on the product greater than on the customer’s need. Railroad management thought that users wanted trains rather than transportation and overlooked the growing challenge of the airlines, buses, trucks, and automobiles. Churches and the post office all assume that they are offering the public the right product and wonder why their sales falter.

These organizations too often are looking into a mirror when they should be looking out the window. 3. The Selling concept: Under this philosophy/concept/, marketing managers assume that consumers purchase products if the organization undertakes an aggressive selling and promotion effort. Therefore, firms emphasize and direct their effort on promotion and selling of their products. Most firms practice the selling concept when they introduce new products and when they have over capacity. The selling concept holds that consumers, if left alone, will ordinarily not buy enough of the organization’s products.

The organization must therefore undertake an aggressive selling effort. The concept assumes that consumers typically show buying inertia or resistance and have to be coaxed into buying, and that the company has available a whole battery of effective selling and promotion tools to stimulate more buying. The selling concept is practiced most aggressively with “unsought goods,” those goods that buyers normally do not think of buying such as insurance, encyclopedias, and funeral plots. These industries have perfected various sales techniques to locate prospects and hard sell them on product benefits.

Most firms practice the selling concept when they have over capacity. Their aim is to sell what they make rather than make what the market wants. In modern industrial economies, productive capacity has been built up to a point where most markets are buyer markets (i. e. , the buyers are dominant), and sellers have to scramble hard for customers. Prospects are bombarded with television commercials, newspaper ads, direct mail, and sales calls. At every turn, someone is trying to sell something. As a result, the public identifies marketing with hard selling and advertising. 4.

The Marketing Concept: The marketing concept is different from the above three concepts. Managers under this concept assumes that the key to achieving organizational goals is based on the determination of the needs and wants of consumers and delivering or providing the desired satisfaction more efficiently, and effectively, than competitors. When we compare the marketing concept with the selling concept, the selling concept focuses on the needs of the seller; the marketing concept focuses on the needs of the buyer. Selling concept focuses on the needs of the seller; marketing on the needs of the buyer.

Selling is preoccupied with the seller’s need to convert his product into cash. Marketing is preoccupied with the idea of satisfying the customers’ needs of the product and the whole cluster of things associated by creating and delivering the product. The marketing concept rests on four main pillars, namely target market, customer needs, coordinated marketing, and profitability. These are shown in figure below – The selling concept Starting pointFocusMeans Ends FactoryProductsSelling ; Profits throughpromotion sales volume The marketing concept Starting point focus meansEnds

Target market Customer CoordinatedProfits through Needs marketingCustomer Satisfaction Here we examine how each pillar of the marketing concept contributes to more marketing that is effective. i. TARGET MARKET: No company can operate in every market and satisfy every need. Nor can it even do a good job within one broad market. Companies do best when define their target market (s) carefully and prepare a tailored marketing program. An auto manufacture can think of designing passenger cars, station wagons, sports carts, and luxury. But this thinking is less precise than defining a customer target group.

One Japanese carmaker is designing a car for the career woman, and it will have many features that male-dominated cars don’t have. Another Japanese carmaker is designing a car for the “ town man,” the young person who needs to get about town and park easily. In each, the company has clarified a target market, and this will greatly influence the car design. Societal Marketing Concept: It holds that the organization should determine the needs, wants, and interests of the target markets and deliver the desired satisfaction more effectively and efficiently than competitors in a way that maintains or improves the customer’s and the ociety’s well-being. The societal marketing concept calls upon marketers to balance three considerations in setting their marketing policies. Originally, companies based their marketing decisions largely on short-run company profit. Overtime, companies began to recognize the long-run importance of satisfying consumer wants, and introduced the marketing concept. Now they are beginning to think of society’s interests when making decisions. The societal marketing concept calls for balancing all three considerations-company profits, consumer wants, and society’s interests.

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