INTRODUCTION

What is Marketing??
Selling? Advertising? Promotions? Making products available in stores? Maintaining inventories?

All of the above, plus much more!

What is Marketing?
A Philosophy
An Attitude A Perspective
A Set of Activities, including: Products Pricing Promotion

A Management
Orientation

Place (Distribution)

Marketing = ?
Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, services to create exchanges that satisfy individual and organizational goals American Marketing Association

Marketing = ?
Marketing management is the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value. or 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

Simple Marketing System

Communication

Goods/services

(a collection of sellers)
Money

Industry

(a collection of Buyers)

Market

Information

Therefore Marketing Is

Marketing is the sum of all activities that take you to a sales outlet. After that sales takes over. Marketing is all about creating a pull, sales is all about push. Marketing is all about managing the four Ps
product price place promotion

The 4 Ps & 4Cs

Marketing Mix Convenience

Product

Place

Customer Solution Price Promotion

Customer Cost

Communication

Product:
Variety Quality Design Features Brand Name Packaging Sizes Services Warranties

Price:
List Price Discounts Allowances Payment-Period Credit Terms

Promotion:
Sales Promotion Advertising Sales Force Public Relations Direct Marketing

Place:
Channels Coverage Assortments Locations Inventory Transport

Difference Between - Sales & Marketing ?

Sales:
trying to get the customer to want what the company produces

Marketing

trying to get the company produce what the customer wants

Scope What do we market

Goods Physical Goods Services Teaching, Banks, Hotels, etc. Events Trade-Shows, Olympics, etc. Experiences Walt- Disney, Indian Cricket Team Coach, etc. Personalities Celebrity, Marketing Artist, Musicians, etc. Place Cites, States, Nations, etc. Organizations Universities, Museum, Co. Favorable Image Properties Real Estate, Stocks, & Bonds, etc. Information Books, online Information,etc. Ideas and concept Exercise Daily, Avoid Fatty Food, Say no to Drugs,
etc.

Core Concepts of Marketing

Based on : Needs, Wants, Desires / Demand Products, Utility, Value & Satisfaction

Exchange, Transactions & Relationships

Markets, Marketing & Marketers.

Needs: are the basic human requirements i.e a state of felt

deprivation.

Wants: when needs are directed to specific objects that might

satisfy the needs i.e. the conscious recognition of need.

Desires / Demand: are wants for specific products backed by

ability to pay.

Need food ( is a must ) Want Pizza, Burger, French fry's ( translation of a need as per our experience ) Demand Burger ( translation of a want as per our willingness and ability to buy ) and Desire is Have a Burger in a five star hotel

Therefore Demand represents: desire and willingness to buy

ability to buy

Hence, Marketing Management is Demand Management.

Utility: utility is a measure of the relative satisfaction from or desirability of consumption of goods.

Product: a set of benefits offered to customer to satisfy their needs.

Exchange: is the process of obtaining a desired products from someone by offering something in return. Transactions: a transaction is a measured exchange i.e. when an agreement is reached b/w two parties we say that a transaction takes place ( a trade of values between two or more parties)

Marketing concept is that of exchanges. A transaction is a measured exchange. Contract formalizes a transaction either for the present or for future and legalizes it if necessary and also provides a recourse(remedy) in case of a market failure
There are five conditions of exchange 1. There are at least two parties

2.
3. 4.

Each party has something that might be of value to the other party
Each party is capable of communication and delivery Each party is free to accept or reject the exchange offer

5.

Each party believes it is appropriate or desirable to deal with other party

The Concept of Exchange

The idea that people give up something in order to receive something they would rather have.

The Concept of Exchange

At Least Two Parties

Something of Value

Necessary Conditions for Exchange

Communication and Delivery

Freedom to Accept or Reject

Desire to Deal With Other Party

The Concept of Exchange

Exchange may not take place even if conditions are met Marketing occurs even if exchange does not take place

Who is a Customer ??
CUSTOMER IS . . .
Anyone who is in the market looking at a product /
service for attention, acquisition, use or consumption that satisfies a want or a need

Customer

CUSTOMER has needs, wants, demands and desires. Understanding these needs is starting point of the entire marketing

Customers - Problem Solution

As a priority , we must bring to our customers WHAT THEY NEED We must be in a position to UNDERSTAND their problems Or in a new situation to give them a chance to AVOID the problems

Customer Value
Value - the value or benefits the customers gain from using the product versus the cost of obtaining the product. or

The ratio of benefits to the sacrifice necessary to obtain those benefits

Customer looks for Value

Value
Benefit

= Benefit / Cost
= Functional Benefit + Emotional Benefit

Cost

= Monetary Cost + Time Cost + Energy Cost + Psychic Cost

Customer Value Requirements

Offer products that perform

Give consumers more than they expect

Avoid unrealistic pricing Give the buyer facts Offer organization-wide commitment in service and after-sales support

 Therefore value can be seen as primarily a combination of quality, service & price (QSP), called the customer value triad.Value increases with quality & service & decreases with price therefore value is a ratio b/w what the customer gets & what he gives.

Value = Benefits / Costs

or
Functional Benefits + Emotional Benefits Monetary Cost + Time Cost + Energy Cost + Psychic Cost

Customer Satisfaction
The feeling that a product has met or exceeded the customers expectations
Satisfaction - Based on a comparison of performance and expectations.

Performance > Expectations =>Satisfaction

Performance < Expectations =>Dissatisfaction

Maintaining Customer Satisfaction

Meet or exceed customers expectations

Focus on delighting customers

Provide solutions to customers problems Cultivate relationships, NOT one-time transactions

 Relationships (Relationship Marketing): has the aim of building mutually satisfying long term relations with key parties- customers, suppliers, distributors, in order to earn & retain business.

Market Place: is physical ( shopping in stores)

Market Space: is digital ( shopping on the internet) Brand: is an offering from a known source

Brand Image: associations with the product

Supply Chain: a longer channel stretching from raw material to components to final product to final buyer. Competition: includes all the actual & potential rival offerings and substitutes that a buyer might consider.

Relationship Marketing
The name of a strategy that build long-term partnerships with customers, both individuals and firms.

Relationship Marketing
Who are your customers

What do customers value

What do they want to buy

Requirements for Building Relationships

How do they prefer to interact

Building Long-Term Relationships

Customer-oriented personnel Effective training programs Empowered employees

Teamwork

Analysis Of Competition
Who are your competitors?

What are their strengths and weaknesses?

What have been their strategies? How are they likely to respond to your Marketing plan?

Marketing Management Philosophies

Production

Product Concept
Sales

Marketing

Competing Philosophies

Customer Concept Societal Marketing Holistic Marketing

Marketing Concept has evolved over many stages

1. 2. 3. Production concept: It holds that consumers will prefer products that are widely available and inexpensive Product concept: Consumers will favor those products that offer the most quality, performance or innovating features Selling concept: Consumers do not buy enough, so firms must put in extra efforts to sell products.

4. Marketing concept: sense the market and respond with offerings consists of both reactive and proactive market orientation. Instead of hunting marketing is gardening. The job is not to find the right customer for your product, But the right product for your customers i.e. Create, deliver & communicate superior value to your chosen target market.

5. Customer Concept: Focus is on individual customer, his

needs & values and on one to one marketing. The end result is profitable growth through capturing customer, share, loyalty and lifetime value.

6. Societal Marketing Concept: Enhances the customer & societys well being. This calls upon marketer to build social & ethical considerations into their marketing practices.
7. Holistic marketing concept: Includes dimensions of internal marketing, development of integrated marketing programs that cover the 4Ps, relationship marketing which covers customers, channel and partners and socially responsible marketing that covers ethics, environment, legal and community issues.

Marketing Management Philosophies

Orientation
Production

Key Ideas
Focus on efficiency of internal operations Focus on aggressive sales techniques and believe that high sales result in high profits Focus on satisfying customer needs and wants while meeting objectives Focus on satisfying customer needs and wants while enhancing individual and societal well-being

Sales

Market

Societal

The Marketing Concept

The idea that the social and economic justification for an organizations existence is the satisfaction of customer wants and needs while meeting organizational objectives.

The Marketing Concept

Focuses on customer wants and needs to distinguish products from competition Integrates all organizations activities to satisfy customer wants and needs Achieves organizations long-term goals by satisfying customer wants and needs

The Marketing Concept

itself has evolved
1) Catering(supply) to the customer

2) Anticipating the customer

3) Leading the customer

What Changed in Marketing

Old Economy New Economy

Organize by product units Focus on profitable transactions Look primarily at financial scorecard Focus on shareholders Marketing does the marketing Build brands through advertising Focus on customer acquisition No customer satisfaction measurement Over-promise, under-deliver

Organize by customer segments Focus on customer lifetime value Look also at marketing scorecard Focus on stakeholders Everyone does the marketing Build brands through performance Focus on customer retention Measure customer satisfaction and retention rate Under-promise, over-deliver

Evolution of Business Models and the role of Marketing

Selling Product Production Marketing Societal Mktg

As business philosophy has evolved, so has the role of marketingcustomer satisfaction is now at the core of most successful corporations

Societal Marketing Orientation

Marketing that preserves or enhances an individuals and societys long-term best interests
Less toxic products More durable products Products with reusable

or recyclable materials

Sales vs. Market Orientations

Organizations Firms Business Focus For Whom? Primary Profit Goal? Maximum sales volume Tools to Achieve

Sales Inward Orientation

Selling Everybody goods and services

Primarily promotion

Outward Market Orientation

Satisfying wants and needs

Specific groups of people

Customer Coordinated satisfaction use of all marketing activities

 Why a product like radio declined and now once again emerging as an entertainment medium ????? Need for environmental analysis : Attempts to give an expensive insight to the current market conditions as well as of impact of external factors that are uncontrollable by the market. AUDIT OF ENVIRONMENTAL INFLUENCES ASSESSMENT OF THE NATURE OF THE ENVT. IDENTIFICATION OF THE KEY EXTERNAL FORCES IDENTICATION OF PRINCIPAL OPPORTUNITIRS & THREATS STRATEGIC POSITION

Marketing Environment

Nature of the Marketing Envt.

INTERNAL ENVT. (Controllable)
Value System Mission , Objectives, Strategy Management Structure & Nature Internal Power Relationships Human Resources Company Image & Brand Equity Miscellaneous Factors-physical assets, R&D, marketing resources financial factors.
EXTERNAL MICRO / TASK/ OPERATING ENVT

EXTERNAL ENVT. (Uncontrollable)

Suppliers Customers Competitors Marketing Intermediaries Financers etc.

MACRO / GENERAL / REMOTE ENVT.: More uncontrollable than the micro forces Political / Govt. Envt. Legal Envt. Demographic Socio / Cultural Technological Natural Global Envt.- WTO Principles, Treaties, Agreements etc.

The macro-environment

is the assessment of the external forces that act upon the firm and its customers, that create threats & opportunities

External Marketing Environment

External Environment is not controllable
Demographics Social Change
Ever-Changing Marketplace

Product Distribution Promotion Price

Physical / Natural

Economic Conditions

Competition

Target Market
Political & Legal Factors

Environmental Scanning

Technology

Factors Influencing Companys Marketing Strategy

Strategic Marketing

Strategic marketing management is concerned with how we will create value for the customer Asks two main questions
What is the organizations main activity at a particular time? Customer Value What are its primary goals and how will these be achieved? how will this value be delivered

Strategic Planning
Strategic Planning is the managerial process of creating and maintaining a fit between the organizations objectives and resources and the evolving market opportunities.
Also All

called Strategic Management Process be Formal or Informal

organizations have this

Can

The Strategic-Planning, Implementation, and Control Process

Business Strategic-Planning Process

External environment (Opportunity &

Threat analysis)

Business Mission

Goal Formulation

Internal Environment
(Strength/ Weakness analysis)

Strategy Formulation
Environmental Analysis Competitor Customer Supplier Regulatory Social/ Political Internal Analysis Technology Know-How Manufacturing Know-How Marketing Know-How Distribution Know-How Logistics Opportunities & Threats Strength & Weaknesses Identity Core Competencies

Identify opportunity

Fit internal Competencies with external opportunities

Firm Strategies

The Marketing Plan

written document that acts as a guidebook of marketing activities for the marketing manager

CONTENTS of MARKETING PLAN

Business Mission Statement Objectives

Situation Analysis (SWOT)

Marketing Strategy Target Market Strategy Marketing Mix

Positioning Product Promotion Price Place Distribution People Process

Implementation, Evaluation and Control

The Marketing Process

Business Mission Statement

Objectives
Situation or SWOT Analysis

Marketing Strategy
Target Market Strategy

Marketing Mix
Product Promotion Place/Distribution Price

Implementation Evaluation, Control

What Were the Drivers of This Change ?

Technology ? Government policy ? Other media substitutes ?

Why Market Leaders Suffered ?

HMT vs. Titan

HLL vs. Nirma

Bajaj vs. Honda Dot.com boom, then bust and now resurgence Market leadership today cannot be taken for granted.New and more efficient companies are able to upstage leaders in a much shorter period.

Achieving a Market Orientation

Obtain information about customers, competitors, and markets Examine the information from a total business perspective

Determine how to deliver superior customer value

Implement actions to provide value to customers

The Organizations Focus

Key Issues in Developing Competitive Advantage

Create Customer Value

Build Long-Term Relationships

Maintain Customer Satisfaction

Defining a Firms Business

Benefits instead of goods/services Ensures a customer focus Encourages innovation Stimulates an awareness of changes in customer preferences

Marketing Process Activities

Understand the organizations mission

Set marketing objectives

Gather, analyze, interpret SWOT information Develop a marketing strategy Implement the marketing strategy Design performance measures Evaluate marketing efforts--change if needed

Why Study Marketing?

Plays an important role in society Vital to business survival, profits and growth Offers career opportunities

Affects your life every day

Trends in Marketing
1. Mass customization: This addresses heterogeneity in markets. e.g. Jenson and Nicholson in paints Mercedes Benz choice of design of cars at factory on order using flexible manufacturing, JIT production JIT distribution, computer information systems Provision of super value / ecstasy Airline frequent flyers tied to hotel rentals/ auto rentals Wants become needs Todays power steering option- want is tomorrows need Increasing Brand Proliferation concept of power brands Trend towards relationship marketing. CRM. Customer building takes precedence over classical marketing Rise of Competition e.g. HLL Pepsodent-Colgate; Computer Industry Rivalry

2. 3. 4. 5. 6.

7.

The importance of branding and other intangible assets such as corporate reputation, intellectual capital.

8. Requirement of both reactive and proactive market response mechanisms.

8.

Firms should make deliberate attempts to step out of short termism and look at long term

10. Societal Marketing more widely practiced.

11. How to convert niche products to larger markets e.g. mobile phones,
home computers etc.

12. Globalization

Marketing Management is Demand Management. Eight demand

States are possible Negative demand ex-convicts and alcoholics in factories for employment No Demand Indian College students in semi-urban areas have no demand for foreign language courses Latent Demand Strong latent demand for harmless cigarettes or fuel efficient cars Declining Demand for Yamaha in Pianos in 1980s Irregular Demand - Metro rail demand through the day, seasonality Full Demand Organizations sell to maximum capacity Overfull Demand Waiting list on Honda Scooters at the dealership Unwholesome Demand Hard Drugs

Retail Management
What is Retail The word retail is derived from French word retaillier which means to cut of a price or to break bulk. Retailing is consist of all the activities involved in the marketing of goods and services directly to the consumers for their personal, family or house hold use.