Marketing management NOTES

marketing management notes

Unit 1 Basic Concepts of Marketing
Marketing is the business function that identifies unfulfilled needs and wants, defines and
measures their magnitude, determines which target market the organisation can best serve,
decides on the appropriate products, pricing and promotion and distribution programs to serve
these markets to develop a market orientation. From a societal point of view, marketing is the
link between a societys material requirements and its economic patterns of response. Marketing
satisfy these needs and wants through exchange processes and building long-term relationships.
It is the process of communicating the value of a product or service through positioning to
customers. Marketing can be looked at as an organisational function and a set of processes for
creating, delivering and communicating value to customers, and managing customer
relationships in ways that benefit the organisation and its shareholders. Marketing is the science
of choosing target markets through market analysis and market segmentation, as well as
understanding consumer buying behavior and providing superior customer value.
Unit 2 The Marketing Environment
There are many variables that operate within an organisations environment that have a direct or
indirect influence on its strategy. A successful organisation is one which understands and can
anticipate and take advantage of changes within their environment.
An organisations operating environment can be analyzed by looking at:
External forces (those factors that an organisation has no control over),
Internal forces (factors that an organisation has direct control over) An organisations macro
environment consists of external factors in the organisations surroundings that have the potential
to affect the organisations strategies. Unless marketing managers understand the external
environment, the firm cannot intelligently plan for the future. Many organisations put together
teams of specialists to continuously put collect and evaluate information, a process known as
environmental scanning. This task usually falls upon marketers, as, more than any other group
within the organisation; marketing managers need to be able to track trends and opportunities.
Unit 3 Market-Oriented Strategic Planning
The fortunes of all companies, depends in a large measure on their ability to analyse their
environmental and competitive context and make sound strategic decisions. This book is
intended to provide you with the concepts, methods and procedures by which the quality of

strategic decision-making can be improved; this unit introduces you to many of these concepts,
which you will understand better as you progress through the book.
Unit 4 Competition and Competitive Strategy
The fundamental purpose of a business unit is to create value for its customers and capture
value for its owners. A firms understanding of the structure of an industry and the competition
within will reflect in its business strategies. Competitive forces within the industry determine the
appropriateness of a firms strategies and its ability to capture value for itself as competitive
strategy is essentially a search for a viable position in the industry. Many companies fail to
establish a viable position, simply because they fail to truly understand the competition within
their industries and performance factors critical to success, in a given industry. Consequently,
their competitive strategy is inadequate to achieving their strategic goals.
Unit 5 Market Research and Demand Forecasting
The emphasis in marketing is on the identification and satisfaction of customer needs. In order to
determine customer needs and to implement marketing strategies and programs aimed at
satisfying those needs, marketing managers need information, They need information about
customers, competitors and other forces in the market place. In the recent years, many factors
have increased the need for more detailed information. As firms have become national and
international in scope, the need for information on larger and more distant markets has increased.
As consumers have become more sophisticated and knowledgeable, managers need better
information on how consumers will respond to products and their marketing programs. As
competition becomes more intense, managers need information on the effectiveness of their
marketing tools. The task of market research is to assess the information needs and provide
management with relevant, accurate, reliable valid and current information. Todays competitive
marketing environment and ever increasing costs attributed to poor decision making, require that
marketing research provide sound information. Sound decisions are not based on gut feeling,
intuition or even pure judgment; they are based facts and sound information.
Unit 6 Consumer Behavior
The aim of marketing is to meet the needs of target markets profitably. Consumer behavior
studies how consumers search for, purchase, use, evaluate and dispose of products and services
that they expect will satisfy their needs. Consumer behavior focuses on how individuals make
decisions to spend available resources (time, money and effort) on consumption related products
and services. Understanding consumers and knowing why consumers do what they do is very
complex. Customers may say one thing and mean another. They may not be aware of their own
deepest motivations and may respond to influences in very impulsive ways. To understand
consumers, marketing theorists have borrowed concepts from other scientific disciplines such as
psychology (study of an individual), sociology (study of groups), social psychology (study of
how an individual operates in groups), anthropology (influence of society on groups) and
economics to form a new marketing discipline known as consumer behavior. The field of
consumer research has emerged as an important area of marketing research, to enable marketers
to predict how consumers will react to messages and to understand why they make the purchase
decisions they do.

Unit 7 Market Segmentation and Selecting Target Markets

One of the earliest proponents of market segmentation was Alfred P Sloan, President and
chairman of General Motors. He inherited a company that was built through takeovers of small
car companies and hence produced many ill-sorted models unguided by clear business
objectives. Sloan re-organised the company and in 1924, articulated the companys product
strategy as a car for every purse and purpose. In the meanwhile, Ford continued to produce the
Model T until 1927, as the market continued to grow through mass production and mass
marketing, guided by Henry Fords philosophy, consumers can buy any color, so long as it is
black. GM, on the other hand, offered a variety of affordable mass produced models from the
autocratic Cadillac to the proletarian Chevrolet and took over a large part of Fords market share.
Long before the birth of the marketing concept, Alfred Sloan realized that all customers are not
created equal and are therefore not alike.
Unit 8 Positioning
The idea of positioning a product or service emerged in the early 1970s when Al Ries and Jack
Trout, advertising executives, wrote a series of articles called The Positioning Era for
Advertising Age. In their 1981 book, Positioning: The Battle for your Mind, Ries and Trout
describe how positioning is used as a communication tool to reach target customers in a crowded
market place. Not long thereafter, the advertising industry the world over began to develop
positioning slogans for their clients and very soon positioning became a key aspect of
marketing communications. Positioning: The Battle for your Mind (recommended reading),
has become a classic in the field of marketing. The concept of positioning has evolved from
being just a communication tool to being a very important marketing concept in an era of hyper
competition.
Unit 9 Product Concepts
We have learnt so far that marketing strategy is built on the concept of segmentation
targeting positioning. A company discovers different needs in the marketplace, targets those
needs that it can satisfy in a superior way and then positions its offering so that the target market
recognises the companys distinctive offering as most appropriate to satisfy its needs. Once a
company has carefully segmented the market, chosen its target customers, identified their needs
and determined its market positioning, the company is in a better position to develop a product.
Marketers play a key role in planning and developing new products and working with R&D
departments at every stage of development. Every company must develop new products, as new
products shape the future of the company. Continuous improvements and replacements of
products must be done to ensure future revenue streams. Boston Consulting Group recently
surveyed 940 senior managers in the US; increasing top-line revenues through innovations was
rated as the key managerial challenge.
Unit 10 Distribution Channels and Marketing of Services
During the past three decades, vast progress has been made in our understanding of the design
and management of distribution channels. Markets have evolved and matured and technological

developments have made distribution a strategic competitive tool, as against a mere process of
marketing which was the case in the past. In India, distribution channels have evolved in three
distinct phases. The first phase spanning the 1950s to early 1960s was when the multinationals
and a few Indian companies concentrated their efforts on reaching out to urban markets. Trade
channels performed limited functions of merely redistributing the merchandise to retailers. Their
own view of their business was limited to that of being merely re sellers.
Unit 11 Strategic Pricing
Pricing as a management function has undergone a vast revolution over the years. What was
largely seen as decision taken by finance and accounting, using cost-plus pricing procedures
because they were seen as financially prudent, pricing has assumed a key strategic role today.
Attitudes towards pricing changed radically when marketers encountered the challenges of the
1980s and 1990s. Fierce competition, erosion of brand loyalty and pricing power, e-competitors,
guerrilla brands and the shift in the balance of power between manufacturers and distribution
channels brought a new approach to pricing. Marketing managers realized that blindly chasing
market share and customer satisfaction often resulted in margin erosion and ultimately erosion of
shareholder value. Managers were jolted into realizing that the ultimate purpose of a business is
to create value for the shareholder or owner of the business through the process of creating value
for the customer.
Unit 12 Integrated Marketing Communications (IMC)
Marketing communications are the mcans by which firms attempt to inform, persuade and
remind its target markets, using both direct and indirect means, about the brands they sell as well
as about the company as a whole. Although communications directed to target markets are the
mainstay of the communications programmed, firms need to communicate with all its
stakeholders (customers, shareholders, suppliers, channel partners, customers, employees and
government agencies). Firms develop specific communications plans directed to the
stakeholders.
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