INTRODUCTION TO MARKETING

MANAGEMENT
 1-2

Introduction
 Marketing occupies an important position in
the organization of business unit.
 Any business is likely to be successful when a
strong marketing viewpoint or philosophy
permeates the thinking and guides the
decision and actions of everyone in the
business.
 A business exists only to serve people, and
marketing is the function that primarily
determines -
 1-3

Introduction
 What the product or services shall
be
 How it shall be presented, promoted
and distributed
 How it shall be priced.
 1-4

What is Marketing?
Classical Definitions ( Product Oriented View)
“ The performance of business activities that
directs the flow of goods and services from
producer to consumer or user”

“ Marketing consists of those efforts which

affect transfers in the ownership of goods
and services and provide for their physical
distribution”
 1-5

What is Marketing?
Modern Definitions ( Customer Oriented View)
“ Marketing is a social and managerial process by
which individuals and groups obtain what they need and
want through creating, offering, and freely exchanging
products and services of value with others”
According to American Marketing association-
“ Marketing is the process of planning and executing the
conception, pricing, promotion and distribution of
ideas and services to create exchanges that satisfy
individual and organizational goals”
 1-6

What is Marketing Management?

“ Marketing Management is the art and

science of choosing target market and
getting, keeping and growing customers
through creating, delivering and
communicating superior customer value”

“ Marketing Management is the marketing

concept in action”
 A brief history of
marketing
3 Areas
 Production
1945
Economies of scale. Simple
products Birth of the
mass consumer
market
 Sales 1950
Development of sales forces to Evolving
distinguish products in competitive distribution
channels
markets. Sold what companies
wanted to sell. 1960
 Marketing Increasing diversity of
media & technologies
Rapidly increasing competition…
the fight for customers.
 1-8

A brief history of marketing

1960s

The 4 Ps
 Product (goods, services, knowledge)
 Price
 Promotion
 Place
The dominant marketing template for the last 40
years
But...notice something curious….
Where is the customer mentioned?
 1-9

A brief history of marketing

1960s to present
 Massive rise in customer expectations
 Increasing competition
 Massive growth in advertising
 Growth in ‘direct’ marketing
 Much easier for customers to switch business
 Proliferation of channels, dictated increasingly by
customers

…a growing need for 2-way dialogue between business &

customers
 1-10

Development of marketing approaches

Transactional to Relationship Marketing:

Transactional Relationship

one-off relationship-building
investment in products investment in customers
market segmentation customer analysis
short-term profit long-term profit
 1-11

Evolution Of Marketing

Marketing Societal
Productio Product Selling
Concept MKTG concept
n Concept Concept
Concept

Late Early Early Mid 1990

1800 1900 1930 1950
 1-12

prefer
PP products that are widely available
pensive
RR
OO
of production – oreiented businesses
DD
ate on
UU achieving high production efficiency,
ts, and
CC mass distribution.
ctionTIT era can be divided into four phases
I
ce phase
OO
rderNNphase
duction
CC
for market phase
uction
OO for market phase
NN
CC
EE
PP
TT
 1-13

PP Consumers favor products that offer

RR the most
OO quality, performance, or innovative
DD
UU features.
CC  Managers in product oriented
TT organizations focus their energy on
CC making superior products and
OO improving them over time.
NN  To improve quality and innovation
CC
EE companies gave importance to product
PP engineering.
TT  Some times the product concept
leads to marketing myopia.
 1-14

 The selling concept holds that

SS
EE consumers and businesses, if left alone,
LL will ordinarily not buy enough of the
LL organizational products.
II  Consumers will buy products only if
NN the company aggressively promotes/sells
GG
these products.
CC  The selling concept is practiced most
OO aggressively with unsought goods that
NN buyers normally do not think of buying
CC such as insurance, encyclopedias etc.
EE  forms practice the selling concept
PP
TT when they have over capacity.
 It gives more importance to seller
needs
 1-15

Starting
point Focus Means Ends

Existing Selling and Profits through

Factory products promotion sales volume

The selling concept

 1-16

MM  Focuses on needs/ wants of target

AA
RR markets & delivering value better
KK than competitors.
EE  The Marketing concept holds that the
TT key to achieving its organizational
II
NN
goals consists of the company being
GG more effective than competitors in
creating delivering and communicating
CC superior customer value to its chosen
OO target markets.
NN  The Marketing concept rests on four
CC
EE pillars
PP  Target Market
TT  Customer needs
Integrated marketing
 1-17

Starting
point Focus Means Ends

Customer Integrated Profits through

Market Needs Marketing Customer
satisfaction

The Marketing concept

 1-18

Selling V/S Marketing Concept

Starting
point Focus Means Ends

Existing Selling and Profits through

Factory products promotion sales volume

(a) The selling concept

Customer Integrated Profits through

Market needs marketing customer
satisfaction

(b) The marketing concept

 1-19

Selling V/S Marketing Concept

 Focuses on the needs  Focuses on the needs
of seller of buyer
 Profit through sales  Profit through
volume customer satisfaction
 Planning is short  Planning is long term
term oriented oriented
 Marketer first makes  Marketer first
the product and then determines the needs
figures out how to and wants of the
sell it.
customers and then
delivers the product
to satisfy those
needs and wants.
 1-20

Selling V/S Marketing Concept

 Importance to  Importance integrated
aggressive selling marketing
 1-21

CC  Under Customer concept companies are

OO shaping separate offers, services and
SS messages to individual customers.
TT
OO
 Companies achieve profitable growth
MM through capturing a larger share of
EE each customers expenditures by
RR building high customers loyalty and
focusing on customer lifetime value
CC Starting
OO point Focus Means Ends
NN Customer Profits through
CC Individual Needs & One to one Customer share,
Customers Value Marketing Loyalty
EE
PP
TT The Customer Concept
 1-22

SS
OO  The Societal Marketing concept holds
CC that organization’s task is to
II
EE determine the needs , wants and
TT interests of target markets and to
AA
LL deliver the desired satisfaction more
effectively and efficiently than
MM
KK competitors in way that preserve the
TT customers and society’s well being.
GG
 It calls upon marketers to build
CC social and ethical considerations into
OO
NN their marketing practices.
CC  There should be balance between
EE
PP company profits, customer
TT satisfaction, and public interest.
 1-23

Societal Marketing Concept

Society
(Human Welfare)

Societal
Marketing
Concept

Consumers Company
(Want Satisfaction) (Profits)
 1-24

Core Concepts of Marketing

Core Concepts  Need

 State of felt deprivation
 Needs, wants, and demands
 Example: Need food
 Marketing offers: including
products, services and  Wants
experiences  The form of needs as shaped
 Value and satisfaction by culture and the individual
 Exchange, transactions and  Demands
relationships
 Wants which are backed by
 Markets
buying power
 1-25

Core concepts of Marketing

Core Concepts  Marketing offer

 Combination of
 Needs, wants, and demands
products, services,
 Marketing offers: including information or
products, services and experiences that satisfy
experiences
a need or want
 Value and satisfaction  Offer may include
 Exchange, transactions and services, activities,
relationships people, places,
 Markets information or ideas
 1-26

Core concepts of Marketing

Core Concepts  Value

 Customers form
 Needs, wants, and demands
expectations regarding value
 Marketing offers: including
products, services and
 Marketers must deliver
experiences value to consumers
 Value and satisfaction  Satisfaction
 Exchange, transactions and  A satisfied customer will
relationships buy again and tell others
 Markets about their good experience
 1-27

Core Concepts of Marketing

Core Concepts  Exchange

 The act of obtaining a
 Needs, wants, and demands
desired object from
 Marketing offers: including someone by offering
products, services and something in return
experiences
 One exchange is not the
 Value and satisfaction
goal, relationships with
 Exchange, transactions and several exchanges are the
relationships goal
 Markets  Relationships are built
through delivering value and
satisfaction
 1-28

Core concepts of Marketing

Core Concepts  Market

 Set of actual and potential
 Needs, wants, and demands
buyers of a product
 Marketing offers: including
products, services and
 Marketers seek buyers that
experiences are profitable
 Value and satisfaction
 Exchange, transactions and
relationships
 Markets
 1-29

Core Concepts of Marketing

Core Concepts  Distinctive category of

 Target Market market which includes
 Marketing place, Marketing market for company’s
Space and Meta Market products and services
 Segmentation
 Marketers Prospects
 Relationship Marketing
and Networks
 1-30

Core concepts of Marketing

Core Concepts  Market place

 Market place is physical. As one
 Target Market goes shopping in a store
 Market Place, Market Space and  Market Space
Meta Market
 Market space is digital. As one
 Segmentation goes shopping on internet
 Marketers Prospects
 Meta Market
 Relationship Marketing and
Networks  Meta market is a cluster of
complementary product and
services that are closely related in
the minds of consumers but are
spread across a a diverse set of
industries.
 1-31

Core concepts of Marketing

Core Concepts  Segmentation

 Grouping of consumers
 Needs, wants, and demands according to such
 Market place, Market space characteristics as income,
and Meta market age, degree of urbanization,
 Segmentation race, or education
 Marketers Prospects
 Relationship Marketing and
Networks
 1-32

Core Concepts of Marketing

Core Concepts  Marketer

 Target Market  Marketer is someone
 Market Place, market Space seeking response.
and Meta Market  Prospect
 Segmentation  Prospect is someone
 Marketers and Prospects
giving response.
 Relationship marketing and
Network
 1-33

Core concepts of Marketing

Core Concepts  Relationship Marketing

 Building mutually satisfying
 Target Market long-term relations with key
parties- customers, supplies,
 Market Place, market Space distributors in order to earn and
and Meta Market retain their business
 Segmentation  Marketing Network
 Marketing network consists of
 Marketers and Prospects the company and its supporting
 Relationship Marketing and stakeholders with whom it has
Network built mutually profitable
business relationship
 1-34

Core Concepts of Marketing

Core Concepts  Sets of Inter dependent

 Marketing Channels organizations involved
 Supply Chain in the process of making
 Marketing Mix a product or service
 Competition available for use or
consumption
 1-35

Core concepts of Marketing

Core Concepts  Supply Chain

 Marketing Channel
 Longer channel stretching
from raw materials to
 Supply Chain components to final
 Marketing Mix products that are carried to
 Competition final buyers
 1-36

Core concepts of Marketing

Core Concepts  Marketing Mix

 MM is the set of marketing
 Marketing Channels tools, the firm uses to
pursue its marketing
 Supply Chain objectives in the target
 Marketing Mix market.
Product
 Competition
Price Promotion

Place (Distribution)
 1-37

Core Concepts of Marketing

Core Concepts  Competition

 Rivalry to attract
 Marketing Channels
customers discretionary
 Supply Chain income
 Marketing Mix  It includes
 Competition  Generic Competition
 Brand Competition
 Form Competition
 Industry Competition
 1-38

Strategic Marketing Planning

 The process of establishing an organizational
mission and formulating goals, corporate
strategy, marketing objectives, marketing
strategy, and a marketing plan
 1-39

Strategic-Planning Implementation and

Control Process

Planning Implementing Controlling

Measuring Results
Corporate Planning

Division Planning Organizing

Diagnosing results
Business Planning
Implementing
Taking Corrective
Product Planning
Action
 1-40

Corporate and Division Strategic

Planning
Defining the Corporate Mission
 1-41

Corporate and Division Strategic

Planning
Defining the Corporate Mission

Establishing Strategic
Business Unit
 1-42

Corporate and Division Strategic

Planning
Defining the Corporate Mission

Establishing Strategic
Business Unit

Planning new businesses,

downsizing older Business
 1-43

Defining the Corporate Mission

 Mission statements define which competitive

scopes the company will operate in
 Industry scope
 Products and applications scope

 Competence scope

 Market-segment scope

 Geographical scope
 1-44

Establishing Strategic Business Units

(SBUs)
 Three characteristics of SBUs
 Single business or collection of related
businesses that can be planned for separately
 Has its own set of competitors
 Has a manager who is responsible for strategic
planning and profit
 1-45

Establishing Strategic Business Units

(SBUs)
 Each SBU is depending on its parent
company's decisions regarding the allocation
of financial resources.
 There are two best known techniques of
portfolio analysis namely
 Boston Consulting Group Matrix [Growth
share matrix]
 General Electric Model
 1-46

Boston Consulting Group’s

Growth-Share Matrix
High
Product-Market
Growth (%)

Low
High Relative Low
Market Share
 1-47

Boston Consulting Group’s

Growth-Share Matrix
High STARS
Product-Market
Growth (%)

Low
High Relative Low
Market Share
 1-48

Boston Consulting Group’s

Growth-Share Matrix
High STARS Question
Mark
Product-Market
Growth (%)

Low
High Relative Low
Market Share
 1-49

Boston Consulting Group’s

Growth-Share Matrix
High STARS Question
Mark
Product-Market
Growth (%)

CASH COWS

Low
High Relative Low
Market Share
 1-50

Boston Consulting Group’s

Growth-Share Matrix
High STARS Question
Mark
Product-Market
Growth (%)

CASH COWS DOGS

Low
High Relative Low
Market Share
 1-51

Boston Consulting Group’s

Growth-Share Matrix
 1-52

Boston Consulting Group portfolio analysis

for Kodak,

Kodak digital Kodak digital

camera photo printer

Kodak film sales: US, Kodak self-

Canada, & W. Europe service kiosk
1-53
 1-54

Planning New Businesses, Downsizing

older Businesses
 Intensive growth
 Integrative growth
 Diversification growth
 Downsizing older businesses
 1-55

Intensive Growth Strategies

PRODUCT
Present New

Present
MARKET

New
 1-56

Intensive Growth Strategies

PRODUCT
Present New

Market
Present
MARKET

Penetration

New
 1-57

Intensive Growth Strategies

PRODUCT
Present New

Market Product
Present
MARKET

Penetration Development

New
 1-58

Intensive Growth Strategies

PRODUCT
Present New

Market Product
Present
MARKET

Penetration Development

Market
New
Development
 1-59

Intensive Growth Strategies

PRODUCT
Present New

Market Product
Present
MARKET

Penetration Development

Market
New Diversification
Development
 1-60

Integrative Growth Strategy

 Identifying opportunities to build or acquire
businesses that are related to current business.
 1-61

Diversification Growth Strategy

 Identifying opportunities to add attractive
business that are unrelated to current
businesses.
 1-62

Downsizing Older Business

 1-63

Business Unit Strategic Planning

Internal
Environment
analysis
Feedback
Business Goal Strategy Programme Imlement-
And
Mission Formulation Formulation Formulation -ation
Control
External
Environment
Analysis
 1-64

Marketing Planning Process

“ The marketing plan is a set of marketing guide
lines prepared by the top management of a
business firm. It spells out the goods or
objectives that company wants to reach with in
a certain period of time and the methods by
which the company intends to reach these goals”
“ Marketing planning process consists of analyzing
marketing opportunities, researching and
selecting target markets, designing strategies,
planning marketing programmes, and organizing,
implementing and controlling the marketing
effort.”
 1-65

Marketing Planning Process

Analyzing Marketing
Opportunities
 1-66

Marketing Planning Process

Analyzing Marketing
Opportunities

Developing Marketing
Strategies
 1-67

Marketing Planning Process

Analyzing Marketing
Opportunities

Developing Marketing
Strategies
Planning Marketing
Programmes
 1-68

Marketing Planning Process

Analyzing Marketing
Opportunities
Developing Marketing
Strategies
Planning Marketing
Programmes
Managing The Marketing
Effort
 1-69

Contents Of The Marketing Plan

 I. Table of contents
 II. Executive summary
 III. Introduction
 IV. Situational analysis-Internal and external
 V. Problems and opportunities
 VI. Marketing objectives and goals
 VII. Marketing strategies, tactics and programs
 VIII. Budgets
 IX. Implementation and control
 Evaluation
 Schedules of completion
 X. Contingencies of completion
 XI. Updating plans
 1-70

Marketing Organization

“ The Marketing Organization provides

the vehicle for making decisions on
products, marketing channels,
physical distribution, promotion
and prices”
 1-71

Marketing Organization Structures

 Function Oriented – Marketing
Organization
 Product Oriented-Marketing Organization
 Customer Oriented – Marketing
Organization
 Geographical oriented – Marketing
Organization
 Combined base
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Function Oriented –
Marketing Organization
Marketing
Manager

Marketing
Advertising Dept Research Sales Department Sales Promotion Dept
Dept.

Sales Sales
Supervisor Supervisor

Salesman
Salesman
 1-73

Product Oriented-Marketing
Organization
Marketing
Manager

Sales Manager Sales Manager Sales Manager Sales Manager

Product A Product B Product C Product D

Sales Sales
Supervisor Supervisor

Salesman
Salesman
 1-74

Customer Oriented –
Marketing Organization
Marketing
Manager

Sales Manager
Sales Manager Sales Manager Sales Manager
Wholesale
Direct Customer Industrial Customer Overseas Customer
Customer

Sales Sales
Supervisor Supervisor

Salesman
Salesman
 1-75

Geographical Oriented –
Marketing Organization
Marketing
Manager

Regional Sales Regional Sales Regional Sales Regional Sales

Manager (East) Manager (West) Manager (South) Manager North)

Sales Sales
Supervisor Supervisor

Salesman
Salesman
 1-76

Combined Marketing
Organization
Marketing
Manager

Marketing
Advertising Dept Research Sales Department Sales Promotion Dept
Dept.

Deputy Regional
Sales Manager Sales Manager
Sales Manger
Product A Product B
( Industrial Sector)

Sales Supervisor
Regional Sales Regional Sales
Manger South Manger South

Salesman
 1-77

Marketing Environment
 ME refers to external and internal
factors and forces that affect the
company’s ability to develop and
maintain successful relationships
with its target customers”
 1-78

Factors Affecting Marketing

Environment
 1-79

Importance of Marketing Management

 Helps to develop and maintain successful

transactions with the target customers.
 Helps to identify the opportunities and treats.
 Helps to identify the strengths and weaknesses of
the organization.
 Helpful to be alert in the market
 Helps to develop strategies that are helpful to
cope up with environmental changes.
 1-80

Major Drivers of the Modern

Marketing
 Digitization and Connectivity
 Disintermediation and
Reintermediation
 Customization and
Customerization
 Industry Convergence
 1-81

How Business Practices are Changing

 Organize by product units to organize

by customer segments
 Shift focus from profitable
transactions to customer lifetime
value
 Shift focus from financial scorecard
to also focusing on the marketing
scorecard
 Shift focus from shareholders to
stakeholders
 1-82

How Business Practices are Changing

 Everyone does the marketing

 Build brands through performance,
not just advertising
 Customer retention rather
than customer acquisition
 From none to in-depth customer
satisfaction measurement
 From over-promise, under-deliver to
under-promise, over-deliver
 1-83

Emerging Trends in Indian Market

 The world of today is changing fast, India
is no exception.
 Specially after the opening up of the
economy, the pace of change that India and
its people are experiencing in their
socio-cultural aspects is really
surprising.
 India, with its wide diversity, offers a
fascinating scope to study the host of
changes which have brought significant
changes in Indian Market
 1-84

1. The Demographic Picture

Year Population (In Million)

1951 361
1961 439
1971 548
1981 684
1991 844
2001 1000
 1-85

2. The Growing Size of the Urban

Market
Year Urbanization ( %)
1951 17.3
1961 18.3
1971 19.9
1981 23.7
1991 25.7
2001
 1-86

3. More Literate Buyers

Literacy Rate in India ( 1951-2001)

Year Total (%) Male (%) Female (%)
1951 17.33 27.16 8.86
1961 28.31 40.40 15.34
1971 34.45 45.95 21.97
1981 45.56 56.37 27.75
1991 52.11 63.86 39.42
2001
 1-87

4. The Market opportunity by Conventional

Measure of Income Distribution
Changing pattern of income distribution (% of Population
Income 1985-86 1987-88 1990-91
Group
Lower 65 61 56
Middle 25 28 31
Higher 10 11 13
 1-88

5. Marketing Opportunity of the New

Segments
 The Housewife Segment
 New Generation Segment
 The Single and Independent Working
Women
 The working Couple
 The Teenagers
 The Kid
 The Baby Segment
 The Senior Citizen
 1-89

6. Growing Markets for popular and

Premium Products
 It is well Known that the middle
income and high income category have
grown at a phenomenal rate in the last
decade.
 The market has witnessed all round
growth especially the demand for the
popular and prestigious products.
 The rising affluence among the upper
middle and high income people in
India has created a vast opportunity
for premium brands.
 1-90

7. Retail Boom
 Beginning with 5,88,000 retail
outlets in the urban areas in early
1980, the figure has grown to
8,90,000 in 1996.
 1-91

8. Packaging Revolution
9. Explosion of the Media
10. Direct Mail and Home shopping
11. Tendency to buy on Credit
12. Growing Interest on Rural Market
13. The Emergence of the Service Sector