52 52 Marketing Management

8/3/2019 52 52 Marketing Management

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Definitions of marketingMainly focus on what it means to the orgn1. The chartered Institute of marketing

define marketing as management processresponsible for identifying, anticipating andsatisfying customer requirements profitably

2. P.Tailor defines marketing is not aboutproviding products or services it is essentialyabout providing changing benefits to thechanging needs and demans of the customer

3. Philip Kotler satisfying needs and wantsthrough an exchange process

Therefore marketing consists of strategies and tactis usedto identify,create and maintain satisfying relationship with the customers that result in value.


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In an era of seamless market ,the customer today has widerchoice. they are not stick on to only locally available brands .

Customers are given different modes to buy goods (teleshopping, internet, advt in the news paper.

Marketers are using every weapon to gain and retain thecustomers and their brand name in the market.e.g KBS in star plus. The news programme moved to starworld. influenced the Indian families to watch the 1 hourprogramme.rival to this Zee TV started programme cash

prize10 times more than KBS but failed.

A market is defined as any place where the seekers of aparticular good or service can meet with the buyer, wherethere is a potential for a transaction to take place.


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Marketing as a concept concept is a customer orientation , customer is the king of

market ( said by mahatma Gandhi).The organization have to bring the goods to the market tosatify their needs without any obligation.

The marketing concept involves :(and the best marketing concept1. customer orientation2. competition orientation3. the ability to respond to the environmentalchanges( chnages in consumer needs, environment, govt policy,technology.E.g Sony and Microsoft investing in futuristic technology


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Marketing (company) orientation towards the marketit involves six dimensional approach

1. consumer orientation

2. an integrated approach to exploiting market : integrate

all marketing mix, e.g is maggi noodles found success,whereas the Lipton with the same product failed.Marketing orientation requires preoccupation with thequality. e.g P&G,Godrej.J&J,Asian paints,Crompton andgrieves have passion for premium quality.

3.futerestic approach : money spent is not an expenditurebut investment for long term.


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4. Highly developed marketing systems : they are marketinformation system like customer feedback, complaintmanagements, customer relationship management (CRM).Helps enhancing their effectiveness.

5. Marketing culture in the organization : the strucure of orgn from top to bottom aimed at market orientation. E.ghospitality industries Windsor and Manner promised topay penalty

Incase customer not satisfied.

6. Speed in responding customers problems : fast relief and toll free communication. Eg LG, ONIDA,ICICI,JDFC

etc.


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Marketing and selling orientationSelling is sales promotion with the intention toclose the sales to increase the profit of the orgn

Marketing is integration of all marketing planconcentrating on customer and selling to maximize

the profit.e.g . of Ambassadors and premier Padmini withMaruti Suzuki in 1984 succeeded in customersatisfaction by increasing the efficiency of thecustomer.Successful marketers think about tomorrow and not just today.


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Difference between marketing and selling

Marketing selling focuses on customers needs sellers needsBegins before production after productionContinues after sale comes to an end with

saleBroader meaning narrow meaningProfit through customer satisfaction through salesLet the seller be aware buyer awareLong term prospective short term

prospectiveCustomer first then product product then

customer


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The essence of modern marketing1. Define the market area: find the right destination of

the business and plan the marketing strategies.three types of major markets are:

Consumer market, the industrial market, the service

market and the fast growing market( both domesticand industries products)

2. Research consumer needs and wants: differentiatebetween the consumer needs and wants,

Eg. A child want a coke and need milk a child want food and need food.

Which to produce more and which in limited quantity.


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3. Developing and redeveloping the product or service:refine and innovate the products where there is no end

for choice or supply for the demand by the consumer.

4. Selecting Training, Motivating and controlling

manpower: best person for the right job with theabove qualities to promote the product andorganization. e.g service, business, education,hospitality etc.

5. Developing sales approach and advertising support:these are wheels of marketing. The marketing issuccessful only when these wheels are moved or

taken into action.


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Marketing management ; is a importrant functional area of business management where planning, organizing,

directing, coordinating, motivating and controlling themarketing activities under customer orientedmarketing activities


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Customer satisfaction, value and retention.Creating value for customers is critical to every

companys success especially during times of austerity. In the old economy, the focus of most companies was internal with respect to their customers meaning they would view customers

based on what they had to sell.In the new economy, the focus of companies is

more external and is based on identifying customers needs and what they will buy.

Focusing on what customers need is key to growing top-line revenues, reducing operating expenses and growing the bottom

line.


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Customers buy value, therefore it follows that improving the customer experience

will increase customer loyalty or retention.The Value of Retaining a Customer

In Frederick Reichhelds book The Loyalty Effect: The Hidden Force Behind Growth,Profits and Lasting Value, his analysis showed

that the cost of acquiring new customers was five times the cost of servicing existing ones .


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Customers buy value therefore it follows thatimproving the customer experience

will increase customer loyalty or retention. Customer satisfaction and customer value are

distinctly different (although related)

Measures of satisfaction indicate howcustomers feel about products and

services, while measures of customer value are indicates of how customers will act.


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Customers buy value therefore it follows thatimproving the customer experience

will increase customer loyalty or retention. Customer satisfaction and customer value are

distinctly different (although related)

Measures of satisfaction indicate howcustomers feel about products and

services, while measures of customer value are indicates of how customers will act.


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Customers are value maximizers, within the boundsof search, cost and limited knoweldge, mobilityand income. They form an expectation of valueand act on it. whether or not the offer lives upto the value effects both satisfaction andrepurchase probability.

Customer perceived value; is the differencebetween the respective customers evaluation of all the benefits and all the costs of an offering

and the perceived alternatives.Total customer value is the percieved monetary

value of the bundle of economic, social,functional and psychological benefits customers


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Expect from a given market offer.Total customer cost is the bundle of costs

customer expect to incur in evaluating,obtaining, using and disposing of the givenmarket offering.

Example: caterpillar tractor vs Komatsu A buyer would like to buy the tractor for

rewsedential construction. Wants buy eithercaterpillar or komatsu.

He looks out for the reliability, durability,performance and its resale value

How can the slaesperson convince this buyer to

purchase caterpillar


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Caterpillar can succeed in selling to this buyer .Caterpillar can improve its offer in three ways.

1. Increase in total customer value by improving product,services, personnel and image benefit.2. It can reduce buyers non monetary cost by reducing the

time, energy and psychic cost.3. it can reduce the products monitory cost. suppose the buyer demand for the tractor is 2lakh

The cost of producing the tractor is 1,50,000.Caterpillars offer generates 50000 over the companys cost. Caterpillar need to charge a price between 150000-2lakh.If it charges 150000 it is a loss. Above 2lakh out of market

price.If it charges 190000. 10000 is the customer perceived value


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40000 profit to the company.

Retaining the customer from komatsu;The salespersons can give( convince) the assuredguarantee warrantee and brand image, serviceof caterpillar and the komatsu. After the sale .

comparison of price and total customer value andcost from both the companies.

Eg of Saturn car division of general Motors.Retaining its 40000 customers throughempolyee satisfaction by paying high salary andits customer loyalty and retention of 60%customers compared to others 40% in themarket.


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Making CVM Work

Data - use whats available; dont overdo it Simple segmentationKnow valuable customers

Leverage value knowledgeMatch channels to segment preferencesDo sale reps follow value targeting?

Does service maintain customerrelationships


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Marketing Information SystemThe need for real time marketing informationgreater than the past Is necessary.

The shifts are dramatic from local to national buyer behaviour, price, preferences of goods etc.To predict buyer behaviour marketer should turnto marketing research.Firms should organize and distribute acontinuous flow of information system to itsmarketing managers and to the outsiders.MIS consists of people, equipment and

procedures to gather, sort, analyze, evaluate and distribute needed, timely and accurate information to marketing decision makers .


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Marketing Information System

For marketers research is used not only for learningbut also for right decisions - such as introductionof new products replacing the old, entering newmarket for dift customers.

Characteristics of MIS

1. it is a continuous process2. It is a preventive and curative process in the

marketing.3. Allows best integration between various mangers4. Provides updated and accurate infn to the

management.


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Components of marketing information system1. Internal marketing information:The datas available within the orgn of various

depts like price product, inventorymachineries, labors etc. with the previousdata and time talent and good decisions.Ready to meet customer demands in time

Coordination of various resources at the end of The day.


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T he order to payment cycle is the core source forMIS which passes sales infn from dealers-customers- sales representatives- firm-outsidersfor the requirement of goods and changes in thegoods acdg to the customers.

Eg. Reliance fresh, big bazar, more etc start theirbusiness early morning with supply of goods.Database system necessary to combine various data

and to be ready for the next sales customersproblems, interests, preferred goods and givethem surprise offer through mail.

Data helps the decision makers to increase the sales


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2. Marketing Intelligence System:It is a external information of marketing

environment provided to mktg executives orcollected about developments in the market Eg.Census data, market news, trade papersmagazines etc.

company can take several steps to improve itsquality;Train and motivate the sales force to gather infn

from external source and to send it to the rightperson.Motivate the distributors to pass infn to and fromthe customers.


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Marketing Information SystemElements /features of marketing research: 1. Intensive study or systematic study 2. Scientific approach 3. Decision tool for management

1. Intensive study: there is a definite purpose the process are:Defining the problem

Determining the sources of information Collection of information Interpretation of data

Preperation of research report



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Marketing Information System2. Scintific approach: collect relevant, correct and

quality information which is lawful, clear reliable

and communicable.State the objective of study, investigating problems,findings and assumptions and conclusions.

3. Decision tool to management: out of the problem.Data, assumptions and findings the managementshould come to the quality and right decision

making conclusion and find best alternative.the objective of marketing research:

1. To know the buyer2.

To measure the result of promotional effort



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Marketing Information System3. Know consumers response4. Know market cost

5. Master the external forces6. Design and implement marketing control

Scope of marketing research1.Consumer research: deals with consumer and their

problems and the solutions.2. Product research: evaluating the product ,

modification, diversification , product innovationand performance.

3. Market research: study the structure of market-

market size, consumer capacity, government



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Marketing Information System4. Sales research: methods of sales, territories and

employee compensation.

5. Pricing research: study different market,customer, cost of mfg etc.6. Distribution research: requirement of channels of

distributions.7. Motivational research: identification of consumers

motives, attitudes, emotions etc ( LIC, SBI,Kellogs, Bajaj Alliance etc )

8. Advertising research: effective and suitable9. Policy research: blend the policies of various

departments for the market success.

Market segmentation


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Market segmentation

Understand the msrket segmentationKnow the meaning of target marketing

Understand how the companies position theirproduct in the marketUnderstand the meaning of productdifferentiation

Measning of market segmentation:It is the identification of portions of the market that

are different from one another. ( to satisfy theneeds of its potential customers.

Levels of segmentation: 1. segmenting the marketMass marketing where all the products are placed

for all kinds of buyers

Differentiate between sector and segment

Market segmentation


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Market segmentation

the marketer does not create the segments , but toidentify the segments which offers benefits over

segments.

The definitions market segmentations acdg to Philip

kotler It is sub dividing of market into homogeneous subsections of customers. Where any sections may be conceivably be selected as a market target to be reached with a distinct marketing mix.

Market segmentation


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Market segmentation

Patterns of market segmentations: Homogeneous preference where the consumers

almost has the same preferences (Pillsbury atta could gain more profit by

segmentation research)

Diffused preferences where the consumerspreferences are scattered and vary throughout.Clustered preferences where distinct preferences

exist as a sector in the segment.Egs: Barbie could reach the market segments by

customizing the product according to customerneeds in 1998( names,design, hair color)

Market segmentation


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Market segmentationLevis jeans for women made customized jeans to

fit women of different waists 1994.

In eye glasses Paris Miki a Japanese company firstused various designs in eye glasses.2. Niche marketing : niche is more narowly defined

group seeking a distinctive group of benefits.Marketer identifies niches dividing a segment into

sub segments.Eg; segment of people who only travel through air

again subdivided into teenagers who only travel in executive class.

The characteristics are- customers have distinct setof needs who will pay premium to the firm thatbest satisfies their needs


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3. Local marketing: local marketing are tailor tothe needs and wants of the local customers.

The companies favourising the local marketsdeny the national advertisements which failsto address the local needs.

4. Individual customer market: the level of segmentation leads to segments of one customized market or one to one market as

the individual preference changes from.Companies are now going for masscustomization of products on a mass basis.

Mass customization comes of age.


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Choice board- is a online customization of products of customer choice. (helps also inInternational business and MNC )It helps and facilitate customers to go forfurther improvement and buy the productHelps the marketer to retain the customersProvide real time market research.Reduce the cost of production and unwantedgoods.They have more market share and faithfulcustomers.

Market segmentation


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Market segmentation

Effective market segmentation requires: Characteristics within each segment should behomogeneousMeasurable: the size, purchasing power

Accessible effectively reachable and targetable

differentiable- where the customers can responddifferently.Segment should be mutually exclusive

Must be measurable and identifiable.

Market segmentation


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Market segmentation

Basis for segmentation in consumermarket:

1. Geographic segmentation: nations, state,regions, cities- product varies acdg tothese segments.

2. Demographic segmentation: divided intogroups such as age, family, family size,family life cycle, gender, income,education, religion etc.- this is required toestimate the size of the market and themedia that should be used.


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Eg: ivillage.com in Europe an online womennetwork reaped the benefits of gender

segmentation after initially seeking a broadermarket. Began to focus on the pregnantwomen (food such as health drink, soups) Theyexchanged the advice and suggestions.

Attracted the largest audience.It evolved into the leading womens online site in

Europe.

BOA in US started different types of investmentfor different age and gender and classesproviding them benefits. ICICI prudential,HDFC

Market segmentation


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Market segmentation

3. Psychographic segmentation: varies on thebasis of lifestyles- it is a behavioralconcept ( may or may not work)

personality or values- personality of individualconnected with the brand or product.

4. Behavioral segmentation: on the basis of knowledge, attitude, use, responsetowards the product, status and loyaltyetc.

The marketer can give the right knowledgeabout the product to these kinds of

customers to promote the product.

Market segmentation


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Market segmentation

Basis for segmentation in industrial markets Industrial customers fewer in number and purchase

larger quantities, decisions are taken by morepersons. Have more knowledge about theproduct.

the characteristics for segmentation are:1. Location: distance from the vendor to theindustries depends on the availibility and legalrestrictions.

2.Company type: business customers can beclassified according toCompany size

industry

Market segmentation


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Market segmentation

Decision making unitPurchase criteria

3. Behavioral characteristics:Usage rateBuying status: potentiality, regularity, payment

in time.Purchase procedure: negotiation, packingconditions, standards, acceptability and otherconditions - offer, discounts, offers etc.

Documents

52 52 Marketing Management