Module 1 MARKETING MANAGEMENT

8/8/2019 Module 1 MARKETING MANAGEMENT

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MARKETING

MANAGEMENT

MODULE -1


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Question:

When I say Marketing,

what comes to your find first ???


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Correct answer:

Consumer satisfaction.


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Why is the subject Marketing important

for this course? The essence of any managerial process is to achieve

organisational objectives by satisfying the needs of thecustomer

Marketing is the specialised tool by which the customer andhis needs are first of all identified and the necessarymanagerial functions are adopted to satisfy the needs .

Customer behaviour,objectives and customer relationshipmanagement are critical for any organisation whether they arein the supply of products or services

Most systems and operational management techniques areassociated with management of marketing or salesmanagement.


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Importance of marketing in Modern

Business Marketing was once only a Company department performing a staff function Marketing is now the driving force of all modern organisations and business. Marketing preceeds all management activities of a new organisation or in the

introduction of a new product or market. With the advent of the Internet and the resulting information revolution

,marketing has become the most important function in customer relationshipmanagement.Most Companies survive and grow by using the existingcustomers instead of trying to find new ones.

Internet has made the customers very aware of the competition and havemade them extremely price sensitive.Marketing has to be very Sophisticatedto meet this factor head-on.


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IMPORTANCE OF MARKETING IN THE

GLOBAL ECONOMY

Nations depend upon marketing to sell their raw materials

and industrial output to other countries

After globalization most of the firms have realized thatprofit and growth objectives can be achieved by

combining domestic and international marketing.


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What Can Be Marketed?

Goods

Services

Experiences

Events

Persons

Places

Properties Organizations

Information

Ideas


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Who Markets

A Marketer is someone who seeks response (attention, a

purchase, vote etc.) from other party called the prospect.


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Popular definitions of Marketing 1)Marketing is the task of creating, promoting and delivering

goods and services to consumers and businesses Philip Kotler.

Philip Kotler is regarded as the father of Marketing, he adds It isnot enough to satisfy customers, you should delight them.

2)Marketing is the sum total of all business activities which dealwith the movement of goods and services from producers toultimate users". Hector Lazo,Head of marketing ,University ofNew York.

3)Marketing is the act of identifying and meeting human and socialneeds.


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CONTINUED 4)Marketing is the art and science of meeting needs in a profitable

manner.

5)Social definition: Marketing is a societal process by which individuals andgroups obtain what they need and want through creating,offering and freelyexchanging products and services of value ,with others.

6)Definition by AMA< Marketing Management is the process of planning andexecution of the conception,pricing,promotion and distribution of ideas,goods andservices to create exchanges that satisfy individual and organisational goals.


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A good definition

Marketing management is the art and science of choosing

target markets and getting ,keeping and growing the

customers through creation ,delivering and

communication of superior customer value.


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IMPORTANCE OF MARKETING IN

SOCIOECONOMIC SYSTEM Marketing creates utilities:

(Something that makes a product capable of satisfyingwants is its utility)

Form Utility is associated with physical or chemical

changes that make a product more valuable. ( Moreassociated with production not marketing)

Place utilitymakes a product accessible to potentialcustomers where they want it.

Time utilitymakes a product available when theywant it.


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IMPORTANCE OF MARKETING IN

ORGANIZATIONS

The basic reason for firms existence iscustomers want satisfaction. Marketing helps

the firm to identify the customer needs andwants. Marketing is the only revenue-producing

activity for the firm. Marketing has become increasingly important

for service firms and nonprofit organizations.


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IMPORTANCE OF MARKETING IN YOUR

LIFE

Marketing is a large part of your daily life.

Consumers are exposed to number of

commercial messages a day. Studying marketing will make you a better-

informed customer.

Marketing probably relates -- directly or

indirectly -- to your career aspirations.


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Evolution of Marketing

The concept of Marketing emerged after Industrial Revolution

(latter part of 1800)

This concept has evolved through three successive stages:

Production era

Sales Era

Marketing Era


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Production Era

Manufacturers in this stage focused on increasing out put

while assuming that customers would seek out and buy

reasonably priced and well made product

Executives with back ground in manufacturing and

engineering shaped the firms strategy

More emphasis was on efficiency and cost control


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Sales Era

This concept evolved in early 1930s

During this stage managers realized that to sell the product afirm want to make some promotional activities

This era was characterized by aggressive selling and usage of

unethical practices to sell the product.


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Marketing Era

This era began in the mid of 1950s

Companies identified the importance of customer needs andwants

Marketing activities were directed towards the twin goal

Customer orientation and profitability.


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Some industries and organizations remain at the

production-orientation stage.

PRODUCTION ORIENTATION

PRODUCTION ORIENTATION SALES ORIENTATION

Other industries and organizations have progressed only to the

sales-orientation stage.

Many industries and organizations have progressed to the

marketing-orientation stage.

PRODUCTION

ORIENTATION

SALES

ORIENTATION

MARKETING

ORIENTATION

Late 1800s Early 1930s Mid-1950s 1990s


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Marketing Management

Philosophies/Concepts/ Orientations

Marketing Management

Philosophies/Concepts/ Orientations

Production ConceptProduction Concept

Product ConceptProduct Concept

Selling ConceptSelling Concept

Marketing ConceptMarketing Concept

Societal Marketing ConceptSocietal Marketing Concept

Consumers favor products that areavailable and highly affordable

Improve production and distribution

Consumers favor products that offerthe most quality, performance, andinnovative features

Consumers will buy products only ifthe company promotes/ sells these

product

Focuses on needs/ wants of target

markets & delivering satisfactionbetter than competitors

Focuses on needs/ wants of targetmarkets & delivering superior value

Societys well-being


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Production concept

Believes that consumers will prefer products that are readilyavailable at reasonable prices.

Improvement in production and distribution efficiency was themain focus for managements under this concept

The production concept, though useful in some situations,

resulted in marketing myopia i.e., this concept focused toonarrowly on their own activities and lose sight of the realobjectives of customers needs satisfaction.


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Product concept

This concept believes that consumers will automatically

favour products that offers the most quality ,performance and

innovative features. Thus the importance is on product

development.

Continuous improvements in product and quality are the

essentials that follow this concept.

This also lead to marketing myopia.


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Selling Concept.

This concept believes that left to themselves Consumers andbusinesses will not buy enough to satisfy the sellers volumes

Thus constant sales promotions and efforts have to be made inorder to reach the required sales volumes

The sales concept is centered on the idea of high pressure

selling to maximize sales volume and hence profits


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Continued

This concept seems to be effective for some industries such asinsurance, encyclopedias etc

However the stress is on to sell what the industry has and notwhat the customer needs


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Marketing Concept

Believed that instead ofmake-and-Sell, Companies shouldSense-and-Respond. So the job is not to find the rightcustomers for your products but the right product for yourcustomers.

There are 2 orientations that support this concept: s

1. Reactive Market orientation: You see the need and yourespond with a product

2. Proactive Market orientation: You see a future need andyou respond with a product. So by the time the need arrivesin the market your product is there.


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Characteristics of Marketing concept

First identify the needs of a target segment of the market.

Design the most effective product that best meets the requirements

of the consumer.

Unlike the selling concept ,marketing concept focuses on the needsof the consumer.

Correctly identify the target market and the target markets

consumers needs.

Implement integrated marketing throughout all departments in the

Organization.

Aim at profitability by creating superior customer value.


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Societal Marketing concept.

Is marketing concept ethical enough?

Marketing has to be made humane and ecological, hence the

societal approach was introduced.

Care should be taken to minimize environmental deterioration,hunger, poverty and moral breakdown

Hence needs to be satisfied in a manner which enhances andpreserves consumers society and societys well being


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Societal Marketing ConceptSocietal Marketing Concept

Society(Human Welfare)

Society(Human Welfare)

Consumers

(Wants)

Consumers

(Wants)

Company

(Profits)

Company

(Profits)

SocietalMarketing

Concept

SocietalMarketing

Concept

M k ti & S l C t


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Marketing & Sales Concepts

Contrasted

Marketing & Sales Concepts

Contrasted

Factory

Existing

Products

Selling

andPromoting

Profits

throughVolume

MarketCustomer

Needs

Integrated

Marketing

Profits

through

Satisfaction

The Selling ConceptThe Selling Concept

The Marketing ConceptThe Marketing Concept

StartingPoint

Focus Means Ends


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Customer concept

Concentrate on consumer loyalty and long term commitment

One to one marketing

Suitable for specialised firms operating in the high end market.

Relationship marketing.


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Selling Vs marketing

Selling Marketing

1.Emphasis is on the product.

2.Company first makes theproduct and then figuresout how to sell it.

1.Emphasis is on customers

wants.2. Company first determines

customers wants and thenfigures out how to make

and deliver a product tosatisfy those wants


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Selling Marketing

3.Management is Salesvolume oriented

4.Planning is done for a shortperiod, in terms of todays

product and markets.

5.Needs of seller are stressed.

3.Management is profitoriented

4.Planning is done for a longperiod, in terms of new

products, tomorrows markets,and future growth.

5.Wants of buyer are stressed.


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Core Marketing Concepts

Needs, wants,and demands

Productsand services

Value,satisfaction,and quality

Exchange,transactions,

and relationships

Markets


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NeedsNeeds - states of felt deprivation for basic items suchas food and clothing and social needs such as cravingfor belonging and affection.

WantsWants - forms that a human need takes as they areshaped by culture and individual personalitycharacteristics.

DemandsDemands - human wants backed by buying powerand willingness to buy.

What are Consumers Needs,

Wants and Demands?

Meeting Consumers Needs,

Wants, andDemands

Thisinterviewwith JeffManning,ExecutiveDirector of theCaliforniaMilkProcessor Board, describeshowtheneeds ofconsumersledto apopular slogan.


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Customers needs wants and what

leads to Demand ?

Needs are the basic human requirements. People need food ,air,water ,clothing and shelter for basic survival

People also have strong need for recreation, education and

entertainment.

Needs become wants when they are directed to specific objects that

might satisfy their needs. An American needs food but wants hamburger while a hungry chinese

may want noodles. Thus wants are shaped by socio-cultural factors.

Demands are wants for specific products backed by an ability to pay.

People need transport, many people want a car but only a few can form

the Demand for a Mercedes Car


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Types of needs acc. to Maslows

Hierachy of needs theory Psychological needs. Safety needs

Social needs Esteem needs Self Actualisation needs


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Types of Demand.

Negative demand : being almost nonexistent due to

Inherently negative nature of the topic

eg: Vaccinations, Income tax, funeral services

Nil-Demand: Due to real or perceived low or nil-

utility

eg: Chinese language courses etc


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Continued.

Latent Demand: Huge demand exists for a productthat is not yet in existence.

eg: harmless cigarettes, non polluting cars, sweetswhich do not cause weight gain or pose problems for

diabetic patients.

Declining Demand: Falling demand due to change in

technology or customer behavioreg: market for type writers, Non-a/c Cinema halls,hand wound watches.


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Continued

Overfull Demand: Demand more than what the,

selling organization can handle.

Eg: Nano cars, Movie ticket for first day first

show.

Unwholesome Demand: When there is a strong

demand for undesirable products and services.

Eg: Drugs, Alcohol, pirated movies


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Continued

Irregular Demand: Demand varies seasonally, andmaybe periodically.

Full Demand: Markets have reached their full

potential of product intake, and organizations areincapable of selling more.

Eg: Newspapers, Lottery tickets


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What Will Satisfy Consumers

Needs and Wants?

ProductsProducts - anything

that can be offered to

a market for attention,

acquisition, use or

consumption and that

might satisfy a need

or want.

ServicesServices - activities or

benefits offered forsale that areessentially intangibleand dont result in theownership of anything


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How Do Consumers Choose Among

Products and Services?

Total Quality Management InvolvesImproving the Quality of Products, Services, and

Marketing Processes

Products Perceived Performance in DeliveringValue Relative to Buyers Expectations is

Customer Satisfaction

Value Gained From Owning a Product andCosts of Obtaining the Product is

Customer Value

H D C h A

How Do Consumers choose Among


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The offering will be successful if it delivers value and

satisfaction to the Target buyer .

Customer ValueCustomer Value - benefit that the customer gains

from owning and using a product compared to the

cost of obtaining the product.

Value is a combination of quality, service, and price

- called customer value triad.


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Customer SatisfactionCustomer Satisfaction - depends on the products

perceived performance (out come) in delivering

value relative to a buyers expectations. If performance falls short of expectation the

customer is dissatisfied.

If it matches the customer is satisfied If it exceeds the customer is delighted.

Ex: you might be satisfied with a Lays pack (Rs.10)

from a petty shop but not the same from a shop

situated near tourist places (Rs.15)


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ExchangesExchanges TransactionsTransactions

RelationshipsRelationships

Building a MarketingNetwork Consisting ofThe Company and All

Its SupportingStakeholders

How Do Consumers Obtain


How do Consumers Obtain



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Products and Services? ExchangesExchanges - act of obtaining a desired object from someone by

offering something in return. This stage includes offeringsomething, discussing the mutually beneficial and acceptableterms and trying to arrive at mutually agreeable terms.

TransactionsTransactions It is a consequence of exchange process. Whentwo parties reach on terms of exchange it become transaction. Itis a trade of values between two or more parties.

RelationshipsRelationships - building long-term relationships with consumers,distributors, dealers, and suppliers.


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Markets

Traditionally market was a physical place where buyersand sellers gathered to buy and sell goods

Economists describe markets as a collection of buyersand sellers who transact over a particular product or

product class


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Who Purchases Products and

Services?

UnexpectedSituationalFactors

Attitudesof

Others

Ethical

PotentialBuyers

Market

a place where

buyers and

sellers

Meet to buyor

sell products

.

ActualBuyers


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Classification of Markets

Resource market Banks, raw material sellers, labour

Manufacturer market

a market which is involved in the production ofgoods for resale

Intermediary market

Sells goods made by the manufacturers to theconsumers


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Government market Provides public service, collects tax revenue, buys from

manufacturers or intermediary markets

Consumer market Companies selling mass consumer goods and services.

Companies spend a huge amount of time and money to buildsuperior brand image.

Global Markets

Markets across political boundaries. Marketers must decide whichcountries to target,how to adapt their products andcommunications and how to price themetc


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Market place Market space.

Meta market

Market place can be a physical entity (market-

store, supermarket etc)

Market space which is in fact digital cyber

space where products and services are offered

and exchanged


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Continued

Metamarkets These are a cluster of complementary products or services that are

closely related in the minds of consumers but are spread across a

diverse set of industries Example: automobile Metamarket consists of automobile

manufacturers, new and used car dealers, Financing companies,

Insurance companies, Mechanics, Spare parts dealers, Service

shops, auto magazines, classifieds, Auto sites on internet etc.


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SuppliersSuppliers

End User

Market

End UserMarket

Marketing

Intermediaries

Marketing

Intermediaries

CompetitorsCompetitors Company(Marketer)Company(Marketer)

En

vir

on

men

tEnviron

ment

Modern Marketing System


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Marketing mix

Set of controllable, tactical, marketing

tools that the firm blends to produce the

response it wants in the target market


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2-11

The Four Ps of the Marketing

MixProduct Place

Price Promotion

C


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The Marketing Mix To achieve the companys objective a marketing program based

on the most suitable marketing mix will be drawn up. Marketing mix is made up of the following factors:

Product

Goods and services offered by a company to the target market, to satisyneeds and wants

The different physical attributes of the products such as design, features,quality, brand name, usage etc

Price

Money value that the consumers have to pay to buy the product or service Discounts, allowances, payment periods, credit facilities


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Marketing Mix (4ps)Promotion

Promotional Mix

Advertising

Personal

Selling

Sales

Promotion

Public Relation

Publicity

Direct

Marketing

A successful product or service meansnothing unless the benefit of such a

service can be communicated clearly to

the target market. An organisations

promotional mix can consist of:


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THANK YOU

Documents

Module 1 MARKETING MANAGEMENT