Introduction class on Services Marketing for Infrastructure Utilities

Introduction to Infrastructure Marketing

MBA~ IM – VTU


Farook A Azam(MBA-IM,PGD-IM,BE)

Infrastructure consultant @ BIG & Faculty @ VTU


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Flow of Presentation

• Definition & Overview on Infrastructure

• Role of MBA’s in IM

• Intro to Marketing

• Few Examples on Infrastructure Projects

from Marketing point of view

• Project Movie Clip On Infrastructure Project


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What is Infrastructure ?• Infrastructure is basic physical and organizational structures needed for

the operation of a society or enterprise, or the services and facilities necessary for an economy to function. It can be generally defined as the set of interconnected structural elements that provide framework supporting an entire structure of development. It is an important term for judging a country or region's development.

• The term typically refers to the technical structures that support a

society, such as roads, bridges, water supply, sewers, electrical grids, telecommunications, and so forth, and can be defined as "the physical components of interrelated systems providing commodities and services essential to enable, sustain, or enhance societal living conditions."

• Viewed functionally, infrastructure facilitates the production of goods and services, and also the distribution of finished products to markets, as well as basic social services such as schools and hospitals; for example, roads enable the transport of raw materials to a factory.


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History of the term• According to the Online Etymology Dictionary,the word infrastructure

has been used in English since at least 1927, originally meaning "The installations that form the basis for any operation or system".

• Other sources, such as the Oxford English Dictionary, trace the word's origins to earlier usage, originally applied in a military sense. The word was imported from French, where it means subgrade, the native material underneath a constructed pavement or railway. The word is a combination of the Latin prefix "infra", meaning "below", and "structure". The military use of the term achieved currency in the United States after the formation of NATO in the 1940s, and was then adopted by urban planners in its modern civilian sense by 1970.

• The term came to prominence in the United States in the 1980s following the publication of America in Ruins,which initiated a public-policy discussion of the nation’s "infrastructure crisis", purported to be caused by decades of inadequate investment and poor maintenance of public works. This crisis discussion has contributed to the increase in infrastructure asset management and maintenance planning in the US.


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History of the term contd....

• That public-policy discussion was hampered by lack of a precise definition for infrastructure. A US National Research Council panel sought to clarify the situation by adopting the term "public works infrastructure", referring to:

• "... both specific functional modes – highways, streets, roads, and bridges; mass transit; airports and airways; water supply and water resources; wastewater management; solid-waste treatment and disposal; electric power generation and transmission; telecommunications; and hazardous waste management – and the combined system these modal elements comprise. A comprehension of infrastructure spans not only these public works facilities, but also the operating procedures, management practices, and development policies that interact together with societal demand and the physical world to facilitate the transport of people and goods, provision of water for drinking and a variety of other uses, safe disposal of society's waste products, provision of energy where it is needed, and transmission of information within and between communities


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History of Indian Infrastructure

• Infrastructure before 1700 consisted mainly of roads and canals. Canals were used for transportation or for irrigation. Sea navigation was aided by ports and lighthouses

The Indus Valley Civilization in India and Pakistan from c3300 BCE had a sophisticated canal irrigation system.

Roads were build by emperor Ashoka Maurya (ca. 269 BCE to 232) BCEhad planted trees beside roads and constructed shelter for shade for Road users.

Emperor Akbar has Build the Road in Kashmir, at present day it is called as Moghul Road (NH1), which his army used it for military purposes as well as for tread and commerce.

Down South Hyderali and Tipu sultan built irrigation canals, Roads, facilities for industries and ports especially in costal Malabar and Mangalore to tap the overseas business for MYSORE State.


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Types of Infrastructure

• Hard Infrastructure "hard" infrastructure refers to the large physical

networks necessary for the functioning of a modern industrial nation.

• Soft Infrastructurewhereas "soft" infrastructure refers to all the

institutions which are required to maintain the economic, health, and cultural and social standards of a country, such as the financial system, the education system, the health care system, the system of government, and law enforcement, as well as emergency services.


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Assets and facilities

Airports Bridges Broadband Canals Critical infrastructure Dams Electricity Energy Hazardous waste Hospitals Levees Lighthouses Mass Transit

Parks Ports Public housing State schools Public spaces Rail Roads Sewage Solid waste Telecommunications Utilities Water supply Wastewater


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Concepts1. Asset management 2. Appropriation 3. Lindahl tax 4. Build-Operate-

Transfer 5. Design-Build 6. Earmark 7. Fixed cost 8. Engineering

contracts 9. Externality 10. Government debt 11. Life cycle

assessment 12. Maintenance

13. Monopoly 14.Property tax 15. Public-private

partnership 16. Public capital 17. Public finance 18. Public good 19. Public sector 20. Renovation 21. Replacement

(upgrade) 22. Spill over effect 23. Supply chain 24. Taxation

** These concepts are of Global level , it may change country to country


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Issues and ideas Air traffic control Brownfield Carbon footprint Containerization Congestion pricing Ethanol fuel Fuel tax Groundwater High-speed rail Hybrid vehicles Land-use planning Mobile data

terminal Pork barrel

Rapid bus transit Recycling Renewable Reverse osmosis Smart grid Smart growth Storm water Urban sprawl Traffic congestion Transit-oriented development Vehicle efficiency Waste-to-energy Weatherization Wireless technology , etc..


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Fields of study

• Architecture

• Civil

• Electrical

• Mechanical engineering

• Public economics

• Public policy

• Urban planning


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Fields of study contd…

Most infrastructure is designed by engineers, urbanists or architects. Generally road and rail transport networks, as well as water and waste management infrastructure are designed by civil engineers, electrical power and lighting networks are designed by power engineers and electrical engineers, and telecommunications, computing and monitoring networks are designed by systems engineers.

In the case of urban infrastructure, the general layout of roads, sidewalks and public places may sometimes be designed by urbanists or architects, although the detailed design will still be performed by civil engineers. If a building is required, it is designed by an architect, and if an industrial or processing plant is required, it may be designed by industrial engineer or a process engineer.


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Economic AnalysisCost-benefit analysis

Equivalent annual cost

Future Worth

Internal rate of return

Present Worth

Return on investment


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Typical attributes

Hard infrastructure generally has the

following attributes

– Capital assets that provide services

– Large networks

– Historicity and interdependence

– Natural monopoly


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Economics, management, engineering, and impacts

The following concerns mainly hard infrastructure and the specialized facilities used for soft infrastructure.– Ownership and financing– Role of pension funds– Infrastructure as a new asset class for pension

funds and SWFs– Infrastructure asset management– Engineering– Impact on economic development– Use as economic stimulus– Environmental impacts


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Infrastructure in the developing world

According to researchers at the Overseas Development Institute, the lack of infrastructure in many developing countries represents one of the most significant limitations to economic growth and achievement of the Millennium Development Goals (MDGs)

• Regional differences The demand for infrastructure, both by consumers and by companies is much higher than the amount invested. There are severe constraints on the supply side of the provision of infrastructure in Asia. The infrastructure financing gap between what is invested in Asia-Pacific (around US$48 billion) and what is needed (US$228 billion) is around US$180 billion every year.


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Roles of MBA’s in Infrastructure Mgmt..

Objectives : Generate young, well trained executives for India’s Infrastructure Sector to:

Convert the huge project investments into quality infrastructure

Upgrade existing infrastructure

Sustain high infrastructure service levels by adopting / evolving better management practices


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MOVIE CLIP


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Introduction to Marketing


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What Is Marketing?

Simple definition:“Marketing is the management process responsible

for identifying, anticipating, and satisfying customer requirements profitably.” (CIM,2001)

Goals: 1. Attract new customers by promising superior

value. 2. Keep and grow current customers by delivering

satisfaction.


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Marketing Defined

• Marketing is the activity, set of instructions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

OLD view of marketing:Making a sale—“telling and

selling”

NEW view of marketing:Satisfying

customer needs


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Why is Marketing Important?

Shifting Business Paradigms

Sellers’ markets

Buyers’ markets


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The Marketing Process

A simple model of the marketing process:

• Understand the marketplace and customer needs and

wants.

• Design a customer-driven marketing strategy.

• Construct an integrated marketing program that delivers

superior value.

• Build profitable relationships and create customer delight.

• Capture value from customers to create profits and

customer quality.


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Needs, Wants, and Demands

Need: State of felt deprivation including physical, social, and individual

needs.

• Physical needs: Food, clothing, shelter, safety

• Social needs: Belonging, affection

• Individual needs: Learning, knowledge, self-expression

Want: Form that a human need takes, as shaped by culture and individual

personality.

• Wants + Buying Power = Demand


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Need/ Want Fulfillment

Needs & wants are fulfilled through a Marketing

Offering:

• Products:

– Persons, places, organizations, information, ideas.

• Services:

– Activity or benefit offered for sale that is essentially

intangible and does not result in ownership.

• Experiences:

– Consumers live the offering.


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Customer Value and Satisfaction

Dependent on the product’s perceived performance

relative to a buyer’s expectations.

Care must be taken when setting expectations:

• If performance is lower than expectations, satisfaction is

low.

• If performance is higher than expectations, satisfaction is

high.

Customer satisfaction often leads to consumer loyalty.

Some firms seek to DELIGHT customers by exceeding

expectations.


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Marketing Management

The art and science of choosing target markets and building profitable relationships with them.

• Requires that consumers and the marketplace be

fully understood.

• Aim is to find, attract, keep, and grow customers

by creating, delivering, and communicating

superior value.


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Marketing Management

Marketing managers must consider the following, to ensure a successful marketing strategy:

1. What customers will we serve?

— What is our target market?

2. How can we best serve these customers?

— What is our value proposition?


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Choosing a Value Proposition

The set of benefits or values a company

promises to deliver to consumers to satisfy

their needs.

• Value propositions dictate how firms will

differentiate and position their brands in

the marketplace.


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The Marketing Concept

The marketing concept:

“A marketing management philosophy that

holds that achieving organizational goals

depends on knowing the needs and wants

of target markets and delivering the

desired satisfaction better than

competitors”


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Customer Perceived Value

Customer perceived value:– “Customer’s evaluation of the difference

between all of the benefits and all of the costs of a marketing offer relative to those of competing offers.” (Armstrong & Kotler)

– Perceptions may be subjective – Consumers often do not objectively

judge values and costs.Customer value = perceived benefits –

perceived sacrifice.


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The Marketing Mix

The set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the target market.

• Product: Variety, features, brand name, quality, design, packaging, and services.

• Price: List price, discounts, allowances, payment period, and credit terms.

• Place: Distribution channels, coverage, logistics, locations, transportation, assortments, and inventory.

• Promotion: Advertising, sales promotion, public relations, and personal selling.


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Infrastructure Projects

Marketing Point of View


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Few examples of Infrastructure Projects

• Airport projects

• METRO RAIL projects

• Ports

• SEZ’s

• Roads (High ways, Expressways, corridors)

• Urban Services & PURA

• Integrated Townships and leisure's

• Telecom Projects


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SEZ’s : IT Sector Specific

• Multi Product SEZ : Mundra port (Gujrat)

• IT SEZ: DLF IT Park ~ Pune / ANZ IT SEZ ~

Bangalore

• Multi product SEZ (Hassan)


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Road Projects

• Golden Quadrilateral

• NSEW Corridor

• Bangalore ~ Chennai Express way

• Pune ~ Mumbai Express way

• BMIC corridor


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Integrated Townships

• DLF City ~ Gurgaon

• Manhattan ~ NY

• BMIC Corridor

• Lavasa City ~ LAVASA


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Thank You

Continue in next class…….

Education

Introduction class on Services Marketing for Infrastructure Utilities