Marketing Management
Transcript of Marketing Management
MARKETING MANAGEMENTMARKETING MANAGEMENT
PRESENTED ON BEHALF OF:PRESENTED ON BEHALF OF:
INTERNATIONAL SCHOOL INTERNATIONAL SCHOOL OF BUSINESS AND MEDIAOF BUSINESS AND MEDIA
BY: PROF. HIMMAT G. ADISAREBY: PROF. HIMMAT G. ADISARE
CORE TEXT: MARKETING MANAGEMENTCORE TEXT: MARKETING MANAGEMENTBY PHILIP KOTLER (11BY PHILIP KOTLER (11thth Edition) Edition)
INTRODUCTION TO INTRODUCTION TO MARKETING MANAGEMENTMARKETING MANAGEMENT
Ref: Chapter 1 of Core TextRef: Chapter 1 of Core Text
MARKETING MANAGEMENT: MARKETING MANAGEMENT: DEFINITIONSDEFINITIONS
1. “Marketing is the creation and delivery of a standard of living”.
2. “Marketing is a managerial and societal process by which individuals and groups obtain what they need and want through creating, offering, and exchanging products and services of value with others”.
Ref: Chapter 1 of Core TextRef: Chapter 1 of Core Text
THE SCOPE OF MARKETINGTHE SCOPE OF MARKETING
Marketers are involved with marketing ten types of entities:1. Physical Goods2. Services
3. Experiences4. Events
5. Persons
6. Places
7. Properties
8. Organizations
9. Information
10. Ideas
Ref: Chapter 1 of Core TextRef: Chapter 1 of Core Text
A SIMPLE MARKETING SYSTEMA SIMPLE MARKETING SYSTEM
INDUSTRYINDUSTRY(A collection(A collectionof sellers)of sellers)
MARKETMARKET(A collection(A collectionof buyers)of buyers)
COMMUNICATIONCOMMUNICATION
INFORMATIONINFORMATION
GOODS & SERVICESGOODS & SERVICES
MONEYMONEY
Ref: Chapter 1 of Core TextRef: Chapter 1 of Core Text
STRUCTURE OF FLOWS IN A MODERN EXCHANGE STRUCTURE OF FLOWS IN A MODERN EXCHANGE ECONOMYECONOMY
RESOURCERESOURCEMARKETSMARKETS
CONSUMERCONSUMERMARKETSMARKETS
INTERMEDIARYINTERMEDIARYMARKETSMARKETS
MANUFACTURERMANUFACTURERMARKETSMARKETS
GOVERNMENTGOVERNMENTMARKETSMARKETS
MONEYMONEY
RESOURCESRESOURCES
MONEYMONEY
RESOURCESRESOURCES
MONEYMONEY MONEYMONEY
GOODS & SERVICESGOODS & SERVICES GOODS & SERVICESGOODS & SERVICES
TAXES &TAXES &GOODSGOODS
SERVICESSERVICES& MONEY & MONEY
S&MS&M
TAXES &TAXES &GOODSGOODS
SERVICESSERVICES
TAXESTAXES
S&MS&M T>&G
MARKETING CONCEPTS-IMARKETING CONCEPTS-I There are five competing concepts under which
organizations conduct marketing activities: The PRODUCTION CONCEPT holds that
consumers will prefer products that are widely available and inexpensive.
The PRODUCT CONCEPT holds that consumers will favor those products that offer the most quality, performance, or innovative features.
(continued)
Ref: Chapter 1 of Core TextRef: Chapter 1 of Core Text
MARKETING CONCEPTS-IMARKETING CONCEPTS-I The SELLING CONCEPT holds that consumers
and businesses, will ordinarily not buy enough of the organization’s products. The organization must therefore, undertake an aggressive selling and promotion effort.
The MARKETING CONCEPT holds that the key to achieving its organizational goals consists of the company being more effective than competitors in creating, delivering, and communicating customer value to its chosen target markets.
(continued)(continued)
Ref: Chapter 1 of Core TextRef: Chapter 1 of Core Text
MARKETING CONCEPTS-IMARKETING CONCEPTS-I
The SOCIETAL MARKETING concept holds that the organization’s task is to determine the needs, wants, and interests of the target markets and to deliver the desired satisfactions more effectively than competitors in a way that preserves the consumers’ and society’s well-being.
Ref: Chapter 1 of Core TextRef: Chapter 1 of Core Text
MARKETING CONCEPTS-IIMARKETING CONCEPTS-II
The Core Concepts of MarketingNeedsNeeds
WantsWants
DemandsDemands
ProductsProducts
ValueValue
CostCost
SatisfactionSatisfaction
ExchangesExchanges
TransactionsTransactions
RelationshipsRelationships
MarketsMarkets
MarketingMarketing
MarketersMarketers
11
22
33
44
55
66
CUSTOMER CUSTOMER RELATIONSHIPSRELATIONSHIPS
Ref: Chapter 2 of Core TextRef: Chapter 2 of Core Text
CREATING CUSTOMER VALUE AND CREATING CUSTOMER VALUE AND SATISFACTIONSATISFACTION
Customer delivered value: the difference between total customer value and total customer cost.
Total customer value: the bundle of benefits customers expect from a given product or service.
Total customer cost: the bundle of costs customers expect to incur in evaluating, obtaining, using, and disposing of the product or service.
(continued)(continued)
Ref: Chapter 2 of Core TextRef: Chapter 2 of Core Text
CREATING CUSTOMER VALUE AND CREATING CUSTOMER VALUE AND SATISFACTIONSATISFACTION
Example of Customer Delivered Value:
a) Buyers perception of offer’s worth =
Rs.2,00,000=00
b) Company’s cost of manufacture =
Rs.1,40,000=00
c) Company’s price = Rs.1,60,000=00
1. Customer Delivered Value: = Rs.40,000=00
2. Customer Delivered Value: = 1.25 (as a ratio)
(continued)(continued)Ref: Chapter 2 of Core TextRef: Chapter 2 of Core Text
CREATING CUSTOMER VALUE CREATING CUSTOMER VALUE AND SATISFACTION AND SATISFACTION
Customer Satisfaction: Whether a customer is satisfied after purchase depends on the offer’s performance in relation to the buyer’s expectations. We may define it as:
“Customer satisfaction or dissatisfaction is a person’s feeling of pleasure or disappointment resulting from comparing a product’s perceived performance (or outcome) in relation to the person’s expectations”.
Ref: Chapter 2 of Core TextRef: Chapter 2 of Core Text
THE NATURE OF HIGH THE NATURE OF HIGH PERFORMANCE BUSINESSESPERFORMANCE BUSINESSES
STAKEHOLDERSSTAKEHOLDERS
PROCESSESPROCESSES
RESOURCESRESOURCES ORGANIZATIONORGANIZATION
Set strategiesSet strategiesto satisfy keyto satisfy keystakeholders …stakeholders …
… … by improvingby improvingcritical businesscritical businessprocesses …processes …
… … and aligningand aligningresources andresources andorganization. organization.
MARKET-ORIENTED MARKET-ORIENTED STRATEGIC PLANNINGSTRATEGIC PLANNING
Ref: Chapter 4 of Core TextRef: Chapter 4 of Core Text
STRATEGIC PLANNING:STRATEGIC PLANNING:THE FOUR LEVELSTHE FOUR LEVELS
Most large companies consist of four organizational levels:
The Corporate level The Division level The Business Unit level The Product level
Ref: Chapter 4 of Core TextRef: Chapter 4 of Core Text
THE STRATEGIC PLANNING, IMPLEMENTATION & THE STRATEGIC PLANNING, IMPLEMENTATION & CONTROL PROCESSESCONTROL PROCESSES
PLANNINGPLANNING IMPLEMENTINGIMPLEMENTING CONTROLLINGCONTROLLING
CorporateCorporatePlanningPlanning
DivisionDivisionPlanningPlanning
BusinessBusinessPlanningPlanning
ProductProductPlanningPlanning
OrganizingOrganizing
ImplementingImplementing
MeasuringMeasuringResultsResults
DiagnosingDiagnosingResultsResults
TakingTakingCorrectiveCorrectiveActionAction
DEFINING THE CORPORATE DEFINING THE CORPORATE MISSIONMISSION
Peter Drucker’s Classic Questions:
1. What is our business?
2. Who is the customer?
3. What is value to the customer?
4. What will our business be?
5. What should our business be?
Ref: Chapter 4 of core TextRef: Chapter 4 of core Text
GOOD MISSION STATEMENTSGOOD MISSION STATEMENTS
Good mission statements have three major characteristics:1. They focus on limited number of goals.2.They stress the major policies and values the company wants to honor.3. They define the major competitive scopes within which the company will operate.
Ref: Chapter 4 of Core TextRef: Chapter 4 of Core Text
COMPETITIVE SCOPES OF A COMPETITIVE SCOPES OF A COMPANYCOMPANY
Industry scopeProducts and applications scopeCompetence scopeMarket segment scopeVertical scopeGeographical scope
Ref: Chapter 4 of Core TextRef: Chapter 4 of Core Text
ESTABLISHING STRATEGIC ESTABLISHING STRATEGIC BUSINESS UNITSBUSINESS UNITS
Large companies normally manage different businesses, each requiring its own strategy. These are termed as Strategic Business Units (SBUs). An SBU has three characteristics:
It is a single business or a collection of related businesses that can be planned separately from the rest of the company.
It has its own set of competitors. It has a manager who is responsible for strategic
planning and profit performance and who controls most of the factors affecting profit.
Ref: Chapter 4 of Core TextRef: Chapter 4 of Core Text
ASSIGNING RESOURCES TO SBUsASSIGNING RESOURCES TO SBUs(THE BCG GROWTH-SHARE MATRIX)(THE BCG GROWTH-SHARE MATRIX)
The Boston Consulting Group (BCG), a leading
management consulting firm, popularized the growth-
share matrix. It is divided into four cells, each
indicating a different type of business. The market-
growth rate on the vertical axis indicates the annual
growth rate of the market in which the business
operates. The relative market share, measured on the
horizontal axis, refers to the SBUs market share
relative to that of the largest competitor in the segment.
Ref: Chapter 4 of Core TextRef: Chapter 4 of Core Text
THE BCG GROWTH-SHARE MATRIXTHE BCG GROWTH-SHARE MATRIX
10%
0%
20%
1x10x 0.1x
STARS QUESTION MARKS
CASH COWS
DOGS
RELATIVE MKT SHARERELATIVE MKT SHARE
MKTMKTGROWTHGROWTH
THE BCG MARIX (CONTD)THE BCG MARIX (CONTD) QUESTION MARKS: New businesses of the company in high
growth-rate markets.
STARS: Successful Question-mark businesses become stars that gain market share and generate profits for the company.
CASH COWS: When market-growth rate slows down as competitors enter the segment, businesses that remain successful become Cash Cows. They fund Stars and new Question-mark businesses.
DOGS: These are businesses in decline and the company has the option to “harvest” or “divest”.
THE MARKETING PROCESSTHE MARKETING PROCESS
The Marketing Process consists of: Analyzing Marketing Opportunities Researching and Selecting Target Markets Designing Marketing Opportunities Planning Marketing Programs Organizing, Implementing, and
Controlling the Marketing Effort
Ref: Chapter 4 of Core Text
MARKETING MARKETING ENVIRONMENT & SYSTEMENVIRONMENT & SYSTEM
Ref: Chapter 6 of Core TextRef: Chapter 6 of Core Text
MARKETING ENVIRONMENT MARKETING ENVIRONMENT FACTORSFACTORS
DEMOGRAPHIC ENVIRONMENTECONOMIC ENVIRONMENTNATURAL ENVIRONMENTTECHNOLOGICAL ENVIRONMENTPOLITICAL-LEGAL ENVIRONMENTSOCIAL-CULTURAL ENVIRONMENT
Ref: Chapter 6 of Core TextRef: Chapter 6 of Core Text
DEMOGRAPHIC ENVIRONMENTDEMOGRAPHIC ENVIRONMENT
Worldwide Population Growth Population Age Mix Ethnic Markets Educational Groups Household Patterns Geographical Shifts in Population Shift from Mass to Micromarkets
Ref: Chapter 6 of Core TextRef: Chapter 6 of Core Text
ECONOMIC ENVIRONMENTECONOMIC ENVIRONMENT
Income Distribution Subsistence economies Raw-material-exporting economies Industrializing economies Industrial economies Savings, Debt, and Credit Availability
Ref: Chapter 6 of Core TextRef: Chapter 6 of Core Text
NATURAL ENVIRONMENTNATURAL ENVIRONMENT Shortage of Raw Materials
Increased Energy Costs
Increased Pollution Levels
Changing Role of Governments
Ref: Chapter 6 of Core TextRef: Chapter 6 of Core Text
TECHNOLOGICAL TECHNOLOGICAL ENVIRONMENTENVIRONMENT
Accelerating Pace of Technological Change
Unlimited Opportunities for Innovation Varying R&D Budgets Increased Regulation of Technological
Change
Ref: Chapter 6 of Core Text Ref: Chapter 6 of Core Text
POLITICO-LEGAL POLITICO-LEGAL ENVIRONMENTENVIRONMENT
Legislation Regulating Business: MRTP Act PCBs FDAGrowth of Special Interest Groups
Ref: Chapter 6 of Core TextRef: Chapter 6 of Core Text
SOCIO-CULTURAL SOCIO-CULTURAL ENVIRONMENTENVIRONMENT
Persistence of Core Cultural Values:Core beliefsSecondary beliefs
Existence of Subcultures
Shifts of Secondary Cultural Values Through Time
Ref: Chapter 6 of Core TextRef: Chapter 6 of Core Text
ANALYZING CONSUMER ANALYZING CONSUMER BEHAVIORBEHAVIOR
Ref: Chapter 7 of Core TextRef: Chapter 7 of Core Text
ANALYZING CONSUMER ANALYZING CONSUMER BEHAVIORBEHAVIOR
FACTORS INFLUENCING CONSUMER BEHAVIOR
BUYING ROLES
TYPES OF BUYING BEHAVIOR
THE BUYING DECISION PROCESS
Ref: Chapter 7 of Core TextRef: Chapter 7 of Core Text
FACTORS INFLUENCING FACTORS INFLUENCING CONSUMER BEHAVIORCONSUMER BEHAVIOR
CULTURAL FACTORS: Culture Sub-culture Social ClassSOCIAL FACTORS: Reference groups Family Roles & statuses
Ref: Chapter 7 of Core TextRef: Chapter 7 of Core Text
FACTORS INFLUENCING FACTORS INFLUENCING CONSUMER BEHAVIOR(2)CONSUMER BEHAVIOR(2)
PERSONAL FACTORS Age and Life-Cycle Stage Occupation Economic Circumstances Lifestyle Personality & Self-concept
Ref: Chapter 7 of Core TextRef: Chapter 7 of Core Text
FACTORS INFLUENCING FACTORS INFLUENCING CONSUMER BEHAVIOR (3)CONSUMER BEHAVIOR (3)PSYCHOLOGICAL FACTORS
Motivation Learning Perception Beliefs & Attitudes
Ref: Chapter 7 of Core TextRef: Chapter 7 of Core Text
BUYING ROLESBUYING ROLES
INITIATOR: The first person to suggest the idea of buying.
INFLUENCER: A person whose views impact the buying decision.
DECIDER: The person who decides on what, when & where to buy the product or service.
BUYER: The actual purchaser. USER: The person who uses/consumes the
product or service.
Ref: Chapter 7 of Core TextRef: Chapter 7 of Core Text
TYPES OF BUYING BEHAVIORTYPES OF BUYING BEHAVIORDEGREE OF INVOLVEMENT
LOWHIGH
DEGREE OFDIFFERENCESIN BRANDS
HIGH
LOW
COMPLEXBUYINGBEHAVIOR
DISSONANCE-REDUCINGBUYINGBEHAVIOR
VARIETY-SEEKINGBUYINGBEHAVIOR
HABITUALBUYINGBEHAVIOR
TYPES OF BUYING BEHAVIORTYPES OF BUYING BEHAVIOR
COMPLEX BUYING BEHAVIOR: High involvement, very expensive, infrequently purchased,very risky, self-expressive products (designer jewelry, custom-designed sports cars, housing).
DISSONANCE REDUCING BUYING BEHAVIOR: High involvement, expensive, infrequently purchased, self-expressive products (furniture, white goods, PCs).
Ref: Chapter 7 of Core Text
TYPES OF BUYING BEHAVIOR TYPES OF BUYING BEHAVIOR (CONTD)(CONTD)
VARIETY SEEKING BUYING BEHAVIOR: Low involvement, frequently purchased, inexpensive products (pastries, biscuits, snacks).
HABITUAL BUYING BEHAVIOR: Low involvement, frequently purchased, inexpensive products (sugar, salt, flour, commodities).
Ref: Chapter 7 of Core Text
THE BUYING DECISION PROCESSTHE BUYING DECISION PROCESS
Problem/need Recognition
Information Search
Evaluation Of Alternatives
Purchase Decision
Postpurchase Behavior
Ref: Chapter 7 of Core Text
PROBLEM/NEED RECOGNITIONPROBLEM/NEED RECOGNITION
From Internal Stimuli: Hunger Thirst Fear
From External Stimuli: Neighbor’s Purchases Advertisements Window Shopping Newspapers & Magazines
Ref: Chapter 7 of Core Text
INFORMATION SEARCHINFORMATION SEARCH
From Personal Sources:
Family Friends Neighbors Acquaintances
From Commercial Sources:
Advertisements Dealers Salespersons Packaging Displays
Ref: Chapter 7 of Core Text
INFORMATION SEARCH INFORMATION SEARCH (CONTD)(CONTD)
From Commercial Sources:AdvertisementsDealersSalespersonsPackagingDisplays
Ref: Chapter 7 of Core Text
INFORMATION SEARCH INFORMATION SEARCH (CONTD)(CONTD)
From Public Sources:
Mass Media Chambers of
Commerce Consumer Rating
Magazines
From Experiential Sources:
Handling the Product
Examining the Product
Using the Product
Ref: Chapter 7 of Core Text
EVALUATION OF ALTERNATIVESEVALUATION OF ALTERNATIVES
Successive Sets in Consumer Decision-Making:
Total Set Awareness Set Consideration Set Choice Set Buying Decision
(continued)
Ref: Chapter 7 of Core Text
EVALUATION OF ALTERNATIVES EVALUATION OF ALTERNATIVES
TOTAL SET
AWARENESSSET
CONSIDERATIONSET
CHOICESET
BUYINGDECISION
Ref: Chapter 7 of Core Text
PURCHASE DECISIONPURCHASE DECISION
Interfering Factors: Attitudes of Others: Opposing and intense
opinions of family members, close friends and acquaintances
Unanticipated situational factors: Changes in income, job transfer, loss of employment, change of priority e.g. sudden payment of educational fees etc.
Ref: Chapter 7 of Core Text
POSTPURCHASE BEHAVIORPOSTPURCHASE BEHAVIORPost purchase Satisfaction: Keep the Product Store the Product Convert to a Second UsePost purchase Dissatisfaction: Try to return the product/take legal recourse Rent it Get rid of it/Throw it
Ref: Chapter 7 of Core Text
BUSINESS MARKETS VERSUS BUSINESS MARKETS VERSUS CONSUMER MARKETSCONSUMER MARKETS
Business Markets: Fewer Buyers Larger Buyers Close Supplier-
Customer Relationship
Geographically Concentrated Buyers
Inelastic Demand
Derived Demand Professional
Purchasing Multiple Buying
Influences Direct Purchasing Reciprocity Leasing
Ref: Chapter 8 of Core Text
MARKET SEGMENTATIONMARKET SEGMENTATION
Ref: Chapter 10 of Core Text
MARKET SEGMENTATION: MARKET SEGMENTATION: VARIABLESVARIABLES
Geographic Segmentation
Demographic Segmentation
Psychographic Segmentation
Behavioral Segmentation
Ref: Chapter 10 of Core Text
SEGMENTATION VARIABLES SEGMENTATION VARIABLES (CONTD)(CONTD)
Geographic Segmentation: By Nations By Regions By States By Cities By Localities
Ref: Chapter 10 of Core Text
SEGMENTATION VARIABLES SEGMENTATION VARIABLES (CONTD)(CONTD)
Demographic Segmentation: By Age By Gender By Income By Education Level By Religion/Race By Nationality
Ref: Chapter 10 of Core Text
SEGMENTATION VARIABLES SEGMENTATION VARIABLES (CONTD)(CONTD)
Psychographic Segmentation:
By Personality
By Lifestyle
By Social Class
Ref: Chapter 10 of Core Text
SEGMENTATION VARIABLES SEGMENTATION VARIABLES (CONTD)(CONTD)
Behavioral Segmentation:
By Usage Pattern By Occasion By Loyalty Factor By Attitude Towards The Product
Ref: Chapter 10 of Core Text
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THIS PROGRAMMETHIS PROGRAMME