Module 1 Section C 2013.pptx

8/14/2019 Module 1 Section C 2013.pptx

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Marketing Management

Sub Code: 12MBA24


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Recommended Books

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1. Marketing Management: A South AsianPerspective- Kotler, Keller, Koshy & Jha, 13/e,

Pearson Education, 2012

2. Marketing : An Introduction- Rosalind Masterson

& David Pickton, 2/e, Sage Publications, 2010

3. Marketing Management- Ramaswamy V.S. &

Namakumar S, 4/e, Macmillan Publishers, 2011

4. Fundamentals of Marketing Management- EtzelM.J, B J Walker & William J. Stanton, 14/e,

TMH, 2012


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Reference Books

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Marketing Management: Rajan Saxena, 4/e,Cenage Learning

Marketing- Lamb, Hair, Sharma Mc Danniel, 1/e,

Cengage Learning, 2012

Marketing: Marketing in the 21stCentury- Evans &

Berman, 2/e, Cengage Learning, 2005

Marketing: Planning, Implementation, and

Control- William M Pride, Ferrel O.C.,


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Modules to be covered

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Module 1: Introduction Module 2: Understanding Consumer Behaviour

Module 3: Market Segmentation, Targeting,Positioning & Branding

Module 4: Product Decisions, Packaging/Labeling

Module 5: Pricing Decisions

Module 6: Distribution Decisions

Module 7: Integrated Marketing Communications

Module 8: Marketing Planning, MarketingOrganisation, Marketing Audit.


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Introduction

Module1

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Good Marketing is No Accident

The roaring success of

Tata Ace,a mini-truck

with the engine capacity

of less than one ton

launched by Tata Motors

in 2005, was due to a

deep understanding ofthe market needs and

customer requirements.

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Defining Marketing

Marketing is a societal process by which

individuals and groups obtain what they need

and want through creating, offering, and freely

exchanging products and services of value withothers

More simply put, Marketing is the delivery of

customer satisfaction at a profit. In other wordsmarketing is meeting needs profitably.

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The American Market ing Associat ionof fers the fol low ing formal def in i t ion :

Marketing is an organizational function and aset of processes for creating, communicating,and delivering value to customers and formanaging customer relationships in ways thatbenefit the organization and its stake holders.

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Evolution Of Marketing

Tribes Barter System

Industrial

Revolution

Relationship Era Production Era

Marketing Era Sales Era

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What is Marketed? Goods Services

Events

Experiences

Persons

Places

Properties

Organizations Information

Ideas

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Goods

GOODS:Physical goods constitute the bulk of most

countriesproduction and marketing effort.

o Each year, Indian companies alone market

billions of fresh, canned, bagged, and frozen foodproducts and millions of cars, refrigerators,television sets, machines, and various othermainstays of a modern economy.

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Services

SERVICES: As economies advance, a growing proportion oftheir activities is focused on the production of services.

The U.S economy today consists of a 70-30 services-to-

goods mix. Services includes the work of airlines, hotels, car

rental firms, barbers and beauticians, maintenance andrepair people, as well as professionals working within or for

companies, such as accountants, bankers, lawyers,

engineers, doctors, software programmers, and

management consultants.

Many market offerings consist of a variable mix of goodsand services. At a fast-food restaurants, for example, the

customer consumes both a product and a service.

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Events

EVENTS: Marketers promote time-based events,such as major trade shows, artistic performances,and company anniversaries.

Global sporting events such as the Olympics or

World Cup are promoted aggressively to bothcompanies and fans. There is a whole professionof meeting planners who work out the details of anevent and make sure it comes off perfectlyaggressively to both companies and fans.

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EXPERIENCES: By Orchestrating several services andgoods, a firm can create, stage, and market experiences.

Walt Disney Worlds Magic Kingdom represents

experiential marketing :Customers visit a fairy kingdom, a

pirate ship, or a haunted house.

Experiences

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Persons

Celebrity marketing is a major business. Today, everymajor film star has an agent, a personal manager, and

ties to a public relations agency. Artists, musicians,

CEOs, physicians, high-profile lawyers and financiers,

and other professionals are also getting help fromcelebrity marketers.

Some people have done a masterful job of marketing

themselves think of Madonna, Oprah Winfrey, the

Rolling Stones, Aerosmith, and Michael Jordan,Management consultant Tom Peters, himself a master

at self-branding, has advised each person to become a

brand.

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Places

Cities, States, regions, and whole nations

compete actively to attract tourists, factories,

company headquarters, and new residents.

Place marketers include economicdevelopment specialists, real estate agents,

commercial banks, local business

associations and advertising and public

relations agencies.

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operties

PROPERTIES: are intangible rights of ownership

of either real property (real estate) or financial

property (stocks and bonds). Properties are

bought and sold, and this requires marketing.

Real estate agents work for property owners or

sellers or buy residential or commercial real estate.

Investment companies and banks are involved inmarketing securities to both institutional and

individual investors.

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Organizations

ORGANIZATIONS actively work to build a strong,favorable, and unique image in the minds of their

target publics. Companies spend money on corporate

identity ads. Philips, the Dutch electronics company,

puts out ads with the tag line Lets Make ThingsBetter.

In the United Kingdom, TescosEveryLittle Bit Helps

marketing program has vaulted it to the top of the

supermarket chains in that country. Universities,museums, performing arts organizations, and non-

profits all use marketing to boost their public images

and to compete for audience and funds.

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Information

INFORMATIONcan be produced and marketed as aproduct. This is essentially what schools and

universities produce and distribute at a price to

parents, students, and communities. Encyclopedias

and most nonfiction books market information. Internetsearch engines such as Google, Wikipedia etc peddle

information.

The production, packaging, and distribution of

information is one of our societys major industries.Even companies that sell physical products attempt to

add value through the use of information.

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Ideas

IDEAS: Every market offering includes a basicidea. Charles Revlon of Revlon observed : In

the factory, we make cosmetics; in the store we

sell hope.

o Products and services are platforms for

delivering some idea or benefit.

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Nature, Scope and Importance

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Marketing is managing profitable customerrelationships. The basic objective of marketing is

to attract new customers by promising and

offering superior value and to retain and grow

current customers by delivering satisfaction. Building customer relationships based on

customer value and satisfaction is at the very

core of modern marketing.

Highly successful companies know that if they

take care of their customers, market share and

profits will follow.

Sound marketing is essential for the success ofever com an , whether lar e or small, lobal or


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Needs, Wants and Demand NeedsNeeds are the basic human

requirements. People need food, air, water,clothing, and shelter to survive. People also havestrong needs for recreation, education, andentertainment.

WantsWants are the forms human needs takeas they are shaped by culture and individualpersonality characteristics. The need becomewants when they are directed to specific objectsthat might satisfy the need.

DemandsWhen human wants are backed bypurchasing power and willingness to buy, theybecome demands. Demands are wants forspecific products backed by an ability to pay.

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Maslows Hierarchy of Needs


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Marketing and Maslows Need Hierarchy Physiological needs (Eg: Thanda Matlab Coca

Cola, Kellogs cereal rich breakfast provides you

with a rich food, Quaker Oats: Eating oatmeal is

good for your heart) Safety Needs (Ads of Insurance Companies)

Social needs ( Eg: BPL mobile helps you to keep

in touch with family and friends wherever they

are,J C Penney: Wherever teens gather, youll hear it.

Its the language of terrific fit and fashion.)


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Esteem Needs (E g: Ownership of omega watchis a sign of excellence. Ad of BMW: The Ultimate

Driving machinestresses power, an egoistic

need, Ad of Esteem: Life is full of twists and

turns. Arent you glad you drive an esteem.Cadillac: Those long hours have paid off. In

recognition, financial success, and in the way you

reward yourself. Isnt it time you owned a

Cadillac? )

Self-actualization needs ( E g: IGNOU: Distance

education programme, encourages you to further

your knowledge)


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Marketing Orientations

The Production Concept It holds that consumers will prefer products that are widely

available and inexpensive. Managers of production orientedbusinesses concentrate on achieving high production efficiency,low costs and mass distribution.

The Product Concept It holds that consumers will favor those products that offer

the most quality, performance, or innovative features.Managers in these organizations focus on making superiorproducts and improving them over time.

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The Selling ConceptIt holds that consumers and businesses, if left alone, will ordinarily

not buy enough of the organizations products. The organizationmust, therefore, undertake an aggressive selling and promotioneffort. The aim is to sell what they make rather than makewhat the market wants.

The Marketing ConceptThis concept emerged in the mid-1950s. Instead of a product-

centered, make-and-sell philosophy, business shifted to acustomer-centered,sense-and-respond philosophy. The jobis not to find the right customers for your products, but theright products for your customers.This concept holds that the

key to achieve organizational goals consists of the companybeing more effective than competitors in creating, delivering, and

communicating superior customer value to its chosen targetmarkets.

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The Holistic Marketing Concept:It is based on the development, design, and

implementation of marketing programs, processes andactivities that recognizes their breadth andinterdependencies. It recognizes that everything matters

with marketing- and that a broad, integrated perspective isoften necessary.

The 4 components of Holistic Marketing are:

1. Relationship Marketing

2. Integrated Marketing

3. Internal Marketing

4. Social Responsibility Marketing

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H

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Relationship Marketing

Relationship Marketing:Increasingly, a key goal of marketing is to developdeep, enduring relationships with all people ororganizations that could directly or indirectly affect

the success of the firmsmarketing activities.

Relationship Marketing has the aim of buildingmutually satisfying long-term relationships with keyparties customers, suppliers, distributors, and

other marketing partners in order to earn andretain their business. Relationship marketing buildsstrong economic, technical, and social ties amongthe parties.

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Integrated Marketing Mix

INTEGRATED MARKETING

The Marketerstask is to devise marketing activities andassemble fully integrated marketing programs to create,

communicate, and deliver value for consumers. Themarketing program consists of numerous decisions onvalue-enhancing marketing activities to use. Marketingactivities come in all forms.

One traditional depiction of marketing activities is interms of the marketing mix, which has been defined asthe set of marketing tools the firm uses to purpose itsmarketing objectives. McCarthy classified these toolsinto four broad groups, which he called the four Ps of

marketing : Product, Price, Place and Promotion31


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Marketing

Mix

roductQuality

Design

Features

Functionality

Brand NameProduct variety

Packaging

Sizes

Services

WarrantiesReturns

ricePricing strategy

List Price

Discounts

Allowances

Payment period

Credit terms

romotionSales Promotion

Advertising

Personal sellingPublic Relations

Direct Marketing

laceChannels

Coverage

Assortments

Locations

Inventory

Transport

The Four P Components of the Marketing Mix

Target

Market

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The Four Ps

Marketing

Mix

Product

PricePromotion

Place

The Four Cs

Customer

Solution

Customer Cost Communication

Convenience

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Internal Marketing

Holistic Marketing incorporates INTERNAL MARKETING,

ensuring that everyone in the organization embracesappropriate marketing principles, especially seniormanagement.

Internal marketing is the task of hiring, training, andmotivating able employees who want to serve customers well.Marketing activities within the company can be as importantas, or even more than marketing activities directed outsidethe company. It makes no sense to promise excellent servicebefore the companysstaff is ready to provide it.

Internal marketing must take place on two levels. At onelevel, the various marketing functions sales force,advertising, customer service, product management,marketing, research must work together. At the other levelall the marketing functions must be coordinated from the

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Social Responsibility Marketing

(Performance Marketing)

SOCIAL RESPONSIBILITY MARKETING:Holistic Marketing incorporates Social Responsibility

Marketing and understanding broader concerns and

the ethical, environmental, legal, and social context of

marketing activities and programs. The cause and effects of marketing clearly extend

beyond the company and the consumer to society as a

whole. Social responsibility also requires that

marketers carefully consider the role that they areplaying and could play in terms of social welfare.

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The Societal Marketing Concepts holds that theorganizations task is to determine the

needs ,wants, and

interests of target markets

and to deliver the desiredsatisfactions more

effectively and efficiently

than competitors in a way

that preserves or enhancesthe consumers and the

societys well-being


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Contrastedeting & Sales Concepts

Contrasted

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Selling Vs Marketing

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Selling starts with the seller and concerned with thesellers needs whereas Marketing starts with the

buyer and concerned with the buyers need.

In Selling, the Core of business activity is the seller

whereas in Marketing, Buyer is the core of all activity. Selling converts existing products into money

whereas Marketing converts customer needs into

products.

Selling views Business as a goods-producing processwhereas Marketing views Business as a customer-

satisfying process.

In Selling, Marketing mix is planned as per sellers

need, whereas in Marketing, Customer dictates thelan of marketin mix.


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In Selling, different departments of the businessact independently ,whereas in Marketing, all

departments work in an integrated way to satisfy

the customer

In Selling, Production is the central function ofbusiness whereas in Marketing, the central

function of business is Marketing

In Selling, Customer is the last link in Business

,whereas in Marketing, Customer is the very

purpose of Business.


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Scanning and Analysing The Environment

Environmental Scanning gives companies advantage over

competition by taking advantage of changing trends. Scanning

requires observation, collecting information and analysis

involves assessing and interpreting the gathered information sothat the opportunities and threats arising from the

environmental factors can be properly understood and

strategies formulated accordingly.


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Marketing Environment

The actors & forces outside marketing that affect

marketing managements ability to build & maintain

successful relationships with target customers


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Definition and Concepts

A companys marketing environment consists of the actors andforces outside marketing that affect managementsability to build andmaintain successful relationships with target customers. (PhilipKotler)

The microenvironment consists of the following actors close to thecompany that affect its ability to serve its customers: (1) TheCompany (2) The Suppliers (3) The Marketing Intermediaries (4) TheCustomers (5) The Competitors (6) The Public.

The macro environment consists of the following larger societalforces that affect the microenvironment: (1) Demographic (2)Economic (3) Socio-cultural(4) Natural (5) Technological(6)Political-Legal


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Micro Environment

Micro environment- The actors close to thecompany that affect its ability to serve its

customersthe company, suppliers, marketing

intermediaries, customers, competitors & publics

Micro Environment

It consists of the actors close to the company that affect its ability to serve its customers


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Micro environment


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Macro Environment

The larger societal forces that affect themicroenvironment- demographic, economic,

natural, technological, social-cultural & political-

legal forces

Macro Level

Influences that affect all firms


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The Company In the Company, marketing managers, in formulating

plans, must take into account the other groups such as

top management, finance, R&D, purchasing,

manufacturing and accounting

The Suppliers

Suppliers form an important link in the companys overall

customer value delivering system. They provide the

resources needed by the company to produce its goals andservices. Price changes, supply shortages, labour strikes,

and other events can interfere with the fulfillment of delivery

promises to customers and lose sales in the short run and

damage customer relationships in the long run.

Analyzing the Microenvironment

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The Marketing Intermediaries Marketing intermediaries are firms that aid the company

in promoting, selling and distributing its goods to the finalbuyers. Middlemen are business firms that help thecompany find customers and/or close sales with them-

agents, brokers, dealers, wholesalers, retailers and soon.

The Customers

Customers of the company belong to Consumer Markets,

Industrial Markets, Reseller Markets, Government Marketsand International markets. The tastes and preferences ofcustomers keep on fluctuating. Customers brand loyaltykeep changing. Only by studying the market demand andcustomer-0related factors on a regular basis can marketerscarry out their business activities successfully.

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The Competitors The companys marketing system is surrounded

and affected by a host of competitors. These

competitors have to be identified, monitored to gain

and maintain customer loyalty. Competitiveadvantage is a superior or distinctive competence of

the company relative to competition in a specific

area.

The PublicsThe company must also acknowledge a large group of

publics that take an interest in its method of doing

business. A public can facilitate or impede the ability of

an organization to accomplish its goals. There are

various types of Public, namely, financial, media,-

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Identifying the Major Forces

Demographic

Economic

Socio-culturalNatural

Technological

Political-legal

Analyzing the Macroenvironment

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Demographic Environment

Worldwide Populat ion Growth

Popu lat ion Age Mix

Ethnic Markets

Household Patterns

Educational Group s

Geographical Shi f ts in Populat ion


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Economic EnvironmentIncome Distribution

Savings, Debt and Credit Availability

Outsourcing and Free Trade

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Social- Cultural Environment Society shapes the beliefs, values, and norms that

largely define consumer tastes and preferences.

People absorb, almost unconsciously, a world view

that defines their relationships to themselves, toothers, to organizations, to society, to nature, and to

the universe.

High Persistence Of Core Cultural values

Existence Of Subcultures Shifts Of Secondary Cultural Values Through Time

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Natural Environment

Shortage Of Raw Materials

Increased Energy Costs

Anti-Pollution Pressures

Changing Role Of governments

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Technological Environment

Accelerating Pace Of Change

Unlimited Opportunities For Innovation

Varying R& D Budgets

Increased Regulation Of Technological Change

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Political-Legal Environment

Increase In Business Legislation

Growth Of Special- Interest Groups Consumer Protection Act,1986

Safety

Information

Choice

Representation Redressal

Consumer education

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Consumer Protection Act, 1986

Right to Safety: To be protected against the sale ofgoods and services which are spurious/hazardous forthe life.

Right to Information: To know the quality, quantity,weight and the price of goods/services being paid for,

so that one is not cheated by unfair trade practices. Right to Choose: To be assured, wherever possible,

access to a variety of goods and services atcompetitive prices.

Right to be Heard: To be heard and to be assured

that the interest would receive due consideration atappropriate forums Right to Seek Redressal: Toseek legal redressal against unfair or restrictive tradepractices or exploitation.

Right to Consumer Education: To have access toconsumer education


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Responding to the Marketing Environment

Many companies view the marketing environment as an

uncontrollable element to which they must adapt. On the other

hand there are companies who take aggressive actions to affect

the publics and forces in their marketing environment.

Marketing managers cannot always control environment forces.

But whenever possible, they should take a proactive approach

to the marketing environment.

Difference b/w consumer and


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Difference b/w consumer and

customer

Generally, a consumer refers to individuals whobuy for themselves or their family (hence the term

'consumerism' in economics and politics),

whereas a customer can also mean the retailer or

person who buys from the manufacturer, etc. forultimate sale to others.

The one who buys the product is called a

customer and the who uses the product is called

a consumer.-A customer is who buys the things but a

consumer is the person who finally utilizes it.


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The Marketing Process

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Analyzing market opportunities

Selecting target markets

Developing the marketing mix

Managing the marketing effort


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The Marketing Process

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Marketing Management Tasks

Developing Marketing Strategies And Plans Capturing Marketing Insights

Connecting With Customers

Building Strong Brands

Shaping The Market Offerings

Delivering Value

Communicating Value

Creating Long-Term Growth

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The New Marketing Realities

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Major Societal Forces Network information technology

Globalization

Privatization

Heightened competition Consumer resistance

Retail transformation


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New Consumer CapabilitiesA substantial increase in buying power

A greater variety of available goods and services

A great amount of information about practically

anything Greater ease in interacting and placing and

receiving orders

An ability to compare notes on products and

servicesAn amplified voice to influence peer and public

opinion

New Company Capabilities


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CRM

CRMCustom er relat ionship management. .

is the overall process of building and maintaining

profitable customer relationships by delivering

superior customer value and satisfaction.

It costs 5 to 10 times MORE to attract a new customer

than it does to keep a current customer satisfied.

Module 1 Section C 2013.pptx

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Transcript of Module 1 Section C 2013.pptx