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Marketing Essentials
The Marketing Concept
Prof. Aparna Kanchan
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Session Objectives
The Marketing Concept
Relevance of the Marketing Concept in India
The Marketing Mix
Marketing Structures & Systems
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What is Marketing??
Selling?
Advertising?
Promotions?
Making products available in stores?
Maintaining inventories?
All of the above, plus much more!
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What is Marketing??
y Marketing is the process of planning and
executing the conception, pricing, promotion, and
distribution of ideas, goods, services to createexchanges that satisfy individual and
organizational goals
--- American Marketing Association
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Marketing management is the art and scienceof choosing target markets and getting,
keeping, and growing customers through
creating, delivering, and communicating
superior customer value.
What is Marketing??
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Industry
(a collection
of sellers)
Market
(a collection
of Buyers)
Goods/services
Money
Communication
Information
Simple Marketing SystemSimple Marketing System
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Marketing is the sum of all activities that take you to a
sales outlet. After that sales takes over.
Marketing is all about creating a pull, sales is all about
push. Marketing is all about managing the four P¶s ±
product
price
place
promotion
What is Marketing??
Product Price
Place Promotion
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Sales
trying to get the customer to want what the
company produces
Marketing
trying to get the company to produce what thecustomer wants
Difference Between - Sales & Marketing ?Difference Between - Sales & Marketing ?
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Marketing Orientation & How it can be employed by Organizations
y A Six dimensional Approach
I. Consumer Orientation-
y Unsuccessful fulfilled needs drive the new product development
at successful companies
II. Integrated approach to exploiting marketing opportunities
y All elements of the mktg.mix to be integrated into a sound
business plan
III. Futuristic Approach
y Mktg. spend looked upon as investment
I. Highly developed Marketing Systems
y Market feedback as source of product improvement
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Marketing Orientation & How it can ne employed by
Organizations
y A Six dimensional Approach
V. Marketing Culture
y
Customer µs interests override organization Interests
VI. Speed
y The rate at which customer queries & problems are
answered
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Marketing Orientation Vis- a vis Selling Orientation
y Selling Approach is more
transaction oriented & aims at
maximization in the short
termy Undermines research & is
more intuitive
y Works well in less complex
markets where competition is
lowy Works on Mass Mktg
y Eg: PAL, Hindustan Motors
y The Marketing Approach
emphasizes customer
management, customized
approach to winning &retaining a customer- profits
over long term
y Based on the premise that
each customer is different &
hence needs will be differenty Customer is the focal point
y Eg: Suzuki
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Relationship Marketing
y Decade of the 90¶ saw the rebirth of Relationship Marketing
y Trust has an asymmetrical quality ± is built slowly over several
transaction but disappears in a flash
y RM emphasizes on both the ³ soft´ & the ³hard´ aspect of Mktg.
y Hard aspect ± Product Reliability, use of interactive
technologies etc..
y Soft Aspect - Human interactions, dependability issues
among salespersons, service personnel etc
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Relationship MarketingAccording to Jonathan R. Capulsky & Michael J. Wolf:
y Relationship Marketing process incorporates the following three main
elements
y Identifying & building database of current & prospective
buyers/consumers, including complete details on demographics &
psycho-graphics of the Target group of consumers & also their
purchasing behaviour
y Based on the above, evolve a differentiated marketing
communication strategy in terms of message content & channel
selection
y
M onitoring each relationship to ensure continued growth in customerspurchases
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Focus on Internal Customer
y Internal Customer focus is as important as external
customer focus
y Customer satisfaction cannot be achieved until & unless all
the personnel within the organization understand theimportance of the external customer & are connected to
them
y It involves each department and individual understanding
the needs , expectations & problems of next-in ± queuedepartment or individual
y Eg: Marketing Department Production Department
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Basic Requirements of an Internal Customer
y Colleagues who are friendly & willing to help
y Courtesy & Respect
y Efficient, Friendly & knowledgeable concepts
y Pleasant Approach
y Fulfillment of ExpectationsCare & Concern
CommunicationCo-operation &Collaboration
The 3 Cs of Internal Customer Care
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Market Driven Organizations
y Primarily customer-centric
y Products are designed to meet the current & the future
needs of the customery Potential to become market leaders
y Products perceived to be superior to those of competitors & hence offer more value for money
y Better track record on product launches & innovationy Eg: HUL
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Marketing as a Process
y Process involves an exchange transaction between the
buyer & the seller
y Difference between Barter & Marketing?
y A transaction could be termed as a µMarketingTransaction¶ only if it could result in mutual satisfaction to
both the buyer & the seller
y Underlying assumption is the development of a long-
term relationship
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Marketing as a Process
y Marketing ± is an exchange
process- Both buyer & seller
must have something to give
each other y Both the buyer & seller must
gain
y It should result in long term
satisfying relationship between
both
a. Involves understanding the customers interest s
b. Serving them in such a way that it helps the selling
organization to fulfill its objective- profit maximization
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Core Marketing ConceptsCore Marketing Concepts
ProductsandServices
Value, satisfaction,and quality
Needs, wants,and demands
Exchange, transactions,and relationships
Markets
CoreMarketingConcepts
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Target Markets & Segmentation
y Market segments can be identified by examining
demographics, psychographics & behavioral differences
among buyersy The segments which offers the greatest opportunity ±
target market
y For each target market, the firm develops a market
offeringy The offering is positioned in the minds of the target buyer
as delivering some central benefit
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Marketplace, Marketspace & Metamarket
y The term M arket is used to cover various groupings of customers
y Need market ( the diet-seeking market)
y Product markets ( the show market)
y Demographics market ( the youth market)
y Geographic market ( the North Indian market)
y Market place is physical
y
Market Space is digitaly MetaMarket is a cluster of Complimentary products & services that
are closely related in the minds of the consumers
y Eg: Automobile Market, Real eastate
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Marketers & Prospects
y M arketer is someone seeking a
response ( attention, a purchase , a
vote, a donation) from another party
called a P rospect
y If 2 parties are seeking to sell
something to each other, we call them
both marketers
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Needs, Wants & Demands
y N eeds ± basic human requirements. People need
food, air, water, clothing & shelter to survive. People
also have strong needs for recreation, education &
entertainment
y W ants ±Needs become wants when they are directed
to specific objects that might satisfy the need. Wants
are shaped by one¶s society
y Demands ± are wants for specific products backed by
the ability to buy
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Product ,Offering, & Brand
y Companies address needs by putting forth value
proposition- a set of benefits they offer to customer to
satisfy their needs
y The intangible value proposition is made physical by an
offering, which can be a combination of products,
services, information & experiences
y A brand is an offering from a known source eg:
McDonald¶s
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Customer Value Reflects Benefits and Costs
Costs Benefits
Customer value concerns the difference between the
benefits a customer sees from a firm¶s market offering and
the costs of obtaining those benefits
The customer¶s view of costs and benefits is not just
limited to economic (or even rational) considerations--
and a low price may NOT result in superior value...
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Customer Value
Costs Benefits
One customer¶s view of the benefits and costs of a firm¶s market
offering may vary from another customer¶s view, so firm may not be
able to satisfy everybody with the same offering.
Customer value concept takes the customers point of view, but
customers may not explicitly weigh costs and benefits and even if they
do their view may not match some ³objective´ reality.
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Marketing Channels
To reach the TG market, the marketer uses three kinds of
Mktg. channels
C ommunication C hannels deliver & receive messages
from target buyers, & include newspapers magazines,radio, T.V, mail, telephones , posters hoardings etc«
y Distribution C hannels is used to display, sell, or deliver
the physical products or service to the buyer or user.These include distributors, wholesalers, retailers &
agents
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Marketing Channels
y S ervice C hannels carry out transactions with potential
buyers.
y S ervice C hannels include warehouses, transportation
companies, banks & insurance companies that facilitate
transactions
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Supply Chain
y The supply chain represents a value delivery
system
y While the Marketing channels connect the
marketer to the target buyer, the supply chain
describes a longer channel stretching from raw
material to components to final product that arecarried to final buyers
y Eg: Women¶s purse
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Competition
y Competition includes all the actual & potential
rival offerings & substitutes that a buyer might
consider.
1. Brand Competition
2. Industry Competition
3. Form Competition
4. Generic Competition
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Marketing Program
y The Marketers task is to build a marketing
program or plan to achieve the company¶s
desired objectives
y The Marketing program consists of numerous
decisions on the mix of the marketing tools to
use.
y The Marketing mix is a set of tools the firm usesto pursue its marketing objectives in the target
market
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The Marketing Mix
y The tools available to a business to gain the
reaction it is seeking from its target market in
relation to its marketing objectives
y 7Ps ± Price, Product, Promotion, Place, People,
Process, Physical Environment
y Traditional 4Ps extended to encompass growth
of service industry
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The Marketing Mix
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Price
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Pricey Pricing Strategy
y Importance of:y knowing the markety elasticity
y keeping an eyeon rivals
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Product
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Producty Methods used toimprove/differentiatethe product and increase salesor target sales more effectively to gain
a competitive advantage e.g.y Extension strategies
y Specialised versions
y New editions
y Improvements real or
otherwise!y Changed packaging
y Technology, etc.
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Promotion
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Promotiony Strategies
to make the
consumer aware of the existence of aproductor service
y NOT just advertising
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Place
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Place
y The means by which products and services get fromproducer to consumer and where they can be accessedby the consumer
y The more places to buy the product and the easier it ismade to buy it, the better for the business (and theconsumer?)
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People
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Peopley People represent the business
y The image they present can be important
y
First contact often human what is the lasting imagethey provide to the customer?
y Extent of training and knowledgeof the product/service concerned
y M
ission statement how relevant?y Do staff represent the desired culture
of the business?
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Process
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Processy How do people consume services?
y What processes do they have to go through toacquire the services?
y Where do they find the availability of the service?y Contact
y Reminders
y
Registrationy Subscription
y Form filling
y Degree of technology
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Physical Environment
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Physical Environmenty The ambience, mood or physical presentation of
the environmenty
Smart/shabby?y Trendy/retro/modern/old fashioned?
y Light/dark/bright/subdued?
y Romantic/chic/loud?
y Clean/dirty/unkempt/neat?y Music?
y Smell?
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The Marketing Mix
y Blend of the mix depends upon:
y Marketing objectives
y Type of product
y Target markety Market structure
y Rivals behaviour
y Global issues culture/religion, etc.
y Marketing position
y Product portfolioy Product lifecycle
y BostonMatrix
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Marketing Management PhilosophiesMarketing Management Philosophies
Production ConceptProduction Concept
Product ConceptProduct Concept
Selling ConceptSelling Concept
MarketingC
onceptMarketingC
oncept
Societal Marketing ConceptSocietal Marketing Concept
Consumers favor products that areavailable and highly affordable
Improve production and distribution
Consumers favor products that offer the most quality, performance, and
innovative features
Consumers will buy products only if the company promotes/ sells theseproduct
Focuses on needs/ wants of target
markets & delivering satisfactionbetter than competitors
Focuses on needs/ wants of targetmarkets & delivering superior value
Society¶s well-being
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Marketing & Sales Concepts ContrastedMarketing & Sales Concepts Contrasted
FactoryExisting
Products
Selling
and
P
romoting
Profits
through
V
ol
ume
Market Customer Needs
IntegratedMarketing
Profitsthrough
Satisfaction
The Selling Concept
The Marketing Concept
StartingPoint
Focus Means Ends
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Societal Marketing ConceptSocietal Marketing Concept
Society(Human Welfare)
Consumers
(Wants)
Company
(Profits)
SocietalMarketing
Concept
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Customers
Front-line people
Middle Management
Top
Management
Traditional Organization Chart
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Customer-Oriented Organization Chart
Customers
Front-line people
Middle management
Top
manage-
ment
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Evolving Views of Marketings Role
a. Marketing as anequal function
FinanceProduction
Marketing Humanresources
b. Marketing as a moreimportant function
Finance
Humanresources
Marketing
Production
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Evolving Views of Marketings Role
c. Marketing as themajor function
Marketing
Production
d. The customer as the
controlling factor
Customer
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Evolving Views of Mark
etingsR
ole
e. The customer as the controllingfunction and marketing as the
integrative function
Customer
Marketing
Production
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Marketing in the Present Millennium- Challenges & IssuesMarketing in the Present Millennium- Challenges & Issues
Seamless Global Society
Internet - Redefining Concept of time & Value
Basis for Competitive Advantage
Knowledge Management & Information
Technology
Business at the Speed of thought
Shorter product Life cycles
Emergence of Virtual Enterprise
Eg: Yahoo.com, Amazon.com, Rediff.com etc..
Size & location- very little say
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Marketing in the resent Millenni - hallenges Iss esMarketing in the resent Millenni - hallenges Iss es
The poor as a market segment
Globalization has widened the gap between the rich & the poor
Since this constitutes a large segments, firms will have to come out
with a creative solutions to meet the needs of this market
Environment Protection
Marketers to make a conscious effort to protect and maintain the
environment
Need for eco- friendly measures ± product development, use or
disposal
Diversity & Convergence Coexist
While markets are diverse, convergence of needs is also a fact
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THANK- YOU
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