mm module - i

INTRODUCTION TO MARKETING MANAGEMENT

MODULE - IINTRODUCTION TO MARKETING MANAGEMENT

Nature & Importance of Marketing

Evolution of Marketing Concept

Marketing Environment

Domestic & International

Marketing

UNDERSTANDING MARKETING

Process of finding out customer needs and serving those

needs profitably

Profit is a legitimate goal of a business organization

Essence of marketing is providing desired value to

customers

Marketing should be considered a central business

function

DEFINITION Marketing is defined as, “a social and

managerial process, by which, individuals and

groups, obtain what they need and want,

through creating, offering and exchanging,

products of value with others”.

- Philip Kotler.

CORE CONCEPT OF MARKETING

Needs & Wants

Demand & Supply

Cash/ Cards, Exchange

Markets

Buyers & Sellers

NEEDS, WANTS AND DEMAND

NEEDS: - Basic state of deprivation that

exists in every human life. (Thirst – Water)

WANTS: - Need for a particular product.

(Thirst – Pepsi)

DEMAND: - Desire for the commodity +

Purchasing power + Willingness to pay.

SIMPLE MARKET SYSTEMS

ELLER

SB

UY

ER

SMARKETSFlow of Goods & Services

Flow of Money

ON BASIS OF NATURE OF PURCHASING & CONSUMPTION

CONSUMER MARKET

INDUSTRIAL MARKET

ON BASIS OF PRODUCTS IN TRADE

BASIC GOODS MARKET

INTERMEDIARY GOODS MARKET

CONSUMER GOODS MARKET Durable Consumer Markets

Non – Durable Consumer Markets

ON BASIS OF MAGNITUDE OF SELLING

WHOLESALE MARKET

RETAIL MARKET

ON BASIS OF TIME PERIOD

SHORT TERM MARKET

LONG TERM MARKET

SEASONAL MARKET

ON BASIS OF GEOGRAPHICAL COVERAGE

LOCAL MARKET

REGIONAL MARKET

NATIONAL MARKET

INTERNATIONAL MARKET

EVOLUTION OF MARKETING CONCEPT

BARTER SYSTEM – Goods For Goods

MONETARY SYSTEM – Cash For Goods

TECHNO-MARKETING SYSTEM – Cards For

Goods

Contd…

Marketing as an equal function

HR FINANCE

MRKTG

PRDN

Marketing as an important function

HR

MRKTG

FINANCE

PRDN

Contd…

Marketing as a major function

HR

FINANCE

PRDN R& D

MARKETING

CONCEPT

S

CONCEPTS

Production Concept

Product Concept

Selling Concept

Marketing Concept

Holistic Concept

Production Concept

Emphasis on Mass Production

Low Cost

High Efficiency

Customers have to buy, whatever is

produced in Bulk.

For E.g. – Ford T-Model Car (All models

available in black colour).

Product Concept

Emphasis on Variety Items production

Customers can buy from among the

various varieties offered.

For E.g. – Toothpastes available in

different flavours and in various sizes

Selling Concept

Emphasis on maximizing the sales,

through Sales Promotional Activities.

Clubs the Marketing Communication

(Ads, Publicity, Sales Promo. Activities)

with Products/Services.

Marketing Concept

Emphasis on maximizing the sales

through customer satisfaction.

Conducts Market Research, to know the

customer taste and preferences.

Manufactures innovative products.

Sales & Warrantees/Guarantees

Customer Feedbacks.

Holistic Concept

It is based on the developments, design and

implementation of marketing programs, processes

and activities that recognizes the

interdependencies of firm and its environment.

COMPONENTS OF HOLISTIC CONCEPTS

Internal Marketing Integrated Marketing

Social Responsibility Marketing Relationship Marketing

Societal Marketing Concept

It holds the orgzn tasks to determine the needs,

wants and interests of target markets and to

deliver the desired satisfactions more effectively

and efficiently than competitors.

NATURE & IMPORTANCE

Marketing – Modern Concept

Ongoing Social & Managerial Process

Complex Structure

Value Driven

SCOPE OF MARKETING

Scope of marketing rests on

the 10 entities. They are: -

GOODS

SERVICES

EXPERIENCES

EVENTS

PERSONS

PLACES

PROPERTIES

IDEAS

INFORMATION

ORGANIZATIONS

MARKETING

PLACES

PERSONSGOODS

SERVICES

EXPERIENCES

EVENTS

PROPERTIES

ORGANISATIONS

INFORMATION

IDEAS

SELLING v/s MARKETING

SELLING

Older Concept

Narrow Concept

Quantity Based

Transferring of Ownership of the

product

Focus on Maximizing Profit through

Increase in Volume of sales

“Love the Product/Brand”

Cost determines Price

MARKETING

Modern Concept

Broader Concept

Quality Based

Offering products that fulfills the needs

and wants of customers, and thereby

customers have satisfaction

Focus on Maximizing profit through

Customer Satisfaction

“Love the Customer & not the product”

Consumer determines Price, Price

determines Cost

SuppliersSuppliers

End UserMarket

End UserMarket

MarketingIntermediaries

MarketingIntermediaries

CompetitorsCompetitors Company(Marketer)Company

(Marketer)

En

vir

on

men

t En

viro

nm

en

t

MODERN MARKETING SYSTEM

VALUE PROPOSITION & OFFERING

Value Proposition A set of benefits offered by the

company to satisfy customer needs

Offering Value proposition is made

physical by an offering which is a combination of products, services, information and experiences.

Customer Value - benefit that the customer gains

from owning and using a product compared to the cost

of obtaining the product.

Customer Satisfaction - depends on the product’s

perceived performance in delivering value relative to a

buyer’s expectations. Linked to Quality and Total

Quality Management (TQM).

How do Consumers choose among the Products &

Services ?

Customer Value Triad – QSP

How Do Customer Measure the Values Obtained from a Product?

VALUE

Quality

Service

Price

Value, Benefits, Costs – How to Increase Customer

Value ?

Value = Benefits/Costs Benefits = Functional Benefits +

Emotional Benefits

Costs = Monetary Costs + Time Costs

+ Energy Costs + Psychic Costs

Note: Psychic Costs - the stress of having to think about a transaction

Value, Benefits, Costs – How to Increase Customer

Value (Cont.-)5 ways

1) Increase Benefits

2) Decrease Costs

3) Increase Benefits and Decrease Costs

4) Increase Benefits by more than the

Increase in Costs

5) Decrease Benefits by less than the

Decrease in Costs

CustomerDelivered

ValueTotal Customer

value

TotalCustomer

Cost

Productvalue

ServiceValue

Personalvalue

Imagevalue

Monetary cost

Time cost

Energycost

Psychiccost

Two Party Exchange Map

HOLY GRACE ACADEMY OF

MGMT STUDIES (Marketer)

STUDENTS

( Prospects)

Students Want List• HIGH QUALITY EDUCATION

• FAIR FEES

• QUALIFIED TEACHERS

• GOOD FACILITIES

HGAMS Want List• GOOD STUDENTS

• TIMELY PAYMENT

• GOOD RESULTS

• GOOD WORD OF MOUTH

VALUE DELIVERY PROCESSTraditional Concept

MAKE THE PRODUCT

SELL THE PRODUCT

VALUE DELIVERY PROCESSModern Concept

Cust. Seg

Mkt Selection

Value Positioning

Pdt/ServiceDvlpmt

Pricing

Sourcing/

Making

Distributing

Sales ForceTrainin

g

Sales Prom

o.

Advtsg

Choose the Value

Provide the Value

Communicate the Value

EmergingChallengesEmerging

Challenges

NonprofitMarketing

New Marketing

Landscape &InformationTechnology

EthicalConcerns Globalization

ChangingWorld

Economy

New Marketing Challenges

RELATIONSHIP MARKETING

Relationship marketing is the process of attracting, maintaining, and enhancing relationships with key people.

Relationship Marketing works in Stages.Interaction > Communication > Valuation > TerminationAwareness > Comparison > Transaction > Reinforcement

Using the relationship marketing approach, programs are customized for individual consumer groups and the stage of the process they are going through, rather than giving everybody the same promotions, with perhaps a change in offer. 

E.g. Customer Life Cycle

Relationships Marketing - Aims

To build mutually satisfying relations with key parties

To build strong economic, technical and social ties among the

parties

To cut down transaction costs and time

To move transactions from being negotiated each time to being a

matter of routine.

To build a Marketing Network

Note: A marketing network is a unique asset of the company

which consists of the company and its supporting stake

holders ( Customers, Employees, Suppliers, Distributors etc.)

MARKETING MIX A set of tools that firms uses to pursue its

marketing objectives, in the target markets. It is developed by Prof. E. Jerome McCarthy.

4 7 8 ?

MARKETINGMIX

PRODUCT

VarietyQualityDesignFeaturesBrandPackingSizesServicesWarrantiesReturns

PRICE

List priceDiscountsAllowancesP. PeriodCredit terms

PROMOTION

SalesAdvertisingSales forceP.R & PublicityDirect Mktg

PLACE

ChannelsCoverageLocationsInventoryTransport

PRODUCTProduct Variety

Quality

Design

Features

Brand Name

Packaging

Sizes

Services

PRICE Discount

Allowances

Payment Period

Credit Terms

PROMOTION

Sales Promotion

Advertising

Sales Force

PR

Direct Marketing

PLACE Channels

Coverage

Assortments

Locations

Inventory

Transport

EXTENDED MARKETING MIX

4 P’s +

PEO

PLE

PHYSICAL EVIDENCE

PR

OC

ESS

NEW BROS FOR MARKETING MIX

4 P+ 3 P +

PACE

PACKAGING

POSI

TIO

NIN

G

Four Ps Four Cs

PRODUCT

PRICE

PLACE

PROMOTION

Customer Solutions

Customer Cost

Customer Convenience

Commn with Customer

ROBERT LAUTERBORN’s4P & 4C Comparison

WHY IS MARKETING PLANNING NECESSARY?

Systematic futuristic thinking by management

Better co-ordination of a company’s efforts

Development of performance standards for

control

Sharpening of objectives and policies

Better prepare for sudden developments

FACTORS INFLUENCING MARKETING MGMT

PROCESS

• Processing

• Pricing

• Packaging

• Promoting

• Financing

• Transportation

• Storage

•Retailing

ECONOMIC CONDITIONS THAT

AFFECTS MARKETING • SUPPLY & DEMAND

• CHANGES IN

CONSUMER TASTES

• COST OF INPUTS

• COST OF RELATED

ITEMS

• PRICE

• COMPETITION

MARKETING MANAGEMENT

PROCESSAnalysis/Audit - where are we now?

Objectives - where do we want to be?

Strategies - which way is best?

Tactics - how do we get there?

Implementation – Getting there!

Control - Ensuring arrival

DIMENSIONS IN MARKET ANALYSIS

• MARKET SIZE (CURRENT

& FUTURE)

• MARKET GROWTH RATE

(C&F)

• MARKET PROFITABILITY

• INDUSTRY COST

STRUCTURE

• MARKET TRENDS

• KEY SUCCESS FACTORS

• DISTRIBUTION

CHANNELS

Value Driven Marketing

It is an orientation for achieving the objectives, by

developing superior value to consumers.

6 principles lies for value driven marketing: -

Customer Principle (focus on creating and delivering customer

value – Direct & Indirect).

Competitor Principle (Offers customer superior value to

competitive alternatives).

Proactive Principle (Offers changes in the firm based on the

changes in environment)

Contd… Value Driven Marketing

Cross Functional Principle (uses cross functional

teams to improve the efficiency and effectiveness).

Continuous Improvement Principle (Offers

continuous improvement in the quality of products,

process and services).

Stakeholder Principle (Ensures maximum returns

for the Stakeholders).