Download - Mm module - i
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INTRODUCTION TO MARKETING MANAGEMENT
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MODULE - IINTRODUCTION TO MARKETING MANAGEMENT
Nature & Importance of Marketing
Evolution of Marketing Concept
Marketing Environment
Domestic & International
Marketing
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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
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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.
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CORE CONCEPT OF MARKETING
Needs & Wants
Demand & Supply
Cash/ Cards, Exchange
Markets
Buyers & Sellers
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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.
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SIMPLE MARKET SYSTEMS
ELLER
SB
UY
ER
SMARKETSFlow of Goods & Services
Flow of Money
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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
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ON BASIS OF MAGNITUDE OF SELLING
WHOLESALE MARKET
RETAIL MARKET
ON BASIS OF TIME PERIOD
SHORT TERM MARKET
LONG TERM MARKET
SEASONAL MARKET
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ON BASIS OF GEOGRAPHICAL COVERAGE
LOCAL MARKET
REGIONAL MARKET
NATIONAL MARKET
INTERNATIONAL MARKET
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EVOLUTION OF MARKETING CONCEPT
BARTER SYSTEM – Goods For Goods
MONETARY SYSTEM – Cash For Goods
TECHNO-MARKETING SYSTEM – Cards For
Goods
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Contd…
Marketing as an equal function
HR FINANCE
MRKTG
PRDN
Marketing as an important function
HR
MRKTG
FINANCE
PRDN
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Contd…
Marketing as a major function
HR
FINANCE
PRDN R& D
MARKETING
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CONCEPT
S
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CONCEPTS
Production Concept
Product Concept
Selling Concept
Marketing Concept
Holistic Concept
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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).
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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
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Selling Concept
Emphasis on maximizing the sales,
through Sales Promotional Activities.
Clubs the Marketing Communication
(Ads, Publicity, Sales Promo. Activities)
with Products/Services.
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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.
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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
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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.
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NATURE & IMPORTANCE
Marketing – Modern Concept
Ongoing Social & Managerial Process
Complex Structure
Value Driven
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SCOPE OF MARKETING
Scope of marketing rests on
the 10 entities. They are: -
GOODS
SERVICES
EXPERIENCES
EVENTS
PERSONS
PLACES
PROPERTIES
IDEAS
INFORMATION
ORGANIZATIONS
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MARKETING
PLACES
PERSONSGOODS
SERVICES
EXPERIENCES
EVENTS
PROPERTIES
ORGANISATIONS
INFORMATION
IDEAS
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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
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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
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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.
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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 ?
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Customer Value Triad – QSP
How Do Customer Measure the Values Obtained from a Product?
VALUE
Quality
Service
Price
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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
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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
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CustomerDelivered
ValueTotal Customer
value
TotalCustomer
Cost
Productvalue
ServiceValue
Personalvalue
Imagevalue
Monetary cost
Time cost
Energycost
Psychiccost
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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
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VALUE DELIVERY PROCESSTraditional Concept
MAKE THE PRODUCT
SELL THE PRODUCT
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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
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EmergingChallengesEmerging
Challenges
NonprofitMarketing
New Marketing
Landscape &InformationTechnology
EthicalConcerns Globalization
ChangingWorld
Economy
New Marketing Challenges
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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
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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.)
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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 ?
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MARKETINGMIX
PRODUCT
VarietyQualityDesignFeaturesBrandPackingSizesServicesWarrantiesReturns
PRICE
List priceDiscountsAllowancesP. PeriodCredit terms
PROMOTION
SalesAdvertisingSales forceP.R & PublicityDirect Mktg
PLACE
ChannelsCoverageLocationsInventoryTransport
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PRODUCTProduct Variety
Quality
Design
Features
Brand Name
Packaging
Sizes
Services
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PRICE Discount
Allowances
Payment Period
Credit Terms
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PROMOTION
Sales Promotion
Advertising
Sales Force
PR
Direct Marketing
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PLACE Channels
Coverage
Assortments
Locations
Inventory
Transport
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EXTENDED MARKETING MIX
4 P’s +
PEO
PLE
PHYSICAL EVIDENCE
PR
OC
ESS
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NEW BROS FOR MARKETING MIX
4 P+ 3 P +
PACE
PACKAGING
POSI
TIO
NIN
G
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Four Ps Four Cs
PRODUCT
PRICE
PLACE
PROMOTION
Customer Solutions
Customer Cost
Customer Convenience
Commn with Customer
ROBERT LAUTERBORN’s4P & 4C Comparison
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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
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FACTORS INFLUENCING MARKETING MGMT
PROCESS
• Processing
• Pricing
• Packaging
• Promoting
• Financing
• Transportation
• Storage
•Retailing
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ECONOMIC CONDITIONS THAT
AFFECTS MARKETING • SUPPLY & DEMAND
• CHANGES IN
CONSUMER TASTES
• COST OF INPUTS
• COST OF RELATED
ITEMS
• PRICE
• COMPETITION
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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
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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
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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)
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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).