mktg 1 intro

8/14/2019 Mktg 1 Intro

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What is Marketing??What is Marketing??

Selling?

Advertising?

Promotions?

Making products available in stores?

Maintaining inventories?

All of the above, plus much more!

Marketing is the fulfillment ofconsumers aspirations.

Selling?

Advertising?

Promotions?

Making products available in stores?

Maintaining inventories?

All of the above, plus much more!

Marketing is the fulfillment ofconsumers aspirations.


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Characteristics of modern market

1. A substantially enhanced buying

power2. A broader bandwidth of available

products and services with greater

amount of information3.A greater ease in trading through e-

commerce

4.An ability to easily benchmark andcompare products and servicesglobally

Characteristics of modern market

1. A substantially enhanced buying

power2. A broader bandwidth of available

products and services with greater

amount of information3.A greater ease in trading through e-

commerce

4.An ability to easily benchmark andcompare products and servicesglobally


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Marketing = ?Marketing = ?

Marketing management is the art and science of choosingtarget markets and getting, keeping, and growing customers

through creating, delivering, and communicating superior

customer value.

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 with others. -

Kotler

Marketing management is the art and science of choosingtarget markets and getting, keeping, and growing customers

through creating, delivering, and communicating superior

customer value.

A societal process by which individuals and groups obtainwhat they need and want through creating , offering and freely

exchanging products and services of value with others. -

Kotler


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Marketing is the social and managerial process of

planning and executing the conception, pricing,

promotion, and distribution of ideas, goods, services to

create exchanges that satisfy individual and

organizational goals

American Marketing Association


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Marketing is the sum of all activities that take a consumer

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 Ps

product

price

place

promotion

Marketing is the sum of all activities that take a consumer

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 Ps

product

price

place

promotion


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The 4 Ps & 4CsThe 4 Ps & 4Cs

Marketing

Mix

Product

Price Promotion

Place

Customer

Solution

Customer

Cost

Communication

Convenience


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4 As4 As

Affordability

Accessibility

Awareness

Acceptability

Affordability

Accessibility

Awareness

Acceptability


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Basic Marketing modelBasic Marketing model

Communicative InformationCommunicative Information

SELLERS BUYERS

FEEDBACK

Money

Market offering


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Scope What do we marketScope What do we market

Goods

Services

Events

Experiences Personalities

Place

Organizations

Properties Information

Ideas and concepts

Goods

Services

Events

Experiences Personalities

Place

Organizations

Properties Information

Ideas and concepts


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Core Concepts ofMarketingCore Concepts ofMarketing

Based on :

Needs, Wants, Desires / demand

Products, Utility, Value & Satisfaction

Exchange, Transactions & Relationships

Markets, Marketing & Marketers.

Based on :

Needs, Wants, Desires / demand

Products, Utility, Value & Satisfaction

Exchange, Transactions & Relationships

Markets, Marketing & Marketers.


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Needs , Wants and DesiresNeeds , Wants and Desires

Needs are the states of felt deprivation.

Wants are educated needs based on human needsas shaped by culture and individual personality.They are described in terms of objectives thatwill satisfy needs.

Demands are empowered human wants i.e whenthe consumers have the ability to satisfy theirwants. They must have willingness and thepurchasing power to buy a particular product.

Needs are the states of felt deprivation.

Wants are educated needs based on human needsas shaped by culture and individual personality.They are described in terms of objectives thatwill satisfy needs.

Demands are empowered human wants i.e whenthe consumers have the ability to satisfy theirwants. They must have willingness and thepurchasing power to buy a particular product.

M l Hi h f


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Maslows Hierarchy ofNeeds

as ow s erarc y oNeeds

Esteem Needs(self-esteem, status)

Social Needs(sense of belonging, love)

Safety Needs(security, protection)

Physiological Needs(hunger, thirst)

Self

Actualization(Self-development)


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y- that something whichmakes a product capable ofsatisfying wants

y- that something whichmakes a product capable ofsatisfying wants

1. Form -leather takes the form of a shoe

2. Place oven in kitchen

3. Time newspaper in the early morning

4. Information tv news providing

relevant information5. Possession - owning a car and riding it.

1. Form -leather takes the form of a shoe

2. Place oven in kitchen

3. Time newspaper in the early morning

4. Information tv news providing

relevant information5. Possession - owning a car and riding it.


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Who is a Customer/ Consumer??Who is a Customer/ Consumer??

Anyone who is in the market looking at a product /

service for attention, acquisition, use or consumptionthatsatisfiesa want or a need

CUSTOMER/ Consumer IS . . . . .

Customers purchase the products but a consumer may actually use the

products.


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Customer Customer

CUSTOMER has needs, wants, demands anddesires

Understanding these needs is starting point of theentire marketing

These needs, wants arise within a frameworkor an ecosystem

Understanding both the needs and the ecosystem isthe starting point of a long term relationship

CUSTOMER has needs, wants, demands anddesires

Understanding these needs is starting point of theentire marketing

These needs, wants arise within a frameworkor an ecosystem

Understanding both the needs and the ecosystem isthe starting point of a long term relationship


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Customers - ProblemSolutionCustomers - ProblemSolution

As a priority , we must bring to our customers

WHAT THEY NEED

We must be in a position to UNDERSTAND their

problems

Or in a new situation to give them a chance toAVOID

the problems

As a priority , we must bring to our customers

WHAT THEY NEED

We must be in a position to UNDERSTANDtheir

problems

Or in a new situation to give them a chance toAVOID

the problems


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Customer looks for ValueCustomer looks for Value

Value = Benefit / Cost

Benefit = FunctionalBenefit + Emotional

Benefit

Cost = Monetary Cost + Time Cost +

Energy Cost + Psychic Cost

Value = Benefit / Cost

Benefit = FunctionalBenefit + Emotional

Benefit

Cost = Monetary Cost + Time Cost +

Energy Cost + Psychic Cost


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Defining Customer ValueDefining Customer Value

Aim is to create and retain customers.Customer Perceived/Delivered

Value( CPV/CDV) diff. b/w prospective

cust.s evaluation of all benefits and costsof an offering and the alternatives.

Total Cust. Value perceived monetaryvalue of the bundle of eco., func. andpsycho. benefits that cust. expect from agiven mkt offering.

Aim is to create and retain customers.Customer Perceived/Delivered

Value( CPV/CDV) diff. b/w prospective

cust.s evaluation of all benefits and costsof an offering and the alternatives.

Total Cust. Value perceived monetaryvalue of the bundle of eco., func. andpsycho. benefits that cust. expect from agiven mkt offering.


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Total Customer valueTotal Customer value

Product value fuel efficiency, sittingcomfort, driving ease etc.,

Service value quality of services

Personnel value derived from the level ofknowledge, skill, responsiveness of theemp. with whom the cust. Interact duringacquisition/ consumption of the product.

Image value purely psych. Benefit derivedfrom products brand power, eg: usingluxurious products

Product value fuel efficiency, sittingcomfort, driving ease etc.,

Service value quality of services

Personnel value derived from the level ofknowledge, skill, responsiveness of theemp. with whom the cust. Interact duringacquisition/ consumption of the product.

Image value purely psych. Benefit derivedfrom products brand power, eg: usingluxurious products


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Total Customer CostTotal Customer Cost

Monetary Cost financial expensesTime cost Monetary equiv. of the time spent

( B2B time with CEO more than junior)

Energy Cost Trouble / hassles

Psychic cost - Amount of risk and uncertaintyof the consumer experiences eg: medicallife saving drugs, insurance.

Customer delivered value = Total cust Value total Cust. Cost

Monetary Cost financial expenses

Time cost Monetary equiv. of the time spent( B2B time with CEO more than junior)

Energy Cost Trouble / hassles

Psychic cost - Amount of risk and uncertaintyof the consumer experiences eg: medicallife saving drugs, insurance.

Customer delivered value = Total cust Value total Cust. Cost

Attracting and retaining customersAttracting and retaining customers


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Attracting and retaining customers -

Decreasing Total Customer CostMonetary cost

Time cost

Energy cost

Psychic cost

Increasing Tot. cust. Value

Product value

Service value

Personnel value

Brand value

Attracting and retaining customers -

Decreasing Total Customer CostMonetary cost

Time cost

Energy cost

Psychic cost

Increasing Tot. cust. Value

Product value

Service value

Personnel value

Brand value


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Defining satisfactionDefining satisfaction

S=P-E where s= satisfaction levelP = performance level of the company as

perceived by the consumer while consumingthe product

E= performance level of the company as alreadyexpected by the consumer while purchasingthe product

If PE , cust. Isdelighted. Levels of cust., satis- Cust. Satis.Index.

S=P-E where s= satisfaction levelP = performance level of the company as

perceived by the consumer while consumingthe product

E= performance level of the company as alreadyexpected by the consumer while purchasingthe product

If PE , cust. Isdelighted. Levels of cust., satis- Cust. Satis.Index.

Delivering Customer Value & ValueDelivering Customer Value & Value


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Delivering Customer Value & ValuechainDelivering Customer Value & Valuechain

Value proposition cluster of benefits thecompany promises to deliver

Value delivery system experiences the custwill have on the way to obtaining and usingthe product.

Value chain primary valueactivities( logistics,operations, mktg&sales,

services) , support activities ( procurement,tech.,hr,infrastruc).

Value proposition cluster of benefits thecompany promises to deliver

Value delivery system experiences the custwill have on the way to obtaining and usingthe product.

Value chain primary valueactivities( logistics,operations, mktg&sales,

services) , support activities ( procurement,tech.,hr,infrastruc).


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BenchmarkingBenchmarking

Finding ways to improve by analysing costsand performance

Mkt sensing process

New offering realisation

Cust. Acquisition process

CRM process

Fulfillment mgmt process

Identifying core competency

Finding ways to improve by analysing costsand performance

Mkt sensing process

New offering realisation

Cust. Acquisition process

CRM process

Fulfillment mgmt process

Identifying core competency


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Core competencyCore competency

Special areas/ distinctive capabilities

Unique to a part.org

Difficult for competitor to imitate

Source of competitive advantage makes a significant contribution.

Special areas/ distinctive capabilities

Unique to a part.org

Difficult for competitor to imitate

Source of competitive advantage makes a significant contribution.


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Exchange and transactionExchange and transaction

Exchange is a process by which anindividual gets a desired object fromsomeone by offering something of value

in return.

Transaction is a trade between two parties

that involves at least two things ofvalue, agreed-upon conditions, a time ofagreement and a place of agreement.

Exchange is a process by which anindividual gets a desired object fromsomeone by offering something of value

in return.

Transaction is a trade between two parties

that involves at least two things ofvalue, agreed-upon conditions, a time ofagreement and a place of agreement.


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Management of DemandManagement of Demand

1.Negative Demand When a major part of themarket dislikes the product and may even pay aprice to avoid it. Eg.: woolen garments for veryhot countries.

(Task of product redesigning, lower prices and more+ve promotion)

2.No demand When the target consumers areunaware of or uninterested in the product. Eg.:

students in learning regional languages(Tasks of relating product benefits with peoples

needs and interests)

1.Negative Demand When a major part of themarket dislikes the product and may even pay aprice to avoid it. Eg.: woolen garments for veryhot countries.

(Task of product redesigning, lower prices and more+ve promotion)

2.No demand When the target consumers areunaware of or uninterested in the product. Eg.:

students in learning regional languages(Tasks of relating product benefits with peoples

needs and interests)

3 Latent Demand : When a strong need exits3 Latent Demand : When a strong need exits


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3.Latent Demand : When a strong need exitsin consumers minds but they cannot satisfyit by any existing product. Eg: solar

products/battery-operated cars, harmlesscigarettes.

(Task of good mkt research and suitableproduct development).

4.Declining Demand : When demand for apart. Product declines over time, eg:demand for typewriters.

( Task of changing product features or moreeffective promotion to boost the demand).

3.Latent Demand : When a strong need exitsin consumers minds but they cannot satisfyit by any existing product. Eg: solar

products/battery-operated cars, harmlesscigarettes.

(Task of good mkt research and suitableproduct development).

4.Declining Demand : When demand for apart. Product declines over time, eg:demand for typewriters.

( Task of changing product features or moreeffective promotion to boost the demand).

5 Irregular Demand : When demand varies on a5 Irregular Demand : When demand varies on a


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5.Irregular Demand : When demand varies on aseasonal, daily or even hourly basis whichgenerally exists for services like tour andtravel, electricity and telephone services peak hours / peak season demand.Eg.: specialschemes for slack hours

(Task of synchromarketing offer flexible

pricing, promotion + other incentives)6.Full Demand: bus. Org. are at full demand &

pleased with their volume

(Task of facing cons. pref. and competition, by

optimising availability of products &maximising returns by aggressive promotionschemes)

5.Irregular Demand : When demand varies on aseasonal, daily or even hourly basis whichgenerally exists for services like tour andtravel, electricity and telephone services peak hours / peak season demand.Eg.: specialschemes for slack hours

(Task of synchromarketing offer flexiblepricing, promotion + other incentives)

6.Full Demand: bus. Org. are at full demand &pleased with their volume

(Task of facing cons. pref. and competition, by

optimising availability of products &maximising returns by aggressive promotionschemes)


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7.Overfull demand: Demand level higher thanwhat the company can handle.Eg: Some forms

of mass transformation system.(Task of demarketing reducing or discouraging

demand temporarily by rising prices, reducingoverheads by less promotion & services).

8.Unwholesome demand : A demand to bediscouraged unhealthy for society. Eg:Demand for drugs, alcohol

(Task of making it unavailable, steep price hike,sending fear messages).

7.Overfull demand: Demand level higher thanwhat the company can handle.Eg: Some forms

of mass transformation system.(Task of demarketing reducing or discouraging

demand temporarily by rising prices, reducingoverheads by less promotion & services).

8.Unwholesome demand : A demand to bediscouraged unhealthy for society. Eg:Demand for drugs, alcohol

(Task of making it unavailable, steep price hike,sending fear messages).


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Evolution Of MarketingEvolution Of Marketing

Production Concept / Productionorientation

1. Demand usually greater than

supply,2. Companies found little problem in

finding customers

3. Focus mainly on improvingproduction and distribution efficiency

Production Concept / Productionorientation

1. Demand usually greater than

supply,2. Companies found little problem in

finding customers

3. Focus mainly on improvingproduction and distribution efficiency


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Marketing MyopiaMarketing Myopia

Term by Theodore Levitt

The marketer has to see the buyers needsrather than the product he sells,

otherwise he suffers from what is knownas marketing myopia.

Father of marketing management

Term by Theodore Levitt

The marketer has to see the buyers needsrather than the product he sells,

otherwise he suffers from what is knownas marketing myopia.

Father of marketing management

S lli C t/ S llS lli C t/ S ll


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Selling Concept/ SellsorientationSelling Concept/ Sellsorientation

Consumers will buy enough of the org.sproducts only if they are convincedthrough large-scale selling and

promotion efforts, because consumershave the opportunity to choose frommany alternatives.

Selling whatever they have maderather than making

goods which the market wants.

Consumers will buy enough of the org.sproducts only if they are convincedthrough large-scale selling and

promotion efforts, because consumershave the opportunity to choose frommany alternatives.

Selling whatever they have maderather than making

goods which the market wants.

M k ti C t/Marketing Concept/


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Marketing Concept/Marketing orientationMarketing Concept/Marketing orientation

Org. work at the level of customer segment - their needs

are identified and activities are tailored accordingly.

Customer Concept - Customers are the kings, shapingseparate offers, services and messages etc.,individually

Societal Marketing Concept The firms activitiesdirected towards meeting societal needs. eg,.:environmental needs, health needs .

Org. work at the level of customer segment - their needs

are identified and activities are tailored accordingly.

Customer Concept - Customers are the kings, shapingseparate offers, services and messages etc.,individually

Societal Marketing Concept The firms activitiesdirected towards meeting societal needs. eg,.:environmental needs, health needs .

What Business Are We In ?


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Xerox We make copymachines.

We automateoffices.

Eastman KodakWe make

cameras andfilm.

We help

preservebeautifulmemories.

Revlon We make

cosmetics, inthe factory.

We sell hope,

in the stores.

Company Production oriented answer

Marketing oriented answer

What Business Are We In ?


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Company Production oriented answer

Marketing oriented answer

AT&T We operate along-distancetelephonecompany.

We providemultiple forms ofreliable, efficientinexpensivetelecomm.services.

Indian Oil We produce oiland gasolineproducts.

We providetypes of safe &cost effectiveenergy.

Indian Railways We run a railroad. We offer atrans ortation &


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Marketers and MarketsMarketers and Markets

Marketers are focused on stimulating

exchanges with customers who make upmarkets B2C or B2B.

The market is comprised of people who playa series of roles: decision makers,consumers, purchasers, and

influencers.It is absolutely essential that marketers

have a detailed understanding ofconsumers, their needs and wants.

Much happens before and afterthe sale toaffect customer satisfaction

Marketers are focused on stimulating

exchanges with customers who make upmarkets B2C or B2B.

The market is comprised of people who playa series of roles: decision makers,consumers, purchasers, and

influencers.It is absolutely essential that marketers

have a detailed understanding ofconsumers, their needs and wants.

Much happens before and afterthe sale toaffect customer satisfaction


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Drivers of Customer SatisfactionDrivers of Customer Satisfaction

Many aspects of the firms value proposition contribute to

customer satisfaction:

The core product or service offered

Support services and systems

The technical performance of the firm

Interaction with the firm and it employees

The emotional connection with customers

Ability to add value and to differentiate as a firm focuses more on

the top levels -- Emergence of Relationship Marketing.

Many aspects of the firms value proposition contribute to

customer satisfaction:

The core product or service offered

Support services and systems

The technical performance of the firm

Interaction with the firm and it employees

The emotional connection with customers

Ability to add value and to differentiate as a firm focuses more on

the top levels -- Emergence of Relationship Marketing.


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Myth 1 The larger the range of products, themore customer-centric I am.

Myth 1 The larger the range of products, themore customer-centric I am.

Mythbuster The range of products hasMythbuster The range of products hasemerged from beingemerged from being

competition-centric.competition-centric.


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Myth 2 Better technology leads to

better customer service.

Mythbuster TechnologyMythbuster Technology

alone does not deliver,alone does not deliver,

helps people do.helps people do.


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Myth 3 Launch a product and the customer will start

using instantly.

- Give a customer a card and he will learn how to play

with it immediately

Mythbuster Customers needMythbuster Customers need

To be educated tooTo be educated too


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Mythbuster CustomersMythbuster Customers

are not only presentare not only present

where competition is.where competition is.

Myth 4 The only way to get a customer isfrom

competition.


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Myth 5 Just advertise and - You will sell.

Mythbuster Advertising will only sell,Mythbuster Advertising will only sell,

Not retain customers.Not retain customers.


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Myth 6 No difference between marketing &selling

Mythbuster Mythbuster Selling focuses on the needs of theSelling focuses on the needs of the

seller; marketing on the needs of the buyer.seller; marketing on the needs of the buyer.


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Difference Between - Sales &Marketing ?

Difference Between - Sales &Marketing ?

Salestryingto get the customer to want what the

companyproduces

Marketingtrying to get the company produce what the

customerwants

mktg 1 intro

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