lecture 1.2- mktg. concept,mix

8/7/2019 Lecture 1.2- Mktg. concept,mix

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Marketing Essentials

The Marketing Concept

Prof. Aparna Kanchan



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Session Objectives


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!



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



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


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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lecture 1.2- mktg. concept,mix

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