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Marketing Management

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Welcome to the class

Dr M Manjunath Shettigar

MA (Econ), MBA, MPhil, PhD

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Marketing Management

Unit 1 Introduction

Market & Marketing

Activities related to making, transferring, using of goods and services

Firms, marketing agencies/service providers, buyers

Marketing activities

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Market Markets as place Market classification based on

Product Geography Type of buyer Scale of transaction

In modern marketing, it refers to a set or group of actual and potential buyers of a product or service.

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Marketing Shopping, selling,

merchandising/designing the product Traditionally, marketing is described

in terms of its functions/activities Marketing is the performance of

business activities that direct the flow of goods & services from producers to consumers

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Marketing Activities included

Designing/merchandising Packaging Warehousing Transportation Branding Selling Advertising pricing

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Marketing Not just post-production activity Nor does it end with selling

Marketing is now looked at as a ‘Social Process’

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Marketing as a social process

A social and managerial process by which individuals & groups obtain what they need & want through creating, offering and exchanging products of value to each other.

It is then a social process wherein people interact with others, in order to persuade them to act in a particular way, say to purchase a product or service

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What is Marketing?

Marketing is the delivery of customer value/satisfaction at a profit.

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The Goal of Marketing is:

To attract new customer by promising superior value, and to keep current customers by delivering satisfaction.

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Marketing as core business activity

Marketing, more than any other business function, deals with customers.

Creating customer value and satisfaction are at the very heart of modern marketing thinking and practice.

Some people believe that only large business organizations operating in highly developed economies use marketing, but sound marketing is critical to the success of every organization – whether large or small, for profit or non – profit, domestic or global.

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Key Terms

To explain marketing definition, we examine the following important terms : Needs, wants, and demands Products and services Value, satisfaction and quality Exchange, transactions, and

relationships Markets

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Needs, Wants, and Demands Needs: The most basic concept underlying marketing

is that of human needs. Human needs are states of felt deprivation. Human have many complex needs:

Physical needs for food, clothing, warmth, and safety

Social needs or belonging and affection Individual needs for knowledge and self –

expression

Maslow's Hierarchy of Needs

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Needs, Wants, and Demands

Wants: Want are the form taken by human needs as

they are shaped by culture and individual personality.

People have almost unlimited wants but limited resources.

They want to choose products that provide the most value and satisfaction for their money.

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Needs, Wants, and Demands

Demands: When backed by buying power, wants become

demands. Consumers view products as bundles of

benefits and choose products that give them the best bundle (of benefits) for their money.

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Products and Services

Product: Anything that is created by using scarce resources

is a product The concept of product is not limited to physical

objects – anything capable of satisfying a need can be called a product.

Goods & Services: Goods are tangible products, while services are

intangible products. In the case of goods, production and sale are

separate processes/activities. But in the case of services, the two happen simultaneously.

What can be marketed Physical Products (Goods): DVD player, Motor cycle, ipods, Cell phone, Footwear, Television, Refrigerator.Services : Insurance, Health Care, Business Process Outsourcing,Security, Easy Bill service, Financial Services(Investment),Computer Education, Online Trading.Ideas : Polio Vaccination, Helpage, Family Planning, Donation of Blood (Red cross), Donation of money on Flag Day (National Foundation for Communal Harmony).Persons : For Election of Candidates for Certain Posts.Place : ‘Visit Agra – ‘City of Love’, ‘Udaipur – ‘The City of Lakes’, ‘Mysore – The City of Gardens’, ‘When Orissa celebrates, Eleven the God Join In’.Experience : Customised Experiences as Dinner with a cricketer (say Dhoni); Lunch with a celebrity (say Bill Gates or Aishwarya Roy) or experience of Balloon Riding, mountaineering, etc.

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What can be marketed Properties : Intangible rights of ownership of real estate in financialproperty (Shares, Debentures).Events : Sports events (say Olympics, Cricket series), diwali mela,fashion show, music concert, film festival, elephant race(Kerala Tourism).Information : Production packaging and distribution of information byorganisations such as by universities, research organisation,providing information as market information (marketingresearch agencies), technology information.Organisations : For boosting their public image organisations such asHindustan Lever, Ranbaxy, Dabur, Proctor and Gamble,communicate with people. Example, Phillips says, Let’s makeThings Better’.

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Values, Satisfaction, and Quality

Values: Customer value is the difference between the

values the customer gains from owning and using a product and the costs of obtaining the products.

Customers often do not judge product value and costs accurately or objectively. They act on perceived value.

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Values, Satisfaction, and Quality

Satisfaction: Customer satisfaction depends on a product’s

perceived performance in delivering value relative to a buyer’s expectation.

If the product’s performance falls short of the customer’s expectations, the buyer is dissatisfied.

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Values, Satisfaction, and Quality

Quality: Customer satisfaction is closely linked to

quality. Quality has a direct impact on product

performance. Quality can be defined as “freedom from

defects”. TQM programs designed to constantly improve

the quality of products, services, and marketing processes.

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Exchange, Transactions, and

Relationships Exchange : The act of obtaining a desired object from

someone by offering something in return Transaction : A trade between two parties that involves at least

two things of value, agreed – upon conditions, a time of agreement, and a place of agreement.

Relationship marketing : The process of creating, maintaining, and

enhancing strong, value – laden relationships with customers and other stakeholders

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Markets

The set of all actual and potential buyers of a product or service

A simple marketing system

Industry (a collection

of sellers)

Market (a collection of

buyers)

Communication

Products / Services

Money

Information

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Suppliers

Competitors

Company (marketer)

Marketing intermediaries End user market

Main actors and forces in a modern marketing system

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Marketing Management

The analysis, planning, implementation, and control of programs designed to create, build, and maintain beneficial exchanges with target buyers for the purpose of achieving organizational objectives.

Marketing Management

“the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organisational goals” - American Management Association

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Marketing Management

Marketing management is the art and science of choosing target markets and getting, keeping and growing customers through creating, delivering and communicating superior customer values.

- Philip Kotler

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Scope of Marketing

1. Gathering & analysing market information

2. Marketing planning3. Product designing & development4. Standardisation & grading5. Packaging and labelling6. Branding

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Scope of Marketing

7. Customer support services8. Pricing of product9. Promotion10. Physical distribution11. Transportation12. Storage & warehousing

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Importance of Marketing As a business function In the economy

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Role of marketing - business

Gaps How marketing bridges the gap

Space Assembly, transportation & distribution

Time Storage, financing & risk taking

Perception (knowledge)

Communication mass media

Ownership Customer contact, termination of sale

value Price, terms of sale

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Role of marketing - Economy

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Makes available goods and services Market efficiency means higher real income New goods & services Increases satisfaction level Creation of employment Raises aspiration level of people Conversion of potential demamd into real

demand Facilitates use of resources & economic growth

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MARKETING MANAGEMENT PHILOSOPHIES The role that marketing plays within a

company varies according to the overall strategy and philosophy of each firm.

There are five alternative concepts under which organizations conduct their marketing activities: Production concept Product concept Selling concept Marketing concept Societal marketing concepts

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Production Concept

The philosophy that consumers will favour products that are available and highly affordable and that management should therefore focus on improving production and distribution efficiency.

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Product Concept

The philosophy that consumers will favour products that offer the most quality, performance, and innovative features.

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Selling Concept

The idea that consumers will not buy enough of the organization’s products unless the organization undertakes a large – scale selling and promotion effort.

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Marketing Concept

The marketing management philosophy that holds that achieving organizational goals depends on determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors do.

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Societal Marketing Concept

The idea that the organization should determine the needs, wants, and interests of target markets and deliver the desired satisfactions more effectively and efficiently than competitors in a way that maintains or improves the consumer’s and society’s well – being.

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Three Considerations Underlying The Societal Marketing

Societal marketing

concept

Society(Human welfare)

Company(Profits)

Consumers(Want satisfaction)

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Modern Marketing Concept

Modern marketing concept depends on achievement of organizational goals through customer satisfaction. Whole marketing effort centers around determining the needs and wants of target markets and delivering the desired satisfaction more effectively and efficiently than the competitors do.

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Modern Marketing Concept

Focus: the focus of the firm following marketing concept is on the development of those products or services which can satisfy the needs of the consumers better than the competitors

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Features of Marketing Concept

1. customer orientation2. Marketing research3. Marketing planning4. Integrated marketing5. Systems approach6. Long term viewpoint

Marketing vs. Sales1. Marketing focuses on customers’ needsSelling focuses on sellers’ needs.2. Under marketing customer enjoys supreme importanceUnder selling product enjoys supreme importance3. Under marketing, focus is on matching product with marketUnder selling, the focus is to sell goods already produced

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Marketing vs. Sales4. Under marketing, integrated approach to achieve long term goals.Under selling, fragmented approach to achieve immediate gains5. Under marketing, the stress is on converting customers’ needs into productsUnder selling, it is converting products into cash6. Caveat vendor (let the seller beware)Caveat emptor (let the buyer beware)7. Profits through customer satisfactionProfits through sales volume

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Factory Existing products

Selling and

promoting

Profits through sales volume

Starting point

Focus Means Ends

The selling concept

Market Customer needs

Integrated marketing

Profits through customer

satisfaction

The marketing concept

 The selling and Marketing Concepts Contrasted

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MARKETING CHALLENGES INTO THE NEW CENTURY

GROWTH OF NON-PROFIT MARKETING THE INFORMANTION TECHNOLOGY

BOOM RAPID GLOBALIZATION THE CHANGING WORLD ECONOMY THE CALL FOR MORE ETHICS AND

SOCIAL RESPONSIBILITY

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THE NEW MARKETING

LANDSCAPE

The past decade taught business firms everywhere a humbling lesson. Domestic companies learned that they can no longer ignore global markets and competitors. Successful firms in mature industries learned that they cannot overlook emerging markets, technologies, and management approaches. Companies of every sort learned that they cannot remain inwardly focused, ignoring the needs of customers and their environment.