Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
MARKETING MANAGEMENT
UNIT I
2013
WWW.EDHOLE.COM
Consumer ................................................................................................................................ 8
Consumer Interest ............................................................................................................................................... 8
Directing ........................................................................................................................................ 11
Controlling ..................................................................................................................................... 12
Market environment...................................................................................................................... 12
Micro environment of marketing ....................................................................................................................... 13
Macro environment of marketing ...................................................................................................................... 14
Factor affecting marketing environment ........................................................................................................... 14
Time Frame.................................................................................................................................................... 18
Considerations............................................................................................................................................... 18
Importance of Marketing
Financial success of any organization depends upon marketing ability of that organization.
There should be sufficient demand for products & services so the company can make profit.
Therefore many companies created chief marketing officer (CMO) position to put marketing on
a more equal footing with other e-level executives. Marketing is tricky & large well known
business such as Levis, Kodak, Xerox etc. had to rethink their business models, Even Microsoft,
Wal-Mart, Nike who are market leaders cannot relax. Thus, we can say that making the right
decision is not easy & marketing managers must take major decisions about the features of the
product prices & design of the product, where to sell products & expenditure on sales &
advertising. Good marketing is no accident but a result of careful planning & execution.
Marketing practices are continuously being refined to increase the chances of success. But
marketing excellence is rare & difficult to achieve & is a never ending task. Eg. NIRMA The
brand icon of the young girl has adorned the package of Nirma washing powder. The jingle has
become one of the enduring times in Indian advertising.
Marketing Strategy
Marketing strategy is a process that can allow an organization to concentrate its limited
resources on the greatest opportunities to increase sales and achieve a sustainable competitive
advantage.
Marketing strategies
Marketing strategies serve as the fundamental underpinning of marketing plans designed to fill
market needs and reach marketing objectives. Plans and objectives are generally tested for
measurable results. Commonly, marketing strategies are developed as multi-year plans, with a
tactical plan detailing specific actions to be accomplished in the current year. Time horizons
covered by the marketing plan vary by company, by industry, and by nation, however, time
horizons are becoming shorter as the speed of change in the environment increases. Marketing
strategies are dynamic and interactive. They are partially planned and partially unplanned. See
strategy dynamics. Marketing strategy involves careful scanning of the internal and external
environments which are summarized in a SWOT analysis. Internal environmental factors include
the marketing mix, plus performance analysis and strategic constraints. External environmental
factors include customer analysis, competitor analysis, target market analysis, as well as
evaluation of any elements of the technological, economic, cultural or political/legal
environment likely to impact success. A key component of marketing strategy is often to keep
marketing in line with a company's overarching mission statement. Besides SWOT analysis,
portfolio analyses such as the GE/McKinsey matrix can or COPE analysis be performed to
determine the strategic focus. Once a thorough environmental scan is complete, a strategic plan
can be constructed to identify business alternatives, establish challenging goals, determine the
optimal marketing mix to attain these goals, and detail implementation. A final step in
developing a marketing strategy is to create a plan to monitor progress and a set of contingencies
if problems arise in the implementation of the plan.
Selling Marketing
1. Selling starts with the seller & the needs of the seller Marketing starts with the buyer &
needs of buyer
2. Seeks to quickly convert products into cash. Seeks to convert customer needs into
products
3. Seller is the centre of business universe Buyer is the centre of the business universe
4. Views Business as a goods producing process Views businesses as a customer satisfying
process.
5. Seller preference determines the formulation of marketing mix. Buyer determines the shape
marketing mix should take.
6. Selling is product oriented Marketing is customer oriented.
7. Sellers motives dominate marketing communication Marketing communication is looked
upon as a tool for communicating the benefits / satisfactions provided by the product.
Retail stores which stock unique products (not available at any other store) quote a higher price
from the buyers.
Place
Place refers to the location where the products are available and can be sold or purchased.
Buyers can purchase products either from physical markets or from virtual markets. In a physical
market, buyers and sellers can physically meet and interact with each other whereas in a virtual
market buyers and sellers meet through internet.
Promotion
Promotion refers to the various strategies and ideas implemented by the marketers to make the
end - users aware of their brand. Promotion includes various techniques employed to promote
and make a brand popular amongst the masses.
Promotion can be through any of the following ways:
Advertising
Print media, Television, radio are effective ways to entice customers and make them aware of the
brands existence.
Billboards, hoardings, banners installed intelligently at strategic locations like heavy traffic
areas, crossings, railway stations, bus stands attract the passing individuals towards a particular
brand.
Taglines also increase the recall value of the brand amongst the customers.
Word of mouth
One satisfied customer brings ten more customers along with him whereas one dis-satisfied
customer takes away ten more customers. Thats the importance of word of mouth. Positive word
of mouth goes a long way in promoting brands amongst the customers.
Lately three more Ps have been added to the marketing mix. They are as follows:
People - The individuals involved in the sale and purchase of products or services come under
people.
Process - Process includes the various mechanisms and procedures which help the product to
finally reach its target market
Physical Evidence - With the help of physical evidence, a marketer tries to communicate the
USPs and benefits of a product to the end users
Now a day, organizations treat their customers like kings. In the current scenario, the four Cs
has thus replaced the four Ps of marketing making it a more customer oriented model. Koichi
Shimizu in the year 1973 proposed a four Cs classification.
Commodity - (Replaces Products)
Cost - (Replaces Price) involves manufacturing cost, buying cost and selling cost
Channel - The various channels which help the product reach the target market.
Communication - (Replaces Promotion)
Robert F. Lauterborn gave a modernized version of the four Cs model in the year 1993.
According to him the four Cs of marketing are:
ConsumerCostConvenienceCommunication\
Consumer
Any individual who purchases goods and services from the market for his/her end-use is called a
consumer.
In simpler words a consumer is one who consumes goods and services available in the market.
Example - Tom might purchase a tricycle for his son or Mike might buy a shirt for himself. In
the above examples, both Tom and Mike are consumers.
Consumer Interest
Every customer shows inclination towards particular products and services. Consumer interest is
nothing but willingness of consumers to purchase products and services as per their taste, need
and of course pocket.
Let us go through the following example:
Both Maria and Sandra went to the nearby shopping mall to buy dresses for themselves. The
store manager showed them the best dresses available with him. Maria immediately purchased
two dresses but Sandra returned home empty handed. The dresses were little too expensive for
Sandra and she preferred simple and subtle designs as compared to designer wears available at
the store.
In the above example Sandra and Maria had similar requirements but there was a huge difference
in their taste, mind set and ability to spend.
Consumer Markets
Consumer markets are the markets for products and services bought by individuals for their own
or family use. Goods bought in consumer markets can be categorised in several ways:
Fast-moving consumer goods (FMCG's)
These are high volume, low unit value, fast repurchase Examples include: Ready meals;
Baked Beans; Newspapers
Consumer durables
These have low volume but high unit value. Consumer durables are often further divided into:
White goods (e.g. fridge-freezers; cookers; dishwashers; microwaves) Brown goods (e.g. DVD
players; games consoles; personal computers)
Soft goods Soft goods are similar to consumer durables, except that they wear out more
quickly and therefore have a shorter replacement cycle Examples include clothes, shoes
Services (e.g. hairdressing, dentists, childcare)
Industrial Markets
Industrial markets involve the sale of goods between businesses. These are goods that are not
aimed directly at consumers. Industrial markets include
Industrial markets often require a slightly different marketing strategy and mix. In particular, a
business may have to focus on a relatively small number of potential buyers (e.g. the IT Director
responsible for ordering computer equipment in a multinational group). Whereas consumer
marketing tends to be aimed at the mass market (in some cases, many millions of potential
customers), industrial marketing tends to be focused.
Depending on budget availability and the skills of the team, you may choose to outsource certain
elements of the marketing process (such as market research) or decide to do these jobs in-house.
Key responsibilities of the marketing manager / director vary according to the business but can
include:
Function of management
Planning
It is the basic function of management. It deals with chalking out a future course of action &
deciding in advance the most appropriate course of actions for achievement of pre-determined
goals. According to KOONTZ, Planning is deciding in advance - what to do, when to do & how
to do. It bridges the gap from where we are & where we want to be. A plan is a future course of
actions. It is an exercise in problem solving & decision making. Planning is determination of
courses of action to achieve desired goals. Thus, planning is a systematic thinking about ways &
means for accomplishment of pre-determined goals. Planning is necessary to ensure proper
utilization of human & non-human resources. It is all pervasive, it is an intellectual activity and it
also helps in avoiding confusion, uncertainties, risks, wastages etc.
Organizing
It is the process of bringing together physical, financial and human resources and developing
productive relationship amongst them for achievement of organizational goals. According to
Henry Fayol, To organize a business is to provide it with everything useful or its functioning
i.e. raw material, tools, capital and personnels. To organize a business involves determining &
providing human and non-human resources to the organizational structure. Organizing as a
process involves:
Identification of activities.
Staffing
It is the function of manning the organization structure and keeping it manned. Staffing has
assumed greater importance in the recent years due to advancement of technology, increase in
size of business, complexity of human behavior etc. The main purpose o staffing is to put right
man on right job i.e. square pegs in square holes and round pegs in round holes. According to
Kootz & ODonell, Managerial function of staffing involves manning the organization structure
through proper and effective selection, appraisal & development of personnel to fill the roles
designed un the structure. Staffing involves:
Manpower Planning (estimating man power in terms of searching, choose the person and giving
the right place).
Directing
It is that part of managerial function which actuates the organizational methods to work
efficiently for achievement of organizational purposes. It is considered life-spark of the
enterprise which sets it in motion the action of people because planning, organizing and staffing
are the mere preparations for doing the work. Direction is that inert-personnel aspect of
management which deals directly with influencing, guiding, supervising, motivating sub-ordinate
for the achievement of organizational goals. Direction has following elements:
Supervision
Motivation
Leadership
Communication
Supervision- implies overseeing the work of subordinates by their superiors. It is the act of
watching & directing work & workers.
Motivation- means inspiring, stimulating or encouraging the sub-ordinates with zeal to work.
Positive, negative, monetary, non-monetary incentives may be used for this purpose.
Leadership- may be defined as a process by which manager guides and influences the work of
subordinates in desired direction.
Communications- is the process of passing information, experience, opinion etc from one person
to another. It is a bridge of understanding.
Controlling
It implies measurement of accomplishment against the standards and correction of deviation if
any to ensure achievement of organizational goals. The purpose of controlling is to ensure that
everything occurs in conformities with the standards. An efficient system of control helps to
predict deviations before they actually occur. According to Theo Haimann , Controlling is the
process of checking whether or not proper progress is being made towards the objectives and
goals and acting if necessary, to correct any deviation. According to Koontz & ODonell
Controlling is the measurement & correction of performance activities of subordinates in order
to make sure that the enterprise objectives and plans desired to obtain them as being
accomplished. Therefore controlling has following steps:
Market environment
The market environment is a marketing term and refers to factors and forces that affect a firms
ability to build and maintain successful relationships with customers. Three levels of the
environment are: Micro (internal) environment - small forces within the company that affect its
ability to serve its customers. Meso environment the industry in which a company operates and
the industrys market(s) Macro (national) environment - larger societal forces that affect the
microenvironment
Marketing environment is one of the important terms of marketing management. It is external to
marketing management and is uncontrollable and ever changing. It consists of
Intra-organizational environment
Micro environment
Macro environment
Global environment (see figure 1):-
Successful companies know the importance of constantly scanning and adopting the changing
environment. Marketing environment mainly consists of
micro and macro environment(see figure 2):-
Public:-the company must have good public relation department to maintain good relations with
the public.
Economic factors: deals with function like purchasing power parity, income level, savings level
and interest rates among many other. For example, countries with a high income level are more
likely to afford luxury items compare to a low income level country. Savings level and interest
rate determine the borrowing power as well as spending power of consumer.
Ecological factors: consist of natural resource composition in a given county. For example,
demand for fossil fuel has sky rocketed in recent years there by increasing general price level in
the market. Companies, therefore, are looking forward to designing products which eco-friendly
design that is they are less fuel dependent and give out less pollution.
Technology factors: like internet and connectivity are changing the face of business. More and
more people are doing business online. Science and medicine are also part of technology factors.
Challenge for the company is to keep up with innovation and offer products, which are not
obsolete.
Political environment: is also changing with more and more market based system rather than the
socialist system. Furthermore, regulatory requirements like competition policy, investment
policy, tax policy, etc. companies should investigate before taking their business to a particular
country.
Culture environment: deals with factors like opinion people have towards themselves, others,
organization and society in general. People have become more eco conscious, contributing one
or many causes they can relate to, want organization to be responsible for their action and are
looking to open society with meaningful co-existence.
system offering the firm a Competitive advantage. Marketing Information should not be
approached in an infrequent manner. If research is done this way, a firm could face these risks:
The total information needs of the marketing department can be specified and satisfied via a
marketing intelligence network, which contains three components.
1. Continuous monitoring is the procedure by which the changing environment is regularly
viewed.2. Marketing research is used to obtain information on particular marketing issues.3.
Data warehousing involves the retention of all types of relevant company records, as well as the
information collected through continuous monitoring and marketing research that is kept by the
organization.
Depending on a firms resources and the complexity of its needs, a marketing intelligence
network may or may not be fully computerized. The ingredients for a good MIS are consistency,
completeness, and orderliness. Marketing plans should be implemented on the basis of
information obtained from the intelligence network.
An Marketing Information System offers many advantages:
1. Organized data collection.2. A broad perspective.3. The storage of important data.4. An
avoidance of crises.5. Coordinated marketing plans.6. Speed in obtaining sufficient information
to make decisions.7. Data amassed and kept over several time periods.8. The ability to do a costbenefit analysis.
The disadvantages of a Marketing information system are high initial time and labor costs and
the complexity of setting up an information system. Marketers often complain that they lack
enough marketing information or the right kind, or have too much of the wrong kind. The
solution is an effective marketing information system.
The information needed by marketing managers comes from three main sources:
1) Internal company information E.g. sales, orders, customer profiles, stocks, customer service
reports etc
2) Marketing intelligence This can be information gathered from many sources, including
suppliers, customers, and distributors. Marketing intelligence is a catchall term to include all the
everyday information about developments in the market that helps a business prepare and adjust
its marketing plans. It is possible to buy intelligence information from outside suppliers (e.g.
IDC, ORG, MARG) who set up data gathering systems to support commercial intelligence
products that can be profitably sold to all players in a market.
(3) Market research Management cannot always wait for information to arrive in bits and
pieces from internal sources. Also, sources of market intelligence cannot always be relied upon
to provide relevant or up-to-date information (particularly for smaller or niche market segments).
In such circumstances, businesses often need to undertake specific studies to support their
marketing strategy this is market research.
Benefits
The primary benefit of a strategic marketing plan is that it puts a written guide in place for a
business to follow to reach its goals and objectives. The second major advantage of strategic
marketing planning is that is allows the business to create and utilize consistent messaging
internally and externally. Consistent messaging in marketing creates efficient companies because
employees and customers understand what the company offers and how the company offers it.
They work toward a common goal. Efficient companies typically see an increase in revenues and
market share, while it sees a decrease in expenses. Ultimately, it all leads to an increase in
company profitability.
Time Frame
Strategic marketing planning is not a one-time action, but rather an ongoing process. Typically, a
company creates a strategic marketing plan that covers short-term (one year) and long-term (two
year, three year and five year plans) periods. When a strategic marketing plan is put in place, the
company uses it as a guide for six months to one year at a time. The company then evaluates the
strategic plan by measuring the results of the marketing programs the plan put in place. After
evaluating the strategic marketing plan on a six-month or one-year basis, the company may
tweak the plan to improve efforts that didnt go as planned or to mimic the results of plans that
achieved success.
Considerations
Effective strategic marketing planning requires companies to conduct a great deal of research
and to really get to know its target market. Companies need to fully get to know who the target
market is, how they think and feel, what they do, how old they are, where they live, what their
hobbies are and more. Companies need to be able to live, think, breathe and feel like their target
market to develop products and services that fit the needs of the target market. Companies need
to remember that product and service development needs to have an existing marketing to sell,
rather than developing products and services, and then seeking out a target market in which to
sell it.