June 2009

MARKETING
MANAGEMENT

JUHI MODI
L.S.Raheja BMS
Why Study Marketing?

• Plays an important role in society

• Vital to business survival, profits, and

growth

• Offers career opportunities

• Affects your life every day

“Marketing is too important to be left to the

marketing department.”

--David Packard, Hewlett-Packard

What is Marketing ?
• Personal Selling?

• Advertising?

• Making products available in

stores?

• Maintaining inventories?
All of the above, plus much more!
What is Marketing ?

A Set of Activities,
including:
A Philosophy
Products
A Function
Services
A Management
Orientation Pricing
Promotion
Distribution
What is Marketing ?
What is Marketing ?

The American Marketing Association Definition

Marketing is the process of planning and

executing the conception, pricing, promotion,
and distribution of ideas, goods, and services
to create exchanges that satisfy individual
and organizational goals.
 Functions of Marketing
Market
Other Research
Product
Functional
Development
Areas

Branding Advertising

MARKETING
Test Sales
Marketing Promotion

After Sale
Pricing
Service

Personal Physical
Selling Distribution
 Core Marketing Concepts
 Needs , Wants & Demands
 Marketers , Prospects & a Market
 Product or Offering
 The Exchange Concept
 Developing Competitive Advantage
 Market Segmentation & Target Markets
 Marketing Environment
 Marketing Mix
 Marketing Channels
 Supply Chain
 Needs , Wants & Demands

Needs are basic human requirements which need to be

fulfilled in order to survive.

The needs become wants when they are directed to

specific objects that may satisfy the need.

Demands are wants or desires backed by ability to pay &

willingness to buy specific products.
 Marketers , Prospects & a Market

A Marketer is someone seeking a response from another

party , called the prospect.

A Market is a group of people or organization , with needs

or wants & with the ability & willingness to buy.
Product or Offering

Product is any offering that can satisfy

a need or a want.

Brand is an offering from a known

source , which identifies a seller’s
product & differentiates it from the
competitors’ product.
The Exchange Concept
Exchange involves obtaining a desired product from
someone by offering something in return.

At Least Two
Parties Something of
Value

Necessary Ability to
Conditions for Communicate Offer
Exchange

Freedom to
Accept or Reject
Desire to Deal
With Other Part
The Exchange Concept

Exchange may not take place

even if conditions are met

An Agreement must be reached

Marketing occurs even if

exchange does not take place
 The Exchange Concept
A Transaction is a trade of values between two parties, on
monetary or barter basis.

A Transaction involves several dimensions :-

– At Least Two things of value
– Agreed upon conditions
– A time of agreement
– A place of agreement

Transfer differs from transaction , it can take place without

consideration.
Developing Competitive Advantage

Companies Create
Competitive Advantage by
Stressing Customer
Importance

Create Retain customers &

Customer build Long term
Value relationships
Maintain Customer
Satisfaction
 Customer Value
• Customer value is the bundle of
benefits customers expect from a
given product or service.

• Its no longer enough to satisfy the

customer , you must delight them!

• Customers are value maximizers

• Marketing is process of Value

Creation between two entities
through the process of transaction.
 Customer Satisfaction

Customer Satisfaction is a consumer’s feelings

resulting from comparing a product’s outcome in
relation to his/her expectations.

– A marketer must meet or exceed customer’s

expectations.

– Focus on keeping customers satisfied.

– Provide solutions to customer’s problems.

 Customer Retention
Customer retention is about developing loyal customers &
building long term relationships.

The key to customer retention is customer satisfaction.

A Highly satisfied customer

– always stays loyal to the company .

– pays less attention to competing brands & is less sensitive to
price.
– Costs less to serve than new customers as the transactions are
routinized.
– Talks favorably about the company & its products.
 Market Segmentation & Target Markets

Market Segmentation is a process of dividing a

market into meaningful, relatively similar, identifiable
segments or groups.

– identifying those segments that offer greatest

opportunity to serve.

– The selected market segment becomes the

Target Market.

– The marketer develops a market offering for

each Target Market.
Market Segmentation & Target Markets
Marketing Environment
 Marketing mix
Marketing mix is a set of marketing variables that the firm uses
to pursue its marketing objectives in the target market.

E.Jerome McCarthy classified these variables ,which he called the

four Ps of Marketing.

 PRODUCT

 PRICE

 PLACE

 PROMOTION
Marketing mix
 Marketing mix
Apart from the 4 Ps of Marketing , there have been
attempts to develop an ‘extended marketing mix’ to
better accommodate specific aspects of marketing.

•People

•Process

• Physical Enviornment
Marketing mix
 Marketing mix
The 3 C’s Model comprises of :

Customer Analysis

Company Analysis Competition Analysis

 Marketing Channels
Marketing Channels link the marketer to the target
customers.

To reach to the target customer the marketer uses three kinds of

channels.

Communication Channels
– To deliver & receive messages from target buyers.
Distribution Channels
– To display or deliver the physical product or service to
the buyer or user.
Selling Channels
– To effect transactions with potential buyers.
Marketing Channels

Examples of Marketing Channels

 Supply Chain
The Supply Chain is the connecting link from the raw
materials & components to final products which are
delivered to the buyers.
A Cigarette Co. Supply Chain
Marketing Management Philosophies

The Production Concept

The Production concept holds that consumers will prefer
products which are widely available & inexpensive.

– Achieving high production efficiency

– Low costs

– Mass distribution

– less developed countries

– Market expansion
Marketing Management Philosophies

The Product Concept

The Product concept holds that consumers will favor the

most quality , performance or innovative features

– Product Excellence & Quality Assurance

– The Management & Product Love Affair

– Marketing Myopia
Marketing Management Philosophies

The Selling Concept

The Selling concept holds that consumers & businesses if

left alone ,will ordinarily not buy enough of the
organizations products.

– Aggressive selling & promotion effort

– Unsought goods & non profit areas

– Hard Sell v/s consumer wants

– Overcapacity
Marketing Management Philosophies

The Marketing Concept

The Marketing concept holds that consumers a business

should start with the determination of consumer wants & end
with the satisfaction of those wants.

– Consumer Orientation

– Integrated Management

– Customer Satisfaction

– Competitor Intelligence

– Realization of Organizational Goals

Marketing Management Philosophies
 RELATIONSHIP MARKETING
Involves building long term mutually satisfying
Relations with key parties , in order to earn &
retain their long term preference & business.

Marketers have realized that the success of marketing depends

upon relationships with :

Customers
Distributors
Dealers
Suppliers

The operating principle is simple:

build an effective network of relationships with key
stakeholders & profits will follow.
Are companies that do an excellent job
of satisfying consumer wants,
necessarily acting in the best ,long run
interests of consumers & society ??
 SOCIETAL MARKETING

Societal Marketing =

Consumer Satisfaction + Company ‘ s

Profits + Society’s well being

Societal Marketing Focuses on satisfying

customer needs &
wants while enhancing individual &
societal well-being
 Importance of Marketing
•Information for Marketing Decisions

•Accomplishment of firm’s objectives

•Widens Markets

•Reputation

•Helps to Develop Brand Loyalty

•Helps to introduce new product

•Helps to face competition

•Movement of goods
Marketing v/s Selling

Meaning
Center / Focus
Perspective
Target Market Focus
Marketing Mix
Process
Nature of Process
Price Determination
Inter-functional Integration
views on customer focus
Market
 Marketing Activities
Gather, analyze, interpret information about environment

Understand organization’s mission and marketing’s role

Conduct a market opportunity analysis

Develop a marketing strategy

Implement the marketing strategy

Evaluate marketing efforts and make changes

Marketing Process
 Trends in Marketing

E-Commerce / E-Marketing

Web / Internet Marketing

Marketing using social networks

 E-Commerce

• Business done online.

• The biggest development in commerce since invention

of money.

• Changing the way people work , buy & Live.

• Involves exchange of products , services , information

& payment through the electronic medium of
computers/networks.

• E-commerce results when a firm connects its business

systems to its customers , distributors , vendors etc…
 E-Commerce

It is the umbrella term for the entire spectrum of

activities such as electronic data interchange ,
electronic payment systems , order management ,
information exchange & other business applications
with paperless or electronic documentation.

Ecommerce has three broad components

B
B to B
B to C
 Web Marketing

A Firms efforts to communicate , promote &

sell its products & services over the internet.

Interactive form of marketing

The two components of web marketing are :

 Marketing to Business Buyers

 Marketing to ultimate consumers
 Web Marketing

We can view web marketing in four ways :

•A Business
• A Medium
• A Marketing Channel (or tool for channel less marketing)
•A Complete Market place

•Elevation of the Web from a medium of communication

to a marketing channel to a complete market place.

•The largest, most dynamic, sleepless, electronic

bazaar/mall of goods and services , the world has ever
seen!!
 Conducting Online Marketing

Electronic Presence

Advertising On-Line

Forums, Newsgroups, Bulletin Boards & web

communities

Email & Web casting

 Benefits to Consumers
Convenience

Scope for informed & competitive buying

• Search advantage & options

• Bargain!!
• Can get “more for less”
• Transparency
• Accuracy

• Shift of the power equation

 Benefits to marketers
Access to all markets.

Renders global marketing feasible for even small firms.

Helps constraints-free growth.

Scope for enhancing customer value & customer service.

Helps Relationship building

Helps reduce costs

Enhances productivity of sales people

Enables to adjust quickly to market conditions

• A versatile medium of communication.

 Limitations
All products do not lend equally well for Web
marketing

Limitation of examining the product

Problem of Delivery

Problem of confidence

Problem of payment

Low Density of PC’s & internet

Legal Problems
Indian Firms taking to Web Marketing

Banking Industry

Entertainment Industry

Information Service

Stock Broking

Airways

Hotels

Others
 Problems Web Marketing faces in India

Legal / Regulatory Problems

• E-documentation is not yet legally admissible
• Absence of Taxation Law

• Infrastructural Problems
• Low density of telephone, PCs & internet access
•Infrastructural bottlenecks

• Commercial Problems
• Problem relating to payment
• Low density of credit cards
• Inability to pay foreign suppliers

Other Problems
•Confidence in the system is low
•Problem of Hacking
•Problem of Illiteracy