MARKETING

Prof. Jogendra Nayak Department of Management Studies IIT Roorkee

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CHANGES IN LIFESTYLE
Earlier Present

Tap water Newspaper Sports Telephone Typewriter Ticket booking Kirana stores

Mineral water Virtual paper Video games Mobile Computer Online booking Shopping centres
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Marketing
Marketing is the process of communicating the value of a product or service to customers, for the purpose of selling that product or service. From a societal point of view, marketing is the link between a societys material requirements and its economic patterns of response. Marketing satisfies these needs and wants through exchange processes and building long term relationships. Marketing can be looked at as an organizational function and a set of processes for creating, delivering and communicating value to customers, and managing customer relationships in ways that also benefit the organization and its shareholders. Marketing is the science of choosing target markets through market analysis and market segmentation, as well as understanding consumer buying behavior and providing superior customer value.

 There are five competing concepts under which organizations can choose to operate their business; the production concept, the product concept, the selling concept, the marketing concept, and the holistic marketing concept. The four components of holistic marketing are relationship marketing, internal marketing, integrated marketing, and socially responsive marketing. The set of engagements necessary for successful marketing management includes, capturing marketing insights, connecting with customers, building strong brands, shaping the market offerings, delivering and communicating value, creating long-term growth, and developing marketing strategies and plans.
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Needs, wants and demands Markets Market place Virtual Meta markets

DEMAND
Negative demand- Consumers dislike the product and may even pay a price to avoid it. (Hospitals, Life Insurance) Nonexistent demand Consumers may be unaware or uninterested in the product. (Pager, Typewriter) Latent demand Consumers may share a strong need that cannot be satisfied by an existing product. (Private Autorickshaws) Declining demand Consumers begin to buy the product less frequently or not at all. (CD Players, Picture Tubes) Irregular demand Consumer purchases vary on a seasonal, monthly, weekly, daily, or even hourly basis. (Fire Crackers, Ice Creams) Full demand Consumers are adequately buying all products put into the marketplace. (Ideal Situation where supply = demand) Overfull demand More consumers would like to buy the product than can be satisfied.(Energy, Maruti Swift which still has a waiting list) Unwholesome demand Consumers may be attracted to products that have undesirable social consequences. (Drugs, Cigarettes)
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What is marketed?
Goods Services Events Experiences Persons Places Properties Organizations Information Ideas
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Challenges in Indian market

High volatility in market Diversity Disparity in income Accessibility Concern for ecology Role of social channels Fast change in lifestyle (DINKs)
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The customer
Customer life cycle
Prospect First time buyer Repeat buyer Core buyer defector

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Barriers to entry and exit

Government policy Presence of strong brands Technology Customer preferences Economies of size Capital intensive Intellectual property High switching costs Investment in specialized equipment Specialized skills
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MARKET STRUCTURE
In economics, market structure is the number of firms producing identical products which are homogeneous. The types of market structures include the following: Monopolistic competition, also called competitive market, where there is a large number of firms, each having a small proportion of the market share and slightly differentiated products. Oligopoly, in which a market is run by a small number of firms that together control the majority of the market share. Duopoly, a special case of an oligopoly with two firms. Monopsony, when there is only one buyer in a market. Oligopsony, a market where many sellers can be present but meet only a few buyers.
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 Monopoly, where there is only one provider of a product or service. Natural monopoly, a monopoly in which economies of scale cause efficiency to increase continuously with the size of the firm. A firm is a natural monopoly if it is able to serve the entire market demand at a lower cost than any combination of two or more smaller, more specialized firms. Perfect competition, a theoretical market structure that features no barriers to entry, an unlimited number of producers and consumers, and a perfectly elastic demand curve. The imperfectly competitive structure is quite identical to the realistic market conditions where some monopolistic competitors, monopolists, oligopolists, and duopolists exist and dominate the market conditions. The elements of Market Structure include the number and size distribution of firms, entry conditions, and the extent of differentiation.
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Competition
Merriam-Webster defines competition in business as "the effort of two or more parties acting independently to secure the business of a third party by offering the most favorable terms". It was described by Adam Smith in The Wealth of Nations (1776) and later economists as allocating productive resources to their most highly-valued uses and encouraging efficiency.

Innovative solutions to existing problems Price war Switching channels of distribution Service based competition Experience based competition
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Market opportunity
Demand analysis Segment analysis Industry analysis Competitor analysis

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SOURCES OF INFORMATION FOR MARKET OPPORTUNITY ANALYSIS

Published Sources
Periodicals and newspapers Trade association reports Standardized information service reports Government documents Company reports

Personal observation
Of customers Of competitors Of macroenvironmental influences
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SOURCES OF INFORMATION FOR MARKET OPPORTUNITY ANALYSIS (continued)

Interviews with experts
Managers of suppliers Managers of trade companies Managers of trade associations Consultants Salespersons

Primary marketing research

Cross-sectional surveys Longitudinal panels Experiments
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TYPES OF ADOPTERS BY ADOPTION TIME REQUIRED

Proportion of eventual adopters

Innovators

Early adopters

Early majority

Late majority Laggards

Time to adoption decision

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Marketing planning
PIMS approach Portfolio methods
BCG Approach GE Approach

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Segmentation
Definition Need for segmentation Mass marketing Niche marketing Local marketing Individual marketing

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Segmenting consumer markets

Geographic Demographic Psychographic Behavioural VALS Framework

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Segmentation Bases
Geographic
Country Region County size SMSA population Density

Demographic
Age Sex Income Education Occupation Race Family life cycle

Segmentation Bases
Psychographic
Social class Personality Lifestyle Activities, interests, & opinions (AIOs)

Behavioralistic
Decision unit Usage rate Readiness Benefits sought Occasion Brand loyalty

Segmenting business markets

Demographic Operating variables Purchasing approaches Situational factors Personal characteristics

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Positioning

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Product strategy
Levels of a product
Core Basic Expected Augmented potential

Product classifications
Durability and tangibility(durable, nondurable, services) Consumer goods classification(convenience, shopping, specialty, unsought) Industrial goods classification(materials and parts, capital items, supplies and business services)
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Product mix
Product mix
Length Width Depth Consistency

Line stretching Line filling Line pruning Co branding

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Setting the price

Setting the pricing objective Determining demand Estimating costs Analyzing competitors costs, prices and offers Selecting a pricing method Selecting the final price

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Pricing objectives
Survival Maximize profit Maximize market share Maximum market skimming Product quality leadership

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Pricing
Product line pricing Optional feature pricing Captive product pricing Two part pricing By-product pricing Product bundling pricing

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Pricing method
Markup pricing Target return pricing Perceived value pricing Value pricing Going rate pricing

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ALTERNATIVE MARKETING CHANNELS

Manufacturers / producers

Agents / brokers

Wholesalers /distributors

Retailers

Retailers

Consumers and organizational end-users

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Channel design decisions

Design stages
Identification of channel alternatives

Decision criteria
Intensity of distribution Access to end-user Prevailing distribution practices Necessary activities and functions

Evaluation and selection of channel(s) to be used

Revenue-cost analysis Time horizon for development Control considerations Legal constraints Channel availability

Selection of channel participants

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Market coverage Capability Intermediarys needs Functions provided Availability

PROMOTION MIX TOOLS

Advertising Print ads Broadcast ads Billboard ads Packaging logos and information The promotion mix Personal selling In-person sales presentations Telemarketing

Sales promotion Games, contests Free samples Trade shows Couponing Trading stamps Price promotion Signs and displays

Publicity Print media news stories Broadcast media news stories Annual reports Speeches by employees

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PROMOTION TOOLS STRENGTHS AND WEAKNESSES

Criteria Cost per Audience member Confined to target markets Advertising Sales promotion Publicity Personal selling Low Low Very low Very high Very good

Poor to good

Good

Moderate

Deliver a Complicated message Interchange with audiences Credibility

Poor to good

Poor

Poor to good

Very good

None

None

Low to moderate

Very good

Low

Low
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High

Moderate to high

Marketing channels
Role of channels Levels of channel Channel design decisions
Lot size Waiting and delivery time Variety Service backup

Channel conflict
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