FUNDAMENTALS OF MARKETING

Prof.D.K.Sakore B.Tech, PGDM (IIM Ahmedabad)

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Prof. DK Sakore
B.Tech in 1991, PGDM (IIM,Ahmedabad) 1993 15 years in corporate life (1993-2008) Diverse experience across industries in sales and marketing Covered 17 states and several countries abroad Started as Marketing Executive, then became Area Manager, Franchise Head, Product Manager and GM (Marketing)

Prof. DK Sakore
Joined Indira group in JULY 2008 Also teaching at Other IGI colleges, Sinhagad and VAMNICOM Family, Hobbies and Sports Participative learning Methodology Discussions, Class exercises, Outdoor assignments, Student Presentations, Case studies, Role Plays, Ads and Videos. Personal Interviews and GDs.

MBA can only provide you the map.

You have to decide the direction where you would like to go.
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Automobiles Hospitality IT & ITES Insurance Telecom Industrial Marketing Consumer Durables

Choice of Industries
Pharma Health Education Retail FMCG Real Estate Banking & F S
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The success mantra

Right amalgam of, Knowledge Skills Attitude Success : Combination of Talent and hard work Marketing : Toughest job physical and mental fitness (ulcer)
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Tools for Success

Books Texts and others Business Newspapers, Magazines Business News (TV) and Internet Competitions and Events Summer Training (PPO) Decide : Functions and Sectors (2/3)

Last (lost) Opportunity

Education - Past is history Best use of the facilities Academics, Personality, and Business Awareness Choice of Marketing - reasons Performance: Career and Future

Phillip Kotler on Marketing

Marketing takes a few days to learn, but it takes lifetime to master.
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What is Marketing ?
Personal Selling ? Advertising ? Making products available in stores ? Maintaining inventories ?

All of this and much more !!!

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Simple definition of Marketing

Meeting needs profitably Delivery of Customer satisfaction at a profit Delivers a higher standard of living to the society Class Exercise : Selling vs Marketing ???

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What is Marketing?
Marketing is a social & managerial process by which individuals & groups obtain what they need & want through creating, offering & exchanging products of value with others
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Concept of Exchange
Meaning ? Options Beg, borrow, steal, produce Fundamental Role Types 4 and examples of companies ? Necessary Conditions ??

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Conditions for Exchange

At least 2 parties Something of Value Ability to communicate the offer Freedom to accept or reject Desire to deal with other party

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Core Marketing Concepts

Need and Wants Desire and Demand Benefits and Value Market and Competition Consumer and Customer Customer Satisfaction and Delight

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Core Marketing Concepts

Products and Services Goods Services Continuum What is Marketed ?

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What is Marketed ?
Goods and Services Events and Experiences Persons and Places Information and Ideas Properties and Organizations

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What is your Target Market ?

People or Organizations with Needs or wants with The ability and The willingness to BUY.

A group of people that lacks any one of the above is not your target market.
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Departments in a Company ???

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Departments in a Company
Marketing Finance HR / Administration Production / Operations R&D
Legal Maintenance Quality Control Company Secretary Purchase / Procurement Systems / Computer

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Sections in a Marketing department ???

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Marketing Department
Marketing research Sales Logistics Business Analyst Business development Innovation Communication Services - CRM Product/ Brand management International Business
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Functions of Marketing
Exchange selling and buying (assembling) Physical Movement transportation, storage, packing, grading, bulk breaking, building distribution network Facilitating Financing, market information, strategy formulation, promotion, planning, branding

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Approaches to Marketing
Production Product Sales Marketing Societal Relational HOLISTIC components Class Exercise : examples of Companies ???

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Selling Vs Marketing
Starting point Focus on needs Objective Emphasis of Organization Dept. Relationships
Product design Price Communication Central function Push vs Pull Terms of Planning
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Concept of Marketing Myopia

Meaning Origin Examples Reasons Learning Mis-interpretations

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Marketing Myopia : Meaning

Short sighted-ness towards business Narrow or incorrect definition of Business - leading to decline

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Marketing Myopia : Origin

Theodore Levitt 1960 Lecturer at HBS Re-visited 1975

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Marketing Myopia : Examples

Rail roads Hollywood Studios Dry cleaning Electric utilities Grocery stores New England Textiles Petroleum Electronics Automobiles
E I DuPont De Nemours Corning Glass Works Kaiser Aluminium & Chemical Corporation Reynolds Metals Company

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Marketing Myopia : Reasons

Population Myth assured growth due to expanding and affluent population Idea of indispensability - Lack of Competitive Substitute Excessive Faith in Mass production resulting in declining unit cost Pre-occupation with R&D
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Marketing Myopia : Learning

No growth industry : Possibility of continued growth Failure at the top Senior management Need for Creative destruction Industry is customer satisfying process (needs) not goods producing process Need for Customer Orientation Visionary Leader with Clear Direction Focus on Marketing ???

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 Marketing Mania responsive to fleeting whims of customers, job shops Un planned expansion of product lines and business lines Sudden jump in marketing budgets and staff Change in Organization structures without proper thinking Unnecessary innovations, Steam shovels Examples in Real life Industry or company

Marketing Myopia : Misinterpretations

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Case Study Method

Analysing Case Study ???

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Case Study Method

Methodologies of Teaching Case and Case Study Method Types of Cases Role of Students and Teacher Benefits Tools used Steps in Case Analysis

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Steps in Case Analysis

Back ground Situation Analysis Problem Identification Reasons for Problems Alternative courses of Action Evaluation of Alternatives Recommendations Contingency Plan

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Marketing Planning Process

Levels in Organizations :

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1. 2. 3. 4. 5.

Analyzing Marketing opportunities Set Marketing Objectives Designing Marketing Strategies Developing Marketing Programs Managing Marketing Efforts

Marketing Planning Process

Levels in Organizations : Corporate, Division, SBU, Product

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Marketing Mix

4 Ps of a Product 7 Ps for a Service Class Exercise in Groups ???

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Marketing Mix
Environmental Variables (Uncontrollable) ??? Concept & Origin Definition & Significance (Controllable) Changes, combination and consistency 4 Ps to 4 Cs Unique features of Services and implications Extended 3Ps for Services origin

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Marketing Mix

Case Study on Marketing Mix ??? Sub-components of 7 Ps

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Product Price
Quality Variety Design Features Brand name Sizes Packaging Services Warranties

List Price Price Validity Payment terms Discount structure Incentive schemes Credit period

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Place Promotion
Channels Coverage Location Assortments Inventory Transport Advertising Sales Promotions Publicity Events Experiences Public Relations Direct Marketing Personal selling
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People Process
Customers Employees Education Training Recruitment Motivation Rewards Teamwork Flow of activities - Standardized / customized Number of steps - Simple / complex Degree of Customer involvement

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Physical Evidence
Equipment Signage Facility design - Layout - Furniture Aesthetics Staff Uniform Business stationary Ambient conditions - Temperature - Music

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Marketing Organization
Concept of Organization Evolution of Marketing in various eras Process of creating structures Types Functional, Geographic, Product, Matrix and Customer / Market based Pros and Cons
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Marketing Organization
Factors governing structure : 1.Type of firm mfg, mktg or both 2.Marketing by self or agents 3.Width of operations regional, national or international 4.No. of Product lines and nature of products 5.Extent of Competition and Customer Service

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Fundamental Requirements
1. 2. 3. 4. Unambiguous Job Specification Careful planning of Spans and Levels Relationship between Line and Staff Effective Co-ordination between various departments

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Inter departmental Relations

Customer Driven organization : 1. Need for harmony to pursue company objectives and think CUSTOMER. 2. Customer focused Role of all departments. Explain ???
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Inter departmental Relations

Conflicts rivalries and distrust Reasons for conflicts : 1.Constraints of Resources 2.Differences of Opinion 3.Overlapping Roles & responsibility 4.Dual control and authority 5.Perceived inequalities

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Outdoor Group Assignment

Marketing Organization
1.Select 2 companies in given sector. 2.Visit the Company head office or branch. 3.Find out Organization structure and total manpower. 4.Find out structure of Marketing department and manpower strength. 5.Find out designations and job profiles at various levels in Marketing department. 6.Make Power point presentation and submit report in next class.
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Buyer Behaviour
Concept and Definition Types & Differences Based on Concepts Need to study Buyer characteristics Buyers Decision Process Buying Roles Diffusion of Innovation Categories of Adopters

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Consumer Behaviour
Study of how individuals, groups and organizations select, buy, use and dispose of goods, services, ideas or experiences to satisfy their needs and wants Business Buying Define ???
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Class Exercise Types Differences ???

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Based on Concepts

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Based on Concepts Economics Psychology Sociology Anthropology Marketing

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Need to study Consumer Behavior ???

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Need to study Consumer 2 Behavior

Studying consumers provides clues for 1.Improving/introducing products & services 2.Setting prices 3.Devising channels 4.Crafting messages 5.Developing other marketing activities 6.Look for emerging trends and new opportunities To understand the buyer and to create a customer out of him
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Buyer Behaviour

C 4 P s E M n a

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e r B u y e r rD o e c ce i ss si o n

r k e t i n g B u y e r B u y e r v i r o n m C e h n a t r a c t e D r i e s ct i i c s s i o n

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Buyer characteristics
Factors influencing Consumer Behaviour ???

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Buyer characteristics
Factors influencing Consumer Behaviour Cultural broadest and deepest influence Social Personal Psychological
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Cultural factors
Culture US / India Sub culture North / South, Religion Multi-cultural marketing Social Class Urban & Rural Eg. Kelloggs, McDonalds

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Social factors
Reference Groups opinion leaders Family Orientation/Procreation
Joint / Nuclear family

Roles and Status VP / Salesman Eg. Provogue, Levis, Onida, Nerolac,

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Personal Factors
Age & Family Life Cycle Vehicle, Insurance, Investment Occupation & Economic Circumstancesworker/manager, clothes & shoes Personality and self concept Lifestyle Eg. Reid & Taylor, Belmonte
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Psychological Factors
Motivation Maslow, Freud, Herzberg Perception (Aggressive Salesman) Selective Attention/Distortion/Retention Eg. Diet Coke / Pepsi Learning Experience & Practice eg. LG product range Memory Encoding & Retrieval
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Factors influencing Consumer Behaviour

Class exercise in Groups

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Buyers Decision Process

Steps

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Buyers Decision Process

Problem (Need) Recognition Information Search Evaluation of Alternatives Purchase Decision intervening factors, components Post purchase behaviour Satisfaction, action, use, disposal
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Types of Consumer Buying Decisions

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Types of Consumer Buying Decisions

Routine Routine Response Response Behaviour Behaviour

Limited Limited Decision Decision Making Making

Extensive Extensive Decision Decision Making Making

Less Involvement

More Involvement
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Level of Consumer Involvement

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Level of Involvement
Previous Experience Previous Experience Interest Interest

Factors Factors Determining Determining Level of Level of Involvement Involvement

Social Visibility Social Visibility

Perceived Risk of Negative Perceived Risk of Negative Consequences Consequences

Situation Situation

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Buying Roles
Types Significance

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Buying Roles
Initiator Influencer Decider Buyer User

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Diffusion of Innovation

Adopter Categories
Implications

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5 Adopter Categories
Everett Rogers Diffusion of Innovation Innovators Early Adopters opinion leaders Early Majority Late Majority Laggards

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Adopter categorization
1. Innovators venturesome (2.5%) 2. Early adopters opinion leaders (13.5%) 3. Early majority deliberate (34%) After average person: 1. Late majority skeptical (34%) 2. Laggards traditional (16%)

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Cognitive Dissonance
Concept Implications

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Consumer Behaviour
Home Assignment

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Marketing Environment
Macro ? Micro ?? Need to understand ???

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Marketing Plan
Concept and Definition Need Contents

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Marketing Plan
Executive summary & table of contents Current marketing situation Opportunity & issue analysis SWOT Objectives financial & marketing goals Marketing strategy Action programs Plan forecasts Controls

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Marketing Plan
Executive summary & table of contents presents a brief overview of the proposed plan Current marketing situation presents relevant background data on the market, product, competition, distribution & macro-environment Opportunity & issue analysis SWOT Objectives defines the plans financial & marketing goals in terms of sales volume, market share & profits

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Marketing Plan
Marketing strategy presents the broad marketing approach that will be used to achieve the plans objectives Action programs presents the special marketing programs designed to achieve the business objectives Projected PL statement forecasts the plans expected financial outcomes Controls plan monitoring

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Concept & Origin Components Benefits

Corporate Social Responsibility

Cause related Marketing Social Marketing

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Segmentation, Targeting and Positioning

Concept Definition Need Strategies

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Segmentation
Market segment is a group of customers sharing a similar set of wants. To be useful, a segment must be: 1.Measurable - in terms of size, purchasing power etc. 2.Substantial large/profitable 3.Accessible can be effectively reached & served 4.Differentiable 5.Actionable

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Bases for Segmentation of Consumer Markets

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Bases for Segmentation of Consumer Markets

Geographic Demographic Psychographic Behavioral

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Geographic
1. Nation 2. State 3. Region 4. City 5. Climate 6. Density (urban/rural)

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Demographic
1. 2. 3. 4. 5. 6. 7. Age/Family size/Life cycle Education Income Religion/Race/Generation Nationality/Social class Gender Occupation

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Psychographic
1. Lifestyle culture, sports, outdoor, Page 3 etc 2. Personality introvert, extrovert, compulsive, ambitious, authoritarian etc

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Behavioral
1. 2. 3. 4. 5. 6. 7. Occasions regular, special Benefits User status non user, regular Usage rate light, heavy Loyalty status medium, strong Readiness stage unaware, aware Attitude toward product positive, indifferent
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Business Market Segmentation Bases

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Business Market Segmentation

1. Demographic industry, company size, location 2. Operating Variables technology, user/nonuser/customer capability 3. Purchasing Approaches purchasing style, power structure, existing relationships 4. Situational Factors urgency, specific application, order size 5. Personal Characteristics loyalty etc

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Targeting
Need Strategies

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Targeting Strategies
Single segment concentration Selective specialization Product specialization Market specialization Full market coverage
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Targeting
Single segment concentration small car only Selective specialization FM channel targeting all age groups with different programs Product specialization one product selling to different segments (paint) Market specialization many needs of 1 group selling only to schools Full market coverage Differentiated and NonD Dell and Coke
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Positioning
Definition Bases

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Bases for Positioning

Attributes Benefits Image Price Competitors Emotion

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PLC
Concept and definition Reasons for PLC Stages in PLC Strategies Sales, Costs, Profits, Marketing Objectives, Customers, Competitors, 4 Ps

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New product development

Definition Need Types Innovator Vs Imitator adv / dis-adv Stages ???

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New product development

1. Idea generation is the idea worth considering? 2. Idea screening is the product idea compatible with company objectives, strategies & resources? 3. Concept development & testing can we find a good concept for the product that consumers would try? 4. Marketing strategy development can we find a cost-effective, affordable marketing strategy?

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New product development

5. Business analysis will this product meet our profit goals? 6. Product development have we developed a technically & commercially sound product? 7. Market testing have product sales met expectations? 8. Commercialization are product sales meeting expectations?

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Product
Meaning, Levels & Types Product Mix dimensions Product Line and Item Packaging and Labeling Product Line Analysis Sales, Profits, Market Profile Product Line Strategies Line stretching, Line filling, Modernization, Featuring and Pruning
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Price
Meaning, Importance Setting, Adapting and Changing Price Stages in Setting Price Price Adaptation and Changing Pricing Methods and Strategies Non-Price Competition

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Place
Meaning, Importance PD, L and SCM Functions of Marketing Channels Objectives Structure of Marketing Channels Consumer goods, Industrial goods and Services Wholesaling , Retailing and Franchising

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Promotion
Meaning Importance Promotional Mix 5 Ms of Advertising

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Promotion
Promotional Mix Advertising, Sales Promotion, Publicity, Public Relations, Events and Experiences, Direct marketing and Personal Selling 5 Ms of Advertising Mission, Money, Message, Media and Measurement

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Marketing Models
BCG Matrix GE Matrix Ansoff Matrix Mckinsey 7-S Model Porters 5-forces Model Porters Generic strategies Perception Mapping

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Marketing Terms
Ambush Marketing Viral Marketing Green Marketing Turbo Marketing Online Marketing Mobile Marketing

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All the best to you in your career.

Enjoy and celebrate Life !

Thank you

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