Marketing Management

1st unit
Introduction
 Definition, Scope and core concepts of

marketing.

 Company orientation towards the market

place.

Emerging trends in indian marketing

environment
Definitions of marketing
Mainly focus on what it means to the orgn
1. The chartered Institute of marketing
define marketing as’ management process
responsible for identifying, anticipating and
satisfying customer requirements profitably’
2. P.Tailor defines ‘marketing is not about
providing products or services it is essentialy
about providing changing benefits to the
changing needs and demans of the customer’
3. Philip Kotler ‘satisfying needs and wants
through an exchange process’
Therefore marketing consists of strategies and tactis used
to identify,create and maintain satisfying relationship
with the customers that result in value.
In an era of seamless market ,the customer today has wider
choice. they are not stick on to only locally available brands .

Customers are given different modes to buy goods (tele

shopping, internet, advt in the news paper.

Marketers are using every weapon to gain and retain the

customers and their brand name in the market.
e.g KBS in star plus. The news programme moved to star
world. influenced the Indian families to watch the 1 hour
programme.rival to this Zee TV started programme cash
prize10 times more than KBS but failed.

A market is defined as any place where the seekers of a

particular good or service can meet with the buyer, where
there is a potential for a transaction to take place.
Marketing as a concept
concept is a customer orientation, customer is the king of
market ( said by mahatma Gandhi).
The organization have to bring the goods to the market to
satify their needs without any obligation.

The marketing concept involves:

(and the best marketing concept
1. customer orientation
2. competition orientation
3. the ability to respond to the environmental
changes(chnages in consumer needs, environment, govt policy,
technology.
E.g Sony and Microsoft investing in futuristic technology
Marketing (company) orientation towards the market
it involves six dimensional approach

1. consumer orientation

2. an integrated approach to exploiting market: integrate

all marketing mix, e.g is maggi noodles found success,
whereas the Lipton with the same product failed.
Marketing orientation requires preoccupation with the
quality. e.g P&G,Godrej.J&J,Asian paints,Crompton and
grieves have passion for premium quality.

3.futerestic approach: money spent is not an expenditure

but investment for long term.
4. Highly developed marketing systems: they are market
information system like customer feedback, complaint
managements, customer relationship management (CRM).
Helps enhancing their effectiveness.

5. Marketing culture in the organization: the strucure of

orgn from top to bottom aimed at market orientation. E.g
hospitality industries – Windsor and Manner promised to
pay penalty
Incase customer not satisfied.

6. Speed in responding customers problems: fast relief

and toll free communication. Eg LG, ONIDA,ICICI,JDFC
etc.
Marketing and selling orientation
Selling is sales promotion with the intention to
close the sales to increase the profit of the orgn
Marketing is integration of all marketing plan
concentrating on customer and selling to maximize
the profit.
e.g. of Ambassadors and premier Padmini with
Maruti Suzuki in 1984 succeeded in customer
satisfaction by increasing the efficiency of the
customer.
Successful marketers think about tomorrow and
not just today.
Difference between marketing and selling

Marketing selling
focuses on customers needs sellers needs
Begins before production after production
Continues after sale comes to an end with
sale
Broader meaning narrow meaning
Profit through customer satisfaction through sales
Let the seller be aware buyer aware
Long term prospective short term
prospective
Customer first then product product then
customer
The essence of modern marketing
1. Define the market area: find the right destination of
the business and plan the marketing strategies.
three types of major markets are:
Consumer market, the industrial market, the service
market and the fast growing market( both domestic
and industries products)
2. Research consumer needs and wants: differentiate
between the consumer needs and wants,
Eg. A child want a coke and need milk
a child want food and need food.
Which to produce more and which in limited quantity.
3. Developing and redeveloping the product or service:
refine and innovate the products where there is no end
for choice or supply for the demand by the consumer.

4. Selecting Training, Motivating and controlling

manpower: best person for the right job with the
above qualities to promote the product and
organization. e.g service, business, education,
hospitality etc.
5. Developing sales approach and advertising support:
these are wheels of marketing. The marketing is
successful only when these wheels are moved or
taken into action.
Marketing management ; is a importrant functional area of
business management where planning, organizing,
directing, coordinating, motivating and controlling the
marketing activities under customer oriented
marketing activities
Customer satisfaction, value and retention.
Creating value for customers is critical to every
company’s success especially during times of
austerity. In the old economy, the focus of most
companies was internal with respect to their
customers—meaning they would view customers
based on what they had to sell.
In the new economy, the focus of companies is
more external and is based on identifying
customers’ needs and what they will buy.
Focusing on what customers need is key to
growing top-line revenues, reducing operating
expenses and growing the bottom
line.
Customers buy value, therefore it follows that
improving the customer experience
will increase customer loyalty or retention.
The Value of Retaining a Customer
In Frederick Reichheld’s book The Loyalty
Effect: The Hidden Force Behind Growth,
Profits and Lasting Value, his analysis showed
that the cost of acquiring new
customers was five times the cost of
servicing existing ones.
 Customers buy value therefore it follows that
improving the customer experience
will increase customer loyalty or retention.
Customer satisfaction and customer value are
distinctly different (although related)

Measures of satisfaction indicate how

customers feel about products and
services, while measures of customer value
are indicates of how customers will act.
 Customers buy value therefore it follows that
improving the customer experience
will increase customer loyalty or retention.
Customer satisfaction and customer value are
distinctly different (although related)

Measures of satisfaction indicate how

customers feel about products and
services, while measures of customer value
are indicates of how customers will act.
Customers are value maximizers, within the bounds
of search, cost and limited knoweldge, mobility
and income. They form an expectation of value
and act on it. whether or not the offer lives up
to the value effects both satisfaction and
repurchase probability.
Customer perceived value; is the difference
between the respective customer’s evaluation of
all the benefits and all the costs of an offering
and the perceived alternatives.
Total customer value is the percieved monetary
value of the bundle of economic, social,
functional and psychological benefits customers
Expect from a given market offer.
Total customer cost is the bundle of costs
customer expect to incur in evaluating,
obtaining, using and disposing of the given
market offering.

Example: caterpillar tractor vs Komatsu

A buyer would like to buy the tractor for
rewsedential construction. Wants buy either
caterpillar or komatsu.
He looks out for the reliability, durability,
performance and its resale value
How can the slaesperson convince this buyer to
purchase caterpillar
Caterpillar can succeed in selling to this buyer .
Caterpillar can improve its offer in three ways.
1. Increase in total customer value by improving product,
services, personnel and image benefit.
2. It can reduce buyers non monetary cost by reducing the
time, energy and psychic cost.
3. it can reduce the product’s monitory cost.
suppose the buyer demand for the tractor is 2lakh
The cost of producing the tractor is 1,50,000.
Caterpillar’s offer generates 50000 over the company’s cost.
Caterpillar need to charge a price between 150000-2lakh.
If it charges 150000 it is a loss. Above 2lakh out of market
price.
If it charges 190000. 10000 is the customer perceived value
40000 profit to the company.

Retaining the customer from komatsu;

The salespersons can give( convince) the assured
guarantee warrantee and brand image, service
of caterpillar and the komatsu. After the sale .
comparison of price and total customer value and
cost from both the companies.

Eg of Saturn car division of general Motors.

Retaining its 40000 customers – through
empolyee satisfaction by paying high salary and
its customer loyalty and retention of 60%
customers compared to others 40% in the
market.
Making CVM Work
 Data - use what’s available; don’t overdo it
 Simple segmentation
 Know valuable customers
 Leverage value knowledge
 Match channels to segment preferences
 Do sale reps follow value targeting?
 Does service maintain customer
relationships
 Marketing Information System
 The need for real time marketing information
greater than the past Is necessary.
 The shifts are dramatic from local to national –
buyer behaviour, price, preferences of goods etc.
 To predict buyer behaviour marketer should turn
to marketing research.
 Firms should organize and distribute a
continuous flow of information system to its
marketing managers and to the outsiders.
 MIS consists of people, equipment and
procedures to gather, sort, analyze,
evaluate and distribute needed, timely and
accurate information to marketing
decision makers.
 Marketing Information System
For marketers research is used not only for learning
but also for right decisions - such as introduction
of new products replacing the old, entering new
market for dift customers.
Characteristics of MIS
1. it is a continuous process
2. It is a preventive and curative process in the
marketing.
3. Allows best integration between various mangers
4. Provides updated and accurate infn to the
management.
Components of marketing information system
1. Internal marketing information:

The datas available within the orgn of various

depts like price product, inventory
machineries, labors etc. with the previous
data and time talent and good decisions.
 Ready to meet customer demands in time

Coordination of various resources at the end of

The day.
The order to payment cycle is the core source for
MIS which passes sales infn from dealers-
customers- sales representatives- firm-outsiders
for the requirement of goods and changes in the
goods acdg to the customers.
Eg. Reliance fresh, big bazar, more etc –start their
business early morning with supply of goods.
Database system necessary to combine various data
and to be ready for the next sales – customers
problems, interests, preferred goods and give
them surprise offer through mail.
Data helps the decision makers to increase the sales
2. Marketing Intelligence System:
It is a external information of marketing environment
provided to mktg executives or collected about
developments in the market –Eg. Census data,
market news, trade papers magazines etc.
company can take several steps to improve its
quality;
 Train and motivate the sales force to gather infn
from external source and to send it to the right
person.
 Motivate the distributors to pass infn to and from
the customers.
 Firm can gather infn from outsiders.
 Establish own internal staff to collect infn from
internet and customer advisory panel.
Eg. Marriot in its website offered various options and
feedback from the customers of their
suggestions and feelings for marriot.
3. Marketing research sytem: it is the function
that links consumer, customer and public to the
marketer through information in identifying
marketing opportunities and problems, evaluate
marketing actions – American marketing
association.
marketing research is a systematic design,
collection, analysis and reporting of data-philip k
 Marketing Information System
Elements /features of marketing research:
1. Intensive study or systematic study
2. Scientific approach
3. Decision tool for management

1. Intensive study: there is a definite purpose

the process are:
 Defining the problem
 Determining the sources of information
 Collection of information
 Interpretation of data
 Preperation of research report
 Marketing Information System
2. Scintific approach: collect relevant, correct and
quality information which is lawful, clear reliable
and communicable.
State the objective of study, investigating problems,
findings and assumptions and conclusions.

3. Decision tool to management: out of the problem.

Data, assumptions and findings the management
should come to the quality and right decision
making conclusion and find best alternative.
the objective of marketing research:
1. To know the buyer
2. To measure the result of promotional effort
 Marketing Information System
3. Know consumers response
4. Know market cost
5. Master the external forces
6. Design and implement marketing control

Scope of marketing research

1.Consumer research: deals with consumer and their
problems and the solutions.
2. Product research: evaluating the product ,
modification, diversification , product innovation
and – performance.
3. Market research: study the structure of market-
market size, consumer capacity, government
 Marketing Information System
4. Sales research: methods of sales, territories and
employee compensation.
5. Pricing research: study different market,
customer, cost of mfg etc.
6. Distribution research: requirement of channels of
distributions.
7. Motivational research: identification of consumers
motives, attitudes, emotions etc ( LIC, SBI,
Kellogs, Bajaj Alliance etc )
8. Advertising research: effective and suitable
9. Policy research: blend the policies of various
departments for the market success.
 Market segmentation
 Understand the msrket segmentation
 Know the meaning of target marketing
 Understand how the companies position their
product in the market
 Understand the meaning of product
differentiation
Measning of market segmentation:
It is the identification of portions of the market that
are different from one another. ( to satisfy the
needs of its potential customers.
Levels of segmentation: 1. segmenting the market
Mass marketing – where all the products are placed
for all kinds of buyers
Differentiate between sector and segment
 Market segmentation
the marketer does not create the segments , but to
identify the segments which offers benefits over
segments.

The definitions market segmentations acdg to Philip

kotler
“It is sub dividing of market into homogeneous
subsections of customers. Where any sections
may be conceivably be selected as a market
target to be reached with a distinct marketing
mix”.
 Market segmentation
Patterns of market segmentations:
Homogeneous preference – where the consumers
almost has the same preferences
(Pillsbury atta could gain more profit by
segmentation – research)
Diffused preferences – where the consumers
preferences are scattered and vary throughout.
Clustered preferences – where distinct preferences
exist as a sector in the segment.
Egs: Barbie could reach the market segments by
customizing the product according to customer
needs in 1998( names,design, hair color)
 Market segmentation
Levi’s jeans for women made customized jeans to
fit women of different waists 1994.
In eye glasses Paris Miki a Japanese company first
used various designs in eye glasses.
2. Niche marketing: niche is more narowly defined
group seeking a distinctive group of benefits.
Marketer identifies niches dividing a segment into
sub segments.
Eg; segment of people who only travel through air
again subdivided into teenagers – who only
travel in executive class.
The characteristics are- customers have distinct set
of needs who will pay premium to the firm that
best satisfies their needs
3. Local marketing: local marketing are tailor to
the needs and wants of the local customers.
 The companies favourising the local markets

deny the national advertisements which fails

to address the local needs.
4. Individual customer market: the level of
segmentation leads to segments of one –
customized market or one to one market as
the individual preference changes from.
Companies are now going for mass
customization of products on a mass basis.
Mass customization comes of age.
 Choice board- is a online customization of
products of customer choice. (helps also in
International business and MNC )
 It helps and facilitate customers to go for
further improvement and buy the product
 Helps the marketer to retain the customers
 Provide real time market research.
 Reduce the cost of production and unwanted
goods.
 They have more market share and faithful
customers.
 Market segmentation
Effective market segmentation requires:
 Characteristics within each segment should be
homogeneous
 Measurable: the size, purchasing power
 Accessible – effectively reachable and targetable
 differentiable- where the customers can respond
differently.
 Segment should be mutually exclusive
 Must be measurable and identifiable.
 Market segmentation

Basis for segmentation in consumer

market:
1. Geographic segmentation: nations, state,
regions, cities- product varies acdg to
these segments.
2. Demographic segmentation: divided into
groups such as age, family, family size,
family life cycle, gender, income,
education, religion etc.- this is required to
estimate the size of the market and the
media that should be used.
Eg: ivillage.com in Europe an online women
network reaped the benefits of gender
segmentation after initially seeking a broader
market. Began to focus on the pregnant
women (food such as health drink, soups) They
exchanged the advice and suggestions.
Attracted the largest audience.
It evolved into the leading women’s online site in
Europe.
BOA in US started different types of investment
for different age and gender and classes
providing them benefits. ICICI prudential,
HDFC
 Market segmentation
3. Psychographic segmentation: varies on the
basis of lifestyles- it is a behavioral
concept ( may or may not work)
personality or values- personality of individual
connected with the brand or product.

4. Behavioral segmentation: on the basis of

knowledge, attitude, use, response
towards the product, status and loyalty
etc.
The marketer can give the right knowledge
about the product to these kinds of
customers to promote the product.
 Market segmentation
Basis for segmentation in industrial markets
Industrial customers fewer in number and purchase
larger quantities, decisions are taken by more
persons. Have more knowledge about the
product.
the characteristics for segmentation are:
1. Location: distance from the vendor to the
industries depends on the availibility and legal
restrictions.
2.Company type: business customers can be
classified according to
 Company size
 industry
 Market segmentation
 Decision making unit
 Purchase criteria
3. Behavioral characteristics:
 Usage rate
 Buying status: potentiality, regularity, payment
in time.
 Purchase procedure: negotiation, packing
conditions, standards, acceptability and other
conditions - offer, discounts, offers etc.