UNIT1: MARKETING MANAGEMENT

Basic Concepts ,Nature, Scope, Importance, Marketing Environment

SHABANI BAGAI
Case studies
• Case 1. MTR Foods-A Marketing Marvel
• Case 2. Customer Value – Explored, Created, Communicated & Delivered Related to India’s
e-commerce Market
• Case 3: Customer Loyalty – The Ultimate Objective of Every Marketer
• Case 4: Starbucks India: The Human Coffee Experience
• Case 5: The Techy Amazon Insight
• Case 6: ZICOM – Leveraging Corporate Trust and Technical Strengths in the B2B Market
• Case 8: Facebook: Business Connections in India and China
• Case 10: Kellogg’s Cornflakes in India: Finding a Platform that Connects
• Case 13: Fevicol –The Iconic Bond
• Case 23: Unilever: Working Beyond the Horizon
CURRICULUM
2 CREDIT
28 HOURS
CRITICISM OF MARKETING?
CRITICISM OF MARKETING?
• Intrusion? Interruption? Exaggeration?

• Sell what’s not wanted, not good, not risky – cigarettes, risky cars
• Materialistic mindset
• Sell even commodities?
• Without considering resources and environments cost

• Economist only wrote about Marketing in 1910 as advertising had no

intention/impact in economics (D/S/Cost/Price)
 iPad created by?
Apple’s engineers - design

Apple’s financial - review the costs of producing + pricing

+
Apple’s operations - manufacturing requirements

logistics managers had to evaluate the cost and timing of getting

the offering to retailers and consumers

Marketing’s responsibility to ensure that the new product delivers value

Finance, operations, accounting, and other business

functions won’t really matter without sufficient demand

Successful marketing builds demand for products and services

Example:
UNILEVER: Aggressive new direction

New marketing model “Crafting Brands for Life” Brands: Dove, Ben & Jerry’s, Lifebuoy, and Knorr

Has set its sights on developing and emerging (D&E)

markets, hoping to grow 15 -20% annually in China
and 70 – 75% of business from D&E markets by 2020

adopted “reverse innovation”

Ex. Spain, it now sells Surf detergent in five-wash packs

Greece -offers mashed potatoes and mayonnaise in

small packages.
IS EVERYTHING IS MARKETED?

SPORT
PERSONALITIES

POLITICAL
MARKETING
PARTIES

SPIRITUAL
GURU

PERVASIVE
GOODS VS SERVICES
• Goods
1. tangible in nature i.e. they can be seen and touched.
2. time gap between production and consumption of goods as they are produced first and
consumed later.
3. They can be stored and utilized when required.
4. They can be transferred from one place to another.

• Services
1. Non-tangible in nature i.e. they can neither be seen nor be touched.
2. There is no time gap between the production and consumption of services. That is why
they are produced and consumed simultaneously.
3. Services cannot be stored.
4. Transfer of service is not possible
GOOD/SERVICE CONTINUUM
Condition for exchange
• At least two parties
• Each party has something that might be of value to the other party
• Each party is capable of communication and delivery
• Each party can accept or reject the offer (gifting not exchange)
• Each party should believe it appropriate and desirable to deal with
the other party (Ex. Defense deal with China?)
KEY CUSTOMER MARKETS

• 1. Consumer Markets Companies selling mass consumer goods and

services such as juices, cosmetics, athletic shoes, and air travel
establish a strong brand image by developing a superior product or
service, ensuring its availability, and backing it with engaging
communications and reliable performance.

• Business Markets Companies selling business goods and services often

face well-informed professional buyers skilled at evaluating competitive
offerings. Advertising and Web sites can play a role, but the sales force,
the price, and the seller’s reputation may play a greater one.
KEY CUSTOMER MARKETS
“Markets” have mention in Webster 1900.

3. Global Markets Companies navigate cultural, language, legal, and

political differences while deciding which countries to enter, how to enter
each (as exporter, licenser, joint venture partner, contract manufacturer,
or solo manufacturer), how to adapt product and service features to each
country, how to set prices, and how to communicate in different cultures.

4. Nonprofit and Governmental Markets Companies selling to nonprofit

organizations with limited purchasing power such as churches,
universities, charitable organizations, and government agencies need to
price carefully. Much government purchasing requires bids; buyers often
focus on practical solutions and favor the lowest bid, other things equal.
WHAT IS MARKETING? (Included only
1910 in dictionary!)
• Identifying and meeting human and social needs
• meeting needs profitably
• Google - needed to more effectively access information on Internet
• IKEA - knockdown furniture

• Designed the right product, based on careful MR - consumers,

competition, and all the external factors that affect cost and demand
• Nintendo designed its Wii
• Apple launched its iPad
• Toyota introduced its Prius hybrid
EXCHANGE OF VALUE: SOCIAL
PROCESS

Cocreation of value among consumers and with businesses

 Four activities/ components of Marketing:
• 1. Creating: The process of collaborating
with suppliers and customers to create
offerings that have value.
• 2. Communicating: Broadly, describing
those offerings, as well as learning from
customers.
• 3. Delivering: Getting those offerings to the
consumer in a way that optimizes value.
• 4. Exchanging: Trading value for those
offerings.
 SIMPLE MARKETING SYSTEM

Market as a collection of buyers and sellers who transact over a particular product or product class
 (raw material markets, labor markets, money markets)

sell finished products

Marketing management
• Marketing management as the art and science of choosing target markets
and getting, keeping, and growing customers through creating, delivering,
and communicating superior customer value.

• It is both an art and a science; Good marketing is no accident

• results from careful planning and execution using state-of-the-art tools and
techniques
• creative, practical solutions to new marketing realities
Core Marketing Concepts

Product or service
CONSUMER NEEDS, WANTS AND
DEMANDS

Travel A-B

SUV Car

when a customer is willing and having the

ability to buy that needs or wants.
 specified clearly by the customer or the market. Most basic

not obvious but are expected by the customer.

Needs that the customer feels

reluctant to admit

Needs are the gaps which the companies try to fulfill with their products and services
Marketer, you should attempt to discover the REAL NEED and
which level of need is your product targeting to.
MARKETER AND PROSPECT
• A marketer is someone who seeks a response—attention, a purchase,
a vote, a donation—from another party, called the prospect

• They seek to influence the level, timing, and composition of demand

to meet the organization’s objectives.

• Marketers are skilled at stimulating demand for their products, but

that’s a limited view of what they do.
OFFERINGS AND BRANDS

• Companies address customer needs by putting forth a value

proposition, a set of benefits that satisfy those needs. The intangible
value proposition is made physical by an offering, which can be a
combination of products, services, information, and experiences.
• A brand is an offering from a known source. A brand name such as
Apple carries many different kinds of associations in people’s minds
that make up its image: creative, innovative, easy-to-use, fun, cool,
iPod, iPhone, and iPad to name just a few. All companies strive to
build a brand image with as many strong, favorable, and unique brand
associations as possible.
 Eight Demand States in Marketing
regular medical checkup

Smart phone was non-existent demand in the past

Smart phone

keypad phone 

D=S

https://www.linkedin.com/pulse/marketing-101-states-demand-james-mccormack/
TARGET MARKETS, POSITIONING, AND SEGMENTATION

• Marketers identify distinct segments of buyers by identifying demographic,

psychographic, and behavioral differences

• firm develops a market offering that it positions in target buyers’ minds as

delivering some key benefit(s)

• Volvo develops its cars for the buyer to whom safety is a major concern,
positioning them as the safest a customer can buy.

• Porsche targets buyers who seek pleasure and excitement in driving and want to
make a statement
Types of Market Segmentation

• A market segment means a homogeneous group consisting of buyers

who seek the same offering
What is Marketing?
MARKETING CHANNELS
MARKETING CHANNELS
• To reach a target market, the marketer uses three kinds of marketing channels
• 1. Distribution channels
• Direct (Expensive) and indirect channels (Cheaper) based on 4 Ps
• display, sell, or deliver the physical product or service(s) to the buyer or user
• may be direct via the Internet, mail, or mobile phone or telephone or indirect with distributors, wholesalers, retailers,
and agents as intermediaries.

• Communication channels (online/offline to mass audience)

• newspapers, magazines, radio, television, mail, telephone, smart phone, internet
• look of their retail stores and Web sites and other media, adding dialogue channels such as e-mail, blogs, text messages,
and URLs to familiar monologue channels such as ads.

• Service channels (Service centre)

• services are provided ; not product
• warehouses, transportation companies, banks, and insurance companies

Design challenge in choosing the best mix of communication, distribution, and service channels for
their offerings
Evolution of marketing philosophies
CORE CONCEPT OF MARKETING
(PHILOSOPHIES)
PRODUCTION CONCEPT

• one of the oldest concepts in business

• consumers prefer products that are widely available and inexpensive
• Focus: achieving high production efficiency, low costs, and mass
distribution
• orientation has made sense in developing countries such as China
PRODUCT CONCEPT
• Cos created products different from the competition- product
innovation: product orientation
• Consumers prefer quality/innovative/performance based products
• Focus on product in marketing mix
• Marketing myopia /short sightedness of not considering customer
needs and behaviour
BETTER MOUSETRAP fallacy?
• Effective reusable mousetrap
• It sold for twelve cents.
• The older, less effective mousetrap was only
five cents.
• The better mousetrap failed

• Who in their right mind would want to clean

and reuse it?
Selling concept
• consumers and businesses, if left alone, won’t buy enough
• Necessary to push their products by advertising and selling
• Selling door-to-door, salesman, push focus
• Consumers have buying inertia and have to be persuaded
• Practised for unsought goods
• Focus: Promotion
• Risk: won’t return or bad-mouth it or complain to consumer
organizations ??
MARKETING CONCEPT
• 1950-90: Marketing concept was developed
• Determine the needs and wants of target market and deliver desired
satisfaction more effectively than competitors
• Companies emphasize creating value for customers
• To build relationships with customers 1-1 ex. Amazon ads
• Focus on all Ps of marketing mix
• Dell - each person customizes the features he or she desires in the
machine
Components of marketing concept
• 1.Satisfaction of Customers: Customer focus. The organization aims at
producing goods and services, which lead to customer satisfaction

• 2. Integrated marketing: The functions of production, finance and

marketing should be integrated to satisfy the needs and expectations

• 3. Profitable sales volume: Marketing is successful only when it is

capable of maximizing profitable sales and achieves long-run
customer satisfaction.
SALES VS MARKETING
SELLING VS MARKETING CONCEPT
HOLISTIC MARKETING CONCEPT
• Acknowledges that everything matters in marketing—broad, integrated
perspective is often necessary.

• Based on the development, design, and implementation of marketing

programs, processes, and activities that recognize their breadth and
interdependencies

• Recognizes scope and complexities of marketing activities

• Four broad components characterizing holistic marketing:

• relationship marketing, integrated marketing,
• internal marketing, and performance marketing
Holistic Marketing Dimensions
COCA COLA HOLISTIC MARKETING:
GOOD FEELING? MOST VALUED NON
TECH
•
CO
Coca-Cola is the best example of Holistic Marketing. They drafted their entire plan of marketing
on one goal – Happiness. They did not just market their product, but they marketed Happiness.
Based on that one goal, Coca-Cola wanted to promote Happiness. The strategy was very smart,
Happiness is one of the most cherished of all. They added ‘Taste the Feeling’ with that brand. They
showcased in a way, whenever you are happy, have a Coke. This marketing strategy was bang on.
It resulted in the massive growth of the company since then.
• Targets abstract concept- happiness
• Targets whole family
• Multi-channel version (#, coke emoji,share a can: happiness campaign)
• Project Connect: 70 countries, 17K used

• https://www.youtube.com/watch?v=XhMVWzVXNNk&t=335s
• https://www.youtube.com/watch?v=1veWbLpGa78 (SMILE AD)
1. RELATIONSHIP MARKETING

• Key goal to develop deep, enduring relationships with people and

organizations that directly or indirectly affect (customer relationship
management (CRM), but partner relationship management (PRM)
• aims to build mutually satisfying long-term relationships with key
constituent
• Marketing network - customers, employees, marketing partners (channels,
suppliers, distributors, dealers, agencies), and members of the financial
community (shareholders, investors, analysts)
• requires understanding their capabilities and resources, needs, goals, and
desires
• profits will follow
2. INTEGRATED MARKETING

• the whole is greater than the sum of its parts

• different marketing activities can create, communicate, and deliver
value
• marketers should design and implement any one marketing activity
with all other activities in mind.
• When a hospital buys an MRI machine from General Electric’s
Medical Systems division, for instance, it expects good installation,
maintenance, and training services to go with the purchase.
• Company must develop an integrated channel strategy
3. INTERNAL MARKETING

• Hiring, training, and motivating able employees who want to serve

customers
• Marketing succeeds only when all departments work together to
achieve customer goals
• interdepartmental harmony
• Requires vertical alignment with senior management and horizontal
alignment with other department
Assessing Which
Company
Departments Are
Customer-Minded
4. PERFORMANCE MARKETING

• understanding the financial and nonfinancial returns to business and

society from marketing activities
• marketing scorecard
• interpret what is happening to market share, customer loss rate,
customer satisfaction, product quality, and other measures
• Considering the legal, ethical, social, and environmental effects of
marketing activities
IMPORTANCE OF MARKETING
• most important activity of the present day
• helpful to the consumer and the development of the economy as well
as the society
• business - marketing brings in revenue,
• consumer it provides the goods and services of utility,
• society it enables a redistribution of income and generation of
employment, and improving the standard of living of people
IMPORTANCE OF MARKETING
• sells the product and brings revenue to the company, and it is also the
key to its success
• Mktg aids in scanning the environment, finding marketing
opportunities, formulating product policies, evolving distribution and
pricing strategies
• enables the consumers to exercise choice and to improve their levels
of consumption
• availability of goods and services of good quality at competitive prices
is made possible only by an efficient marketing system
IMPORTANCE OF MARKETING
• Marketing creates time, place and possession utilities to products and
services
• Marketing contributes to the economic development of the country -
generate employment and income
• offers career opportunities to a large number of people
NATURE OF MARKETING
• Managerial Function: Marketing is all about successfully managing the
product, place, price and promotion of business to generate revenue.
• Human Activity: It satisfies the never-ending needs and desires of human
beings.
• Economic Function: The crucial second marketing objective is to earn a
profit.
• Both Art and Science: Creating demand for the product among consumers
is an art and understanding human behaviour, and psychology is a science.
• Customer-Centric: Marketing strategies are framed with the motive of
customer acquisition.
NATURE OF MARKETING
• Consumer-Oriented: It practices market research and surveys to know about
consumer’s taste and expectations.
• Goal-Oriented: It aims at accomplishing the seller’s profitability goals and
buyer’s purchasing goals.
• Interactive Activity: Marketing is all about exchanging ideas and information
among buyers and sellers.
• Dynamic Process: Marketing practice keeps on changing from time to time to
improve its effectiveness.
• Creates Utility: It establishes utility to the consumer through four different
means; form (kind of product or service), time (whenever needed), place
(availability) and possession (ownership)
IS ONLY THIS MARKETING?
SCOPE OF MARKETING

• 1. Study of Consumer Wants and Needs - These needs and wants

motivate the consumer to purchase
• 2. Study of Consumer Behaviour - Analysis of buyer behavior helps
marketers in market segmentation and targeting.
• 3. Production Planning and Development - starts with the generation
of product ideas and ends with product development and
commercialization. eX. branding and packaging to product line
expansion and contraction.
• 4. Pricing Policies -  It depends on the level of competition, product
life cycle, marketing goals, and objectives, etc.
SCOPE OF MARKETING

• 5. Distribution- or maximum sales and profit, goods are required to

be distributed to the maximum consumers at minimum cost.
• 6. Promotion - The right promotion mix is crucial in the
accomplishment of marketing goals.Ex. Personal selling, sales
promotion, and advertising
• 7. Consumer Satisfaction - Consumer satisfaction is the major
objective of marketing.
• 8. Marketing Control - marketing audit is done to control the
marketing activities
MARKETING-MIX TOOLS

• A framework to help marketers develop a marketing strategy

• Offer can be altered by varying the mix elements
• E. Jerome McCarthy created 4Ps in 1960:
Customer value
CONCEPT OF VALUE (CAR)

Functional: Travel , safer than other alternative modes

Emotional: Better status symbol
Rail Ticket booking – Online vs Standing in Line(Energy cosy) – Time Cost
Online booking reduces Psychic Cost before hand by taking data
PERCIEVED PERSONAL VALUE
EQUATION CASE
• One way to think of value is to think of a meal in a restaurant.
• If you and three friends go to a restaurant and order the same dish, each of you will like it
more or less depending on your own personal tastes.
• Yet the dish was exactly the same, priced the same, and served exactly the same way.
• Because your tastes varied, the benefits you received varied.
• Therefore the value varied for each of you. That’s why we call it a personal value equation
• Value varies from customer to customer based on each customer’s needs
• Google creates value to both users and advertisers by showing customized ads that are
matched to the content of the page that is viewed by the users.
• Ebay creates value to its users by opening up geographical boundaries that are difficult
for users to navigate, and find each other.
INTROSPECTION
• Exchange happen when Value is positive
• goal as marketers is to create a profitable exchange for consumers
• value equation is positive: Value = benefits received – [price + hassle]
• E- Commerce
• Cost: reduces time, energy and psychic cost; greater convenience
• Benefit: Huge assortment of item
OFFERINGS AND BRANDS

• Companies address customer needs by putting forth a value

proposition, a set of benefits that satisfy those needs. The intangible
value proposition is made physical by an offering, which can be a
combination of products, services, information, and experiences.
• A brand is an offering from a known source. A brand name such as
Apple carries many different kinds of associations in people’s minds
that make up its image: creative, innovative, easy-to-use, fun, cool,
iPod, iPhone, and iPad to name just a few. All companies strive to
build a brand image with as many strong, favorable, and unique brand
associations as possible.
The New Marketing Realities
END