Marketing Management

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Topics to be covered
Introduction Nature & Scope of Marketing Evolution Various Marketing Orientations Marketing Vs. Selling Concept Consumer Need, Wants & Demand Concepts

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Question
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What is meant by marketing? What are the activities involved in marketing?

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Marketing - Definition
Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering and exchanging products and services of value with others. Marketing is an organizational function and a set of processes for creating , communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders. - American Marketing Association Meeting needs profitably.

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Marketing activities include y Identifying customer needs y Designing goods and services that meet those needs y Pricing goods and services to reflect costs, competition and customers ability to buy. y Communicating information about those goods and services to prospective buyers y Making the goods or services available at times and places that meets customers needs y Providing the necessary service and follow-up to ensure customer satisfaction after the purchase
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Marketing Management 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.

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Marketing system
Communication Goods/Services Industry [a collection of sellers] Money Market [a collection of buyers]

Information

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Question
Which are the ten different entities marketed by a marketer? (Imp)

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Scope of Marketing
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Goods Physical goods constitute the bulk of most countries production and marketing efforts. Eg. Consumer Durables, cars, trucks, television sets , toys, dolls, coins etc. eBay (online trading community auction site). Services Services include the work of airlines, hotels, car rental firms, barbers and beauticians, maintenance and repair people, and accountants, bankers, lawyers, engineers, doctors, software programmers and management consultants. Events Marketers promote time-based events, such as major trade shows, artistic performances, musical concerts and company anniversaries. Global sporting events , such as the Olympics, IPL , Commonwealth Games and the World Cup are promoted aggressively to both companies and fans. Experiences Orchestrating several services and goods, a firm can create, stage and market experiences. An amusement park or a water park represents experiential marketing : customers, by taking different rides in the amusement park or the water park, enjoy the thrill provided by these experiences. A theme restaurant that creates the ambience of a village in Rajasthan. Persons Celebrity Marketing is a major business. Artists, musicians, CEOs, physicians, high profile lawyers and financiers , and other professionals all get help from celebrity marketers. Major film stars has an agent, a personal manager and ties to a public relations agency. CEOs of companies by printing an article, newsletter etc.

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Contd.
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Places Cities, states, regions, and whole nations compete actively to attract tourists, factories, company headquarters and new residents. In the software industry, Bangalore is positioned as the Silicon Valley of India. In the tourism industry, Kerala is marketed as Gods own country and has become one of the hot spots for tourism. The government of India is marketing India as a tourist destination through the Incredible India advertising campaign. Properties Intangible rights of ownership of either real property (real estate) or financial property ( stocks and bonds).Properties are bought and sold and these exchanges require marketing. Real estate agents buy and sell residential or commercial real estate. Investment companies and banks market securities to both institutional and individual investors. Organizations Actively work to build a strong, favorable and unique image in the minds of their target publics. Universities, performing arts organizations and nonprofits all use marketing to boost their public images and to compete for audiences and funds. Organizations opting for CSR activities to boost their public image.Tata, Infosys setting up Cancer Foundation to have a positive image in the minds of public.
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Contd.
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Information Information is essentially what books, schools, and universities produce, market, and distribute at a price to parents, students and communities. Magazines such as Road & Track and Auto compile and publish information on cars. Byte is a magazine selling information on computers. AC Nielsen is a research company completely into producing and distributing information.

Ideas Products and services are platforms for delivering some idea or benefit. Social marketers are busy promoting such ideas by creating awareness about AIDS, encouraging family planning and discouraging smoking which fall in the realm of social marketing. MS Dhoni Save Tigers SAY NO TO DRUGS , EXERCISE DAILY.

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Question
Trace briefly the various stages in the evolution of present day Marketing system./ What are the various marketing concepts?

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Evolution of Marketing/ Marketing Concepts

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The Production Concept It holds that customers will choose products and services that are widely available and are of low cost. So managers try to achieve higher volume by lowering production costs and following intensive distribution strategy. This seems a viable strategy in a developing market where market expansion is the survival strategy for the business. Companies interested to take the benefit of scale economies pursue this kind of orientation. It is natural that the companies cannot deliver quality products and suffer from problems arising out of impersonal behavior with the customers.
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Salient features
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This concept is based on the belief that customers needs can be satisfied with reasonable quality and reasonably priced product. The manufacturer should maintain availability of sufficient quantity of low priced products and consistency in quality. There is fair amount of competition and competing products are sold with complete knowledge of the products available in the market.
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The Product concept

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Consumers will favour those products that offer the most quality, performance or innovative features.Managers in these organizations should focus on making innovative and superior products and improving them over time.

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Salient Features
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Consumers generally look and prefer quality of the product. Consumers compare quality of products to competing product or brand quality. Consumers generally buy products to meet their overall needs and not specific needs. Consumers are aware of the product quality differences between competing brands and they choose the quality which comes closest to their preference and their affordable price. Consumers rating of manufacturers is based on their quality products and reliability and brand loyalty is also based on quality perception.
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The Selling Concept

The concept maintains that the company has to aggressively promote and push its products ; it cannot expect its products to get picked up automatically by the customers. Heavy advertising, high power personal selling, large scale sales promotion , heavy price discounts and strong publicity and public relations are the normal tools used by organisations that rely on this concept. y Practised most aggressively with unsought goods, goods that buyers normally do not think of buying. Eg. Insurance, encyclopedias etc.
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Salient Features
Consumers generally do not waste money in buying things which are not essential or buying excess quantities than required. y Consumers prefer to be motivated to buy things by use of selling efforts by organisations. y Consumers appreciate good selling techniques, efforts and good salesmanship. y Consumer rating of organisation and retail outlets are high where there is an organised and effective selling effort is made.
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The Marketing Concept

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It holds that the key to achieving its organisational goals consist of the company being more effective than competitors in creating, delivering, and communicating superior customer value to its chosen target markets. Customer centred (sense and respond)
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Product centred (make and sell)

Salient Features
The customers needs and wants are varied and these must be understood and suitable products and services offered to match the requirement. y The market consists of different segments and these segments can be grouped according to the customers characteristics. y The consumers in any market may not buy a product if they feel that it will not serve the purpose of solving their needs and wants.
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Question
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Discuss briefly the concept of societal marketing.

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The societal-marketing concept societaly

It holds that the organisations task is to determine the needs, wants and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors in a way that preserves or enhances the customers and the societys well-being.

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Objectives of Societal marketing

To satisfy customers long term needs and wants and satisfy societys long term interests. Consumers will prefer and favour such marketing organisations. y Consumers are now concerned about safety and environmental problems and marketing companies need to understand them.
y

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Question
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Differentiate between selling and marketing concepts.

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Marketing Vs. Selling

Dimension Focus Selling Emphasis is on the product. Marketing Emphasis is on consumer needs and wants. PULL STRATEGY. Company first determines customer needs and wants and then decides on how to deliver a product to satisfy these wants. Management is http://www.facebook.com/mr.fortyseven profit oriented.

Strategy

PUSH STRATEGY. Company manufactures the product first and then decides to push it in the market.

Orientation Style

Management is sales volume oriented.

planni ng

Planning is short run oriented, in terms of todays products and market. Selling and conversational.

Planning is long run oriented, in terms of new products, tomorrows markets and future growth. Analytical.

Skills

Goal

Views business as a goods producing process. Stresses needs of seller.

Views business as consumer satisfying process. Stresses needs and wants of buyers.

Emphasis is on innovation in Emphasis is on staying every sphere, on providing with existing technology better value to the and reducing costs. customer by adopting a http://www.facebook.com/mr.fortyseven superior technology.

Depatments

Different departments work in highly separate water tight compartments.

All departments of the business operate in an integrated manner, the sole purpose being generation of customer satisfaction. Consumer determines price, price determines costs. Marketing views the customer as the very purpose in business.
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Cost determines price.

Selling views customer as the last link in business.

Market, Marketplace, Marketspace and Metamarket

Market is a physical place where buyers and sellers gather to buy and sell goods. y The marketplace is physical, as when one goes shopping in a market. y The marketspace is digital, as when one goes shopping on the internet. y Metamarket is a cluster of complementary products and services that are closely related in the minds of consumers but are spread across a diverse set of industries. Automobile metamarket consists of automobile manufacturers, new car and used car dealers, financing companies,Insurance companies, mechanics, spare part dealers, auto magazines and so on.
y
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Exchange and Transactions

Exchange is the process of obtaining a desired product from someone by offering something in return. A transaction is a trade of values between two or more parties. Two parties are engaged in exchange if they are negotiating trying to arrive at mutually agreeable terms.When an agreement is reached, we say that a transaction takes place.
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Relationships and Networks

Relationship marketing has the aim of building mutually satisfying long term relations with key parties customers, suppliers, distributors in order to earn and retain their business. A marketing network consists of the company and its supporting stakeholders (customers, employees, suppliers, distributors, retailers, ad agencies, university scientists and others) with whom it has built mutually profitable business relationships.
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Question
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What do you understand by need, wants and demand concepts?

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Core Marketing Concepts

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Need, Wants and Demands Needs are the basic human requirements. People need air, water, clothing and shelter to survive. People also have strong needs for recreation, education and entertainment. These needs become wants when they are directed to specific objects that might satisfy the need. An American needs food but wants a hamburger, French Fries and a soft drink. Demands are wants for specific products backed by an ability to pay. Many people want a Mercedes, only a few are able and willing to buy one.
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Needs preexist marketers. Marketers, along with other societal factors, influence wants.

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Five Types of Needs

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Stated Needs - The need stated by the customer to the marketer.(customer wants an inexpensive car) Real Needs The actual need of the customer.(The customer wants a car whose operating cost, not its initial price is low.) Unstated Needs Need not stated by the customer but still needs it. (customer expects good service from the dealer.) Delight Needs Offering which gives the customer immense pleasure.( The customer would like the dealer to include free seat covers, music system etc.) Secret Needs Customer gets inner satisfaction.(The customer wants friends to see him as a savvy customer and can impress his peer group.)
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Segmentation,Target Markets & Positioning

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Identifying and profiling distinct groups of buyers who might prefer or require varying product and service mixes by examining demographic, psychographic and behavioral differences among buyers is known as segmentation. Eg. Microfinance by Muhammad Yunus Market segment which presents the greatest opportunity is the target market.

Creating an impact of the market offering in the minds of the target buyers as delivering some central benefits. Eg.Volvo positions its car as the safest a customer can buy. Scorpio is designed for people who prefer a sturdy vehicle that offers luxury and comfort. Scorpio is therefore positioned as a vehicle that offers the luxury of a car and the thrill of an SUV.

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Offerings and Brands

Value proposition is a set of benefits that companies offer to customers to satisfy their needs. y Combination of products, services, information and experiences is an offering. Intangible value proposition is made physical by an offering.
y y

A brand is an offering from a known source. eg. McDonald carries many associations in peoples minds that make up the brand image : burgers, fun, children, fast food and convenience.
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Value and Satisfaction

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Value reflects the sum of the perceived tangible and intangible benefits and costs to customers. Primarily a combination of quality, service and price called the customer value triad. Value increases with quality and service and decreases with price, although other factors can also play an important role in our perceptions of value. The buyer chooses between different offerings based on which she perceives to deliver the most value.

Satisfaction reflects a persons judgements of a products perceived performance (or outcome) in relationship to expectations. If the performance falls short of expectations, the customer is dissatisfied and disappointed. If t matches expectations, the customer is satisfied. If it exceeds them, the customer is delighted.
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Marketing Channels
Vehicle or medium to reach a target market and to transfer goods, services and information from the manufacturer to the buyer.

Communication channels deliver and receive messages from target buyers. eg. Newspaper, Magazines, Radio,Television, Mail, Telephone, Billboards, Posters, Fliers, CDs, audiotapes and the Internet. They also communicate through the look of the retail stores, appearance of the web sites etc. Marketers are increasingly adding dialogue channels such as e-mail, blogs and toll-free numbers. Distribution Channels to display, sell or deliver the physical product or service to the buyer or user. Eg. Distributors, wholesalers, retailers and agents. Service Channels to carry out transactions with potential buyers. Eg.Warehouses,Transportation companies, banks and insurance companies that facilitate transaction.
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Supply Chain
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Longer channel stretching from raw materials to components to final products that are carried to final buyers. The supply chain for womens purses starts with hides and moves through tanning, cutting, manufacturing and the marketing channels to bring products to customers.

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Competition
Competition includes all the actual and potential rival offerings and substitutes a buyer might consider. For an automobile company planning to buy steel for its cars, there are several possible levels of competitors. They can buy steel from Tata Steel or the SAIL or import from abroad; or buy aluminum for certain parts to lighten the cars weight; or buy engineered plastics for bumpers instead of steel.
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Four Levels of Competition

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Brand Competition Company competes with other companies offering similar products and services to the same customers at similar prices. Eg. Volkswagen competes with Toyota, Honda, Renault and other manufacturers of medium-priced automobiles. Industry Competition Company competes with all companies making the same product or class of products. Eg.Volkswagen competing against all other automobile manufacturers. Form Competition Company competes with all companies manufacturing products that supply the same service. Eg.Volkswagen competing against manufacturers of motorcycles, bicycles and trucks. Generic Competition Company competes with all companies that compete for the same consumer rupees.Volkswagen competing with companies that sell major consumer durables, foreign vacations and new homes.

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Marketing Environment
Marketing EnvironmentTask Environment

Broad Environment Task Environment Includes the actors engaged in producing, distributing and promoting the offering.These are the company, suppliers, distributors, dealers and the target customers. In the supplier group are material suppliers and service suppliers such as marketing research agencies, advertising agencies, banking and insurance companies, transportation companies and telecommunications companies. Distributors and dealers include agents, brokers and manufacturer representatives. Broad Environment Six Components: demographic environment, economic environment, natural environment, technological environment, political-legal environment, and social-cultural environment.

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Question
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What is marketing mix? Define its constituents.

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Marketing Mix
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The marketing mix is the set of marketing tools the firm uses to pursue its marketing objectives in the target market.

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Marketing Mix
Marketing mix

Product
Product variety Quality Design Features Brand name Packaging Sizes Warranties Returns

Place Price
List Price Discounts Allowances Payment period Credit terms

Promotion
Sales Promotion Advertising Sales force Public relations Direct marketing

Channels Coverage Assortments Locations Inventory Transport

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