Introduction to Marketing MM I

Introduction to MarketingIntroduction to Marketing

Ajay Pandit

January 31, February 14, 2015

What is marketing?What is marketing?

Incredible India: International tourist travel has been low as compared to the neighboring countries like Thailand and Singapore. The Incredible India campaign was launched in the wake of the events of September 11, 2001 and the consequent impact on tourism. The campaign differentiated India from the competing destinations by developing a unique market position and image. The campaign was built around the brand proposition of “India : the voyage to the land of Ananda, the bliss”.

[www.ogilvyindia.com; www.incredibleindia.com]

Kotler’s social definition:

“Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others.”

What is Marketing?What is Marketing?

Societal definition A societal process by which individuals

and groups obtain what they need and want through creating, offering and freely exchanging products and services of value with others

What is Marketing?What is Marketing?

AMA definition Marketing is an organizational function and

a set of processes for creating, communicating and delivering value to the customers and for managing customer relationships in ways that benefit the organizations and its stakeholders.

Peter DruckerPeter Drucker

“The purpose of business is to create and keep a customer.”

Marketing ManagementMarketing Management

Marketing management is “the art and science of choosing target markets and building profitable relationships with them.”– Creating, delivering and

communicating superior customer value is key.

Needs and WantsNeeds and Wants

Needs are basic human requirementsWants are needs directed to specific

objects/services that might satisfy the need

Five Types of NeedsFive Types of Needs

Stated Need (Consumer wants inexpensive Car) Real Needs (Car with low operating cost) Unstated Need (Expects good service from the

dealer) Delight Need (Extras) Secret Need (Wants to be seen by friends as a

savvy customer)

ExchangeExchange

Get something (product /service) by offering something in return.

Eg. kind (barter) or money (value )Exchange is a value creating process

because it leaves both parties better off (win – win situation)

ExchangeExchangeFive conditions must be satisfied: There are 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 is free to accept or reject the

exchange offer. Each party believes it is appropriate or desirable

to deal with the other party

What is marketed?What is marketed? Goods / Products Services Events Experiences Persons Places Properties Organizations Information Ideas

““Commodities”Commodities”

Water

Salt

http://www.perrier.com/index.asp

DemandDemand

This is the wants for specific products backed by an ability to pay.

Target MarketTarget Market

Very rarely does a product cater to the entire market. Most products are designed to cater to a group of customers who specifically want such a product. This group of customers is the target market which is a slice of the total market. We say it is the market segment.

Value and SatisfactionValue and Satisfaction

Value = Benefits/CostsBenefits = Functional Benefits + Emotional

benefitsCosts = Monetary costs + Time + Energy + Psychic costs

Transaction and TransferTransaction and Transfer

A transaction is an exchange between two things of value on agreed conditions and a time and place of agreement.

A transfer is a one way exchange without receiving anything in return.

Relationship MarketingRelationship Marketing

Building long term mutually satisfying relations with customers, suppliers, distributors in order to retain their long term preference and business

CRMCRM

CRM – Customer relationship management . . .“is the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.”

CRMCRMIt costs 5 to 10 times MORE to attract a

new customer than it does to keep a current customer satisfied.

Marketers must be concerned with the lifetime value of the customer.

CRMCRM

Attracting, retaining and growing customers

Building customer relationships and customer equity

Customer value/satisfaction– Perceptions are key– Meeting/exceeding

expectations creates satisfaction Loyalty and retention

– Benefits of loyalty – Loyalty increases as

satisfaction levels increase– Delighting consumers should

be the goal Growing share of customer

– Cross-selling

Key ConceptsKey Concepts

CRMCRMCustomer equity

– The total combined customer lifetime values of all customers.

– Measures a firm’s performance, but in a manner that looks to the future.

Key ConceptsKey Concepts• Attracting, Attracting,

retaining and retaining and growing growing customerscustomers

• Building Building customer customer relationships relationships and customer and customer equityequity

Marketing ChallengesMarketing Challenges

Technological advances, rapid globalization, and continuing social and economic shifts are causing marketplace changes.

Major marketing developments can be grouped under the theme of Connecting.


Via technologyWith customersWith marketing

partnersWith the world

Advances in computers, telecommunications, video-conferencing, etc. are major forces.– Databases allow for

customization of products, messages and analysis of needs.

- Social networking The Internet

– Facilitates anytime, anywhere connections

– Facilitates CRM– Creates marketspaces

ConnectingConnecting


Selective relationship management is key.– Customer profitability

analysis separates winners from losers.

Growing “share of customer” – Cross-selling and up-

selling are helpful. Direct sales to buyers are

growing.

ConnectingConnectingVia technologyWith customersWith marketing



Partner relationship management involves:– Connecting inside the

company– Connecting with

outside partners Supply chain

management Strategic alliances



Marketing ChallengesMarketing Challenges Globalization

– Competition– New opportunities

Greater concern for environmental and social responsibility

Increased marketing by nonprofit and public-sector entities– Social marketing

campaigns



Marketing MixMarketing Mix

It is the tools that an organization employs to pursue its marketing objectives in the target market

Product, Price, Place, Promotion4 C’s – Customer solution, Cost,

Convenience, Communication

The 4 Ps of MarketingThe 4 Ps of Marketing

Product: is that which you trade for cash – your customers want your product and you want their cash

Price: The amount of money charged for a product or service

Promotion: How you will promote and create awareness of your product in the market place

Place: How you bring your product together with your customer - distribution

Traditional Marketing ModelTraditional Marketing Model

Kotler,

4Ps in Action – The Marketing 4Ps in Action – The Marketing MixMix

Your Business

Market place

Control of 4 independent variables (Marketing Mix)

Sales Volume Rs

Current economics

Legislation/Regulation

Political environment

Social trends

Cultural trends

Consumer confidence

Competition•New technology•Their 4 Ps

Uncontrollable

1. Product 2. Price3. Promotion4. Place

Concepts under which firms Concepts under which firms conduct marketing activitiesconduct marketing activities

Production conceptProduct ConceptSelling ConceptMarketing ConceptSocietal marketing Concept

1. Production Orientation1. Production Orientation

Focuses on internal capabilities of firm. “ Field of Dreams” strategy

– “If we build it, they will come” Best used when

– competition is weak – demand exceeds supply– generic products competing solely on price

Problem is that they don’t understand wants/needs of marketplace.

2. Sales Orientation2. Sales OrientationPeople will buy more goods/services if

aggressive sales techniques are used.High sales will result in high profits.Used with unsought products

– life insurance– encyclopedias

Problem is that they don’t understand wants/needs of marketplace.

3. Marketing Orientation3. Marketing Orientation

Marketing concept: The social and economic justification for an organization’s existence is the satisfaction of

customer wants and needs, while meeting organizational objectives.

3. Marketing Orientation . . .3. Marketing Orientation . . .

Focusing on customer wants so the organization can distinguish its products from competitors’ .

Integrating all the organization’s activities, including promotion, to satisfy these wants.

Achieving long term goals for the organization by satisfying customer wants and needs legally and responsibly.

3. Marketing Orientation . . .3. Marketing Orientation . . .Requires:

– Top management leadership– A customer focus– Competitor intelligence

strengths weaknesses

– Interfunctional coordination to meet customer wants/needs and deliver superior values.

4. Societal Marketing 4. Societal Marketing OrientationOrientation

Organization exists not only to satisfy customer wants/needs and to meet organizational objectives, but also to preserve and enhance individuals’ and society’s long-term best interests.

Extends marketing concept to serve one more customer - society as a whole.

Differences between Sales & Differences between Sales & Marketing OrientationsMarketing OrientationsSales Focus

Organization’s needs Selling goods/services

Everybody

Profit through max. sales volume

Intensive promotion

Marketing Focus Customer’s needs Satisfying customer

wants/needs Specific groups of

people Profit through

customer satisfaction Coordinated mktg.

activities (4 p’s)

How should business be How should business be defineddefined

Becoming Global Becoming Global

We live in a global village and several Indian firms have ventured into the global arena through the acquisition route. Tata Group’s leveraged acquisition of Tetley enabled it to become dominant player in 67 countries of the world.

Questions

Answers

Documents

Introduction to Marketing MM I