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Dr M Manjunath Shettigar
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Marketing Management
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Welcome to the class
Dr M Manjunath Shettigar
MA (Econ), MBA, MPhil, PhD
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Marketing Management
Unit 1 Introduction
Market & Marketing
Activities related to making, transferring, using of goods and services
Firms, marketing agencies/service providers, buyers
Marketing activities
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Market Markets as place Market classification based on
Product Geography Type of buyer Scale of transaction
In modern marketing, it refers to a set or group of actual and potential buyers of a product or service.
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Marketing Shopping, selling,
merchandising/designing the product Traditionally, marketing is described
in terms of its functions/activities Marketing is the performance of
business activities that direct the flow of goods & services from producers to consumers
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Marketing Activities included
Designing/merchandising Packaging Warehousing Transportation Branding Selling Advertising pricing
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Marketing Not just post-production activity Nor does it end with selling
Marketing is now looked at as a ‘Social Process’
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Marketing as a social process
A social and managerial process by which individuals & groups obtain what they need & want through creating, offering and exchanging products of value to each other.
It is then a social process wherein people interact with others, in order to persuade them to act in a particular way, say to purchase a product or service
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What is Marketing?
Marketing is the delivery of customer value/satisfaction at a profit.
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The Goal of Marketing is:
To attract new customer by promising superior value, and to keep current customers by delivering satisfaction.
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Marketing as core business activity
Marketing, more than any other business function, deals with customers.
Creating customer value and satisfaction are at the very heart of modern marketing thinking and practice.
Some people believe that only large business organizations operating in highly developed economies use marketing, but sound marketing is critical to the success of every organization – whether large or small, for profit or non – profit, domestic or global.
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Key Terms
To explain marketing definition, we examine the following important terms : Needs, wants, and demands Products and services Value, satisfaction and quality Exchange, transactions, and
relationships Markets
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Needs, Wants, and Demands Needs: The most basic concept underlying marketing
is that of human needs. Human needs are states of felt deprivation. Human have many complex needs:
Physical needs for food, clothing, warmth, and safety
Social needs or belonging and affection Individual needs for knowledge and self –
expression
Maslow's Hierarchy of Needs
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Needs, Wants, and Demands
Wants: Want are the form taken by human needs as
they are shaped by culture and individual personality.
People have almost unlimited wants but limited resources.
They want to choose products that provide the most value and satisfaction for their money.
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Needs, Wants, and Demands
Demands: When backed by buying power, wants become
demands. Consumers view products as bundles of
benefits and choose products that give them the best bundle (of benefits) for their money.
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Products and Services
Product: Anything that is created by using scarce resources
is a product The concept of product is not limited to physical
objects – anything capable of satisfying a need can be called a product.
Goods & Services: Goods are tangible products, while services are
intangible products. In the case of goods, production and sale are
separate processes/activities. But in the case of services, the two happen simultaneously.
What can be marketed Physical Products (Goods): DVD player, Motor cycle, ipods, Cell phone, Footwear, Television, Refrigerator.Services : Insurance, Health Care, Business Process Outsourcing,Security, Easy Bill service, Financial Services(Investment),Computer Education, Online Trading.Ideas : Polio Vaccination, Helpage, Family Planning, Donation of Blood (Red cross), Donation of money on Flag Day (National Foundation for Communal Harmony).Persons : For Election of Candidates for Certain Posts.Place : ‘Visit Agra – ‘City of Love’, ‘Udaipur – ‘The City of Lakes’, ‘Mysore – The City of Gardens’, ‘When Orissa celebrates, Eleven the God Join In’.Experience : Customised Experiences as Dinner with a cricketer (say Dhoni); Lunch with a celebrity (say Bill Gates or Aishwarya Roy) or experience of Balloon Riding, mountaineering, etc.
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What can be marketed Properties : Intangible rights of ownership of real estate in financialproperty (Shares, Debentures).Events : Sports events (say Olympics, Cricket series), diwali mela,fashion show, music concert, film festival, elephant race(Kerala Tourism).Information : Production packaging and distribution of information byorganisations such as by universities, research organisation,providing information as market information (marketingresearch agencies), technology information.Organisations : For boosting their public image organisations such asHindustan Lever, Ranbaxy, Dabur, Proctor and Gamble,communicate with people. Example, Phillips says, Let’s makeThings Better’.
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Values, Satisfaction, and Quality
Values: Customer value is the difference between the
values the customer gains from owning and using a product and the costs of obtaining the products.
Customers often do not judge product value and costs accurately or objectively. They act on perceived value.
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Values, Satisfaction, and Quality
Satisfaction: Customer satisfaction depends on a product’s
perceived performance in delivering value relative to a buyer’s expectation.
If the product’s performance falls short of the customer’s expectations, the buyer is dissatisfied.
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Values, Satisfaction, and Quality
Quality: Customer satisfaction is closely linked to
quality. Quality has a direct impact on product
performance. Quality can be defined as “freedom from
defects”. TQM programs designed to constantly improve
the quality of products, services, and marketing processes.
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Exchange, Transactions, and
Relationships Exchange : The act of obtaining a desired object from
someone by offering something in return Transaction : A trade between two parties that involves at least
two things of value, agreed – upon conditions, a time of agreement, and a place of agreement.
Relationship marketing : The process of creating, maintaining, and
enhancing strong, value – laden relationships with customers and other stakeholders
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Markets
The set of all actual and potential buyers of a product or service
A simple marketing system
Industry (a collection
of sellers)
Market (a collection of
buyers)
Communication
Products / Services
Money
Information
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Suppliers
Competitors
Company (marketer)
Marketing intermediaries End user market
Main actors and forces in a modern marketing system
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Marketing Management
The analysis, planning, implementation, and control of programs designed to create, build, and maintain beneficial exchanges with target buyers for the purpose of achieving organizational objectives.
Marketing Management
“the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organisational goals” - American Management Association
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Marketing Management
Marketing management is the art and science of choosing target markets and getting, keeping and growing customers through creating, delivering and communicating superior customer values.
- Philip Kotler
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Scope of Marketing
1. Gathering & analysing market information
2. Marketing planning3. Product designing & development4. Standardisation & grading5. Packaging and labelling6. Branding
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Scope of Marketing
7. Customer support services8. Pricing of product9. Promotion10. Physical distribution11. Transportation12. Storage & warehousing
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Importance of Marketing As a business function In the economy
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Role of marketing - business
Gaps How marketing bridges the gap
Space Assembly, transportation & distribution
Time Storage, financing & risk taking
Perception (knowledge)
Communication mass media
Ownership Customer contact, termination of sale
value Price, terms of sale
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Role of marketing - Economy
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Makes available goods and services Market efficiency means higher real income New goods & services Increases satisfaction level Creation of employment Raises aspiration level of people Conversion of potential demamd into real
demand Facilitates use of resources & economic growth
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MARKETING MANAGEMENT PHILOSOPHIES The role that marketing plays within a
company varies according to the overall strategy and philosophy of each firm.
There are five alternative concepts under which organizations conduct their marketing activities: Production concept Product concept Selling concept Marketing concept Societal marketing concepts
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Production Concept
The philosophy that consumers will favour products that are available and highly affordable and that management should therefore focus on improving production and distribution efficiency.
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Product Concept
The philosophy that consumers will favour products that offer the most quality, performance, and innovative features.
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Selling Concept
The idea that consumers will not buy enough of the organization’s products unless the organization undertakes a large – scale selling and promotion effort.
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Marketing Concept
The marketing management philosophy that holds that achieving organizational goals depends on determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors do.
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Societal Marketing Concept
The idea that the organization should determine the needs, wants, and interests of target markets and deliver the desired satisfactions more effectively and efficiently than competitors in a way that maintains or improves the consumer’s and society’s well – being.
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Three Considerations Underlying The Societal Marketing
Societal marketing
concept
Society(Human welfare)
Company(Profits)
Consumers(Want satisfaction)
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Modern Marketing Concept
Modern marketing concept depends on achievement of organizational goals through customer satisfaction. Whole marketing effort centers around determining the needs and wants of target markets and delivering the desired satisfaction more effectively and efficiently than the competitors do.
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Modern Marketing Concept
Focus: the focus of the firm following marketing concept is on the development of those products or services which can satisfy the needs of the consumers better than the competitors
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Features of Marketing Concept
1. customer orientation2. Marketing research3. Marketing planning4. Integrated marketing5. Systems approach6. Long term viewpoint
Marketing vs. Sales1. Marketing focuses on customers’ needsSelling focuses on sellers’ needs.2. Under marketing customer enjoys supreme importanceUnder selling product enjoys supreme importance3. Under marketing, focus is on matching product with marketUnder selling, the focus is to sell goods already produced
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Marketing vs. Sales4. Under marketing, integrated approach to achieve long term goals.Under selling, fragmented approach to achieve immediate gains5. Under marketing, the stress is on converting customers’ needs into productsUnder selling, it is converting products into cash6. Caveat vendor (let the seller beware)Caveat emptor (let the buyer beware)7. Profits through customer satisfactionProfits through sales volume
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Factory Existing products
Selling and
promoting
Profits through sales volume
Starting point
Focus Means Ends
The selling concept
Market Customer needs
Integrated marketing
Profits through customer
satisfaction
The marketing concept
The selling and Marketing Concepts Contrasted
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MARKETING CHALLENGES INTO THE NEW CENTURY
GROWTH OF NON-PROFIT MARKETING THE INFORMANTION TECHNOLOGY
BOOM RAPID GLOBALIZATION THE CHANGING WORLD ECONOMY THE CALL FOR MORE ETHICS AND
SOCIAL RESPONSIBILITY
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THE NEW MARKETING
LANDSCAPE
The past decade taught business firms everywhere a humbling lesson. Domestic companies learned that they can no longer ignore global markets and competitors. Successful firms in mature industries learned that they cannot overlook emerging markets, technologies, and management approaches. Companies of every sort learned that they cannot remain inwardly focused, ignoring the needs of customers and their environment.