INTRODUCTION TO

MARKETING MANAGEMENT

Discussion Questions

1. Why is marketing important?

2. What is the scope of marketing?

3. What are some fundamental

marketing concepts?

4. How has marketing management

changed in recent years?

5. What are the task necessary for

successful marketing management?

Suggested Readings1. Marketing Management - Philip Kotler, Rajan saxena

2. Marketing Management - Ramasamy and

Namakumari - 5ed

3. Basic Marketing – Perault

4. Marketing - Ramesh Kumar

Introduction• Change is the only constant in Business

• Yesterday vogue today out of fashion

• Firms which do not change to marketing trends are out

of business

• Marketing is as old as Mankind

• Any thing can be marketed

• Significant change in the field of Science & Technology

• Marketing is the most Critical function

• E.g.., On line websites, internet

Importance of Marketing

• Marketing creates demand for a product, which in turn

drives revenue.

• Greater demand creates the need for companies to hire

new workers, while revenue (top line) contributes to a

company’s bottom line (profits), which allow the

company to be more fully engaged in socially

responsible activities.

Marketing

Demand

Revenue

Definition - Marketing

• Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offers that have value for customers, clients, partners, and society at large.

• Marketing is the process of communicating the value of a

product or service to customers.

Definition – 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 value.

Simple Marketing System

Industry(a collection

of sellers)

Market(a collection

of Buyers)

Goods/services

Money

Communication

Information

What is Marketed? Experiences Events Properties Organizations Information Ideas

Persons

Services

Goods

Places

Who markets?

Marketer Prospect

Attention

Purchase

Donation

Vote

Response

Key Customer MarketsGlobal Markets

Business Markets Government Market

Consumer Market

Markets

Marketplaces Marketspaces

Metamarkets

Core Marketing Concepts

Needs, Wants, and Demands Target Markets, Positioning, and Segmentation

Offerings and Brands

Value and Satisfaction

Core Marketing Concepts

Marketing Channels

CompetitionMarketing Environment

Supply Chain

The New Marketing Realities

New Company Capabilities

Major Societal Forces

Information Technology

Globalization

Increased Competition

Consumer Information

Communicate w/CustomerCollect

Information

Differentiate Goods

Who is Responsible for Marketing?

Chief Marketing Officer(CMO)

Entire Organization

Marketing Department

Marketing Concepts

HolisticMarketingSellingProductProductionMass productionMass distribution

QualityInnovation

Unsought goodsOvercapacity “hard-sell” to increase demand

“sense-and-respond” Create, deliver, and communicate value

Evolution of Marketing

• Production Era – supply creates its own demand. They

wand product rather than features

• Sales Era – 1920 -1950, not only producing need to sell

them. Collected data about markets through research

• Marketing Era – companies started looking into need

& wants of customers., i.e.. instead of pushing they

tried to fulfill.

• Marketing do not create demands, Marketers can

provide four types of utility to target customers

– Form, time & Place

Holistic Marketing Dimensions

Relationship Marketing

Attracting a new customer can cost five times as much as

retaining existing customers so building long-term

relationships makes financial sense for the company.

Build long-term relationships Develop marketing networks

customers, employees, partners, and member of the financial community

Integrated Marketing

All activities undertaken by the company should create, communicate, and deliver value

Internal MarketingInternal marketing is the task of hiring, training,

and motivating able employees to serve customers well. You can’t promise excellent service if you

can’t deliver excellent service.

Performance Marketing

Financial accountability involves the justification of marketing expenditures in terms

of financial returns. Ethical, environmental, legal, and social aspects

Social Responsibility Financial Accountability

Financial and nonfinancial returns to a business and society

• Developing market strategies and plans

• Capturing marketing insights

• Connecting with customers

• Building strong brands

• Shaping market offerings

• Delivering value

• Communicating value

• Creating long-term growth

Marketing Management Tasks

Marketing EnvironmentAll the actors and forces influencing the company’s

ability to transact business effectively with it’s target market.

Marketing Environment Includes:

Micro environment - forces close to the company that affect its ability to serve its customers.

Macro environment - larger societal forces that affect the whole microenvironment.

EquipmentCustomersCompetitors External Factors

Forces Affecting a Company’s Ability

to Serve

Customers

Publics

Suppliers

Intermediaries

Customers

Competitors

The Microenvironme

nt

The Macro environment

Economic

Sociocultural

Natural

Technological

Political-Legal

Demographics

Demographic Environment

• Worldwide population growth

• Population age mix

• Ethnic and other markets

• Educational Groups

• Household patterns“Married with Children”; single live-alones; living with nonrelatives only; and other family structures

Economic Environment

Consumer Psychology

Income Distribution

Ourselves

Universe

OrganizationsSociety

NatureSocio-

cultural Environm

ent

Natural Environment

Environmental Regulations

Effects of their business on the environment

Technological Environment

Accelerated pace of change

Unlimited opportunities

R&D Spending

Political-Legal Environment

Special Interest Groups

Government Agencies

Laws

Legal• Laws & regulations of a country have a major impact on the way a company conduct its business• Ignorance of law is considered no excuse• Some of the legal act regard to Indian business

– Prevention of food & adulteration – 1954– Drugs control act – 1954– Company act – 1956– Standard weight & Measurement act – 1956– Display of price order – 1963– Indian patent act – 1970– Consumer protection act – 1986– Water & air pollution act – 1974 & 1981– Environment act - 1986

refers to the channel, or the route, through which goods move from the source to the

final user

The Four P’s of the Marketing Mix

a product is anything that can be offered to a market that might satisfy a want or need

price is the quantity of payment or compensation given by one party to

another in return for goods or services.

activity that supports or encourages a cause, venture, or aim.

Marketing Mix

Product

PricePromotion

Place

Elements of Marketing Mix

Levels of Product

• Theodore Levitt – Total product concept

– The marketer offer main product

– Next level formal product

– Third Level is Expected Product

– Fourth level Augmented product

– Fifth level Potential Product

PRODUCT LEVELS

Potential Product

Core Benefit

Basic Product

Expected Product

Augmented Product

(Preservation) (compressor and cooling system)

(door, shelves, trays)

(Freezer, Bulb, Thermostat, Quiet not noisy)

(Free rice – cooker, warranty )

(opening of doors, Faster cooling)

PRODUCT CLASSIFICATIONSNondurable goods

ServicesDurable goods

Durability and Tangibility

Intangible & perishable Either an independent

product or inseparable part of product

Tangible in nature Consumed over longer

period of time

Tangible in nature Consumed over a short period

of time Fast Moving Consumer Goods

PRODUCT CLASSIFICATIONSConsumer-Goods

Convenience goods

Shopping goods

Specialty goods

Unsought goods

• Staples• Impulse goods• Emergency goods

Classification of Consumer Products• Convenience products

• Relatively inexpensive & bought frequently• Spends minimal time & involvement• They check the shell space & stores stock,

Packaging• Marketers try to use screen display at the

entrance of the store

• Shopping products• Willing to spend time & effort in planning &

purchasing• Expected to have longer shelf life &

purchased less frequently• Home appliances, cameras etc.,• Marketers used promotion based on price

Classification of Consumer Products• Specialty Products

• That have one or more unique characteristic features

• Available on few select outlets• Customers might wait to get the product

even alternatives are available.• Original painting, Mont blanc pen, an

antique car etc.,

• Unsought Products• Customer purchase when faced with a

sudden problem• Umbrellas, medicines, surgery etc.,• Marketers use personal selling like

insurance

Product ClassificationsIndustrial-Goods

Raw materials

Materials and Parts

Manufactured materials Capital Items

Installations

EquipmentSupplies and business Services

Organizational products• Production Goods– Raw Material

• Basic material used in production• Fairly perishable in nature• Pig iron, crude oil, fabric, chemicals

– Component parts• Finished product or a product that needs a little processing before

becoming a part of the main product• They purchase the components parts to their own specifications• Engine, carburetor, wheels, seats etc.,

– Process material• Used directly in production of the final product• Not easily identified as part of production• Perfume company used alcohol

Organizational products• Support products

– Capital equipment• Comprises of large tools & machines used for production• Expensive, long period• Sometimes customization of machine done by companies

– Accessory Equipment• Help in production or office activities• They do not become a final part of product• Mechanical tools, computers, calculators

– Consumable supplies• Consumed During Production Of Product & Do Not Become Final Product• Paper pencils, oils, paints, brooms, office stationeries, water

– Business services• Intangible in nature for smooth functioning of their equipments• Financial services, legal, market research, janitor services• Buy some services on contract basis from outside

An act or performance one party can offer to another that essentially intangible and does not result in the ownership of anything.

Service

Classification of service• End User

• Degree of Tangibility

• People based services

• Expertise

• Orientation towards Profit

Classification of service• Based on End User

• Consumer (Individual customers) –leisure,

hairdressing, personal finance, package holidays.

• Business to business (Organizations) - advertising agencies, printing, accountancy, consultancy

• Industrial (Contract between organizations)

- plant maintenance and repair, work wear and hygiene,

installation, project management.

Classification of service• Based on Service Tangibility

• Highly tangible - car rental, vending machines,

telecommunications.

• Service linked to tangible goods - domestic appliance

repair, car service.

• Tangible goods linked to services – airline services offer

food

• Highly intangible - psychotherapy, consultancy, legal service

Classification of service• People Based Services

• labor-intensive (people based) & equipment-based services. Represented by the degree of contact

• People-based services - high contact

- education, dental care, Restaurants, medical services.

• Equipment-based - low contact - automatic carwash, Launderette, vending machine,

cinema

Classification of service• Profit Orientation (Purpose of doing

business)

• Not-for-profit ( To Serve society) - The

Scouts Association, charities, public sector leisure

facilities.

• Commercial (To earn revenues) - Banks,

airlines, tour operators, hotel and catering services

Classification of service• Based on Expertise

• Professional (Formally Trained) - Medical services,

legal services, Pilot, accountancy, IT, Consultant

• Non-professional (No training is required) -

Babysitting, care taking, casual labor, House keeping

MARKETING STRATEGIES The aim of marketers is always to identify and satisfy

customer needs and wants profitably. Objectives are a statement of where a company wants to

go; strategy Is a grand design for getting there. Marketing strategy of a firm is the complete and

unbeatable plan or instrument designed specifically for attaining the marketing objectives of the firm.

The marketing objectives will tell us where the firm wants to go: the marketing strategy will provide the design for getting there.

THE VALUE DELIVERY APPROACH

Value

ChooseProvideCommunicate

segment the market, select the appropriate target,

specific product features, prices, and distribution

use of the sales force, the Internet, advertising

CORPORATE STRATEGIC PLANNING

Define corporate mission

Establish SBU’s

Assign resources to SBU’s

Assess growth opportunities

1

2

3

4

DEFINING THE CORPORATE MISSION

What is our business?

Who is the customer? What is of

value to the customer?

What will our business be?

What should our business

be?

DEFINING STRATEGIC BUSINESS UNITS

Technology

Customer groups

Customer needs

DIVERSIFICATION GROWTH

New O

pportunity

CORPORATE CULTURE

… is the shared experiences, stories, beliefs, and norms that characterize an organization.

MARKETING INNOVATION

Identify and encourage new ideas

Scenario Analysis

EVALUATING AND SELECTING SEGMENTS

Individual marketing

Full market coverage

Multiple segment specialization

Single-segment concentration

PORTER’S FIVE FORCE

Rivals

New Entrants

Substitute ProductsBuyer Power

Supplier Power

STRATEGY FORMULATION

Porter’s Generic Strategies

Strategic Alliances

SWOT ANALYSIS

TThreat

Ext

ern

alIn

tern

al SStrength WWeakness

OOpportunity

PROGRAM FORMULATION AND IMPLEMENTATION

FEEDBACK AND CONTROL

Strong leadership

Product and Services Differentiation

Difference between goods & services

Product DifferentiationForm

Customization

Performance

Reliability

Features

Durability

Conformance

Repairability

Style

Services DifferentiationOrdering Ease Delivery &

Returns

Installation

Training

Maintenance & Repair

Customer Consulting

Consumer Behavior

Unit - 2