Introduction to

Marketing:Sessions 1-2

“Marketing is too important to be left to the marketing department.”

KNOW YOUR FACULTYProf. Freda J Swaminathan

Faculty at FORE since 4 ½ years. Graduated from the Indian Institute of Management, Ahmedabad and Illinois State University ( USA).

•Professional in Advertising, Corporate Communications and Marketing. Worked with leading organizations viz LINTAS ( 8 years), JW Thompsons Associates ( 4 years ), Goodyear ( 3 years ), Advertising & Sales Promotions – CK Birla group ( 6 years ) and the Dalmias ( 3 years ).

•Worked on some of India’s leading FMCG brands and services.

•On the client side, handled major ad agencies including Leo Burnett, McCann Erickson, Enterprise Nexus & Percept Advertising.

Wanted – a Marketing Manager

Responsibilities:Strategy1. Gather and analyze market intelligence for defining marketing strategy, product positioning and monitoring competitive activity

2. Identify and segregate potential market segments

3. Develop and implement a company-wide plan to push products

4. Prepare an effective marketing plan and deliver all marketing activities within the agreed budget

Wanted – a Marketing Manager

Responsibilities:

Execution -

1. Analyze and build potential strategic alliances for product lines at local/regional/national level for sales and branding

2. Implement BTL Marketing strategies for Sales and Branding (Customer Presentations/ Tie-ups, Seminars, Database Marketing, Events and Fairs, Promotional and Direct Mail Campaigns, Online Marketing)

3. Develop Marketing Collaterals, Creative and related marketing communication

4. Manage Advertising and PR Activities and Negotiations

5. Develop the Alternate Channels via Franchisee / ICC/ Corporate and Institutional Tie-ups and provide the necessary training/support/coordination to generate business

6. Manage and Expand the existing Franchisee Model

7. Recruit BDMs/BDEs/ Marketing and Sales ExecutivesProvide Sales Training to the entire team

8. Lead, Motivate and Incentivize the Sales team

9. Implement exact Sales and Reporting systems and follow through processes

10. Monitoring performance of the team to achieve defined targets

11. Effectively communicate across departments to drive fast execution

12. Vendor Management

Core Courses – Marketing 1 & 11Marketing 1Decision areas in Marketing• Assessing market opportunity

– Customer analysis– Competition Analysis– Assessing Marketing Environment

• Designing the Market Offering– Product offering– Promotions

Marketing 2• Market Assessment and Forecasting• Market Research and Information System• Delivering the Offer

– Sales and Distribution Management– Pricing

• Emerging Issues in Marketing

Assessment Methods and Marks Distribution

Method Weight

Class Participation & In class presentation

15%

Written submissionsGroup Projects @ 5*3 =15

Case Analysis 2@5 = 10

Quiz @ 2.5 * 2=5

30%

Mid Term 15%

Final Exam 40%

Projects due in July, 2009

Group Projects – 3 nos. Group to be of 5 membersRead the assignment given in the Reading

Material.Report is due on the day of presentation.First presentation on Session 5.Second presentation on Sessions 13 & 14Case analysisVora & Co – due on Session 7 Quiz on Session 10

M T W TH F S Week end

JULY130th June

Introduction -1

2 3Marks & Spencers -2

4

6 7M&S 2009 -3How to market for a recession

8 9Case : Kinko- 4

10 11 Group Project

13 14Group Project- 5

15 16Case on Segmentation: TITAN - 6

17 18 Case Analysis:Vora & Co

20Vora & Co:

Discussion7

21Case on ServicesKerala Tourism- 8

22 23Competition9

24 25 Prepare Chapters : 1,6,7,8

27 28Quiz # 1Competition - 10

29Case : Kodak versus Fuji - 11

30Mid Term Review - 12

31 Group Project : environment

JulyAugust

M T W TH F S Remarks

AUGUST1

3Group Project - 13

4Group Project - 14

5 6 7 8 Mid Term Preparation

10Mid Ter m

11Mid Ter m

12Mid Ter m

13 14Case : Apple15

15

17Understanding Product 16

18 19Case : Social Networking Sites17

20 21Product Planning 18

22 Assignment 2New Kids on the Block

24 25Positioning19

26 27 28Case :Fair & LovelyBrand Equity20

29 30Prepare for Quiz

JulyAugust

M T W TH F S Remarks

September 1 2Quiz # 2IMC – Case : Innova - 21

3 4Group Presentation - 22

5

7Group Presentation - 23

8 9Wrap Up - 24

10 11 12

14End Term

15 16

JulyAugust

“ In the factory we produce cosmetics. In the drugstore we sell hope.” Charles Revson

Work in Pairs:Make a similar statement for anotherProduct.

Role of Marketing in an Organization

Introduction to Marketing

Activity

How Marketing Savvy are you ?

1. ( 1 mark ) Who said this:

“They can have any color they want as long as it is black.”

a) G D Birla founder of Hindustan Motors.b) Henry Ford founder of Fordc) Henry Royce founder of Rolls-Royce d) Louis-Joseph Chevrolet co founder of Chevrolete) Kiichiro Toyoda founder of Toyota

Tata Jamsetji Walmart Sam Walton CNN Ted Turner Kingfisher Vijay Mallyya Nike Phil Knight VIP Suitcases Piramal Virgin Richard Branson Reliance Ambani FedEx Fred Smith Satyam Ramalingam Raju Sony Akio Morita Bharti Sunil Mittal Ford Chrysler Lee Iacocca HCL Shiv Nader MicroSoft Bill Gates Eveready Khaitans 

Morepen Labs BurnolHeinz ComplanMarico KayaHUL Kwality WallsTata IndicaP&G ArielPidilite FevicolNestle CerelacWipro SantoorITC Sunfeast

( 1 mark ) Which IT company is nicknamed 'Big Blue'?Hewlett PackardDellIBMSonyCompaq

Michelin Bibendum Asian Paints GattuNike Phil KnightAmul MoppetFerrari HorseMcDonald’s RonaldAir India MaharajaAdidas Three stripesVodafone ZoozooNirma Dancing girlKingfisher Bird7 Up Fido

Four Eras of Marketing History

“A good product will sell itself.”

“Creative advertising and selling will overcome consumers’ resistance and convince them to buy.”

“The consumer rules! Find a need and fill it.”

“Long term relationships with customers and other partners lead to success.”

Prior to 1920’s to 1950’s Since 1950’s Since 1990’sEra Production Sales Prior Marketing Relationship

In the United States and other highly industrialized economies

Relationship Marketing

The development, growth, and maintenance of long-term, cost-effective exchange relationships with individual customers, suppliers, employees, and other partners for mutual benefit.

Advocate

LoyalSupporter

RegularPurchaser

NewCustomer

16l

Customer Needs / Wants / Demands

Directed at specific

Objects – shaped by

one’s society. Eg.

Rice, dals, fruits

Wants for specific products backed by an ability to pay.

Eg : Pepsi, Benz, etc.

Customer Needs ( Basic )

Wants Demands

Eg. FoodAir, shelter

I want it, I need it…..

5 Types of Needs

• Stated needs:• Real needs:• Unstated needs:• Delight needs:• Secret needs:

I want it, I need it…..

5 Types of Needs

• Stated needs: admission to a good institute.• Real needs: must afford the fees.• Unstated needs: good teaching from faculty• Delight needs: good placement• Secret needs: good brand to last a life time

What is Marketing?

Marketing is finding out what the consumer wants and then

giving it to him / her, in a commerciallyviable manner.

Marketing therefore becomes an attitude, a state of mind and a philosophywhich guides the operations of a business.

.

What is Marketing?

"Marketing is the activity, set of institutions and processes, for creating,

communicating, delivering and exchanging offerings that have value for

customers, clients, partners, and society at large.“

AMA, 2008

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

What is marketing ?

Marketing Variables - Marketing Mix

• Product• Price• Promotion• Place

Using the Marketing Mix to build long term relationships.

Concepts of Sesson 1

• What is Mktg• History of marketing• Relationship marketing• Consumer orientation in marketing• Needs wants demands

(basic) ( aimed at object) desire for brand

• Marketing mixNext session : Mark’s & Spencer’s. Read the case for a mini quiz.

Mark’s & Spencer’s

Session 2

Marks & Spencer

• What is the problem that Stuart Rose was facing when he took charge of M&S?

Marks & Spencer

• What is M&S strategy

• What value is being created

• What should S Rose do and why

Stuart Rose’s concerns

Processes

Stakeholders

Resources

Organization

Marks & Spencer

Decision Areas in Marketing

•Creating customer value

•Strategic planning

Characteristics of Company

• No senior mngt sign off – too much delegation• Too much inventory• High profile customers• St Michael’s – a value for money brand• 16 sub brands .• Advertising not aspirational but functional• Diverted from retail heartland – not customer focused.• New competition like Next, Walmart ( ASDA)• Led by consultants experimenting with projects• De motivated staff

What Stuart Rose did • Fighting off a hostile takeover• Managing Press• Support of 2 trusted execs – in IT and Marketing• Streamlined 5 sourcing offices• Made suppliers conscious of this being ‘our’ problem and reduced costs• House cleaning – off many brands• Retrenched 650 staff but retained home grown talent• Motivated retained staff – making them customer focused• HR measures• Stock management – 2 crimes : overstocked and short of stock• Daily reporting to ceo of stock position• Problems are not allowed to fester• Focus on the basics of the business – improve product / store / service• Selling off their financial services to HSBC• Buying Per Una womens wear brand

Concepts of Sesson 2

• Strategic and Tactical Marketing• Marketing myopia• Case Analysis: No Alternatives, no problem!

Problem Definition

Co objectives

Alternative strategies – SWOT of same

Recommendation

Contingency Plan

Calendar – Till Mid Term July 9th : Kinko , the case

July 14th : Consumer Behavior – GP

July 16th : Financials of Marketing

Week end: Vora & Co : Write Case analysis

July 20th : Kerala Tourism

July 21st : Titan

July 23rd : Competition lecture

Week end : Prepare for Quiz on Chs 1,6,7,8

July 27th: Quiz / Competition

July 28th : Kodak versus Fuji

July 30th : Mid Term Wrap up

Aug 3rd / 4th : Group Presentations on environment

Project 1

– What were the triggers of purchase.– What were the stages in the purchase

processes.– What inputs were sought in each of these

stages.– Who played what kinds of roles in each stage

and– Approximately how much time was taken in

each stage.– Was there any post purchase dissonance?

Methodology

• Based on the learning’s and insight from the in-depth discussions with THREE consumers, please draw implications for marketing decisions.

• Ask probing questions.• Do not construct a structured questionnaire. Just carry with you a

list of

questions to guide you discussions.• The report should be limited to 3 pages ( one and a half space, 12pt

Times Roman / Arial ) including Appendix, if any.• The report is due just before the presentation.• Late submissions irrespective of reasons, however genuine, will

have a 50% reduction in marks if the report is submitted after the next 2 days and will not be accepted beyond 2 days.

M&S – 2004 – Group activity

What are the rules of doing business in the retail space?

Was there anything new being done by Stuart Rose?

Rules of the Game

Paradigm shift – changing the rules of the game.

When you create a concept, you

create a future…

Marketing….

Marketing Mix and the Customer

Four Ps• Product• Price• Place• Promotion

Four Cs• Customer solution• Customer cost• Convenience• Communication

Marketing Myopia

Management’s failure to recognize the scope of its business.

Avoiding Marketing Myopia by Focusing on Benefits

“We are in the entertainment business.”

“We are in the video game business.”

Sony

“We are in the financial services business.”

“We are in the stock brokerage business.”

Prudential Securities

“We are in the transportation business.”

“We are in the airline business.”

Northwest Airlines

“We are a communications company.”

“We are a telephone company.”

MCI Worldcom

Marketing-Oriented Description

Myopic DescriptionCompany

Make Product(Design, Procure, Make)

Sell Product(4 P’s / 4 C’s)

Product Process

STPSegmentation, Targeting,

Positioning

Provide & CommunicateValue through

4 P’s / 4 C’s

Value Creation & Delivery

Strategic Marketing Tactical Marketing

How do we identity needs, wants , desires and market to diverse and large crowds :

STP

Brands &Benefits

CustomerSatisfaction

Markets:ChannelsSupply ChainCompetition

MktgEnvn.Societal

Forces

ConsumerCapabilities

Company Capabilities

Internal Marketing: Relationship Marketing;Integrated Marketing

4 P’s

HOLISTIC RELATIONSHIP MARKETING FRAMEWORK

CUSTOMERS CORPORATION COLLABORATORS

1) Who is involved?

HOLISTIC RELATIONSHIP MARKETING FRAMEWORK

MARKETSPACE

CUSTOMERS CORPORATION COLLABORATORS

1) Who is involved?

2) How can we define relevant market space?

HOLISTIC RELATIONSHIP MARKETING FRAMEWORK

MARKETSPACE

POTENTIALOPPORTUNITIES

CUSTOMERS CORPORATION COLLABORATORS

3) What are the potential opportunities emerging from the market space?

1) Who is involved?

2) How can we define relevant market space?

HOLISTIC RELATIONSHIP MARKETING FRAMEWORK

MARKETSPACE

POTENTIALOPPORTUNITIES

BUSINESSINVESTMENT

CUSTOMERS CORPORATION COLLABORATORS

3) What are the potential opportunities emerging from the market space?

4) What business capabilities and infrastructure required?

1) Who is involved?

2) How can we define relevant market space?

HOLISTIC RELATIONSHIP MARKETING FRAMEWORK

MARKETSPACE

POTENTIALOPPORTUNITIES

BUSINESSINVESTMENT

CUSTOMERS CORPORATION COLLABORATORS

CUSTOMER CUSTOMER FOCUSFOCUS

CORE CORE COMPETENCIESCOMPETENCIES

COLLABORATIVE COLLABORATIVE NETWORKNETWORK

2) How can we define relevant market space?

3) What are the potential opportunities emerging from the market space?

4) What business capabilities and infrastructure required?

1) Who is involved?

ExploreValue

Createvalue

DeliverValue

Printed on CANON

COMPETITIVE PLATFORMS

Market

Offerings

COGNITIVESPACE

CUSTOMERVALUE

BUSINESS DOMAIN

COMPETENCYSPACE

Business

Architecture

BUSINESS PARTNERS

CRM ERP

RESOURCE SPACE

SCM

Marketing Activities

Operational

System

Creating Creating ValueValue

DeliveringDeliveringValueValue

Customer Customer FocusFocus

Core Core CompetenciesCompetencies

Collaborative Collaborative NetworkNetwork

M&S

How did strategies change over 2004 to 2008?

M&S Now

How should M&S market in today’s downturn?

Group Activity :

Defining the corporate mission for M&S

• Mission– What business is M&S in? What businesses should

we be in? What do we do best? What are the values/ethics of the firm?

– Define business by need rather than product features.

- Lodging vs hotel- Quick service restaurants vs fast food hamburgers

Characteristics of Core Competencies

• A source of competitive advantage

• Applications in a wide variety of markets

• Difficult to imitate

Categories of Marketing Alliances

• Product or Service Alliances

• Promotional Alliances

• Logistics Alliances

• Pricing collaborations

Concepts of Sesson 3 & 4

• A holistic marketing framework

• Marketing myopia

• Core competency

• B2B marketing

• Business buying behavior

Consumer Decision Making Process

Project 1

– What were the triggers of purchase.– What were the stages in the purchase

processes.– What inputs were sought in each of these

stages.– Who played what kinds of roles in each stage

and– Approximately how much time was taken in

each stage.– Was there any post purchase dissonance?

6-62

What Influences Consumer Behavior?

• Cultural factors – related to values/social class / religion/community

• Social factors – related to reference groups, family, roles & status.

• Personal factors – related to family life cycle / occupation / personality / self-concept / life style

6-63

Social Factors

Referencegroups

Social roles

Statuses

Family

6-64

Reference Groups

• Membership

• Primary

• Secondary

• Aspirational

• Dissociative

6-65

Family

• Family of orientation– Religion– Politics– Economics

• Family of procreation– Everyday buying behavior

6-66

Personal Factors

• Age• Life cycle stage• Occupation• Wealth

• Personality• Values• Lifestyle• Self-concept

Socio economic Classification

• Urban : Occupation & Education ( SEC A, B,C & D )

• Rural : Type of House ( pucca, semi-pucca and kucha ) and education ( R 1, R2 etc )

Socioeconomic Classification (SEC) Matrix—India (Urban)

Key Psychological Processes

• Motivation

• Perception

• Learning

• Memory

Motivation

• Maslow’s hierarchy of needs

• Freud’s theory

• Herzberg’s two-factor theory

Physiological Needs(Food, water, air, shelter, sex)

Safety and Security Needs(Protection, order, stability)

Social Needs(affection, friendship, belonging)

Maslow’s Hierarchy of Needs

Ego Needs(Prestige, status, self esteem)

Self-Actualization(Self-fulfillment)

Besides ‘Needs’ behavior is due to :

• Unconscious psychological process ( Freud )

• Motivations that cause satisfaction or dissatisfaction ( Herzberg )

• High involvement or low involvement product

Perception

• Selective attention

• Selective retention

• Selective distortion

• Subliminal perception

Project 1

– What were the triggers of purchase.– What were the stages in the purchase

processes.– What inputs were sought in each of these

stages.– Who played what kinds of roles in each stage

and– Approximately how much time was taken in

each stage.– Was there any post purchase dissonance?

How do consumers make buying decision?

• Initiators

• Influencers

• Deciders

• Buyers

• Users

6-76

Consumer Buying Process

• Problem recognition

• Information search

• Evaluation

• Purchase decision

• Postpurchase behavior

6-77

Other Theories of Consumer Decision Making

Involvement• Elaboration likelihood

model• Low-involvement marketing

strategies• Variety-seeking buying

behavior

Decision Heuristics ( non rational)

• Availability – quickness & ease• Representativeness ie how

similar is the outcome• Anchoring and adjustment .

First impressions are lasting impressions.

Project 1

– What were the triggers of purchase.– What were the stages in the purchase

processes.– What inputs were sought in each of these

stages.– Who played what kinds of roles in each stage

and– Approximately how much time was taken in

each stage.– Was there any post purchase dissonance?

Economic Conditions

New Technology

Media

Law & Politics

Social Culture

Marketing mix (competitor & own)

Characteristics resultingfrom:-social /reference groups-family values-role & status

Personal circumstances-socio-economic-life style-psychologicalprocess &personality

Decision process-need recognition-information search-evaluation-purchase intention-purchase-post purchase perceptions

Product form

Brand

Retail outlet

Value

Form of payment

Timing of purchase

External Factors Buyer’s Black Box Outcomes

Consumer’s Purchase Decision

Session on Consumer Behavior

• Reference group• Aspirations• Maslow• Freud• Herzberg• Selective Attention• Decision making process• High & Low involvement