Marketing

Marketing

An Introduction

11/28/2014PRAJEESH E MENON

MBA, KVM COLLEGE,Cherathala, Kerala

Evolution of Marketing

Evolution of Commerce and Industry

Household Economy

Barter Economy

Village Economy

Rise of Entrepreneurs

Industrial Revolution – late 18th and early 19th

century.

Emerged in the early 1900s.

Different orientations.

11/28/2014PRAJEESH E MENON MBA, KVM

COLLEGE,Cherathala, Kerala

Co creation – Tanishq, Coke,.. / real time interaction



Production Oriented

Sales Oriented

Marketing Oriented

Upto1930s

1950s

Till date

Mass production; Supply

exceeds Demand.

‘Customer will not buy’ if

there is no hard selling.

Emphasis on Product,

Distribution and Sales

Promotion.

Cold calling,

Mass production; Demand

exceeds Supply.

‘Supply creates its own

demand’.

Emphasis on product

(standardization) and

Distribution

Automobile, Film, Radio

(1st broadcasting medium

for entertainment and

advtsng) and Chemical

Industries flourished.

Customized Production.

Determination of customer

needs.

Emphasis on proper

marketing mix strategy.



Essex race cars on display in Salt Lake

City, U S (1920)



The concept of Marketing…

• Aim of Marketing: Is to know and understand the customers so

well that the product or service fits him and sells itself.

• American Marketing Association

Marketing is an organizational function and a set of process

for creating, communicating, and delivering value to

customers and for managing customer relationships in ways

that benefit the organization and its stake holders.



• Philip Kotler defines marketing as a

“social 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”.

– Two parties must be present; the buyer / customer and the seller/

marketer

– Both must have something viewed valuable by each other

– They must have the freedom to either accept or reject the offer

– Each of the parties feel desirable to deal with each other

– Each party is capable of communication and delivery



Marketing

Art

Science

Business

Function

Practice

System

Process

Relationship

Philosophy



Core Marketing Concept

Marketing offers

(products, services and

Experience)

Value and Satisfaction

Exchange, transaction and

Relationship

Markets

Needs, wants and demands



• Need: Essentials of life (food, shelter, clothing) – primary

necessities

• Wants: Desires or wishes that are created – secondary in

nature

• Demands : Ability backed by desire to purchase the product

• Product: Anything that satisfies the needs and wants of the

customer

• Services: intangible in nature, different from product



• Value: what is being delivered to the customer (brand value)

• Satisfaction: increases when the gap between expectation and

delivery decreases

• Exchange: money / money’s worth in return for a product

• Relationship: build and maintain a relation with the target

audience – 2 adv; customer retention (satisfaction), cost element

• Utility: absolute concept- usefulness of the product

• Markets: The set of actual and potential buyers of product and

service.



Markets

• Consumer Markets

• Business Markets

• Global Markets

• Non profit and Govt. Markets.



Marketing Offers

• Goods

• Services

• Events

• Experiences

• Persons

• Places

• Properties

• Organizations

• Information

• Ideas



Offer for a service





A product



Selling an idea.



Concepts in Marketing

Production Concept

Product Concept

Selling Concept

Marketing Concept

Holistic Marketing Concept.



Production

Concept

Product

Concept

Selling Concept Marketing

concept

Consumers will

prefer products

widely available

and inexpensive.

Management

becomes cost

focused

Objective is cost

reduction

High production

efficiency, low

costs, mass

distribution.

Eg; China

Favor products

that will give high

quality,

performance,

innovative

features.

Concentrates on

producing superior

prdts and

improving them.

Consumers if left

alone will not buy

organisation’s

prdts.

Product or

service is not made

according to

customer’s

requirements

Aggressively

practiced in

unsought goods.

Aim ‘ sell what

they make and not

make what the

market wants.

All activities are

focused upon

providing customer

satisfaction.

Right products

for your customers

and not the other

way.

Organisational

goal is creating,

communicating,

delivering superior

customer value to

consumers.11/28/2014

PRAJEESH E MENON MBA, KVM COLLEGE,Cherathala, Kerala

Selling Vs Marketing

Selling starts with seller .

All the activities will start with the

existing product.

Emphasizes on the saleable surplus

available within the corporation.

Seeks to quickly convert products to

cash.

Views business as a “goods

producing processes”

Marketing starts with the buyer.

All the activities will follow the

buyer and his needs.

Emphasizes on Identification of a

market opportunity.

Seeks to convert customer ‘needs’

to ‘products’.

Customer satisfying process.



Selling Vs Marketing

Marketing mix is dominated with

the sellers preference.

Makes the product first and then

figures out how to sell it and earn

profit.

Emphasis on the existing

technology and reducing cost.

Cost determines the price.

‘Selling’ views the customer as the

last link in the business.

Buyer determines the marketing

mix.

The product offered is determined

by the customer.

Better technology thus better value

products for the customers.

Consumer determines price and

price determines cost.

‘Marketing’ views the customer as

the very purpose of the business.11/28/2014


MARKETING MYOPIA



WHAT IS MARKETING MYOPIA?

• Myopia literally means short sightedness.

• Marketing myopia is the inefficiency of the top

management to broadly define its business and meet

customer needs resulting to the decline of the product.



Contd…

• Concept by Theodore Levitt in Harvard Business

Review in 1960.



CONTD..

• Short sighted and inward looking approach to

marketing that focuses on the needs of the firm

instead of defining the firm and its products in terms

of the customer’s need and wants.

• In short, marketing myopia means, “focusing

products rather than customers”.



MYTHS IN MARKETING MYOPIA

• Population myth.

• Production myth.

• Dangers in R&D.

• Threat from substitutes.



AFFECTED INDUSTRIES…

• Banking

• Automobile

• Entertainment



POPULATION MYTH

• In the population myth, it is believed that profits are

assured by an expanding and more affluent

population.

• The market also starts expanding and more and more

people started buying the product.

• This myth contributed largely to the failure of many

products.



FAILURE OF

IN FOCUSING CUSTOMER SERVICE

• SBI is the largest state owned bank.

• It has more than 16000 branches in India and 130

branches overseas.

• It provides the range of banking products through its

vast network of branches in India and overseas.



Contd…

• But , managing huge population became a serious

threat for SBI.

• Lack of focus on customer service and delay in

incorporating computerization worsened the situation.



SBI SERVICES

• Computerization.

• Online banking.

• ATMs.

• Retail banking.

• Commercial banking.

• Life Insurance.



PRODUCTION MYTH

• Concentration of companies only on production or

product.

• Belief that companies can protect themselves and

ensure growth through mass production.

• Emphasis only on mass production and economics of

scale.

• More product oriented, rather than customer oriented.11/28/2014


AMBASSADOR STRUGGLE FOR SURVIVAL



OVERVIEW

• HM an Indian automobile manufacturer is a part of

Birla Group of industries.

• The company was the largest car manufacturer in

India before the rise of Maruti Udyog Ltd(MUL).



Contd..

• Ambassador Launched in 1958 was known as the first

Indian car, owes its design and technology to British

car model Morris Oxford built by Morris Motor

Company at Oxford, UK.

• Ambassador quickly occupied and ruled Indian

Markets from 1958-1980



AMBASSADOR-SUCCESS STORY.

• Ambassador was widely used as a taxicab and as a

government limousine.

• It was the only car with Diesel option.

• A sturdy car, ideal for Indian Markets.

• Perception of being less expensive to maintain.

• Large spaced.

• Over 16% of brand sales came from the Indian

Government.11/28/2014PRAJEESH E MENON MBA, KVM


REASONS FOR THE BRAND FAILURE.

• HM never knew whether they fit in the existing

economy

• Ambassador never changed with times. It focused on

only one segment till 1997 and within that time MUL

was able to bring out brands for each segments within

the nation.



Contd..• HM didn’t try to make some changes and upgrades

but overall the look and built-in quality remained the

same.

• Ambassador sales dipped badly in the year 2000 but

HM never bothered to rationalized the price of the

brand. Even today it costs over Rs. 4,00,000.



Contd..

• Indica took away the taxi car market and the

customers got a new option for Diesel car with

modern technology.

• Immense competition from other major dealers like

MUL, Hyundai etc.



Contd..

• In 2002, Mr. A. B. Vajpai replaced Ambassador with a

BMW Limo, from then on it lost the position of being

the first politicians’ choice.

• The car lacked the quality and refinement. Rattling

sound and rustling were some of the common

complaints.



AMBIEROD





FEATURES

• Remodeled by ace car designer Dilip Chabria.

• Price- Rs.4crore.

• Maximum speed-309 kms per hour.

• Focuses mainly on Indian youth.



DANGERS IN R&D

• Companies focused only on the theme that technical

research and development will ensure the growth of

the company.

• But, lack of experimentation, improvement and

manufacturing cost reduction created inefficiencies

and ultimately fails the product.



FAILURE OF MARUTI GYPSY



OVERVIEW

• Maruti Gypsy was a major player in the car market.

• It was one of India’s first sport utility vehicles with

the tagline of, “There is a Gypsy in everyone”.

• But, Gypsy did not changed itself in tune with the

changing industry requirements.



Contd…

• Even the company enhanced the power from

975 cc to 1300 cc only after 11 years.

• Thus, the product was failed in the market.



NEW MARUTI GYPSY



FEATURES

• Big tires for jeeps.

• 1300 cc engine.

• New youth look.

• Projected as a sports vehicle.



SHADOW OF OBSOLESCENCE

• Threat from substitutes.

• Many products and services failed because of:

– Lack of upgradation

– Under estimation of market scenario

– Threats from substitutes or competitors.



Contd…

• In essence, the companies believed that there are no

substitutes for its products or services.

• But, this underestimation lead to the failure of the

product



FAILURE OF DOORADARSHAN

TV NETWORK.



OVERVIEW

• Dooradarshan was the only option available to Indian

viewers in 1980s.

• It was running successfully with huge hits like

Ramayana, Sreekrishna, Shaktimaan, Jai-Hanuman,

Chhaya-geet, Malgudi days etc.



Contd…

• But this TV network failed because of reasons

like:

– Incapabilities in catching up with latest technologies

and trends.

– Changing customer tastes.

– Tough competition from satellite channels.

– Not yet digitalized.



CAUSES OF MARKETING MYOPIA

• Narrow minded approach to marketing situation

where only short ranged goals are considered.

• Product oriented rather than customer oriented.

• Stepchild treatment to marketing.

-Selling focuses on needs of the seller,

-marketing on the needs of the

buyer.

• Excessive focus on Research and Development.11/28/2014PRAJEESH E MENON MBA, KVM


IMPACTS OF MARKETING MYOPIA

• Short sightedness affects the mission in vision of the

company.

• Growth gets checked.

• Uncertain future.

• May lead to the death of the product.



POSSIBLE LEARNINGS.

• A brand exists in the market till it becomes dated,

after that it is virtually impossible to rejuvenate the

brand.

• Brand must go to the customers for new ideas.

• Rationalize the price in the light of emerging market.



Contd…

• Changes in the product along with the change in

market can sustain the brand even in emerging

market.

• Best example is Maruti 800, the brand is still

surviving because it made changes along with

changing customer values and demands.



HOW TO PREVENT MARKET MYOPIA..?

• Customer Orientation

Focus on customer rather than on product.

• Focus on Marketing

• Looking for future opportunities.

• Retention of existing customers.



CONCLUSION

Focusing on the customer’s satisfaction and

needs, the industry has to re-innovate its

mission, vision and goals.



Concepts in Marketing

Production Concept

Product Concept

Selling Concept

Marketing Concept

Holistic Marketing Concept.



The Holistic Marketing Concept

Integrating the value exploration, value creation and value delivery activities with

the purpose of building long- term, mutually satisfying relationships and co-

prosperity among the key shareholders.

Holistic Marketing

Relationship Marketing

Internal Marketing

Socially Responsible Marketing

Integrated Marketing



Internal Marketing

Ensures all the departments in the organization hold the marketing

principles.

Internal Marketing more important that outside marketing.

Co-ordination of all the departments.

Other departments must also “think customer”.

Integrated Marketing

All aspects of communication mix works unified. (Advertising, Personal

selling ,Sales promotion, Public Relations, Direct Marketing)

Marketing mix decisions, made for influencing the trade channels and final

consumers.

Many different marketing activities are employed to communicate and

deliver value.

Design and implementation of any one marketing activity is done with all

other activities in mind.11/28/2014


Socially Responsible Marketing

Concerns about the ethical, environmental, legal, and social context of

marketing activities and programs.

Marketer should be concerned about the role playing and could play in terms of

social welfare.

Companies try to attain a long term interests of consumers and society.

Relationship Marketing

Aim in building long-term relationships with customers, employees, and other

marketing partners (suppliers, distributors) and the members of the financial

community ( shareholders, investors).

Core is CRM and PRM ( Partner ).

Used relatively high value products.

The companies collect info. On each customer’s past transactions,

demographic, psychographics, and media and distribution preferences.



Scope and Functions of Marketing

A. Functions of Research

B. Functions of Exchange

C. Functions of

Physical Treatment

D. Functions of

Facilitating

Exchange

1.Marketing Research

2.Product Planning

and

Development. 1.Buying and Assembling.

2.Selling

1.Standardisation, Grading

and Branding.

2.Packaging

3.Storage

4.Transportation.

1.Salesmanship

2.Advertising

3.Pricing

4.Financing

5.Insurance.



A. Functions of Research

1.Marketing Research

Marketing research helps in analyzing the buyer’s habits, relative popularity of

the Product ,effectiveness of advertisement media, etc.

Provide the marketing managers with the timely and accurate information.

2.Product Planning and Development

A product is something which is offered by a business firm to customers to

satisfy their needs.

It is important to plan and develop product which meet the specification of the

customers.



B. Functions of Exchange

1.Buying and Assembling

The information regarding the needs and tastes of the consumer.

A proper co-ordination between the marketing department and

purchasing department is needed.

Assembling means collection of goods already purchased from different

sources at a common point.

2. Selling

Ownership of good s is transferred from the seller to the buyer.



C. Functions of Physical Treatment.

1.Standardization,Grading and Branding

Standardization-Setting up of specifications of the product.

Grading- Higher price for higher grades of products. Eg: Agricultural

products like Wheat, rice, apple and mango.

Branding-Brand is a symbol, a mark, or a name that acts as means of

communication to bring about an identity of the product.

Distinct individuality of the product.

2.Packaging

Individuality to a product.

Protect the goods form damage and facilitate easy transfer of goods to

customers.

Branding the product.

Labelling- Communicate brand , grade and give other informations like

distinctive features, its composition, its performance etc. 11/28/2014


3.Storage

Goods are stored in warehouse to protect form damage.

Warehouse creates time utility.

Marketing services like grading , packaging, labelling.

4.Transportation

Transfer of goods from the place of production to the place of consumption.

Creates time utility in goods and services as speedy transport minimizes the

time of transit.

Influence price of the product.



D. Functions Facilitating Exchange

1.Salesmanship

•Personal selling

•Direct and personal contact with the buyer.

2.Advertising

Spread the message of the product and promote the sale.

Creates a non personal link between the advertiser and the receivers of the

message.

Advertising media- Newspapers, magazines, radio, television, hoardings,

window displays etc.



3.Pricing.

•Price of a product is influenced by the cost of product and services offered,

profit margin desired, prices fixed by the rival firm and Government policy.

4.Financing

•Financing of customer purchasing as become an integral part.

• Provision of goods to customers on credit basis has become important in

increasing the volume of sales.- Also credit facilities to retailers and

wholesalers.

5.Insurance

•Risks are involved in the exchange of goods and services. Insurance

facilitates the smooth exchange of goods covering risks in storage and

transportation.



MARKETING ENVIRONMENT



Importance

Develop broad strategies and long term policies.

Analyze competitor's strategies and formulate effective

counter strategies.

Knowledge about changing environment will keep the

organisation dynamic in approach.

Adjust to the prevailing condition of the environment.



Marketing Environment

All the external factors and forces that affect a firm’s ability to

develop and maintain successful transactions and relationships

with the target customers.

It brings opportunities or threats to the firm.

Marketing Environment External environment.

Internal environment.



Internal Environment

Controllable factors

Organization modify or alter the factors to suit the

environment.

Internal environment consists mainly the marketing mix

Organizational recourses, R & D , Finance, Marketing and

Operational capabilities.



External Environment(uncontrollable factors)

1. Suppliers

2. Customers

3. Intermediaries

4. Competitors

5. Public

1. Demographic

2. Economic

3. Natural/

Physical

4. Technological

5. Politico- legal

6. Socio-cultural

Micro Environment Macro Environment



1. Demographic Environment

Level of population growth, age ,sex, education patterns, family

influences and shifts.

2. Economic Environment

factors

Economic conditions

Economic Policies

Economic Systems

1.Free Market Economic Systems

2.Centrally Planned Economies

3.Mixed Economies



3.Natural Environment

Modern technology in industry may cause a rapid deterioration of the physical

environment i.e. air pollution, water pollution, noise pollution etc.

Assessed by biologist, ecologist, sociologist and conservationists.

Consider physical environmental factors – quality and quantity of existing forest

wealth, possibility rain, the exploitation of sea products, the health hazards out of

pollution.

4. Political/ Legal Environment

Political system in the country decides, promotes and controls business

activities.

Pass legislation on matters as wages and prices, employment opportunities,

safety and health at work, location, what the plant can emit into the air, how much

noise etc.



5.Tecnological Environment

•Changes affects the production methods, processes and consumption of raw

materials for the manufacture of product.

•Affects more for volatile industries than, stable industries.

6.Social and Cultural Environment

Encompasses the economic, political, legal and technological factors.

Socio-cultural customs and beliefs of the people shape the economy, the

political legal system and technology.

Affects the strategies of the organisation.

Culture determines, the type of goods and services a business should produce.



Environmental Scanning

Organizations assemble a team of specialists to continually

collect and evaluate environmental information.

Goal is to identify future market opportunities and threats.

Competitor moves can be anticipated and countered.

Marketer is able to know the organizational strengths,

capabilities and related opportunities.

Can easily adapt to the uncontrollable environment.





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