July 2012

Why Study Marketing?Why Study Marketing?

• Plays an important role in society

• Vital to business survival, profits, and growth

• Offers career opportunities

• Affects your life every day

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

--David Packard, Hewlett-Packard

Personal Selling?

Advertising?

Making products available in stores?

Maintaining inventories?

What is Marketing ?

All of the above, plus much more!

What is Marketing ?

A Philosophy

A Function

A Management Orientation

A Set of Activities, including:

Products

Services

Pricing

Promotion

Distribution

What is Marketing ?

The American Marketing Association Definition

Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual

and organizational goals.

What is Marketing ?

OtherFunctional

Areas

Branding

TestMarketing

After SaleService

Personal Selling

Physical Distribution

Pricing

Sales Promotion

Advertising

Product Development

Market Research

MARKETING

Needs , Wants & Demands Marketers , Prospects & a Market Product or Offering The Exchange Concept Developing Competitive Advantage Market Segmentation & Target Markets Marketing Environment Marketing Mix Marketing Channels Supply Chain

Needs are basic human requirements which need to be fulfilled in order to survive.

The needs become wants when they are directed to specific objects that may satisfy the need.

Demands are wants or desires backed by ability to pay & willingness to buy specific products.

A Marketer is someone seeking a response from another party , called the prospect.

A Market is a group of people or organization , with needs or wants & with the ability & willingness to buy.

Product is any offering that can satisfy a need or a want.

Brand is an offering from a known source , which identifies a seller’s product & differentiates it from the competitors’ product.

The Exchange Concept

Desire to Deal With Other Part

Freedom to Accept or Reject

Something of Value

Ability to Communicate Offer

At Least Two Parties

Necessary Conditions for

Exchange

Exchange involves obtaining a desired product from someone by offering something in return.

The Exchange Concept

Exchange may not take place even if conditions are met

An Agreement must be reached

Marketing occurs even if exchange does not take place

A Transaction is a trade of values between two parties, on monetary or barter basis.

A Transaction involves several dimensions :-◦ At Least Two things of value◦ Agreed upon conditions◦ A time of agreement◦ A place of agreement

Transfer differs from transaction , it can take place without consideration.

Create Customer

ValueMaintain Customer

Satisfaction

Companies Create Competitive Advantage by

Stressing Customer Importance

Retain customers & build Long term relationships

Customer value is the bundle of benefits customers expect from a given product or service.

Its no longer enough to satisfy the customer , you must delight them!

Customers are value maximizers

Marketing is process of Value Creation between two entities through the process of transaction.

Customer Satisfaction is a consumer’s feelings resulting from comparing a product’s outcome in relation to his/her expectations.

◦ A marketer must meet or exceed customer’s expectations.

◦ Focus on keeping customers satisfied.

◦ Provide solutions to customer’s problems.

Customer retention is about developing loyal customers & building long term relationships.

The key to customer retention is customer satisfaction.

A Highly satisfied customer

◦ always stays loyal to the company .◦ pays less attention to competing brands & is less sensitive to price.

◦ Costs less to serve than new customers as the transactions become routine.

◦ Talks favorably about the company & its products.

Market Segmentation is a process of dividing a market into meaningful, relatively similar, identifiable segments or groups.

◦ identifying those segments that offer greatest opportunity to serve.

◦ The selected market segment becomes the Target Market.

◦ The marketer develops a market offering for each Target Market.

Marketing mix is a set of marketing variables that the firm uses to pursue its marketing objectives in the target market.

E.Jerome McCarthy classified these variables ,which he called the four Ps of Marketing.

PRODUCT

PRICE

PLACE

PROMOTION

Apart from the 4 Ps of Marketing , there have been attempts to develop an ‘extended marketing mix’ to better accommodate specific aspects of marketing.

•People

•Process

•Physical Environment

Customer Analysis

Competition AnalysisCompany Analysis

The 3 C’s Model comprises of :

Marketing Channels link the marketer to the target customers.

To reach to the target customer the marketer uses three kinds of channels.

Communication Channels◦ To deliver & receive messages from target

buyers.Distribution Channels

◦ To display or deliver the physical product or service to the buyer or user.

Selling Channels◦ To effect transactions with potential buyers.

Examples of Marketing Channels

The Supply Chain is the connecting link from the raw materials & components to final products which are delivered to the buyers.

The Production Concept

The Production concept holds that consumers will prefer products which are widely available & inexpensive.

◦ Achieving high production efficiency

◦ Low costs

◦ Mass distribution

◦ less developed countries

◦ Market expansion

Marketing Management Philosophies

The Product Concept

The Product concept holds that consumers will favor the most quality , performance or innovative features

◦ Product Excellence & Quality Assurance

◦ The Management & Product Love Affair

◦ Marketing Myopia

Marketing Management Philosophies

The Selling Concept

The Selling concept holds that consumers & businesses if left alone ,will ordinarily not buy enough of the organizations products.

◦ Aggressive selling & promotion effort

◦ Unsought goods & non profit areas

◦ Hard Sell vs consumer wants

◦ Overcapacity

Marketing Management Philosophies

The Marketing Concept

The Marketing concept holds that consumers a business should start with the determination of consumer wants & end with the satisfaction of those wants.

◦ Consumer Orientation

◦ Integrated Management

◦ Customer Satisfaction

◦ Competitor Intelligence

◦ Realization of Organizational Goals

Marketing Management Philosophies

Involves building long term mutually satisfyingRelations with key parties , in order to earn & retain their long term preference & business.

Marketers have realized that the success of marketing depends upon relationships with :

CustomersDistributorsDealers Suppliers

The operating principle is simple: build an effective network of relationships with key stakeholders & profits will follow.

Are companies that do an excellent job of satisfying consumer wants, necessarily acting in the best ,long run interests of consumers & society ??

Societal Marketing =

Consumer Satisfaction + Company ‘ s Profits + Society’s well being

Societal Marketing Focuses on satisfying customer needs & wants while enhancing individual & societal well-being

•Information for Marketing Decisions

•Accomplishment of firm’s objectives

•Widens Markets

•Reputation

•Helps to Develop Brand Loyalty

•Helps to introduce new product

•Helps to face competition

•Movement of goods

MeaningCenter / FocusPerspectiveTarget Market FocusMarketing MixProcessNature of ProcessPrice DeterminationInter-functional IntegrationViews on customer focusMarket

Gather, analyze, interpret information about environment

Understand organization’s mission and marketing’s role

Conduct a market opportunity analysis

Implement the marketing strategy

Evaluate marketing efforts and make changes

Develop a marketing strategy

E-Commerce / E-Marketing

Web / Internet Marketing

Marketing using social networks

Business done online.

The biggest development in commerce since invention of money.

Changing the way people work , buy & Live.

Involves exchange of products , services , information & payment through the electronic medium of computers/networks.

E-commerce results when a firm connects its business systems to its customers , distributors , vendors etc…

It is the umbrella term for the entire spectrum of activities such as electronic data interchange , electronic payment systems , order management , information exchange & other business applications with paperless or electronic documentation.

Ecommerce has three broad components

BB to BB to C

A Firms efforts to communicate , promote & sell its products & services over the internet.

Interactive form of marketing

The two components of web marketing are :

Marketing to Business Buyers Marketing to ultimate consumers

We can view web marketing in four ways :A Business A Medium A Marketing Channel (or tool for channel less marketing)

A Complete Market place

Elevation of the Web from a medium of communication to a marketing channel to a complete market place.

The largest, most dynamic, sleepless, electronic bazaar/mall of goods and services , the world has ever seen!!

Electronic Presence

Advertising On-Line

Forums, Newsgroups, Bulletin Boards & web communities

Email & Web casting

Convenience

Scope for informed & competitive buying

• Search advantage & options• Bargain!!• Can get “more for less”• Transparency• Accuracy

• Shift of the power equation

Access to all markets.

Renders global marketing feasible for even small firms.

Helps constraints-free growth.

Scope for enhancing customer value & customer service.

Helps Relationship building

Helps reduce costs

Enhances productivity of sales people

Enables to adjust quickly to market conditions

A versatile medium of communication.

All products do not lend equally well for Web marketing

Limitation of examining the product

Problem of Delivery

Problem of confidence

Problem of payment

Low Density of PC’s & internet

Legal Problems

Banking Industry

Entertainment Industry

Information Service

Stock Broking

Airways

Hotels

Others

Legal / Regulatory Problems E-documentation is not yet legally admissible Absence of Taxation Law

Infrastructural Problems Low density of telephone, PCs & internet accessInfrastructural bottlenecks

Commercial Problems Problem relating to payment Low density of credit cards Inability to pay foreign suppliers

Other ProblemsConfidence in the system is lowProblem of HackingProblem of Illiteracy