Chap.1 Marketing

8/3/2019 Chap.1 Marketing

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Marketing

Marketing


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Chapter Questions

Why is marketing important?What is the scope of marketing?What are some fundamental marketingconcepts?How has marketing management changed?What are the tasks necessary forsuccessful marketing management?


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G ood Marketing is No Accident

T he roaring success of four-wheeler Tata Ace,

in a market earlier

dominated by three-wheeler load carriers,

was due to a deepunderstanding of the

market needs andcustomer

requirements.


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W hat is Marketing?

Marketing is an organizational functionand a set of processes for creating,

communicating, and delivering valueto customers and for managing

customer relationships

in ways that benefit theorganization and its stakeholders.


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W hat is Marketing Management?

Marketing management is theart and science

of choosing target marketsand getting, keeping, and growing

customers through

creating, delivering, and communicatingsuperior customer value.


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Selling is only the tip of the iceberg

Th ere will always be a need for some selling. But t h e aim of marketing is

to make selling superfluous.Th

e aim of marketing is to know and understand t h ecustomer so well t h at t h e product or

service fits h im and sells itself. Ideally,marketing s h ould result in a customer w h o

is ready to buy. All t h at s h ould be needed isto make t h e product or service available.

Peter Drucker


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Marketing Can Promote Ideas


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D emand S tates

N onexistent Latent

Declining Irregular

Full UnwholesomeOverfull

N egative


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Key Customer MarketsConsumer Markets

Business Markets

Global Markets

N onprofit/ Government Markets


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F unctions of CMOs

S trengthening the brandsMeasuring marketing effectiveness

Driving new product development based oncustomer needsGathering meaningful customer insights

Utilizing new marketing technology


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Improving CMO S uccess

Make the mission and responsibilities clearFit the role to the marketing culture andstructure

Ensure the CMO is compatible with the CEORemember that show people don t succeedMatch the personality with the CMO type

Make line managers marketing heroesInfiltrate the line organizationRequire right-brain and left-brain skills


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Positioning

P ress ads of theScorpio focused on

the functionalfeatures of the vehicleand the television adsfocused on emotional

benefits.


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The marketplace isn t what it used to be

Information technology

Globalization

Deregulation

P rivatization

Competition

Convergence

Consumer resistance

Retail transformation


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RB C emphasizes arelationship marketing approach


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New Consumer Capabilities

A substantial increase in buying powerA greater variety of available goods andservices

A great amount of information about practically anythingGreater ease in interacting and placing andreceiving orders

An ability to compare notes on products andservicesAn amplified voice to influence public opinion


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Introduction to Marketing

Wh at is Marketing?Identifying and Meeting Human & Social

needsMeeting needs profitably.Marketing is all about turning private or

social needs into profitable businessopportunity


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D efinition of Marketing?American Marketing Association defines

Marketing as an organizational functionand a set of processes for creating,communicating and delivering value to acustomer and managing customerrelationship in ways that benefit theorganization and its stake holders


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D efinition of Marketing?According to P hilip Kotler Marketing

Management is an art and science of choosing target markets and getting,keeping and growing customers throughcreating, delivering and communicatingsuperior customer value.


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D efinition of Marketing?We can define Marketing from social andmanagerial view point.

A social definition creates marketing s role asdelivering high standard of living.A social definition serves a purpose and hasbeen defined by kotler as A societal process by

which individual and groups obtain what theyneed and want through creating, offering andfreely exchanging products and services of values with others


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Introduction to MarketingWh at is Marketed?

T hey can market goods, services, events, experience persons, places,properties, organization, information and ideas

Goods

: Physical Goods

Car,

Truck,

Televisionetc.

Services : Airline, hotel, Car Rental etc.

Events : T rade Shows, World Cup, Olympics, Beauty P ageants etc.

Experience : Amusement P ark, different rides in the park, thrills provided andso on..

Persons : C elebrity Marketing is the major business. Artist, Musicians,P hysician, high profile Lawyer etc.


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Introduction to MarketingWh at is Marketed?

Places : C ity, S tates, Region, Tourism.

Properties : Intangibles rights of ownership of either real properties orfinancial properties. Real Estate (Real P roperty) or financial property in stocksand bonds.

Organizations : T hey build a strong, favorable and unique image in the mindsof target public. For. e.g. Tesco super market in U.K. or WALMAR T in U.S .

Information : Its essentially what books, schools, university produce in market

Ideas : Every market offering includes a basic idea. e.g. Charles Revson of Revlon once said In the factory we make cosmetics and in the store we sellhope


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C ore Marketing C onceptsN eeds : are the basic human requirements

like air, food and water.W ants : they are directed to specific objectsthat might satisfy the needs.D

emand:are want for specific productsbacked by an ability to pay


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Company Orientation towards MarketPlace

PRO DUCT ION CONC EP THolds that the Consumer will buy a product which is

P riced LowWidely Distributed

Management s Focus : Mass production and extensivedistributionC oncept h olds in two situations:

When demand exceeds supply and consumer wants the product and not its finer pointsWhen product s cost is high and has to be brought down byincreasing production


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H enry Ford (1863-1947)

T h e first Model T Ford was built on September

27, 1908. Ford continued building t h

e "T

" fort h e next 19 years, until it was replaced by t h eModel "A" in 1928.

SUCCESS THROUGH PRODUCTIONCONCEPT


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H enry Fords Vision

"I will build a car for t h e great multitude. It will belarge enoug h for t h e family, but small enoug h fort h e individual to run and care for. It will be

constructed of t h

e best materials, by t h

e best mento be h ired, after t h e simplest designs t h at modernengineering can devise. But it will be low in pricet h at no man making a good salary will be unable toown one-and enjoy wit h h is family t h e blessing of h

ours of pleasure inG

od's great open spaces.-Henry Ford


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Th e reality A Ford Model T (1926)Advertisement


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Th e Model T story

Initially the Model T came in 3 colors,red, green and gray

By 1910 Ford started painting theircars dark blue- almost black.

By 1914 all the cars were paintedBlack to achieve maximum economies of scale.Ford was producing one car every 93 minutes !


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" The Customer Can Have Any Color HeW ants S o Long As It's B lack ".

-- Henry Ford

The Model T Story


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B y 1927 Ford had sold

Model Ts !Ford Motor Co. stopped producing Model Ts in

July 1927

The Model T story


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PRO DUCT C ONC EP T

Holds that Consumer will buy a product which is best in :

Quality Features Performance

Management s focus:

make superior products andimprove them periodically


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PRODU CT CONCE PT IN ACT ION

In 1985 S teve Jobs resigned from AppleComputers to formed his company, N ext Inc.In late 1980 s S teve Jobs introduced a newdesktop computer called N eXT .

Steve Jobs (1955- 2011)


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Th e NeX T Story

N eXT was attractive and user friendly.It was the first evercomputer with a hi-fi speakers and CD-ROM reader.It was positioned as a scholars workstation . It was priced at

$ 10,000With such a steep price tag, most scholars could not affordit.It was then re-positioned as an engineers best tool .However, engineers preferred Sun Micro Systems & S iliconGraphics desktop work station, which they were usingalready.


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T he software for N eXT was not compatiblewith IBM or Apple , so few compatible

software were available in the market.In 1993, after spending $200 million ondesign, development, promotion & marketing,Jobs stopped production and sale of N eXT.

Th e NeX T Story


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SELLING C ONC EP T

Holds that the consumers resist purchaseand have to be coaxed to buy

Management s focus : undertake aggressiveselling and promotion efforts


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MARKET ING C ONC EP T

Holds that Consumers prefer to

buy a product that best satisfiestheir needs

Management s focus : know and

understand the Consumers andtheir needs and then produceproducts that satisfy their needs


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Selling revolves around the needs and interests of the

seller Th e purpose of selling is to sell w h at is made rat h er

t h an make w h at t h e customer wants. Views business as a task of some h ow disposing off

existing products.

Marketing revolves around the needs and interests of the buyer

M arketing starts wit h t h e customers. Views business as a task of meeting t h e needs of t h e

customers.


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Levitt and Drucker on Marketing Customer orientation is the essence of marketing


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Is not selling a part of marketing ?Certainly yes; but marketing recognises the futility of pushingthat is inherent in the sales approach. In the marketingapproach, there is no need for pushing the product on theconsumers

Does not marketing seek profit just asselling does?Yes; but selling seeks profits by pushing the products on theconsumers, while marketing seeks profits by creating value

satisfaction for the consumers


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H OLIST IC MARKET ING CONC EPT

It recognizes that everything matters in

marketingIt s a broad and integrated perspectiveIts includes 4 broad components Relationship Marketing,

Integrated Marketing, Internal Marketing P erformance Marketing


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H olisticMarketing

InternalMarketing

Performance

Marketing

IntegratedMarketing

Relations h ip

Marketing

MarketingD epartment

SeniorManagement

Ot h erD epartment

C ommunications Product &Services C h annels

Sales Revenue

Brand &customer

equity

Et h ics

Environment LegalC ommunity

C ustomers

C h annel Partners


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UnderstandingMarketing in a New

Perspective


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At the end of this chapter, you should be able to appreciatethat :

Th ere is a Need for a New Perspective in Understanding M arketing

M arketing is now Under Attack

M any Criticisms are being levelled Against M arketing s Performance

Ignoring Value Delivery M ain Reason Be h ind M arketing s T rouble

M arketing h as been Attending M ore to Downstream and Less toUpstream M arketing Activities

M arketing now needs a New Perspective Centred on Value


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Th e Need for a New Perspective in Understanding Marketing

T raditionally, texts on M arketing h ave addressed M arketing t h roug h t h eCustomer cum 4P framework (Product, Place, Price and Promotion)

Discussions were centred on t h e Customer and t h e 4P

In t h is sch eme, t h e crux of marketing h ad been denied its due prominence.

Value Delivery got blurred in t h e mire of marketing terminologies and prescriptions.

Th e problem was one of Perspective.

Th is Course is presenting M arketing in a new Perspective


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Marketing Under Attack

In yester years, Marketing enjoyed the pride of place in the world of business

But in recent times, marketing has been under attack and marketingmen on the firing line


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Ignoring Value Delivery th e Main Reason B e h ind Marketing sTrouble

Where did M arketing go wrong?

It is marketing s failure to recognise value delivery as the crux of marketing that caused the trouble

Marketing men forgot that Value Delivery is the foundation of customersatisfaction and that it is by sticking to value delivery that marketingcan get its practical direction


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H ow Did Marketing Men H appen To Ignore Value Delivery ?

Excessively P reoccupied with the 4 P Framework

4P framework has been operating at a narrow, tactical level

Marketing men tying up Marketing to mere implementation issues

Attending More to Downstream and Less to Upstream Marketing Activities

Relying Increasingly on Gimmicks and Quick Fixes

Clinging Excessively to

Segmentation Approach,

Neglecting the IndividualN eeds of the Customer

Making Exaggerated P roduct P romises


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Marketing in a New Perspective

A P aradigm Shift in Understanding Marketing has BecomeImperative

T his Course P resents Marketing in a N ew P erspective : AP erspective Centred on Value

Chap.1 Marketing

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