The New Economy The New Economy Globalization: Globalization: Worldwide Trends in consumer needs Worldwide Trends in consumer needs Cos launching world products Cos launching world products Consumers happily acquiring products and services Consumers happily acquiring products and services manufactured in distant countries manufactured in distant countries Currency becoming freely exchangeable Currency becoming freely exchangeable
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The New EconomyThe New Economy
Globalization:Globalization:
Worldwide Trends in consumer needsWorldwide Trends in consumer needs
Cos launching world productsCos launching world products
Consumers happily acquiring products and services Consumers happily acquiring products and services manufactured in distant countriesmanufactured in distant countries
Currency becoming freely exchangeableCurrency becoming freely exchangeable
Speed…the Currency of the New EconomySpeed…the Currency of the New Economy
Rapid rate of Rapid rate of obsolescence obsolescence inin
Technology and Fashion MarketsTechnology and Fashion Markets
AutomobilesAutomobiles CellphonesCellphones ComputersComputers Internet ServicesInternet Services
Disruptive Disruptive TechnologiesTechnologies
Displaced Displaced TechnologiesTechnologies
Printing PressPrinting Press ManuscriptManuscript
Personal ComputersPersonal Computers TypewritersTypewriters
RailwaysRailways CanalsCanals
Digital camerasDigital cameras Photographic FilmsPhotographic Films
Mobile TelephonyMobile Telephony Fixed TelephonyFixed Telephony
ADSL/CableADSL/Cable ISDNISDN
Personal ComputersPersonal Computers MinicomputersMinicomputers
Flash DrivesFlash Drives Floppy DrivesFloppy Drives
The New Empowered CustomerThe New Empowered Customer
Power flows from right of choicePower flows from right of choice
More information about more choicesMore information about more choices
Consumers setting prices: Consumers setting prices: Reverse AuctionsReverse Auctions
Consumers demanding and getting services at their convenienceConsumers demanding and getting services at their convenience
Consumers sharing their experiencesConsumers sharing their experiences
NewNew capability for coscapability for cos
Powerful information and sales channelPowerful information and sales channel
Wider geographic reachWider geographic reach
Internet powerful tool to know consumers betterInternet powerful tool to know consumers better
Faster communication internallyFaster communication internally
Customization of offeringsCustomization of offerings
More efficient Value ChainMore efficient Value Chain
Efficiency in Recruitment and TrainingEfficiency in Recruitment and Training
Promise of the Information AgePromise of the Information Age
More accurate levels of productionMore accurate levels of production
More targeted communicationMore targeted communication
More relevant pricingMore relevant pricing
Two sides of MarketingTwo sides of Marketing
FormulatedFormulated
CreativeCreative
Formulated MarketingFormulated Marketing
Focus:Focus:
AdvertisingAdvertising
Market ResearchMarket Research
Sales ManagementSales Management
Formulated Marketing PractitionersFormulated Marketing Practitioners
Hindustan Unilever LtdHindustan Unilever Ltd
P & GP & G
Creative MarketingCreative Marketing
FocusFocus
CreativityCreativity
PassionPassion
Creative Marketing PractitionersCreative Marketing Practitioners
AmazonAmazon
Air DeccanAir Deccan
Scope of MarketingScope of Marketing
Starting Point: Starting Point: Organizational ObjectivesOrganizational Objectives
Usually set in terms like:Usually set in terms like:
Financial: Returns on InvestmentsFinancial: Returns on Investments
Marketing: Market shareMarketing: Market share
Job of the Marketing ManagerJob of the Marketing Manager
Seek to Seek to influence influence the:the:
LEVELLEVEL
TIMINGTIMING
COMPOSITIONCOMPOSITION
Of DemandOf Demand
Different entities a marketer Different entities a marketer marketsmarkets
GoodsGoods ServicesServices EventsEvents PersonsPersons PlacesPlaces PropertiesProperties OrganizationOrganization InformationInformation IdeasIdeas
Marketing managementMarketing management
Problem of Problem of Regulating Regulating thethe
LevelLevel TimingTiming CharacterCharacter
Of Demand for one or more products of an Of Demand for one or more products of an organizationorganization
The Basic Marketing TasksThe Basic Marketing Tasks
Demand StateDemand State Marketing TaskMarketing Task Formal NameFormal Name
Negative DemandNegative Demand Disabuse DemandDisabuse Demand Conversional MarketingConversional Marketing
No DemandNo Demand Create DemandCreate Demand Stimulational Stimulational MarketingMarketing
Latent DemandLatent Demand Develop DemandDevelop Demand Developmental Developmental MarketingMarketing
Faltering DemandFaltering Demand Revitalize DemandRevitalize Demand RemarketingRemarketing
Irregular DemandIrregular Demand Synchronize DemandSynchronize Demand SynchromarketingSynchromarketing
Full DemandFull Demand Maintain DemandMaintain Demand Maintenance DemandMaintenance Demand
Overfull DemandOverfull Demand Reduce DemandReduce Demand DemarketingDemarketing
Unwholesome DemandUnwholesome Demand Destroy DemandDestroy Demand CountermarketingCountermarketing
Negative DemandNegative Demand
All/most potential customers dislike the productAll/most potential customers dislike the product
Try avoiding the productTry avoiding the product
The challengeThe challenge: Develop a plan that will cause attitude to change from : Develop a plan that will cause attitude to change from negative to positivenegative to positive
Marketing Tasks for Negative Demand-Marketing Tasks for Negative Demand-Conversional MarketingConversional Marketing
Analyze Analyze sources sources of resistanceof resistance
BELIEFSBELIEFS
VALUESVALUES
COSTSCOSTS
Communication ProgramCommunication Program
No DemandNo Demand
All/most important customer segments All/most important customer segments uninteresteduninterested or or indifferentindifferent to a to a particular productparticular product
Three categories:Three categories:
Familiar objects perceived to have no valueFamiliar objects perceived to have no value
Familiar objects,has perceived value, but Familiar objects,has perceived value, but not in particular marketnot in particular market
No Demand as no knowledge of unfamilar objectsNo Demand as no knowledge of unfamilar objects
Marketing Task for No Demand….Stimulational Marketing Task for No Demand….Stimulational MarketingMarketing
Connect object with some existing needConnect object with some existing need
Distribute Information/Increase ExposureDistribute Information/Increase Exposure
Latent DemandLatent Demand
When substantial number of people share a strong need for something When substantial number of people share a strong need for something that that does not existdoes not exist
Opportunity to Opportunity to develop a productdevelop a product
When right products developed and marketed, When right products developed and marketed, market is assuredmarket is assured
Marketing Task for Latent Demand-Marketing Task for Latent Demand-Developmental Developmental MarketingMarketing
Recognition of latent needRecognition of latent need
Development of the Development of the right productright product
Choosing theChoosing the right priceright price
Right channel of distributionRight channel of distribution
Adequate/convincing product information disseminationAdequate/convincing product information dissemination
Faltering DemandFaltering Demand
Demand for a product Demand for a product less than formal level less than formal level and whereand where further decline further decline is expected in the is expected in the absence of remedial effortsabsence of remedial efforts
Marketing Tasks for faltering Marketing Tasks for faltering DemandDemand
Revise:Revise:
Target MarketTarget Market ProductProduct Marketing EffortsMarketing Efforts
Challenge: Challenge: RevitalizationRevitalization
Irregular DemandIrregular Demand
Current Timing Pattern Current Timing Pattern of demand is marked by of demand is marked by seasonalseasonal or or volatile fluctuations volatile fluctuations that depart from the timing pattern of that depart from the timing pattern of supplysupply
Examples:Examples:
Mass transportMass transport
HotelsHotels
Airconditioner compressorsAirconditioner compressors
Irregular Demand-Another versionIrregular Demand-Another version
Supply is also variable and fluctuatesSupply is also variable and fluctuates
E.g. Mango ripens in summerE.g. Mango ripens in summer
In demand all through the yearIn demand all through the year
Irregular Demand-OptionsIrregular Demand-Options
Alter the Alter the supply pattern supply pattern to meet the demand patternto meet the demand pattern
Alter the Alter the demand patterndemand pattern to fit the natural supply to fit the natural supply patternpattern
Alter BothAlter Both
SynchromarketingSynchromarketing
StepsSteps
Promotion of new uses.desires during off seasonPromotion of new uses.desires during off season
Seasonal pricingSeasonal pricing
Off season advertisingOff season advertising
Full DemandFull Demand
Current level and timing of demand Current level and timing of demand is equal tois equal to the the desired level and timing of demanddesired level and timing of demand
Two erosive forces:Two erosive forces:
Changing Needs and tastesChanging Needs and tastes
Active competitionActive competition
Maintenance MarketingMaintenance Marketing
Primarily tactical issuesPrimarily tactical issues
Keeping the price rightKeeping the price right
Keeping the salesforce/dealers motivatedKeeping the salesforce/dealers motivated
Keeping tight control over costsKeeping tight control over costs
Overfull DemandOverfull Demand
Demand exceeds the level at which the marketer feels Demand exceeds the level at which the marketer feels able/motivated to supply able/motivated to supply
DemarketingDemarketing: : attempts to attempts to discourage discourage customers in customers in general or a certain class of customers either general or a certain class of customers either temporarily temporarily or or permanent permanent basis basis
General DemarketingGeneral Demarketing
Undertaken by a seller when he wants to discourage Undertaken by a seller when he wants to discourage overall demandoverall demand for his products for his products
Arises because of two reasons:Arises because of two reasons:
Temporary shortage of goodsTemporary shortage of goods
Products suffer from chronic overpopularityProducts suffer from chronic overpopularity
Selective DemarketingSelective Demarketing
Attempts to reduce demand Attempts to reduce demand selectivelyselectively
CertainCertain unprofitable unprofitable and and undesirableundesirable customerscustomers discourageddiscouraged
HotelsHotels ClubsClubs DiscosDiscos UniversitiesUniversities
Unwholesome DemandUnwholesome Demand
Undesirable qualities associated with productUndesirable qualities associated with product
Countermarketing/UnsellingCountermarketing/Unselling
Vice Products: Alcohol,cigarettes and drugsVice Products: Alcohol,cigarettes and drugs
WarsWars
Idea of Large familiesIdea of Large families
Eating tasty but nutritionally poor foodsEating tasty but nutritionally poor foods
Unselling competitor procuts/brandsUnselling competitor procuts/brands
Marketers DecisionsMarketers Decisions
Some common decisionsSome common decisions
How do we spot/choose attractive target markets?How do we spot/choose attractive target markets?
What feautures do we incorporate in our products?What feautures do we incorporate in our products?
What is the positioning of our offering?What is the positioning of our offering?
How do we increase volume of salesHow do we increase volume of sales
What is the size of the sales force that we employ?What is the size of the sales force that we employ?
Consumer MarketsConsumer Markets
Companies selling mass-consumed products and services:Companies selling mass-consumed products and services:
BooksBooks
TelevisionsTelevisions
AirtravelAirtravel
HealthcareHealthcare
EducationEducation
Writing PensWriting Pens
Consumer Marketer-Activities and DecisionsConsumer Marketer-Activities and Decisions
Research Consumer Needs
Develop offering to profitably meet consumer needs
Develop products Set Prices Communicate Offerings
Make Offerings accessible
Decisions:FeaturesQuality Levels
Decision:
Pricing Strategy
Decisions:Differentiation Positioning StrategyWhat media
Channel Strategy
Selection of channel members
Business MarketsBusiness Markets
Primary Motivation of buyers: Primary Motivation of buyers: ProfitsProfits
Products are bought either for:Products are bought either for:
INPUTSINPUTS
RESALERESALE
Business BuyersBusiness Buyers
Need to be convinced on how product acquisition will Need to be convinced on how product acquisition will lead to:lead to:
Higher RevenuesHigher Revenues Lower CostsLower Costs
Relatively minor role of advertisingRelatively minor role of advertising Strong Role: Sales ForceStrong Role: Sales Force Company ReputationCompany Reputation
Global MarketsGlobal Markets Which markets to enter?Which markets to enter?
Mode of entry?Mode of entry?
Product: Adaptation/motivationProduct: Adaptation/motivation
Pricing: How to set pricing in different countriesPricing: How to set pricing in different countries
Communication: How to adaptCommunication: How to adapt
Nonprofit and Government MarketsNonprofit and Government Markets
Limited purchasing powerLimited purchasing power
Lowest bid system: Little room for qualityLowest bid system: Little room for quality
Definition of MarketingDefinition of Marketing
The Social Perspective:The Social Perspective:
Process by which individuals and groups obtain what Process by which individuals and groups obtain what they need and want through:they need and want through:
CreatingCreating OfferingOffering ExchangingExchanging Products and Services of Value with othersProducts and Services of Value with others
Definition of MarketingDefinition of Marketing
The Management PerspectiveThe Management Perspective Process of planning and executing theProcess of planning and executing the ConceptionConception PricingPricing PromotionPromotion Distribution ofDistribution of
IdeasIdeas GoodsGoods ServicesServices
To create To create exchanges exchanges that satisfy individual and organizational goalsthat satisfy individual and organizational goals
Target Markets and SegmentationTarget Markets and Segmentation
No marketer can expect to satisfy everyone No marketer can expect to satisfy everyone with same offeringwith same offering
Need for marketer to Need for marketer to choose its customerchoose its customer
Step 1: Step 1: Marketer divides a market by Marketer divides a market by identifyingidentifying and and profiling profiling different different buyer buyer groups: Segmentationgroups: Segmentation
SegmentationSegmentation
Market is composed of several elements-there are elements of homogeneity and hetreogeneity
Segmentation brings like minded decision makers to gether
Before After
STP-TSTP-T
Step 2Step 2
Targeting Targeting
Process of Process of selectionselection of one or more segmentsof one or more segments
The marketer develops a The marketer develops a market offering market offering for selected for selected target market target market
STP-PSTP-P
Create a positionCreate a position in the in the mindmind of the targeted of the targeted buyer through buyer through communicationcommunication
A Simple Marketing SystemA Simple Marketing System
Industry(A collection
of sellers)
Market(A collectionOf buyers)
Communication
Goods/
Services
Money
Information
MarketsMarkets
Groupings of BuyersGroupings of Buyers
Different types of marketsDifferent types of markets
Needs MarketsNeeds Markets: Buyers share : Buyers share common needscommon needs
The Health Tourism MarketThe Health Tourism Market The Adventure Tourism MarketThe Adventure Tourism Market The Golf Tourism MarketThe Golf Tourism Market The Spritual Tourism MarketThe Spritual Tourism Market
Product MarketProduct Market
Buyers share needs of Buyers share needs of productsproducts
E.g The Branded menswear marketE.g The Branded menswear market
Market: All buyers of branded menswear productsMarket: All buyers of branded menswear products
Industry: All sellers of branded menswear productsIndustry: All sellers of branded menswear products
Demographic MarketDemographic Market
Buyers share Buyers share common demographic characteristicscommon demographic characteristics
e.g the DINK Familye.g the DINK Family
Geographic MarketGeographic Market
Buyers share Buyers share common geographic coordinatescommon geographic coordinates
e.g. the Maharashtra markete.g. the Maharashtra market
Other MarketsOther Markets
Commodity MarketsCommodity Markets
Job MarketsJob Markets
Donor MarketsDonor Markets
Consumer MarketsGovernment MarketsManufacturers Market
Resource Markets
Intermediary Markets
MarketplaceMarketplace versus versus MarketspaceMarketspace
Marketplace: Marketplace: PhysicalPhysical
Going to Foodworld to buy a packet of MaggiGoing to Foodworld to buy a packet of Maggi
Marketspace: Marketspace: DigitalDigital
Going to Going to www.irctc.co.inwww.irctc.co.in to buy a train ticket to buy a train ticket
Shift from Marketplace to MarketspaceShift from Marketplace to Marketspace
Physical location of inventoryPhysical location of inventory irrelevant irrelevant
Actual siteActual site of buying and selling irrelevant of buying and selling irrelevant
Traditional marketplace interactionTraditional marketplace interaction eliminated eliminated
Difference between marketspace transaction and Difference between marketspace transaction and marketplace transactionmarketplace transaction
ContentContent
ContextContext
InfrastructureInfrastructure
The Networked EconomyThe Networked Economy
Disintermediation: Removal of the intermediariesDisintermediation: Removal of the intermediaries
Reintermediation:Reintermediation: PortalsPortals (Yahoo,Rediff) (Yahoo,Rediff) AuctionsAuctions (eBay,UBid) (eBay,UBid) Matchmakers Matchmakers (Naukri,Indiamarkets)(Naukri,Indiamarkets) Comparison Shopping Engines Comparison Shopping Engines
(Shopping.com,Froogle)(Shopping.com,Froogle)
IndiaMarkets.comIndiaMarkets.com
India’s first B2B InfomediaryIndia’s first B2B Infomediary
140 product categories140 product categories
Few listed categories: Few listed categories: Electrical & Power Electrical & Power equipements,Healthcare,Plastic,Rubber and rubber equipements,Healthcare,Plastic,Rubber and rubber products,Electronics,Gems and Jewelleries,Paperproducts,Electronics,Gems and Jewelleries,Paper
Procurement Management Services(PMS) from Procurement Management Services(PMS) from IndiaMarkets.comIndiaMarkets.com
Extensive Extensive databasedatabase of of validated suppliersvalidated suppliers
Physical nationwide network of business centresPhysical nationwide network of business centres
Proven Proven online auctiononline auction mechanism mechanism
The Net Connects…..DisintermediationThe Net Connects…..Disintermediation
The Net connects :The Net connects :
Firm with firmFirm with firm
Firm with customersFirm with customers
People with peoplePeople with people
At At far lower costsfar lower costs and and far greater flexibilityfar greater flexibility
Buying AllianceBuying Alliance
The Net brings buyers togetherThe Net brings buyers together
Worldwide Retail Exchange(Worldwide Retail Exchange(www.worldretailexchange.comwww.worldretailexchange.com))
17 Major Retailers came together17 Major Retailers came together:: BestbuyBestbuy J C PenneyJ C Penney M&SM&S TargetTarget TescoTesco
The Net brings buyers and sellers togetherThe Net brings buyers and sellers together
IndiMarkets.comIndiMarkets.com MarketRx.comMarketRx.com
Improved connectivity reducing cost of communication and Improved connectivity reducing cost of communication and co-ordination of exchange transactionsco-ordination of exchange transactions
Possible to bypass Possible to bypass meditators meditators who have traditionally who have traditionally facilitated facilitated flow of information and goodsflow of information and goods
DisintermediationDisintermediation
Several industries:Several industries:
Travel(cleartrip,makemytrip,Yatra)Travel(cleartrip,makemytrip,Yatra)
Bookstores(Flipkart,FirstandSecond)Bookstores(Flipkart,FirstandSecond)
Stockmarkets(NSE)Stockmarkets(NSE)
Disintermediation threatens middlemenDisintermediation threatens middlemen
Travel AgentsTravel Agents StockbrokersStockbrokers MarriagebrokersMarriagebrokers Retail BanksRetail Banks BookstoresBookstores Automobile RetailersAutomobile Retailers Education ConsultantsEducation Consultants
Disintermediation creates new middlemenDisintermediation creates new middlemen
For every mediator eliminated,several new For every mediator eliminated,several new intermediaries createdintermediaries created
Flipkart disintermediates book retailersFlipkart disintermediates book retailers
Flipkart employs UPS for order fulfilmentFlipkart employs UPS for order fulfilment
For most productsFor most products
Products: Products:
Two components:Two components:
Physical ComponentPhysical Component Information ComponentInformation Component
Internet Enables SeperationInternet Enables Seperation
Information Information from from Physical ProductPhysical Product
Core ProductCore Product from from Complementary ProductComplementary Product
Core ProductCore Product Complementary Complementary ProductProduct
ComputerComputer SoftwareSoftware
Internet ConnectionInternet Connection
CameraCamera LensLens
FilmFilm
CarCar WarrantyWarranty
InsuranceInsurance
Financing Financing
AccessoriesAccessories
Buying a car….Analog WorldBuying a car….Analog World
Buyer depends on Automobile dealer for:Buyer depends on Automobile dealer for:
InformationInformation NegotiationNegotiation FinancingFinancing WarrantiesWarranties DeliveryDelivery
Buying a car….Analog WorldBuying a car….Analog World
Advantage:Advantage:
One Stop ConvenienceOne Stop Convenience
Disadvantage:Disadvantage:
Middlemen often not the best/lowest cost providers of Middlemen often not the best/lowest cost providers of information and complementary productsinformation and complementary products
Buying a car….Digital WorldBuying a car….Digital World
Customers can:Customers can:
Search for informationSearch for information NegotiateNegotiate Pay forPay for Receive DeliveryReceive Delivery
At At different points of timedifferent points of time from from different providersdifferent providers
The New MediatorsThe New Mediators
Integrated MediatorsIntegrated Mediators replaced by replaced by
Combination of:Combination of:
Marketspace MediatorsMarketspace Mediators: Manages : Manages Information FlowsInformation Flows
Marketplace Mediators: Marketplace Mediators: Manages Manages Physical FlowsPhysical Flows
The New Mediators-The Dark SideThe New Mediators-The Dark Side
Need to deal with a number of specialized mediatorsNeed to deal with a number of specialized mediators
High Search and Evaluation CostsHigh Search and Evaluation Costs
Customers connect with firmsCustomers connect with firms
Gather InfoGather Info Evaluate productsEvaluate products Configure ProductsConfigure Products Place OrdersPlace Orders Get Technical SupportGet Technical Support
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