M M - Unit I

MARKETING Marketing is the process of planning and executing the conception, promotion and distribution of ideas, goods, services, organizations and events to create and maintain relationships that will satisfy individual and organizational objectives.- Boone & Kurtz.

Marketing is the social process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others. - Kotler Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing the customer relationships in ways that benefit the organization and its stake holders. - American Management Association

IMPORTANT ELEMENTS OF MARKETING Marketing focuses on the satisfaction of customer needs, wants and requirements. The Philosophy of Marketing needs to be owned by everyone from within the organization. Future needs to be identified and anticipated. Focus on the Profitability in case of Corporate Sectors. Recent definitions recognizes the influence of Marketing upon society.

SCOPE OF MARKETING Spot and choose right marketing segment. Know how to differentiate our offerings. Handle Price Objections. Compete against lower cost and lower price competitors. Customize the offerings. Grow on Business. Build stronger Brands. Reduce the cost of customer acquisitions. Keep the customers loyal for long. Measure the effects of Advertisement , Sales Promotion & PR. Improve Sales Forces Productivity. Establish and Manage multiple channels. Effectively resolve channel conflicts and remain customer oriented.

WHAT IS

MARKETED ?

Goods Services Experiences Persons Events Properties Organizations Information Ideas Places -

physical goods. airlines, beauticians, car rentals amusement parks, dolari-dhani celebrities , film stars / sports trade shows, olympic / sports real estate, stocks and bonds. corporate identity ads etc., encyclopedias , package labels aids awareness / disc. smoking states, cities, regions, tourism

MARKET Physical place where buyers and sellers gathered to buy and sell goods. Refers to the group of consumers or organizations that is interested in the product, has the resources to purchase the product, and is permitted by law and other regulations to acquire the product. Total Population Potential Market Available Market Qualified Available Market Target Market Penetrated Market - those who have interest in buying - those who have enough resources to buy - those who are legally permitted to buy - the segment the firm decided to serve - those who have purchased the product

MARKET PLACE Vs MARKET SPACE Market Place Physical in nature Ex. shopping in a store Vs Market Space digital in nature shopping on the Internet

Metamarket cluster of complimentary products and services that are closely related in the minds of consumers but are spread across diverse set of industries. Ex Automobile metamarket automobile manufacturers, new & old car dealers, financiers, ins.co.mechanics, spare parts dealers , service shops, auto magazines, auto sites on Internet , auto ads etc.,

KEY MARKETS Consumer Markets Consumer goods , cosmetics, soft drinks etc., a. superior brand image b. superior product quality, packaging etc., c. availability and reliable service Business Markets - Co s selling business goods & services. a. well informed professional buyers b. stronger role played by sales force , price & co s reputation for reliability and quality.

KEY MARKETS Global Markets companies selling goods and services in the global markets. a. pricing in difft. countries. b. product and service features. c. culture , language , political systems , currency Non Profit & Governmental Markets co s selling their goods and services to non-profit organizations or govt. agencies. a. carefully priced b. lowest bid favoured

MARKETING NEW OPPORTUNITIES & CHALLENGES Changing technology digital revolution , Information age Globalization - technological advances in transport , shipping & com Deregulation greater competition and growth opportunities Privatization increase in efficiency Customer empowerment customer expect higher quality & service Customization personalized services Industry convergence add on products / services by cos. Retail transformation marketing an experience Disintermediation delivery of products / services thru on line.

MARKETING MANAGEMENT

Marketing Management is the art and science of choosing target markets and getting, keeping , and growing customers through creating , delivering and communicating superior customer value.

MARKETING CONCEPTS Needs , Wants & Demands Needs Basic human requirements * stated needs * real needs * unstated needs * delight needs * secret needs * Needs become wants when people are directed to specific objects that might satisfy the need. * Demands wants for specific products backed by an ability to pay.

MARKETING CONCEPTS Segmentation Division of the market in to various segments by analyzing the profile of buyers based on their demographic , psychological and behavioral patterns. Target Markets segments present the greatest opportunity. Positioning The market offering ( product ) is positioned in the minds of target buyers as delivering some central benefits.

MARKETING CONCEPTS Offerings & Brands Offering is a value proposition , a set of benefits companies offer to customers , to satisfy their needs. Brand an offering from a known source and carries many associations in the minds of people. Value & Satisfaction tangible & intangible benefits to customers.

MARKETING CONCEPTS Marketing Channels to reach the target market* communication channels radio, t v, magazines , mail , posters * distribution channels - distributors , wholesalers, retailers , agents * service channels to carryout the transaction with potential buyers - warehouses, banks, ins. , transportation cos.. Supply Chain A longer channel stretching from raw materials to components and to final products that are carried to final buyers. Competition Includes all the actual and potential rival offerings & substitutes that a buyer might consider.

MARKETING CONCEPTS Marketing Environment* Task Environment production, distribution and promotion depts. * Involves company, suppliers, distributors, dealers & target cust. * Broad Environment consists of 6 components. * demographic environment * economic environment * physical environment * technological environment * political legal environment * social cultural environment * Market Planning analyzing mkt opportunity , selecting target mkt , designing mkt strategy, developing mktg programme, managing mktg effort.

MARKETING PHILOSOPHIES 1.Production Concept 2.Product Concept 3.Selling Concept 4.Marketing Concept 5.Holistic Marketing Concepta. Relationship marketing b. Integrated marketing c. Internal marketing d. Social Responsibility marketing

MARKETING PHILOSOPHY THE PRODUCTION CONCEPT One of the Oldest concepts prevailed from the time of industrial revolution until 1920s. Its an idea that the firm should focus on those products that it could produce most efficiently. Production and supply of low cost products will in turn create demand that leads to consumers preferring widely available , inexpensive products. Ex : Chinas Legend PC mfr. & Haier appliances co.: took advantage of the countrys inexpensive labor pool

MARKETING PHILOSOPHY The Product Concept Termed as make & sell philosophy Consumers favor products of high quality, performance, innovative features. The Selling Concept This concept emerged by the early 1930s. Companies not only would produce the products, but also would try to convince customers to buy them through advertising and personal selling. The purpose of marketing is to sell more stuff to more people more often for more money in order to make more profit. - By an aggressive sales man.

MARKETING PHILOSOPHY THE MARKETING CONCEPT This concept emerged in mid-1950s. ( after world war II ) Customer centered philosophy ( sense and respond )

Focuses on the customer needs before developing the product. Aligns all functions of the company to focus on those needs. Realizes a profit by successfully satisfying customer needs over the long term. Reactive Market orientation understanding and meeting customers expressed needs. Proactive Market orientation - satisfy customers latent ( hidden unsaid ) needs also.

MARKETING PHILOSOPHY THE HOLISTIC MARKETING CONCEPT

Based on the development, design, and implementation of marketing programs, processes, and activities that recognizes their breadth and inter-dependencies. Four components of Holistic Marketing are * Relationship Marketing * Integrated Marketing * Internal Marketing * Social Responsibility Marketing

* Holistic Marketing attempts to recognize and reconcile the scope and complexities of marketing activities.

HOLISTIC MARKETING - COMPONENTS Relationship Marketing To develop deep, enduring relationships with all people or organizations that could directly or indirectly affect the success of the firms marketing activities. Aims to building mutually satisfying long term relationships with key parties customers, suppliers , distributors and other marketing partners in order to earn and retain their business. CRM & PRM to be strengthened. To build a unique company asset called marketing network. Integrated Marketing a program to create, communicate & deliver value for consumers. Mktg Mix set of marketing tools a firm uses to pursue its marketing operations. McCarthys Four Ps of Marketing

HOLISTIC MARKETING - COMPONENTS

4 Ps Product , Price , Place & Promotion.Internal Marketing Is the task of hiring, training and motivating able employees who want to serve customers well. Various marketing functions sales force , advertising , customer service , product mgt. , marketing research must work together. Social Responsibility Marketing Incorporates ethical , environmental , legal and social context of marketing activities and programs. Marketers to build social and ethical considerations in to their marketing practices. Cause Related Marketing Co. with an image, product , or service to market builds a relationship or partnership with the cause or for mutual benefit.

LATEST TRENDS IN MARKETINGFundamental Mktg Trend Marketing for the organization Organizing by product units Making everything By own Using Many suppliers Relying on old Market Positions Emphasizing Tangible Assets Building brands thru Ads

Latest Trend in Marketing* Marketing to everyone in the org. * Organizing by customer segments. * Outsourcing Prods, Sub-contracting * partnership with few suppliers. * Exploring New Mkts with Innovation. * Emphasizing intangible assets. * Building brands thru performance & integrated communications.

LATEST TRENDS IN MARKETING

Fundamental Mktg Trend

Latest Trend in Marketing

B2C thru stores & sales people * B2B thru Online ( Internet Mktg ) Selling to Everyone * Selling to well defined target markets

Focusing on Profitable transactions * Focus on customer lifetime value Focus on gaining mkt. share * Focus on building customer share * Global Standardization

Local adaptation thru Centralization & De-centralization strategy

Focusing on the Financial strength * Focusing on Marketing Strength Focusing on Shareholders prosperity * Focus on Stakeholders prosperity

MARKETING MANAGEMENT TASKS Developing Marketing strategies & Marketing Plans Capturing Marketing insights Marketing Information Systems Marketing Environment Micro ( suppliers , customers , channels, competitors ) Marketing Environment - Macro ( demographic , economic , physical, technologypolitical legal, social cultural forces )

Connecting with customers Building strong brands

create value for the chosen target mkt. & develop strong, profitable, long term relationships with customers.

Shaping the Market Offerings Product quality, design features, packaging

MARKETING MANAGEMENT TASKS Delivering Value by products & services to the target market. Communicating Value Marketing communication activities. Develop Integrated Marketing communication program an attemptto inform, persuade , remind the customers on the products & services directly or indirectly, about the brands the cos. Sell.

Set up Mass Communication Programs Advertising , Sales Promotion , events , Public relations, hire , train &motivate sales people.

Creating Long term Growth Product Positioning , New Product Developmenttesting , launching & analyzing the changing global opportunities & challenges etc.,

Organize Marketing Resources & Implement & Control Marketing Plan

Describes the strategic position of the product in the market place.

MARKETING MIX

Marketing Mix Theory origin 1948 By James Culliton. Marketing decision should be the result of something similar to recipe 1953- Neil Borden President of AMA changed the recipe idea & introduced term Marketing Mix. 1960 E. Jerome McCarthy Introduced 4Ps. Product An object or service that is mass produced or manufactured on a large scale with a specific volume of units. Price the amount customer pays for the product. Place a location where the product can be purchased. Promotion all of the communications that a marketer may use in the market place. Some Marketing experts still say..5Psothers say Extended 7Ps.( People , Physical Evidence Uniforms, Business Cards, Signages & Process the whole customer experience ) 7Ps applicable for service oriented companies.

MARKETING MIX 4 Ps( To generate positive response in the target market by blending these 4 marketing mix variables in an optimal manner )

Product

Price Target Market

Place

Promotion

MARKETING MIX - PRODUCT Product Characteristics : * Functionality * Quality * Appearance * Packaging * Brand * Service * Support * Warranty

MARKETING MIX - PRICE Price Characteristics : List Price Discounts Financing Leasing Options Allowances

MARKETING MIX - PLACE Place Characteristics : Locations Logistics Channel Members Channel Motivation Market Coverage Service Levels Internet / Mobile

MARKETING MIX - PROMOTION

Promotion Characteristics : Advertising Public Relations Trade Show Personal Selling Direct Selling Media Leaflets Discounts Offers

MARKETING STRATEGY FORMULATION

Identifying the target market Product Positioning Product pricing Distribution Marketing Communications Marketing Research Gathering Feedback & exercising control

Analysis of market situation & Forecast of future marketing Environment development

Analysis Phase

Determining of marketing goals Market share Sales Volume Image Awareness

Formulation of marketing strategies Market field strategies Market stimulation strategies Market parceling strategies Market area strategies Competition oriented strategies

Planning Phase

Planning market policy activities Product policy Pricing * Communication Distribution Policy

Realization of the marketing decision

Implementation phase

Control of marketing success

Control phase

MARKETING STRATEGIES Defining the corporate mission Defining the Business The Business Mission Goal Formulation Strategy Formulation Program formulation Implementation Feedback & Control

MARKETING PLAN Marketing Plan is a written document that summarizes what the marketer has learned about the market place and indicates how the firm plans to reach its marketing objectives. It contains the tactical guidelines for the marketing programs and financial allocations over the planning period. Contents of Marketing Plan Executive summary and table of contents brief summary of the main goals and recommendations. Situational analysis relevant back ground data on sales , costs , the market , competitors , and the various forces in the macro environment. Marketing strategy Financial projections sales forecast, expense forecast, break even analysis etc., Implementation controls control mechanisms for monitoring and adjusting implementation of the plan.

MARKETING ENVIRONMENT MACRO ENVIRONMENTAL FORCES 1. DEMOGRAPHIC ENVIRONMENT 2. ECONOMIC ENVIRONMENT 3. SOCIAL CULTURAL ENVIRONMENT 4. NATURAL ENVIRONMENT 5. TECHNOLOGICAL ENVIRONMENT 6. POLITICAL LEGAL ENVIRONMENT

DEMOGRAPHIC ENVIRONMENT Marketers must be aware of * worldwide population growth * changing mixes of age * ethnic composition & educational levels * rise of non-traditional families * large geographic shifts in population * shift from mass marketing to micromarketing

ECONOMIC ENVIRONMENT

Marketers need to focus on Income distribution Levels of savings Debt availability Credit availability

SOCIAL CULTURAL ENVIRONMENT Marketers must understand the societal factors such as beliefs, values and norms that largely define the tastes and preferences of target buyers. Indian Social Cultural environment very complex - consists of regional differences in language, customs, social systems, values, caste systems, habits and religions. Marketer must address the target market with Customized research on consumption behavior Customized research on attitudes of buyers specific to products and services.

NATURAL ENVIRONMENT Marketers need to be aware of the threats and opportunities associated with Raw materials shortages Increased Energy costs Pollution Levels Changing role of governments in environmental protection New regulations by Central / State Governments.

TECHNOLOGICAL ENVIRONMENT Marketers should take account of Accelerating pace of technological change Increasing no. of ideas

Opportunities for innovation Startling range of new technologies that will revolutionize products & production processes.

Varying R&D Budgets Increased opportunities in the R&D sector due to globalization.

Increased governmental regulations of technological change Increased awareness on the safety of products leading to Govt. banning potentially unsafe products.

POLITICAL LEGAL ENVIRONMENT Political Legal environment composed of laws , government agencies , pressure groups that influence and limit various organizations and individuals.Increase in Business Legislation 1. to protect cos. From unfair competition 2. to protect consumers from unfair business practices 3. to protect the interests of society from unbridled business behavior. consumer protection regulation , consumer complaints council ( CCC ) 4. NCDRC National consumer disputes Redressal Commission.

SWOT Analysis Is an important tool for auditing the overall strategic position of a business and its environment. It involves monitoring the external and internal marketing environment. Environmental factors internal to the firm usually can be classified as strengths ( S ) or weaknesses ( W ) and those external to the firm can be classified as opportunities ( O ) or threats ( T ) This analysis of the strategic environment is referred to as a SWOT Analysis.

SWOT FRAMEWORKENVIRONMENT SCANInternal Environment Analysis

External Environment Analysis

Strengths

Weaknesses

Opportunities

Threats

Internal Environment ( Strengths / Weaknesses ) Analysis( The internal analysis is a comprehensive evaluation of internal environments potential strengths & weaknesses )

Strengths A firms strengths are its resources and capabilities that can be used for developing a competitive advantages. Examples of such strengths include.. Strong Brand Names Patents Good reputation among customers Cost advantages from proprietary know-how. Exclusive access to natural resources Technological skills Distribution Channels Production Quality Management

Internal Environment ( Strengths / Weaknesses ) Analysis Weaknesses The absence of a firms certain strengths are a weakness. The following may be considered as weaknesses. A weak Brand Name Lack of Patent protection Poor reputation among customers High Cost Structure Lack of access to the best natural resources Absence of Important Technological skills Poor access to Distribution Channels Low customer retention Weak Management In some cases the weakness may be the flip side of a strength Ex. A firm has a large amount of manufacturing capacity which is a strength but unable to react quickly in the strategic environment due to large investment in its manufacturing capacity.

External Environment ( Opportunities / Threats ) Analysis

Opportunities The External Environment analysis may reveal certain new opportunities for profit and growth. Some Ex. For opportunities are An unfulfilled customer need Arrival of new technologies Loosening of regulations Removal of international trade barriers Changing customer tastes / lifestyles Changes in Governments policies Lower Personal Taxes Change in population age structure New Distribution Channels Customized Products More convenient buying process ( Buying thru Internet etc., ) Faster Delivery of a product or service (FedEx delivers faster than US Post) Companies uses Market Opportunity Analysis ( MOA ) to evaluate opportunities.

External Environment ( Opportunities / Threats ) Analysis Threats Changes in the External Environment may present threats to the firm. Few Examples are.. Shifts in consumer tastes away from the firms products. Emergence of substitute products New Governmental regulations Increased Trade Barriers Technological advances Tax Increase Changes in Population-age structure New Distribution Channels

Strengths

Weaknesses 1.A weak Brand Name

1.Strong Brand Names 2.Patents 3.Good reputation among customers 4.Cost advantages from prop. know-how. 5.Exclusive access to natural resources 6.Technological skills 7.Distribution Channels 8.Production Quality 9.Management Opportunities 1.An unfulfilled customer need 2.Arrival of new technologies 3.Loosening of regulations 4.Removal of international trade barriers 5.Changing customer tastes / lifestyles 6.Changes in Governments policies 7.Lower Personal Taxes 8.Change in population age structure 9.New Distribution Channels

2.Lack of Patent protection 3.Poor reputation among customers 4.High Cost Structure 5.Lack of access to the best natural resources 6.Absence of Important Techno. skills 7.Poor access to Distribution Channels 8.Low customer retention 9.Weak ManagementThreats

1.Shifts in consumer tastes away from the firms products. 2.Emergence of substitute products 3.New Governmental regulations 4.Increased Trade Barriers 5.Technological advances 6.Tax Increases & New Distr. Channels 7.Changes in Population-age structure

Summary Many themes or challenges facing the Companies/ industries have been around for a long time, though the list grows ever-longer The company should know what it must do Companies not crying-wolf when describing challenges SWOT Analysis has very effectively captured them After years of adaptation and rationalization the Companies / Industries remains vulnerable to a hostile operating and regulatory environment Companies should do SWOT Analysis in all their strategic planning before taking any strategic decisions with respect to their Products & Services.