Marketing management

MARKETING MANAGEMENT

BYProf. N. N. Panda

GIACR ENGG. COLLEGE, RAYAGADA

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Marketing is ancient art. Its emergence as a management discipline is of relatively recent origin. And within this relatively short period, it has gained a great deal of importance. In fact today marketing is regarded as most important of all management functions of business. All of us involved in marketing in one-way or the other.

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Marketing-Definition“Marketing is a societal 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” - Philip Kotler

Marketing is a key function of management. It brings success to business organization. A business organization performs two key functions producing goods and services and making them available to potential customers for use.

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An organization business success largely depends on how efficiently the products and services are delivered to customers and how differently do the customers perceive the difference in delivery in comparison to the competitors. Quality production and efficient marketing are the key success factors in building sustainable competitive edge for every Business Corporation.

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Marketing Management-DefinitionAmerican Marketing Association – “It is the process of planning & executing the conception, pricing, promotion & distribution of ideas, goods & services to create exchange that satisfy individual & organizational goals.”

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Marketing Concepts:1. The Production Concept: This is one of the oldest concepts guiding the sellers. This concept holds that consumers will favour those products that are widely available and low in cost. Managers of production oriented organizations concentrate on achieving high production efficiency and wide distribution coverage.

2. The Product Concept: This concept holds that consumers will favour those products that offer most quality performance, or innovative features. Managers in these product-oriented organizations form their energy on making superior products and improving them over time. Thus, the product concept leads to “Marketing myopia”, a focus on the product rather than on the customer’s need.

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3. The Selling Concept: this concept holds that customers, if left alone, will ordinarily not buy enough of the organization’s product. The organization must, therefore, undertake an aggressive selling and promotion effort. 4. The Marketing Concept: This concept emphasizes the determination of the requirements of potential customers and supplying products to satisfy their requirements.

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5. The Societal Marketing Concept: The societal marketing concept holds that the organization’s task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfaction more effectively and efficiently than competitors in a way that preserves or enhances the consumer’s and the society’s well-being.

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Marketing FunctionsIn most of the business enterprises, marketing department is set up under the supervision of the marketing manager. The major purpose of this department is to generate revenue for the business by selling want satisfying goods and services to the customers.

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In order to achieve this objective, marketing manager performs the following functions:1. Marketing Research: Marketing research is the systematic search for and analysis of facts related to a marketing function. It helps in analyzing the buyers habits, relative popularity of a product, effectiveness of advertisements, etc. It provides up-to-date information in regular intervals of time regarding marketing and thus, helps in decision making.

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2. Product Planning and Development: It is always necessary to plan and develop products which meet the specifications of the customers. Product planning and development involves a number of decisions. viz., What to produce ? How to have its packaging? How to fix its price and how to sell it?, etc.

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3. Buying and Assembling: Buying and assembling are important functions of marketing. Buying is different from marketing. Buying involves determination of requirements, finding the sources of supply placing the order and receiving the goods. But assembling means collection of goods already purchased from different sources at a common point. It is also used in another sense. Raw materials are purchased and assembled in order to produce goods and services as per the need of customer.

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4. Selling: This is an important function of marketing under which ownership of goods is transferred from the seller to the buyer. This is done at a price. There are two different forms of selling, viz., negotiated selling and auction selling.

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5. Standardization, Grading and Branding: Standardization means setting up of specifications of a product. The gradation is done on the basis of these specifications and standards. At last a brand name is given to a product for identification. In general branding is a way for an organization to identify its offerings and distinguish them from those of competitors.

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6. Packaging: A good package represents a combination of the designer’s creative skills and the product as well as marketing and sales knowledge of the manufacturer’s management team. Packaging has became one of the essential services of modern marketing. Now, it is used by the manufacturer to establish his branded products as distinct from those of rivals. Packaging also gives protection to the products. Thus, packaging acts as a multi-purpose arrangement.

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7. Storage: Storage of goods in warehouse has become an indispensable service these days. Goods are stored in the warehouses to protect them from any kind of damage till they are actually sold in the market. In addition, modern warehouses perform certain marketing services like grading, packaging, labelling, etc.

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8. Transportation: Transportation provides the physical means which facilitate the movement of persons, goods and services from one place to another. It plays significant role in the socio-economic development of a country. It also plays a crucial role in the price mechanism. It tends to equalize and stabilize the price of various commodities by moving them from the areas where they are surplus to those areas where they are scarce.

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9. Salesmanship: Salesmanship or personal selling is widely used in retail marketing. It involves direct and personal contact of the seller or his representative with the purchaser.10. Advertising: Advertising has become an important function of marketing in the competitive world. It helps to spread the message about the product and thus, promote its sale.11. Pricing: Determination of price of a product is an important function of a marketing manager. Price of a product is influenced by the cost of production, profit margin, prices fixed by the rival firms, and Govt. policy.

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12. Financing: Financing of customer-purchasing has become an integral part of modern marketing. The provision of goods to the customers on credit basis is an important device to increase the volume of sales. 13. Insurance: A large number of risks are involved in exchange of goods and services. Insurance helps to cover these risks. It facilitates the smooth exchange of goods by covering risks in storage and transportation.

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The Marketing Mix (The 4 P's of Marketing)Marketing decisions generally fall into the following four controllable categories: a. Productb. Pricec. Place (distribution)d. Promotion

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Product - A tangible object or an intangible service that is mass produced or manufactured on a large scale with a specific volume of units. Intangible products are service based like the tourism industry & the hotel industry or codes-based products like cell phone load and credits. Typical examples of a mass produced tangible object are the motor car and the disposable razor. A less obvious but ubiquitous mass produced service is a computer operating system. Packaging also needs to be taken into consideration.

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Here are some examples of the product decisions to be made: Brand nameFunctionalityStylingQualitySafetyPackagingRepairs and SupportWarrantyAccessories and services

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Price – The price is the amount a customer pays for the product. It is determined by a number of factors including market share, competition, material costs, product identity and the customer's perceived value of the product. The business may increase or decrease the price of product if other stores have the same product.

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Some examples of pricing decisions to be made include: Pricing strategy (skim, penetration, etc.)Suggested retail priceVolume discounts and wholesale pricingCash and early payment discountsSeasonal pricingBundlingPrice flexibilityPrice discrimination

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Place – Place represents the location where a product can be purchased. It is often referred to as the distribution channel. It can include any physical store as well as virtual stores on the Internet. Place is not exactly a physical store where it is available Place is nothing but how the product takes place or create image in the mind of customers. It depends upon the perception of customers.

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Some examples of distribution decisions include: Distribution channelsMarket coverage (inclusive, selective, or exclusive distribution)Specific channel membersInventory managementWarehousingDistribution centersOrder processingTransportationReverse logistics

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Promotion- Promotion represents all of the communications that a marketer may use in the marketplace. Promotion has four distinct elements: advertising, public relations, personal selling and sales promotion. A certain amount of crossover occurs when promotion uses the four principal elements together, which is common in film promotion. Advertising covers any communication that is paid for, from cinema commercials, radio and Internet adverts through print media and billboards. Public relations are where the communication is not directly paid for and includes press releases, sponsorship deals, exhibitions, conferences, seminars or trade fairs and events.

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Word of mouth is any apparently informal communication about the product by ordinary individuals, satisfied customers or people specifically engaged to create word of mouth momentum. Sales staff often plays an important role in word of mouth and Public Relations (see Product above). In Short, promotion represents the various aspects of marketing communication, that is, the communication of information about the product with the goal of generating a positive customer response. Marketing communication decisions include: Promotional strategy (push, pull, etc.)AdvertisingPersonal selling & sales forceSales promotionsPublic relations & publicityMarketing communications budget

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The Fundamental Needs of Customers

The Six Basic Needs of Customers are: 1. FriendlinessFriendliness is the most basic of all customers needs, usually associated with being greeted graciously and with warmth. We all want to be acknowledged and welcomed by someone who sincerely is glad to see us. A customer shouldn’t feel they are an intrusion on the service provider’s work day!

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2. Understanding and empathyCustomers need to feel that the service person understands and appreciates their circumstances and feelings without criticism or judgment. Customers have simple expectations that we who serve them can put ourselves in their shoes, understanding what it is they came to us for in the first place.

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3. Fairness We all need to feel we are being treated fairly. Customers get very annoyed and defensive when they feel they are subject to any class distinctions. No one wants to be treated as if they fall into a certain category, left wondering if “the grass is greener on the other side” and if they only received second best.

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4. Control Control represents the customers’ need to feel they have an impact on the way things turn out. Our ability to meet this need for them comes from our own willingness to say “yes” much more than we say “no.” Customers don’t care about policies and rules; they want to deal with us in all our reasonableness.

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5. Options and alternativesCustomers need to feel that other avenues are available to getting what they want accomplished. They realize that they may be charting virgin territory, and they depend on us to be “in the know” and provide them with the “inside scoop.” They get pretty upset when they feel they have spun their wheels getting something done, and we knew all along a better way, but never made the suggestion.

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6. Information“Tell me, show me – everything!” Customers need to be educated and informed about our products and services, and they don’t want us leaving anything out! They don’t want to waste precious time doing homework on their own – they look to us to be their walking, talking, information central.

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Channel of DistributionA channel of distribution always includes both the producer and the final consumers for the product in its present form as well as any middleman such as retailers and wholesalers. Channels play a vital role in marketing. Firms rely on the marketing channels for generating customer satisfaction and for achieving differentiation over competitors. The distribution channels right from the producer to the final consumer is designed in such a way that it provides sufficient value to the customer and creates a competitive advantage to the producer.

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“A channel is a pipeline/ path/ route through which a product flows on its way to the consumers.”or “ The Marketing channels are sets of independent organizations involved in the process of making a product or service available for use or consumption”.

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Role of Distribution Channel1. Facilitate selling by being physically close to customer.2. They gather information about potential and customers, competitors, other actors and forces of the environment.3. Provide distributional efficiency by bridging the manufacturer with the user, efficiently and economically.4. Assemble products into assortments to meet buyers needs, match “segments of supply” with “segments of demand”.5. Assist in sales promotion.6. Assist in introducing new product.7. Assist in implementing the price mechanism.8. Assist in developing sales forecast.9. Provide market intelligence and feedback.10. Maintain records.11. Take care of liaison requirements.12. Standardize transaction.

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AdvertisingAdvertising is a form of non personal communication intended to persuade an audience (viewers, readers or listeners) to purchase or take some action upon products, ideals, or services. It includes the name of a product or service and how that product or service could benefit the consumer, to persuade a target market to purchase or to consume that particular brand.

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Modern advertising developed with the rise of mass production in the late 19th and early 20th centuries. Mass media can be defined as any media meant to reach a mass amount of people. Several types of mass media are television, internet, radio, news programs, and published pictures and articles.

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Commercial advertisers often seek to generate increased consumption of their products or services through branding, which involves the repetition of an image or product name in an effort to associate related qualities with the brand in the minds of consumers. Different types of media can be used to deliver these messages, including traditional media such as newspapers, magazines, television, radio, outdoor or direct mail; or new media such as websites and text messages.

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Advertising is the promotion of a company’s products and services carried out primarily to drive sales of the products and services but also to build a brand identity and communicate changes or new product /services to the customers. Advertising has become an essential element of the corporate world and hence the companies allot a considerable amount of revenues as their advertising budget.

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There are several reasons for advertising some of which are as follows: 1. Increasing the sales of the product/service2. Creating and maintaining a brand identity or brand image.3. Communicating a change in the existing product line.4. Introduction of a new product or service.5. Increasing the buzz-value of the brand or the company.

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Types of Advertising 1. Print Advertising – Newspapers, Magazines, Brochures, Fliers The print media have always been a popular advertising medium. Advertising products via newspapers or magazines is a common practice. In addition to this, the print media also offers options like promotional brochures and fliers for advertising purposes. Often the newspapers and the magazines sell the advertising space according to the area occupied by the advertisement, the position of the advertisement (front page/middle page), as well as the readership of the publications.

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2- Outdoor Advertising – Billboards, Kiosks, Tradeshows and EventsOutdoor advertising is also a very popular form of advertising, which makes use of several tools and techniques to attract the customers outdoors. The most common examples of outdoor advertising are billboards, kiosks, and also several events and tradeshows organized by the company. The billboard advertising is very popular however has to be really terse and catchy in order to grab the attention of the passers by. The company can organize trade fairs, or even exhibitions for advertising their products.

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3- Broadcast advertising – Television, Radio and the Internet Broadcast advertising is a very popular advertising medium that constitutes of several branches like television, radio or the Internet. Television advertisements have been very popular ever since they have been introduced. The cost of television advertising often depends on the duration of the advertisement, the time of broadcast (prime time/peak time), and of course the popularity of the television channel on which the advertisement is going to be broadcasted. The radio might have lost its charm owing to the new age media however the radio remains to be the choice of small-scale advertisers.

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4- Covert Advertising – Advertising in Movies Covert advertising is a unique kind of advertising in which a product or a particular brand is incorporated in some entertainment and media channels like movies, television shows or even sports. There is no commercial in the entertainment but the brand or the product is subtly( or sometimes evidently) showcased in the entertainment show. Some of the famous examples for this sort of advertising have to be the appearance of brand Nokia which is displayed on Tom Cruise’s phone in the movie Minority Report, or the use of Cadillac cars in the movie Matrix Reloaded.

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5- Surrogate Advertising – Advertising Indirectly Surrogate advertising is prominently seen in cases where advertising a particular product is banned by law. Advertisement for products like cigarettes or alcohol which are injurious to heath are prohibited by law in several countries and hence these companies have to come up with several other products that might have the same brand name and indirectly remind people of the cigarettes or beer bottles of the same brand. Common examples include Fosters and Kingfisher beer brands, which are often seen to promote their brand with the help of surrogate advertising.

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6. Public Service Advertising – Advertising for Social Causes Public service advertising is a technique that makes use of advertising as an effective communication medium to convey socially relevant messaged about important matters and social welfare causes like AIDS, energy conservation, political integrity, deforestation, illiteracy, poverty and so on.

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7- Celebrity AdvertisingAlthough the audience is getting smarter and smarter and the modern day consumer getting immune to the exaggerated claims made in a majority of advertisements, there exist a section of advertisers that still bank upon celebrities and their popularity for advertising their products. Using celebrities for advertising involves signing up celebrities for advertising campaigns, which consist of all sorts of advertising including, television ads or even print advertisements.

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ADVERTISING GOALS / IMPORTANCE OF ADVERTISING1. Building Brand ImageBuilding a strong global brand and corporate image is one of the most important advertising goals. A strong brand creates brand equity. Brand equity is a set of characteristics that make a brand seem different and better to both consumers and businesses. These benefits can be enhanced when they combine effective advertising with quality products.

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2. Providing InformationBesides building brand recognition and equity, advertising serves other goals. For example, advertising often is used to provide information to both consumers and business buyers. Typical information for consumers includes a retailer’s store hours, business location, or sometimes more detailed product specifications. Information can make the purchasing process appear to be convenient and relatively simple, which can entice customers to finalize the purchasing decision and travel to the store.

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3. PersuasionOne of the most common goals of advertising programs is persuasion. Advertisements can convince consumers that a particular brand is superior to other brands. They can show consumers the negative consequences of failing to use a particular brand. Changing consumer attitudes and persuading them to consider a new purchasing choice is a challenging task. As described later, advertisers can utilize several methods of persuasion. Persuasive advertising is used more in consumer marketing than in business-to-business situations. Persuasion techniques are used more frequently in broadcast media such as television and radio rather than in print advertising.

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4. Supporting Marketing EffortsAnother goal of advertising is to support other marketing functions. For example, manufacturers use advertising to support trade and consumer promotions, such as theme packaging or combination offers. Any type of special sale (diwali offer sales, buy-one-get-one-free, pre-Christmas sale) requires effective advertising to attract customers to the store. Both manufacturers and retail outlets use advertisements in conjunction with coupons or other special offers. When ads are combined with other marketing efforts into a larger, more integrated effort revolving around a theme, the program is called a promotional campaign.

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5. Encouraging ActionMany firms set motivational goals for advertising programs. A television commercial that encourages viewers to take action by dialing a toll-free number to make a quick purchase is an example.

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ConsumerismConsumerism is a social and economic order that is based on the systematic creation and fostering of a desire to purchase goods or services in ever greater amounts. The term is often associated with criticisms of consumption starting with Thorstein Veblen or, more recently by a movement called Enoughism. Veblen's subject of examination, the newly emergent middle class arising at the turn of the twentieth century, comes to full fruition by the end of the twentieth century through the process of globalization.

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It also may refer to a movement seeking to protect and inform consumers by requiring such practices as honest packaging and advertising, product guarantees, and improved safety standards. In this sense it is a movement or a set of policies aimed at regulating the products, services, methods, and standards of manufacturers, sellers, and advertisers in the interests of the buyer.

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In economics, consumerism refers to economic policies placing emphasis on consumption. In an abstract sense, it is the belief that the free choice of consumers should dictate the economic structure of a society (Producerism, especially in the British sense of the term).

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EnvironmentalismEnvironmentalism is a broad philosophy and social movement regarding concerns for environmental conservation and improvement of the state of the environment. Environmentalism and environmental concerns are often represented by the color green.

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Environmentalism as a social movementEnvironmentalism can also be defined as a social movement that seeks to influence the political process by lobbying, activism, and education in order to protect natural resources and ecosystems. In recognition of humanity as a participant in ecosystems, the environmental movement is centered on ecology, health, and human rights.

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An environmentalist is a person who may speak out about our natural environment and the sustainable management of its resources through changes in public policy or individual behavior by supporting practices such as not being wasteful. In various ways (for example, grassroots activism and protests), environmentalists and environmental organizations seek to give the natural world a stronger voice in human affairs.