MARKETING MANAGEMENT

An Introduction

19 September 2017 MARKETING MANAGEMENT 1

 Whats Marketing?
Only selling and advertising?
Telling and selling-old sense
Satisfying customer needs
If the company understands the consumer
needs, develops products and services, prices,
distributes and promote effectively, these
products will sell easily.
The aim of marketing is to make selling
unnecessary-Peter F Drucker.
19 September 2017 MARKETING MANAGEMENT 2
 WHAT IS MARKETING ?

ANY INTERPERSONAL AND

INTERORGANISATIONAL
RELATIONSHIP INVOLVING AN
EXCHANGE IS MARKETING .
WILLIAM J.STANTON
Marketing

Demand Jobs

Revenue Profits Giving

 Marketing is the activity, set of
institutions, and processes for
creating, communicating, delivering,
and exchanging offers that have
value for customers, clients, partners,
and society at large.

Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 5 of 25

 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.

Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall Slide 6 of 25

 Marketing Defined
In a broader sense Its a social and
managerial process by which individuals and
organizations obtains what they need and
want through creating and exchanging of
values with others. Philip Kotler.
In a narrow sense, is the process by which
companies create value for customers and
build strong customer relationships in order to
capture value from the customers

19 September 2017 MARKETING MANAGEMENT 7

 WHAT IS MARKETING ?

The essence of Marketing is a transaction - an

exchange- intended to satisfy human needs and
wants. There are three elements in the
marketing process :
(A) MARKETERS
(B) WHAT IS BEING MARKETED
(C) TARGET MARKET
 What is Marketed?
Persons Experiences
Events
Properties
Organizations
Information
Ideas

Goods
Places
Services
 What is Marketed?
Goods e.g. cars, machines, watches, cosmetics
Services e.g. restaurants
Events e.g. world cup, Olympics
Experiences e.g. amusement park, water park
Persons e.g. celebrity marketing
Places e.g. incredible India campaign
Properties e.g. real estate
Organizations e.g. Philips sense and simplicity
campaign
Information e.g. schools, labs
Ideas e.g. AIDS awareness, discourage smoking
 Who markets?
Response
Attention
Purchase
Donation
Vote

Marketer Prospect
 Types of Demand

Unwholesome Declining

Nonexistent
Latent
Irregular Full
Negative Overfull
Markets- a collection of buyers & sellers who
transact over a particular product or product class
Simple Marketing System
 Key Customer Markets
Global Markets

Consumer Market

Business Markets Government Market

 Key Customer Markets
Consumer Markets- soft drinks, cosmetics, air
travel, athletics shoes
Business markets- more professional buyers, buy
goods in order to make or resell a product to
others at a profit. Stronger role of sales force,
price and companys reputation for reliability &
quality.
Global markets- companies selling goods &
services in the global market place
Non profit & Govt. Markets
19 September 2017 MARKETING MANAGEMENT 16
 Markets

Marketplaces Marketspaces

Metamarkets
 Characteristics / features of
marketing
Operational
Customer-oriented
Overall business philosophy
Long-term survival
Mutual benefits
Business objective
 Nature of Marketing
1. Marketing is Customer- focused: marketing
efforts must be directed at meeting customer
needs, not market shares. For this, marketers
must track customer needs on a continuous
basis.
2. Marketing must deliver value: the company
must satisfy following equation
customer value = benefits/ cost
 VALUE AND SATISFACTION
Value is the customers estimate of the
Products capacity to satisfy a set of goals
Value is the ratio between what the
customer gets and what he gives (V=B/C)
Customer gets benefits & assume costs
WHEN :
Customer Expectance=Performance (satisfied)
Customer Expectance>Performance (dis-satisfied)
Customer Expectance<Performance (Highly satisfied)
 Nature of Marketing (contd.)
3. Marketing is Business: customer is the focus of
all the activities , marketer has not to search
customers to seek response to his products.
Customer provides business & business seeks
customer.
4. Marketing is surrounded by customer needs : it
starts with identifying customer needs &
requirements.
5. Marketing is a part of total environment:
6. Marketing system affects Company strategy:
 EXCHANGE AND TRANSACTION

Exchange is the act of obtaining a desired product

by offering something in return .
Exchange takes place when 5 conditions are satisfied:
(a) Two parties should be there
(b) Each party must have something of value to the other
(c) Each party is capable of communication & delivery
(d) Each party is free to accept or reject the offer
(e) Each party believes that it is appropriate to deal with the other
party
 EXCHANGE AND TRANSACTION

Exchange is a process rather than event. It is

a value creating process because it normally
leaves both parties better off.
A transaction is a trade of values between
two or more parties ( A BARTER
TRANSACTION OR A MONETARY
TRANSACTION ).
 EXERCISE FOR STUDENTS
Kamal store is a reputed retail store. Mr. Laxmi Narayan, the
proprietor has seen it grow from strength to strength over
the last 20 years.
The store prides for quality products and enjoys a good
image in the market.
In recent times, many departmental stores have come up in
the adjoining areas and slowly the competition is growing.
Mr. Laxmi Narayans major concern is about losing
patronage to the bigger stores as they are offering lower
prices. He knows he could not compete on prices though he
prides himself on excellent customer service and quality
products.
Advise Mr. Laxmi Narayan regarding the new threat posed
by competition and ways to meet it.
19 September 2017 MARKETING MANAGEMENT 24
 Core Marketing Concepts
Needs, Wants, and Demands Target Markets, Positioning,
and Segmentation

Offerings and Brands

Value and Satisfaction

 Core Marketing Concepts
Marketing Channels

Supply Chain

Marketing Environment
Competition
 Core marketing concepts
To understand the marketing function, we need
to understand the following core set of concepts.
1. Needs, Wants, and Demands
2. Target Markets, Positioning, and Segmentation
3. Offerings and Brands
4. Value and Satisfaction
5. Marketing Channels
6. Supply Chain
7. Competition
8. Marketing Environment
 Needs, wants and demands
Needs are the basic human requirements. E.g.
air, food, water, clothing, shelter

Needs become wants when they are directed

to specific objects that might satisfy the need.
Wants are shaped by our society.

Demands are wants for specific products

backed by an ability to pay.
 Needs
Five types of needs:
1. Stated needs (The customer wants an inexpensive car.)
2. Real needs (The customer wants a car whose
operating cost, not its initial price, is low.)
3. Unstated needs (The customer expects good service
from the dealer.)
4. Delight needs (The consumer would like the dealer to
include an onboard navigation system.)
5. Secret needs (The customer wants friends to see him
as a savvy consumer.)
 Target market, positioning and
segmentation
Marketers start dividing the market into segments.
They identify distinct group of buyers by examining
demographic, psychographic, and behavioral
differences of buyers.

After identifying market segments, the marketer then

decides which present the greatest opportunity
which are its target market.

For each, the firm develops a market offering that it

positions in the minds of the target buyers as
delivering some central benefit(s).

E.g. Volvo for safety, Mahindra Scorpio luxury car

(SUV)
 Offering and brands
Companies address needs by putting forth a
value proposition, a set of benefits that they
offer to customers to satisfy their needs.
Offering can be a combination of products,
services, information, and experiences.

A brand is an offering from a known source.

 Value and satisfaction
The offerings will be successful if it delivers value
and satisfaction to the target buyer.

Value reflects the sum of the perceived tangible

and intangible benefits and costs to customers.
(quality, service, price)

Satisfaction reflects a persons judgments of a

products perceived performance (or outcome) in
relationship to expectations.
 Marketing channels
To reach a target market, the marketer uses three kinds of
marketing channels.

Communication channels deliver and receive messages from

target buyers. E.g., newspapers, magazines, radio, television,
mail, telephone, posters, internet.

The marketer uses distribution channels to display, sell, or

deliver the physical product or service(s) to the buyer or user.
They include distributors, wholesalers, retailers, and agents.

Service channels to carry out transactions with potential

buyers. They include warehouses, transportation companies,
banks, and insurance companies.
 Supply chain
The supply chain is a longer channel stretching
from raw materials to components to final
products that are carried to final buyers.

When a company acquires competitors or

expands upstream or downstream, its aim is
to capture a higher percentage of supply chain
value.
 Competition
Competition includes all the actual and
potential rival offerings and substitutes a
buyer might consider.

E.g. car manufacturer may buy from TATA steel

or Steel authority of India (SAIL) or from
abroad; or buy aluminum for certain parts to
lighten the cars weight.
 Marketing environment. . .
The marketing environment consists of the task
environment and the broad environment.

The task environment includes the actors engaged in

producing, distributing, and promoting the offering.
These are the company, suppliers, distributors,
dealers, and the target customers.
In the supplier group are material suppliers and
service suppliers, such as marketing research
agencies, advertising agencies, banking and insurance
companies, transportation companies and
telecommunication companies.
Distributors and dealers include agents, brokers,
manufacturer representatives, and others who
facilitate finding and selling to customers.
 . . . Marketing environment
The broad environment consist of six components.

1. Demographic environment
2. Economic environment
3. Physical environment
4. Technological environment
5. Political-legal environment
6. Social-cultural environment

Marketers must pay close attention to the trends

and developments in these environments and make
timely adjustments to their marketing strategies.
 Functions of marketing. . .
Marketing is not something to be done just by the
marketing department. The real task of doing
marketing is delivering benefits to meet customers
present and future needs is part of everyones job.

Tasks in marketing-
Setting marketing objectives
Developing and implementing strategic marketing
plans
Market and environmental analysis
Conducting marketing research
 . . .Functions of marketing. . .
Designing the appropriate marketing mix-
The service product itself
Pricing policy
Promotion and advertising
Distribution systems
People-customer service and marketing training delivery
process.
Designing the service environment

o Marketing input in sales management

o Internal communications
o Integration with other departments
 . . .Functions of marketing
To achieve organizational objectives.
The primary objective of marketing is the realization of
profit through customer satisfaction.

The important functions of marketing management are:

Marketing research
Sales forecasting
Marketing mix / 4 Ps in marketing
Advertising
Sales promotion
Pricing
 Market & consumer research
Market planning
Exchange functions
Product designing & development
Standardization & grading
Physical distribution
Financing
Risk taking
Packaging, labeling & branding
Customer support services

19 September 2017 MARKETING MANAGEMENT 41

 Importance of Marketing
Cost of marketing accounts to 40-60% of total cost
(appx.)
If you target most of their needs then _______
If you push more on the product and ignore their
wants then ________
EVOLUTION OF MARKETING FROM FOLOOWING STAGES:
Stage 1 : Marketing as an equal function.
Stage 2 : Marketing as a more important function.
Stage 3: Marketing as the major function.
Stage 4: Customer as the controlling factor
Stage 5: Customer as controller & marketing as
integrative function.
19 September 2017 MARKETING MANAGEMENT 42
 Marketing promotes product awareness to the
public.
Marketing helps in enhancing product sales
Marketing builds company reputation.

19 September 2017 MARKETING MANAGEMENT 43

 Marketing Process

Capture value
Design
Understand Construct a from
customer Build
customer marketing customers to
driven Profitable
needs and programme to create profit
Marketing relationships
wants deliver value and customer
strategy
equity

19 September 2017 MARKETING MANAGEMENT 44

 FEATURES OF MODERN MARKETING
Modern marketing is customer oriented.
Customer satisfaction is the core.
Emphasis shifted from mere profit maximization to
profit through customer satisfaction.
It begins and ends with customers
It precedes and succeeds production
It is competition oriented
It focus on customer retention.Once a customer,
always a customer

19 September 2017 MARKETING MANAGEMENT 45

 >> FEATURES OF MODERN MARKETING
It is technology based
(for survey, analysis, generalization, product
formulation, testing, test marketing, feed-
backs, advts, after sale services, information
dissemination, etc.)
It is based on segmentation and targeting

19 September 2017 MARKETING MANAGEMENT 46

 Selling Vs. Marketing
Starting Point- focus- Means- End

Profits through sales

Factory Product Promotion volume

Target Customer Integrated - Profit through customer

Market needs Marketing satisfaction
 Marketing and Selling
Selling
Emphasis is on product
Emphasis is on sellers needs
Selling is profit oriented
Aims sales and Profit maximization
Selling begins after production
It create only possession utility
Narrow in scope
19 September 2017
Marketing
Emphasis is on customer value
Emphasis is on buyers needs
Marketing is customer oriented
Aims customer satisfaction
It begins even before production
It creates time, place and possession
utility
Wider in scope
MARKETING MANAGEMENT 48
 Marketing Mix
(Four Ps)
It is one of the major concept in modern
marketing,
There are controllable and uncontrollable
factors that influence the marketing
programme.
It is a set of controllable tactical marketing
tools-product, price, place and promotion that
the firm blends to produce the response it
wants in the target market.
19 September 2017 MARKETING MANAGEMENT 49
 Marketing Mix
Marketing mix is everything that the firm can do
to influence the demand for its products
Competitors behavior, govt.policy,fashion, trend
etc. are uncontrollable.
It consists of everything that the firm can do to
influence the demand for its products
Product means the goods and services
combination the company offers to the target
market.
It is actually a product mix.

50
 Product
Variety
Quality
Design
Features
Brand Name
Packaging
Services

Price
Promotion List Price
Advertising Discounts
Target Allowances
Personal selling Customers
Sales Promotion Payment Period
Public relations Credit terms

Place
Channels
Coverage
Assortments
Location
Inventory
Transportation
Logistics
MARKETING MANAGEMENT