BASICS OF

MARKETING
PRIYA RAMACHANDRAN
INDIA
 SPCR = Strong Profitable
Customer Relationships

 MARKETING = Building
SPCR



M A R K E T IN G M A N A G E M E N T =
M a n a g in g S P C R

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 Some Interpretations About
Marketing
–A specialized
function within
the organization
that co-exists
with other
functions such as
HR, Finance and
Operations
–A collection of
activities such as
marketing
research,
W h ich advertising,
vie w is co rre ct a n d w h y so
public relations,
PRIYA RAMACHANDRAN, INDIA 3
What is Marketing?
 Simple Definition:
 Marketing is
managing
profitable
customer
relationships.
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 Goal of Marketing
 A ttra ct new  Keep and grow
cu sto m e rs by current
p ro m isin g customers by
su p e rio r va lu e . delivering
satisfaction.


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 Marketing - Old vs. New
 Old view of
marketing
 New view of

marketing

 Making a sale –
 Satisfying customer
 “Telling & selling”
needs

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 Marketing Defined

Marketing is a social and managerial

process
by which individuals and groups
obtain what they need and want
through creating and exchanging
products and value
with others.
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In order to understand Marketing let us begin with the
Marketing Triangle

Customers

Company Competition

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A Simple Model of the Marketing
Process

Capture value
from customers
to create
profits &
customer equity
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 The Marketing
Triad

NEEDS DEMAND

WANTS
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Need: A human need is a
state of felt deprivation of
some basic satisfaction.
Three types of needs exist
physical, social, and
individual needs.
Physical Needs = Food,
clothing, shelter, safety
Social Needs = Belonging,
affection
Individual Needs =
Learning, knowledge, self-
expression

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 Want & Demand
 Want:
Form that a human


need takes, as
shaped by culture
and individual
personality.
 Demand:
Wants for specific
products that are
backed up by an
ability to pay
= Wants + Buying
Power PRIYA RAMACHANDRAN, INDIA 12
 Need/Want
Fulfillment
 Needs and Wants fulfilled
through a Marketing Offer :
 Some combination of products,
services, information, or
experiences offered to a market to
satisfy a need or want.


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PRIYA RAMACHANDRAN, INDIA 14
What Satisfies Consumers’ Needs
and Wants?

 Product:
Anything that can
be offered to
market for
attention,
acquisition, use or
consumption that
might satisfy a
want or need. It
includes physical
objects, services,
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What Satisfies Consumers’ Needs
and Wants?

 Service:
A service is a form
of product that
consist of
activities,
benefits, or
satisfactions
offered for sale
that are
essentially
intangible and do
not result in the
ownership of
anything.
Examples include
PRIYA RAMACHANDRAN, INDIA 16
Marketing Myopia
• Sellers pay more
attention to the
specific products
they offer than to
the benefits and
experiences
produced by the
products.
•
• They focus on the
“wants” and lose
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 How Do Consumers Choose Among
Products & Services?

Value - the value or benefits the



customers gain from using the product

versus the cost of obtaining the
product.


Satisfaction - Based on a comparison of



performance and expectations.

– Performance >Expectations =>
Satisfaction
– Performance < Expectations =>
Dissatisfaction

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 Exchange vs. Transaction
• Exchange:
– Act of
• Transaction:
obtaining a –A trade of
desired values
object from between
someone by two
offering parties.
something in
return. – One party
gives X to
another
party and
gets Y in
return.
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 Marketers and Markets
Marketers
 are focused on
stimulating exchanges with
customers who make up
markets – B2C or B2B.


The market is comprised of



people who play a series of roles:

decision makers, consumers,
purchasers, and influencers.


It is absolutely essential that



marketers have a detailed

understanding of consumers,
their needs and wants.
 PRIYA RAMACHANDRAN, INDIA 20
 What is a Market?
• Root word: Mercor – to buy in the Latin
language


• The set of actual and potential buyers of a

product.
•
• These people share a need or want that can be
satisfied through exchange relationships.
•
• Thus a pharmaceuticals market =
 Doctors + Hospitals + Trade
•
• In Economics, Market = Buyers + Sellers
 For Marketers, Sellers is Industry, Buyers is
Market
PRIYA RAMACHANDRAN, INDIA 21
 The Exchange Process:
Giving Up One Thing in Return for
Another

Something of Value (money,

credit,
labor,
goods)
Buyer
Seller
(goods,
services,
ideas)
Something of Value

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 Simple Marketing System

Communication

Goods/services
Industr y Mar ket
(a (a
collection collection
of sellers) Money of Buyers)

Information
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24 PRIYA RAMACHANDRAN, INDIA
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Modern Marketing System
 What is 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.
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 Questions To Asked By Marketing
Managers


1.What customers will we serve?

 What is our target market?
2.
3.How can we best serve these
customers?
 What is our value proposition?

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Segmentation & Target
Marketing
 Market Segmentation:
– Divide the market into
segments of
customers


 Target Marketing:
– Select the segment to
cultivate
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 Marketing Management
• Demand • Demarketing
Management – Temporarily or
– Finding and permanently
increasing reducing the
demand, also number of
changing or customers or
reducing shifting their
demand. demand

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 Evolution Of The Field Of
Marketing
Production Concept / Era roughly 1800 – 1900s

Product Concept / Era 1900s – 1920s

Selling Concept / Era 1920s – 1950s

Marketing Concept / Era 1960s – 1980s

Societal Concept / Era 1980s – 1990s

Relationship Concept / Era 1990s – present

PRIYA RAMACHANDRAN, INDIA 29

 Evolution Of Business Models And
The Role Of Marketing

Societa
Product Produc Sellin Marketing l
ion t g Mktg

As
As business
business philosophy
philosophy has
has evolved,
evolved, so
so has
has the
the
role
role of
of marketing…customer
marketing…customer satisfaction
satisfaction is
is now
now
at
at the
the core
core of
of most
most successful
successful corporations
corporations
PRIYA RAMACHANDRAN, INDIA 30
 Societal Marketing
Concept
Society
Society
(Human
(Human Welfare
Welfare))

Societal
Societal
Marketing
Marketing
Concept
Concept

Consumers
Consumers Company
Company
(Wants)
(Wants) PRIYA RAMACHANDRAN, INDIA (Profits)
(Profits) 31
Dimensional Differentiation of Selling &
Marketing
S.No. Dimension Selling Marketing

1 Concept Integral part of Broader concept, includes

Marketing Selling, Brand, MR,
Distribution, Promotion,
and Strategy

2 Objective Transaction Exchange, Customer &

Demand Management

3 Target Buyer Needs/Wants of the

customer

4 Focus Product Brand/Service

5 Operating Platform Price Value

PRIYA RAMACHANDRAN, INDIA 32

Dimensional Differentiation of Selling &
Marketing
S.No. Dimension Selling Marketing

6 Strategy Salesforce & Promotion Marketing Mix

7 Period Short term Long term

8 Controls Sales, Delivery, Customer Satisfaction, Market

Collections Share
9 Skills Selling, Communication Analytical

10 Orientation People Team

11 Begins When you have a product Much before and long after a
product

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PRIYA RAMACHANDRAN, INDIA 34
Recap - What is Marketing?

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 Recap - What is Marketing?

• Process by which individuals and

groups obtain what they need
and want through creating and
exchanging products and value
with others.

• More simply: Marketing is the

delivery of customer satisfaction
at a profit.
• PRIYA RAMACHANDRAN, INDIA 36
 Marketing Management
Philosophies
•Consumers favor products that are
Production
Production Concept
Concept available and highly affordable
•Improve production and distribution

•Consumers favor products that offer

Product
Product Concept
Concept the most quality, performance, and
innovative features

•Consumers will buy products only if

Selling
Selling Concept
Concept the company promotes/ sells these
product

•Focuses on needs/ wants of target

Marketing markets & delivering satisfaction
Marketing Concept
Concept better than competitors

•Focuses on needs/ wants of target

markets & delivering superior
Societal
SocietalMarketing
MarketingConcept
Concept value
•Society’s well-being
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 The Marketing
Concept
 The idea that an organization
should try to satisfy customer’s
needs through coordinated
activities that allow it to achieve its
own goals (profit).


– Adopt Consumer Orientation

– Utilize Research
– Organizational Coordination
PRIYA RAMACHANDRAN, INDIA 38
 Customer-Driven Marketing

How many of us would



have thought to ask

for a “wearable” PC?


Marketers must often



understand customer
needs even better
than customers
themselves do.
PRIYA RAMACHANDRAN, INDIA 39
Toolbox Of Every Marketer

Marketing
 is all
about managing the
four P’s:
èProduct
èPrice
èPlace
èPromotion


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 The 4 Ps & 4Cs

Marketing
Mix

Place
Product

Convenience
Customer
Promoti
Solution Price
on

Customer Communication
Cost
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 Marketing Mix and the
Customer
 FOUR P’S  FOUR C’S
• Product • Customer
• Price solution
• Place • Customer cost
• Promotion • Convenience
• Communication

PRIYA RAMACHANDRAN, INDIA 42

 Who is a Customer ?

A CUSTOMER IS . . .

Anyone who is in the

market looking at a
product / service for
attention, acquisition,
use or consumption
that satisfies a want
or a need
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Customer Gyan

 CUSTOMER has needs,
wants, demands and
desires

 Understanding these
needs is starting point of
the entire marketing

 These needs, wants ……
arise within a framework
or a marketing
ecosystem

 Understanding both the
needs and the
ecosystem is the starting
point of a long term
relationship
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 How Do Consumers Choose Among
Products & Services?

Value - the value or benefits the



customers gain from using the product

versus the cost of obtaining the
product.


Satisfaction - Based on a comparison of



performance and expectations.

– Performance >Expectations =>
Satisfaction
– Performance < Expectations =>
Dissatisfaction

PRIYA RAMACHANDRAN, INDIA 45

 Customers are really looking for
Problem Solution

As a priority , we must

bring to our customers
“WHAT THEY NEED”
We must be in a position

to UNDERSTAND their
problems
Or in a new situation to
give them a chance to
AVOID the problems

PRIYA RAMACHANDRAN, INDIA 46

Customer Looks For Value
Value = Benefit / Cost
Benefit = Functional Benefit + Economic

Benefit + Emotional Benefit

Cost = Monetary Cost + Time Cost +
Energy Cost + Psychic Cost

PRIYA RAMACHANDRAN, INDIA 47

 Customer Relationship
Management

The overall process



of building and
maintaining
profitable customer
relationships by
delivering superior
customer value and
satisfaction.
– Acquiring
customers
– Keeping
customers
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– Growing
Customer Perceived Value

Customer’s


evaluation of the
difference
between all of the
benefits and all of
the costs of a
marketing offer
relative to those
of competing
offers.
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 Customer Perceived Value
 Is FedEx’s service
worth the higher
price?
 thinks so.


It promises reliability,


speed, and peace of

mind.


FedEx ads say,

“Need to get it there

or else? Don’t worry.

There’s a FedEx for
PRIYA RAMACHANDRAN, INDIA 50
Customer Satisfaction
Dependent
 on the
product’s perceived
performance relative to
a buyer’s expectations.
– Customer
satisfaction often
leads to consumer
loyalty.
– Some firms seek to
DELIGHT
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INDIA by
51
Drivers of Customer
Satisfaction
Many aspects of the firm’s value


proposition contribute to customer

satisfaction:
– The core product or service offered
– Support services and systems
– The technical performance of the firm
– Interaction with the firm and it
employees
– The emotional connection with
customers


Ability to add value and to



differentiate as a firm focuses more

on the top levels
PRIYA RAMACHANDRAN, INDIA 52
Customer Relationships
Loyalty
 and retention
programs build
relationships and may
feature:
– Financial Benefits
• EX: Frequency marketing
programs
– Social Benefits
• EX: Club marketing
programs
– Structural Ties


Focus is on relating
directly to profitable
customers, for the
PRIYA RAMACHANDRAN, INDIA 53
longterm.
Customer Relationship
Levels

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The Relationship Marketing
Continuum
• First Level:
 Focus on
Price
•
• Second
Level:
 Social
Interactions
•
• Third Level:
Interdepende
PRIYA RAMACHANDRAN, INDIA 55
  Three Levels of Relationship
Marketing
Characteristic Level 1 Level 2 Level 3
Primary bond Financial Social Structural
Degree of Low Medium Medium to high
customization
Potential for Low Moderate High
sustained
competitive
advantage

Examples Jet Airways’ Bullet Club, Royal Federal Express’

Frequent Flyer Enfield Motorcycles Power Ship
Programme Jet Official community program
Privilege (JP)

PRIYA RAMACHANDRAN, INDIA 56

 Partner Relationship
Marketing
• Marketing partners help create customer
value and assist in building customer
relationships.
• Partners inside the firm:
– All employees customer focused
– Teams coordinate efforts toward
 customers
• Partners outside the firm:
– Supply chain management
– Strategic alliances
• PRIYA RAMACHANDRAN, INDIA 57
 Customer Loyalty &
Retention
Customer
 Share of
Lifetime Value Customer
– The entire  The share a
stream of company
purchases gets
that the of the
customer customers
would purchasing in
make over their product
a lifetime categories.
of 

patronage.
PRIYA RAMACHANDRAN, INDIA 58
Customer Equity

The
 combined
discounted
customer lifetime
values of all the
company’s
current and
potential
customers.
– Classify
customers
by loyalty
PRIYA RAMACHANDRAN, INDIA
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potential
Customer Relationship Groups

PRIYA RAMACHANDRAN, INDIA 60

 The real differentiator of
customer – centricity in a
commoditised world of Indian
markets is
Customer Service !
PRIYA RAMACHANDRAN, INDIA 61
New Marketing Challenges
New
Marketing
Landscape &
Information Nonprofit
Technology
Marketing

Ethical
Concerns Globalization

Changing
World
Economy

PRIYA RAMACHANDRAN, INDIA 62

 The Internet
• The technology behind a New
Economy
• Applications:
– “Click-and-mortar” companies
– “Click-only” companies
– Business-to-business e-commerce
(online transactions crossed the $4.3
trillion mark by 2005)
 >50,000 companies use the Internet
to do business (International Data Corp, IDC
estimates)
PRIYA RAMACHANDRAN, INDIA 63
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Till We Meet Again…

iAdios,


Amigos!

PRIYA RAMACHANDRAN, INDIA 65