Marketing Management Notes PDF

MARKETING MANAGEMENT DR ANAND NANDWANI, ASSOCIATE PROFESSOR, MERI Any Difference? Marketing / Selling Difference between selling and marketing Basis Selling Marketing Starting point Factory Ma...

MARKETING MANAGEMENT DR ANAND NANDWANI, ASSOCIATE PROFESSOR, MERI Any Difference? Marketing / Selling Difference between selling and marketing Basis Selling Marketing Starting point Factory Market Focus Existing products Customers needs Ends Profit through volume Profit through customer satisfaction Marketing  According to Philip Kotler - "A social and managerial process by which individuals and groups obtain what they need and want through creating, offering, and exchanging products of value with others."  According to American Marketing Association, "Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.“  Marketing is the process by which a firm profitably translates customer needs into revenue. -Mark Burgess  Marketing is meeting the needs and wants of a consumer. -Andrew Cohen  Marketing is “The management process responsible for identifying, anticipating and satisfying customer requirements profitably.” — The Chartered Institute of Marketing Marketing Management  According to Philip Kotler, "Marketing Management is the analysis, planning, implementation and control of programmes designed to bring about desired exchanges with target audiences for the purpose of personal and of mutual gain. It relies heavily on the adoption and coordination of product, price, promotion and place for achieving responses.".  According to American Marketing Association, “Marketing management is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, services to create exchanges that satisfy individual and organisational goals”. Nature of Marketing  Marketing is a philosophy based on consumer orientation and satisfaction  Marketing is an Economic Function  Marketing is a Managerial function  Marketing is a social process  Marketing is a Legal Process by which Ownership Transfers  Marketing is a System of Interacting Business Activities Importance  Helps in Brand building  Helps in retaining the existing customer  Helps in attracting the new customer  Helps in competing more effectively  Helps in entering new markets Scope of Marketing  Study of Consumer Behaviour  Production Planning and Development Decisions  New Product Development Decisions  Pricing Policies Decisions  Distribution Decisions  Promotion Decisions Core Concepts of Marketing Core Concepts of Marketing  Needs, Wants and Demands  Products  Relationships and Networks  Markets  Marketers and Prospects  Value and Satisfaction  Exchange  Segmentation, Targeting and Positioning  Marketing Environment  Marketing Channels  Brands Needs, Wants and Demands  A human need is a state of deprivation of some basic satisfaction. A human need refers to basic human requirements.  e.g. food, shelter, water, etc.  Wants are the desires for specific satisfiers of needs.  e.g. Coke, French fries etc.  Demands are wants for specific products that are backed by an ability and willingness to buy them.  Wants become demands when supported by purchasing power Products  A product is anything that can be offered to satisfy a need or want.  It can consist of as many as three components: physical goods, services and ideas. Relationships and Networks  Relationship Marketing is the practice of building long term satisfying relations with the key parties- customers, suppliers and distributors.  The ultimate outcome of relationship marketing is the building of a unique company asset called a marketing network. Markets  A market consist of all the potential customers sharing a particular need or want. Marketers and Prospects  A Marketer is someone seeking one or more prospects who might engage in an exchange of values.  A prospect is someone whom the marketer identifies as potentially willing and able to engage in an exchange of values. Value and Satisfaction  Value is the consumer’s estimate of the product’s overall capacity to satisfy his needs. Exchange  Exchange is the act of obtaining a desired product from someone by offering something in return.  Two parties are engaged in exchange if they are negotiating and moving toward an agreement.  When an agreement is reached, we say that a transaction takes place.  Transaction is a trade of values between two or more parties.  CompetingConcepts / Marketing Philosophies Competing Concepts / Marketing Philosophies  Following are the competing concepts under which organizations can choose their marketing activities:  Production Concept  Product Concept  Selling Concept  Marketing Concept  Societal Marketing Concept  Holistic Marketing Concept Production Concept  This concept holds that consumers will favor those products that are widely/easily available and affordable/low in cost.  Managers who follow this concept concentrate on achieving high production efficiency and wide distribution. Product Concept  This concept holds that consumers will favor those products that offer the most quality, performance, or innovative features.  Managers who follow this concept focus their energy on making superior products and their improvement.  The product concept leads to the kind of marketing myopia- i.e. looking into a mirror, when they should be looking out of the window. Selling Concept  This concept holds that consumers, if left alone, will ordinarily not buy enough of the organizations products.  A firm using a sales orientation focuses primarily on the selling/promotion of a particular product, and not determining new consumer desires. Marketing Concept  This concept holds that the key to achieving organizational goals consist of being more effective than the competitors in integrating marketing activities toward determining and satisfying the needs and wants of target customers. Societal Marketing Concept  This concept holds that the organization’s task is to determine the needs, wants and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than the competitors in a way that preserves or enhances the consumer’s and the society’s well being.  The purpose of social marketing is societal benefit rather than commercial profit. Its purpose is to bring about positive health and social change. Holistic Marketing Concept  The holistic marketing concept looks at marketing as a complex activity and acknowledges that everything matters in marketing - and that a broad and integrated perspective is necessary.  Main components are: Internal marketing, Integrated marketing, Relationship marketing, Socially responsible MarketingMix (4 P’S of Marketing) Marketing Mix (4 P’S of Marketing)  Marketing Mix is the set of marketing tools that the firm uses to pursue the marketing objectives in the target market.  McCarthy popularized a four factor classification of these tools called the four 4’s:  Product,  Price,  Place, and  Promotion  Brooms and Bitner suggested the additional three P’s involved in Service Marketing:  People,  Process, and  Physical Evidence. Marketing Mix (4 P’S of Marketing) 4 C’s 4 C’s  In recent times, giving more importance to customer a new concept have been introduced, i.e. Concept of 4C's.  The Concept of 4C's is more customer-driven replacement of 4P's.  According to Lauterborn's the 4C's are - Consumer, Cost, Communication, and Convenience. 4 P’s vs. 4 C’s  Product Consumer  Price Cost  Place Convenience  Promotion Communication Marketing Environment Marketing Environment  The marketing environment refers to factors and forces that affect a firm's ability to build and maintain successful relationships with customers.  The term Marketing Environment refers to the forces and factors that affects the organisation ability to built and maintain good relationship with its customers.  The market environment is a marketing term and refers to factors and forces that affect a firm’s ability to build and maintain successful relationships with customers. Marketing Environment Marketing Environment Micro Environment  The micro environment refers to the forces that are close to the marketing organisation and directly impact the customer experience.  It includes the organisation itself, its suppliers, marketing intermediaries, customers, markets or segments, competitors, and publics.  Happenings in micro environment is relatively controllable for the marketing organisation. Macro Environment  Macro environment refers to all forces that are part of the larger society and affects the micro environment.  It includes demography, economy, politics, culture, technology, and natural forces.  The Marketing Process The Marketing Process  Situation Analysis V  Marketing Strategy V  Marketing Mix Decisions V  Implementation & Control I. Situation Analysis   SWOT analysis (strengths, weaknesses, opportunities, and threats)   PEST analysis (political, economic, societal, and technological) II. Marketing Strategy   Segmentation   Targeting   Positioning III. Marketing Mix Decisions  4P's (Product, Price, Place and Promotion) IV. Implementation and Control  At this point in the process, the marketing plan has been developed and the product has been launched. Given that few environments are static, the results of the marketing effort should be monitored closely.  As the market changes, the marketing mix can be adjusted to accommodate the changes.  Often, small changes in consumer wants can be addressed by changing the advertising message.  As the changes become more significant, a product redesign or an entirely new product may be needed.  The marketing process does not end with implementation - continual monitoring and adaptation is needed to fulfill customer needs consistently over the long- term. CONSUMER BEHAVIOUR Introduction Traditional View Management Front-Line People Customer Modern View Customer Front-Line People Management  Definition  “The behavior that consumers display in searching for, purchasing, using, evaluating and disposing of products and services that they expect will satisfy their needs.” - Schiffman and Kanuk  Reasons for Studying Consumer Behavior  Decision regarding channels of distribution  Decision regarding pricing policies  Decision regarding production policies  Decision regarding promotion policies  Decision regarding introduction of new products  Participants in The Consumer Buying Process  Initiator  Influencer  Decider  Buyer  User Consumer Decision Making Process  Problem Recognition  Types of problem recognition: Routine problems Emergency problems Evolving situation  Information Search  Sources of information search: Personal sources (family, friends, neighbors etc.) Commercial sources (advertising, sales persons, dealers, displays etc.)  Evaluation of Alternatives  Evaluation criteria: Price Features Quality Brand Country of origin Maintenance Resale value  Purchase Decision  Purchase intensions get converted into purchase actually only when situational factors act favorably.  Important factors at the POP: Physical surroundings Social surroundings  Purchase Decision  Reasons: Trial (First time user) Unavailability of the desired brand Variety seeking Impulse purchases  Post Purchase Behavior  Satisfied buyer: expectation = perceived performance  Dissatisfied buyer: expectation > perceived performance  Delighted buyer: expectation < perceived performance  Post Purchase Behavior  Satisfied / Delighted: Repurchases Word of mouth publicity Brand loyalty  Dissatisfied: Switching to other brand Viral marketing  Factors Influencing Consumer Behaviour  Personal (Age, gender, qualification, income)  Social (Family, reference group, roles and status)  Psychological (Motivation, perception, learning, attitude)  Cultural (Culture, subculture, social class)  Organizational Buying Behavior  Organizational /Business/ Industrial buying can be defined as the decision- making process by which formal organizations establish the need for purchase products and services and identify, evaluate, and choose among alternative brands and suppliers.  Difference Between Organizational and Individual Buying  Purpose  Type of Product  Quantity  Payment  Decision Making Process  Role Players  Involvement  Participants in The Business Buying Process  Initiators  Influencer  Gatekeepers  Approvers  Deciders  Buyers  Users  Major Influences on Business Buyers  Organizational factors (Centralized / Decentralized purchasing)  Environmental factors (Expected demand)  Interpersonal factors (Relationship with the suppliers and/or sales representatives)  Individual factors (Personal experience, expectation etc. of the owner) Organizational Buying Process  STP STP  Segmentation  Targeting  Positioning Segmentation  Market segmentation is a marketing strategy that involves dividing a broad target market into subsets of consumers who have common needs and priorities.  Methods for segmenting consumer markets: Geographic Segmentation, Demographic Segmentation, Psychographic Segmentation, Behavioristic Segmentation etc. Segmentation  Geographic Segmentation:  EAST / WEST / NORTH / SOUTH / CENTRAL  CITY / DISTRICT / STATE / COUNTRY Segmentation  Demographic Segmentation:   Age   Gender   Family size   Family lifecycle   Generation: baby-boomers, Generation X, etc.   Income   Occupation   Education   Nationality   Religion   Social class Segmentation  Psychographic Segmentation  Psychographic segmentation groups customers according to their lifestyle. Some psychographic variables include:   Activities   Interests   Opinions   Attitudes   Values Segmentation  Behavioristic Segmentation  Behavioral segmentation is based on actual customer behavior toward products.   Benefits sought   Usage rate   Brand loyalty   User status: potential, first-time, regular, etc.   Readiness to buy   Occasions: holidays and events that stimulate purchases Targeting  Strategies for reaching target markets:  Undifferentiated Marketing: It is a standardization strategy option, where the firm offers the same product, uses the same advertising, promotional, distribution, publicity, public relations and pricing strategies to different market segment.  Differentiated marketing strategy: One where the company decides to provide separate offerings to each different market segment that it targets.  Concentrated marketing: A strategy which targets very defined and specific segments of the consumer population. Positioning  A product‘s position is the place the position occupies in consumers‘ minds relative to competing products- Philip Kotler  The process where marketers try to create a product image or identity in the minds of their target market relative to competitive products.  It is all about placing a product / brand in the minds of the customer to occupy a stable, distinct and permanent place in their rational and conscious mind set.  Unique Selling Proposition Unique Selling Proposition  The unique selling proposition (USP), or unique selling point, or "'unique selling product"' or "' unique selling price"' is a marketing concept first proposed as a theory to explain a pattern in successful advertising campaigns of the early 1940s.  The USP states that such campaigns made unique propositions to the customer that convinced them to switch brands.  The term was developed by television advertising pioneer Rosser Reeves of Ted Bates & Company.  The term has been used to describe one's "personal brand" in the marketplace.  Today, the term is used in other fields or just casually to refer to any aspect of an object that differentiates it from similar objects.  THANK YOU