Principals of Marketing - Module I PDF

Module I Principals of Marketing  Marketing Definition Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals....

Module I Principals of Marketing  Marketing Definition Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals. AMA The aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. Peter Drucker  Marketing Definition Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and exchanging products and services of value freely with others. Need Want Desire  Needs, Wants, and Demands Needs are the basic human requirements such as for air, food, water, clothing, and shelter. Needs become wants when directed to specific objects that might satisfy the need. Demands are wants for specific products backed by an ability to pay.  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 initial price, is low.) 3.Unstated needs (The customer expects good service from the dealer.) 4.Delight needs (The customer wouldlike the dealer to include an onboard GPS system.) 5.Secret needs (The customer wants  Market Segmentation Market Segmentation is the sub dividing of customers into homogenous sub set of customers where any sub set may be selected as market target to be reached with distinct marketing mix. - Kotler The process of defining and subdividing a large homogenous market into clearly identifiable segments having similar needs, wants or demand is called 2/23/20 Jitendra Patel, Assistant 6 22 Segmentation Professor ,PIMR  Need for Segmentation To develop Marketing Activities Increase market effectiveness Greater customer satisfaction Create savings To overcome competition effectively 2/23/20 Jitendra Patel, Assistant 7 22 Professor ,PIMR  The Good Segment Must be Well Defined Small Manageable Targeted and Focused. Profitable Substantial Size 2/23/20 Jitendra Patel, Assistant 8 22 Professor ,PIMR  Basis of Market Segmentation Segmenting Consumer Markets Geographic Demographic Psychographic Behavioral 2/23/20 Jitendra Patel, Assistant 9 22 Professor ,PIMR  Targeting Targeting is the second stage of the SEGMENT "Target" POSITION(STP) process. After the market has been separated into its segments, the marketer will select a segment or series of segments and ‘target’ it/them. Resources and effort will be targeted at the segment. 2/23/20 Jitendra Patel, Assistant 1 22 Professor ,PIMR 0  Targeting Consumer Targe t Unawar Awar e e Not Tire Yet Tired d Negativ Favorabl Neutr Rejecte Switche Use e e Opinio al Opinion r r r n Moderat Heav Light e User y User User 2/23/20 Jitendra Patel, Assistant 1 22 Professor ,PIMR 1  Criteria for Selecting Target Size: The market must be large enough to justify segmenting. If the market is small, it may make it smaller. Difference: Measurable differences must exist between segments. Money: Anticipated profits must exceed the costs of additional marketing plans and other changes. Accessible: Each segment must be accessible to your team and the segment must be able to receive your marketing messages Focus on different benefits: 2/23/2022 Jitendra Patel, Assistant Professor ,PIMR 12  Target market strategies Single Segment g Strate y Selective n Specializatio Product Specialization Market Specialization Full Market 22 Coverage 2/23/20 Jitendra Patel, Assistant Professor ,PIMR 1 3  Full Market Coverage is done in three way Undifferentiated, Concentrated, Strategy Description Differentiated Example Sending the same Promoting the city as a historic Undifferentiate promotional destination by placing ads in d message to widely read newspapers everyone Designing a promotional Promoting the city as historic Concentrated message that by targeting elderly members communicates the of historical societies by benefits desired by a placing ads in their newsletters single specific segment Designing more than Also targeting families by Differentiated one promotional communicating a message, with each promotional message about communicating the importance of children different benefits learning history 2/23/20 Jitendra Patel, Assistant 1 22 Professor ,PIMR 4  Positioning The place a product occupies in consumers’ minds relative to competing products. 2/23/20 Jitendra Patel, Assistant 1 22 Professor ,PIMR 5  Scope of Marketing Goods Services Experience s Events Persons Places Properties Organizati ons Informatio n  MARKETERS AND PROSPECTS A marketer is someone who seeks a response— attention, a purchase, a vote, a donation—from another party, called the prospect  Eight demand states are possible: 1.Negative demand—Consumers dislike the product and may even pay to avoid it. 2.Nonexistent demand—Consumers may be unaware of or uninterested in the product. 3.Latent demand—Consumers may share a strong need that cannot be satisfied by an existing product. 4.Declining demand—Consumers begin to buy the product less frequently or not at all. 5.Irregular demand—Consumer purchases vary on a seasonal, monthly, weekly, daily, or even hourly basis. 6.Full demand—Consumers are adequately buying all products put into the marketplace. 7.Overfull demand—More consumers would like to buy the product than can be satisfied. 8.Unwholesome demand—Consumers may be attracted A Simple Marketing System  MARKETS Consumer Markets Business Markets Global Markets Nonprofit and Governmental Markets  Product or Offering A product is any offering that can satisfy a need or want, such as offerings of goods, services, experiences, events, persons, places, properties, organizations, information, and ideas. A brand is an offering from a known source. These associations make up the brand image. All companies strive to build a strong, favorable brand image.  Marketing Channels Communication Channels – deliver and receive messages from target buyers and include newspapers, magazines, radio, television, mail, telephone, smart phone, billboards, posters, fliers, CDs, audiotapes, and the Internet. Distribution Channels - display, sell, or deliver the physical product or service(s) to the buyer or user. These channels may be direct via the Internet, mail, or mobile phone or telephone or indirect with distributors, wholesalers, retailers, and agents as intermediaries. Service Channels - warehouses,  Paid, Owned and Earned Media Paid Media - TV, magazine and display ads, paid search, and sponsorships, all of which allow marketers to show their ad or brand for a fee. Owned Media - Communication channels marketers actually own, like a company or brand brochure, Web site, blog, Facebook page, or Twitter account. Earned Media - Streams in which consumers, the press, or other outsiders voluntarily communicate something about the brand via word  CHIPOTLE – Case One Study of the fastest-growing restaurant chains over the last decade, Chipotle is committed to fresh food. The company supports family farms and sources sustainable ingredients from local growers who behave responsibly toward animals and the environment. It has over 1,600 stores and over 1.7 million social media fans–yet spends next to nothing on traditional paid media. Instead Chipotle engages customers through Facebook, Twitter, and other social media via its grassroots “Food With Integrity” digital strategy which puts the focus on what it sells and where it comes from.  Impressions and Engagement Impressions - Consumers view a communication that can be compared across all communication types. Impressions don’t provide any insight into the results of viewing the communication. Engagement - The extent of a customer’s attention and active involvement with a communication- Facebook “likes,” Twitter tweets, comments on a blog or Web site, and  Value and Satisfaction Value - Combination of quality, service and price (qsp), called the Customer Value Triad. Value perceptions increase with quality and service but decrease with price. Satisfaction - A person’s judgment of a product’s perceived performance in relationship to expectations.  Supply Chain The supply chain is a channel stretching from raw materials to components to finished products carried to final buyers.  The Marketing View of Competition What desire Which type Which What do I do I want of restaurant I South want to Indian eat? restaurant South Indian Lodhi Hotel Sports Home Food Mughlai Andh Video Film Restaurant Eat Out Fast Food Chinese ra Prades h Bhawa Desire Generic Product n Competit Competit Form Brand or or Competitor Competit or Jitendra Patel, Assistant 2/23/20 2 Professor, PIMR, 22 9  Competition Four levels of competition, based on degree of product substitutability: 1. Brand Competition: The firm considers other firms offering a similar product/service to the same customers at similar prices as its competitors. Example: Coca Cola would see Pepsi Cola as its main competitor. 2. Industry Competition: The firm sees as its competitors all firms making the same product or class of products. Example: Coca Cola would see all other soda manufacturers as its competitors.  Competition… 3. Form Competition: The firm sees its competitors as firms manufacturing products that supply the same service. Example: Coca Cola would see all other carbonated beverages manufacturers as its competitors. 4. Generic Competition: The firm sees its competitors as firms that compete for the same consumer dollars. Example: Coca Cola would see all other beverages suppliers as its competitors. Four C’s of Marketing Communication Robert Lauterborn suggested that the sellers’ four Ps correspond to the customers’ Four Ps four Cs Four Cs Product Customer Price solution Place Customer Promoti cost on Convenience Communicat  Marketing Environment A company’s marketing environment consists of the task environment of actors and the broad environment that affect the company’s ability to develop and maintain successful transactions with its target customers.  Task Environment The task environment includes the immediate actors involved in producing, distributing, and promoting the offering, including the company, suppliers, distributors, dealers, and the target customers. Material suppliers and service suppliers such as marketing research agencies, advertising agencies, Web site designers, banking and insurance companies, and transportation and telecommunications companies are included in the supplier group. Agents, brokers, manufacturer representatives, and others who facilitate finding and selling to customers are included with distributors and dealers.  Broad Environment The broad environment consists of six components: 1. Demographic Environment 2. Economic Environnent 3. Natural Environment 4. Technological Environment 5. Political-legal Environment 6. Social-Cultural Environment  Colgate- Palmolive’s Total Global Branding Strategy Colgate- Palmolive has had global success with its Colgate line of tooth-care products. The products and their packaging design do not vary from country to country; the only thing that Forces (Macro) & Actors (Micro) Broad Forces Political/ Technologi Legal cal Task Actors Customers Supplie Competitor Compa rs s ny Intermedia Publics/ rie s Stakeh Economic olders Social/ Cultural Marketing Management Philosophies There are five alternative concepts under which organizations conduct their marketing activities: 1. The Production Concept 2. Product Concept 3. Selling Concept 4. Marketing Concept 5. Societal Marketing Concept  Production Concepts The production concept, one of the holds oldest that busine in consumers ss, prefer that are widely inexpensive. availableand produc ts Managers of production-oriented businesses concentrate on achieving high production efficiency, low costs, and mass distribution.  The Product Concept Consumers favor those products that offer the most quality, performance, or innovative features. It on making products focus improving superiorthem buyers over can appraise quality time, andand performance. assuming that  The Selling Concept Focus on aggressive selling and promotion effort Practiced aggressively with unsought goods Aim is to sell what they make rather than make what the market wants.  The Marketing Concept Achieving organizational goals consists companybeing of more effectivethan the competitors in its creating, communicating customer value and delivering, to its chosen target markets. The marketing concept rests on four pillars: target market, customer needs, integrated marketing, and profitability.  Holistic Marketing Concept Internal Marketing focus on motivati hiring, able employees training, and who want to ng serve custome Marketing aims to rs satisfying long-term build relationships mutually with key Relatio constituents in order to earn and retain their business. nship Performance Marketing requires understanding the financial and nonfinancial returns to business and society from marketing activities and programs. Integrated Marketing occurs when the marketer devises marketing activities and assembles marketing programs to Holistic Marketing Dimensions Value Creation Process Growth Organic + Economic merger/acquisiti Value Creation on + alliances Innovatio Margin n New ROIC- products cost + new of methods +new Capital markets  The Value Delivery Process The traditional view assumes that the company knows what to make and that the market will buy enough units to produce profits for the company. The value delivery process begins before there is a product and continues through development and after launch. Each phase has cost implications. 1. Choosing the value before any product exists. 2. Providing the value - product features, prices, and distribution. 3. Communicating the value - utilizing the Internet, advertising, sales force, and any other communication tools to announce and promote the product.  Current Trends Reengineering: From focusing on functional departments to reorganizing by key processes, each managed by multidiscipline teams. Outsourcing: From making everything inside the company to buying more products from outside if they can be obtained cheaper and better. Virtual companies outsource everything, so they own very few assets and, therefore, earn extraordinary rates of return. E-commerce: From attracting customers to stores and having salespeople call on offices to making virtually all products available on the Internet. Business-to business purchasing is growing fast on the  Current Trends Benchmarking: From relying on self- improvement to studying world-class performers and adopting best practices. Alliances: From trying to win alone to forming networks of partner firms.24 Partner–suppliers: From using many suppliers to using fewer but more reliable suppliers who work closely in a “partnership” relationship with the company. Market-centered: From organizing by products to organizing by market segment. Global and local: From being local to being both global and local. Decentralized: From being managed from  Major Adjustment in Changing Environment Relationship marketing Customer lifetime value Customer share Target marketing Individualization Customer database Integrated marketing communications Channels as partners Every employee a marketer