basics of marketing mba ii

8/7/2019 Basics of marketing MBA II

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Basics of marketing

Market / marketing/CustomerNeed / want / demand

concepts / philosophy /process

Difference between selling & marketingMarketing management

Marketing mix

environment

STP/Market research/communication

Customer satisfaction /feedback1


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Basics relationships

Customer

Market

Product / service Marketing activities

Profitability

Customer satisfaction

CREATE VALUE CAPTURE VALUE THROUGH

BUILDING RELATIONSHIP

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Market

from Latin word Marcatus which meansplace where business is conducted

A place where customers of similar need exist A place or region where buyer & seller are in

free competition with each other

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marketing

Marketing starts with the term Market which is a set ofactual and potential buyers . Buyer or customer is onewho buys the product form marketers.

Marketing is a broad term comprising of performances ofall the functions related to assessing, stimulating andfulfilling the need of the customers achieving their bestpossible satisfaction .

Marketing is the process of creating values for customersand building strong customer relationship in order tocapture value from customer in the form of sales, profit andlong term relationship

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TYPES OF CUSTOMERS

03 TYPES

1. Attached to company

2. Attached to competitor3. undecided

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marketing

Process of satisfying the need of a customer

and achieving the objectives in return

Creation of value for the customer as per hisneed and capture the value in exchange by

establishing relation with the customer and

achieving his satisfaction

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It is customer oriented approach

It is profitability oriented approach

It is optimum resource utilization approach It begins and ends at customer

it covers sales & after sales with respect to

customer satisfaction

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Features of marketing

Customer oriented produce & sell as perdemand of the customer

System approach all activities must beintegrated and planned

Dual objective - best service/product and bestprofit

Social approach social welfare ,apart fromcustomer welfare to be taken cared

MIS adequate and accurate information ofcustomer, need, and competition helps inplanning, action and control process

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Marketing process Process includes market place, demand,

marketing program, strategy, customerrelationship, satisfaction, profit and fulfillment ofcustomer needs capturing values from customer

it is a five step process ; 1) understanding the market and customer needs 2)design a customer driven marketing strategy 3) construct a marketing program that delivers

superior values 4)build profitable relationship and create

customer delight 5) capture value in return from customer as profit

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Understanding steps

1) need/ wants/demand Need- state of felt deprivation Wants-the form human need shaped by individual Demand wants supported by buying power 2) market searching that set of targeted buyers with

common need for the product 3)designing strategies- building profitable relationshipwith customers

production concept making availability product concept quality product selling concept - large scale selling to force

customers marketing concept customer need satisfaction social marketing - balancing profit, needs and

social interests

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Marketing concepts( Evolution )

Evolution of marketing concept

production concept

Product concept Selling concept

Marketing concept

Social marketing concept

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Factors responsible for growth of

marketing concept

Population growth

Growing households

New attitude towards lifeIncome growth

Technological changes

Growth of mediaGrowth of channels

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Advantages of marketing concept

Long term success if needs are recognized

Enables Capitalize opportunities

Customer demand receives top consideration

Enables Effective planning and development More emphasis on research and innovation

Provides integrated view of business

interdependence of all sections

Interest of organization and society harmonized

Marketing research provide vital information todecision making

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philosophy of marketing

Customer orientation satisfaction theobjective

Marketing information system adequateinformation about customer / needs andcompetition

System approach all marketing activitiesmust be properly integrated and coordinated

Dual objectives- profitability and customersatisfaction

Social orientation- broaderconcept . createsatisfied customers and contribute to the socialwelfare. Concern for environment trends.

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SELLING vs Marketing

Selling is part of marketing

Short term- long term

Profit oriented customer satisfaction oriented

Product oriented need base production

Company oriented market oriented

Cost determines the price- consumer determines

the price Converting goods into cash-converting consumer

need to product

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Marketing managementManagement which looks after the related marketing

activities towards achieving the objectives oforganization

Marketing management

Marketing + management

Management is a process of decision making andcontrol over the action of all concerned activities andhuman beings for attaining the pre determined goals

Marketing management is a creative management

function which promotes trade and employment byassessing consumer need and by initiating research and

development to meet them

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Functions

Planning

Implementation

Organization Control

analysis

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Responsibilities of marketing

management

Market analysis

Determining market goals

Organizing marketing activities Assembling

Product management

Controlling marketing activities

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Objectives of marketing management

Increase in profits

Growth of company

Increase sale volume Customer satisfaction

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Social functions

1. Survival under changing environment of demand and

competition survival for self and connected employeesand network

2. Profitability- it is indicator of efficiency but social normsof non exploitation of customers & employees must beadhered too .Black marketing , non fare pricing ,

adulteration and unfair means are to be avoided. 3.Service being road to profitability too, service to

customer must be on top as is serves the society also.Consumer protection must be followed over and aboveevery thing

4. Social responsibility being in socio economicenvironment, obligation to meet social responsibilitiestowards employees, community and public. Company isexpected to act as good citizen in public . Responsibilitiestowards govt. and also expected.

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MARKETING MIX

The combination of marketing methods ordevices towards the objective of marketing ,iscalled marketing mix

Basic 4 Ps

ProductPrice

Promotion

Physical distribution

Additional 3 PsPerception

Persistence

packaging21


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Elements of marketing mix

Decision on overall frame work

Decision on product

Decision on price

Decision on promotion

Decision on distribution and physical

handling

Decision on Sales force

Decision on Market researchDecision in one area affects all other areas,the are closely interrelated and form the

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Product mix-

product rangeService / after sales

Brand

Package*Warranty

Style/ design

color scheme

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Price mix

Pricing strategy/policy

discounts Allowances

margin

Terms of credit

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Promotion mix

Personal selling

Advertisement Publicity

Sales promotion- dealers aid & customer aid

Word of mouth

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Physical Distribution mix

Distribution channels

wholesalers

retailers

mercantile agentsPhysical distribution

Transportation Warehousing

inventory

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Factors influencing marketing mix

a) Variables related to market consumer behavior

competition

distribution pattern

govt. control

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b)Variable related to Product -

product planning

branding

packagingchannel of distribution

personal selling

advertisingpromotion

market research

physical distribution28


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Marketing process

ConcentrationDispersion

equalization

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ar e ng unc ons:

Buying raw material at right time at right place at rightprice

Selling at targeted market , at defined price ,at right profit,at right time at

Product planning and development

Standardization of product- as per requirement of thecustomer

Financing arranging finance for the production and related

activitiesDistribution- arranging channel of distribution/transportation

Risk bearing- during the waiting period from production tosale

PricingPackaging

Managing sales force

Market feed back- though management information systemwhich collects, processed and interpretedhelp management decisions

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Marketing planning

Analysis of market opportunity

Marketing objectives to match

marketing opportunity in a competitive

market

Marketing strategy providing market

segmentation and market share

Marketing mix formation

Controlling the marketing plan

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MARKETING ENVIRONMENT

The factors and forces affecting the

marketing managements ability to build

and maintain successful relationship withtarget customers are called environment

Any organization works under system

approach which consists of inputs,processor ,outputs and feed backs

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Microenvironment- factors that affect its ability

to serve its customers

Macro environment- societal factors that affects

microenvironment

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1)The company interrelated groups of thecompany viz. purchase ,operations, finance

production management etc. form internal

environment which effect the marketing

management functions a great deal.

2) Suppliers suppliers form an important

link in any companys delivery system and

effect customer satisfaction and selling varymuch

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3) Marketing intermediaries- firms that help the

management to promote ,sell/ resell, store,transport ,finance etc. are playing very important

role in the performance of marketing functions of

any management

4) Customer markets- various types of customermarkets effect marketing environment

Individual & household

Business market for their products

/serviceResellers market

Government market

International market

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5) Competition- company must provide

greater customer value than

competitors according to their status

and analysis of market competitors

6) Publics group that can have impact

on the organizational ability viz.Financiers

Media

Internal

Local publicConsumer organization

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Macro environment

Demographic forces human

population as per size , location, age ,

density, all affect the marketing

functions

economic forces -changing values and

income status effecting a lot

natural forces shortages of raw

material, pollution ,govt. intervention,

natural environment existing etc.

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technological forces - with fast

changing technologies in every field it isvery difficult for companies to make

modifications and stand in competition

political forces changes in political

scenario , laws, pressure groups etc.

affects the company

cultural forces according to the

cultural environment, institutions andbeliefs

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CONSUMER BEHAVIOR ( buyer

behavior)

It is defined as all psychological, social andphysical behavior of potential customers asthey become aware , evaluate, purchase,consume, and tell to others about product and

servicesDeterminants of consumer behavior

Inputs

Processing Outputs

Feedback loop

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FACTORS INFLUENCING BEHAVIOR

1. Cultural factors

Every group or society has its own culture

that influence buying behavior and it changesfrom place to place

2. Social factors

family , groups, social roles, and status

Income/ occupation/ education/wealth

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Upper class/ middle class/working class/lower class

Group a persons behavior is influenced by smallgroups

Membership group the group where a personbelongs to.

Reference group they affect directly or indirectly .

customers are exposed to new life style and behavior.Influence their personal attitude , self concept and

create pressure to affect their choices of brand andproduct

Aspiration group where person wishes to join

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Opinion leader is the person or persons ;

within a reference group ;who with their

experience, knowledge, special skill

,personality or some other characteristics,

affect the group for their preferences

Family family members are the strongest

influencer of the buyer behavior

Role and status

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SegmentationIn order to provide right product at right price to

right customer, companies believe in targeting thespecific buyers with similar needs and buyingbehavior in the market instead of going formasses.These buyers have greater interest in thevalues created best for them

BASES OF SEGMENTATION

customer based segmentation

product related segmentation

competition related segmentation

MARKET SEGMENTATION, TARGET MARKETING

AND POSITIONING

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customer based segmentation

Geographical segmentation- dividing the market into

geographical units such as nations, countries, regions ,cities, density of population ( viz. urban, rural), climateetc.

Company may decide to operate in one or more or allsegments, but pay attention to them according to

geographical needs

Demographic segmentation dividing the market intogroups based on age , sex, family size, family life cycle ,income , occupation, education, religion, generation,

nationality etc.This is the most popular way of segmentation because

the needs and usage vary closely with such variablesand easy to measure than other variables and alsoeasier to reach effectively to the customers

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Psychographic segmentation -

Social class such as lower/ middle/upper

middle/ higher /working class etc.

Lifestyles - such as achievers, survivors,

strivers

Personality- such as ambitious, compulsive,

authoritarian etc.

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Behavioral segmentation

Occasions special occasion, regular occasion

Benefits- quality/service/convenience/economy

User status- non user/ftu /potential user/ex-user/potential user

User rates- light user/medium/heavy user

Loyalty status none /medium/strong/absolute

Readiness stage- unaware/aware/informed//interested

Attitude towards product

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PRODUCT RELATED SEGMENTATION

product use situation product is selected by a customerdepending upon the use situation

benefits segmentation according to use the customerslook for

consumption heavy , medium and light use markets ofproduct

decision criteria what criteria is being used by customersfor evaluation of product

price

perceived quality / service service offered

technology

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COMPETITION BASED SEGMENTATION

hard core loyal- continue to by over and again

soft core loyal loyal to two three brands

switchers change brand easily

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Multiple segmentation bases

Marketers rarely limit their segmentation

analysis of customers to one or few variables

but use multiple segmentation bases to

identify smaller and better defined target

group. This provides powerful tool for

segmenting market, refining demand

estimates, selecting target market and shapingpromotional messages

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STAGES OF MARKET SEGMENTATION


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STAGES OF MARKET SEGMENTATION

marketers believe that buying behavior and benefits arethe best basis for business segmentation

survey stage - surveys of market by

a.focus group discussion and in depth interview to getinsight into customer motivation , attitudes , behavior

b. sample group of consumers with questionnaire to

collect data on brand awareness, attributes sought inthe product, usage pattern,demographic/psychological/media habits ofrespondents

analysis stage collecting data , it is analysed using factor

analysis . differentiation of segments is done to clusterthe customers into different groups

profiling stage each cluster is profiled in terms ofconsumption habits , behavior ,attitude etc.

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Requirement for effective


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Requirement for effective

segmentation

Measurable- the size, purchasing power and profiles of segmentcan be measured

Accessible- can be reached and served effectively

Substantial- should be largest possible homogeneous worthperusing a tailor made marketing program

Differentiable- should be differing conceptually and responddifferently from other segments to different marketing mixprograms

Actionable - effective programs can be designed for attracting and

serving segments Viable should be cost effective

Intensity in competition in the light of inter firm rivalry how muchit is intensive

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targeting

After segmenting the market, evaluation ofsegments is done to decide and select the targetsegment to operate with.This process consists

1.Evaluation of market segments

a)Segment size and growth-according to thecapacity to serve and gain more

b)Structural attractiveness- potential / power ofbuyers/ power of competitors

c)Company objectives and resources- enter onlythose, where you can provide superior valuesthan competitors

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2.Selecting target market segment- / targeting

strategies

a)Undifferentiated marketing ( mass marketing) /

standardization (very broad approach) with

concept of what is common in customers instead

of what is different and ignoring the segment

differentiation and just targeting mass. As it is notpossible to develop the product of such mass

customers this is facing difficulties

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c)Concentrated marketing- / focus ( niche

marketing) when company resources are

limited. Companies try for large share of small

market segment instead of small share of

large market segments. market is handled

more effectively, efficiently with fine tuning of

products and earn special reputation. Manycompanies apply this approach to gain large

status at later stages.

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d)Micro marketing ( narrow approach)- it is to reach individualcustomers through local marketing and personal marketing. It is thepractice of tailoring the product and program to suit the taste ofspecific individuals and locations

i)Local marketing- approach different groups locally to reacheffectively but sometime face problems of varied requirements andlogistics apart from fear of brand image due to varying messages in

different localities

ii)Individual marketing it is also called one to one, masscustomization or markets of one marketing.Tailoring program andmarketing to the need and preferences of individual customer. Masscustomization is being made possible with the help of detailed

database, quick production through modern technology, flexiblemanufacturing.This has made relation with the customers mostimportant than ever. Here customers are also searching for thequality product with the help of information received undercustomize marketing approach from companies.

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CHOOSING TARGET MARKETING


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CHOOSING TARGET MARKETING

STRATEGY Company resources- limited resources concentrated

marketing Product viability-uniform product-undifferentiated

marketing

variety product differentiation orconcentrated marketing

Products life cycle stage- introduction undifferentiatedmarketing

-mature stage differentiated marketing

Market variability if customers react similarly thenundifferentiated marketing

Competitors strategy-if competitor is already gone fordifferentiated marketing then one should not go forundifferentiated marketing but if they are usingundifferentiated or concentrated, one can go for the same

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BENEFITS / IMPORTACE OF MARKET


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BENEFITS / IMPORTACE OF MARKET

SEGMENTATION

Increase in sale volume recognizes multiple demand &sale accordingly , increase sale vis a vis multiple demand

Specialized marketingmarketing ,promotions can bedone for specialized segment and demand

Sound marketing programme- sound marketingprogramme can be prepared

Increase in marketing opportunities- manufacturers cancome more closer to particular group of customers andbecomes more responsive to changes

Better utilization of market resources- provides betteropportunities to tap resources

Other advantage-provides various market relatedinformation, to get help and evaluate activities

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Target marketing helps companies to be more

efficient and effective by focusing on the

segments that they can satisfy by reaching

the specific customers with offers specially

tailored for them that too most profitable

way

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POSITIONING OF PRODUCT

The way any product is defined by the customers onimportant attributes, the place the product occupiesin the mind of customers relative to the competingproducts is called product positioning. It involves the

unique benefits and differentiation of product w.r.t.competitors

Hence product positioning is the complex set of

perceptions ,impressions,and feelings that customershave for the competitive products

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choosing positioning strategy a)Identifying a set of possible competitive advantages

upon which to build a positionto provide superiorvalues than competitors ,companies begin withactually differentiating the offer to gain competitiveadvantage but then it must deliver the promisedadvantage or difference. It can differentiate on

following lines

product differentiation

service differentiation

channel differentiation people or personnel differentiation

image differentiation

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b)choosing the right competitive advantages. Choosing how manydifferences to promote and which differences to promote is the keyto success in positioning by any company.

This process of choosing the differences to promote is done as perfollowing criteria

Important the difference deliver a highly valued benefits to target

buyers Distinctive non similar to competitors, it should be distinctive

Superior superior to other ways to provide benefits to customers

Communicable- the difference is visible and communicable tobuyers

Preemptive ( difficult to copy) difficult to copy by anybody orcompetitors

Affordable buyers can afford to pay for the difference

profitable company can introduce the difference profitably

basics of marketing mba ii

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