Download - Module 1 - Nature and Scope of Marketing
Module 1: Nature and Scope ofMarketing
3. Global Markets and Marketing
2. The Dynamic Marketing Environment
1. The Field of Marketing
1. The Field of Marketing
Introduction
• Introduction - Self • Introduction – Students
– Name, Roll No– Educational background – Degree,
College– Home Town– Photograph– Why came to this college– Career aims and objectives
• Group Formation
Who makes what?
List B. CompaniesITC, Godrej, BHEL, Videocon, Voltas, HP, Britannia, L&T,Atlas, Bata, HLL, Wipro, Microsoft, P&G
List A. Products1. Air Conditioners2. Hamam soap3. Washing machines4. Power generators5. Sunsilk shampoo6. Lux Soap7. Safety Locks8. Dove9. Refrigerators10.Laptops
11. Biscuits12. Cement13. Office furniture14. Shoes15. Bicycles16. Computer Software17. Computer Hardware18. Cooking Oil19. Tooth Paste20. Detergent Powder
What does a Marketer Do?
What does a Marketer Do?
Why Bike(Analyze Needs)
Why Bike(Analyze Needs)
Bike Type (Product Plan)
Bike Type (Product Plan)
Which people? (Segment)
Which people? (Segment)
What Quantity? (Demand Forecasting)
What Quantity? (Demand Forecasting)
Where to Sell? (Distribution)
Where to Sell? (Distribution)
What to Charge? (Price)
What to Charge? (Price)
What & how to inform? (Promotion)
What & how to inform? (Promotion)
Who all will compete (Analyze Competitors) Who all will compete
(Analyze Competitors)
What if problem?(Warranty)
What if problem?(Warranty)
Marketing, Defined
Business activities designed to
PlanPrice
PromoteDistribute (Place)
Want-satisfying products to target markets
to achieveorganizational objectives
Business activities designed to
PlanPrice
PromoteDistribute (Place)
Want-satisfying products to target markets
to achieveorganizational objectives
Exchange – at the heart of Marketing
Between Organizations and/or Individuals
Between Organizations and/or Individuals Marketers and MarketsMarketers and Markets
Exchange – the essence of MarketingExchange – the essence of Marketing
Tangible/ Intangible goods, Services, Ideas,
places, people
Tangible/ Intangible goods, Services, Ideas,
places, people
Conditions of Exchange
Voluntary participation Voluntary participation 2 or More parties2 or More parties
Each has something of value for the other partyEach has something of value for the other party
Parties must communicateParties must communicate
Marketing Defined
Business activities designed to
PlanPrice
PromotePlace (Distribute)
Want-satisfying products to target markets
to achieveorganizational objectives
Business activities designed to
PlanPrice
PromotePlace (Distribute)
Want-satisfying products to target markets
to achieveorganizational objectives
Stages of the Evolution of Marketing
Promote throughSales and Advertising
Promote throughSales and Advertising
Sales-Orientation Stage
Sales-Orientation Stage
Increase SupplyProduce EfficientlyIncrease Supply
Produce EfficientlyProduct-Orientation
StageProduct-Orientation
Stage
Market-Orientation Stage
Market-Orientation Stage
Long-Run Customer Satisfaction
Long-Run Customer Satisfaction
How Should a Business Be Defined?
KodakWe make
Cameras and FilmsWe help Preserve
Beautiful Memories.
HLL We make and sell Soaps & Detergents
??
IBM We make Computer
??
SSIM We provide MBA Degree
??
Company Product orientedanswer
Market orientedanswer
Marketing Concept
Customer Satisfaction & Organizational
Success
A business philosophy that makes Customer Satisfaction as focal point of all
the activities of the business
A business philosophy that makes Customer Satisfaction as focal point of all
the activities of the business
CustomerOrientation
&Organization'sPerformanceObjectives
CoordinatedMarketingActivities
Implementing the Marketing Concept (Customer
Orientation)
Mass CustomizationProduce products with variety and
uniqueness
RelationshipsCustomer Relationship Management
(CRM)
Implementing the Marketing Concept (Coordinated Marketing
Activities)
Value CreationBenefits vs. Costs
QualityTotal Quality Management
Implementing the Marketing Concept
(Organizational Objectives)
Societal Marketing ConceptFulfill firm’s social responsibility
Performance MetricsReturn on the marketing investment
Marketing Program (A Market)
People or
Organizations
People or
Organizations
Moneyto
Spend
Moneyto
Spend
Willingnessto
Spend
Willingnessto
Spend
Needs to
Satisfy
Needs to
Satisfy
MarketMarket
Marketing Program (Market Segments)
Segments are subgroups of the market with similarities
Segments are subgroups of the market with similarities
WantsWants
ProductUse
ProductUse
BuyingPreferences
BuyingPreferences
Marketing Program (Target market)
MarketSegment
A
MarketSegment
C
MarketSegment
B
TARGET MARKET
A market segment at which the firmA market segment at which the firm directs its marketing programdirects its marketing program
A market segment at which the firmA market segment at which the firm directs its marketing programdirects its marketing program
Marketing Program (Position)
TARGET MARKET
Strategies and tactics to establish a unique positionStrategies and tactics to establish a unique position in the prospect’s mind so the product is in the prospect’s mind so the product is viewed in a distinctive and attractive way viewed in a distinctive and attractive way
Strategies and tactics to establish a unique positionStrategies and tactics to establish a unique position in the prospect’s mind so the product is in the prospect’s mind so the product is viewed in a distinctive and attractive way viewed in a distinctive and attractive way
DISTRIBUTION PROMOTION
PRODUCT PRICE
Ethics and Marketing
TRUSTBuilds
BusinessRelationships
CODE OF
ETHICS
CONFLICTSChallenges fromconflicting goals
ETHICSStandards
accepted by asociety
Importance of Marketing
Personally
Organizationally
Domestically
Globally
Creating Utility
Form utility Place utility
Time utility Information utility
Possession utility
Further references
• Visit www.nordstrom.com to check how they have been able to restore their position by further innovation.
• Visit www.harleydavidson.com to check what they do to work out a long term relationship with customers.
• Visit www.johndeere.com to check how they implement mass customization.
• Visit www.tatamotors.com and check how the company create value.
Key Terms and Concepts• Exchange• Marketing • Product-Orientation Stage• Sales-Orientation Stage• Market-Orientation Stage• The Marketing Concept• Customer Relationship Management
(CRM) • Mass customization • Total Quality Management (TQM) • Value• Societal Marketing Concept• Market • Market segments • Target market• Positioning • Marketing mix • Ethics • Creating Utility
2. The Dynamic Marketing Environment
Levels of External Forces
Macro LevelMacro Level
Influences that affect all firmsInfluences that affect all firms
Micro LevelMicro Level
Influences that affect a particular firmInfluences that affect a particular firm
External Macroenvironment Forces
Technology
Politicaland Legal
Forces
Social &CulturalForces
NaturalEnvironment
Competition
Company’sMarketingProgram
Demo-graphics
Economic
conditions
Demographics
People MakeMarkets
People MakeMarkets
DistributionDistribution GrowthGrowth
SizeSize
Characteristics of Populations
Characteristics of Populations
Key Demographics of India
>1 billion Population
growing @ 2%
>1 billion Population
growing @ 2%
Literacy 65%(1951 – 17%)
Literacy 65%(1951 – 17%)
Over 3.5 MillionEngineers &
Scientists
Over 3.5 MillionEngineers &
Scientists
Life Expectancy>62 Years
Life Expectancy>62 Years
2nd largest Market
(next to China)
2nd largest Market
(next to China)
Economic Factors
InflationInflationInterest Rates
Interest Rates
Stage of the Business
Cycle
Stage of the Business
Cycle
People withMoney to Spendand Willing to
Spend it
People withMoney to Spendand Willing to
Spend it
Key Economic Facts (Indian Environment)
Significant FDI,Vibrant CapitalMarket, High FE Reserve
Significant FDI,Vibrant CapitalMarket, High FE Reserve
Inflation(Moderate – High)
Inflation(Moderate – High)
Interest Rates(High)
Interest Rates(High)
Competition
Rivals for Customers’
Limited Buying Power
Rivals for Customers’
Limited Buying Power Substitute
ProductsSubstitute Products
Every Company
Every Company
BrandCompetition
BrandCompetition
Differential AdvantageDifferential Advantage
Social and Cultural Forces
People MakeMarkets
People MakeMarkets
BeliefsBeliefs
Socio-culturalPatterns
Changing Quickly
Socio-culturalPatterns
Changing Quickly
ValuesValuesLifestylesLifestyles
Key socio-cultural facts of India
7 Religions17 Languages7 Religions
17 Languages
Many Cultures, Tradition bound (Changing fast due
to exposure to lifestyle, Media, Globalization)
Many Cultures, Tradition bound (Changing fast due
to exposure to lifestyle, Media, Globalization)
More Health Conscious, Working Harder/Longer,
Premium on time
More Health Conscious, Working Harder/Longer,
Premium on time
Changing role of Women (Housewife-Employed women)
Changing role of Women (Housewife-Employed women)
Political and Legal Forces
Type of Governance
andDirection
Type of Governance
andDirection
GovernmentalRelationship
with Industries
GovernmentalRelationship
with Industries
Monetaryand
Fiscal Policies
Monetaryand
Fiscal Policies
Legislation - Social & Related
to Marketing
Legislation - Social & Related
to Marketing
Key facts of India's Political & Legal Environment
Political consensuson
Economic Growth
Political consensuson
Economic Growth
EconomicReforms, Moving rapidly to Market
economy
EconomicReforms, Moving rapidly to Market
economy
To operate within legal
framework of laws related to
Corporate affairs,Consumer protection,Employee protection,
MRTP etc
To operate within legal
framework of laws related to
Corporate affairs,Consumer protection,Employee protection,
MRTP etc
Key facts of India's Natural Environment
Rich naturalresources
(iron, coal, rareminerals,
ocean wealth)
Rich naturalresources
(iron, coal, rareminerals,
ocean wealth)
Tropical climate favours
agriculture and industry
Tropical climate favours
agriculture and industry
Good rainfall,Has strong
network of rivers
Good rainfall,Has strong
network of rivers
In energy,costs are
constantlyon rise
In energy,costs are
constantlyon rise
Technology
Affects HowMarketing isCarried Out
Affects HowMarketing isCarried Out
Altering Existing
Industries
Altering Existing
Industries
Impacts lifestyles, consumption patterns,
economic well-being
Impacts lifestyles, consumption patterns,
economic well-being
StartingNew
Industries
StartingNew
Industries
Stimulates Marketsand
Other Industries
Stimulates Marketsand
Other Industries
External Microenvironment of a
Company’s Marketing Program
Company’sMarketingProgram
MarketingInterme-diaries
TheMarket
MarketingInterme-diaries
Suppliers
Value Chain
Internal Environment
Internal Environment Affecting aCompany’s Marketing Activities
MarktgIntrmdries
MarketMarktg
IntrmdiariesMarket
Tech
nolo
gy
Pol
itica
lan
d Le
gal
Forc
es
Social &CulturalForces
Natural
EnvironmentCompetitio
n
Demo-graphics
Economic
conditions
Firm’s Marketing Environment
Key Terms and Concepts
•Environmental monitoring. •Demographics.•Economic Environment •Business Cycle •Inflation. •Interest rates •Differential advantage •Suppliers. •Marketing intermediaries•Channels of distribution.•Value Chain
3. Global Markets and Marketing
Lesson Objectives
• The significance of marketing to firms and countries
• The attractiveness of foreign markets• The challenges of designing international
marketing strategies• The alternative organizational structures• The international marketing mix issues
and concepts
Reasons for International Trade
Access to products
Comparative Advantage
Role of Export Trade in Selected Countries
INSERT TABLE 3.1
International Trade
Balance of PaymentsAccounting record of all
Transactions between countries
Trade BalanceDifference between imports and exports
Factors Affecting International Trade
TechnologyConsumer Preferences
Trade Barriers
Subsidized Industries
Tax Structure
Marketing Capability
Why International Marketing?
PotentialDemand
MarketSaturation
CustomerExpectations
Strategic Planning for International Marketing
RegionalStrategy
LocalStrategy
Global Strategy
Market Demand
Number of
people
Buying behavior
Ability to buy
Social and Cultural Environment
Family
Customs and Behavior
Education
Language Differences
Economic Environment
Infrastructure
Competition
Level of Economic Development
Political and Legal Forces
Trade Barriers
• Tariff• Import quota• Local-content law• Local operating laws
• Standards and certification
• Boycott
Political and Legal Forces
Trade AgreementsTrade AgreementsTrade AgreementsTrade AgreementsWorld Trade Organization
European Union
North American Free Trade Agreement
Asia-Pacific Economic Cooperation forum
Association of Southeast Asian Nations
Common Market of the South
WTO
EU
NAFTA
APEC
ASEAN
MERCOSUR
Structures for Operating in Foreign Markets
ExportingDirectly,or throughImport-ExportMiddlemen
CompanySalesBranches
LicensingForeignProducts
ContractManufact-uring byForeignProducers
Joint VenturesandStrategicAlliances
Wholly OwnedSubsidia-ries
MultinationalCorporat-ions
Lowinvolvementabroad
Highinvolveme
ntabroad
Designing the Marketing Mix
Market Research•Data availability•Infrastructure, etc
ProductPlanning
•Product extension•Product adaptation•New invention•Branding•Labeling
Pricing
•Cost Plus•Dumping•Countertrade or Barter
Distribution Systems
•Export/Import Agents•Export Merchant•Gray Marketing
Advertising
•Language•Format•Media etc
Key Terms and Concepts
• Balance of Payments
• Trade balance
• International marketing
• Global Strategy
• Regional strategy
• Local strategy
• Infrastructure
• Trade barriers
• Tariff
• Import quota
• Local-content law
• Local operating laws
• Standards and certification
• Boycott
• World Trade Organizations
• European Union
• North American Free Trade Agreement
Key Terms and Concepts
• Asia-Pacific Economic Cooperation forum
• Association of Southeast Asian Nations
• Common Market of the South
• Exporting
• Export merchant
• Export agent
• Company sales branch
• Contracting
• Licensing
• Contract manufacturing
• Franchising
• Direct foreign investment
• Joint venture
• Strategic alliance
• wholly owned subsidiary
• Multinational corporation
Key Terms and Concepts
• Trademark infringement
• Dumping
• Price differential
• Foreign exchange
• Countertrade or barter
• Cartel
• Gray marketing
• Bribes
