fundamentals of marketing management

8/8/2019 Fundamentals of Marketing Management

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BASICS OF

MARKETINGPRIYA RAMACHANDRAN

INDIA



PRIYA RAMACHANDRAN, INDIA 3

Some Interpretations AboutMarketing

– A specializedfunction withinthe organizationthat co-existswith otherfunctions such asHR, Finance andOperations

– A collection of

activities such asmarketingresearch,advertising,

public relations,

h

ich v ie w is co rre ct a n d w h y so




What is Marketing?

Simple Definition:

Marketing ismanagingprofitable

customerrelationships.




Goal of Marketing

A ttra ct n e w

cu sto m e rs b y

p ro m isin g

.su p e rio r va lu e

Keep and growcurrentcustomers by

deliveringsatisfaction.




Marketing - Old vs. New

Old view of marketing

Making a sale – “Telling & selling”

New view of marketing

Satisfying customerneeds




Marketing Defined

Marketing is a social and managerial process

by which individuals and groupsobtain what they need and want

through creating and exchanging products and value

with others.




A Simple Model of the MarketingProcess

Capture value from customers to create

&profits

customer equity




The Marketing Triad

NEEDS

WANTS

DEMAND

N d h d i




Need: A human need is astate of felt deprivation of

some basic satisfaction. Three types of needs exist, ,physical social and

.individual needs hysical Needs = ,Food, ,clothing shelter safety

ocial Needs = ,Belonging affection ndividual Needs =, , -Learning knowledge self expression




Want & Demand

Want:Form that a humanneed takes, asshaped by culture

and individualpersonality.Demand:Wants for specific

products that arebacked up by anability to pay

= Wants + BuyingPower

d




Need/WantFulfillment

Needs and Wants fulfilled

through a Marketing Offer : Some combination of products,

services, information, orexperiences offered to a market to

satisfy a need or want.




Product:Anything that canbe offered to

market forattention,acquisition, use or

consumption thatmight satisfy awant or need. Itincludes physical

objects, services,

What Satisfies Consumers’ Needsand Wants?




Service:A service is a formof product thatconsist of activities,benefits, orsatisfactionsoffered for salethat areessentiallyintangible and donot result in theownership of anything.Examples include

What Satisfies Consumers’ Needsand Wants?




Marketing Myopia

• Sellers pay moreattention to thespecific products

they offer than tothe benefits andexperiencesproduced by the

products.•

• They focus on the

“wants” and lose




How Do Consumers Choose AmongProducts & Services?

Value - the value or benefits thecustomers gain from using the productversus the cost of obtaining theproduct.

Satisfaction - Based on a comparison of performance and expectations.

– Performance >Expectations =>

Satisfaction – Performance < Expectations =>

Dissatisfaction




Exchange vs. Transaction

• Exchange: – Act of

obtaining adesired

object fromsomeone byofferingsomething inreturn.

• Transaction: – A trade of

values

betweentwoparties.

– One party

gives X toanotherparty andgets Y inreturn.Can




Marketers and Markets

Marketers are focused onstimulating exchanges withcustomers who make upmarkets – 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 thatmarketers have a detailedunderstanding of consumers,their needs and wants.




What is a Market?

• Root word: Mercor – to buy in the Latin

language

• The set of actual and potential buyers of aproduct.

•• These people share a need or want that can besatisfied through exchange relationships.

•• Thus a pharmaceuticals market = Doctors + Hospitals + Trade

•• In Economics, Market = Buyers + Sellers For Marketers, Sellers is Industry, Buyers is

Market

•




Simple Marketing System

Industry

(a

collection

of sellers)

Market

(a

collection

of Buyers)

Goods/services

Money

Communication

Information

M d M k ti S t




Modern Marketing System

S u p p l i e r s S u p p l i e r s

E n d U s e r M a r k e t E n d U s e r

M a r k e t

M a r k e t i n g I n t e r m e d i a r i e s

M a r k e t i n g I n t e r m e d i a r i e s

C o m p e t i t o r s C o m p e t i t o r s C o m p a n y ( M a r k e t e r )

C o m p a n y ( M a r k e t e r )

E n v

i r o n

m e

n t

E n v i r o n m

e n

t




What is MarketingManagement?

Marketing management is theart and science

of choosing target marketsand getting, keeping, and growing

customers throughcreating, delivering, and communicating

superior customer value.




Questions To Asked By MarketingManagers

1.What customers will we serve? What is our target market?

2.

3.How can we best serve thesecustomers?

What is our value proposition?




Segmentation & TargetMarketing

Market Segmentation: – Divide the market into

segments of customers

Target Marketing:

– Select the segment to

cultivate




Marketing Management

• DemandManagement – Finding and

increasingdemand, alsochanging orreducingdemand.

• Demarketing – Temporarily or

permanentlyreducing the

number of customers orshifting theirdemand




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




Evolution Of Business Models And

The Role Of Marketing

S o c i e t ao c i e t a

lM k t gk t g

M a r k e t i n ga r k e t i n ge l l i ne l l i ng

As business philosophy has evolved, so has theAs business philosophy has evolved, so has therole of marketing…customer satisfaction is nowrole of marketing…customer satisfaction is nowat the core of most successful corporationsat the core of most successful corporations

As business philosophy has evolved, so has theAs business philosophy has evolved, so has therole of marketing…customer satisfaction is nowrole of marketing…customer satisfaction is nowat the core of most successful corporationsat the core of most successful corporations

P r o d u cr o d u ct

P r o d u c tr o d u c ti o no n

Societal Marketing




Societal MarketingConcept

Society(Human Welfare)

Society(Human Welfare)

Consumers

(Wants)

Consumers

(Wants)

Company

(Profits)

Company

(Profits)

SocietalMarketing

Concept

SocietalMarketing

Concept

Dimensional Differentiation of Selling &




Dimensional Differentiation of Selling &Marketing

S.No. Dimension Selling Marketing

1 Concept Integral part of Marketing

Broader concept, includesSelling, Brand, MR,Distribution, Promotion,and Strategy

2 Objective Transaction Exchange, Customer &Demand Management

3 Target Buyer Needs/Wants of thecustomer

4 Focus Product Brand/Service

5 Operating Platform Price Value

Di i l Diff ti ti f S lli &




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,Collections

Customer Satisfaction, MarketShare

9 Skills Selling, Communication Analytical

10 Orientation People Team

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




Recap - What is Marketing?




Recap - What is Marketing?

• Process by which individuals andgroups obtain what they needand want through creating andexchanging products and valuewith others.

• More simply: Marketing is thedelivery of customer satisfactionat a profit.

•




Marketing ManagementPhilosophies

Production ConceptProduction Concept

Product ConceptProduct Concept

Selling ConceptSelling Concept

Marketing ConceptMarketing Concept

Societal Marketing ConceptSocietal Marketing Concept

•Consumers favor products that areavailable and highly affordable

•Improve production and distribution •Consumers favor products that offer

the most quality, performance, andinnovative features

•Consumers will buy products only if

the company promotes/ sells these product •Focuses on needs/ wants of target

markets & delivering satisfactionbetter than competitors

•Focuses on needs/ wants of target

markets & delivering superior value•Society’s well-being




Toolbox Of Every Marketer

Marketing is all

about managing the

four P’s:èProductèPrice

èPlaceèPromotion




The 4 Ps & 4Cs

Marketing

Mix

Product

PricePromoti

on

Place

Customer

Solution

Customer

Cost

Communication

Convenience




Who is a Customer ?

Anyone who is in the

market looking at aproduct / service for

attention, acquisition,

use or consumptionthat satisfies a want

or a need

A CUSTOMER IS . . .




Customer Gyan

CUSTOMER has needs,wants, demands anddesires

Understanding theseneeds is starting point of the entire marketing

These needs, wants ……arise within a frameworkor a marketingecosystem

Understanding both theneeds and theecosystem is the startingpoint of a long termrelationship

H D C Ch A




How Do Consumers Choose AmongProducts & Services?

Value - the value or benefits thecustomers gain from using the productversus the cost of obtaining theproduct.

Satisfaction - Based on a comparison of performance and expectations.

– Performance >Expectations =>

Satisfaction – Performance < Expectations =>Dissatisfaction




Customers are really looking forProblem Solution

As a priority , we mustbring to our customers“WHAT THEY NEED”

We must be in a positionto UNDERSTAND their problems

Or in a new situation togive them a chance to

AVOID the problems




Customer Looks For Value

Value = Benefit / CostBenefit = Functional Benefit + Economic

Benefit + Emotional Benefit

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




Customer RelationshipManagement

The overall processof building andmaintainingprofitable customerrelationships bydelivering superiorcustomer value andsatisfaction.

– Acquiringcustomers

– Keepingcustomers

– Growing




Customer Perceived Value

Customer’sevaluation of the

differencebetween all of thebenefits and all of

the costs of amarketing offerrelative to thoseof competingoffers.




Customer Perceived Value

Is FedEx’s serviceworth the higherprice? thinks so.

It promises reliability,speed, and peace of mind.

FedEx ads say,“Need to get it thereor else? Don’t worry.

There’s a FedEx for”




Customer Satisfaction

Dependent on theproduct’s perceivedperformance relative to

a buyer’s expectations. – Customer

satisfaction oftenleads to consumerloyalty.

– Some firms seek toDELIGHT

customers by

Drivers of Customer




Drivers of CustomerSatisfaction

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 itemployees

– The emotional connection withcustomers

Ability to add value and todifferentiate as a firm focuses moreon the top levels




Customer Relationships

Loyalty and retentionprograms buildrelationships and mayfeature:

– Financial Benefits• EX: Frequency marketingprograms

– Social Benefits• EX: Club marketing

programs

– Structural Ties

Focus is on relatingdirectly to profitable

customers, for thelon term.

Customer Relationship




Customer RelationshipLevels

The Relationship Marketing




The Relationship MarketingContinuum

• First Level: Focus on

Price

•• Second

Level:

SocialInteractions

•

• Third Level:Interdepende




Three Levels of RelationshipThree Levels of RelationshipMarketingMarketing

Characteristic Level 1 Level 2 Level 3

Primary bond Financial Social Structural

Degree of customization

Low Medium Medium to high

Potential forsustainedcompetitiveadvantage

Low Moderate High

Examples Jet Airways’

Frequent FlyerProgramme JetPrivilege (JP)

Bullet Club, Royal

Enfield MotorcyclesOfficial community

Federal Express’

Power Shipprogram

P t R l ti hi




Partner RelationshipMarketing

• Marketing partners help create customervalue and assist in building customerrelationships.

• Partners inside the firm: – All employees customer focused

– Teams coordinate efforts toward customers

• Partners outside the firm: – Supply chain management

– Strategic alliances

•

Customer Loyalty &




Customer Loyalty &Retention

CustomerLifetime Value

– The entirestream of

purchasesthat thecustomerwouldmake overa lifetimeof patronage.

Share of Customer

The share acompanygetsof thecustomerspurchasing intheir productcategories.

Customer Equit




Customer Equity

The combineddiscountedcustomer lifetimevalues of all thecompany’scurrent andpotential

customers. – Classifycustomersby loyaltyandotential




The real differentiator of The real differentiator of

customer – centricity in acustomer – centricity in a

commoditised world of Indiancommoditised world of Indian

markets ismarkets is

Customer Service !Customer Service !

New Marketing Challenges




NonprofitMarketing

New

MarketingLandscape &InformationTechnology

EthicalConcerns Globalization

Changing

WorldEconomy

New e g C e ges



Till We Meet Again…

iAdios,Amigos!

fundamentals of marketing management

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