intro marketing ppt-1

Definitions of marketing

‘Marketing is the management process that identifies, anticipates and satisfies customer

requirements profitably’

The Chartered Institute of Marketing

‘The right product, in the right place, at the right time, and at the right price’

Adcock et al

‘Marketing is the human activity directed at satisfying human needs

and wants through an exchange process’

Kotler 1980

‘Marketing is a social and managerial process by which individuals and

groups obtain what they want and need through creating, offering and exchanging products of value with

others’Kotler 1991

Implications of marketing

• Who are our existing / potential customers?• What are their current / future needs?• How can we satisfy these needs?

• Can we offer a product/ service that the customer would value?

• Can we communicate with our customers?• Can we deliver a competitive product of service?

• Why should customers buy from us?

Why marketing?

• Changing technology• Globalization• Deregulation• Privatization• Customer empowerment• Customization• Competition• Industry convergence • Retail transformation and disintermediation

Marketing – its importance to the society

• Delivery of goods and services as per the standard of living

• Providing employment• Reduction in distribution cost• Increase in national income• Protection against business slump

Marketing – its importance to the firm

• Better business planning and decision making• Increasing profit• Collecting information

The marketing concept

• choosing and targeting appropriate customers

• positioning your offering• interacting with those customers• controlling the marketing effort• continuity of performance

Successful marketing requires:

• Profitable

• Offensive (rather than defensive)

• Integrated

• Strategic (is future orientated)

• Effective (gets results) Hugh Davidson 1972

Marketing management process

• Analysis/Audit - where are we now?• Objectives - where do we want to be?• Strategies - which way is best?• Tactics - how do we get there?• (Implementation - Getting there!)• Control - Ensuring arrival

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Scope of Marketing What is Marketed?

• Basically 10 types of entities are being marketed. 1. Goods Consumer goods, industrial goods2. Services Intangible offerings of people or

organizations3. Experiences Tourism, Recreation, adventure 4. Events Anniversaries, shows, testimonials 5. Persons Marketing one's self e.g. celebrities,

politicians, artists etc.

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6. Places Cities, states, regions, historical places, tourism

7. Properties Intangible rights of ownership either real property (real estates) or financial property ( stocks & bonds).

8. Organizations Firms, Universities, museums.9. Information News, views like encyclopedias news

papers etc.10. Ideas New ideas/research about production,

services, advertisement etc.

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Kinds of Markets

1. Consumer Market Consists of all individuals or house holds who buy or acquire offerings for personal usage.

2. Industrial/Business Market Consists of buyers who purchase or acquire offerings for resell or reproduction to earn profit

3. Global Market/International markets. Import, export etc.

4. Non Profit & Government Markets

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• Market ( Market place) A physical place where buyers and sellers gathered to exchange to exchange goods.

• Market Space exchange of goods without physical market (digital, Virtual) e.g. eCommerce, internet etc.

• Target Market People/place for whom seller designs his particular offering.

• Segmentation Division of market in small groups keeping on any base (Purchasing power, age, social values etc.)

• Metamarket refers to a cluster of complementary goods and services that are closely related in the minds of consumers but are spread across a diverse set of industries.

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• Marketer some one who is seeking a response (attention. A purchase, a vote, a donation) from another party called prospect.

• Prospects future potential buyer• Need, Wants, and Demand Need Basic human requirement Want Need becomes want when it is directed to

specific object that satisfies need. Demand want for specific product backed by

purchasing power.• Marketing Offer- Some combination of products, services,

information or experience offered to market to satisfy a need or a want.

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Value is ratio between what consumer gets & what he gives (Value = Benefits / Costs or Value= Functional benefits + Emotional benefits / Monetary costs + Time costs + Energy costs + Psychic costs)

• Marketers can enhance the value of an offering to the customer by:

Raising benefits. Reducing costs. Raising benefits while lowering costs. Raising benefits by more than the increase in costs. Lowering benefits by less than the reduction in costs.

Customer Satisfaction- Its related with how well the product performance lives up to customers expectation.

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• Exchange involves obtaining a desired product from someone by offering something in return.

A person can obtain a product by 4 ways Self Produce By Force Beg Exchange ( Core of Marketing)

5 conditions of exchange At least 2 parties Each party must have some thing value able to other party Parties are capable to communicate & deliver Parties are free to accept or reject exchange offers Willingness to deal with other party

Transaction A trade of values between two or more parties, involves at least two things of value, agreed-upon conditions, a time of agreement, and a place of agreement.

Transfer A gives something to B but doesn’t receive anything tangible in return.

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• Product, Brand & Generic– Product Any offering that can satisfy a need or want

( usually 10 entities which are being marketed)– Brand An offering from a known source. (Lux, N95,

Sprite, H&S)– Generic unbranded product, from unknown source.

• Supply Chain A longer channel stretching from raw materials to components to final products that are carried to final buyers.

Each company captures only a certain percentage of the total value generated by the supply chain.

Marketing Network Consists of a company and its supporting stake holders with whom it has built mutually profitable business relation. ( customers, suppliers, employees, distributors, retailers, ad agencies, scientists and others)

FIVE CONCEPTS

• The Production Concept• Product Concept• The Selling Concept• The Marketing Concept• The Societal Marketing Concept

MarketingConcept

MarketingConcept

Product ConceptProduct Concept

MarketingConceptsMarketingConcepts

Production ConceptProduction Concept

SocietalMarketing

SocietalMarketing

Competing Marketing Concepts

Selling ConceptSelling Concept

Production Concept

• Consumers will favour those products that are widely available and low in cost.

• Therefore increase production and cut down costs.

Product Concept

• Consumers will favour those products that offer the most quality, performance, or innovative features.

• Therefore, improve quality, performance and features.

• This would lead to increased sales and profits.

The Selling Concept

• Consumers , if left alone , will not buy enough of company’s products.

• Therefore, promote sales aggressively.

• And,build profit through quick turnover.

The Marketing Concept

• The key to achieving organizational goals consist in determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors.

• And build profit through customer satisfaction and loyalty.

4 PILLARS

• The marketing concept rests on 4 pillars, namely

• 1. Target Market• 2. Customer Needs• 3. Integrated marketing• 4. Profitability

The Societal Marketing Concept• The societal marketing 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 competitors in a way that preserves or enhances the consumer’s and the society’s well being.

• Societal Marketing =

Consumer Satisfaction + Company ‘ s Profits + Society’s well being.

Holistic marketing

‘Everything matters’

Holistic marketing

IntegratedMarketing

InternalMarketing

SociallyResponsibleMarketing

Relationship Marketing

Components of holistic marketing

• Internal marketing: Hiring, training and motivating the employees

• Socially responsible marketing: Ethical, environmental, legal and social context of marketing

• Integrated marketing: Integration of all marketing functions

• Relationship marketing: Customer relationship management (CRM) and Partner relationship management (PRM)

4’P’ s and 4 ‘C’s of marketing

• Product Customer solution • Price Customer cost• Place Customer convenience• Promotion Communication

Marketing Mix Marketing Mix

PricePrice

Mkt MixMkt Mix

PlacementPlacement PromotionPromotionProductProduct

Marketing Mix

• ProductProduct VarietyQualityDesignFeaturesBrand NamePackagingSizesServicesWarrantiesReturns

Price

List Price

Discounts

Allowances

Payment Period

Promotion

Sales Promotion

Advertising

Sales Force

Public Relations

Publicity

Place

Channels

Coverage

Assortments

Locations

Inventory

Transport

Basic conceptswhat is a product

• Product: A product is anything that can be offered for attention, acquisition, use or consumption that might satisfy a want or a need.

• Product item: A product item is a distinct unit that is distinguishable by size, appearance or some other attribute. An item is sometimes called a stock keeping unit or product variant.

Basic conceptsnature of product


• Generic product: are unbranded, plainly packaged products and are less expensive than branded products. Indicates core benefit or service.

• Expected/Tangible product : this represents the basic requirements a customer finds essential to buy a product. Marketers try to identify attributes and conditions required by the customers and try to build these into their products. It includes brand name, packaging, features, quality, styling.


• Augmented product: companies do not limit the attributes of a product to what the customer expects in the product. They include after sales service, guarantee, warranty, delivery and credit, installation, toll free number etc,.

• Potential product: potential products are products which include all the improvements that are possible under given technological, economical and competitive conditions. The potential product helps in attracting and retaining customers.

Classification of product

Products

Consumer Products Industrial Products

Convenience goods Raw materialsShopping goods Fabricated partsSpecialty goods InstallationsUnsought goods Accessories Operating supplies

Basic conceptsproduct classification based on

durability and tangibility• Non durables: are tangible in nature. Consumed

over a short period of time.• Durables : are tangible in nature. They are

consumed over a relatively longer period of time.

• Services : intangible and perishable in nature. Services can either an independent product, or a inseparable part of the product.

Basic conceptsbased on usage of the product

consumer products• Convenience products: are those which are

relatively inexpensive and are bought frequently, bought with minimum thought and effort, less bulky, sold at lower price, not affected by fashion or fad.

• Convenience products can be classified into: 1. staple goods : milk, bread, newspaper.2. impulse goods: magazines3. Buyer spends minimal time in planning the

purchase.• No brand loyalty.

Basic conceptsbased on the usage of the product

consumer products• Shopping products: are products for which the

consumer is willing to spend time and effort in planning and making the purchase decisions.

• These products are expected to have longer life and are purchased less frequently.

• Are relatively more expensive and are sold at a few retail outlets in comparison with convenience products.

• Buyers are not loyal to a particular brand.• Take considerable time to compare and evaluate the

brands. E.g. Sarees, Shirts, Shoes


consumer products• Specialty products: are products that have one

or more unique characteristic features.• Available through select outlets or only through

single outlet.• Customers are sure what they want and will not

accept a substitute.• Customers are extremely brand – store - or

person loyal and are willing to pay premium.• E.g. cars, motorcycles, cell phones etc.

Basic concepts: based on the usage of the product- consumer products

• Unsought products: Are products which the customer buys when faced with a sudden problem. Customer is aware of the product but does not want it right now.

• Customers are not greatly aware of the need and they do not think it vitally necessary purchase the product e.g.. Umbrella, plumber’s services etc.

• Marketers use personal selling and advertising to market these products

• They indulge in aggressive selling tactics for promoting these products e.g. Insurance policies.

Basic concepts: based on the usage of the product industrial products

• Industrial products: products that go onto production of other products or facilitate smooth functioning of an organization.

• They are purchased to satisfy the organizational needs.• Based on their characteristics and intended usage,

organizational products can be classified into:a. production goods.b. support goods.


industrial products• Production goods are further divided into:1. raw materials.2. component parts3. process materials.


industrial goodsRaw Material:• Is the basic material used in producing a product.• These products are fairly perishable in nature.• They are bought in large quantities according to their

grade and specification.• These products are fairly simple but they are required

in bulk. Hence total purchases in rupee terms can run into huge amounts. e.g. Crude oil, chemicals, farm products.


industrial products• Process material: Used directly in the

production of the final product.• But these products are not easily identified as

part of the final product.• For example a company producing perfumes

uses alcohol as a base for its products, though it cannot be identified in the main product


industrial products• Component parts: A component is a finished

product or a product that needs a little processing before becoming a part of the main product.

• A component can be easily distinguished from the main product.

• Industrial customers use components to assemble their products. E.g. wheels of a car


industrial products• Support products: are products that facilitate the

process of production.• They do not become part of the final product.• Support products are further divided into:1. capital equipment.2. accessory equipment.3. consumable supplies.4. business services.


industrial products• Capital equipment: Comprises of large tools and

machines that are used for the production of goods or for providing services.

• Usually expensive.• Long term use.• Customized to suit to the requirements of the

organization.• Purchase decisions are taken at the highest levels of

management.• Marketers of such products usually provide services like

installations, training, repair, maintenance etc.

Basic conceptsbased on the usage of the products

industrial products• Accessory equipment: Accessories are those products

which help in production or office activities.• They do not become part of the final product.• Examples are calculators, brooms, computers,

furniture etc.• Accessories are relatively less expensive, demand less

services and maintenance and are purchased more frequently when compared to capital equipment.


industrial products• Consumable supplies: Products that are consumed

during production and delivery of the product but they do not become part of the product. Example – paper, pens, pencils etc.

• They are often referred to as MRO items:• Maintenance items: brooms and other equipment.• Repair items : handy tools, replacement parts.• Operating items : office stationary, water, electricity

etc.

Basic conceptsbased on the usage of the products

industrial products• Business services:• Are intangible in nature.• Require services for smooth functioning of the

operations.• Services include legal, market research,

temporary workers, insurance, various consultants etc.

Basic conceptsproduct mix

• Product Mix:• The product mix is the set of all the products that an

organization offers.• For example HLL offers detergents, shampoos, hair

care products, cosmetics, beverages, health care products, ice creams etc.

• A product mix consists of all the product mix lines and categories.

• It has certain characteristics features like product width, length, depth and consistency.


• Width: This is the total number of product lines a company carries.

• Length: The length of the product mix is the total number of items in that mix.

• The average length of a line is obtained by dividing the total length by the number of lines.


• Depth: The depth of a product mix is the assortment of sizes, colors and variations offered for each product in the product line.

• Consistency: This refers to the closeness exhibited by the product lines in production requirements, distribution, end usage etc.,

• For example most of the HLL product lines are consistent as they are consumer goods, distributed by the same channels of distribution and are produced in similar manufacturing facilities.

The Product Mix

• Product variety• Quality• Design• Features• Brand name• Packaging• Size, service warranties, returns etc.

The Price Mix

• List price• Discounts• Allowances• Payment period• Credit terms

The Promotional Mix

• Sales promotion• Advertisement• Personal selling and sales force management• Public relations• Direct marketing

The Place Mix

• Channels• Coverage• Assortments• Locations• Inventory• Transport

Product positioning

• Positioning word was coined by Al Ries and Jack Trout in the year 1972.

• According to them positioning is not what you do to the product.

• On the other hand it is what you do to the mind of the customer.

• In other words product positioning refers to all the activities undertaken by a marketer to create and maintain the concept of value regarding its brand in the minds of the customers as against competitors brands.

Challenges of Today’s Organization

Organization

Bigness

Diversification

Globalization

Govt. Interference

Competition

Information

Change

Science & Tech

Marketing Environment

• Task Environment• Broad Environment

Organization’s Environment

Macro or Far Environment

Technological Factors

Social Factors

Political Factors

Economic Factors

Near or Operating Environment

Customers

Clients

Competitors

Partners

Suppliers

ORGANIZATION

Task Environment

• Company• Suppliers• Distributors• Dealers• Target Customers• Competitors

Broad Marketing Environment

• The following forces in the Broad Environment have a major impact on the Task Environment:– Demographics– Economics– Natural environment– Technological environment– Political-legal environment– Social-cultural environment

Demographic Environment

• Population Age Mix• Population Growth• Ethnic Group• Education Status• Household Patterns

Economic Environment

• Income DistributionSubsistence Economies

Raw Material Exporting EconomiesIndustrializing EconomiesIndustrialized Economies

• Savings, Debt and Credit Availability

Natural Environment

• Shortage of Raw Materials• Increased Energy Costs• Increased Pollution Levels• Changing Role of Government

Technological Environment

• Accelerating Technological Change• Innovation Opportunities• Varying R&D Budgets• Regulations of Technological Change

Political-Legal Environment

• Legislation Regulating Business• Growth of Special Interest Groups

Social-Cultural Environment

• Beliefs• Values• Norms• Subculture

SWOT Analysis

• Strengths (Internal)• Weaknesses (Internal)• Opportunities (External)• Threats (External)

SWOT AnalysisSWOT Analysis

Why is marketing planning necessary?

• Systematic futuristic thinking by management• better co-ordination of a company’s efforts• development of performance standards for

control• sharpening of objectives and policies• better prepare for sudden developments

Contents of the Marketing Plan

– Executive Summary– Current Marketing Situation– Opportunity and issue analysis– Objectives– Marketing strategy– Action programs– Financial projections– Implementation controls

• Segmentation• Positioning• Product Management• Pricing• Distribution• Marketing Communications• Marketing Research

Marketing Strategy

intro marketing ppt-1

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